Under the EU Regulations governing all area-based payment schemes, a comprehensive administrative check of all applications, including cross-checks with the Land Parcel Identification System, must be completed before any AEOS payment can issue. Successive EU audits have made it absolutely clear that compliance with the Regulations must be strictly adhered to and that all administrative checks must be passed and eligibility conditions met before payment issues. As a result, my Department is obliged to ensure that individual payments will not issue until all aspects of a farmer's application are in order, all outstanding documentation provided and all queries resolved. When a person is found to be in breach of the Terms and Conditions of the scheme a penalty will be applied to their AEOS application. Penalties can be applied to AEOS applications for a number of reasons including non compliances with the terms and conditions of the scheme following on farm inspections, area over declarations and SPS penalties which can cross over to AEOS applications. Payments on penalty cases under AEOS 1 and 2 are nearing completion and officials in my Department are currently finalising penalty cases with the intention of completing outstanding cases as soon as possible.