Regulation (EU) 2021/2116 on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013.

This Regulation lays down rules on the financing, management and monitoring of the common agricultural policy (CAP), and in particular on the financing of expenditure under the CAP; the management and control systems to be put in place by the Member States; and clearance and conformity procedures. Article 3 sets out the exemptions in cases of force majeure and exceptional circumstances, such as a severe natural disaster or severe meteorological event gravely affecting the holding.
Chapter I under Title II sets out general provisions on the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) to finance the preparatory, monitoring, administrative and technical support activities, and the evaluation, audit and inspection, required to implement the CAP. The activities include but not limited to: the constitution of greenhouse gas inventories under the United Nations Framework Convention on Climate Change, agri-economic and agri-environmental-climate monitoring of agricultural land use and agricultural land use change and soil health, and assessment of the resilience of agricultural systems and progress towards the achievement of the relevant United Nations Sustainable Development Goals.
Chapter I under Title III lays down provisions for the financial management of the EAGF and EAFRD, and the establishment of a Union agricultural reserve in the EAGF to provide additional support for the agricultural sector for the purpose of market management or stabilisation and to respond promptly in the case of crises affecting the agricultural production or distribution.
Article 59 provides for the protection of the financial interests of the Union by checking the legality and regularity of operations financed by the EAGF and EAFRD; ensuring effective prevention against fraud; preventing, detecting and correcting irregularities and fraud; imposing penalties which are effective, proportionate and dissuasive; and recovering undue payments plus interest and bring legal proceedings to that effect.
Chapter II under Title IV establishes an integrated administration and control system which applies to the area- and animal-based interventions and lays down provisions on the identification system for agricultural parcels, geo-spatial and animal-based application system, area monitoring system, system for the identification of beneficiaries, control and penalty system, and system for the identification and registration of payment entitlements.
Chapter V under Title IV sets out rules regarding the control and enforcement systems in the field of social and employment legislation and applicable labour standards and the application of administrative penalties to beneficiaries who do not comply with the rules on social conditionality listed in Annex IV to that Regulation.