AGRICULTURE: FISCHLER SPEAKS OUT ON CAP BUDGET DEBTS CANCELLATION.

The Parliamentary question concerned the arrangements for a Member States to release/recover securities lodged by traders. Mr Fischler said in his reply that the EU Financial Regulation's Article 29 provided for a special procedure to allow a reported debt to be repudiated, with the process involving an inter-services consultation. The upshot in the event of an agreement is a financial controllor visa and registration by a Commission accountant.--The "Flechard" case goes back to the late 1993 and early 1994 period when a row flared up between the various Commission services (Legal Service, Agriculture and Financial Control Directorates-General) on what sanctions to apply to the French agri-foods firm Flechard, which had been involved in a fraudulent butter export transaction in 1999. The butter was exported to Poland when it should have been sent to Russia, a destination for which higher export refunds were paid. In the end, on January 7, 1994, a decision was taken (during a meeting of the Cabinet of the then European Commission President Jacques Delors) to reduce the fine imposed on Flechard from ECU 261/100 kg to 44.5. The security (or penalty) was first estimated at Euro 17.6 million but was then cut to 3 million. The minutes for the meeting were mislaid. The anti-fraud coordination office (UCLAF) was asked to look into the matter in1999 as part of the financial discharge procedure (budget control, plus the European Parliament's political opinion about the Commission's behaviour thereby allowing the Community budget accounts to be closed). During his interview with MEPs in September 1999, Trade Commissioner Pascal Lamy sought to justify the EU executive's position although at the time he was Chef de Cabinet and sherpa for Jacques Delors: "The solution agreed upon by common consent during the meeting struck me as a reflection of the concern to evoke the Commission's assessment powers to find a fair solution in keeping with the damage sustained by Community finances. To accept the penalty provided for by the 1991 regime in force when the incident occurred would have been excessive: the idea was to prevent the exported butter returning to the Internal Market, which was not the case. In the meantime, the Regulation was amended in 1993 so as to reduce the level of penalties to be applied. The maximum penalty would have represented six times more than the capital base of the company employing about one thousand workers and would have meant...