Vol. 521 No. 6
7 Mr. Stagg asked the Minister for Agriculture, Food and Rural Development his views on whether Irish authorities failed to insist on a proper investigation into claims of major fraud over the delivery of Irish butter to Eastern Europe in the early 1990s; if implications will arise in this regard; and if he will make a statement on the matter. [17789/00]
I assume the Deputy is referring to the purchase by a French company in 1991 of 6,750 tonnes of Irish intervention butter for sale in the former Soviet Union. It was subsequently discovered that the butter had been diverted to the Polish market in breach of the conditions of sale. The matter was the subject of an investigation by a mission from the European Commission in 1992. Following consideration of the report of the investigation by the EU Commission, the Commission indicated that the Department of Agriculture, Food and Rural Development should apply a forfeiture of three million ecu from the security being held as a penalty for the non-performance of the conditions of sale. My Department, accordingly, applied this penalty.
This matter was the subject of a recent report by the European Court of Auditors. No further action is required by my Department.
Is the Minister satisfied that Irish authorities have complied fully with all requests from the EU on this allegation of fraud?
I am satisfied. This related to the sale of butter to Russia which was diverted to Poland. A French company, Flechard SA, tendered for and purchased the butter. I am further informed there was no loss of funds to the Irish or EU authorities. A fine was imposed on the company, as it did not meet the requirements set down.
Was an Irish investigation conducted into this matter or a report commissioned on it?
This investigation was carried out by the European Commission. The Irish authorities, namely, Customs and Excise, co-operated fully with the investigation.
Has this incident damaged the reputation of the quality of our butter? This was a serious incident. Did we conduct a separate investigation into this matter? We should not depend on the EU to carry out an investigation into this matter for us.
This matter relates to an EU scheme under which butter was to be supplied to the Soviet Union, but it was diverted to Poland. The EU subsidises that scheme and it carried out an investigation into that matter. There was full co-operation and compliance with that investigation. A fine was levied on the company concerned and it was paid. It involved no loss to our Exchequer or to EU funds.
Is the Minister satisfied that Irish and EU procedures are in place to ensure such an event could not recur?
Following my inquiries into the matter, I am satisfied from the Irish side that every possible precaution is taken. Our experience with the EU and its Court of Auditors and auditing system is that it is overly supervisory. From time to time I get a great deal of criticism about EU payments, inspections, audits and so on. There are two or three inspections and there are spot checks. There is a tremendous degree of accountability there, which is right and proper, but at the same time one wants to run schemes smoothly and so far as farmers are concerned, one does not want to over penalise or over inspect them. I am satisfied there are adequate safeguards in relation to these schemes now.
