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"B COMMISSION REGULATION (EEC) No 411/88
of 12 February 1988
on the method and the rate of interest to be used for calculating the costs of financing intervention
measures comprising buying-in, storage and disposal
(OJ L 40, 13.2.1988, p. 25)
Amended by:
Official Journal
No page date
"M1 Commission Regulation (EEC) No 674/88 of 15 March 1988 L 70 11 16.3.1988
"M2 Commission Regulation (EEC) No 439/89 of 22 February 1989 L 51 7 23.2.1989
"M3 Commission Regulation (EEC) No 1644/89 of 12 June 1989 L 162 18 13.6.1989
"M4 Commission Regulation (EC) No 2623/1999 of 10 December 1999 L 318 14 11.12.19991988R0411 — EN — 01.10.1999 — 002.001 — 1
COMMISSION REGULATION (EEC) No 411/88
of 12 February 1988
on the method and the rate of interest to be used for calculating the costs
of financing intervention measures comprising buying-in, storage and
disposal
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,Having regard to Council Regulation (EEC) No 1883/78 of 2 August 1978
laying down general rules for the financing of interventions by the EuropeanAgricultural Guidance and Guarantee Fund, Guarantee Section (
1), as last
amended by Regulation (EEC) No 2095/87 (2), and in particular Article 5
thereof,
Whereas the provisions concerning the calculation of the costs of financing
intervention measures comprising buying-in, storage and disposal, initiallylaid down in Commission Regulation (EEC) No 467/77 (
3), as last amended
by Regulation (EEC) No 331/87 (4), have been amended a number of times
since their adoption; whereas, by reason of their number, complexity anddispersal among various issues of the Official Journal of the European
Communities , the relevant texts are difficult to use and thus lack the clarity
which should be an essential feature of all legislation; whereas they should
therefore be consolidated;
Whereas, under Article 4 (1) of Regulation (EEC) No 1883/78, an account is
drawn up for each Member State and for each financial year showing the netlosses sustained by the intervention agencies concerned;
Whereas these accounts include financing costs which are to be calculated by
a method and at a rate of interest adopted in accordance with the procedure
laid down in Article 13 of Council Regulation (EEC) No 729/70 (
5), as last
amended by Regulation (EEC) No 3769/85 (6);
Whereas the financing costs should be calculated according to a method
which takes account of the volume of the stocks, of the different ways inwhich the goods are presented for intervention, of the depreciation of goods in
storage since the beginning of the financial year and also of changes in the
intervention prices of products during the financial year; whereas this methodshould be easy to apply;
Whereas the interest rate must be representative of the cost of money
prevailing in the Community;
Whereas, with a view to ensuring that the Community budget continues to be
implemented under appropriate conditions, Regulation (EEC) No 1883/78
authorizes the Commission to fix the uniform interest rate at a level below its
representative level for the 1986, 1987 and 1988 budget years; whereas thebudget year includes, for this type of expenditure, expenditure on material
operations from 1 October of the previous year to 30 September; whereas, in
these circumstances, the interest rate has been reduced to 7 %;
Whereas the second paragraph of Article 5 of Regulation (EEC) No 1883/78
empowered the Commission to fix the uniform interest rate at a lower level inthe case of Member States which have interest costs below those which resultfrom the application of the uniform interest rate for calculating financial
costs; whereas the uniform interest rate has been fixed at 7 % since 1
December 1985; whereas in comparison with the situation in 1985 the interestrates in two Member States fell below the uniform interest rate during 1986;
whereas the specific interest rate to be applied in those Member States should
be fixed;
Whereas Article 7 of Council Regulation (EEC) No 1883/78 provides that
where the products in question experience a depreciation as a result ofstorage, the financial effect thereof is to be recorded and taken into account at
the time of entry into intervention; whereas the basis for calculating the!B
(1) OJ No L 216, 5. 8. 1978, p. 1.
(2) OJ No L 196, 17. 7. 1987 (SIC!, p. 3).
(3) OJ No L 62, 8. 3. 1977, p. 9.
(4) OJ No L 32, 3. 2. 1987, p. 10.
(5) OJ No L 94, 28. 4. 1970, p. 13.
(6) OJ No L 362, 31. 12. 1985, p. 17.1988R0411 — EN — 01.10.1999 — 002.001 — 2
financing costs which are used in determining the net losses of the
intervention agencies is thereby changed; whereas the correspondingdepreciation must therefore be taken into account when calculating theaverage value per tonne of the product;
Whereas, under the rules governing common market organizations, provision
may be made for payment for a product bought in by an intervention agency
to be effected only after a certain period; whereas the method used for
calculating interest charges should therefore be adjusted to take account of theperiod for payment where this is stipulated in the rules;
Whereas, where payment for a product bought in by an intervention agency is
effected after a certain period, the quantities to be used for the calculation ofinterest charges are to be reduced; whereas it transpires that, as a consequence
of the extension of periods for payment and of major buying-in in certain
sectors at the end of the financial year, this reduction may produce a negativeresult; whereas the method of calculation should be adjusted to take accountof this effect;
Whereas the rules governing the common market organizations or
Community invitations to tender governing the sale of agricultural products
in public intervention may allow the purchaser of such products a period in
which to remove them, once payment has been made; whereas the method forcalculating interest charges should be altered to take account of such removal
period;
Whereas, on account of the exceptionally high levels of stocks of certain
agricultural products in intervention storage, the Commission has, in certain
instances, provided for a period in which payment may be made after the
purchaser has removed the products from store; whereas it is thus appropriate,as an exceptional measure, to adjust the method of calculating interest charges
for the sales concerned, in order to take account of such period for payment;
Whereas the measures provided for in this Regulation are in accordance with
the opinion of the EAGGF Committee,
HAS ADOPTED THIS REGULATION:
Article 1
1. The interest costs referred to in Article 1 (1) (b) of Council Regulation
(EEC) No 3247/81 (
1) shall be calculated by applying the rate fixed in
Articles 3 and 4 (2) thereof to the average value per tonne of product which
has been the subject of intervention and by multiplying the figure obtained by
the average stock over the financial year in question.
2. The average value per tonne of product shall be calculated by dividing the
sum of the value of products in store on the first day of the financial year andthe value of products bought in during that year by the sum of the quantity ofproducts in store on the first day of the financial year and the quantity of
products bought in during the financial year.
3. The average stock for the financial year shall be calculated by adding the
total stock at the beginning of each month to the total stock at the end of each
month and dividing the total thus obtained by twice the number of months inthe financial year.
Article 2
1. Where a coefficient of depreciation is fixed for a product pursuant to
Article 7 of Regulation (EEC) No 1883/78, the value of the products boughtin during the financial year shall be calculated by multiplying the buying-in
price by this coefficient.
In the case of products for which a reduction in value has been fixed pursuant
to the second subparagraph of Article 8 of Regulation (EEC) No 1883/78, the
calculation of average stocks shall be made before the effective date of eachreduction in value taken into account for the purposes of the average value.
2. Where it is stipulated, in the rules governing common market
organizations, that payment for a product bought in by an interventionagency may not be effected until a minimum of one month has elapsed after
the date of acceptance of delivery, the average stock calculated in accordance!B
(1) OJ No L 327, 14. 11. 1981, p. 1.1988R0411 — EN — 01.10.1999 — 002.001 — 3
with paragraph 3 shall be reduced by a quantity resulting from the following
calculation:
Q/C2N
12
Q = quantities bought in during the financial year,
N = number of months of minimum period for payment.
For the purposes of this calculation, the minimum period given in the rules
shall be taken as the period for payment. A month shall be considered as
consisting of 30 days. Any part of a month longer than 15 days shall beconsidered a whole month; any part of a month equal to or less than 15 days
shall not be taken into account for this calculation.
Where the calculation of average stock at the end of the year gives a negative
result once the reduction referred to in the first subparagraph has been
effected, that amount shall be deducted from the average stock calculated forthe following financial year.
3. Where, for the sale of products by intervention agencies, the rules
governing the common market organization or notices of invitation to tenderallow the purchaser of such products a period in which to remove them, once
payment has been made, and where such period exceeds 30 days, the
financing costs calculated in accordance with the preceding paragraphs shallbe reduced by the amount produced by the following calculation:
V/C2J/C2i
365
V = amount paid by the purchaser,
J = number of days between receipt of payment and removal of product,
less 30,
i = interest rate specified in Article 3.
4. In respect of sales of agricultural products by intervention agencies based
on specific Community regulations, where the actual period for payment after
removal of such products exceeds 30 days, the financing costs calculated in
accordance with the preceding paragraphs shall be increased by the amountproduced by the following calculation:
M/C2D/C2i
365
M amount to be paid by purchaser,
D number of days between removal of product and receipt of payment, less
30,
i interest rate specified in Article 3.
Article 3
The interest rate referred to in Article 5 of Regulation (EEC) No 1883/78
shall correspond to the three months’ and twelve months’ forward EURIBORrates with a weighting of one third and two thirds respectively.
The interest rate shall be fixed before the beginning of each EAGGF
Guarantee Section accounting year on the basis of the rates recorded in the six
months preceding fixing.
Article 4
1. If the rate of interest costs borne by a Member State is lower for at least 6
months than the uniform interest rate fixed for the Community, a specific
interest rate shall be fixed for that Member State.!B
!M3
!M4
!M3
!B1988R0411 — EN — 01.10.1999 — 002.001 — 4
!M3
1a. The interest costs borne by a Member State shall be notified to the
Commission no later than 20 days before the end of the financial year. It shall
relate to the six months preceding such notification.
Where no interest rate is notified, the interest costs to be applied are
determined on the basis of the reference interest rates set out in the Annex.
2. For the period 1 January to 30 September 1989, the specific interest rate
shall be:
— 6 % for Germany,
— 6,5 % for the Netherlands and for Luxembourg.
Article 5
Regulation (EEC) No 467/77 is hereby repealed.
Article 6
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable in all
Member States.!M2
!B1988R0411 — EN — 01.10.1999 — 002.001 — 5
ANNEX
Reference interest rates referred to in Article 4(1a) (1)
1. Denmark
Copenhagen interbank borrowing offered rate three months (CIBOR)
2. Greece
Athens interbank borrowing offered rate three months (ATHIBOR)
3. Sweden
Stockholm interbank borrowing offered rate three months (STIBOR)
4. United Kingdom
London interbank borrowing offered rate three months (LIBOR)
5. For the other Member States
Euro interbank borrowing offered rate three months (EURIBOR)
NB: These rates will be increased by one percentage point, corresponding to the
banking margin.!M4
(1) Net interest rates concerned, i.e. interest rates after setting off the possible part that
corresponds to fiscal charges (withholding tax, etc.).1988R0411 — EN — 01.10.1999 — 002.001 — 6