Artificial Conditions

COMBATING THE CLAIMS OF THE RURAL INVESTMENTS FINANCING AGENCY (AFIR) RELATING TO THE CREATION OF ARTIFICIAL CONDITIONS:

Several verifications of AFIR (former APDRP) have led to resolutions of non-reimbursable financing agreements concluded under the national programme for rural development, on the motivation of creating artificial conditions and exceeding the minimis threshold.

With regard to the irregularities found by AFIR, respectively creation of artificial conditions and exceeding de minimis threshold, the control body claims that, in a number of cases, projects submitted and accepted ”are affected by artificial conditions, as they are mirror reflected projects” and that in the situation of head offices identity, similarities between financing applications or the projects submitted, or other similar elements, the persons concerned have cooperated for overcoming de minimis threshold.

The fact that a number of projects submitted or elaborated by the same consultant are identical or similar shall not contravene in any way the European provisions in the matter under analysis and even the domestic law does not contain any regulation to prohibit a consulting company that has already elaborated some projects for a Beneficiary to elaborate a similar project for another Beneficiary.

Most of the times, coordination of multiple projects by one person or group of persons represents a mere assumption, which has no legal ground and no legal value.

If the State had wanted to provide as exclusion criteria from the qualification, those criteria invoked by the control body, respectively the similarities between two or more projects, it would have done it at the time of issuing the rules on eligibility criteria, but it also had the obligation to do it.

In this regard, we note that the Regulation EC 65/2011 clearly provides in art. 4 par.2, that ”Member States shall ensure that all eligibility criteria provided by the European Union legislation or national legislation or established by the rural development programmes can be controlled according to a set of verifiable indicators which are to be set out by the Member States”.

We consider that the administrative tax document is most of the times unlawful and unreasonable, based on the legal ground invoked in the sanctioning minutes, respectively art. 4 par. 8 of the EC Regulation.

The EC Regulation 65/2011, art. 4 par. 8 provides that ”no payments shall be made in favour of beneficiaries for whom it is established that they have artificially created the conditions required for obtaining such payments with a view to obtaining an advantage contrary to the objectives of the Scheme”.

According to the text of law relied on, the control body shall prove, on the one part, the artificial creation of the necessary conditions and on the other part, shall mention the advantage contrary to the scheme objectives.

The persons affected by the interpretation given by APDRP/AFIR to the concept of artificial conditions of exceeding de minimis threshold, have to refer in defending their case to the provisions of EC standards in question, respectively the Commission Regulation (EC) no. 65/2011, art. 4 par. 8, Regulation (EC) no. 2988/1995 art.4 par. 3, REGULATION (EC) NO. 1974/2006 and the considerations of the Decision of the Court (sixth chamber) of 12th September 2013 v 2013vSlancheva sila EOOD against Izpalnitelendirektor na Darzhaven fond «Zemedelie» Razplashtatelnaagentsia, ruled in Case C-434/12.                                                                                          

Under these conditions, several Courts of Appeal, in the country and Bucharest municipality, have ruled in favour of beneficiaries and ordered the cancellation of minutes finding irregularities and establishing budgetary debts.