Audit on the protection of nature in the Region Lake Neusidl Ferto

Report ID: 2

The nature-protection of the area is basically determined by obligations emerging from international agreements signed by both countries. Among them are the RAMSAR-Convention (“Convention on Wetlands of International Importance, especially as Waterfowl Habitat”), the Convention on Biological Diversity, and the EU-Directives on Bird Protection, respectively Habitat. Lake Neusiedl/Fertő is a frontier water; therefore the provisions of the Helsinki Agreement on cross-border waterways and the protection of international lakes are taken into consideration with special importance.

In the region of Lake Neusiedl/Fertő, on the Hungarian side HUF 14,486.4 million domestic and HUF 1,476.5 million international resources were used for environment and nature protection developments.

Of this, HUF 289.3 million was spent on direct nature protection aims, while the rest served the purposes of traffic developments with a special focus on decreasing air pollution, and the construction of bicycle roads. The shortcoming was observed that the so-called other financial expenditures spent on the audited field, and the expenditures of professional tasks discharged by certain professional bodies, agencies, could not be demonstrated separately.

A recommendation was made to the minister that the accounting of the expenditures going to nature protection be established.

In Hungary, the natural, preservation and surrounding zones of Lake Neusiedl/Fertő were designated, but the list of these was not published in legal regulations; therefore it is not official. In case of the Lake Neusiedl/Fertő area, such legal provisions on increasingly protected and protected areas were applied, that are in line with the international requirements and set out in the law on nature protection.

For the protected areas, management plans valid from 2003 were made, in which the management and cultivation prescriptions were defined by parcel, in accordance with the characteristic features of the land and nature. However, the subsidy necessary for execution and the regulations on indemnification resulting from the restrictions of use are still outstanding. Therefore, the Hungarian State Audit Office has recommended that the government issue the decree on this issue as soon as possible. In its reply the government has indicated that the  preparation of the decree is underway.

Some of the different areas in Austria were clearly determined by law or other regulations. Some other nominations or borders, like the Biosphere Reserve of the UNESCO and the European Biogenetic Reserve could not be empathised at the Government of the Federal State of Burgenland. The cartographic definition of the borders of the RAMSAR protected area was adapted and changed during the audit. The Austrian Court of Audit recommended, to gather all relevant data concerning protected areas and international awards in a single central database. For the sake of juridical guarantee the borders of the different areas should be fixed, updated and defined by the exact borders of the pieces of land. The Government of the Federal State of Burgenland responded, that there were no files about the awards of UNESCO and European Council available, because the Federal State was not involved in the process of nomination.

The demanded update of the borders in the region of Lake Neusiedl/Fertő is in preparation.

The preservation of the protected areas is carried out by the two countries with different methods. On the Hungarian side, the areas have come – through buying-up – under state ownership, and were then utilised in frame of own activity, i.e. agricultural production (animal husbandry, grazing), or leasing out. In frame of safeguarding land for protection purposes, endeavours were made to establish larger, adjoining areas by keeping aspects of economy in mind. In addition to bringing the lands under state management, no other alternative solutions – e.g. renting – have come up. As a result of the decrease of state resources, the rate of buying-up has slowed; therefore a recommendation was made to the minister in charge of environment protection that necessary financial resources should be provided, in order to close the program as soon as possible.

In Austria safeguarding land was done by renting land. For the National Park Neuiedler See–Seewinkel. 9.650 ha were rented from the owners (at the end of 2001). In total there were twelve rent agreements, mainly with interest groups. The Austrian Court of Audit recommended for future contracts to aim at long–term rent agreements.

Besides, a comparison of expected expenses and possible kinds of financing should be made. On the Hungarian side, several developments aimed at the protection of the environment and nature were carried out in the audited region. In the area of reptile-migration, tunnels have been constructed under the motorway running in the area.

Within the framework of mine reconstructions, the revitalisation and restoration of the former open-pit mining areas took place.

The Austrian Court of Audit found out that the actual state of the fishstocks was unsatisfactory due to the distortion of species. The Government of the Federal State of Burgenland reported, that the release of eels (Anguilla anguilla) will be stopped. To protect the fishstocks. Hungarian authorities have submitted a joint project concerning the acquisition of the fishery right.

In consequence of the measures and investments, the quality of water is sufficient; this is checked through continuous water-quality tests, and dredging has been carried out when necessary. As a result of the measures and investments, the habitat of water fauna and flora can be considered secured. The economic use of the salty ponds, that are located in Austrian territory, results in disruption of the natural water management and as a consequence in losses of typical plants and in devastation of the ponds, due to the overwhelming penetration of reed and soil. This endangers the typical fauna of the region.

The Austrian Court of Audit recommended measures for the restitution of ponds. The Government of the Federal State of Burgenland reported the beginning of the restitution of ponds in the National Park, which led to a retreat of reed. Except of singular events there are no more disturbances of the natural water management of the ponds. In addition Beside the Hanság Channel serving the conduct of water from the lake, the Hungarian experts, to maintain and protect the water fauna and flora, have carried out habitat reconstruction covering 430 hectares.

A factor basically influencing the water quality of the lake is the wastewater management of the communities of the area. On the Hungarian side, the channelling of waste waters from the catchment area of the lake – with the exception of three sewage water treatment plants – has practically been solved, the pollution of problematic plants is expected to cease with the investment project due to finish in 2006. The further filtering of pollution will be ensured in the year 2003 by the putting into operation of the two filter-fields established in the cane-field.

For the communities on the western shore of the Lake a central waste water facility was constructed in the community of Schützen am Gebirge. It shall replace the existing nine local facilities.

The quality of reed stock in the Hungarian part of the lake has decreased even though modern equipment – satellite photographs – have been used for the surveillance of its state and quality and the monitoring of the reed harvest. In the interest of professional reed management and the improvement of the quality of the cane-field the management authorities are making efforts to terminate the monopolistic right of usage of reed production. The Hungarian State Audit Office has recommended that the government should issue a decree uniformly regulating reed management.

In Austria there were conflicts of use with agriculture, hunting, fishery and tourism. Drainage in the interest of agriculture has caused the creeping degradation of soil and the salty ponds, due to the continuous loss of salt. A guidance system for visitors, with the indications of requirements and prohibitions, was established only in the National Park. The intensive agricultural use resulted in endangering the typical habitats. Measures for agricultural downgrading, as they are implemented in the National Park, should be extended. Besides, the hunting of waterfowls in a RAMSAR protection area should be scrutinised. Any economic use of the ponds has to be avoided.

In the interest of the preparation of the nature protection measures and decisions, as well as the monitoring of the condition of the region, regular research and monitoring programs are carried out on the lake and in its environment in both countries.

The preparation of a program aimed at the longterm utilisation of the lake has emerged as a central issue. In 2002, the Hungarian National Park – as a result of examinations and professional work – prepared a long-term professional study. In the interest of securing the long-term, unified utilisation of Lake Neusiedl/Fertő, the State Audit Office recommended that the study should be developed into a comprehensive professional and financial project.

In the framework of the EU–initiative INTERREG II two projects were carried out in the Austrian National Park in co-operation with the administration of the Hungarian National Park.

Besides, many research and scientific projects were financed by the Austrian Federal Ministry of Agriculture, Forestry, Environment and Water Management and the Government of the Federal State of Burgenland. The Biological Center Illmitz was also permanently involved in projects of research and monitoring.

The Austrian Court of Audit recommended to develop a concept for research, nature protection and measures of development and to make up a ranking of the planned measures. The Government of the Federal State of Burgenland reported that the Scientific Advisory Board of the Austrian National Park was working on an overall research framework.

Besides, a co–financed project concerning the ponds is planned. In Hungary, the tasks related to the nature protection of Lake Neusiedl/Fertő are carried out by The Ministry of Environmental Protection and Water and its subordinate agencies, while in the Republic of Austria by the Office of the Government of the Federal State Burgenland. The Hungarian and Austrian authorities co-operate within the framework of the Austrian–Hungarian Committee for the National Parks, as well as Austrian–Hungarian Committee for cross border waterbodies. The relationship is outstandingly good, especially in the area of water management, in the framework of which – in addition to data exchange – the water quality is tested continuously and regularly.

The two supreme audit institutions have established in harmony with one another that the results, respectively the acceptance and recognition of the results, prove that the co-operation between Hungary and Austria is excellent both in the field of water issues and the national parks.

Parallel Audit of the Austrian Court of Audit and the Swiss Federal Audit Office - Controll of VAT

Report ID: 3

In a parallel audit the Austrian Court of Audit and the Swiss Federal Audit Office carried out a comparison of VAT inspections in the context of inspections on the premises in both countries. The year 2002 served as the basis for comparison, unless otherwise indicated.

Key Figures

In Switzerland there are approximately 300,000 registered entities liable to pay VAT; in Austria there are more than one million taxable entities. The comparatively high figure in Austria is due to approximately one million small enterprises subject to tax, the figure for these in Switzerland is only 186,600.

In Switzerland 160 inspectors were assigned to the VAT inspections, and they carried out approximately 6,700 audits. In Austria approximately 1,746 inspectors carried out around 42,500 audits, which – with the exception of special audits (Umsatzsteuer–Sonderprüfung) – concerned all attributable federal taxes.

In Switzerland, due to the activities of the inspectors, subsequent claims amounting to approximately EUR 164 million were made.

In Austria external audits led to EUR 1,293 million worth of subsequent tax claims, of which EUR 497 million concerned VAT.

In Switzerland an inspection resulted in a subsequent average VAT claim of approximately EUR 24,600 EUR, while in Austria the total subsequent average claim was approximately EUR 30,400, approximately EUR 11,700 of which was VAT.

In Switzerland, an inspector achieved on average subsequent claims of approximately EUR 1 million per annum, whereas in Austria the activities of an external auditor resulted on average in subsequent tax claims of approximately EUR 0.7 million, of which EUR 0.3 million concerned VAT.

The VAT system is similarly structured in both countries. However, existing differences should be taken into account in interpreting the comparison.

Legislation

The normal tax rate in Austria is 20 %, in Switzerland this is 7.6 %. The annual revenue level at which liability to value–added tax is incurred is considerably higher in Switzerland than in Austria.

This level is EUR 48,585 (CHF 75,000). In Austria tax liability is already incurred by annual revenues of more than EUR 22,000, which ex plains why so many small enterprises in Austria are registered to pay tax.

Organisational structure

In contrast to Switzerland, VAT in Austria is levied and inspected together with income tax and profits tax. 41 regional tax offices have been set up to this end. Monitoring the biggest enterprises is carried out by special organisational units.

The VAT inspections in Switzerland are carried out by the Federal Tax Administration (FTA) in Bern. The inspectors are based all over Switzerland.

Monitoring procedure

In Austria the procedure of a VAT–inspection is regulated in a published service regulation and is transparent for all involved. A concluding discussion on the premises about the results of the external audit is compulsory. The supplementary tax claims are stipulated by decree. Up–to–date controls are carried out using a special method, a special VAT audit (Umsatzsteuer–Sonderprüfung).

In Switzerland general information is published about the procedure concerning VAT inspections. The procedure has been standardized into three types of inspections.

Case selection and allocation

In Austria, tax offices draw up annual audit plans on the basis of three criteria (time, group and individual selection). The cases to be inspected over the coming weeks are assigned by the management.

In Switzerland, an inspector from the Federal Tax Administration receives a list of about 200 enterprises, (criteria–based selection and random selection) for several years, from which inspection cases are selected by the inspector himself. In addition, inspections which are particularly urgent are assigned by the management.

Controlling data

In Austria the relevant controlling data are published annually in a so–called “Anti–Fraud Report“.

In Switzerland there is a minimum of controlling data for internal use.

Value Added Tax Administration

Report ID: 25

This material provides information on the course and results of parallel audit performed by the Supreme Audit Office, Czech Republic and the Supreme Audit Office of the Slovak Republic which was concerned with the area of administration of value added tax and use of the VIES (Value Added Tax Information Exchange System).

In May 2004, the Czech Republic and the Slovak Republic acceded to the European Union and, consequently, income from the value added tax affects not only the State budgets of the two countries, but also the budget of the European Union as a whole. The parallel audit was concerned particularly with the procedure of tax administrators in relation to a review of the value added tax paid within commercial transactions between the individual member countries of the European Union.

Introduction of the VIES system enabled electronic exchange of information on registration of VAT payers in the individual member countries of the European Union and on commercial transactions performed by the VAT payers. Variance between information in the VIES and information stated in a value added tax return submitted by a taxpayer should alert the tax administrator to any suspicious cases and facilitate detection of tax evasions or frauds.

Excise Duty Administration

Report ID: 27

The joint report presents information about the course and result of international cooperation in parallel audits performed by the Supreme Audit Office, the Czech Republic, and the Supreme Audit Office of the Slovak Republic, focused on excise duty administration after the accession of both countries into the European Union.

The cooperation was performed pursuant to the Agreement on Audit Cooperation signed in February 2006.

Parallel audits were chosen with respect to radical changes in the excise duty collection system as a result of the accession of the Czech and Slovak Republic into the EU internal market as of 1 May 2004. The functioning of the EU internal market requires free movement of goods, including excisable goods. The basic principle is to enable circulation of tax-free goods up to the date of their presentation for end use. The new legislation adopted in both countries enables movement of goods under tax supervision under the duty suspension arrangement in accordance with the aforementioned principle. The system imposes high requirements on tax authorities and anticipates mutual cooperation of particular administrative authorities of the Member States in the fight against tax fraud.

The cooperation between the SAO, CR and the SAO SR enabled comparison of legislation governing the field of excise duties in both countries, procedures of the Czech and Slovak Customs Authorities at the start and end of the movement of goods under the duty-suspension arrangement between both countries, registration of movements and also comparison of information exchanged between Customs Authorities under international cooperation.

Report on implementation of the NATURA 2000 NETWORK in Europe

Report ID: 50

Characteristics of the Natura 2000 network

Natura 2000 is an EU wide network of nature protection areas established under the 1992 Habitats Directive.
As stated in the European Commission strategy to protect Europe's most important wildlife areas, the aim of the network is to assure the long-term survival of Europe's most valuable and threatened species and habitats. It comprises Special Areas of Conservation (SAC) designated by Member States under the Habitats Directive, and Special Protection Areas (SPA) designated under the 1979 Birds Directive.

The establishment of protected areas also fulfils a Community obligation under the UN Convention on Biological Diversity.

The selection of Natura 2000 sites is based exclusively on scientific criteria, such as the size and density of populations of target species and the ecological quality and area of target habitat types present on the site.

The Directive does not lay down rules regarding the consultation process to be followed in selecting the
sites. This is for Member States to determine.

The directives do not say how much land and marine areas are to be included in Natura 2000 network. This will depend on the biological richness of the different regions. If, for example, a Member State is particularly rich in specific species and habitats, it is expected to designate sites in proportion to this wealth of biodiversity.

Although the establishment of Natura 2000 is not yet complete, an area equivalent to more than 15% of EU territory has now been proposed for conservation under the network.

Natura 2000 is not a system of strict nature reserves where all human activities are excluded. Human activities can continue on Natura 2000 sites, provided the future management is compatible with the objectives of biodiversity protection.

New activities or developments within Natura 2000 sites are not prohibited a priori, but are to be judged on a case by case basis. Procedure is defined in the Habitats Directive for assessment and subsequent decisions relating to development proposals that are likely to have an impact on designated sites.

Member States must ensure full compliance with the legal requirements of Natura 2000, regardless of whether they are in receipt of structural funds. However, it is particularly important to ensure compliance in situations that involve Community funded programmes.

In the light of this concern the Commission has already informed Member States that failure to present lists of Natura 2000 sites could result in the suspension of payments under certain structural funds programmes.

The threat of suspension of payments from such programmes was a precautionary measure to ensure that
Community funded programmes would not contribute to irreparable damage to sites before they have been officially proposed for protection under Natura 2000 policy.