Article 4
United Kingdom
The amount of financial corrections made by the Commission under Article 26(3b) of Decision 2004/904/EC for individual or systemic irregularities shall be assessed wherever possible and practicable on the basis of individual files and be equal to the amount of expenditure wrongly charged to the Fund, having regard to the principle of proportionality.
Where it is not possible or practicable to quantify precisely the amount of irregular expenditure or where it would be disproportionate to cancel all the expenditure concerned, the Commission shall base its financial corrections on:
extrapolation, using a representative sample of transactions that are homogeneous in nature;
or
a flat-rate, in which case it shall assess the seriousness of the infringement of the rules and the extent and financial implications of the irregularity established.
Where the Commission bases its position on facts established by auditors from outside its own departments it shall draw its own conclusions on the financial implications after examining the measures taken by the Member State concerned under Article 25(2) of Decision 2004/904/EC.
The period of time within which the Member State concerned may respond to a request under Article 26(3) of Decision 2004/904/EC shall be two months. In duly justified cases, a longer period may be agreed by the Commission.
Where the Commission proposes financial corrections determined by extrapolation or at a flat rate, the Member State shall be given the opportunity to demonstrate, on the basis of an examination of the files concerned, that the actual extent of irregularity was less than the Commission’s assessment. In agreement with the Commission, the Member State may limit the scope of this examination to an appropriate proportion or sample of the files concerned. Except in duly justified cases, the time allowed for this examination shall not exceed a further period of two months after the two-month period referred to in paragraph 4. The Commission shall take account of any evidence supplied by the Member State within the time-limits.
Where the Commission suspends payments under Article 26(1) of Decision 2004/904/EC or where after expiry of the period referred to in paragraph 4, the reasons for the suspension remain or the Member State concerned has not notified the Commission of the measures taken to correct the irregularities, Article 26(3) will apply.
Guidelines on the principles, criteria and indicative scales to be applied by Commission departments in determining the flat-rate corrections are set out in the Annex to this Decision.