411/88 - - - I
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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 No L 40, 13. 2. 1988, p. 25)
Amended by:
Official Journal
No page date
Commission Regulation (EEC) No 674/88 of 15 March 1988 L 70 11 16. 3. 1988
Commission Regulation (EEC) No 439/89 of 22 February 1989 L 51 7 23. 2. 1989Commission Regulation (EEC) No 1644/89 of 12 June 1989 L 162 18 13. 6. 1989
411/88 - - - I
ICOMMISSION 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 T reaty establishing the EuropeanEconomic 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 European Agricultural Guidance
and Guarantee Fund, Guarantee Section (
1), as last
amended by Regulation (EEC) No 2095/87 (2), and in par-
ticular Article 5 thereof,
Whereas the provisions concerning the calculation of the
costs of financing intervention measures comprising buying-
in, storage and disposal, initially laid down in CommissionRegulation (EEC) No 467/77 (
3), as last amended by Re-
gulation (EEC) No 331/87 (4), have been amended a
number of times since their adoption; whereas, by reason
of their number, complexity and dispersal 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 legisla-
tion; 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 net losses
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 Ar-
ticle 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 in which the goods are pres-
ented for intervention, of the depreciation of goods in stor-
age since the beginning of the financial year and also of
changes in the intervention prices of products during the
financial year; whereas this method should be easy to
apply;
(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.
411/88 - - - I
IIWhereas 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 the budget 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 in the case of
Member States which have interest costs below those
which result from the application of the uniform interestrate for calculating financial costs; whereas the uniform in-
terest rate has been fixed at 7 % since 1 December 1985;
whereas in comparison with the situation in 1985 the in-
terest rates 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 of storage, the finan-
cial effect thereof is to be recorded and taken into account
at the time of entry into intervention; whereas the basis
for calculating the financing costs which are used in deter-
mining the net losses of the intervention agencies is there-
by changed; whereas the corresponding depreciation must
therefore be taken into account when calculating the aver-
age value per tonne of the product;
Whereas, under the rules governing common market or-
ganizations, 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 the period for payment where this is stipu-
lated 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 of interest charges
are to be reduced; whereas it transpires that, as a conse-
quence of the extension of periods for payment and of
major buying-in in certain sectors at the end of the finan-cial year, this reduction may produce a negative result;
whereas the method of calculation should be adjusted to
take account of this effect;
411/88 - - - I
IIIWhereas the rules governing the common market organiz-
ations 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 for calculating 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 stor-
age, the Commission has, in certain instances, provided for
a period in which payment may be made after the pur-
chaser 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 con-
cerned, in order to take account of such period for pay-
ment;
Whereas the measures provided for in this Regulation are
in accordance with the opinion of the EAGGF Committee,
HAS ADOPTED THIS REGULATION:
411/88 - - - I
1Article 1
1. The interest costs referred to in Article 1 (1) (b) of
Council Regulation (EEC) No 3247/81 (7) shall be calcu-
l a t e db ya p p l y i n gt h er a t ef i x e di nA r t i c l e s 3a n d4( 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 and the value of
products bought in during that year by the sum of the
quantity of products in store on the first day of the finan-
cial 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 ofeach month to the total stock at the end of each month
and dividing the total thus obtained by twice the number
of months in the 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 bought in 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 Ar-
ticle 8 of Regulation (EEC) No 1883/78, the calculation of
a v e r a g es t o c k ss h a l lb em a d eb e f o r et h ee f f e c t i v ed a t eo f
each reduction in value taken into account for the pur-
poses 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 intervention agency may not be effected until a
minimum of one month has elapsed after the date of ac-
ceptance of delivery, the average stock calculated in ac-
cordance with paragraph 3 shall be reduced by a quantity
resulting from the following calculation:
Q×N
12
Q = quantities bought in during the financial year,
N = number of months of minimum period for payment.
(7) OJ No L 327, 14. 11. 1981, p. 1.411/88
411/88 - - - I
2For 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 be considered 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 for the
following financial year.
3. Where, for the sale of products by intervention
agencies, the rules governing the common market organiz-
ation or notices of invitation to tender allow 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 withthe preceding paragraphs shall be reduced by the amount
produced by the following calculation:
V×J×i
365
V = amount paid by the purchaser,
J = number of days between receipt of payment and re-
moval of product, less 30,
i = interest rate specified in Article 3.
4. In respect of sales of agricultural products by inter-
vention 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 in-
creased by the amount produced by the following calcula-
tion:
M×D×i
365
M = amount to be paid by purchaser,
D = number of days between removal of product and re-
ceipt 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 c orrespond to the interest rates
for the ecu for three months’ and 12 months’ forward rates
recorded by the Statistical Office of the European
Communities on the Euromarkets with a weighting of one-
third and two-thirds respectively.411/88
1644/89
411/88 - - - I
3The 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 fix-
ing.
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.
1a. The interest costs borne by a Member State shall benotified 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 in-
terest rates set out in the Annex.
2. For the period 1 January to 30 September 1989, thespecific 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 fol-
lowing its publication in the Official Journal of the Euro-
pean Communities.1644/89
411/88
1644/89
439/89
411/88
411/88 - - - I
4ANNEX
Reference interest rates referred to in Article 4 (1a) (1)
1.Belgium:
Brussels interbank borrowing offered rate three months
2.Denmark:
Y i e l do ni s s u eo f1 2 - m o n t hT r e a s u r yb o n d s
3.Germany:
Frankfurt interbank borrowing offered rate three months
4.Greece:
Yield on issue of three-month Treasury bonds
5.France:
Paris interbank borrowing offered rate three months
6.Spain:
Madrid interbank borrowing offered rate three months
7.Ireland:
Dublin interbank borrowing offered rate three months
8.Italy:
Yield on issue of three month Treasury bonds
9.Luxembourg:
Interbank rate three months
10.Netherlands:
Amsterdam interbank borrowing offered rate three months
11.Portugal:
Lisbon interbank borrowing offered rate three months
12.United Kingdom:
London interbank borrowing offered rate three months
NB: These rates will be increased by one percentage point,
corresponding to banking margin.
(1) Net interest rates concerned, i.e. interest rates after setting off the
possible part that corresponds to fiscal charges (withholding tax,
etc).1644/89