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COMMISSION DECISION No 1433/87/ECSC

of 20 May 1987

on converting a proportion of the production quotas into quotas for delivery in the common market

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community,

Having regard to Commission Decision No 3485/85/ECSC of 27 November 1985 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry (1), as amended by Decision No 3746/86/ECSC (2), and in particular Article 18 thereof,

Whereas exports to non-Community countries by the Community's steel undertakings were particularly low in 1986. The volume of exports during the last quarter of the year was probably the lowest since the introduction of the quota system. Similarly, the ratio between costs and export prices has deteriorated significantly in the last three years and the situation is unlikely to improve appreciably in 1987;

Whereas because this trend has persisted for so long it is affecting all undertakings, in proportion to the extent to which they are dependent on exports. Account should also be taken of the fact that the undertakings were allocated their reference figures several years ago and some of these must now be out of date in view of changes in the market. It would therefore be appropriate to seek some remedy within the quota system itself by permitting the conversion of a portion of the production quotas into quotas for delivery in the common market. As the extent to which undertakings are affected by the deterioration in the world market depends directly on the extent to which they are dependent on exports of products covered by the quota system, it would be advisable to differentiate accordingly. Nevertheless, in the interests of internal market stability, it would be desirable to limit the amount of conversion. It would also be advisable to lay down a conversion ratio such as to mitigate the side-effects on undertakings less able to profit from the measure;

Whereas all undertakings should be given the opportunity of deciding for themselves for which category of products they wish to use the conversion option in a particular quarter.

Whereas the situation described above constitutes a radical change in the iron and steel market within the meaning of Article 18 (1) of Decision No 3485/85/ECSC,

HAS ADOPTED THIS DECISION:

Article 1

1. Each quarter, for a category of products to be decided by them, undertakings shall be permitted to convert a portion of the difference between their production quota derived from their reference production and the proportion of the quota which may be delivered in the common market derived from their reference quantity into quotas for delivery in the common market at the rate of 1: 0,85. This portion shall not exceed 30 % where the ratio of reference quantities to reference production for all products subject to the quota system is more than 15 percentage points below the relevant average for all undertakings. It shall not exceed 15 % where this ratio is more than five percentage points below the average, or 5 % where the ratio is better than the latter. The average for all undertakings and product categories is 76 %.

2. Untertakings exercising the option granted in paragraph 1 shall notify the Commission before the end of the quarter in question.

Article 2

Undertakings applying the provisions of Article 1 to a product category shall not have the option of applying the provisions of Article 14 B or 11 (4) of Decision 3485/85/ECSC to that product category.

Article 3

This Decision shall enter into force on the day of its publication in the Official Journal of the European Communities.

It shall apply with effect from 1 January 1987.

This Decision shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 20 May 1987.

For the Council

Karl-Heinz NARJES

Vice-President

(1) OJ No L 340, 18. 12. 1985, p. 5.

(2) OJ No L 348, 10. 12. 1986, p. 1.