Article 39

Financial corrections 1. The Member States shall, in the first instance, bear the responsibility for investigating irregularities, acting upon evidence of any major change affecting the nature or conditions for the implementation or supervision of assistance and making the financial corrections required. The Member State shall make the financial corrections required in connection with the individual or systemic irregularity. The corrections made by the Member State shall consist in cancelling all or part of the Community contribution. The Community funds released in this way may be re-used by the Member State for the assistance concerned, in compliance with the arrangements to be defined pursuant to Article 53(2). 2. If, after completing the necessary verifications, the Commission concludes that: a Member State has not complied with its obligations under paragraph 1; or all or part of an operation justifies neither part nor the whole of the contribution from the Funds; or there are serious failings in the management or control systems which could lead to systemic irregularities; the Commission shall suspend the interim payments in question and, stating its reasons, request that the Member State submit its comments and, where appropriate, carry out any corrections, within a specified period of time. If the Member State objects to the observations made by the Commission, the Member State shall be invited to a hearing by the Commission, in which both sides in cooperation based on the partnership make efforts to reach an agreement about the observations and the conclusions to be drawn from them. 3. At the end of the period set by the Commission, the Commission may, if no agreement has been reached and the Member State has not made the corrections and taking account of any comments made by the Member State, decide within three months to: reduce the payment on account referred to in Article 32(2); or make the financial corrections required by cancelling all or part of the contribution of the Funds to the assistance concerned. The Commission shall when deciding the amount of a correction take account, in compliance with the principle of proportionality, of the type of irregularity or change and the extent and financial implications of the shortcomings found in the management or control systems of the Member States. In the absence of a decision to do either (a) or (b) the interim payments shall immediately cease to be suspended. 4. Any sum received unduly and to be recovered shall be repaid to the Commission, together with interest on account of late payment. 5. This Article shall apply without prejudice to Article 32. CHAPTER III EVALUATION

Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for… (EU) — sign in to see which provisions, and what they say.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-08 · Text as adopted (Official Journal); later amendments are not incorporated in this text.