[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 14.8.2007

SEC(2007) 1066

COMMISSION STAFF WORKING DOCUMENT ANNEX TO THE

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on existing legal provisions, systems and practices in the Member States and at Community level relating to liability in the food and feed sectors and on feasible systems for financial guarantees in the feed sector at Community level in accordance with Article 8 of Regulation (EC) No 183/2005 of the European Parliament and of the Council of 12 January 2005 laying down requirements for feed hygiene {COM(2007) 469 final}

BACKGROUND

Production of feedingstuffs

Feed supply must be safe and suitable for each animal species and age category. Although the largest source of feed for ruminants is found in pastures and primary agricultural products from the farm, animals kept for food production are also fed with compound feedingstuffs , which are either manufactured in feed mills or in the farms where they will be used. A broad range of feed materials is mixed together, frequently with premixtures of feed additives , to manufacture compound feedingstuffs.

Some feed materials derive from a first-stage processing of agricultural products (e.g. cereals, legumes, oil seeds); others are obtained from the processing of animal products (e.g. fish meal, milk products, animal fat) or from the processing of food and drinks (e.g. bakery and brewery by-products, sugar beet pulp). On the other hand, most feed additives (e.g. vitamins, enzymes) are manufactured by the chemical and pharmaceutical industries.

In addition to processing, feedingstuffs are transported over short or long distances between the places of production, manufacture, storage and use. Other trade operators (e.g. importers, wholesalers, retailers) are also involved in the chain. A large amount of feed materials is imported from third countries. Of the 150 million tonnes used as raw materials by the feed industry each year, about 55 million tonnes (mainly soya meal and cereals) are imported from third countries.

Given that Regulation (EC) No 183/2005 extended the scope of registration to a very large number of feed business operators, Member States have been developing comprehensive registers of operators. According to provisional data provided by the Member States' competent authorities, the number of feed business operators at the level of primary production of feed within the scope of Article 5(1) of Regulation (EC) No 183/2005 is now estimated at about 5 million. With regard to operators falling within the scope of Article 5(2) of Regulation (EC) No 183/2005, about 1 million (of whom 85% are in Poland) are livestock farmers who mix feed for the exclusive requirements of their own holdings, and about 0.33 million are manufacturers of feed materials, food businesses selling by-products intended for use as feed materials, manufacturers of feed additives, premixtures and compound feedingstuffs, as well as other businesses engaged in storage, distribution or transport of feed.

The value of feedingstuffs used in 2005 by EU-25 livestock producers, including forages produced on the farm is estimated at EUR 61 billion, which accounts for 47% of the turnover in livestock production (EUR 129 billion).

Feed safety incidents

Taking into account the numerous stages in the production, processing and handling of feedingstuffs and the diversity of products obtained, many different hazards can threaten feed safety. Failures can occur at any stage of the chain, but some of these stages are more critical.

Experience has shown that the safety of the food chain depends on its weakest link. One single error made by an operator can jeopardise the work of customers and partners along the distribution chain. Sometimes these incidents affect only a small number of operators in a restricted area and are limited to a few levels of the chain. However, incidents can also expand through a cascade effect with serious consequences for many operators and on different levels before reaching the consumers. In those cases, not only feed is contaminated, but also the animals that have been fed, as well as the foodstuffs of animal origin derived therefrom. The severity of the incidents depends on several factors, such as the hazardous nature of the contaminant, its concentration in the products, the duration of exposure to the contamination, the pattern of accumulation in tissues and the speed of processing and transport operations. It also depends on how early the event is detected, and on the effectiveness of the measures taken for tracing back and analysing feed and food suspected to be hazardous and food-producing animals suspected to be affected. Finally, it depends on the speed of withdrawing hazardous products from the market.

If an operator suspects that a feedingstuff does not satisfy feed safety requirements, he must initiate procedures to withdraw the product from the market. This process has been facilitated by the introduction of mandatory traceability requirements, but it is still not an easy task, due to the complexity of feed production and distribution.

Unsafe products must always be withdrawn from the market and disposed of. The corresponding costs have to be paid, no matter whether the contamination has resulted from fault, negligence, intent or other factors.

Withdrawal and disposal costs

Despite preventive measures, large-scale feed safety incidents have occurred in recent years. The situation has often been remedied by withdrawing from the market, treating and destroying feed and food, and by culling of animals and testing. These actions have incurred great expenditure , which is estimated at:

- annual losses of EUR 2.75 billion related to the BSE epidemic in the EU since 1986[1], taking into account the direct costs of control measures (e.g. slaughtering, containment, eradication), as well as the loss in value due to the exclusion from the food chain of certain carcass components, the safe disposal of waste material, the animal testing and the extra procedures and precautions implemented in the slaughtering industry;

- direct costs of EUR 181 million resulting from the 1999 dioxin contamination in Belgium, 73 % of which represents the value of destroyed products;

- direct costs of EUR 1 million (in the two most affected German Länder) resulting from the 2002 nitrofen contamination of cereals in Germany, not including the value of affected products and animals;

- direct costs of EUR 43 million (in the Netherlands only, being the most affected country) resulting from the 2002 MPA contamination of glucose syrup, 44% of which represents the value of destroyed food and feed, and 31% the cost of destruction;

- direct costs of EUR 0.7 million resulting from the 2003 dioxin contamination of dried bakery by-products and other dried products in Germany, 81% of which represents the value of destroyed food and feed.

In two of these cases (dioxins 1999 and nitrofen 2002), the expenditure was totally borne by public authorities. With the exception of the BSE cost estimate, only direct costs are included. Indirect costs not taken into account in these examples relate to: production standstills, ban on sales of potentially affected products, loss of market share and reputation.

When facing severe feed safety incidents, the Member States' competent authorities implement a number of immediate measures aimed at containing the spread of the contamination. These measures generally comprise traceability , testing and withdrawal order . The trigger for an official withdrawal order is the existence of a danger, hazard, risk or threat to humans or animals and, in some cases, also to the environment. One of the objectives of the immediate measures is to prevent the distribution, display and offer of feed which is hazardous to animals and of food which is hazardous to consumers. Another objective is to prevent the production of food from affected animals, which can be achieved by confining the affected and suspected animals as well as any hazardous ingredients that could be used for feed or food production.

After containing the incident, the competent authorities order the safe disposal of the feed, food and animals that have been withdrawn from the chain. They can either be subjected to special treatment that will bring them into line with the legal requirements or used for other purposes, re-dispatched or otherwise destroyed or disposed of in a safe way.

Between January 2000 and May 2005 , Member States reported a total of 267 thousand tonnes of feed withdrawals resulting from official orders, of which 60 thousand tonnes constitute the amount of hormone-contaminated (MPA) feed destroyed in the Netherlands. This figure does not include contaminated food or animals. The quantity of withdrawn feed differs greatly between Member States. This can be partly explained by differences in national rules, for instance regarding the control of Salmonella in feed.

The cost of 52 feed withdrawals ordered by the competent authorities in four Member States averages out at around EUR 160 per tonne , although there is a broad range of minimum and maximum costs. As regards claims for reimbursement of costs in 13 reporting Member States, feed business operators have always (in four Member States) or most of the time (in six Member States) paid back all of the costs. However, in three Member States, such reimbursement has hardly ever been made. In those cases, feed business operators have seldom gone bankrupt.

LEGAL PROVISIONS, SYSTEMS AND PRACTICES RELATING TO LIABILITY AND TO FINANCIAL GUARANTEES IN THE FEED SECTOR AND OTHER SECTORS

Liability in Community legislation

The Treaties do not provide an explicit legal basis empowering the Community to regulate liability. In the absence of such provisions, Community rules related to liability, when available, are based on sector-specific competences , such as public health, environment, agriculture and transport.

In one case, Member States are obliged to put in place a system of administrative liability , whereby operators must bear the costs resulting from prevention or remedying of environmental damage (Directive 2004/35/EC[2]). In other cases, Member States are obliged to put in place a system of civil liability , whereby operators must compensate individuals for damage caused by defective products (Directive 85/374/EEC[3]), or for non-performance of contracts for package travel, package holidays and package tours (Directive 90/314/EEC[4]). Operating air carriers must compensate and assist passengers in the event of denied boarding and of cancellation or long delay of flights (Regulation (EC) No 261/2004[5]).

Regulation (EC) No 183/2005 on feed hygiene sets out the principle that “feed business operators shall be liable for any infringements of the relevant legislation on feed safety […]”.

By contrast, no equivalent provision is to be found in Regulation (EC) No 178/2002[6] on food law or in Regulation (EC) No 852/2004[7] on the hygiene of foodstuffs , which leave it to the Member States to decide which kind of rules to adopt at national level and whether these rules encompass civil and administrative liability.

The Standing Committee on the Food Chain and Animal Health has concluded[8] that “[…] Determining the facts and circumstances which may render an operator liable to criminal penalties and/or civil liability is a complex matter which depends very much on the structure of the different national legal systems. […] Interactions between producers, manufacturers and distributors are becoming increasingly complex. Thus for example, in many cases primary producers have contractual obligations to manufacturers or distributors to meet specifications which cover quality and/or safety. Distributors increasingly have products produced under their own brand-name and play a key role in product conception and design. […] This new situation should then result in greater joint responsibility throughout the food chain, rather than dispersed individual responsibilities. However, each link in the food chain should take the measures necessary to ensure compliance with food law requirements within the context of its own specific activities, applying HACCP-type principles and other similar instruments. Where a product is found failing food law requirements, the liability of each link in the chain should be reviewed according to whether or not it has properly fulfilled its own specific responsibilities.”

On the other hand, Regulation (EC) No 882/2004[9] on official feed and food controls establishes rules for charging operators for the expenses incurred by the competent authorities arising from additional official controls, including “the taking and analysis of samples as well as other controls that are required to check the extent of a problem, to verify whether corrective action has been taken, or to detect and/or substantiate non-compliance”.

Liability in national legislation

In 2005, the competent authorities of the countries surveyed had the power to order the withdrawal, treatment and/or destruction of feed, animals and food produced therefrom, on safety grounds. The legal basis was found in sector-specific national legislation, except in two Member States, where this was exclusively laid down in, or complemented by, general national legislation. The legal basis for claiming reimbursement of withdrawal and disposal costs incurred by competent authorities from the responsible feed business operator was, again, mainly found in sector-specific legislation.

Competent authorities in 18 countries could claim reimbursement of withdrawal and disposal costs from all types of feed business operators, but the competent authorities in two other countries could not claim such costs. In 15 countries, the competent authorities could claim all types of costs related to withdrawal and disposal, while in four other countries just some costs could be recovered. Whilst in 17 countries there was no limit of liability for costs resulting from an official order, in four other countries there was such a limit.

In the case of several feed business operators being liable for withdrawal and disposal costs, joint and several liability applied in six countries, which means that the competent authorities could claim the total costs from any of the liable feed business operators. However, in four other countries, proportional liability applied, whereby the competent authorities could claim only a portion of the costs from each liable feed business operator.

In 16 countries there was a strict liability regime, whereby liability of feed business operators for costs resulting from an official order does not depend on fault. However, five other countries had a fault-based regime in place, i.e. liability requires negligence or intent.

Financial guarantees at Community level in the feed sector

As successive feed crises have shown, failures at any stage in the feed chain can have severe economic consequences. In the majority of small to medium-scale incidents the liable feed business operators have paid the withdrawal and disposal costs. However, in large-scale incidents some costs were not recovered from the responsible feed business operators and therefore had to be borne by public authorities. Although only a few incidents attained a large scale, very high costs had to be borne by public authorities in those cases.

Considering that public money should not systematically be spent on remedying the damage caused by failure of feed business operators to ensure a product’s safety, measures should be taken to ensure that the operators whose activities cause economic damage are held financially responsible and that they have the means to pay . One solution would be to request feed business operators to provide financial guarantees for their activities. Such a scheme would also give operators an additional incentive to adopt measures to minimise the risks related to their activities and to meet high standards.

The proposal for a Regulation on feed hygiene (subsequently amended and adopted as Regulation (EC) No 183/2005) contained provisions for financial guarantees in the feed sector. This was a pioneering initiative from the Commission, not enshrined in feed and food law, aimed at avoiding the spending of public funds on remedying feed safety incidents. According to the proposal, feed business operators should ensure that a financial guarantee, such as insurance, is available to cover the cost of risks related to their businesses. That guarantee should provide cover for the total cost of withdrawing from the market, treating and/or destroying any feed and food products.

During the legislative co-decision procedure, the European Parliament, the Council and the Economic and Social Committee did not reject the principle of financial guarantees but requested more clarity and specification on certain matters:

- the nature or form of financial guarantee (e.g. insurance, or other) and the choice of a mandatory or a voluntary system;

- the categories of feed business operators required to have financial guarantees, namely the possibility of exempting primary producers;

- the risks to be covered: only known contaminants or also unknown ones; withdrawal on grounds of feed safety or for additional reasons (e.g. unsold products);

- the liability regime: fault-based or strict, i.e. requiring or not requiring proof of negligence or intent;

- the trigger for the guarantees: who takes the decision as to the unacceptability of the products (e.g. only withdrawal and disposal ordered by a competent authority, or also recall carried out on the initiative of feed business operators);

- the costs to be covered (e.g. recall, withdrawal, treatment, destruction of contaminated products, production standstill, ban on sales, loss of market share);

- the financial impact on feed businesses, in particular on primary producers.

Finally, the Commission was requested to submit a report accompanied, where appropriate, by legislative proposals. The report analyses various options for financial guarantees and therefore the analysis may be wider than the options envisaged by Article 8. Moreover, the Regulation lays down that feed business operators (except those at the level of primary production of feed and associated operations) “[…] shall submit proof that they are covered by the financial guarantees required by the Community legislative measures […]”. However, this requirement to submit proof can only be implemented after the adoption of such legislative measures, which must themselves be preceded by this Commission report. Operators at the level of primary production of feed and associated operations are not required to provide such proof.

Financial guarantees at national and international level in the feed sector

In addition to compulsory schemes to cover the costs of livestock diseases, there are several voluntary schemes to cover feed recall costs, details of which have been provided by competent authorities, business associations and other bodies:

- general liability insurance covering recall costs in Finland;

- a combined inspection and recall insurance scheme for feed materials offered by an international inspection, verification, testing and certification company;

- an insurance scheme in the process of being expanded into a combination of product liability and product recall insurance, with some exclusions (BSE, unauthorised GMOs, exports to the US), provided by a Belgian feed sector stakeholder for its members;

- an excess of loss insurance scheme for product liability and recall losses, with some exclusions (BSE, GMOs), provided by a German feed sector stakeholder for its members.

Financial guarantees in sectors other than feed

At the national and international levels, a variety of compulsory financial guarantee/insurance systems exist, ranging from compulsory professional indemnity insurance to motor vehicle third party insurance.

At Community level, other financial security instruments and guarantees are laid down in Community legislation in addition to the financial guarantees for the feed sector. These are mainly instruments of environmental protection (environmental liability, landfill of waste, shipment of waste, waste electrical and electronic equipment). In other instances, the aim is to protect consumers (package travel, package holidays and package tours) and – through a proposal subject to the co-decision procedure – to protect recipients of a service in the internal market. The level of detail and the type of guarantee to be provided are different in each case. None of the examples given provide coverage for product recall costs.

One fundamental principle of environmental liability is that the operator who caused the environmental damage should be held financially liable. Article 14 of Directive 2004/35/EC envisages the development of financial security instruments and markets by the appropriate economic and financial operators. This can include mechanisms in case of insolvency, with the aim of enabling operators to use financial guarantees to cover their responsibilities. In a second stage, before 2010, the Commission will present a report on the effectiveness of this provision.

Article 8 of Directive 1999/31/EC[10] on the landfill of waste includes the following provision: “Member States shall take measures in order that […] the competent authority does not issue a landfill permit unless it is satisfied that […] adequate provisions, by way of a financial security or any other equivalent, on the basis of modalities to be decided by Member States, has been or will be made by the applicant prior to the commencement of disposal operations to ensure that the obligations (including after-care provisions) arising under the permit issued under the provisions of this Directive are discharged and that the closure procedures required by Article 13 are followed.”

Article 27(1) of Council Regulation (EEC) No 259/93[11] on the supervision and control of shipments of waste within, into and out of the European Community provides that “all shipments of waste […] shall be subject to the provision of a financial guarantee or equivalent insurance covering costs for shipment […] and for disposal or recovery”.

Article 8(2) of Directive 2002/96/EC[12] on waste electrical and electronic equipment (WEEE) stipulates that “Member States shall ensure that each producer provides a guarantee when placing a product on the market showing that the management of all WEEE will be financed […]. The guarantee may take the form of participation by the producer in appropriate schemes for the financing of the management of WEEE, a recycling insurance or a blocked bank account.”

Article 7 of Directive 90/314/EEC on package travel, package holidays and package tours provides that “the organizer and/or retailer party to the contract shall provide sufficient evidence of security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency”.

The Commission proposal[13] on services in the internal market envisages professional indemnity insurance for “providers whose services present a particular risk for the health or safety of the recipient, or a particular financial risk to the recipient”.

Financial guarantees from the perspective of the feed sector

The European representatives of feed business operators that have expressed their views oppose the introduction of compulsory financial guarantees. They claim, for instance, that recall insurance would affect the competitiveness of the industry by placing an additional financial burden on them. Some of them doubt whether such a burden would bring any measurable public health benefits. Others claim that such a system would not provide operators with an incentive to meet high standards, nor would it prevent rogue traders from operating, and would undercut responsible business operators. One of the comments concerns the way in which competent national authorities may order product withdrawals, which is not always predictable from some operators’ point of view. In addition, part of the feed sector holds the view that the structure of the feed chain and the kind of risk involved is not as different from the food sector as to warrant different rules in this regard. Furthermore, several stakeholders consider that this is an issue to be addressed on a horizontal basis first, for instance in the light of the general liability regime.

Certain stakeholders also point to the fact that a market for recall insurance is still not developed for the feed sector . Rather than giving support to a system of financial guarantees that would prepare for failures in the chain, they believe in a different approach focusing efforts strictly on effective implementation of the hygiene legal framework and the strengthening of official controls. Some would prefer alternatives to legally binding measures, for example guidelines to feed business operators for establishing financial guarantees on a voluntary basis.

Financial guarantees from the perspective of the insurance sector

The representatives of the European insurance sector , opposed to a compulsory system of financial guarantees in the feed sector, conducted a survey[14] on existing product recall insurance in Europe among national associations of insurers. From the replies provided by 11 of these national associations, the authors of the survey concluded that product recall insurance has developed in the motor and food processing industries, but not in the feed sector . However, the authors state that product recall insurance is characterised by very strict underwriting policies, which are subject to the implementation of very strict general conditions and prevention measures with regard to withdrawal and traceability. Moreover, the authors consider that the insurance market capacity is tiny and will never enable the feed business operators to get a financial guarantee in the form of insurance. Furthermore, the insurance sector shows reticence towards product recall insurance in the feed sector, for which they do not yet have experience or sufficient data. They doubt that such an approach would enable feed business operators to fulfil the requirements as regards financial guarantees or meet the policy objectives of transferring withdrawal and disposal costs from the public to the private sector.

CONDITIONS FOR A FEASIBLE AND PRACTICABLE SYSTEM OF FINANCIAL GUARANTEES AT COMMUNITY LEVEL

In principle, all risks are insurable as long as insurance cover is offered for them in the market. However, insurers exercise a lot of caution and they do not offer unrestricted cover for these risks. Rather, they impose strict limits on the insured losses and the sums insured are not enough to cover possible maximum losses. Therefore it is important to specify the main limits of coverage to make the risks more insurable. There is a danger that cover that is too wide could cause insurers or other providers of financial guarantees to withdraw from this market.

Rather than covering “the total costs for which the operators could be held liable as a direct consequence of the withdrawal from the market, treatment and/or destruction of any feed, animals and food produced therefrom”, financial guarantees in this context should cover essentially the withdrawal and disposal costs . This means that the value of the hazardous feed, affected food-producing animals and hazardous food produced therefrom, which have been withdrawn and disposed of, should not be covered by these financial guarantees. Cover for other property losses, loss of income or non-pecuniary losses should also be left out of the scope of these guarantees. Moreover, financial guarantees should not apply in the case of recalls carried out only at the discretion of feed business operators. These cases could be left to voluntary insurance. Feed business operators will inevitably remove products from the market for reasons other than feed safety. In fact, an operator wishing to withdraw from the market a product that is considered safe should not be able to make use of financial guarantees to cover the costs of withdrawal. Moreover, the purpose of financial guarantees is not to cover the loss of revenue or to compensate for other kinds of damage resulting from feed and/or food safety incidents.

Financial guarantees should be applied by means of a dual triggering mechanism involving the competent authorities and the providers of the guarantees. The first criterion should be the existence of an official withdrawal order issued by the competent authorities, based on safety considerations, accurate data on permitted levels and adherence to the rules for the performance of official controls (e.g. methods of analysis, labs and results). There might also be scope for including recalls initiated by a feed business operator on the basis of a clear legal obligation to recall affected feed for safety reasons, but without an explicit official authorisation. Even if it were made a prerequisite that the recall would have to be officially mandated, additional facts would be required as a second criterion of the trigger. It would thus be necessary to examine, in consultation with experts designated by the providers of the financial guarantees, objective evidence of unacceptable safety risks showing that maximum permitted levels which have been defined for safety reasons in European or national legislation are exceeded, or the existence of an actual or imminent danger of bodily injury to humans or to animals based on risk assessment.

ABBREVIATIONS AND SPECIAL TERMS USED IN THE CONTEXT OF THIS REPORT

affected food-producing animal | animal presenting an unacceptable risk for human or animal health, through the food or feed produced therefrom. |

billion | 1 000 million |

BSE | bovine spongiform encephalopathy |

compound feedingstuffs[15] | mixtures of feed materials, whether or not containing additives, for oral animal feeding in the form of complete or complementary feedingstuffs. |

disposal | the destruction, special treatment (to bring the feed or food into line with the legal requirements), re-dispatch, use or processing for purposes other than animal or human consumption, or any other forms of safe disposal of hazardous feed, affected food-producing animals and hazardous food produced therefrom. |

EEA | European Economic Area |

establishment[16] | any unit of a feed business. |

EU | European Union |

EU-25 | the 25 countries of the EU between 1.5.2004 and 31.12.2006. |

feed or feedingstuff[17] | any substance or product, including additives, whether processed, partially processed or unprocessed, intended to be used for oral feeding to animals; feed materials, feed additives, premixtures and compound feedingstuffs are examples of categories of feed. |

feed additives[18] | substances, micro-organisms or preparations, other than feed material and premixtures, which are intentionally added to feed or water in order to perform, in particular, one or more of the functions mentioned in Article 5(3) of Regulation (EC) No 1831/2003[19] on additives for use in animal nutrition. |

feed business operator[20] | natural or legal persons responsible for ensuring that the requirements of food law, and the requirements of Regulation (EC) No 183/2005 on feed hygiene, are met within the feed business under their control; operators in the sector of feed for food-producing animals and operators in the petfood sector (except the retail of petfood) are both feed business operators. |

feed materials[21] | various products of vegetable or animal origin, in their natural state, fresh or preserved, and products derived from the industrial processing thereof, and organic or inorganic substances, whether or not containing additives, which are intended for use in oral animal feeding either directly as such, or after processing, in the preparation of compound feedingstuffs or as carriers of premixtures. |

food business operator[22] | natural or legal persons responsible for ensuring that the requirements of food law are met within the food business under their control. |

GMO | genetically modified organism |

HACCP | Hazard Analysis and Critical Control Points |

hazardous or unsafe feed or food | feed or food that presents an unacceptable risk for human health, animal health or animal welfare, either directly or through the environment. |

liability | the obligation to pay for the prevention or remediation of damage, as it may flow from civil or administrative law; this excludes criminal and disciplinary liability; civil liability: arises under contract or tort law and concerns the relationship between private parties; administrative liability: arises under public law and concerns the relationship between a public authority and an individual. |

MPA | medroxyprogesterone acetate |

official order | order given by the competent authorities of the Member States |

primary production of feed[23] | the production of agricultural products, including in particular growing, harvesting, milking, rearing of animals (prior to their slaughter) or fishing resulting exclusively in products which do not undergo any other operation following their harvest, collection or capture, apart from simple physical treatment. |

recall | any measure taken by a feed or food business operator aimed at achieving the return of hazardous feed or food that has left the immediate control of that feed or food business operator, has been supplied and is held by another feed or food business operator, and may have been made available to and reached the intended end-users or consumers. |

withdrawal | any measure taken by a feed or food business operator or ordered by a competent authority aimed at preventing the distribution, display and offer of feed or food hazardous to the animals or to the consumer, as well as preventing the production of food from affected animals; these measures include, in particular, the tracing back and forward, issuing of warnings, notification of affected parties and competent authorities, collection, handling, testing, packaging, transport and storage of hazardous feed, affected food-producing animals and hazardous food produced therefrom. |

withdrawal and disposal costs | costs arising directly from the withdrawal and disposal of hazardous feed, affected food-producing animals and hazardous food produced therefrom, including the costs of sampling and analysis of feed and food suspected to be hazardous and of food-producing animals suspected to be affected. |

[1] E.P. Cunningham and the European Association for Animal Production, “After BSE – A future for the European livestock sector”, EAAP publication no 108, 2003. http://www.wageningenacademic.com/books/eaap108.htm

[2] Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage. OJ L 143, 30.4.2004, p. 56.

[3] Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products. OJ L 210, 7.8.1985, p. 29.

[4] Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours. OJ L 158, 23.6.1990, p. 59.

[5] Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91. OJ L 46, 17.2.2004, p. 1.

[6] Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety. OJ L 31, 1.2.2002, p. 1. Regulation as last amended by Regulation (EC) No 575/2006 (OJ L 100, 8.4.2006, p. 3).

[7] Regulation (EC) No 852/2004 of the European Parliament and of the Council of 29 April 2004 on the hygiene of foodstuffs. OJ L 139, 30.4.2004, p. 1.

[8] Guidance on the implementation of Articles 11, 12, 16, 17, 18, 19 and 20 of Regulation (EC) No 178/2002 on general food law. Conclusions of the Standing Committee on the Food Chain and Animal Health, 20.12.2004, European Commission, 2005.

[9] Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules. OJ L 165, 30.4.2004, p. 1.

[10] Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste. OJ L 182, 16.7.1999, p. 1.

[11] Council Regulation (EEC) No 259/93 of 1 February 1993 on the supervision and control of shipments of waste within, into and out of the European Community. OJ L 30, 6.2.1993, p. 1.

[12] Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on waste electrical and electronic equipment (WEEE). OJ L 37, 13.2.2003, p. 24.

[13] Proposal for a Directive of the European Parliament and of the Council on services in the internal market. COM/2004/0002 final/3 - COD 2004/0001.

[14] CEA Note of 8 July 2005. http://www.cea.assur.org/cea/v1.1/posi/pdf/uk/position265.pdf

[15] Council Directive of 2 April 1979 on the circulation of compound feedingstuffs. OJ L 86, 6.4.1979, p. 30. Directive as last amended by Regulation (EC) No 807/2003 (OJ L 122, 16.5.2003, p. 36).

[16] Regulation (EC) No 183/2005 of the European Parliament and of the Council of 12 January 2005 laying down requirements for feed hygiene. OJ L 35, 8.2.2005, p. 1.

[17] Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety. OJ L 31, 1.2.2002, p. 1. Regulation as last amended by Regulation (EC) No 575/2006 (OJ L 100, 8.4.2006, p. 3).

[18] Adapted from Regulation (EC) No 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition. OJ L 268, 18.10.2003, p. 29.

[19] Regulation (EC) No 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition. OJ L 268, 18.10.2003, p. 29. Regulation as last amended by Regulation (EC) No 378/2005 (OJ L 59, 5.3.2005, p. 8).

[20] Regulation (EC) No 183/2005 of the European Parliament and of the Council of 12 January 2005 laying down requirements for feed hygiene. OJ L 35, 8.2.2005, p. 1.

[21] Council Directive 96/25/EC of 29 April 1996 on the circulation and use of feed materials, amending Directives 70/524/EEC, 74/63/EEC, 82/471/EEC and 93/74/EEC and repealing Directive 77/101/EEC. OJ L 125, 23.5.1996, p. 35. Directive as last amended by Directive 2001/46/EC (OJ L 234, 1.9.2001, p. 55).

[22] Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety. OJ L 31, 1.2.2002, p. 1. Regulation as last amended by Regulation (EC) No 575/2006 (OJ L 100, 8.4.2006, p. 3).

[23] Regulation (EC) No 183/2005 of the European Parliament and of the Council of 12 January 2005 laying down requirements for feed hygiene. OJ L 35, 8.2.2005, p. 1.