Proposal for a COUNCIL REGULATION amending Regulation No 3448/93 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. Under the Uruguay Round, the agreement on agriculture limits the amount of payments in the form of refunds which can be granted to certain agricultural products exported in the form of goods not covered by Annex I to the Treaty to EUR 475 million for financial year 2000, and EUR 415 million for 2001 and subsequent years.

2. Having regard to firstly Community prices for basic agricultural products and secondly price prospects on the world market, requirements in terms of refunds will exceed budget limits.

3. The lack of available resources for refunds gives rise to a climate of uncertainty in the agri-foodstuffs industry. This could have an adverse effect on investment. In the long term, it could affect the maintenance of employment levels and the production of value added in the European Union.

4. The inward processing arrangements applied at present already relieve the pressure on spending on refunds. The present arrangements should therefore be maintained, particularly in respect of fulfilling the economic conditions.

5. In addition, given the lack of funds available for refunds each year, a further facility should be created for exports of goods eligible for refunds, which would consider the economic conditions to have been fulfilled. This arrangement guarantees the European agri-foodstuffs industry supplies of agricultural raw materials under the same conditions as its competitors in other countries and thus creates a climate favouring investment.

6. However, in order to encourage the use of Community agricultural raw materials, it is necessary to limit this additional facility to the quantities actually required.

7. Moreover, in order to meet the commitments entered into in the multilateral negotiations under the Uruguay Round, measures have been taken, particularly with the adoption of Commission Regulation (EC) No 1702/1999 establishing a system of certificates for goods not covered by Annex I. This system could usefully be exploited for the notification of non-Annex I commitments to the WTO.

8. Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission laid down certain rules of procedure, including those for the Management Committee. This requires an amendment to the corresponding article of Regulation (EEC) No 3448/93.

9. Finally, the Treaty of Amsterdam codified the Treaty establishing the European Community, leading to changes in the numbering of its articles and annexes. Therefore, certain references should be changed on the occasion of this amendment to the Regulation.

1999/0284 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation No 3448/93 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 37 and 133 thereof,

Having regard to the proposal from the Commission [1],

[1] OJ L ..., ..., p. ...

Having regard to the opinion of the European Parliament [2],

[2] OJ L ..., ..., p. ...

Having regard to the opinion of the Economic and Social Committee [3],

[3] OJ L ..., ..., p. ...

Whereas:

(1) Article 8 of Council Regulation (EC) No 3448/93 of 6 December 1993 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products [4], as last amended by Commission Regulation (EC) No 2491/98 [5], lays down that on exportation of the goods, the agricultural products which have been used may qualify for refunds established pursuant to the regulations on the common organisation of the market in the sectors concerned. This article should be amended to take account of the constraints arising from the agreement on agriculture concluded in the multilateral trade negotiations under the Uruguay Round.

[4] OJ L 318, 20.12.1993, p. 18.

[5] OJ L 309, 19.11.1998, p. 28.

(2) In particular, there should be checks on expenditure on the basis of commitments through the issuing of certificates. However, as regards expenditure which has not been covered by obtaining a certificate or certificates, accounting of such expenditure will continue to be carried out on the basis of refund payments, if necessary in the form of an advance.

(3) Under agreements concluded in accordance with Article 300 of the Treaty, it is possible that the requirements for the processing industries in terms of agricultural raw materials may not be covered completely, under competitive conditions, by Community raw materials. Article 117(c) of Council Regulation (EEC) No 2913/92 [6], as last amended by Regulation (EEC) No 955/1999 [7] of the European Parliament and of the Council establishing the Community Customs Code, admits goods under the inward processing arrangements subject to fulfilment of the economic conditions as defined by Commission Regulation (EC) No 2454/93 [8], as last amended by Regulation (EC) No 1662/1999 [9]. Having regard to the abovementioned agreements, there should also be provision for considering the economic conditions to have been fulfilled for the admission of certain quantities of agricultural products under the processing arrangements.

[6] OJ L 302, 19.12.1992, p. 1.

[7] OJ L 119, 17.5.1999, p.1.

[8] OJ L 253, 11.10.1993 p.1.

[9] OJ L 197, 29.7.1999, p. 25.

(4) In order to safeguard the interests of producers of agricultural raw materials, there should be overall checks, on the basis of a forward estimate, of the quantities admitted under inward processing arrangements not subject to prior individual checks of the economic conditions (excluding those used for processing, the usual forms of handling or the manufacture of goods not eligible for refunds) and in compliance with the other general conditions relating to the inward processing arrangements.

(5) As the measures necessary for the implementation of Council Regulation (EC) No 3448/93 are management measures within the meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [10], these measures should be adopted in accordance with the management procedure provided for in Article 4 of that Decision.

[10] OJ L 184, 17.7.1999, p.23.

(6) Certain references and definitions should be updated following the codification of the Treaty establishing the European Community.

(7) As a consequence, Regulation (EC) No 3448/93 should be amended,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 3448/93 is hereby amended as follows :

1. In Article 1, paragraph 2 is replaced by the following:

« 2. For the purposes of this Regulation:

- « agricultural products » shall mean products covered by Annex I to the Treaty,

- « goods » shall mean products not covered by Annex I to the Treaty and listed in Annex B.

However, the term « goods » used in Chapter II of Title 1 and in Article 11 relates to products not covered by Annex I to the Treaty and listed in the corresponding annexes of the Regulations on the common organisation of markets in the agricultural sector. »

2. In Article 8, the following paragraph is added:

"5. Compliance with the limits arising from agreements concluded in accordance with Article 300 of the Treaty shall be ensured on the basis of certificates issued in respect of the reference periods laid down, complemented by the amount provided for in respect of small exporters."

3. Article 11 is replaced by the following :

« 1. Admission of agricultural products under the inward processing arrangements shall be subject to a prior check on compliance with the economic conditions referred to in Article 117(c) of Regulation (EEC) No 2913/92. These conditions shall be considered fulfilled in accordance with Article 552 of Regulation (EEC) 2454/93.

Moreover, and in accordance with Regulation (EEC) No 2454/93, the economic conditions referred to in Article 117(c) of Regulation (EEC) No 2913/92 shall also be considered fulfilled for certain quantities of agricultural products used for the manufacture of goods. These quantities shall be determined with the aid of a supply balance drawn up by the Commission based on a comparison between the required available funds and the forecast refund requirements. This supply balance, and hence these quantities shall be reviewed at regular intervals in order to take account of developments in economic and regulatory factors.

The detailed rules for the application of the preceding subparagraph, making it possible to determine the agricultural products to be admitted under inward processing arrangements and check and plan the quantities thereof, shall be adopted in accordance with the procedure referred to in Article 16.

2. The quantity of goods admitted under inward processing arrangements and, therefore, not subject to the charge provided for in Article 2 for the purpose of or as a result of, exporting other goods shall be that actually used in the manufacture of the goods.»

4. Article 15 is deleted.

5. Article 16 is hereby replaced by the following :

"1. The Commission shall be assisted by a management committee on horizontal questions concerning trade in agricultural products not listed in Annex I, hereinafter referred to as "the committee", composed of representatives of the Member States and chaired by the representative of the Commission."

2. In cases where reference is made to this Article, the management procedure provided for in Article 4 of Decision 1999/468/EC shall apply, in accordance with the provisions of Article 7(3) of that Decision.

3. The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month."

Article 2

This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Communities.

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

Done at Brussels,

For the Council

The President

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