9 Penalties for Non Compliance
15.76 The European legislation lays down administrative penalties to be applied in cases of breach of the cross-compliance conditions. An administrative penalty is to be applied ‘where the non-compliance is the result of an act or omission directly attributable to the beneficiary concerned’, and also relates to the agricultural activity of the beneficiary and the area of the beneficiary’s holding.178 The extent of the penalty applied in each case will depend upon whether the breach was intentional or negligent.179 In the case of a first incident of intentional non-compliance, as a general rule 20% of the payments made to the farmer should be deducted or withdrawn.180 In cases of repeat infringements, the penalty can be increased to 100% of all direct payments and can include exclusion from one or more aid schemes for one or more calendar years.
Repeated infringements of the cross-compliance rules could, therefore, in principle result in exclusion from (for example) one or more of the agri-environment schemes funded under Pillar I, as well as from the basic payment. If the breach was due to negligence, the penalty should not exceed 5% (usually a reduction in the grant aid paid under the basic scheme) and in the case of repeated negligent infringements the penalty can be increased to a maximum of 15%.181