No C 299/8 Official Journal of the European Communities 24. 11. 88 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation (EEC) establishing a financing facility for imports of food 
products by developing countries from the European Community 
COM(88) 431 final 
(Submitted by the Commission to the Council on 29 July 1988) 
(88/C 299/06) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 43 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Whereas many developing countries face severe food 
deficits constituting a considerable burden on their 
balance of payments and are engaged in adjustment 
policies requiring additional resources; whereas these 
developing countries have asked the Community to make 
available agricultural products on concessional terms; 
whereas access to the use of a medium or long te,rm 
financing facility will help them to face their balance of 
payments difficulties and will provide support to their 
adjustment programmes; 
Whereas such an instrument would be an important 
contribution to the Community's efforts to reduce 
structural imbalance between supply and demand in the 
market organizations suffering from surpluses; 
Whereas the establishment of such a financing facility 
thus fully meets the main objectives of the Community's 
export policy on agricultural products as well as of 
internal market policy and constitutes therefore an 
instrument of the common agricultural policy; 
Whereas the facility will also be an element of diversifi­
cation of export instruments in the framework of agri­
cultural policy; 
Whereas the implementation of the financing facility has 
to be consistent with the recipient country's own devel­
opment policy and with the development cooperation of 
the Community with the country concerned, and its use 
should not harm the interests of other developing 
countries, in particular those exporting food products; Whereas the conditions under which agricultural 
products are made available to developing countries 
should be in conformity with the Food and Agriculture 
Organization's (FAO) principles of surplus disposal; 
whereas conformity with FAO principles will be ensured 
through the supply of food aid being facilitated by a 
credit to the importing country of more than three years 
duration together with a grant element of not less than 
35 % on terms equivalent to interest rates significantly 
below commercial rates, associated with the estab­
lishment of usual marketing requirements (UMR); 
Whereas in order to meet the abovementioned 
objectives, the facility should consist of a grant element 
financed by the European Agricultural Guidance and 
Guarantee Fund (EAGGF), and a Community credit 
guarantee in order to ensure the availability of credit to 
the importing country; 
Whereas it is necessary to provide that the facility shall 
be made available for food exports at the request of the 
government of the importing country or an agency 
thereof in the framework of an agreement between the 
Commission and the government of the country 
concerned; whereas it is necessary to provide that the 
facility shall be exclusively used for the purchase of food 
products originating in the Community, 
HAS ADOPTED THIS REGULATION: 
Article 1 
A financing facility, hereinafter referred to as 'the 
facility', is established to allow developing countries to 
import food products from the European Community 
under the conditions laid down in this Regulation. 
TITLE I 
General guidelines 
Article 2 
When deciding on the award of the facility referred to in 
Article 1, particular consideration shall be given to the 
24. 11. 88 Official Journal of the European Communities No C 299/9 
following criteria without excluding other pertinent 
considerations: 
(a) in so far as it concerns the countries to which the 
•facility is granted: 
— the overall economic situation of the country, 
— their food import requirements, 
— their balance of payments situation, 
— their own efforts in carrying out adjustment 
policies, 
— the impact on the agricultural exports of other 
developing countries; 
(b) in so far as it concerns the Community: 
— the development of the Community's global 
exports of food products and the general 
situation of the relevant markets, 
— the traditional imports of food products by the 
country concerned from the Community, 
— the preferential character of relations between the 
country concerned and the Community, 
— the credit risk involved. 
Article 3 
The products supplied under this facility shall be 
marketed in such a way so as not to disturb the local 
market. The implementation of the facility shall be 
consistent with the beneficiary country's own devel­
opment policy, in particular relating to the food and 
agricultural sector, and with the Community's devel­
opment cooperation relations. The concessional element 
of the funds resulting from the sale of the products shall 
be used in support of agreed development programmes 
and the implementation of adjustment policies. 
Article 4 
1. The facility awarded pursuant to the Regulation 
shall provide for a period of repayment of more than 
three years. A grant of not less than 35 %, of the total 
cost, calculated in accordance with the practice followed 
under the Organization for Economic Cooperation and 
Development (OECD) arrangement on export credits, 
shall be made available by the Community for each 
operation. The balance may consist of a credit in favour 
of the beneficiary country directly arranged by the 
Community on financial markets, and guaranted by the 
Community itself. 
2. The facility shall be made available for food 
imports by the government of the beneficiary country or 
an agency thereof in the framework of an agreement 
between the Commission and the government or 
government agency concerned. The abovementioned 
agreement shall fix the terms of the facility. Its 
conclusion shall be subject to the presentation of a 
commercial contract stipulating all the provisions relative 
to the delivery. 3. The Commission shall take all measures necessary 
to ensure that the facility is granted under conditions 
which are in conformity with the FAO principles of 
surplus disposal. 
Article 5 
The award of the facility shall be made subject to the 
conditions that the facility is used exclusively for the 
purchase of agricultural products originating in the 
Community, and that free competition shall be 
guaranteed for supply of the products. 
Article 6 
The grant element under Article 4 (1) of this Regulation 
shall be regarded as intervention measures designed to 
regulate the agricultural markets within the meaning of 
Article 3 (1) of Regulation (EEC) No 729/70. 
TITLE II 
Procedures 
Article 7 
The Commission, in accordance with the procedure laid 
down in Article 8 shall: 
— adopt the list of products for which the facility may 
be awarded, on an annual or multiannual basis, 
— decide on the award of the facility and the terms of 
such a facility, 
— adopt as necessary the detailed rules for the 
application of this Regulation. 
Article 8 
Where reference is made to the procedure of this Article, 
the Commission shall be assisted by a committee of an 
advisory nature, composed of the representatives of the 
Member States and chaired by the representative of the 
Commission. 
The representative of the Commission shall submit to the 
committee a draft of the measures to be taken. The 
committee shall deliver its opinion on the draft, within a 
time limit which the chairman may lay down according 
to the urgency of the matter, if necessary by taking a 
vote. 
The opinion shall be recorded in the minutes. In 
addition, each Member State shall have the right to ask 
to have its position recorded in the minutes. 
The Commission shall take the utmost account of the 
opinion delivered by the committee. It shall inform the 
committee of the manner in which its opinion has been 
taken into account. 
No C 299/10 Official Journal of the European Communities 24. 11. 88 
Article 9 
In accordance with the decisions taken under Article 7, 
the Commission shall decide on: 
— the conclusion of the agreement for the award of the 
facility, 
— all the appropriate measures to ensure the proper 
implementation of the facility, the marketing of the products and the use of the funds corresponding to 
the grant element. 
Article 10 
This Regulation shall enter into force on 1 January, 
1989. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States.