7.

The following Chapter 17c is inserted: ‘CHAPTER 17c TOBACCO AID Article 171c Definitions For the purposes of this Chapter: (a) “delivery” means any operation taking place on a given day which involves a farmer or a producer association handing over raw tobacco to a processing undertaking under a cultivation contract; (b) “control certificate” means the document issued by the competent control body certifying that the quantity of tobacco concerned has been taken over by the first processor, that this quantity has been delivered under a registered contract and that the operations have been carried out in accordance with Articles 171cj and 171ck of this Regulation; (c) “first processor” means any approved natural or legal person who carries out first processing of raw tobacco by operation, in his own name and on his own account, of one or more first tobacco processing establishments suitably equipped for that purpose; (d) “first processing” means the processing of raw tobacco delivered by a farmer into a stable, storable product put up in uniform bales or packages of a quality meeting final user (manufacturer) requirements; (e) “producer association” means an association representing farmers producing tobacco. Article 171ca Raw tobacco variety groups Raw tobacco varieties shall be classified in the following groups: (a) flue-cured: tobacco dried in ovens with controlled air circulation, temperature and humidity; (b) light air-cured: tobacco dried in the air under cover; (c) dark air-cured: tobacco dried in the air under cover, fermented before being marketed; (d) fire-cured: tobacco dried by fire; (e) sun-cured: tobacco dried in the sun; (f) Basmas (sun-cured); (g) Katerini (sun-cured); (h) Kaba-Koulak (classic) and similar (sun-cured). The varieties in each group are listed in Annex XXV. Article 171cb First processors 1. Member States shall approve first processors established on their territory and shall establish the appropriate conditions for such approval. An approved first processor is authorised to sign cultivation contracts, provided it sells at least 60 % of its marketed tobacco of Community origin to tobacco manufacturing undertakings either directly, or indirectly without further processing. 2. Approval shall be withdrawn by the Member State if the processor, deliberately or through serious negligence, fails to comply with the provisions concerning raw tobacco at Community or at national level. Article 171cc Production areas For each group of varieties, the production areas referred to in Article 110k(a) of Regulation (EC) No 1782/2003 shall be those laid down in Annex XXVI to this Regulation. Member States may specify more restricted production areas, especially in the interests of quality. Restricted production areas may not exceed the area of the administrative unit or, in France, the canton. Article 171cd Cultivation contracts 1. Cultivation contracts referred to in Article 110k(c) of Regulation (EC) No 1782/2003 shall be concluded between a first processor, on the one hand, and a farmer or a producer association representing him on the other hand, provided that the producer association is recognised by the Member State concerned. 2. Cultivation contracts shall be concluded by variety or group of varieties. They shall commit the first processor to taking delivery of the quantity of leaf tobacco provided for in the contract and the farmer or the producer association representing him to deliver that quantity to the first processor, to the extent that their actual production so allows. 3. For each harvest, cultivation contracts shall include at least the following details: (a) the names and addresses of the parties to the contract; (b) the variety and group of varieties of tobacco covered by the contract; (c) the maximum quantity to be delivered; (d) the exact location where the tobacco is produced: the production area as referred to in Article 171cc, province, municipality, identification of the parcel under the integrated control system; (e) the area of the parcel concerned, excluding service roads and enclosures; (f) the purchase price according to quality grade, excluding the aid, any service charges and taxes; (g) the minimum quality requirements agreed per quality grade, with a minimum of three grades per position on the stalk, and an undertaking by the farmer to deliver to the processor raw tobacco by quality grade meeting at least those quality requirements; (h) a commitment by the first processor to pay the farmer the purchase price according to quality grade; (i) the time-limit for payment of the purchase price, which may not exceed 30 days from the date of delivery; (j) an undertaking by the farmer to replant the tobacco on the parcel concerned by 20 June of the harvest year. 4. If replanting is delayed beyond the date of 20 June, the farmer shall inform the processor and the competent authority of the Member State thereof by registered letter before that date, giving the reason for the delay and giving details of any change of parcel. 5. The parties to a cultivation contract may, by means of a written amendment, increase the quantities initially specified in the contract. The amendment shall be submitted for registration to the competent authority not later than the 40th day following the deadline for concluding cultivation contracts referred to in Article 171ce(1). Article 171ce Conclusion and registration of contracts 1. Cultivation contracts shall be concluded, except in cases of force majeure, by 30 April of the harvest year. Member States may fix an earlier date. 2. Except in cases of force majeure, cultivation contracts once concluded shall be submitted for registration to the competent body no later than 15 days after the deadline for concluding them referred to in paragraph 1. The competent body shall be that of the Member State in which processing is to take place. Where processing is to take place in a Member State other than that in which the tobacco was grown, the competent body of the Member State in which processing is to take place shall immediately send a copy of the registered contract to the competent body of the producer Member State. If that body does not itself carry out checks on the aid system, it shall send a copy of the registered contract to the competent control body. 3. If the deadline for the conclusion of contracts referred to in paragraph 1 or for the submission of cultivation contracts provided for in paragraph 2 is exceeded by a maximum of 15 days, the aid to be paid shall be reduced by 20 %. Article 171cf Contracts with a producer association 1. Where a cultivation contract is concluded between a first processor and a producer association, it shall be accompanied by a list containing the names of the farmers concerned and their respective maximum quantity to be delivered, exact parcel location and the area of the parcels concerned, as referred to Article 171cd(3)(c), (d) and (e). That list shall be submitted for registration to the competent body no later than 15 May of the harvest year. 2. Producer associations referred to in paragraph 1 may not carry out first processing of tobacco. 3. Farmers producing tobacco may not belong to more than one producer association. Article 171cg Minimum quality requirements Tobacco delivered to processors shall be of sound, fair and merchantable quality and free from any of the characteristics listed in Annex XXVII. Stricter quality requirements may be established by the Member State or may be agreed on by contracting parties. Article 171ch Disputes The Member States may provide that disputes concerning the quality of tobacco delivered to the first processor shall be submitted to an arbitration body. The Member States shall lay down the rules governing the membership and the decision-making procedures of such bodies. Arbitration bodies must include one or more representatives of producers and processors, in equal numbers. Article 171ci Aid level In application of Article 110k(d) of Regulation (EC) No 1782/2003, Member States shall fix the indicative aid amount per kg by tobacco variety or group of varieties before 15 March of the harvest year. Member States may differentiate the aid level depending on the quality of the tobacco delivered. For each variety or group of varieties, the aid level shall not exceed the premium amount by group of varieties fixed for the 2005 harvest by Council Regulation (EC) No 546/2002 (10). The Member States shall fix the final aid amount per kg by tobacco variety or group of varieties within 15 working days following the day on which all tobacco for the harvest concerned has been delivered. If the total amount of aid applied for in a Member State exceeds the national ceiling established in Article 110l of Regulation (EC) No 1782/2003, as adjusted in accordance with Article 110m of that Regulation, the Member State shall proceed to a linear reduction of the amounts paid to each farmer. Article 171cj Calculation of the aid payment 1. The aid to be paid to farmers shall be calculated on the basis of the weight of leaf tobacco of the variety or group of varieties concerned corresponding to the minimum quality required and taken over by the first processor. 2. Where the moisture content differs from the level laid down in Annex XXVIII for the variety concerned, the weight shall be adjusted for each percentage point of difference, within the tolerances laid down in that Annex. 3. The methods for determining moisture content, sampling levels and frequency and the method for calculating the adjusted weight shall be as set out in Annex XXIX. Article 171ck Delivery 1. Except in cases of force majeure, farmers shall deliver their entire production to the first processor by 30 April of the year following the year of harvest, failing which they shall lose their entitlement to the aid. Member States may fix an earlier date. 2. The delivery shall be made either directly to the place where the tobacco will be processed or, if the Member State so authorises, to an approved purchasing centre. The competent control body shall approve such purchasing centres, which shall have the appropriate facilities, weighing scales and premises. 3. If the unprocessed tobacco has not been delivered to the places referred to in paragraph 2, or the transporter conveying distinct quantities of tobacco from the purchasing centre to the processing plant does not have authorisation to effect transport, the first processing undertaking which received the tobacco concerned shall pay the Member State a sum of money equal to the aid for the quantity of tobacco in question. This amount shall be booked to the European Agricultural Guidance and Guarantee Fund (EAGGF). Article 171cl Payment The Member State’s competent body shall pay the aid to the farmer on the basis of a control certificate issued by the competent control body certifying that the tobacco has been delivered. Article 171cm Advances 1. By way of derogation from Article 10(1) of Regulation (EC) No 796/2004, Member States may apply a system of advances on tobacco aid for farmers. 2. Farmers’ applications for an advance may be submitted after 16 September of the year of the harvest. They shall be accompanied by the following documents, save where a Member State provides otherwise on the grounds that they are already in its possession: (a) a copy of the cultivation contract or its registration number; (b) a written declaration from the farmer concerned specifying the quantities of tobacco he is in a position to deliver during the current harvest. 3. Payment of the advance, the maximum amount of which shall be equal to 50 % of the aid amount payable, based on the indicative aid level fixed in accordance with Article 171ci shall be subject to the lodging of a security equal to the amount of the advance plus 15 % of the amount of the advance. The security shall be released when the total aid amount has been paid in accordance with Article 19 of Regulation (EEC) No 2220/85. 4. The advance shall be paid from 16 October of the year of the harvest and within 30 days of submission of the application referred to in paragraph 2 and of proof that the security referred to in paragraph 3 has been lodged. The advance paid shall be deducted from the amount of the tobacco aid payable under Article 171cl . 5. Member States shall determine any further conditions governing the grant of advances, and in particular the final date for lodging applications. Farmers may not lodge an application for an advance once they have begun making deliveries. Article 171cn Cross-border processing 1. Aid shall be paid or advanced by the Member State in which the tobacco was produced. 2. Where tobacco is processed in a Member State other than that in which it was produced, the processing Member State shall, after carrying out the necessary checks, provide the producer Member State with all the information needed to enable it to pay the aid or release the security. Article171co Notifications to the Commission 1. Each Member State concerned shall notify the Commission by 31 January of each harvest year at the latest of: (a) the names and addresses of the bodies responsible for the registration of cultivation contracts; (b) the names and addresses of the approved first-processing undertakings. The Commission shall publish the list of the bodies responsible for the registration of cultivation contracts and of approved first-processing undertakings in the ‘C’ series of the Official Journal of the European Union. 2. Each Member State concerned shall immediately notify the Commission of the national measures taken to apply this Chapter. Article 171cp Transitional measure Without prejudice to any future amendments, producers whose tobacco production quotas were bought back during the 2002 and 2003 harvests in accordance with Article 14 of Regulation (EEC) No 2075/92 shall be entitled as from 1 January 2006, for the remainder of the five harvest years following the year in which their quota is bought back, to receive an amount equal to a percentage of the premium granted in respect of the 2005 harvest, as shown in the tables in Annex XXX. These amounts shall be paid before 31 May each year.