fixing the production levies and the coefficient for calculating the additional levy in the sugar sector for the 1999/2000 marketing year and fixing the production levies in the sugar sector for the 2000/2001 marketing year

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

On 9 February 2017, the Court of Justice delivered its judgment in case C-585/15, Raffinerie Tirlemontoise SA v État belge by which it declared invalid Commission Regulation (EC) No 2267/2000 of 12 October 2000 fixing the production levies and the coefficient for calculating the additional levy in the sugar sector for the marketing year 1999/2000 and Commission Regulation (EC) No 1993/2001 of 11 October 2001 fixing the production levies in the sugar sector for the marketing year 2000/2001.

The levies for the marketing years in question were originally set by the Commission pursuant to Council Regulation (EC) No 2038/1999 of 13 September 1999 on the common organisation of the markets in the sugar sector. This regulation provided for a self-financing system of the sugar sector set by flexible production levies.

Under Council Regulation (EC) No 2038/1999, the common organisation of the markets in the sugar sector was based on the principle that producers should bear full financial responsibility for the losses incurred each marketing year from disposing of that part of Community production under quota which is surplus to the Community's internal consumption and on a differentiation of price guarantees for disposal, reflecting the production quota allocated to each undertaking.

The principle of financial responsibility was assured by producers being charged a basic production levy on all production of A and B sugar, limited to 2% of the intervention price for white sugar and a B levy charged on the production of B sugar up to a limit of 37,5% of that price. When those levies did not allow achieving the objective of self-financing of the sector, each marketing year Regulation (EC) No 2038/1999 provided for an additional levy to be charged to producers. Article 33 of Regulation (EC) No 2038/1999 provided for the elements to be taken into consideration for the calculation of the levies.

In its above mentioned judgement the Court did not put into question the production levy system and the principle by which the sugar producers had to bear the full financial responsibility for the losses incurred in each marketing year by disposing of that part of production under quota which is surplus to the Union's internal consumption and were accordingly liable to a levy on their production under quota, to be fixed by the Commission with a view to covering the losses incurred during the marketing years 1999/2000 and 2000/2001.

The Court has ruled, however, that the Commission has erred in calculating the annual levies set for the period in question pursuant to Council Regulation (EC) No 2038/1999. It found that the method used by the Commission in its Regulations (EC) No 2267/2000 and No 1993/2001, in order to fix the levies, was incorrect because it led to an over-estimation of the costs to be covered and to consequently over-charging sugar producers.

The judgement has left a legal void as to the exact amount of the levies for the marketing years 1999/2000 and 2000/2001. Therefore, to comply with the judgement, the levies set for these marketing years should be replaced by new ones, calculated according to the method validated by the Court, with retroactive effect.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis