L 269/10 Official Journal of the European Union 28.9.2006 COMMISSION REGULATION (EC) No 14232006 of 26 September 2006 establishing a mechanism for appropriate measures in the field of agricultural spending in respect of Bulgaria and Romania THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty of Accession of Bulgaria and Romania, and in particular Article 4(3) thereof, Having regard to the Act of Accession of Bulgaria and Romania, and in particular Article 37 thereof, Whereas: 4 According to Article 2 of the Act of Accession, the provisions of the acts adopted by the institutions before accession shall be binding on Bulgaria and Romania and shall apply in those States under the conditions laid down in the Treaties and the aforesaid Act. Article 37 of the Act of Accession enables the Commission to take appropriate measures in case Bulgaria or Romania has failed to implement commitments undertaken in the context of the accession negotiations, causing a serious breach of the functioning of the internal market or an imminent risk of such a breach. Article 17 of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (') requires Member States to set up an inte- grated administration and control system, hereinafter referred to as the TACS. As of their accession, Bulgaria and Romania are required to have an TACS in place in order to control a large part () O L 270, 21.10.2003, p. 1. Regulation as last amended by Commission Regulation (EC) No 29.7.2006, p. 3). 1156/2006 (O] L 208, (6) of the Community’s agricultural support in these States. The Commission has concluded on the basis of infor- mation provided by Bulgaria and Romania until the date of adoption of this Regulation and on the basis of its own inspections that there is a real risk as to the existence and operability of the IACS in these States. Serious deficiencies in the IACS of Bulgaria or Romania would lead to a situation where the payments of agri- cultural support which should be controlled under this system would not or not properly be controlled. There would exist, therefore, a serious risk that producers who are not, either in total or in part, entitled to the agri- cultural support would receive this support, thereby being put in a more favourable position than foreseen in Community legislation. For each of these States ex- penditure for direct payments and rural develop- ment controlled under the IACS will amount to around 80 % of total agricultural expenditure and involve substantial amounts of several hundreds of millions of euro, which demonstrates the importance of a properly functioning IACS for the introduction of the common agricultural policy in the two countries and the good functioning of the Community’s internal market. As the more favourable position in combination with the sums involved is likely to have an effect on trade of agri- cultural products in the internal market, it would cause an imminent risk of a serious breach of the functioning of this market. This risk cannot be properly addressed solely by the application of Articles 17 and 27 of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (?), given the nature of the systems and procedures foreseen in these provisions. It is therefore necessary to have recourse to Article 37 of the Act of Accession allowing the Commission to take the appropriate measures aimed at eliminating the risk. After the accession, both Bulgaria and Romania should, on the basis of a report from an independent body, make a declaration to the Commission stating whether their IACS exists and is operational. In case of deficiencies, these States should remedy the deficiencies immediately. (®» OJ L 209, 11.8.2005, p. 1. Regulation as amended by Regulation (EQ) No 320/2006 (O] L 58, 28.2.2006, p. 42).