Failure to keep EU rules meant £9m loss

ABOUT £9 million was disallowed in EU payments to the Exchequer last year due to failure by the Department of Agriculture, Food and Forestry to comply with regulations.

A total of £8.8 million has been incurred in disallowances imposed by the EU since 1991, most of which were discharged last year.

A further £250,000 was lost interest to the Exchequer last year. A Department spokesman and the IFA attributed the disallowances to the "learning curve" -involved in adjusting to the reformed CAP.

Of the amount disallowed, £2.78 million was disallowed last year, and a further £0.72 million this year (£3.5 million in total) due to delays in payment - An automatic penalty for late payment relating to 1993 schemes amounted to £2.9 million, including legal costs. These latter disallowances involved stopped beef export refunds, due to "inadequate proof of arrival" and unsatisfactory control over securities", and amounted to 2.78 million and £1.55 million respectively

With reference to the £2.78 million, the report, commenting In the two cases concerned, said: "In one case details of the exact port or date of arrival in the non-member country, Iraq, were not given and there were also doubts "about the quality of the product.

"In the other case," the report, continued, "the Commission ruled that the country of import, Yemen, was not a country from which primary proof documents were difficult to obtain, there was no evidence of the trader's diligence to provide the proofs required, and the Department did not inform the Commission of having difficulties in obtaining such documents."

The Attorney General, Mr Dermot Gleeson, was consulted and advised that "a serious challenge" could be mounted in the European Court of Justice against the Yemen disallowance but that the Iraqi case would be difficult "given the loss of documentation in Baghdad".

In September 1993 the EU notified the Department that, as and from the end of the 1994 financial year, spending by the Department on schemes after an agreed deadline would be reimbursed at a decreasing rate, ranging from 90 per cent of the spending in the first month after deadline to nil by the fifth month.

August 1994 was set as the deadline for the acceptance by the EU of full payments on the 1993 headage and premium schemes. However the deadlines were not met in some instances.