Sir, - Deputy O'Malley (January 28th) is correct in stating that in October 1992, the European Commission expressed concern about the format of some Bureau Veritas certificates which had been accepted by the Department of Agriculture as proof of import for export refund purposes.
However these certificates, which were in respect of trade in 1989, had been accepted in 1990 and by 1992 all of the relevant files had been processed and almost all of the related securities had been released. The Commission can, and does, impose disallowances on Member States on grounds of delay in processing claims under the market support schemes. Furthermore, this was not a generalised reservation about proofs from this agency. It was specific to particular transactions in respect of which information held in the agency's headquarters in Paris could not be verified from local records at point of import, as these had been destroyed.
Under the export refund system, a very considerable number and variety of imports proof documents from customs services and agencies around the world are received by this Department. The acceptability or otherwise of these documents must be judged on a case by case basis and there are few hard and fast rules upon which to rely. It is only at a stage when decisions have been made and acted upon that the Commission auditors pass their own judgement on the decisions taken, and can impose disallowances. By this time there is generally no legal recourse against the exporter.
This system has caused problems for most Member States, particularly in the early 1990s - in those years alone, Germany, France, Netherlands, Denmark, Belgium, Greece and Spain as well as Ireland suffered disallowances related specifically to import proof issues. Indeed, under the 1991 clearance of accounts procedure (the relevant year for these disallowances, which were not finalised by the Commission until the end of 1994), Ireland suffered less than 0.5 per cent of the total disallowance imposed by the Commission in the agriculture sector.
In recognition of the difficulties caused by this system of post factum auditing, the Commission has now moved towards the establishment of more permanent systems audits and it is also more willing to give guidance as regards individual proof formats in advance. Beef export refund disallowances for Ireland for 1992 amounted to just £76,000 out of an expenditure of £124 million - 0.06 per cent of the total. Following a more recent intensive systems audit of prefinanced beef export refund expenditure amounting to £428 million, indications from the Commission are that no disallowances are to be proposed.
In relation to other points raised by Deputy O'Malley's letter, I should add that there was not just one but eight beneficiaries of the export refunds in question. Furthermore, the £17 million of securities referred to were released with the agreement of the Commission following recovery of £7.3 million from the exporter concerned, and this amount has been paid in full. It is not correct to state that the £17 million released was based on Bureau Veritas certification - the vast bulk of securities released were based on proof documents not issued by Bureau Veritas. - Yours, etc.,
Information Officer,
Department of Agriculture,
Food and Forestry,
Kildare Street,
Dublin 2.