Citation and commencement

1. These Regulations may be cited as the Farm Modernisation Programme Regulations (Northern Ireland) 2008 and shall come into operation on 21st August 2008.

Interpretation

2.–(1) In these Regulations–

"agent" means a person authorised in writing by the Department for the purposes of these Regulations;

"application" means an application for the approval of expenditure under regulation 4;

"approved" in relation to any expenditure means approved by the Department or the agent under regulation 5;

"authorised person" means any person authorised by the Department, either generally or specifically, for the purposes of these Regulations and includes any official of the Commission who accompanies such an authorised person;

"beneficiary" means a person who has been granted approval for an operation;

"Commission Regulation 1974/2006"(3) means Commission Regulation (EC) No. 1974/2006 laying down detailed rules for the application of Council Regulation (EC) No. 1698/2005(4) on support for rural development by the European Agricultural Fund for Rural Development (EAFRD);

"Commission Regulation 1975/2006"(5) means Commission Regulation (EC) No. 1975/2006 laying down detailed rules for the implementation of Council Regulation (EC) No. 1698/2005 as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures;

"Community support" means support payable pursuant to Articles 20(b)(i) and 26 of the Council Regulation from the European Agricultural Fund for Rural Development in accordance with the Community legislation;

"the Community legislation" means the Council Regulation and any other instruments listed in the Schedule insofar as they relate to Community support;

"Council Regulation 1782/2003"(6) means Council Regulation (EC) No. 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers;

"the Council Regulation" means Council Regulation (EC) No. 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development;

"the Department" means the Department of Agriculture and Rural Development;

"electronic communication" has the same meaning as in the Electronic Communications Act (Northern Ireland) 2001(7);

"financial support" means an amount paid or payable under these Regulations;

"operation" means an investment or project in Northern Ireland;

"public funds" means monies available by–

(2) A reference in these Regulations to anything done in writing or produced in written form includes a reference to an electronic communication which has been recorded and is consequently capable of being reproduced.

(3) The Interpretation Act (Northern Ireland) 1954(8) shall apply to these Regulations as it applies to an Act of the Northern Ireland Assembly.

(4) Any reference in these Regulations to a Community instrument is a reference to that instrument as amended on the date on which these Regulations are made.

(5) Other expressions used in these Regulations which are also used in the Council Regulation 1698/2005 or Commission Regulation 1975/2006 shall be construed in accordance with the appropriate Regulation.

Grants payable

3. The Department may pay financial support to a beneficiary towards approved expenditure incurred or to be incurred in connection with an operation.

Applications for approval of operation

4. An application for the approval of expenditure in connection with an operation shall be made in such form and at such time, and contain such information, as the Department or an agent reasonably may require.

Approval of operations

5.–(1) Subject to paragraph (2) the Department or an agent may approve in whole or in part expenditure in connection with an operation for which an application has been made.

(2) The Department or an agent shall not approve expenditure unless it is satisfied that the operation to which it relates is eligible for Community support.

(3) Approval may be given subject to such conditions as the Department or an agent may determine.

(4) Where the Department or an agent refuses approval for an operation under paragraph (1) it shall–

(a) give the applicant its decision in writing with a statement of its reasons;

(b) give that applicant an opportunity to make written representations within such time as the Department or, as the case may be, the agent considers reasonable; and

(c) consider any such representations.

(5) Subject to paragraph (6) the Department or an agent may vary any approval granted under this regulation.

(6) The Department or an agent shall only vary an approval granted under this regulation pursuant to a request in writing from the beneficiary to do so, or in any other case after–

(a) giving the beneficiary notice in writing that it proposes to do so together with a statement of its reasons;

(b) giving the beneficiary an opportunity to make written representations within such time as the Department or, as the case may be, the agent considers reasonable; and

(c) considering any such representations.

(7) An approval or variation under this regulation shall be in writing.

Claims

6. A claim for financial support shall be made at such time or within such period and in such form, and be accompanied by such information, as the Department or, as the case may be, an agent reasonably may require.

Payments

7.–(1) The Department may pay financial support in respect of approved expenditure in connection with an operation by payment of a single lump sum or by instalments.

(2) Payments under paragraph (1) may be made–

(a) at such time as the Department reasonably may determine; and

(b) subject to such conditions as the Department reasonably may determine.

Information

8.–(1) A beneficiary shall supply the Department or an agent with such information about any approved expenditure and any operation in connection with which such expenditure is incurred as the Department or the agent reasonably may require.

(2) Where the Department or an agent requires such information, the beneficiary shall give it to the Department or the agent within such period as the Department or agent reasonably may determine.

Record-keeping

9.–(1) A beneficiary shall, subject to paragraphs (2) and (3), keep any invoice, account or other document relating to approved expenditure or any operation in connection with which such expenditure is incurred until 31st December 2020.

(2) If in the normal course of business a beneficiary transfers to another person the original of any document he is required to keep under paragraph (1) within the period he is required to keep it under that paragraph, it shall be sufficient compliance with that paragraph for him to keep a copy of that document for that period.

(3) Paragraph (1) shall not apply in any case where a document to which that paragraph relates has been removed by any person lawfully authorised to remove it.

Powers of authorised persons

10.–(1) An authorised person may at all reasonable times, on producing, if so required, some duly authenticated document showing his authority, enter on any land, other than land used solely for the purpose of a dwelling-house–

(a) to which an application or approved expenditure relates; or

(b) on which he has reasonable grounds to believe that documents or equipment relating to an application or approved expenditure are being kept, for any of the purposes mentioned in paragraph (2).

(2) The purposes referred to in paragraph (1) are–

(a) inspecting the land, building or equipment to which an application or approved expenditure relates;

(b) verifying the accuracy of any information provided by an applicant or beneficiary relating to an application or approved expenditure; and

(c) determining whether or not a beneficiary has complied with the conditions of an approval.

(3) An authorised person who has entered any land under paragraph (1) may–

(a) inspect the land and any document, record or equipment on it which he reasonably believes relates to an application or approved expenditure;

(b) require the applicant or beneficiary or any employee, servant or agent of such applicant or beneficiary, to produce, or secure the production of, any document or supply any additional information in his possession or under his control relating to the application or approved expenditure, as the case may be;

(c) where any information referred to in sub-paragraph (b) is kept by means of a computer, have access to any computer and any associated apparatus or material which is or has been used for storing that information and require information to be reproduced in a form in which it is legible and can be taken away;

(d) require copies of or extracts from any such document or other record referred to in sub-paragraph (a) or (b) to be produced; and

(e) seize and retain any document or other record which he reasonably believes may be required as evidence in proceedings under these Regulations.

(4) An applicant or beneficiary, and any employee, servant or agent of such applicant or beneficiary shall give an authorised person all reasonable assistance in relation to the exercise of his powers under paragraphs (1) and (3).

(5) An authorised person entering any land under paragraph (1) may take with him such other person as he considers necessary and paragraphs (3) and (4) shall apply to any such person when acting under the instructions of an authorised person as if he were an authorised person.

Breaches of obligations

11.–(1) Where–

(a) any information furnished to the Department or an agent by the beneficiary is false or misleading;

(b) the beneficiary is in breach of any of the conditions of an approval;

(c) the beneficiary is in breach of any requirement to which he is subject under these Regulations or under the Community legislation; or

(d) the whole or part of the financial support payable in respect of approved expenditure duplicates other grant paid or to be paid out of public funds,

the Department may exercise the powers contained in regulation 13.

(2) For the purposes of paragraph (1)(d), other grant duplicates such financial support if it is, or would be, for any of the same purposes as the financial support.

(3) Where–

(a) a beneficiary has transferred all or part of the land to which an approval relates to another person ("the transferee");

(b) the transferee has given an undertaking to the Department or the agent to assume the conditions of the approval in place of the beneficiary; and

(c) the Department or the agent has accepted that undertaking,

the beneficiary shall be released from the conditions of the approval, other than in respect of any breach or other matter occurring before the acceptance by the Department or the agent of the transferee´s undertaking.

Other cases in which recovery etc. powers apply

12. The Department may exercise the powers contained in paragraph (1)(a) and (b) of regulation 13 where–

(a) there has been a material change in the nature, scale, costs or timing of the approved expenditure in question or any operation to which it relates; or

(b) the operation to which the approved expenditure in question relates has been or is being delayed, or is unlikely to be completed.

Department´s powers

13.–(1) The powers conferred by regulations 11(1) and 12 are–

(a) to withhold, or to direct the agent to withhold, the whole or any part of the financial support payable to the beneficiary; and

(b) to recover on demand, or to direct the agent to recover on demand, the whole or any part of the financial support already paid to the beneficiary.

(2) Where all the circumstances in which the powers conferred by regulation 11(1) and specified in paragraph (1) have become exercisable are such as were intended by the beneficiary or as to which the beneficiary was reckless, the Department may require, or direct the agent to require, the beneficiary to pay to the Department or, as the case may be, to the agent an additional sum equal to no more than 10 per cent of the financial support paid or payable to him.

(3) Where the Department takes any step specified in paragraph (1) it may also serve in writing or direct the agent to serve in writing on the beneficiary a notice suspending or terminating the approval.

(4) Where, under paragraph (3), the Department or, as the case may be, the agent treats the approval as terminated, the Department may–

(a) by notice in writing served on the beneficiary prohibit the beneficiary from making an application for the approval of expenditure in connection with an operation for such period (not exceeding two years) from the date of the termination as may be specified in the notice; or

(b) direct the agent to serve a notice on the beneficiary prohibiting the beneficiary from making an application for the approval of expenditure in connection with an operation for such period (not exceeding two years) from the date of the termination as may be specified in the notice.

(5) Before taking any steps specified in paragraph (1), (2), (3) or (4) the Department shall–

(a) give to the beneficiary a written explanation of the reasons for the steps proposed to be taken;

(b) afford the beneficiary an opportunity to make written representations within such time as the Department considers reasonable; and

(c) consider any such representations.

Recovery of interest

14.–(1) If the Department decides to recover, or to direct an agent to recover, any amount under regulation 11 or 12, it may also recover on demand or, as the case may be, direct an agent to recover on demand interest on the amount to be recovered for the period beginning with the day following that on which the financial support was paid and ending on the day on which the Department or, as the case may be, the agent recovers it.

(2) The rate at which the interest is payable for any day in that period is one percentage point above LIBOR.

(3) For the purposes of paragraph (2) "LIBOR" means the sterling three-month London interbank offered rate in force on the day in question, and in any proceedings relating to the recovery of such interest a certificate of the Department stating the LIBOR applicable for any day is conclusive evidence of the rate applicable for that day if the certificate also states that the Bank of England notified the Department of that rate.

Recovery of payments

15. In any case where an amount falls to be paid to the Department or an agent by virtue of (or by virtue of action taken under) these Regulations, the amounts so falling to be paid shall be recoverable as a debt.

Directions

16. An agent shall comply with any directions of the Department under regulation 13 or 14.

Breach by an agent of his authorisation

17.–(1) Where an agent breaches any of the conditions of his authorisation, the Department may–

(a) withhold funds from the agent; and

(b) recover on demand the whole or any part of funds already made available to the agent.

(2) Where the Department takes any steps specified in paragraph (1) it may also serve a notice in writing on the agent termination his authorisation.

(3) Before taking any steps specified in paragraph (1) or (2) the Department shall–

(a) give the agent notice in writing of what it proposes to do, together with a statement of its reasons;

(b) give the agent an opportunity to make written representations within such time as the Department considers reasonable; and

(c) consider any such representations.

Set-off

18. The amount of any sum payable by the Department under the Council Regulation or Council Regulation 1782/2003, whether as principal or agent, may be set off against the amount of any sum recoverable by the Department under regulation 13(1), 13(2) or 14(1).

Offences and penalties

19.–(1) A person is guilty of an offence if–

(a) for the purposes of obtaining financial support for himself or any other person under these Regulations he knowingly or recklessly makes a statement which is false or misleading in a material particular; or

(b) he intentionally obstructs an authorised person (or a person accompanying him and acting under his instructions) in the exercise of his powers under regulation 10.

(2) A person who is guilty of an offence shall be liable–

(a) in the case of an offence under paragraph (1)(a)–

(i) on summary conviction, to a fine not exceeding the statutory maximum; or

(ii) on conviction on indictment, to a fine; and

(b) in the case of an offence under paragraph (1)(b), on summary conviction to a fine not exceeding level 3 on the standard scale.

Regulation 2(1)

SCHEDULE Meaning of "Community Legislation"

1. Commission Regulation (EC) No. 1974/2006 of 15 December 2006 laying down detailed rules for the application of Council Regulation (EC) No. 1698/2005 on support for Rural Development by the European Agricultural Fund for Rural Development (EAFRD) (O.J. No. L368, 23.12.2006, p. 15).

2. Commission Regulation (EC) No. 1975/2006 of 7 December 2006 laying down detailed rules for the implementation of Regulation (EC) No. 1698/2005 as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures (O.J. No. L368, 23.12.2006, p. 74).

3. Commission Regulation (EC) No. 1320/2006 laying down specific rules to facilitate the transition from the rural development programming under Regulation (EC) No. 1257/1999 and (EC) No. 1268/1999 to that established by Regulation (EC) No. 1698/2005 (O.J. No. L243, 6.9.2006, p. 6).

4. Council Regulation (EC) No. 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (O.J. No. L209, 11.8.2005, p. 1).

5. Commission Regulation (EC) No. 885/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and the EAFRD (O.J. No. L171, 23.6.2006, p. 90).

6. Commission Regulation (EC) No. 883/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) No. 1290/2005 as regards the keeping of accounts by the paying agencies, declaration of expenditure and revenue and the conditions for reimbursing expenditure under the EAGF and EAFRD (O.J. No. L171, 23.6.2006, p. 1).

7. Commission Regulation (EC) No. 1481/2006 of 6 September 2006 laying down form and content of the accounting information to be submitted to the Commission for the purpose of the clearance of the accounts of the EAFG and EAFRD as well as for monitoring and forecasting purposes (O.J. No. L276, 7.10.2006, p. 3).

8. Commission Decision of 27 September 2007 approving the Northern Ireland Rural Development Programme – C (2007) 4411.

Explanatory Note

(This note is not part of the Regulations.)

These Regulations, which come into operation on 21st August 2008, supplement in respect of Northern Ireland the Community legislation listed in the Schedule to the Regulations ("the Community legislation"). The Community legislation inter alia provides for support to be paid from the European Agricultural Fund for Rural Development ("Community support") towards investments which contribute to the competitiveness of farm and horticulture businesses in Northern Ireland.

They also implement Article 74(1) of Council Regulation No. 1698/2005 (O.J. No. L277, 21.10.2005, p. 1) ("the Rural Development Regulation") and Article 9(1) of Council Regulation (EC) No.1290/2005 (O.J. No. L209, 11.8.2005, p. 1), which requires Member States to adopt legislative and administrative provisions to ensure that the Community financial interests in relation to expenditure on rural development are effectively protected.

The Regulations operate within the scope of these provisions by enabling Community support to be paid by the Department of Agriculture and Rural Development ("the Department") or its agent in respect of any expenditure it has approved. Such expenditure may be approved if it is eligible for assistance under the Community legislation and is expenditure for which support may be granted pursuant to Articles 20(a)(i) of Council Regulation (EC) No. 1698/2005 (regulations 3 to 5).

The Regulations also provide for the making of claims for, and the payment of, grants following approval (regulations 6 and 7) and also contain provisions creating obligations on those in receipt of grants concerning the provision of information (regulation 8) and record-keeping (regulation 9).

In addition the Regulations confer powers of entry on certain authorised persons, including Officials of the Commission (regulation 10), introduce a system of penalties to be imposed in the event of a breach of obligations by granting the Department various powers to take action, up to and including termination of approval in the event of breaches of the conditions of an approval and in a number of other cases (regulations 11 to 13), provide power to recover interest on sums recovered and that these be to classify sums recovered as a debt (regulations 14 and 15), provide that an agent shall comply with any directions of the Department (regulation 16), provide the Department with power to take action should any agent breach any condition of his authorisation (regulation 17), provide the Department with powers of set-off (regulation 18) and create offences in respect of the furnishing of false information for the purpose of obtaining financial assistance and in respect of obstruction (regulation 19).