WORLD TRADE  
ORGANIZATION  WT/DS265/35/Add.1 
WT/DS266/35/Add.1 
WT/DS283/16/Add.1 
2 June 2006 
 
 (06-2646) 
 Original:  English/ 
                French/ 
                Spanish 
    
EUROPEAN COMMUNITIES – EX PORT SUBSIDIES ON SUGAR 
 
Status Report by the European Communities
 
 
Addendum  
 
 
 The following communication, dated 24 May 2006, from the delegation of the European Communities to the Chairman of the Dispute Settleme nt Body, is circulated pursuant to Article 21.6 
of the DSU.  
_______________ 
 
   
Status Report Regarding Implementation of the
 
DSB Recommendations and Rulings in the Dispute  
European Communities – Export Subsidies on Sugar  
(WT/DS265, WT/DS266, WT/DS283)  
   The European Communities submits this second report in accordance with Article 21.6 of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"). A first 
status report was submitted on 5 May 2006.   On 19 May 2005 the Dispute Settlement Body (t he "DSB") adopted the Panel and Appellate 
Body Reports in European Communities – Export Subsidies on Sugar .   
 
 On 28 October 2005 the arbitrator acting under Article 21.3(c) of the DSU determined the 
“reasonable period of time” for the European Co mmunities to implement the recommendations and 
rulings of the DSB to be 12 months and 3 days, thus expiring on 22 May 2006.  
 
 Council Regulation (EC) No 318/2006 of 20 February 2006  on the common organization of 
the markets in the sugar sector  sets out the framework for a comp rehensive reform of the EU sugar 
sector. The sugar reform is expected to bring dow n the EU support price by 36%, EU production by 
8 million tons and exports by more than 5 million t ons.  In a similar fashion to the provision of 
Article 27(14) of Regulation (EC) 1260/2001 in relation to exports with refunds, Article 34 of 
Regulation (EC) No 318/2006 provides for the respect  of commitments in relation to all exports on 
the basis of export licences issued for the relevant marketing years. This regulation no longer requires 
C sugar (now termed "out-of quo ta sugar") to be exported. WT/DS265/35/Add.1 
WT/DS266/35/Add.1 WT/DS283/16/Add.1 
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    Regulation (EC) No 318/2006 also gives the necessary powers to the Commission to adopt 
the relevant implementing and transitional measures in ter alia to ensure compliance for the purpose of 
this dispute. Article 44(b) provides in particular for transitional measures to ensure compliance with 
international obligations in rela tion to C sugar referred to in  Article 13 of Regulation (EC) 
No 1260/2001.    Following the discontinuation of the obligation to  export provided in Article 13 of Regulation 
(EC) No 1260/2001, Commission Regulation (EC) No 493/2006 of 27 March 2006 laying down 
transitional measures within the framework of the reform of the common organization of the markets 
in the sugar sector, and amending Regulatio n (EC) No 1265/2001 and (EC) No 314/2002  allows for 
carrying forward of C sugar to the 2006/2007 marketi ng year and provides that the remaining C sugar 
shall be considered as out-of-quota sugar for the ma rketing year 2006/2007 and thus subject to a 
surplus amount if not used in accordance w ith Article 12 of Regulation (EC) No 318/2006. 
 
 In addition, Commission Regulation (EC) No 769/2006 of 19 May 2006 suspending the 
lodging of applications for export licences fo r C sugar from 23 May 2006 and amending Regulation 
(EC) No 493/2006 as regards the transitional measures applicable to C sugar  allows for the return of 
export licences for C sugar issued but not used by 22 May 2006 and suspends further issuance of 
export licences for C sugar from 23 May 2006.   
 
 On the basis of the above legal provisions, the European Communities is now in a position to 
maintain its subsidized exports of sugar with in its commitments as from the marketing year 
2006/2007, as well as applied on a pro rata basis for the remaining of the marketing year 2005/2006.     
 The European Communities has thus fully complied with the DSB rulings and 
recommendations in this dispute within the reas onable period of time specified for this purpose. 
  WT/DS265/35Add.1 
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COUNCIL REGULATION (EC) No 318/2006 
of 20 February 2006 
on the common organisation of the markets in the sugar sector 
 
 
 
THE COUNCIL OF THE EUROPEAN UNION,  
Having regard to the Treaty establishing the Europe an Community, and in particular Article 36 and 
the third subparagraph of Article 37(2) thereof, 
 
Having regard to the proposal from the Commission, 
 
Having regard to the Opinion from the European Parliament
1, 
 
Having regard to the Opinion from the Eu ropean Economic and Social Committee2, 
 Whereas: 
 
(1) The operation and development of the common market for agricultural products should be 
accompanied by the establishment of a common agri cultural policy to include, in particular, a 
common organisation of agricultural markets wh ich may take various forms depending on the 
product. 
 
(2)  The sugar market in the Community is b ased on principles which for other common market 
organisations have been substantially reformed  in the past. In order to pursue the objectives 
set out in Article 33 of the Treaty, and notably in  order to stabilise the markets and to ensure a 
fair standard of living for the agricultural commun ity within the sugar sector, it is necessary to 
fundamentally review the common organisation of the market in the sugar sector. 
 
(3)  In the light of these developments, Counc il Regulation (EC) No 1260/2001 of 19 June 2001 
on the common organisation of the markets in the sugar sector 
3 should be repealed and 
replaced by a new Regulation. 
 (4)  Reference prices should be fixed for standa rd qualities of white sugar and raw sugar. Such 
standard qualities should be average qualities representative of sugar produced in the 
Community and defined on the basis of criteria used by the sugar trade. It should also be possible to review the standard qualities to take account, in particular, of commercial 
requirements and developments in technical analysis. 
 (5)  In order to achieve reliable information on Community market prices for sugar, a price 
reporting system should be set up on the basis of  which market price levels for white sugar 
should be determined. 
 
                                                     
 
 1 Opinion delivered on 19 January 2006 (not yet published in the Official Journal).  
2 Opinion delivered on 26 October 2005 (not yet published in the Official Journal) . 
3 OJ L 178, 30.6.2001, p. 1. Regulation as last amended by Commission Regulation (EC) No 39/2004 
(OJ L 6, 10.1.2004, p. 16).  
 WT/DS265/35/Add.1 
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   (6)  A minimum price should be fixed for quota beet corresponding to a standard quality which 
should be defined, in order to ensure a fair standard of living for the Community growers of 
sugar beet and sugar cane. 
 
(7)  Specific instruments are need ed to ensure a fair balance of rights and obligations between 
sugar undertakings and sugar beet growers. Th erefore, standard provisions should be laid 
down to govern the contractual relations betw een buyers and sellers of sugar beet. The 
diversity of natural, economic and technical situations makes it difficult to provide for 
uniform purchase terms for sugar beet throughout the Community. Agreements within the trade already exist between associations of  sugar beet growers and sugar undertakings. 
Therefore, framework provisions should onl y define the minimum guarantees required by 
both sugar beet growers and the sugar industry to ensure a smooth functioning of the sugar 
market with the possibility to derogate from some  rules in the context of an agreement within 
the trade. 
 (8)  The reasons which in the past led the Community to adopt a production quota system for 
sugar, isoglucose and inulin syrup still remain valid. However, due to developments within 
the Community and internationally, it is necessar y to adjust the production system in order to 
provide for new arrangements and reductions of  the quotas. In line with the previous quota 
system, a Member State should allocate quotas to the undertakings established within its 
territory. The new common organisation of the markets in the sugar sector should maintain the legal status of the quotas in so far as, accordi ng to the case-law of the Court of Justice, the 
system of quotas constitutes a mechanism for regul ating the market in the sugar sector which 
aims to ensure the attainment of public interest objectives. 
 
(9)  Following the recent decisions on export subs idies of the World Trade Organisation Panel and 
the Appellate Body on EU export subsidies for sugar and in order for Community operators to 
ensure a smooth change-over from the previous quota system to the present system, it should 
be possible during the marketing year 2006/2007 for sugar undertakings to be allocated an additional quota under conditions that take into account the lower value of C sugar. 
 
(10)  To counterbalance the effects on isoglucose of the fall in sugar prices, as well as to avoid 
penalizing the production of some  isoglucose qualities, additional quotas should be allocated 
to the current isoglucose beneficiaries. More over, supplementary quotas should be available 
for adjustments of the sweet eners sector of some Member States under the conditions 
provided for granting additional sugar quota. 
 
(11)  To ensure that the Community’s production of sugar, isoglucose and inulin syrup is reduced 
sufficiently, the Commission should be entitled to ad just the quotas to a sustainable level after 
the termination of the restructuring fund in 2010. 
 
(12)  Given the need to allow for a certain na tional flexibility in relation to the structural 
adjustment of the processing industry and of beet and cane growing during the period in which the quotas are to be applied, Member St ates should be allowed to alter the quotas of 
undertakings within certain limits whilst not restricting the operation of the restructuring fund 
established by Council Regulation (EC) No 320/ 2006 of 20 February 2006 establishing a 
temporary scheme for the restructuring of the sugar industry in the Community 
4 as an 
instrument. 
 
                                                      
4 See page 42 of this Official Journal.   WT/DS265/35Add.1 
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   (13)  The sugar quotas are allocated or reduced follo wing a merger or transfer of undertakings, the 
transfer of a factory, or the lease of a fact ory. The conditions for adjustment by the Member 
States of the quotas of the undertakings in question should be established while ensuring that 
changes to the quotas of sugar undertakings are not  detrimental to the interests of the beet 
growers or cane growers concerned. 
 (14)  Since allocating quota production to undertak ings is a way of ensuring that sugar beet and 
cane growers are paid Community prices and have  an outlet for their production, the interests 
of all parties concerned, in particular b eet and cane growers, should be taken into 
consideration when quotas are transferred inside production regions. 
 
(15)  To expand the outlets for sugar, isogluco se and inulin syrup on the Community’s internal 
market, it should be possible to consider s ugar, isoglucose and inulin syrup used for 
manufacture in the Community of certain produc ts such as chemical, pharmaceutical, alcohol 
or rum, as out-of-quota production unde r conditions to be laid down. 
 
(16)  A part of the out of quota production should be used to ensure the adequate supply to the 
outermost regions or could be exported under the Community’s WTO commitments. 
 
(17)  Should the production of sugar, isoglucose or inulin syrup exceed the quotas, it should be 
possible to provide for a mechanism to carry fo rward the surplus sugar, isoglucose or inulin 
syrup to be treated as quota production of the following marketing year, in order to avoid the 
surplus sugar distorting the sugar market. 
 
(18)  Certain mechanisms are available for out of quota production.  If, for certain quantities, the 
applicable conditions are not met, a levy on the surplus should be imposed in order to avoid the accumulation of these quantities thr eatening the market situation. 
 
(19)  A production charge should be introduced to contribute to the financing of the expenditure 
occurring under the common organisation of the markets in the sugar sector. 
 
(20)  In order to provide for an efficient cont rol of the production of ope rators producing sugar, 
isoglucose or inulin syrup, an approval sy stem for operators should be established and 
detailed information in relati on to their production should be submitted to the Member State 
concerned. 
 
(21)  A temporary and limited buying-in interventi on system should be kept in place in order to 
contribute to stabilising the market for cases wher e market prices in a given marketing year 
would fall below the reference price fi xed for the following marketing year. 
 
(22)  New market tools to be managed by the Commission should be introduced. Firstly, if market 
prices fall below the reference price for white s ugar, it should be possible for operators, under 
conditions to be determined by the Commission,  to benefit from a private storage scheme. 
Secondly, to maintain the structural balance of the markets in sugar at a price level close to 
the reference price, it should be possible for the Commission to decide to withdraw sugar 
from the market for as long as it tak es for the market to rebalance. 
 
(23)  The creation of a single Community market for sugar involves the introduction of a trading 
system at the external borders of the Community. That trading system should include import duties and export refunds and should, in prin ciple, stabilise the Community market. The WT/DS265/35/Add.1 
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   trading system should be based on the undert akings accepted under the Uruguay Round of 
multilateral trade negotiations.  
 
(24)  In order to monitor the volume in trade in sugar with third countries, provision should be 
made for an import and export licence scheme with the lodging of a security to ensure that the 
transactions for which such licences are issued are actually carried out.  
 
(25)  To ensure that those trading arrangement s can function properly, provision should be made 
for regulating or, when the situation on the mark et so requires, prohibiting the use of inward 
processing arrangements.  
 
(26)  The customs duty system makes it possible to  dispense with all other protective measures at 
the external frontiers of the Community. The in ternal market and duty mechanism could, in 
exceptional circumstances, prove to be inadequa te. In such cases, in order not to leave the 
Community market without defence against dist urbances that might ensue, the Community 
should be able to take all necessary measures without delay. Such measures should comply 
with the international commi tments of the Community.  
 (27)  For the most part, the customs duties app licable to agricultural products under the WTO 
agreements are laid down in the common custom s tariff. However, for some products falling 
within the scope of this Regulation, the introduction of additional mechanisms makes it 
necessary to provide for the possibility to adopt derogations.  
 
(28)  In order to prevent or counteract advers e effects on the Community market which could result 
from imports of certain agricultural products, im ports of such products should be subject to 
payment of an additional duty, if certain conditions are fulfilled.  
 
(29)  It is appropriate, under certain conditions, to confer on the Commission the power to open and 
administer tariff quotas resulting from internati onal agreements concluded in accordance with 
the Treaty or from other acts of the Council.  
 
(30)  The Community has several preferential market access arrangements with third countries 
which allow those countries to export cane sugar to the Community under favourable 
conditions. Therefore, it is necessary to evaluate  refiners’ need for sugar for refining and, 
under certain conditions, to reserve import licences to specialised users of notable quantities of imported raw cane sugar, deemed as bei ng full-time refiners in the Community.  
 
(31)  Provisions for granting refunds on exports to  third countries, based on the difference between 
prices within the Community and on the world mark et, and falling within the limits set by the 
EC’s commitments in the WTO, should serve to safeguard the possible Community 
participation in international trade in sugar. S ubsidised exports should be subject to limits in 
terms of quantity and budgetary outlay.  
 (32)  Compliance with the limits in terms of va lue should be ensured at the time when the export 
refunds are fixed through the monitoring of payments under the rules relating to the European 
Agricultural Guidance and Guarantee Fund. Moni toring can be facilitated by the compulsory 
advance fixing of export refunds, while allowing the possibility, in the case of differentiated 
refunds, of changing the specified destination within a geographical area to which a single 
export refund rate applies. In the case of a cha nge of destination, the export refund applicable 
to the actual destination should be paid, with  a ceiling of the amount applicable to the 
destination fixed in advance.   WT/DS265/35Add.1 
 WT/DS266/35/Add.1 
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   (33)  Compliance with the quantity limits should be ensured by a reliable and effective system of 
monitoring. To that end, the granting of expor t refunds should be made  subject to an export 
licence. Export refunds should be granted up to the limits available, depending on the 
particular situation of each product concerned. Exceptions to that ru le should be permitted 
only for processed products not listed in Annex I to the Treaty, to which volume limits do not 
apply. Provision should be made for deroga ting from strict compliance with management 
rules where exports benefiting from export refunds  are not likely to exceed the quantity laid 
down.  
 (34)  The proper working of the single market based on common prices would be jeopardised by 
the granting of national aid. Therefore, the provisions of the Treaty governing State aid 
should apply to the products covered by this co mmon market organisation. However, with a 
view to attenuating the effects the reform of the sugar sector is expected to have in certain 
circumstances the granting of certain  State aid should be allowed.  
 (35)  In Member States with a significant reduc tion of sugar quota sugar beet producers will face 
particularly severe adaptation problems. In su ch cases the transitional Community aid to sugar 
beet growers will not suffice to fully address the beet growers’ difficulties. Therefore, 
Member States having reduced their quota by more than 50 % should be authorised to grant 
State aid to sugar beet growers during the application period of the transitional Community 
aid. To avoid Member States granting State aid exceeding the needs of their sugar beet growers the determination of the total amount of the State aid concerned should be made 
subject to Commission approval, except in the case of Italy where the maximum need for 
most productive sugar beet to adapt to the market  conditions after the re form can be estimated 
at EUR 11 per tonne of sugar beet produced. Moreover, due to the particular problems 
expected to arise in Italy provision should be  made for arrangement s allowing sugar beet 
growers to benefit directly or indirectly from  the State aid granted. 28.2.2006 EN Official 
Journal of the European Union L 58/3  
 (36)  In Finland sugar beet growing is subject to particular geographical  and climatic conditions 
which will adversely affect the growing beyond the general effects of the sugar reform. For 
this reason provision should be made for author ising that Member State on a permanent basis 
to grant its sugar beet growers an adequate amount of State aid.  
 
(37)  It is appropriate to provide for measures to be taken when a substantial rise or fall in prices 
disturbs or threatens to disturb the Comm unity market. These measures may include the 
opening of a quota at reduced tariff for imports of sugar from the world market for the time 
necessary.  
 
(38)  Since the common market in sugar is c ontinuously evolving, the Member States and the 
Commission should keep each informed of relevant developments.  
 
(39)  The measures necessary for the implementation of this Regulation should be adopted in 
accordance with Council Decision 1999/468/EC of  28 June 1999 laying down the procedures 
for the exercise of implementing powers conferred on the Commission
5.  
 (40)  The Commission should be authorised to a dopt necessary measures to solve specific practical 
problems in case of emergency.  
 
                                                     
 
5 OJ L 184, 17.7.1999, p. 23.  WT/DS265/35/Add.1 
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   (41)  The characteristics of sugar production in the outermost regions of the Community 
distinguish that production from sugar production in the rest of the Community. Financial 
support should therefore be given to the sector by allocating resources to farmers in those 
regions after the entry into force of the support programmes to assist local production which 
Member States draw up under Council Regula tion (EC) No 247/2006 of 30 January 2006 
laying down specific measures for agriculture in the outer most regions of the Union
6. For the 
same reason, France should be authorised to gran t a fixed amount of State aid to its outermost 
regions.  
 (42)  Expenditure incurred by the Member States as a result of the obligations arising from the 
application of this Regulation should be fi nanced by the Commun ity in accordance with 
Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common 
agricultural policy
7, and, as from 1 January 2007 in acco rdance with Council Regulation (EC) 
No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy.  
 (43)  The change-over from the arrangements in Regulation (EC) No 1260/2001 to those provided 
for in this Regulation as well as the change-ove r from the market situation in the marketing 
year 2005/2006 to the market situation in the marketing year 2006/2007 and in order to ensure 
compliance by the Community with its interna tional commitments with regard to C sugar 
referred to in Article 13 of Regulation (EC) No 1260/2001 could give rise to difficulties 
which are not dealt with in this Regulation. In order to deal with such difficulties, the 
Commission should be enabled to adopt transitional measures,  
 
HAS ADOPTED THIS REGULATION: 
 
                                                     
 
6 OJ L 42, 14.2.2006, p. 1. 
7 OJ L 160, 26.6.1999, p. 103.  Regulation as repealed by Regulation (EC) N° 1290/2005 OJ L 209, 
11.8.2005, p. 1.  WT/DS265/35Add.1 
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TITLE I 
 
SCOPE AND DEFINITIONS 
 
 
Article 1 
 
Scope 
 
1. The common organisation of the markets in the sugar sector established by this Regulation shall 
cover the following products:  
CN Code Description 
(a) 1212 91 
 1212 99 20 Sugar beet 
 Sugar cane 
 
(b) 1701 Cane or beet sugar and chemically purse sucrose, in 
solid form 
(c) 
 
 
 
 
  
 
  
 
  1702 20 
 
1702 60 95 
and 
1702 90 99 
  
1702 90 60 
  
1702 90 71 
  
2106 90 59 Maple sugar and maple syrup 
 
Other sugars in solid fo rm and sugar syrups, not 
containing added flavouring or colouring matter, but 
not including lactose, glucose, maltodextrine and 
isoglucose  
Artificial honey, whether or  not mixed with natural 
honey  
Caramel containing 50 % or more by weight of 
sucrose in the dry matter  
Flavoured or coloured isoglucose syrups (h) 2303 20 
Beet pulp, bagasse and other waste of sugar undertakings 
 
 
(d) 1702 30 10  
1702 40 10  
1702 60 10  
702 90 30 Isoglucose 
(e) 1702 60 80  
1702 90 80 Inulin syrup 
 
 
(f) 1703 Molasses resulting from the extraction or refining of 
sugar 
(g) 2106 90 30 Flavoured or coloured isoglucose syrups 
(h) 2303 20 Beet pulp, bagasse and other waste of sugar 
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    2.  The marketing year for the products listed in  paragraph 1 shall begin on 1 October and end on 
30 September of the following year.  
 
However, the marketing year 2006/2007 shall begin on 1 July 2006 and end on 30 September 2007. 
 
 
Article 2 
 
Definitions 
 
 For the purposes of this Regulation, th e following definitions shall apply:  
 
1)  ‘white sugars’ means suga rs, not flavoured or coloured or containing any other added 
substances, containing, in the dry state, 99,5 % or more by weight of sucrose, determined by 
the polarimetric method;  
 
2)  ‘raw sugars’ means sugars, not flavoured or coloured or containing any other added 
substances, containing, in the dry state, less than  99,5 % by weight of sucrose, determined by 
the polarimetric method;  
 3)  ‘isoglucose’ means the product obtained fro m glucose or its polymers with a content by 
weight in the dry state of at least 10 % fructose;  
 
4)  ‘inulin syrup’ means the immediate product obtained by hydrolysis of inulin or 
oligofructoses, containing in the dry state at least 10 % fructose in free form or as sucrose, 
and expressed as sugar/isoglucose equivalents. In order to avoid restrictions on the market for 
products with low sweetening power produced by inulin fibre processors without inulin syrup 
quota, this definition may be amended in accordan ce with the procedure referred to in Article 
39(2);  
 
5)  ‘quota sugar’, ‘quota isoglucose’ and ‘quota inulin syrup’ mean any quantity of sugar, 
isoglucose or inulin syrup production attributed to a specific marketing year under the quota 
of the undertaking concerned;  
 6)  ‘industrial sugar’ means any quantity of suga r production attributed to a specific marketing 
year over and above the sugar quantity referred to  in point (5), intended for the production by 
the industry of one of the products  referred to in Article 13(2);  
 
7)  ‘industrial isoglucose’ and ‘i ndustrial inulin syrup’ mean any quantity of isoglucose or inulin 
syrup production attributed to a specific marketing year, intended for the production by the 
industry of one of the products referred to in Article 13(2);  
 8)  ‘surplus sugar’, ‘surplus is oglucose’ and ‘surplus inulin syru p’ mean any quantity of sugar, 
isoglucose or inulin syrup production attributed  to a specific marketing year over and above 
the respective quantities referred to in points (5), (6) and (7);  
 
9)  ‘quota beet’ means all sugar beet processed into quota sugar;  
 10)  ‘delivery contract’ means a contract conc luded between a seller and an undertaking for the 
delivery of beet for the manufacture of sugar;   WT/DS265/35Add.1 
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11)  ‘agreement within the trad e’ means one of the following:  
 
 (a)  an agreement concluded at Community le vel, prior to the conclusion of any delivery 
contract, between a group of national undert akings’ organisations on the one hand 
and a group of national sellers’ organisations on the other;  
 
 (b)  an agreement concluded, prior to th e conclusion of any delivery contract, between 
undertakings or an undertakings’ organisation recognised by the Member State concerned on the one hand and a sellers’ association recognised by the Member State 
concerned on the other;  
  (c)  in the absence of any agreement as refe rred to in point (a) or (b), the law on 
companies and the law on cooperatives, in so far as they govern the delivery of sugar 
beet by the shareholders or members of a company or cooperative manufacturing sugar;  
 
 (d)  in the absence of any agreement as refe rred to in point (a) or  (b), the arrangements 
existing before the conclusion of any deliver y contract, provided the sellers accepting 
the arrangement supply at least 60 % of th e total beet bought by the undertaking for 
the manufacture of sugar in one or more factories;  
 
12) ‘ACP/Indian sugar’ means sugar falling within  CN code 1701 originating in the States listed 
in Annex VI and imported into the Community under:  
 
 —  Protocol 3 to Annex V to th e ACP-EC Partnership Agreement,  
 
 or  
  —  the Agreement on cane sugar between th e European Community and the Republic of 
India
8; 
  13) ‘full-time refiner’ means a production unit:  
 
 —  of which the sole activity consists  of refining imported raw cane sugar,  
 
 or  
  —  which refined in the marketing year 2004/2005 a quantity of at least 15 000 tonnes of 
  imported raw cane sugar.  
 
 
 
                                                     
 
8 OJ L 190, 23.7.1975, p. 36. WT/DS265/35/Add.1 
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   TITLE II 
 
INTERNAL MARKET 
 
 
CHAPTER 1 
 
Prices 
  
Article 3 
 
Reference prices 
 1. For white sugar, the reference price shall be:  
 
(a)  EUR 631,9 per tonne for each of the marketing years 2006/2007 and 2007/2008;  
 (b)  EUR 541,5 per tonne for the marketing year 2008/2009;  
 
(c)  EUR 404,4 per tonne as from the marketing year 2009/2010.   
2. For raw sugar, the reference price shall be:  
 
(a)  EUR 496,8 per tonne for each of the marketing years 2006/2007 and 2007/2008;  
 (b)  EUR 448,8 per tonne for the marketing year 2008/2009;  
 
(c)  EUR 335,2 per tonne as from marketing year 2009/2010.   
3.  The reference prices referred to in paragra phs 1 and 2 shall apply to  unpacked sugar, ex 
factory. They shall apply to white sugar and raw s ugar of the standard quality described in Annex I.  
 
 
Article 4 
 
Price reporting 
  
The Commission shall set up an information system on prices in the sugar market, including a system 
for the publication of price levels for the sugar market.  
 
The system shall be based on information submitte d by undertakings producing white sugar or by 
other operators involved in the sugar trade. This in formation shall be treated with confidentiality. The 
Commission shall ensure that the information publ ished shall not permit to identify the prices of 
individual undertakings or operators.   
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   Article 5 
 
Minimum beet price 
 
 
1. The minimum price for quota beet shall be:  
 
(a)  EUR 32,86 per tonne for the marketing year 2006/2007;  
 (b)  EUR 29,78 per tonne for the marketing year 2007/2008;  
 
(c)  EUR 27,83 per tonne for the marketing year 2008/2009;   
(d)  EUR 26,29 per tonne as from the marketing year 2009/2010.  
 2.  The minimum price referred to in paragraph 1 shall apply to sugar beet  of the standard quality 
described in Annex I.  
 3.  Sugar undertakings buying quota beet suita ble for processing into sugar and intended for 
processing into quota sugar shall be  required to pay at least the minimum price, adjusted by price 
increases or reductions to allow for deviations from the standard quality.   
4.  For the quantities of sugar beet corresponding  to the quantities of industrial sugar or surplus 
sugar that are subject to the surplus amount pr ovided for in Article 15, the sugar undertaking 
concerned shall adjust the purchase price so that it is at least equal to the minimum price for quota 
beet.   
 
Article 6 
 
Interprofessional agreements 
  
1.  Agreements within the trade and delivery contracts shall conform to paragraph 3 and to 
purchase terms laid down in Annex II, in particular  as regards the conditions governing the purchase, 
delivery, taking over and payment of beet.  
 
2.  The terms for buying sugar beet and sugar cane shall be governed by agreements within the 
trade concluded between Community growers of these raw materials and Community sugar 
undertakings. 
 
3.  In delivery contracts, a distinction shall be  made according to whether the quantities of sugar 
to be manufactured from sugar beet will be:   
—  quota sugar,  
 —  out-of-quota sugar. 
 
 4.  Each sugar undertaking shall provide the Member State in which it produces sugar with the 
following information:  
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   (a)  the quantities of beet referred to in the firs t indent of paragraph 3,  for which they have 
concluded pre-sowing delivery contracts and the sugar content on which those contracts are 
based;  
 
(b)  the corresponding estimated yield.  
 Member States may require additional information.  
 
5.  Sugar undertakings which have not signed pre-sowing delivery contracts at the minimum 
price for quota beet for a quantity of beet equivalent  to their quota sugar shall be required to pay at 
least the minimum price for quota beet for all the sugar beet they process into sugar.  
 6.  Subject to the approval of the Member Stat e concerned, agreements within the trade may 
derogate from paragraphs 3 and 4.  
 7.  If no agreements within the trade exist, th e Member State concerned shall take the necessary 
steps under this Regulation to protect the interests of the parties concerned.  
 
CHAPTER 2 
 
Quota production 
 
 
Article 7 
 
Quota allocation 
 
 1.  The quotas for the production of sugar, isogl ucose and inulin syrup at national or regional 
level are fixed in Annex III.  
 
2.  The Member States shall allocate a quota to each undertaking producing sugar, isoglucose or 
inulin syrup established in its terr itory and approved under Article 17.  
 
For each undertaking, the allocated quota shall be  equal to the total of the A and B quotas under 
Regulation (EC) No 1260/2001 which were allocate d to the undertaking for the marketing year 
2005/2006.  
 3.  In case of allocation of a quota to a sugar undertaking having more than one production unit, 
the Member States shall adopt the measures they cons ider necessary in order to take due account of 
the interests of sugar beet and cane growers.  
 
 
Article 8 
 
Additional sugar quota 
 
 1.  By 30 September 2007 at the latest, any sugar undertaking may request from the Member 
State where it is established the allocation of an additional sugar quota.  
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   The maximum additional sugar quotas per Member State are fixed in point I of Annex IV. 
 
2.  On the basis of the requests, the Member  State shall determine according to objective and 
non-discriminatory criteria the quantities which ar e acceptable. If the sum of these demands for 
additional quantities exceeds the available nationa l quantity, the Member State concerned shall 
provide for a proportional reduction of the acceptabl e quantities. The resulting quantities shall be the 
additional quota allocated to the undertakings concerned.  
 
3.  A one-off amount of EUR 730 shall be levi ed on the additional quotas that have been 
allocated to undertakings in accordance with paragra phs 1 and 2. It shall be collected per tonne of 
additional quota allocated.  
 4.  The totality of the one-off amount paid in acco rdance with paragraph 3 shall be charged by 
the Member State to the undertakings on its territo ry that have been allocated an additional quota.  
 The payment of the one-off amount by a sugar undert aking concerned shall be made by a deadline to 
be determined by the Member States. The deadlin e shall not be later than 28 February 2008.  
 5.  If the sugar undertaking has not paid th e one-off amount before 28 February 2008 the 
additional quotas shall not be considered as allo cated to the sugar undertaking concerned.  
  
Article 9 
 
Additional and supplementary isoglucose quota 
 
 
1.  In the marketing year 2006/2007 an isoglucose quota of 100 000 tonnes shall be added to the 
total of the isoglucose quota fixed in Annex III.  In each of the marketing years 2007/2008 and 
2008/2009 a further isoglucose quota of 100 000 tonnes shall be added to the quota of the preceding 
marketing year.  
 Member States shall allocate the additional quotas to  undertakings, proportionately to the isoglucose 
quotas that have been allocated in accordance with Article 7(2).  
 2.  Italy, Lithuania and Sweden may allocate, upon request by any undertaking established on 
their respective territories a supplementary isogl ucose quota in the period from the marketing year 
2006/2007 until the marketing year 2009/2010. Th e maximum supplementary quotas are fixed per 
Member State in point II of Annex IV.  
 
3.  A one-off amount of EUR 730 shall be levied  on the quotas that have been allocated to 
undertakings in accordance with paragraph 2. It shal l be collected per tonne of supplementary quota 
allocated.   
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   Article 10 
 
Quota management 
 
  1.  In accordance with the procedure referred to  in Article 39(2), the quotas set out in Annex III 
shall be adjusted by 30 September 2006 at the latest  for the marketing year 2006/2007 and by the end 
of February at the latest of the previous marke ting year for each of the marketing years 2007/2008, 
2008/2009, 2009/2010 and 2010/2011. The adjustments shall result from the application of Articles 8 and 9, of paragraph 2 of this Artic le, and of Articles 14 and 19 of this Regulation and of Article 3 of 
Regulation (EC) No 320/2006.  
 2.  Taking into account the results of the rest ructuring scheme provided for in Regulation (EC) 
No 320/2006, the Commission shall decide by the end of February 2010 at the latest, in accordance 
with the procedure referred to in Article 39(2), th e common percentage needed to reduce the existing 
quotas for sugar, isoglucose and inulin syrup per Member State or region with a view to avoid market 
imbalances in the marketing years as from 2010/2011.  
 3.  The Member States shall adjust th e quota of each undertaking accordingly.  
 
 
Article 11 
 
National quota reallocation 
 
  
1.  A Member State may reduce the sugar or isoglucose quota as allocated to an undertaking 
established on its territory:  
 —  by up to 25 % for the marketing years 2006/2007 and 2007/2008 whilst respecting the 
freedom of undertakings to participate in th e mechanisms established by Regulation (EC) 
No 320/2006,  
 
 and   
— by up to 10 % for the marketing year 2008/2009 and following. 
 2.  Member States may transfer quotas between undertakings in accordance with the rules laid 
down in Annex V and taking into consideration the interests of each of the parties concerned, 
particularly sugar beet and cane growers. 
 
3.  The quantities reduced pursuant to paragraphs 1 and 2 shall be allocated by the Member State 
in question to one or more undertakings on its  territory, whether or not holding a quota.  
 
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   CHAPTER 3 
 
Out-of-quota production 
 
 
Article 12 
 
Scope 
  
The sugar, isoglucose or inulin syrup produced duri ng a marketing year in excess of the quota referred 
to in Article 7 may be:   
(a)  used for the processing of certain products as referred to in Article 13;  
 (b)  carried forward to the quota production of the next marketing year, in accordance with 
Article 14; 
  (c)  used for the specific supply regime for th e outermost regions, in accordance with Title II of 
Regulation (EC) No 247/2006;  
  or  
 
(d)  exported within the quantitative limit fixed in accordance with the procedure referred to in 
Article 39(2) respecting the commitments resulting from agreements concluded under 
Article 300 of the Treaty.  
 
Other quantities shall be subject to the surplus amount referred to in Article 15.  
  
Article 13 
 
Industrial sugar 
 
 
1.  Industrial sugar, industrial isoglucose or in dustrial inulin syrup shall be reserved for the 
production of one of the products re ferred to in paragraph 2 when:  
 (a)  it has been subject to a delivery contract concluded before the end of the marketing year 
between a producer and a user which have bot h been granted approval under Article 17;  
 
 and  
 (b) it has been delivered to the user by 30 November  of the following marketing year at the latest.  
 
2.  In accordance with the proce dure referred to in Article 39(2) the Commission shall draw up a 
list of products for the production of which industria l sugar, industrial isoglucose or industrial inulin 
syrup is used.  
 The list shall in particular include:  
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   (a)  bioethanol, alcohol, rum, live yeast and quan tities of syrups for spreading and those to be 
processed into ‘Rinse appelstroop’;  
 
(b)  certain industrial products without sugar c ontent but the processing of which uses sugar, 
isoglucose or inulin syrup;  
 (c)  certain products of the chemical or pharmac eutical industry which contain sugar, isoglucose 
or inulin syrup.  
 3.  A production refund may be granted on the products  listed in Article 1(1)(b) to (e) if surplus 
sugar or imported sugar, surplus isoglucose or surplus inulin syrup is not available at a price 
corresponding to the world price for the manufacturing of products referred to in paragraph 2(b) and 
(c) of this Article.  
 
The production refund shall be fixed taking into acc ount in particular the costs arising from the use of 
imported sugar which the industry would have to bear in the event of supply on the world market and 
the price of the surplus sugar ava ilable on the Community market or th e reference price if there is no 
surplus sugar.   
 
Article 14 
 
Carry forward of surplus sugar 
 
 
 
 1.  Each undertaking may decide to carry forwar d all or part of its production in excess of its 
sugar quota, its isoglucose quota or its inulin syrup q uota to be treated as part of the next marketing 
year’s production. Without prejudice to paragr aph 3, that decision shall be irrevocable.  
 
2.  Undertakings which take the deci sion referred to in paragraph 1 shall:  
 (a)  inform the Member State concerned before a da te to be determined by this Member State:  
 
 —  between 1 February and 30 June of the current marketing year for quantities of cane 
sugar being carried forward,  
 
 —  between 1 February and 15 April of th e current marketing year for others quantities 
  of sugar or inulin syrup being carried forward;  
 
(b)  undertake to store such quantities at their ow n expense until the end of the current marketing 
year. 
  3.  If an undertaking’s definitive production in the marketing year concerned was less than the 
estimate made when the decision in accordance with paragraph 1 was taken, the quantity carried 
forward may be adjusted retroactively by 31 October of the following marketing year at the latest. 
 
4.  The quantities carried forward shall be deem ed to be the first quantities produced under the 
quota of the following marketing year.   
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   Article 15 
 
Surplus amount 
 
  1.  A surplus amount shall be levied on quantities of:  
 
(a)  surplus sugar, surplus is oglucose and surplus inulin syrup produced during any marketing 
year, except quantities carried forward to th e quota production of the following marketing 
year and stored in accordance with Article 14 or quantities referred to in Article 12(c) and (d);  
 
(b)  industrial sugar, industrial isoglucose and industrial inulin sy rup for which no proof has been 
supplied, by a date to be determined, that it has been processed in one of the products referred 
to in Article 13(2);  
 c)  sugar, isoglucose and inulin syrup withdraw n from the market in accordance with Article 19 
and for which the obligations provided for in Article 19(3) are not met.  
 2.  The surplus amount shall be fixed in accordance with the procedure referred to in 
Article 39(2) at a sufficiently high level in order to  avoid the accumulation of quantities referred to in 
paragraph 1.   
3.  The surplus amount paid in accordance with  paragraph 1 shall be charged by the Member 
State to the undertakings on its territory according to the quantities of production referred to in 
paragraph 1 that have been established for the un dertakings for the marketing year concerned.  
  
CHAPTER 4 
 
Market management 
 
 
Article 16 
 
Production charge 
 
 
 
1.  As from the marketing year 2007/2008, a pr oduction charge shall be levied on the sugar 
quota, the isoglucose quota and the inulin syrup quota held by undertakings producing sugar, 
isoglucose or inulin syrup.  
 
2.  The production charge shall be set at EUR 12, 00 per tonne of the quota sugar and quota inulin 
syrup. For isoglucose, the production charge shall be set at 50 % of the charge applicable to sugar.  
 
3.  The totality of the production charge paid in  accordance with paragraph 1 shall be charged by 
the Member State to the undertakings on its terr itory according to the quota held during the marketing 
year concerned.  
 Payments shall be made by the undertakings by the en d of February of the relevant marketing year at 
the latest.  WT/DS265/35/Add.1 
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4.  Community sugar and inulin syrup undert akings may require sugar-beet or sugar-cane 
growers or chicory suppliers to bear up to  50 % of the production charge concerned.  
 
 
Article 17 
 
Approved operators 
 
 
  1.  On request, Member States shall grant an approval to an undertaking producing sugar, 
isoglucose or inulin syrup or to an undertaking that processes these products into a product included 
in the list referred to in Article 13(2) provided that the undertaking:  
 (a)  proves his professional production capacities;  
 
(b)  agrees to provide any information and to be s ubject to controls related to this Regulation;  
 
(c)  is not subject to suspension or withdrawal of the approval.  
 2.  The approved undertakings shall provide the Me mber State in whose territory the harvest of 
beet, cane or the refining takes place,  with the following information:  
 
(a)  the quantities of beet or cane for which a de livery contract has been concluded, as well as the 
corresponding estimated yields of beet or cane, and sugar per hectare;  
 
(b)  data regarding provisiona l and actual sugar beet, sugar cane and raw sugar deliveries, and 
regarding sugar production and statements of sugar stocks;  
 
(c)  quantities of white sugar sold a nd corresponding prices and conditions.  
  
Article 18 
 
Private storage and intervention 
 
 
1.  If the average Community price recorded is below the reference price, during a representative 
period, and is likely to remain at that level, taki ng into account the market situation, aid for private 
storage of white sugar may be granted to undertakings which are allocated a sugar quota.  
 
2.  Throughout the marketing years 2006/2007, 2007/2008, 2008/2009 and 2009/2010, the intervention agency designated by  each sugar-producing Member Stat e shall buy in, up to a total 
quantity of 600 000 tonnes, expressed in white suga r, per marketing year for the Community, any 
white or raw sugar offered to it pr ovided that the sugar concerned: 
 
—  has been produced under quota and manufactu red from beet or cane harvested in the 
Community,  
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   —  has been the subject of a storage contract concluded between the seller and the intervention 
agency.  
 
Intervention agencies shall buy in at 80 % of the re ference price fixed in Article 3 for the marketing 
year following the marketing year during which the offer is lodged. If the quality of the sugar differs 
from the standard quality for whic h the reference price is fixed, this price shall be increased or 
reduced accordingly.  
 
3.  Intervention agencies may sell sugar only at a price which is higher than the reference price 
fixed for the marketing year in which the sale takes place.  
 
However, it may be decided in accordance with the procedure referred to in Article 39(2), whilst 
respecting the commitments resulting from agreemen ts concluded under Article 300 of the Treaty, 
that intervention agencies:  
 (a)  may sell sugar at a price equal to or lower th an the reference price referred to in the first 
subparagraph if the sugar is intended:  
  —  for use as animal feed,  
 
  o r    
 —  for export, either without further proces sing or after processing into products listed in 
Annex I to the Treaty or into goods liste d in Annex VII to this Regulation.  
 
(b)  are to make unprocessed sugar held by them available, for human consumption on the internal 
market of the Community, to charitable orga nisations — recognised by the Member State 
concerned or by the Commission in cases where a Member State has not recognised any such 
organisation — at a price which is lower than the current reference price or free of charge for the distribution as part of individual emergency aid operations.  
 
 
Article 19 
 
Withdrawal of sugar 
 
  1.  In order to preserve the structural balance of the market at a price level which is close to the 
reference price, taking into acc ount the commitments of the Comm unity resulting from agreements 
concluded in accordance with Article 300 of the Treat y, a percentage, common to all Member States, 
of quota sugar, quota isoglucose and quota inulin syrup may be withdrawn from the market until the 
beginning of the following marketing year.  
 In that case, the traditional supply need for refining imported raw sugar referred to in Article 29(1) of 
this Regulation shall be reduced by the same pe rcentage for the marketing year concerned.  
 2.  The withdrawal percentage referred to in paragraph 1 shall be dete rmined by 31 October of 
the marketing year concerned at the latest on th e basis of expected market trends during that 
marketing year.   WT/DS265/35/Add.1 
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   3.  Each undertaking provided with a quota shall store at its own expense during the period of 
withdrawal the quantities of sugar corresponding to the application of the percentage referred to in 
paragraph 1 to its production under quot a for the marketing year concerned.  
 
The sugar quantities withdrawn during a marketing year shall be treated as the first quantities 
produced under quota for the following marketing ye ar. However, taking into account the expected 
sugar market trends, it may be decided, in accordan ce with the procedure referred to in Article 39(2), 
to consider, for the current and/or the following mark eting year, all or part of the withdrawn sugar, 
isoglucose or inulin syrup as:   
—  surplus sugar, surplus isoglucose or surplus i nulin syrup available to become industrial sugar, 
industrial isoglucose or industrial inulin syrup,  
 
 or  
 —  temporary quota production of which a pa rt may be reserved for export respecting 
commitments of the Community resulting from agreements conclude d under Article 300 of 
the Treaty.  
 
4.  If sugar supply in the Community is inade quate, it may be decided, in accordance with the 
procedure referred to in Article 39(2), that a cer tain quantity of withdrawn sugar, isoglucose and 
inulin syrup may be sold on the Community market before the end of the period of withdrawal.  
 
 
 
Article 20 
 
Storage under different measures 
  
Sugar stored under one of the measures referred to  in Article 14, Article 18 or Article 19 during a 
marketing year may not be subject to private or public storage under any other of those provisions.  
 
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   TITLE III 
 
TRADE WITH THIRD COUNTRIES 
 
 
CHAPTER 1 
 
Common provisions on imports and exports 
  
Article 21 
 
Combined Nomenclature 
 
 
The general rules for interpreting the Combined Nome nclature and the special rules for its application 
shall apply to the tariff classification of products covered by this Regulation. The tariff nomenclature 
resulting from the application of this Regulation shall be included in the Common Customs Tariff. 
 
 
Article 22 
 
General principles 
 
  Unless otherwise provided for in this Regulation or in provisions adopted pursuant thereto, the 
following shall be prohibited in trade with third countries:  
 
(a)  the levying of any charge having equivalent effect to a customs duty;   
(b)  the application of any quantitative restri ction or measure having equivalent effect.  
  
Article 23 
 
Export and import licences 
 
 
1.  Imports into the Community, or exports th erefrom, of any of the products listed in 
Article 1(1), except those under point (h), shall be  subject to presentation of an import or export 
licence. However, derogations may be provided for if licences are not required for the management of 
certain imports of sugar.  
 2.  Licences shall be issued by the Member Stat es to any applicant, irrespective of his place of 
establishment in the Community, and without prejud ice to measures taken for the application of 
Articles 28 and 32 of this Regulation, of Article 12(5) of Council Regulation (EC) No 980/2005 of 
27 June 2005 applying a scheme of generalised tariff preferences
9 and the application of agreements 
concluded in accordance with Article 133 or Article 300 of the Treaty.  
 
                                                      
9 OJ L 169, 30.6.2005, p. 1. WT/DS265/35/Add.1 
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   3.  Import and export licences shall be  valid throughout the Community.  
 
Licences shall be issued subject to the lodging of a security guaranteeing that the products are 
imported or exported during the term of validity of the licence. Except in cases of force majeure , the 
security shall be forfeited in whole or in part if the import or export is not carried out, or is carried out 
only partially, within that period.   
4.  The terms of validity of the licences shall be  fixed in accordance with the procedure referred 
to in Article 39(2).   
 
Article 24 
 
Inward processing arrangements 
  
To the extent necessary for the proper functioning of the common organisation of the markets in the 
sugar sector, the use of inward processing arrangement s for the products listed in Article 1(1) may be 
fully or partially prohibited in  accordance with the procedure referred to in Article 39(2).  
 
 
Article 25 
 
Safeguard measure 
 
 
1.  If, by reasons of imports or exports, the Co mmunity market in one or more of the products 
listed in Article 1(1) is affected by, or is threat ened with, serious disturbance likely to jeopardise the 
achievement of the objectives set out in Article 33 of the Treaty, appropriate measures respecting the 
Communities’ international engagements may be applie d in trade until such disturbance or threat has 
ceased.  
 2.  If the situation referred to in paragraph 1 ar ises, the Commission shall, at the request of a 
Member State or on its own initiative, decide upon the necessary measures.  
 If the Commission receives a request from a Member State, it shall take a decision thereon within 
three working days following receipt of the request.  
 The Member States shall be notified of such measures, which shall be immediately applicable.  
 
3.  Measures decided on by the Commission pursuant to paragraph 2 may be referred to the 
Council by any Member State within three working da ys of the date on which they were notified. The 
Council shall meet without delay. It may, acting by  qualified majority, amend or repeal the measures 
in question within one month following the date  on which they were referred to the Council.  
 
4.  However measures applying to Members of the WTO adopted pursuant to this Article shall be 
applied on the basis of Council Regulation (EC)  No 3285/94 of 22 December 1994 on the common 
rules for imports
10.  
                                                      
10 OJ L 349, 31.12.1994, p. 53. Regulation as last amended by Regulation (EC) No 2200/2004 (OJ 
L 374, 22.12.2004, p. 1).    WT/DS265/35Add.1 
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CHAPTER 2 
 
Provisions applicable to imports 
 
 
Article 26 
 
Import duties 
  
1.  Unless this Regulation provides otherwise, the rates of import duty in the Common Customs 
Tariff shall apply to the products listed in Article 1(1).   
2.  Notwithstanding paragraph 1, the Commission ma y suspend in whole or in part for certain 
quantities the application of import duties on the foll owing products to ensure that the Community 
market is adequately supplied by means of imports from third countries:  
 
—  raw sugar for refining falling within CN codes 1701 11 10 and 1701 12 10,   
—  molasses falling within CN code 1703.  
 
3.  In order to guarantee the supply necessary fo r the manufacturing of products referred to in 
Article 13(2), the Commission may suspend in whole or in part for certain quantities the application 
of import duties on sugar falling within CN code  1701 and isoglucose falling within CN codes 1702 
30 10, 1702 40 10, 1702 60 10 and 1702 90 30.  
  
Article 27 
 
Management of imports 
 
  
1.  In order to prevent or counteract adverse effects on the market of the Community which may 
result from imports of certain products listed in Article  1(1), imports of one or  more of such products 
at the rate of duty laid down in the Common Custom s Tariff shall be subject to the payment of an 
additional import duty if the conditions to be dete rmined pursuant to Article 40(1)(e) are fulfilled, 
unless the imports are unlikely to disturb the Comm unity market, or where the effects would be 
disproportionate to the intended objective.  
 2.  Imports made at a price below the level notified by the Community to the World Trade 
Organisation (‘the trigger price’) may be subject to an additional import duty.  
 The import prices to be taken into consideration for imposing that additional import duty shall be 
determined on the basis of the cif import prices of the consignment under consideration.  
 Cif import prices shall be checked to that end agai nst the representative prices for the product on the 
world market or on the Community import market for that product.  WT/DS265/35/Add.1 
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3.  If the volume of imports in any year in whic h the adverse effects referred to in paragraph 1 
arise or are likely to arise exceeds a level b ased on market access opportunities defined as the 
percentage of the corresponding domestic consumpti on during the three previous years (‘the trigger 
volume’), an additional import duty may also be imposed.  
  
Article 28 
 
Tariff quotas 
 
 
1.  Tariff quotas for imports of products liste d in Article 1(1) resulting from agreements 
concluded in accordance with Article 300 of the Tr eaty or from any other act of the Council shall be 
opened and administered by the Commission under detailed rules adopted in accordance with the 
procedure referred to in Article  39(2) of this Regulation.  
 
2.  Tariff quotas shall be administered in a ma nner which avoids any discrimination between the 
operators concerned, by applying one of the followi ng methods or a combination of them or another 
appropriate method:  
 (a)  a method based on the chronological order of  the lodging of applications (‘first come, first 
served’ principle);  
 
(b)  a method of distribution in proportion to the quantities requested when the applications were 
lodged (using the ‘simultaneous examination method’);  
 
(c)  a method based on taking traditional trade pa tterns into account (using the ‘traditional/new 
arrival method’).  
 
3.  The method of administration adopted shall, where appropriate, give due weight to the supply 
requirements of the Community market and the need  to safeguard the equilibrium of that market. 
 
 
Article 29 
 
Traditional supply need for refining 
  
1.  Notwithstanding Article 19(1), a traditional suppl y need of sugar for refining is fixed for the 
Community at 1 796 351 tonnes per marke ting year, expressed in white sugar.  
 
During the marketing years 2006/2007, 2007/2008 and 20 08/2009, the traditional supply need shall be 
distributed as follows:  
 
— 296 627 tonnes for France,   
— 291 633 tonnes for Portugal,  
 — 19 585 tonnes for Slovenia,  
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   — 59 925 tonnes for Finland,  
 
— 1 128 581 tonnes for the United Kingdom.  
 
2.  The traditional supply need referred to in the first subparagraph of  paragraph 1 shall be 
increased:  
(a)  by 50 000 tonnes in the marketing year 2007/2008 and by 100 000 tonnes as from the 
marketing year 2008/2009. These quantities shall be made available to Italy in the marketing 
years 2007/2008 and 2008/2009;  
 
(b)  by 30 000 tonnes as from the marketing year 2006/2007 and by a supplementary 
35 000 tonnes as from the marketing year in wh ich the sugar quota has been reduced by at 
least 50 %.  
 The quantities referred to in point (b) of the first subparagraph shall concern raw cane sugar and shall 
be reserved for the marketing years 2006/2007, 200 7/2008 and 2008/2009 for the sole sugar beet 
processing plant at work in 2005 in Portugal. This pr ocessing plant is deemed to be a full time refiner. 
 
3.  Import licences for sugar for refining shall be issued only to full-time refiners provided that 
the concerned quantities do not exceed the quantities th at may be imported in the framework of the 
traditional supply need referred to in paragraphs 1 and 2. The licences in question may be transferred 
only between full-time refiners and their validity expi res at the end of the marketing year for which 
they have been issued.  
 
This paragraph shall apply for the marketing y ears 2006/2007, 2007/2008 and 2008/2009, and for the 
first three months of each of the following marketing years.  
 
4.  The application of import duties on cane suga r for refining falling within CN code 1701 11 10 
originating in the States referred to in Annex VI shall be suspended for the complementary quantity 
which is needed to allow an adequate supply of th e full-time refiners for each of the marketing years 
2006/2007, 2007/2008 and 2008/2009.   
The complementary quantity shall be fixed in acco rdance with the procedure referred to in 
Article 39(2), based on the balance between the traditi onal supply need referred to in paragraph 1 of 
this Article and the forecast supply of sugar for refining for the marketing year concerned. This 
balance may be revised in accordance with the pr ocedure referred to in Article 39(2) during the 
marketing year and may be based on historic flat-rate estimates of the raw sugar intended for consumption. 
 
 
Article 30 
 
Guaranteed price 
 
 
1.  The guaranteed prices fixed for the ACP/Indi an sugar shall apply for import of standard 
quality raw and white sugar from:  
 (a)  the least developed countries under the arra ngements referred to in Articles 12 and 13 of 
Regulation (EC) No 980/2005;  WT/DS265/35/Add.1 
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(b)  the States listed in Annex VI to this Regula tion for the complementary quantity referred to in 
Article 29(4).  
 
2.  Applications for import licences for sugar benefiting from a guaranteed price shall be 
accompanied by an export licence issued by the authorities of the exporting country certifying the 
compliance of the sugar with the rules provi ded for in the agreements concerned.  
 
 
Article 31 
 
Sugar Protocol Commitments 
 
 In accordance with the procedure referred to in Ar ticle 39(2), measures may be adopted to ensure that 
the ACP/Indian sugar is imported into the Community  under the conditions set out in Protocol 3 to 
Annex V to the ACP-EC Partnership Agreemen t and the Agreement on cane sugar between the 
European Community and the Republic of India. Th ose measures may, if necessary, derogate from 
Article 29 of this Regulation.  
 
 
CHAPTER 3 
 
Provisions applicable to exports 
 
 
Article 32 
 
Scope of export refunds 
 
 
 
1.  To the extent necessary to en able the products listed in Article 1(1) (b) and (c) to be exported 
without further processing or in the form of pro cessed products listed in Annex VII, on the basis of 
world market quotations or prices of sugar and with in the limits resulting from agreements concluded 
in accordance with Article 300 of the Treaty, the difference between those quotations or prices and 
prices in the Community may be covered by export refunds.  
 2.  Provision may be made for export refunds  to be granted on the products listed in 
Article 1(1)(d) and (g) and exported without furthe r processing or in the form of processed products 
listed in Annex VII. 
 
 In that case, the amount of the refund per tonne of  dry matter shall be fixed taking particular account 
of:  
 
(a)  the refund applicable to exports of products falling within CN code 1702 30 91;  
 
(b)  the refund applicable to exports of the products listed in Article 1(1)(c);  
 (c)  the economic aspects of the planned exports.  
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   3.  The export refund for raw sugar of the sta ndard quality defined in Annex I may not exceed 
92 % of that granted for white sugar. However, this limit shall not apply to export refunds to be fixed 
for candy sugar.  
 
4.  Export refunds on the products exported in  the form of processed products listed in 
Annex VII may not be higher than those applicable  to the same products exported without further 
processing.  
 
 
Article 33 
 
Export refund fixation 
 
 1.  The quantities which may be exported with an export refund shall be allocated by the method 
which:  
 
(a)  is most suited to the nature of the produc t and the situation on the market in question, 
allowing the most efficient possible use of the resources available, account being taken of the 
efficiency and structure of Community exports  without creating discrimination between the 
operators concerned and notably be tween large and small operators;  
 
(b)  is least cumbersome administratively for operators, account being taken of administration 
requirements.  
 
2.  Export refunds shall be the same for th e whole Community. They may vary according to 
destination, where the world market situation or the specific requirements of certain markets make 
this necessary.  
 Export refunds shall be fixed in accordance with the procedure referred to in Article 39(2).  
 
Refunds may be fixed:   
(a)  at regular intervals;  
 (b)  by invitation to tender for products in respect  of which provision was made for that procedure 
in the past.  
 Export refunds fixed at regular intervals, may, if  necessary, be amended in the interval by the 
Commission, at the request either of a Member State or on its own initiative.  
 
3.  Export refunds on products referred to in Article 32(1) and (2) and exported without further 
processing shall be granted only on application and on presentation of an export licence.  
 
The export refund applicable to pr oducts referred to in Article 32(1)  and (2) exported without further 
processing shall be that applicable on the day of application for the licence and, in the case of a 
differentiated refund, that applicable on the same day:  
 
(a)  for the destination indicated on the licence,   
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(b)  where appropriate, for the actual destination if  this differs from the destination indicated on 
the licence, in which case, the amount applicable  shall not exceed the amount applicable to 
the destination indicated on the licence.  
 
4.  The scope of paragraph 3 may be extended to  apply to the products in question that are 
exported in the form of processed products listed in Annex VII, in accordance with the procedure 
referred to in Article 16(2) of Council Regulati on (EC) No 3448/93 of 6 December 1993 laying down 
the trade arrangements applicable to certain goods  resulting from the processing of the agricultural 
products
11. Detailed implementing rules shall be adopt ed in accordance with that procedure.  
 
 
Article 34 
 
Export limits 
 
 Observance of the volume commitments resulting fro m the agreements concluded in accordance with 
Article 300 of the Treaty shall be ensured on the basi s of the export licences issued for the reference 
periods which apply to the products concerned.  
  
Article 35 
 
Export restrictions 
  
1.  When the quotations or prices on the world ma rket of one or more of the products listed in 
Article 1(1) reach a level that disrupts or threat ens to disrupt the availa bility of supply on the 
Community market and where that situation is lik ely to continue and deteriorate, appropriate 
measures may be taken in case of extreme emergency.  
 2.  Measures adopted pursuant to this Article sha ll be applied having regard to the obligations 
arising from agreements concluded in accord ance with Article 300(2) of the Treaty.  
  
 
                                                     
 
11 OJ L 318, 20.12.1993, p. 18. Regulation as last amended by Regulation (EC) No 2580/2000 (OJ 
L 298, 25.11.2000, p. 5).  WT/DS265/35Add.1 
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   TITLE IV 
 
GENERAL, TRANSITIONAL AND FINAL PROVISIONS 
 
 
CHAPTER 1 
 
General provisions 
  
Article 36 
 
State aid 
 
 
1.  Unless this Regulation provides otherwise, Articles 87, 88 and 89 of the Treaty shall apply to the production of and trade in the products listed in Article 1(1), except for the State aid laid down in 
paragraphs 2 and 3 of this Article.   
2.  Member States which reduce their sugar quota by  more than 50 %, may grant temporary State 
aid during the period for which the transitional aid fo r beet growers is being paid in accordance with 
chapter 10f of Council Regulation (EC) No 319/20 06 of 20 February 2006 am ending Regulation (EC) 
No 1782/2003 establishing common rules for direct support schemes under the common agricultural 
policy and establishing certain support scheme for farmers
12. The Commission shall, on the basis of 
an application by any Member State concerned, decide on the total amount of the State aid available 
for this measure.   
For Italy, the temporary aid referred to in the firs t subparagraph, shall not exceed a total of EUR 11 
per marketing year per tonne of sugar beet to be gr anted to sugar beet growers and for the transport of 
sugar beet.  
 
3.  Finland may grant aid up to EUR 350 per hectar e per marketing year to sugar beet growers.  
 
4.  The Member States concerned shall inform th e Commission within 30 days of the end of each 
marketing year of the amount of State aid actually granted in that marketing year.   
 
Article 37 
 
Disturbance clause 
 
 When a substantial rise or fall in prices is  recorded on the Community market and: 
 
—  all measures available under the other Articl es of this Regulation have been taken,  
  and  
 
—  the situation is likely to continue disturbing or threatening to disturb the market,  
                                                     
 
12 See page 32 of this Official Journal. WT/DS265/35/Add.1 
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further necessary measures may be taken.  
 
 
Article 38 
 
Communication 
 
  
Member States and the Commission shall provide each  other with any information necessary for the 
application of this Regulation and for complying with the international ob ligations concerning the 
products referred to in Article 1(1).  
 
 
Article 39 
 
Management Committee for Sugar 
 
 1.  The Commission shall be assisted by a Management Committee for Sugar (hereinafter 
referred to as ‘the Committee’).  
 
2.  Where reference is made to this paragr aph, Articles 4 and 7 of Decision 1999/468/EC shall 
apply.  
 The period laid down in Article 4(3) of D ecision 1999/468/EC shall be set at one month. 
 
3.  The Committee shall adopt its Rules of Procedure.   
 
Article 40 
 
Implementing rules 
  
1.  Detailed rules for the implementation of this  Regulation shall be adopted in accordance with 
the procedure referred to in Article 39(2) . They shall include in particular:  
 
(a)  detailed rules for the application of Articles 3 to 6, in particular those concerning increases 
and reductions of prices to be applied for devia tions from the standard of the reference price 
referred to in Article 3(3) and the mini mum price referred to in Article 5(3);  
 (b)  detailed rules for the application of Articles 7 to 10;  
 
(c)  detailed rules for the application of Articles 12,  13, 14 and 15, and in particular the conditions 
for granting production refunds, the amounts of su ch refunds and the eligible quantities;  
 
(d)  detailed rules regarding the establishment and the communications of the amounts referred to 
in Articles 8, 9, 15 and 16;  
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   (e)  detailed rules for the application of Artic les 26, 27 and 28. These rules may include in 
particular:  
 (i)  any suspension referred to in Article 26( 2) and (3) which could be determined by a 
tendering procedure;  
 
 (ii)  the specification of the products to which additional import duties may be applied 
under Article 27;  
 
 (iii)  the annual tariff quotas under Article 28(1), if necessary suitably phased over the 
year, and the determination of the admini strative method to be used which, where 
appropriate, shall include: 
    —  guarantees covering the nature, pr ovenance and origin of the product;  
 
  —  recognition of the document used for verifying the guarantees referred to in 
the first indent;  
 
  —  the conditions under which import licences shall be issued and their term of 
validity;  
 
(f)  detailed rules for the applic ation of Articles 36 and 38;  
 
(g)  detailed rules for the application of the pr ovisions of Chapter 3 of Title III. These rules may 
include in particular:  
 
 (i)  detailed rules on the redistribution of exportable quantities which have not been 
allocated or utilised;  
 
 (ii)  the appropriate measures as referred to in Article 35.   
2.  The following may in addition be adopted in accordance with the procedure referred to in 
Article 39(2):   
(a)  criteria to be applied by the sugar unde rtakings when allocating among beet sellers the 
quantities of beet to be covered by pre-sowing deliv ery contracts as referred to in Article 6(4);  
 
(b)  amendments to Annexes I and II;  
 (c)  a derogation from the dates laid down in Article 14(2);  
 
(d)  detailed rules for the application of Articles 16 to 19 and, in particular:  
 
 (i)  the supplementary information to be submitted by the approved operators;  
 (ii)  the criteria for sanctions, suspensions and withdrawal of approval of the operators;  
  (iii)  the granting of aids and the amount of aids for private storage provided for in 
Article 18(1);  
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    (iv)  the minimum quality and quantity re quirements, the price increases and reductions 
applicable, and the procedures and require ments for taking over by the intervention 
agencies, and for intervention buying in provided for in Article 18(2);  
 
 (v)  the percentage of withdrawn quot a sugar referred to in Article 19(1);  
  (vi)  the conditions for the payment of the minimum price in case the withdrawn sugar is 
being sold on the Community market under Article 19(4);  
 (e)  rules for the application of the derogation provided for in Article 23(1);  
 
(f)  detailed rules for the application of Articles 29 and 30 and, in particular, to comply with 
international agreements:  
 
 (i)  amendments to the definition provided for in Article 2(11);  
 (ii)  amendments to Annex VI;  
 (g)  measures in application of Article 37.  
 
 
Article 41 
 
Amendment to Regulation (EC) No 247/2006 
 
 
Regulation (EC) No 247/2006 is hereby amended as follows:   
1)  The following paragraph sh all be added to Article 16: 
 
 ‘3. France may grant national aid for the sugar sector in the French outermost regions, of up 
to EUR 60 million for the marketing year 2005/2006 and up to EUR 90 million for the 
marketing years 2006/2007 onwards.  
 
 Articles 87, 88 and 89 of the Treaty shall not appl y to the aid referred to in this paragraph.  
 
 France shall inform the Commission within 30 days  of the end of each marketing year of the 
amount of aid actually granted’.;  
 
2)  Article 23(2) shall be replaced by the following: 
 
 ‘2. The Community shall finance the measure s provided for in Titles II and III of this 
 Regulation up to an annual maximum as follows:   
 
  
 
  
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   (million EUR) 
 Financial year 
2007 Financial year 
2008 Financial year 
2009 Financial year 
2010 and further 
French overseas 
departments 
 
Azores and Madeira 
 
 Canary Islands  
126,6 
 
 
77,9 
 
127,3  
133,5 
 
 
78,0 
 
127,3  
140,3 
 
 
787,1 
 
127,3  
143,9 
 
 
78,2 
 
127,3’ 
   
Article 42 
 
Specific measures 
 
 
Measures which are both necessary and justifiable in an emergency, in order to resolve practical 
specific problems shall be adopted in accordance with  the procedure referred to in Article 39(2).  
 Such measures may derogate from provisions of this Regulation, but only to the extent that, and for 
such a period, as is strictly necessary.  
 
 
Article 43 
 
Financial provisions 
 
 
 Regulation (EC) No 1258/1999 and, as from 1 January  2007, Regulation (EC) No 1290/2005, and the 
provisions adopted for the implementation thereof shall apply to the expenditure incurred by the 
Member States in carrying out obligations under this Regulation.  
  
 
CHAPTER 2 
 
Transitional and final provisions 
 
 
Article 44 
 
Transitional measures 
 
 
 In accordance with the procedure referred to in Article 39(2), measures may be adopted:  
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   (a)  to facilitate the transition from the market situation in the marketing year 2005/2006 to the 
market situation in the marketing year 2006/2007 , in particular by reducing the quantity that 
may be produced under quota, and the transiti on from the rules provided for in Regulation 
(EC) No 1260/2001 to those established by this Regulation,  
 
 and   
(b)  to ensure compliance by the Community with its international obligations with regard to C 
sugar referred to in Article 13 of Re gulation (EC) No 1260/2001 while avoiding any 
disruption of the sugar market in the Community.  
 
 
Article 45 
 
Repeal 
 
 Regulation (EC) No 1260/2001 shall be repealed.  
 
 
Article 46 
 
Entry into force 
 
 This Regulation shall enter into force on the th ird day following that of its publication in the Official 
Journal of the European Union .  
 
It shall apply from the marketing year 2006/2007. However, Articles 39, 40, 41 and 44 shall apply 
from the date of entry into force of this Regulation.  Title II shall apply until the end of marketing year 
2014/2015.  
  
 
This Regulation shall be binding in its entirety a nd directly applicable in all Member States.  
 
Done at Brussels, 20 February 2006.  
 
For the Council  
 The President      J. PRÖLL  
 
 
_______________ 
 
  
 
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ANNEX I 
 
STANDARD QUALITIES 
 
 
POINT I 
 
Standard quality for sugar beet 
 
 
Standard quality beet shall:  
 
(a)  be of sound and fa ir merchantable quality;  
 (b)  have a sugar content of 16 % at the reception point.  
 
 
POINT II 
 
Standard quality for white sugar 
 
 1.  White sugar of the standard quality sh all have the following characteristics:  
 
 (a)  be of sound, genuine and merchantable quality; dry,  in homogeneous granulated 
crystals, free-flowing;  
 
 (b)  minimum polarisation: 99,7°;   
 (c)  maximum moisture content: 0,06 %;  
  (d)  maximum invert sugar content: 0,04 %;  
 
 (e)  the number of points determined under para graph 2 shall not exceed a total of 22, nor:  
 
  15 for the ash content,  
   9 for the colour type, determined using the method of the Brunswick Institute of 
Agricultural Technology (hereinafter referred to as ‘the Brunswick method’),  
 
  6 for the colouring of the solution, determined using the method of the International 
Commission for Uniform Methods of Sugar Anal ysis (hereinafter referred to as ‘the 
ICUMSA method’).  
 
2.  One point shall correspond to:   
 (a)  0,0018 % of ash content determined  using the ICUMSA method at 28° Brix,  
  (b)  0,5 units of colour type determined using the Brunswick method,  
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    (c)  7,5 units of colouring of the solution determined using the ICUMSA method.  
 
3.  The methods for determining the factors refe rred to in paragraph 1 shall be those used for 
determining those factors under the intervention measures.  
 
 
POINT III 
 
Standard quality for raw sugar 
 
 1.  Raw sugar of the standard quality shall be sugar with a yield in white sugar of 92 %.  
 
2.  The yield of raw beet sugar shall be calcula ted by subtracting from the degree of polarisation 
of that sugar:   
 (a)  its percentage ash content multiplied by four;  
  (b)  its percentage invert s ugar content multiplied by two;  
 
 (c)  the number 1.   
3.  The yield of raw cane sugar shall be calculated by subtracting 100 from the degree of 
polarisation of that sugar multiplied by two.   WT/DS265/35Add.1 
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   ANNEX II 
 
PURCHASE TERMS FOR BEET 
 
 
POINT I 
 
 
For the purposes of this Annex ‘C ontracting Parties’ means:  
 
(a)  sugar undertakings (hereinafter  referred to as ‘manufacturers’),  
  and  
 
(b)  beet sellers (hereinafter referred to as ‘sellers’).   
 
POINT II 
 
 
1.  Delivery contracts shall be made in wr iting for a specified quantity of quota beet.  
 
2.  Delivery contracts shall specify whether an additional quantity of beet may be supplied, and 
under what terms.  
 
 
POINT III 
 
 1.  Delivery contracts shall indicate the purchase prices for the quantities of beet referred to in 
the first indent and, if appropriate, second inde nt, of Article 6(3). In the case of the quantities 
referred to in the first indent of Article 6(3) , those prices may not be lower than the minimum 
price for quota beet referred to in Article 5(1).  
 
2.  Delivery contracts shall lay down a fixed sugar content for beet. They shall include a 
conversion scale showing the different sugar cont ents and factors for converting the quantities 
of beet supplied into quantities corresponding to  the sugar content shown in the delivery 
contract.  
 
 The scale shall be based on the yields co rresponding to the different sugar contents.  
 
3.  Where a seller has signed a delivery contract with a manufacturer for the delivery of beet as 
referred to in the first indent of Article 6(3), all deliveries by that seller, converted in accordance with paragraph 2 of this Point, sha ll be considered to be deliveries within the 
meaning of the first indent of Article 6(3), up to  the quantity of beet specified in the delivery 
contract.  
 
4.  Manufacturers producing a quantity of sugar lo wer than their quota beet for which they have 
signed pre-sowing delivery contracts under the firs t indent of Article 6(3), shall distribute the 
quantity of beet corresponding to any additiona l production up to the amount of their quota WT/DS265/35/Add.1 
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   among the sellers with whom they have signe d pre-sowing delivery contracts within the 
meaning of the first indent of Article 6(3).  
 
 Agreements within the trade may derogate from this provision.  
 
 
POINT IV 
 
 1.  Delivery contracts shall contain provisions concerning the staggering and normal duration of 
beet deliveries.  
 2.  Provisions referred to in paragraph 1 shall be  those applicable during the previous marketing 
year, taking account of the level of actual production; agreements within the trade may 
derogate therefrom.  
 
 
 
POINT V 
 
 1.  Delivery contracts shall provide for beet collection places.  
 
2.  Where sellers and manufacturers have already signed a delivery contract for the previous 
marketing year, the collection places agreed  upon by them for deliveries during that 
marketing year shall remain in operation. Agreem ents within the trade may derogate from this 
provision.  
 
3.  Delivery contracts shall provide that loadi ng and transport costs from the collection places are 
to be borne by the manufacturer subject to speci al agreements based on local rules or usages 
in operation before the previous marketing year.  
 4.  However, in Denmark, Greece, Spain, Ireland, Portugal, Finland and the United Kingdom, 
where beet is delivered freeat- factory, deliv ery contracts shall require manufacturers to 
contribute to loading and transport costs and shall stipulate the percentage or amounts.  
 
 
POINT VI 
 
 
1.  Delivery contracts shall provide for reception points for beet.  
 
2.  Where sellers and manufacturers have already signed a delivery contract for the previous 
marketing year, the reception points agreed upon by them for deliveries during that marketing 
year shall remain in operation. Agreements with in the trade may derogate from this provision.  
  
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   POINT VII 
 
 
1.  Delivery contracts shall provide for the sugar content to be determined using the polarimetric 
method. A sample of the beet shall be drawn at the time of reception.  
 2.  Agreements within the trade may provide for samples to be drawn at another stage. In such 
cases, the delivery contract shall provide for a correction to compensate for any drop in the 
sugar content between the reception and the drawing of the sample.  
 
 
POINT VIII 
 
 
Delivery contracts shall provide for gross weight, tare  and sugar content to be determined using one of 
the following procedures:  
 
(a)  jointly, by the manufacturer and the beet grow ers’ trade organisation, if an agreement within 
the trade so provides;  
 
(b)  by the manufacturer, under the supervision of the beet growers’ trade organisation;   
(c)  by the manufacturer, under the supervision of  an expert recognised by the Member State 
concerned, provided the seller defrays the costs thereof.  
 
 
POINT IX 
 
 1.  Delivery contracts shall require manufacturer s to do one or more of the following for the 
whole quantity of beet delivered:  
  (a)  to return the fresh pulp from the tonnage of  beet delivered free of charge to the seller, 
ex factory;  
  (b)  to return part of that pulp, pressed, dried or dried and molassed, free of charge to the 
seller, ex factory;  
  (c)  to return the pulp, pressed or dried, to  the seller, ex factory; in this case, the 
manufacturer may require the seller to pay the pressing or drying costs;  
 
 (d)  to pay the seller compensation which ta kes account of the possibilities of selling the 
pulp concerned.  
 
 When parts of the whole quantity of beet de livered are subject to different treatment, the 
delivery contract shall impose more than one of the obligations provided for in the first 
subparagraph.  
 
2.  Agreements within the trade may provide for pulp to be delivered at a stage other than that 
referred to in paragraph 1(a), (b) and (c).  
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POINT X 
 
 
1.  Delivery contracts shall fix the time limits for any advance payments and for payment of the 
purchase price for beet.  
 
2.  The time limits referred to in paragraph 1 sh all be those valid during the previous marketing 
year. Agreements within the trade may derogate from this provision.  
 
 
POINT XI 
 
 
Where delivery contracts lay down rules covering ma tters which are dealt with in this Annex, or 
where they contain provisions governing other matte rs, their provisions and effects shall not conflict 
with this Annex.  
  
POINT XII 
  
1.  Agreements within the trade as described in Article 2(11)(b) shall contain arbitration clauses.  
 
2.  Where agreements within the trade at Co mmunity, regional or local level lay down rules 
covering matters which are dealt with in this Regulation, or where they contain provisions 
governing other matters, their provisions and eff ects shall not conflict with this Annex.  
 
3. Agreements referred to in para graph 2 lay down, in particular:  
 
 (a)  rules on the distribution to sellers of quantities of beet which the manufacturer 
decides to buy prior to sowing, for the manufacture of sugar within the limits of the quota;  
 
 (b)  rules on distribution as referred to in Point III(4);   
 (c)  the conversion scale referred to in Point III(2);  
  (d)  rules on the choice and supply of seeds of the varieties of beet to be produced;  
 
 (e)  the minimum sugar content of beet to be delivered;  
 
 (f)  a requirement for consultation between the manufacturer and the sellers’ 
representatives before the starting date of beet deliveries is fixed;  
 
 (g)  the payment of premiums to sellers for early or late deliveries;   
 (h)  details of:  
   (i)  the part of the pulp referred to in Point IX(1)(b),  
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     (ii)  the costs referred to in Point IX(1)(c),  
 
  (iii)  the compensation referred to in Point IX(1)(d);   
 
 (i)  the removal of pulp by the seller;  
  (j) without prejudice to Article 5(1), rul es on how any difference between the reference 
price and the actual selling price of the sugar is to be allocated between the 
manufacturer and sellers.  
 
 
POINT XIII 
 
 
Where there is no set agreement within the trade as to how the quantities of beet intended for the 
manufacture of sugar within the quota limits which the manufacturer offers to buy before sowing 
should be allocated among the sellers, the Member St ate concerned may itself lay down rules for such 
allocation.   
Those rules may also grant to traditional sellers of beet to cooperatives delivery rights other than those 
which they would enjoy if they belonged to such cooperatives.   
 
 
_______________ 
 
 
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ANNEX III 
 
NATIONAL AND REGIONAL QUOTAS 
 
(tonnes)  
Member States or 
regions (1)  Sugar (2)  Isoglucose (3)  Inulin Syrup (4)  
Belgium  
Czech Republic 
Denmark  
 Germany Greece 
Spain 
France (metropolitan)  French overseas 
 departments 
Ireland  Italy 
Latvia  
Lithuania  
Hungary 
Netherlands  Austria  
Poland 
Portugal (mainland.)  The autonomous region 
 of the Azores  
Slovakia Slovenia 
Finland  
Sweden  United Kingdom    819 812 
454 862 
420 746 
3 416 896 
317 502 
996 961 
 3 288 747 
 
480 245 
199 260 
1 557 443 
66 505 
103 010 
401 684 
864 560 387 326 
1 671 926 
69 718 
 
9 953 
207 432 
52 973 
146 087 
368 262 
1 138 627  71 592 
— 
— 
35 389 12 893 
82 579 
19 846 
 
— 
— 
20 302 
— 
— 
137 627 
9 099 
— 
26 781 
9 917 
 
— 
42 547 
— 
11 872 
— 
27 237 
 215 247 
— 
— 
— — 
— 
24 521 
 
— 
— — 
— 
— 
— 
80 950 
— 
— 
— 
 
— 
— — 
— 
— — 
 
 
Total 17 440 537  507 680  320 718  
 
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ANNEX IV 
 
POINT I 
 
ADDITIONAL QUOTAS FOR SUGAR 
 
(tonnes) 
Member states Additional quota 
Belgium 
Czech Republic 
Denmark Germany 
Greece 
Spain France (metropolitan) 
Ireland 
Italy 
Latvia 
Lithuania Hungary 
Netherlands 
Austria Poland 
Portugal (mainland) 
Slovakia Slovenia 
Finland 
Sweden United Kingdom 
 62 489 
20 070 
31 720 
238 560 
10 000 
10 000 
351 695 
10 000 
10 000 
10 000 
8 985 
10 000 
66 875 
18 486 
100 551 
10 000 
10 000 10 000 
10 000 
17 722 82 847 
Total 1 100 000  
 
 
 
POINT II 
 
SUPPLEMENTARY QUOTAS FOR ISOGLUCOSE 
 
(tonnes) 
Member states Supplementary quota 
Italy 
Lithuania 
Sweden 60 000 
8 000 
35 000 
 
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ANNEX V 
 
DETAILED RULES ON TRANSFERS OF SUGAR OR ISOGLUCOSE QUOTAS 
 
 
POINT I 
 
 For the purposes of this Annex:  
 
(a)  ‘merger of undertakings’ means the consolida tion of two or more undertakings into a single 
undertaking;  
 
(b)  ‘transfer of an undertaking’ means the tran sfer or absorption of the assets of an undertaking 
having quota to one or more undertakings;  
 
(c)  ‘transfer of a factory’ means the transfer of ownership of a technical unit, including all the 
plant required to manufacture the product con cerned, to one or more undertakings, resulting 
in the partial or total absorption of the production of the undertaking making the transfer;  
 (d)  ‘lease of a factory’ means the leasehold contract of a technical unit including all the plant 
required for the manufacture of sugar, with a view  to its operation, concluded for a period of 
at least three consecutive marketing years, which the parties agree not to terminate before the 
end of the third marketing year, with an undert aking which is established in the same Member 
State, as the factory concerned, if, after the lease takes effect, the undertaking which rents the 
factory can be considered a solely sugar-pr oducing undertaking for its entire production.  
 
 
POINT II 
 
 1. Without prejudice to paragraph 2, in the even t of the merger or transfer of sugar-producing 
undertakings or the transfer of sugar factori es, the quota shall be adjusted as follows:  
  (a)  in the event of the merger of sugar-p roducing undertakings, the Member States shall 
allocate to the undertaking resulting from the merger a quota equal to the sum of the 
quotas allocated prior to the merger to the sugarproducing undertakings concerned;  
 
 (b)  in the event of the transfer of a suga r-producing undertaking, the Member State shall 
allocate the quota of the transferred undert aking to the transferee undertaking for the 
production of sugar or, if there is more than  one transferee undertaking, the allocation 
shall be made in proportion to the suga r production absorbed by each of them;  
 
 (c)  in the event of the transfer of a sugar factory, the Member State shall reduce the quota 
of the undertaking transferring ownership of  the factory and shall increase the quota 
of the sugar-producing undertaking or undertakings purchasing the factory in 
question by the quantity deducted in proportion to the production absorbed.  
 2.  Where a number of the sugar-beet or cane grower s directly affected by one of the operations 
referred to in paragraph 1 expressly show their willingness to supply their beet or cane to a  WT/DS265/35Add.1 
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   sugar-producing undertaking which is not party to those operations, the Member State may 
make the allocation on the basis of the producti on absorbed by the undertaking to which they 
intend to supply their beet or cane.  
 
3.  In the event of closure, in circumstances ot her than those referred to in paragraph 1, of:  
  (a)  a sugar-producing undertaking;  
 
 (b)  one or more factories of a sugar-producing undertaking,   
 the Member State may allocate th e part of the quotas involved in such closure to one or more 
sugar-producing undertakings. 
 
 Also in the case referred to in point (b) of  the preceding subparagraph, where some of the 
producers concerned expressly show their willingness  to supply their beet or cane to a given 
sugar-producing undertaking, the Member State may allocate the proportion of the quotas 
corresponding to the beet or cane concerned to  the undertaking which they intend to supply 
with those products.  
 
4.  Where the derogation referred to in Article 6(6) is invoked, the Member State concerned may 
require the beet growers and the sugar undertak ings concerned by that derogation to include 
in their agreements within th e trade special clauses enabling the Member State to apply 
paragraphs 2 and 3 of this Point.  
 
5.  In the event of the lease of a factory be longing to a sugar-producing undertaking, the Member 
State may reduce the quota of the undertaking offering the factory for rent and allocate the portion by which the quota was reduced to the unde rtaking which rents the factory in order to 
produce sugar in it.  
  If the lease is terminated during the period of th ree marketing years referred to in Point I (d) 
the adjustment of quota under the first subparagr aph of this paragra ph shall be cancelled 
retroactively by the Member State as at the da te on which the lease took effect. However, if 
the lease is terminated by reason of force majeure , the Member State shall not be bound to 
cancel the adjustment.  
 6.  Where a sugar-producing undertaking can no lo nger ensure that it meets its obligations under 
Community legislation towards the sugar-beet or  cane producers concerned, and where that 
situation has been ascertained by  the competent authorities of the Member State concerned, 
the latter may allocate for one or more marketi ng years the part of the quotas involved to one 
or more sugar-producing undertakings in proportion to the production absorbed.  
 
7.  Where a Member State grants a sugar pr oducing undertaking price and outlet guarantees for 
processing sugar beet into ethyl alcohol, that Member State may, in agreement with that 
undertaking and the beet growers concerned, allocate all or part of the sugar production 
quotas to one or more other undertakings for one or more marketing years.  
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   POINT III 
 
 
In the event of the merger or transfer of isogluc ose-producing undertakings or the transfer of an 
isoglucose-producing factory, the Member State may allocate the quotas involved for the production 
of isoglucose to one or more other undertakings , whether or not they have a production quota 
 
 
POINT IV 
 
 
The measures taken pursuant to Points II and III may take effect only if the following conditions are 
met:  
 
(a)  the interests of each of the parties concerned are taken into consideration; 
 
(b)  the Member State concerned considers that they are likely to improve the structure of the 
beet, cane and sugarmanufacturing sectors;  
 
(c)  they concern undertakings established in th e same territory for which the quota is set in 
Annex III.  
 
 
POINT V 
 
 When the merger or transfer occurs between 1 October and 30 April of the following year, the 
measures referred to in Points II and III shall ta ke effect for the current marketing year.  
 When the merger or transfer occurs between 1 Ma y and 30 September of the same year, the measures 
referred to in Points II and III shall take effect for the following marketing year.  
  
POINT VI 
  
Where Article 10(3) is applied, Member States shall allocate the adjusted quotas by the end of 
February at the latest with a view to appl ying them in the following marketing year.  
 
 
POINT VII 
 
 Where Points II and III are applied, Member Stat es shall inform the Commission of the adjusted 
quotas not later than 15 days after the expiry of the periods referred to in Point V.  
  
 
_______________ 
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ANNEX VI 
 
STATES REFERRED TO IN ARTICLE 2(12) 
 
 Barbados  
Belize  
Côte d’Ivoire  
Republic of the Congo  Fiji  
Guyana  
India  Jamaica  
Kenya  
Madagascar  Malawi  
Mauritius  
Mozambique  Saint Kitts and Nevis — Anguilla  
Suriname  
Swaziland  
Tanzania  
Trinidad and Tobago  Uganda  
Zambia  
Zimbabwe  
_______________ 
 
 
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ANNEX VII 
 
PROCESSED PRODUCTS 
  
CN Code Description 
ex 0403  Buttermilk, curdled milk and cream, yo ghurt, kephir and other fermented or 
acidified milk and cream, whether or not concentrated or containing added sugar 
or other sweetening matter or flavoured or  containing added fruit, nuts or cocoa:  
0403 10  – Yoghurt:  
0403 10 51 to  
0403 10 99  – – Flavoured or containing added fruit, nuts or cocoa  
0403 90  – Other:  
0403 90 71 to  
0403 90 99  – – Flavoured or containing added fruit, nuts or cocoa  
ex 0710  – Vegetables (uncooked or cooked by stea ming or by boiling in water), frozen:  
0710 40 00  – Sweetcorn  
ex 0711  – Vegetables provisionally preserved (for example, by sulphur dioxide gas, in 
brine, in sulphur water or in other preser vative solutions), but unsuitable in that 
state for immediate consumption:  
0711 90  – Other vegetables; mixtures of vegetables:  
 – – Vegetables:  
0711 90 30  – Sweetcorn  
1702 50 00  Chemically pure fructose  
ex 1704  Sugar confectionery (including white chocolate), not containing cocoa, except 
liquorice extract of subheading No 1704 90 10  
1806  Chocolate and other food preparations containing cocoa  
ex 1901  Malt extract: food preparations of flour, meal, starch or malt extract, not 
containing cocoa or containing less than 40 % by weight of cocoa calculated on a 
totally defatted basis, not elsewhere speci fied or included; food preparations of 
goods of heading Nos 0401 to 0404, not containing cocoa or containing less than 
5 % by weight of cocoa calculated on a totally defatted basis, not elsewhere 
specified or included:  
1901 10 00  – Preparations for infant use, put up for retail sale  
1901 20 00  – Mixes and doughs for the preparations of bakers’ wares of heading No 1905  
1901 90  – Other:  
 – – Other:  
1901 90 99  – – – Other  
ex 1902  Pasta, whether or not cooked or stuffe d (with meat or other substances) or 
otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, 
ravioli, cannelloni; couscous, whether or not prepared:  
1902 20  – Stuffed pasta, (whether or not cooked or otherwise prepared):  
 – – Other:  
1902 20 91  – – – Cooked  
1902 20 99  – – – Other  
1902 30  – Other pasta  
1902 40  – Couscous:   WT/DS265/35Add.1 
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   CN Code Description 
1902 40 90  – – Other  
1904  Prepared foods obtained by the swelling or roasting of cereals or cereal products 
(for example, cornflakes); cereals (other th an maize (corn)) in grain form or in 
the form of flakes or other worked grains (except flour and meal), pre-cooked, or 
otherwise prepared, not elsewhere specified or included  
ex 1905  Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing 
cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical 
use, sealing wafers, rice paper and similar products:  
1905 10 00  – Crispbread  
1905 20  – Gingerbread and the like  
1905 31  – – Sweet biscuit  
1905 32  – – Waffles and wafers  
1905 40 – Rusks, toasted bread and similar toasted products  
1905 90  – Other:  
 – – Other:  
1905 90 45  – – – Biscuits  
1905 90 55  – – – Extruded or expanded  products, savoury or salted  
1905 90 60  – – – – With added sweetening matter  
1905 90 90  – – – – Other  
ex 2001  Vegetables, fruit, nuts and other edible pa rts of plants, prepared or preserved by 
vinegar or acetic acid:  
2001 90  – Other:  
2001 90 30  – – Sweetcorn ( Zea mays var. saccharata ) 
2001 90 40  – – Yams, sweet potatoes and similar edible parts of plants containing 5 % or 
more by weight of starch  
ex 2004  Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, 
frozen, other than products of heading No 2006:  
2004 10  – Potatoes:  
 – – Other:  
2004 10 91 – – – In the form of flour, meal or flakes  
2004 90 – Other vegetables and mixtures of vegetables:  
2004 90 10 – – Sweetcorn ( Zea mays var. saccharata ) 
ex 2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, 
not frozen, other than products of heading No 2006):  
2005 20 – Potatoes:  
2005 20 10 – – In the form of flour, meal or flakes  
2005 80 00 – Sweetcorn ( Zea mays var. saccharata ) 
ex 2101 Extracts, essences and concentrates of co ffee, tea or mate and preparations with a 
basis of these products or with a basis of  coffee, tea or mate; roasted chicory and 
other roasted coffee substitutes, and extr acts, essences and concentrates thereof:  
 – Extracts, essences and concentrates of co ffee and preparations with a basis of 
these products or with a basis of these extr acts, essences or concentrates or with a 
basis of coffee:  
 – – Preparations with a basis of these ex tracts, essences or concentrates or with a 
basis of coffee:  
2101 12 98  – – – Other  
 – Extracts, essences and concentrates, of tea or mate, and preparations with a 
basis of these extracts, essences or concen trates, or with a basis of tea or mate:  WT/DS265/35/Add.1 
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   CN Code Description 
 – – Preparations:  
  
2101 20 98  – – – Other  
 – Roasted chicory and other roasted coff ee substitutes, and extracts, essences and 
concentrates thereof:  
 – – Roasted chicory and other roasted coffee substitutes:  
2101 30 19  – – – Other  
 – – Extracts, essences and concentrates of  roasted chicory and other roasted 
coffee substitute:  
2101 30 99  – – – Other  
2105 00  Ice cream and other edible ice, whether or not containing cocoa  
ex 2106  Food preparations not elsewhere specified or included:  
2106 90  – Other:  
2106 90 10  – – Cheese fondues  
 – – Other:  
2106 90 92  – – – – – Containing no milk fats, sucrose, isoglucose, glucose or starch or 
containing, by weight, less than 1,5 % m ilk fat, 5 % sucrose or isoglucose, 5 % 
glucose or starch  
2106 90 98  – – – – – Other  
2202  Waters, including mineral waters and aera ted waters, containing added sugar or 
other sweetening matter or flavoured, an d other non-alcoholic beverages, not 
including fruit or vegetable juices of heading No 2009  
2205  Vermouth and other wine of fresh grapes flavoured with plants or aromatic 
substances  
ex 2208  Undenatured ethyl alcohol of an alcoholic  strength by volume of less than 80 % 
vol.; spirits, liqueurs and other spirituous beverages:  
2208 20  – Spirits obtained by distilling grape wine or grape marc:  
2208 50 91 to  
2208 50 99  Geneva  
2208 70  Liqueurs and cordials  
2208 90 41 to  
2208 90 78  – Other spirits and spirituous beverages  
2905 43 00  Mannitol  
2905 44  D-glucitol (sorbitol)  
ex 3302  Mixtures of odoriferous substances and mi xtures (including alcoholic solutions) 
with a basis of one or more of these substances of a kind used as raw materials in 
industry; other preparations based on odoriferous substances, of a kind used for 
the manufacture of beverages:  
3302 10  – Of a kind used in the food or drink industries:  
 – – Of a kind used in the drink industries:  
 – – – Preparations containing all flavour ing agents characterising a beverage: 
 – – – – – Other (of an actual alcoholic strength by volume not exceeding 0,5 %): 
3302 10 29  Other 
ex Chapter 38  Miscellaneous chemical products 
3824 60  Sorbitol other than that of subheading 2905 44 
 
 
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   COMMISSION REGULATION (EC) No 493/2006 
 
of 27 March 2006 
 
laying down transitional measures within the framework of the reform 
of the common organisation of the markets in the sugar sector, 
and amending Regulations (EC) No 1265/2001 and (EC) No 314/2002 
 
THE COMMISSION OF THE EUROPEAN COMMUNITIES,  
 Having regard to the Treaty establishing the European Community,   Having regard to Council Regulation (EC) No  318/2006 of 20 February 2006 on the common 
organisation of the markets in the sugar sector
1, and in particular Article 44 thereof,  
 Having regard to Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common 
organisation of the markets in the sugar sector
2, and in particular Articles 7(5), 15(8) and 16(5) 
thereof,  
Whereas:   
  (1)  The necessary measures should be taken to fac ilitate the transition in the sugar sector from the 
rules provided for in Regulation (EC) No 1260/2001 to the new regime established by 
Regulation (EC) No 318/2006.  
 (2)  Following the deletion of the obligation to export provided for in Article 13 of Regulation 
(EC) No 1260/2001, measures should be laid dow n to manage the quantities of sugar resulting 
from the disappearance of this obligation and of  the C sugar arrangements from 1 July 2006. 
These measures should comply with the Co mmunity’s international obligations.  
 
(3)  To improve management of the quantiti es of sugar produced in excess of the quota 
attributable to the 2005/2006 marketing year, undertakings should be allowed to carry 
forward some of these quantities to the 2006/2007 ma rketing year. To this end, it should be 
laid down that the carry forward in question is subject to the application of Commission 
Regulation (EEC) No 65/82 of 13 January 198 2 laying down detailed rules for carrying 
forward sugar to the following marketing year
3, while allowing a certain degree of flexibility 
on the decision to carry forward in order to facilitate the transition between the existing 
regime and the new regime.  
 (4)  The quantity of non-quota sugar in the 2005/ 2006 marketing year, which may be neither 
carried over nor exported, should be consid ered to be non-quota sugar in the 2006/2007 
marketing year in order to allow its disposal th rough the uses provided fo r in respect of this 
sugar by Regulation (EC) No 318/2006, as well as, taking into account the exceptional 
conditions of the transition between those ma rketing years, its use in animal feed.  
                                                     
 
1 OJ L 58, 28.2.2006, p. 1.   
2 OJ L 178, 30.6.2001, p. 1. Regulation as last amended by Commission Regulation (EC) No 39/2004 
(OJ L 6, 10.1.2004, p. 16).   
3 OJ L 9, 14.1.1982, p. 14. Regulation as last amended by Regulation (EC) No 2223/2000 (OJ L 253, 
7.10.2000, p. 15). WT/DS265/35/Add.1 
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   (5)  For control purposes and, where applicable, the application of penalties, the proportion of C 
sugar production in the 2005/2006 marketing year not carried over and not considered to be in 
excess of the quota in the 2006/2007 marketing ye ar should continue to be subject to the 
application of Commission Regulation (EEC) No 2670/81 of 14 September 1981 laying down 
detailed implementing rules in respect of sugar production in excess of the quota
4 .  
 (6)  In order to improve the market balance in  the Community without creating new stocks of 
sugar in the 2006/2007 marketing year, provision s hould be made for a transitional measure to 
reduce eligible production under quota in respect of that marketing year. A threshold should 
be fixed above which the pr oduction under quota of each undertaking is considered 
withdrawn within the meaning of Article 19 of Regulation (EC) No 318/2006 or, at the request of the undertaking, as production in excess of the quota within the meaning of Article 12 of that Regulation. In view of the tr ansition between the two regimes, this threshold 
should be obtained by a combination, in equal pa rts, of the method laid down in Article 10 of 
Regulation (EC) No 1260/2001 and that laid  down in Article 19 of Regulation (EC) 
No 318/2006 and take into account the special e fforts made by some Member States within 
the framework of the restructuring fund set up by Council Regulation (EC) No 320/2006 of 20 February 2006 establishing a temporary scheme for the restructuring of the sugar industry in the Community and amending Regulation (EC) No 1290/2005 on the financing of the 
common agricultural policy
5.  
 (7)  In order to comply with the marketing conditions for the 2005/2006 marketing year, it should 
be laid down that the aid for disposal and add itional aid for sugar produced in certain regions 
of the Community in the 2005/2006 marketing y ear and, within the limits of the quantities set 
by Commission Regulation (EC) No 180/2006 of 1 February 2006
6, the refining aid for 
certain preferential sugars imported and re fined in the 2005/2006 delivery period may 
continue to be paid beyond 30  June 2006. To this end, Commission Regulation (EC) 
No 1554/2001 of 30 July 2001 laying down detailed rules for the application of Council Regulation (EC) No 1260/2001 as regards marke ting sugar produced in the French overseas 
departments and equalising the price c onditions with preferential raw sugar
7 and Commission 
Regulation (EC) No 1646/2001 of 13 August 2001 laying down detailed implementing rules 
for the grant of adjustment aid to the prefer ential raw sugar refining industry and adjusting 
both the adjustment aid and additional b asic aid for the sugar refining industry8 (8) should 
continue to apply to the granting of these ai ds. For the sugar concerned the refining of 
preferential sugars by certain refineries shoul d continue to be limited and the control on 
presumed maximum supply needs should be main tained, and provision should be made for 
the continued application of Commission Regul ation (EC) No 1460/2003 of 18 August 2003 
setting for the 2003/2004 to 2005/2006 marketing years rules of application for Council Regulation (EC) No 1260/2001 as regards the pr esumed maximum raw sugar supply needs of 
refineries
9.  
 
                                                      
4 OJ L 262, 16.9.1981, p. 14. Regulation as last amended by Regulation (EC) No 95/2002 (OJ L 17, 
19.1.2002, p. 37). 
5 OJ L 58, 28.2.2006, p. 42.   
6 OJ L 29, 2.2.2006, p. 28. 
7 OJ L 205, 31.7.2001, p. 18. Regulation as amended by Regulation (EC) No 1442/2002 (OJ L 212, 
8.8.2002, p. 5). 
8 OJ L 219, 14.8.2001, p. 14. Regulation as amended by Regulation (EC) No 1164/2002 (OJ L 170, 
29.6.2002, p. 48).   
 9 OJ L 208, 19.8.2003, p. 12.  WT/DS265/35Add.1 
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   (8)  To carry out the calculation, fixing and collecting of production levies in the 2005/2006 
marketing year, certain provisions of Commission Regulation (EC) No 314/2002 of 20 February 2002 laying down detailed rules for the application of the quota system in the 
sugar sector
10 (10) and of Commission Regulation (EC) No 779/96 of 29 April 1996 laying 
down detailed rules for the application of Council Regulation (EEC) No 1785/81 as regards 
communications in the sugar sector11  should continue to apply beyond 30 June 2006. The 
levies are calculated on the basis of statistical da ta which are regularly updated. As it is the 
last time that levies are to  be fixed for the entire period between the 2001/2002 marketing 
year and the 2005/2006 marketing year, without a su bsequent possibility, as in previous years, 
to adjust the calculations on the basis of upda ted figures, the calculation should be deferred 
and the levies should be fixed on 15 Februa ry 2007 to guarantee the reliability of the 
calculations and the relevance of the statistical data used.  
 
(9)  In order to ensure the supply to the chemical  industry in the context of the transition between 
the existing regime and the new regime intr oduced on 1 July 2006, certain provisions of 
Commission Regulation (EC) No 1265/2001 of 27  June 2001 laying down detailed rules for 
the application of Council Regulation (EC) No 1260/2001 as regards granting the production 
refund on certain sugar products u sed in the chemical industry12 (12) should continue to apply 
beyond 30 June 2006 to the refund certificates issu ed before that date. Since the new regime 
allows the use by the chemical industry of nonquota sugar, the period of validity of the export 
certificates should be reduced and the granti ng of the refund should be limited to the 
production under quota in the 2005/2006 marketing year.  
 (10)  Under Article 1(2) of Regulation (EC) No  318/2006, the period covered by the marketing 
year begins on 1 October and ends on 30 Se ptember of the following year. However, the 
2005/2006 marketing year, as laid down by Regulation (EC) No 1260/2001, ends on 
30 June 2006. The 2006/2007 marketing year ther efore begins on 1 July 2006 and ends on 
30 September 2007, and thus extends over 15 months. For the 2006/2007 marketing year, 
therefore, provision should be made for an in crease in the quotas and the traditional refining 
requirements which previously corresponded to a 12-month period and which will, after this 
marketing year, again apply to a 12-month period, by taking the extra three months into 
account so as to ensure an allocation whic h corresponds to that of the preceding and 
subsequent marketing years. These transiti onal quotas should cover s ugar production from the 
start of the 2006/2007 marketing year, from s ugar beet sown before 1 January 2006.  
 
(11)  Regulations (EC) No 314/2002 and (EC)  No 1265/2001 should therefore be amended 
accordingly.  
 (12)  The measures provided for in this Regula tion are in accordance with  the opinion of the 
Management Committee for Sugar,  
 
HAS ADOPTED THIS REGULATION:  
  
                                                     
 
10 OJ L 50, 21.2.2002, p. 40. Regulation as last amended by Regulation (EC) No 1665/2005 (OJ L 268, 
13.10.2005, p. 3). 
11 OJ L 106, 30.4.1996, p. 9. Regulation as last amended by Regulation (EC) No 1159/2003 (OJ L 162, 
1.7.2003, p. 25). 
12 OJ L 178, 30.6.2001, p. 63 WT/DS265/35/Add.1 
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   CHAPTER I 
 
TRANSITIONAL MEASURES 
 
 
Article 1 
 
Carrying forward of quotas 
 
 
1.  Notwithstanding Article 14 of Regulation (E C) No 1260/2001, and within the limits laid 
down in the second subparagraph of Article 2(1) of Regulation (EEC) No 65/82, each undertaking 
may decide by 31 October 2006 on the quantity of C sugar production attributable to the 2005/2006 
marketing year that it is to carry forward to th e 2006/2007 marketing year, or amend its decision made 
before the entry into force of this Regula tion to carry forward a certain quantity.  
 2.  Undertakings which make a decision to carry forward as referred to in paragraph 1, or which 
amend their decision, shall:   
(a)  inform the Member State concerned, before 31 October 2006, of the quantity of sugar carried 
forward;  
 (b)  undertake to store the quantity carried forward until 31 October 2006.   
3.  Regulation (EEC) No 65/82 shall apply to B and C sugar from the 2005/2006 marketing year 
carried forward to the 2006/2007 marketing year.   4.  Member States shall inform the Commission,  not later than 30 November 2006 and for each 
undertaking, of the quantity of B and C sugar carried forward from the 2005/2006 marketing year to the 2006/2007 marketing year.  
 
 
Article 2 
 
C sugar 
 
 
1.  Without prejudice to decisions to carry forw ard taken in accordance with Article 1 of this 
Regulation, and to exports under licences issued  in accordance with Article 4 of Commission 
Regulation (EC) No 1464/95 
13, C sugar from the 2005/2006 marketing year shall be considered to be 
non-quota sugar, as referred to in Article 12 of Re gulation (EC) No 318/2006, produced in respect of 
the 2006/2007 marketing year.  
 2.  Notwithstanding Article 15 of Regulation (EC)  No 318/2006, the levy shall not be charged on 
the quantities of C sugar referred to in paragraph 1 of  this Article which are used in animal feed under 
the same control conditions as those laid down by the Commission for the industrial sugar referred to 
in Article 13(2) of Regulation (EC) No 318/2006.  
                                                     
 
 13 OJ L 144, 28.6.1995, p. 14.  Regulation as last amended by Regulation (EC) No 96/2004 
(OJ L 15, 22.1.2004, p. 3).  
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3.  Regulation (EEC) No 2670/81 shall apply to  C sugar production in the 2005/2006 marketing 
year, with the exception of the sugar carried forward or considered to be non-quota sugar in the 
2006/2007 marketing year as referred to in paragraph 1 of this Article.  
 The minimum price for A sugar for the 2005/2006 marketi ng year shall apply to the beet equivalent to 
the quantity of sugar referred to in Ar ticle 3 of Regulation (EEC) No 2670/81.  
 
 
Article 3 
 
Preventive withdrawal 
 
 1.  For each undertaking, the share of the productio n of sugar, isoglucose or inulin syrup in the 
2006/2007 marketing year which is produced under th e quotas listed in Annex III to Regulation (EC) 
No 318/2006 and which exceeds the threshold establis hed in accordance with paragraph 2 of this 
Article shall be considered withdrawn within the m eaning of Article 19 of that Regulation or, at the 
request of the undertaking concerned before 31 January 2007, shall be considered fully or partially to 
be produced in excess of the quota within the meaning of Article 12 of that Regulation.  
 2.  For each undertaking, the threshold referre d to in paragraph 1 shall be established by 
multiplying the quota allocated to the undertaking un der Article 7(2) of Regulation (EC) No 318/2006 
by the sum of the following coefficients:  
 
(a)  the coefficient fixed for the Member Stat e concerned in Annex I to this Regulation;  
 (b)  the coefficient obtained by dividing th e sum of the quotas renounced in the 2006/2007 
marketing year in the Member State concerned under Article 3 of Regulation (EC) No 320/2006 by the sum of the quotas fixed for that Member State in Annex III to Regulation 
(EC) No 318/2006. The Commission shall fix this coefficient not later than 15 October 2006.  
 However, where the sum of the coe fficients exceeds 1,0000, the thr eshold shall be equal to the quota 
referred to in paragraph 1.   
3.  The minimum price applicable to the quan tity of beet equivalent to the sugar production 
withdrawn in accordance with paragraph 1 sha ll be that of the 2007/2008 marketing year. 
 4.  The obligation referred to in Article 6(5) of Regulation (EC) No 318/2006 shall concern the 
quantity of beet equivalent to the threshold referred to in paragraph 1 of this Article.  
 
5.  Before 1 July 2006, Member States shall se nd the Commission an estimate of the quantities of 
sugar, isoglucose and inulin syrup to be considered withdrawn under this Article.  
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   Article 4 
 
Aid for sugar produced in the French overseas departments 
 
 
1.  Aid for disposal and additional aid shall be granted to sugar produced under quota in the 
2005/2006 marketing year in the French overseas de partments, refined and/or transported between 
1 July 2006 and 31 October 2006.  
 
They shall apply to the quantities of sugar concerne d, in replacement for the aids referred to in 
Articles 7(4) and 38(3) and (4) of Regulation (EC) No 1260/2001.   The aid for disposal shall concern:  
 
—  refining in refineries in the European regions of the Community of the sugars produced in the 
French overseas departments, in particular on the basis of their output,  
 —  the transport of sugar produced in the French overseas departments to the European regions of 
the Community and, where appropriate, its storage in these departments.  
 
2.  Regulations (EC) No 1554/2001 and (EC) No 1646/2001 shall apply to the sugar produced under quota in the 2005/2006 marketing year for the ai d for disposal and the additional aid referred to 
in paragraph 1 of this Article.   
3.  For the purposes of this Article, ‘refinery’ means a production unit whose sole activity 
consists in refining either raw sugar or syrups  produced prior to the crystallising stage.  
  
Article 5 
 
Refining aid 
 
 
1.  Adjustment aid shall be granted to the i ndustry refining preferential raw cane sugar imported 
under Protocol 3 on ACP sugar attached to Annex IV to the ACP-EC Partnership Agreement signed 
in Cotonou on 23 June 2000
14 (14), and refined in the 2005/2006 delivery period between 1 July 2006 
and 30 September 2006.   This aid shall be paid to refineri es. It shall apply to the quantiti es referred to in Regulation (EC) 
No 180/2006 and not refined by 1 July 2006, as a replace ment for the aid referred to in Article 38(1), 
(2) and (4) of Regulation (EC) No 1260/2001.  
 
2.  Regulation (EC) No 1646/2001 shall apply to the preferential sugar refined in the 2005/2006 
delivery period.   3.  Except in cases of force majeure , where the presumed maximum supply needs for a Member 
State as laid down in Article 39(2) of Regulation (EC) No 1260/2001 are exceeded in the course of 
the 2005/2006 marketing year, a quantity corresponding to the excess shall be subject to the payment 
                                                     
 
14 OJ L 317, 15.12.2000, p. 3.  WT/DS265/35Add.1 
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   of an amount corresponding to the full rate of import duty in force for the marketing year in question, 
increased by EUR 115,40 per tonne of white sugar equivalent.   
4.  Regulation (EC) No 1460/2003 shall apply to control and, where appropriate, the 
consequences of exceeding the presumed maximu m supply needs for the refining industries as 
referred to in paragraph 3 of this Article.   5.  For the purposes of this Article, ‘refinery’ means a production unit whose sole activity 
consists in refining either raw sugar or syrups  produced prior to the crystallising stage.  
  
Article 6 
 
Levies 
 
 
Regulation (EC) No 314/2002, as amended by this Regul ation, shall apply to the fixing and collecting 
of production levies in the 2005/2006 marketing y ear, including the corrections relating to the 
calculation of the levies in the 2001/2002, 2002/2003, 2003/2004 and 2004/2005 marketing years as 
laid down in Article 15(2) of Regulation (EC) No 1260/2001.  
  
Article 7 
 
Production refunds 
 
 
Articles 1, 2, 3, 11, 14, 15, 17 18, 19, 20 and 21 of Regulation (EC) No 1265/2001, as amended by 
this Regulation, shall apply to the refund  certificates issued until 30 June 2006.  
 
 
Article 8 
 
Notifications 
 
 Regulation (EC) No 779/96 shall apply until 30 September 2006.  
  
Article 9 
 
Transitional quotas 
  
1.  For the 2006/2007 marketing year, a tran sitional sugar quota of 497 780 tonnes shall be 
allocated to the Member Stat es in accordance with the breakdown in part A of Annex II.  
 
The quota referred to in the first subparagraph sha ll be reserved for sugar produced from beet sown 
before 1 January 2006. The minimum price of this b eet, within the meaning of Article 5 of Regulation 
(EC) No 318/2006, shall be EUR 47,67 per tonne.   WT/DS265/35/Add.1 
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   2.  For the 2006/2007 marketing year, a transitional isoglucose quota of 126 921 tonnes of dry 
matter shall be allocated to the Member States in accordance with the breakdown in part B of 
Annex II.  
 
3.  For the 2006/2007 marketing year, a transitional inulin syrup quota of 80 180 tonnes of dry matter, expressed as white sugar/isoglucose equivale nt, shall be allocated to the Member States in 
accordance with the breakdown in part C of Annex II. 
 
4.  The transitional quotas laid down in paragraphs 1, 2 and 3:  
 (a)  shall not be subject to the payment of th e temporary restructuring amount provided for in 
Article 11(2) of Regulation (EC) No 320/2006;  
 
(b)  may not benefit from the payment of the aid provided for in Regulation (EC) No 320/2006.  
 5.  The Member States shall allo cate transitional quotas, on the basis of objective criteria and in a 
manner ensuring equal treatment of producers and to  avoid market and competition distortion, to 
undertakings producing sugar, isoglucose and inulin syrup established in their territory and approved 
in accordance with Article 17 of Regulation (EC) No 318/2006.  
 
6.  The Member States shall introduce a control sy stem and shall take all the necessary steps to 
verify the production of the products referred to in pa ragraphs 1, 2 and 3, and in particular that the 
sugar corresponds to sugar beet sown before 1 January 2006.   
The Member States shall communicate to the Commi ssion, not later than 15 July 2006, the breakdown 
by undertaking of the transitional qu otas allocated under this Article.  
 The Member States shall notify the Commission, no t later than 31 December 2006, of the control 
measures taken and the results thereof.   
 
Article 10 
 
Traditional refining requirements 
 
 For the 2006/2007 marketing year, the traditional refini ng requirements referred to in Article 29(1) of 
Regulation (EC) No 318/2006 shall be increased  by the quantities laid down in Annex III. 
 
 
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   CHAPTER II 
 
AMENDMENTS OF REGULATIONS (EC) NO 1265/2001 AND (EC) NO 314/2002 
 
 
Article 11 
 
Amendment of Regulation (EC) No 1265/2001 
 
 
Regulation (EC) No 1265/2001 is hereby amended as follows:  
 1. The following paragraph is added to Article 11:  
 
  ‘5. At the request of the interested party, th e competent authority of the Member State shall 
cancel refund certificates which have not been fu lly used and have not passed their final date 
of validity. The relevant security sha ll be released for the amount unused.  
 
 Member States shall inform the Commission at the end of each month of the quantity of 
refund certificates cancelled in the course of the previous month, broken down by month of 
issue of the refund certificate.’  
  
2.  The following paragraph is added to Article 14 
  ‘3. The refund certificate shall be valid only fo r the basic products referred to in Article 1 
which are produced under quota in the 2005/2006 marketing year or previous marketing years.’  
 
3.  The following sentence is added to Article 15:  
  ‘However, the refund certificates shall no longer be valid after 31 August 2006.’  
 4.  The following paragraph is added to Article 17:  
 
 ‘3. Member States shall take the necessary add itional steps to ensure the proper application of 
the provisions of Article 14(3).’  
  
Article 12 
 
Amendment of Regulation (EC) No 314/2002 
 
 Regulation (EC) No 314/2002 is hereby amended as follows:  
 
1.  Article 4a(5) is deleted;   2.  The following sentence is added to th e third subparagraph of Article 4c(1):  
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    ‘The notification for the 2005/2006 marketing y ear shall be made before 1 December 2006.’  
 3.  Article 8 is amended as follows:  
 
 (a)  The following subparagra ph is added to paragraph 1:  
   ‘In respect of the 2005/2006 marketing y ear, the amounts and the coefficients referred 
to in points (a) and (b) of the firs t subparagraph shall be fixed before 
15 February 2007.’;  
  (b)  paragraph 2 is amended as follows:     (i)  the following sentence is added to the first subparagraph:  
 
  ‘For the 2005/2006 marketing year, these balances shall be determined before 
28 February 2007.’;  
   (ii)  the following sentence is added to the second subparagraph:   
  ‘For the 2005/2006 marketing year, this payment shall be made before 
15 April 2007.’ 
  
CHAPTER III 
 
FINAL PROVISION 
  
Article 13 
 
Entry into force 
  
This Regulation shall enter into force on the third day following that of its publication in the Official 
Journal of the European Union .  
 
It shall apply from 1 July 2006. However, Articles 1,  3, 11(3) and 12(1) shall apply from the date of 
its entry into force.   This Regulation shall be binding in its entirety a nd directly applicable in all Member States.  
 
Done at Brussels, 27 March 2006.  
  
    For the Commission  
Mariann FISCHER BOEL  
Member of the Commission  
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   ANNEX I 
 
Coefficients referred to in Article 3(2)(a) 
 
 
Member State Coefficients 
Belgium  
Czech Republic  Denmark  Germany  
Greece  
Spain  France (mainland)  France (French overseas departments)  Ireland  
Italy  
Latvia  Lithuania  Hungary  Netherlands  
Austria  
Poland  Portugal (mainland)  Portugal (Azores)  Slovenia  Slovakia  
Finland  
Sweden  United Kingdom  0,8558 
0,9043 0,8395 0,8370 
0,8829 
0,8993 0,8393 0,8827 0,8845 
0,8621 
0,9136 0,9141 0,9061 0,8475 
0,8522 
0,8960 0,8852 
0,884 
0,8844 0,8833 
0,8841 
0,8845 0,8834  
 
 
 
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   ANNEX II 
  
 
Part A: Transitional quotas for sugar referred to in Article 9(1) 
  
Member State Transitional quota for sugar 2006/2007 (tonnes of 
white sugar)  
Spain 
Italy 
Portugal 324 000 
121 187 
52593  
Total 497 780 
  
 
Part B: Transitional quotas for isogl ucose referred to in Article 9(2) 
  
Member State Transitional quota isoglucose 2006/2007 (in 
tonnes of dry matter) 
 Belgium  
Germany  
Greece  Spain  France  Italy  Hungary  
Netherlands  
Poland  Portugal  Slovakia  Finland  
United Kingdom  
17 898 
8 847 
3 223 
20 645 
4 962 5 076 
34 407 
2 275 
6 695 2 479 
10 637 
2 96 
6 809 
Total 126 921 
 
 
Part C: Transitional quotas for inulin syrup referred to in Article 9(3) 
 
 
Member State  Transitional quota inulin syrup 2006/2007 (in 
tonnes of dry matter sugar/isoglucose equivalent)  
Belgium  
France  Netherlands  53 812 
6 130 
20 238  
Total 80 180 
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ANNEX III 
 
Transitional traditional refining requirements referred to in Article 10 
  
Member State  Transitional traditional refining requirements 
2006/2007 (tonnes of white sugar)  
France  
Portugal  
Slovenia  
Finland  
United Kingdom  
 74 157 
72 908  
4 896  
14 981 
282 145 
 
Total 479 087  
 
 
 
 
_______________ 
  
  
 
  
 
  
 
  
 
  
 
  
 
 
 
  
 
  
 
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   COMMISSION REGULATION (EC) No 769/2006 
 
of 19 May 2006 
 
suspending the lodging of applications for ex port licences for C sugar from 23 May 2006 and 
amending Regulation (EC) No 493/2006 
as regards the transitional measures applicable to C sugar 
 
 
THE COMMISSION OF THE EUROPEAN COMMUNITIES,  
 Having regard to the Treaty establishing the European Community,   
Having regard to Council Regulation (EC) No  318/2006 of 20 February 2006 on the common 
organisation of the markets in the sugar sector
1, and in particular Article 44 thereof, 
 Whereas:   (1)  The Agreement on Agriculture conclude d under the Uruguay Round of multilateral trade 
negotiations
2  in accordance with Article 300 of the Treaty contains limits on the quantity and 
value of exports subsidised by  the Community. As a result of the conclusions of the World 
Trade Organisation’s (WTO) Appellate Body of  19 May 2005, exports of C sugar must be 
taken into account in those limits. The Commun ity has been granted a period ending on 
22 May 2006 to comply with its WTO obligations.  
 
(2)  Article 13(1) of Council Regulation (EC)  No 1260/2001 of 19 June 2001 on the common 
organisation of the markets in the sugar sector3  provides in particular for an obligation to 
export C sugar not carried forward. Regul ation (EC) No 318/2006, which applies from 
1 July 2006, no longer includes such an obligation for non-quota sugar produced in respect of the 2006/07 marketing year. Article 44 of that Regulation provides for the possibility of 
adopting transitional measures to facilitate th e transition from the market situation in the 
2005/06 marketing year to the market situation in the 2006/07 marketing year, and the derogations required to ensure compliance by the Community with its international 
obligations with regard to C sugar produced in respect of the 2005/06 marketing year.  
 
(3)  In accordance with Article 44 of Regulation (EC) No 318/2006, Article 2(1) of Commission 
Regulation (EC) No 493/2006 of 27 March 2006 la ying down transitional measures within the 
framework of the reform of the common organi sation of the markets in the sugar sector, and 
amending Regulations (EC) No  1265/2001 and (EC) No 314/2002
4, from 1 July 2006 C sugar 
produced in respect of the 2005/06 marketing year which cannot be carried forward or exported is to be considered non-quota sugar as referred to in Regulation (EC) No 318/2006, 
produced in respect of the 2006/07 marketing year.  
 (4)  Article 27(14) of Council Regulation (EC) No 1260/2001 provides that compliance with the 
restrictions on volume resulting from agreements  concluded under Article 300 of the Treaty is 
                                                     
 
1 OJ L 58, 28.2.2006, p. 1. 
2 OJ L 336, 23.12.1994, p. 22. 
3 OJ L 178, 30.6.2001, p. 1. Regulation as repealed by Regulation (EC) No 318/2006. 
4 OJ L 89, 28.3.2006, p. 11.  WT/DS265/35Add.1 
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   to be ensured by means of export licences issued  for the reerence periods provided for in such 
agreements.  
 
(5)  As a result, taking into account the obliga tions of the European Community under the WTO 
agreements, a derogation from the obligation to export C sugar should be laid down by 
suspending the lodging of applications for export licences for C sugar from 23 May 2006, and 
the transitional arrangements provided for in  Article 2 of Regulation (EC) No 493/2006 
should be applied to C sugar not exported unde r an export licence issued before 23 May 2006.  
 
(6)  Regulation (EC) No 493/2006 should therefore be amended accordingly.   (7)  The measures provided for in this Regula tion are in accordance with  the opinion of the 
Management Committee for Sugar,  
 
 HAS ADOPTED THIS REGULATION:    
Article 1 
 
 
The lodging of applications for export li cences for C sugar in accordance with Commission 
Regulation (EC) No 1464/95
5 (5) is hereby suspended from 23 May 2006. Applications for export 
licences submitted during the period of suspension shall be inadmissible.  
 
 Export licences for C sugar issued but not used by 22 May 2006 may be returned to the issuing body 
during their period of validity. In such cases, not withstanding Article 35 of Commission Regulation 
(EC) No 1291/2000
6, the security shall be released immediately.  
 
 
Article 2 
  
Regulation (EC) No 493/2006 is hereby amended as follows:   
1.  Article 2(1) is replaced by the following:    ‘1. Without prejudice to decisions to carry forw ard taken in accordance with Article 1 of this 
Regulation, C sugar from the 2005/06 marketing year not exported under an export licence 
issued before 23 May 2006 shall be considered , from that date, to be non-quota sugar, as 
referred to in Article 12 of Regulation (EC) No 318/2006, produced in respect of the 2006/07 
marketing year.’;  
 2.  the following sentence is added to  the second paragraph of Article 13:  
 
 ‘Article 2 shall apply from 23 May 2006.’  
 
                                                     
 
5 OJ L 144, 28.6.1995, p. 14. 
6 OJ L 152, 24.6.2000, p. 1. WT/DS265/35/Add.1 
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Article 3 
 
 This Regulation shall enter into force on the day following its publication in the Official Journal of 
the European Union .  
  
It shall apply from 23 May 2006.  
 This Regulation shall be binding in its entirety a nd directly applicable in all Member States.  
 Done at Brussels, 19 May 2006.  
 
    For the Commission  
Mariann FISCHER BOEL  
Member of the Commission  
  
__________