COMMISSION DECISION No 3716/83/ECSC of 23 December 1983 establishing a guarantee system for certain steel products and a system for the verification of the minimum prices

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Articles 47 and 95 thereof,

With the unanimous assent of the Council and after consulting the Consultative Committee,

Whereas:

In order to combat the manifest crisis in the Community steel industry, the Commission recently established by Decision No 3715/83/ECSC (1) minimum prices for certain flat products, sections and beams. That system is intended to strengthen the system of monitoring and production quotas in force for certain steel products, as extended by Commission Decision No 2177/83/ECSC (2).

In order to ensure that these measures are fully effective, it is necessary to ensure that the undertakings fulfil their obligations pursuant to the two abovementioned Decisions. Experience has shown that the traditional procedures provided for in the ECSC Treaty are inadequate.

The provisions of a guarantee calculated on the basis of the quarterly reference quantity for each undertaking is an appropriate means of guaranteeing that a penalty can be enforced rapidly in the event of non-compliance with the minimum prices or with the quantities which can be delivered in the common market.

In order to affect the cash flow of the undertakings as little as possible, it is appropriate that they should be given a choice between a guarantee in the form of a transfer to a special bank account, a bank guarantee or draft or any other means approved by the Commission.

For the system to be effective, administrative procedures involving the Member States are required. It is the responsibility of the Member States inter alia to ensure that the undertakings correctly discharge their obligations under the guarantee system, to send the undertakings, where appropriate, a letter of notice in the name and on behalf of the Commission, in accordance with Article 36 of the ECSC Treaty, to append as soon as possible the order for enforcement to the Commission's penalty decision, in accordance with Article 92 of the ECSC Treaty, and to enforce that decision without delay.

It is appropriate to place a limit on the fine which the Commission may impose on an undertaking in the event of non-fulfilment of its obligations under the guarantee system.

It is appropriate to determine the procedures for returning or releasing the guarantee where an undertaking has lodged the guarantee due for the following quarter and has paid any fine due.

In order to make the penalty procedures more effective, it is appropriate to make provision for the Commission to be able to block, provisionally, the return or release of an appropriate amount of the guarantee in the event of infringement of the quota or price rules.

It is the responsibility of authorized representatives of officials of the Commission to verify that undertakings are complying with the minimum prices. Inspection must be tightened up. In this respect a suitable means is to require undertakings to instruct an auditing company or another body authorized to this end to carry out the necessary verifications and to submit regular reports to the Commission and the Member State concerned.

Certain small undertakings may be exempted from the provisions of this Decision without affecting the aims pursued.

The ECSC Treaty does not provide the necessary powers to enable the Commission to impose the obligations in question. This Decision is nevertheless necessary in order to attain one of the objectives of the Community. Article 95 of the ECSC Treaty enables the necessary decisions to be taken in such cases, (1) See page 1 of this Official Journal. (2) OJ No L 208, 31.7.1983, p. 1.

HAS ADOPTED THIS DECISION:

Article 1

1. A guarantee system is hereby established for those products subject to the system of production quotas for categories Ia, Ib, II and III, pursuant to Decision No 2177/83/ECSC, for the purpose of ensuring compliance by the undertakings with the obligations arising from the system of minimum prices and the system of production quotas.

2. This Decision shall not apply to undertakings: - whose total quotas for categories Ia, Ib, II and III, including adjustments of quotas under Article 14 of Decision No 2177/83/ECSC, amount to 15 000 tonnes or less per quarter,

and

- whose total quotas for all the products subject to the system established under Article 58 of the Treaty do not exceed 20 000 tonnes per quarter.

Article 2

1. For the products referred to in Article 1, each undertaking shall be required either: (a) to deposit in a special bank account opened in accordance with Annex 1, or

(b) to give the Commission, subject to the agreement of the latter, by irrevocable bank guarantee, draft or any other form of guarantee in accordance with Annex 1,

by way of guarantee an amount equal to 15 ECU per tonne, or the equivalent thereof in national currency, multiplied by the undertaking's quarterly reference quantity applied to the abatement rates. This operation shall be carried out on a single occasion during the first month of each quarter.

The Commission shall notify the Member States of the names of the undertakings covered by this Decision and of the amounts required as guarantees.

2. Undertakings shall inform the Commission and the Member State concerned of the situation regarding the bank account or other form of guarantee referred to above at the beginning of the second month of each quarter.

3. Where an undertaking does not fulfil its obligations in accordance with paragraphs 1 and 2 the Commission shall inform the Member State concerned. The latter shall send the undertaking a letter of notice in accordance with Annex 2.

4. If, on expiry of the period laid down in the letter of notice, the undertaking has not fulfilled its obligations, the Member State shall inform the Commission thereof without delay and shall at the same time forward any comments by the undertaking, where appropriate. The Commission may decide to impose a fine not exceeding 20 % of the amount required by way of guarantee.

5. The Commission shall send a copy of its decision to the Member State. The latter shall append the order for enforcement in accordance with Article 92 of the ECSC Treaty, within five working days. The Member State, acting in the name and on behalf of the Commission, shall initiate the enforcement procedure as soon as possible. It shall transfer as soon as possible to the Commission's account the proceeds of the fine recovered.

6. No later than the end of the first week of the second month following the quarter referred to in paragraph 1, the Commission shall return or release the amounts blocked, subject to the provisions of paragraphs 7 to 9 below, as soon as the guarantee for the following quarter has been lodged.

7. Where the Commission has, in respect of the products referred to in Article 1, prima facie evidence of infringement of the quota or price rules under the ECSC Treaty, and without prejudice to the procedure provided for in Article 36 of the ECSC Treaty, it shall send the undertaking a reasoned decision provisionally blocking the return of an appropriate amount and shall inform the Member State concerned thereof.

8. Where the Commission has taken a decision imposing on an undertaking a fine for infringing these rules, an amount corresponding to the level of the fine shall not be returned or released in accordance with paragraph 6 until such time as the undertaking has paid the fine imposed. Where the undertaking fails to effect payment within the prescribed period, an amount corresponding to the level of the fine shall be forfeited to the Commission, and the remainder shall be returned to the undertaking or placed at its disposal.

9. In the absence of a Commission decision imposing a penalty within a period of six months following notification of the reasoned decision blocking the return or release, the corresponding amount shall be returned or released.

Article 3

1. Undertakings shall be required to entrust the verification: - of their orders and sales invoices for the products referred to in Article 1,

- of payment against invoices,

to an auditing company or other body of their choice, authorized to carry out the said function, accepted by the Commission and, where appropriate, by the Member State if the latter so requests. The auditing company or other body shall not be responsible for payment. They shall carry out an inspection each month and shall submit an inspection report to the Commission no later than the end of the following month and shall forward copies thereof to the Member State in question. The cost of these inspections shall be borne by the undertakings.

2. The system described in paragraph 1 shall apply for deliveries effected from 1 January 1984.

Undertakings shall inform the Commission before 15 January 1984 of the arrangements that they have made to this effect. The Commission may request undertakings to alter these arrangements if they do not appear to be satisfactory.

3. Undertakings shall take the measures necessary to allow verifications at the auditing company or other body of their choice by authorized representatives or officials of the Commission who are responsible for carrying out inspections, under the conditions laid down in Commission decisions adopted under Article 47 of the ECSC Treaty.

Article 4

The Commission may make technical amendments to this Decision, in particular in the light of experience.

Article 5

This Decision shall enter into force on 1 January 1984.

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

Done at Brussels, 23 December 1983.

For the Commission

Étienne DAVIGNON

Vice-President

ANNEX 1

Each undertaking shall open at a bank of its choice established in the Community a special bank account in which it shall lodge the guarantee.

The undertaking shall give the bank irrevocable instructions to the effect that only the Commission is authorized to draw on the account.

The Commission shall give the bank instructions concerning inter alia the return, blocking or transfer to a Commission account of all or part of the guarantee.

The costs involved in opening and administering the said account shall be borne by the undertaking.

The undertaking shall issue instructions to the bank to confirm to the Commission the extent of the powers conferred upon the latter to administer the abovementioned special account. The Commission shall supply the bank with a list of persons authorized to sign for banking operations concerning the said account.

Where a draft is the means chosen, the undertaking should deposit the draft with a bank of its choice established in the Community. The draft may be returned to the undertaking only on the Commission's orders. The undertaking shall issue instructions to the bank to inform the Commission that the draft has been deposited.

Where a bank guarantee is the means chosen, the text of the bank guarantee must be approved in advance by the Commission. The undertaking shall choose a bank established in the Community. The undertaking shall issue instructions to the bank to send the Commission a copy of the contract of guarantee drawn up in favour of the Commission.

ANNEX 2 LETTER OF NOTICE

The Commission has established that your undertaking has not to date deposited (has only partially deposited), in the account opened for this purpose, the guarantee required by Article 2 of Decision No 3716/83/ECSC published in Official Journal of the European Communities No L 373 of 31 December 1983. Nor has it fulfilled the relevant obligations by any other means approved by the Commission.

Acting in the name and for the account of the Commission of the European Communities, we hereby request you to kindly comply, within seven working days of receipt of this letter, with the abovementioned obligations or to submit your comments on this matter, in accordance with Article 36 of the ECSC Treaty.