Checks and sanctions

1. Prior to granting the payment, the competent national authority shall carry out administrative checks on all aid applications as well as on-the-spot checks on a significant sample of applications.

2. Administrative checks on aid applications shall be exhaustive and shall include:

cross-checks of the eligible areas claimed with, inter alia, data from the integrated administration and control system provided for in Chapter 4 of Title II of Regulation (EC) No 73/2009;

a verification of the contribution of the measures implemented to the aims referred to in Article 122(c) of Regulation (EC) No 1234/2007.

3. On-the-spot checks shall be conducted at each producer organisation and cover at least 5 % of the aid to be distributed. Such checks shall verify in particular:

the producer organisations’ compliance with the recognition criteria;

the eligibility of the hop areas claimed;

a representative sample of the measures implemented, completed or ongoing and the corresponding expenditure incurred or committed during the calendar year of the aid application with a view to achieving the aims referred to in Article 122(c) of Regulation (EC) No 1234/2007.

4. Provided that the purpose of the on-the-spot check is not jeopardised, advance notice, strictly limited to the minimum time period necessary, may be given.

5. In all appropriate cases, Germany shall make use of the integrated administration and control system.

6. In the event of undue payment, Article 80 of Commission Regulation (EC) No 1122/2009 ( 4 ) shall apply mutatis mutandis .

7. Where an undue payment has been made as a result of a false declaration, false documents or serious negligence, the applicant shall, in addition to the recovery of unduly paid amounts, repay an amount equal to the difference between the amount initially paid and the amount to which the applicant was actually entitled. These amounts shall be payable to the EU budget.

8. The competent control authority shall draw up a control report on each on-the-spot check. The report shall describe precisely the different items and aspects controlled, and provide sufficient detail to allow review of the control work performed and results achieved.

9. The German competent authority executing the payments shall send an annual report to the Commission on the producer organisations’ use of the amounts received, including a description of the measures that have been financed by means of the payments. The report shall include details of the number of the on-the-spot checks carried out and the related findings, and shall be sent at the latest by 30 June of each year.

COMMISSION REGULATION (EU) No 738/2010 of 16 August 2010 laying down detailed rules on payments to German producer organisations in the hops sector