25The guidelines for the application of flat-rate corrections had been laid down in Commission Document No VI/5330/97 of 23 December 1997, entitled ‘Guidelines for the calculation of financial consequences when preparing the decision regarding the clearance of the accounts of the EAGGF Guarantee’ (‘Document No VI/5330/97’). Where the information provided by the inquiry did not permit assessment of the losses suffered by the Community on the basis of an extrapolation of those losses, by statistical means or by reference to other verifiable data, a flat-rate correction could be considered. The level of correction applied depended on the seriousness of the deficiencies identified in the performance of the controls. That document stated:‘When one or more key controls are not applied or applied so poorly or so infrequently that they are completely ineffective in determining the eligibility of the claim or preventing irregularity, then a correction of 10% is justified, as it can reasonably be concluded that there was a high risk of wide-spread loss to the [European Agricultural Guidance and Guarantee Fund (EAGGF)].…However, where implementation of the checking system by a Member State has been non-existent or seriously inadequate and there are indications of very frequent irregularities and negligence in combating irregular or fraudulent practices, an adjustment of 25% is justified in so far as it may reasonably be considered that the freedom to submit claims with impunity where there is no entitlement will result in extremely high losses for the EAGGF.’…[Correction flat rates] are to be applied to the remaining expenditure after deduction of excluded amounts in respect of individual files or pursuant to Regulation No 296/96 …’
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