EC hands out hefty fines for subsidy fraud

The fines, totalling 317.3m euros, come after an audit showed farm subsidies
being paid after faulty applications involving financial irregularities and
outright fraud.

The member states are being penalised for what Brussels regards as
‘negligence’ in pursuing guilty aid claimants. Italy will bear the lion’s share
of the pain, with a 310.8m euros penalty. Britain will pay a 2m euros fine,
Spain 2.4m euros, France 1.3m euros and Germany 600,000 euros.

The fines follow audits carried out prior to 1999 by the commission, which
investigated the recovery procedures for payments to individual farmers and

Procedures were found wanting. The EU’s anti-fraud commissioner Siim Kallas
said: ‘The commission is serious about not tolerating irregular spending of the
EU taxpayer’s money.’

Kallas condemned national governments’ faulty recovery procedures, which
meant ‘even a case of outright fraud may not necessarily lead to a loss of

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