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COMMISSION DECISION No 2365/86/ECSC

of 28 July 1986

laying down the conditions and criteria for the application of Article 7 of Decision No 3485/85/ECSC on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry

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), and in particular Article 7 thereof,

Whereas:

1. Purpose

The purpose of Article 7 of Decision No 3485/85/ECSC is to limit to a maximum of 1 % the loss of relativity during two consecutive quarters suffered by a company not benefiting or benefiting relatively less than Community undertakings viewed as a whole, from the additional quotas granted under Articles 14 and 14A of Decision No 3485/85/ECSC.

The position on quotas must be corrected category by category, with the proviso that the undertaking must also have been suffering a loss of at least 1 % in all the categories it produces for two consecutive quarters.

It is the Commission's responsibility to lay down the conditions and criteria for application to enable the principle established by the above Article to be realised.

2. References

The reference figures to be used are those calculated in accordance with Article 6 of Decision No 3485/85/ECSC, including those calculated in accordance with Article 4 (5) and exchanges and/or transfers and adjustments granted by the Commission pursuant to Article 2 (1), Article 13 and Article 15 (1), (2), (3) and (4) of that Decision.

3. Calculation of the 'basic quotas'

The 'basic quotas' are obtained solely by applying the abatement rates to the reference figures for the undertaking during the quarters considered.

4. Calculation of the 'final quotas'

The 'final quotas' of an undertaking are defined, for production and deliveries in each category, as the sum of the 'basic quota' and adjustments pursuant to Article 14 or 14A of Decision No 3485/85/ECSC for the quarter concerned.

5. Method for determining eligibility for the application of Article 7 of Decision No 3485/85/ECSC

The method for determining whether or not an undertaking is eligible for the application of Article 7 is as follows:

- For each undertaking and for each quarter from the first quarter of 1986, the ratio of the sum of the undertaking's 'basic quotas' to the sum of the 'basic quotas' of all Community undertakings for the same categories is compared to the ratio of the sum of the undertaking's 'final quotas' to the sum of the 'final quotas' of all Community undertakings for the same categories.

- If the difference between the ratio of the 'final quotas' and the ratio of the 'basic quotas' is negative and exceeds 1 % of the ratio of the 'basic quotas' during two consecutive quarters, the calculation must then be made of the adjustments necessary to reduce the loss to a maximum of 1 % for each of the categories for each quarter in terms of the production quotas and proportions of such quotas which may be delivered in the common market. The sum of the adjustments for each category may not result in a positive overall difference between the ratios of 'final quotas' and the ratio of 'basic quotas' for all categories together, nor may that sum result in a negative difference that is less than 1 % in absolute terms. The adjustments thus calculated are to be spread over a reasonable period to enable the undertaking to use them adequately and to avoid too great a concentration of deliveries in a short space of time, which could disturb the market. Spreading over two quarters the adjustments for the two preceding quarters will obviate such disadvantages.

- The calculation set out above is repeated in each quarter in order to check whether the undertaking fulfils the eligibility conditions during two consecutive quarters, bearing in mind that the application of Article 7 of Decision No 3485/85/ECSC may not be granted more than once per quarter. Where an undertaking no longer fulfils the eligibility conditions during a quarter, the sequence is interrupted for that undertaking and will not be resumed until the conditions are again fulfilled during two consecutive quarters.

6. Procedure

After the end of each quarter the Commission will draw up the list of undertakings eligible for the application of Article 7 of Decision No 3485/85/ECSC. The Commission will automatically allocate the resulting additional quotas to the recipient undertakings.

HAS ADOPTED THIS DECISION:

Article 1

The reference figures to be used for the purposes of Article 7 of Decision No 3485/85/ECSC shall be those calculated in accordance with Article 6 of that Decision, including those calculated in accordance with Article 4 (5) and exchanges and/or transfers and adjustments granted by the Commission pursuant to Articles 2 (1), 13 and 15 (1), (2), (3), (4) of that Decision.

Article 2

The 'basic quotas' within the meaning of Articles 3 and 4 shall be obtained by applying the abatement rates to the reference figures for the undertaking during the quarter or quarters considered.

Article 3

The 'final quotas' within the meaning of Article 4 shall be equal to the sum:

'basic quotas' + adjustment under Article 14 of Decision No 3485/85/ECSC

or the sum:

'final quotas' + adjustment under Article 14A of Decision No 3485/85/ECSC.

Article 4

The chance of relativity during a quarter, by category and for all categories produced by an undertaking, shall be equal to the difference between the ratios 1. and 2. below, calculated as follows for the same quarter:

1.

undertaking's 'basic quotas' × 100,00

'basic quotas' for the Community as a whole for the

category or categories in question

2.

undertaking's 'final quotas' × 100,00

'final quotas' for the Community as a whole for the

category or categories in question

Article 5

Application of Article 7 of Decision No 3485/85/ECSC shall be granted to undertakings for which the difference, for all categories, between the ratios 2. and 1. set out in Article 4 of the Decision is negative and exceeds 1 % of ratio 1. during at least two consecutive quarters.

Article 6

The calculations and the allocation of additional quotas granted under Article 7 of Decision No 3485/85/ECSC shall be made separately by category for production quotas and for that proportion of the quotas which may be delivered in the common market.

Article 7

The additional production quotas and the proportions of those quotas which may be sold on the common market, which may be granted category by category under Article 7 of Decision No 3485/85/ECSC, shall be calculated in such a way that the ratio between the 'final quotas' of the undertaking concerned (including additional quotas granted under Article 7 of Decision No 3485/85/ECSC) and the 'final quotas' for Community undertakings as a whole in the category in question shall not differ by more than 1 % from the equivalent ratio between the 'basic quotas' for the undertaking concerned and the 'basic quotas' for Community undertakings as a whole. However, the difference calculated for all categories between the ratios 2. and 1. set out in Article 4 (including additional quotas granted to the undertaking in question under Article 7 of Decision No 3485/85/ECSC) must be negative and may not be less than 1 % in absolute terms.

Article 8

The adjustments granted under Article 5 shall be valid for use by the recipient undertaking until the end of the second quarter following the last quarter for which the adjustment was granted.

Article 9

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

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

Done at Brussels, 28 July 1986.

For the Commission

Karl-Heinz NARJES

Vice-President

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