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Breaches and penalties for rural development schemes

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European Commission regulations require reductions and exclusions to be applied if customers do not comply with the agri-environment scheme rules.

If administrative checks or an inspection reveals that you have not complied with scheme rules we are obliged to reduce your payment and apply a penalty. You will be notified in writing if breaches are found. The appropriate levels of reductions and/or exclusions will be determined according to the level of severity, extent and duration, and the number of times a breach occurs and its seriousness. A serious breach may result in your contract being terminated. Serious non-compliance is considered to be the discovery of a third breach of the same type or a breach of the baseline requirements. 

Retrospective penalties must be applied when a breach is discovered. In these cases penalties will be applied to the payment for the year in which the scheme breach occurred and applied back to the beginning of the start of the contract or of the management option using the percentage penalty applicable in the year of the breach. For example, if an inspection identifies damage to habit land, resulting in a 3% penalty in year 2 of the contract, a 3% penalty will be applied to the management payment for year 1 as well as year 2. 

The Welsh Government assesses breaches against the verifiable standards for each scheme. A matrix is used to determine the level of penalty to be applied.