Article 7

Member States shall check whether the undertaking referred to in Article 3 (2) has been fulfilled, by periodic on-the-spot inspections in such a way that each holding is inspected at least every five years.

Member States shall notify the Commission of the results of the checks referred to in paragraph 1.

Where the Member States find that the undertaking referred to in Article 3 (2) has not been fulfilled:

• they shall take steps to recover the grubbing up premium paid, plus interest calculated on the basis of the time between the payment of the premium and its reimbursement by the beneficiary,

  and

• they shall require the offender to pay an amount equal to that of the grubbing up premium paid.

The rate of the interest referred to in the first subparagraph shall be the rate applied by the European Monetary Institute to its transactions in ecus as published in the ‘C’ series of the Official Journal of the European Communities, in force on the date of the undue payment and increased by three percentage points.

The amounts recovered and the interest shall be paid to the competent paying agency and shall be deducted from the expenditure financed by the European Agricultural Guidance and Guarantee Fund.