5. 6. 79 Official  Journal  of the European  Communities No C 139/15 
II 
(Preparatory  Acts) 
COURT  OF AUDITORS 
Opinion  of the Court  of Auditors  on the draft  Council  Regulations: 
I. on  the management  of food  aid 
II. amending  Regulations  (EEC)  No 2052/69,  (EEC)  No 1703/72  and  (EEC)  No 2681/74 
on Community  financing  of expenditure  incurred  in respect  of the supply  of agricultural 
products  as food  aid,  and  repealing  Decision  72/335/EEC 
THE  COURT  OF  AUDITORS  OF  THE  EUROPEAN 
COMMUNITIES, 
Having  regard  to the Treaty  establishing  the European 
Economic  Community,  and  in particular  Articles  206 
(a) and  209  thereof, 
Having  regard  to the letter  of 29 January  1979  in which 
the Secretary-General  of the  Council  informed  the 
Court  that  'on 26 January  1979  the Council  decided  to 
consult  the Court  of Auditors  on this  proposal,  the text 
of which  I enclose  (Doc.  COM(79)  1 final)'  on the 
management  of food  aid  and  amending  Regulations 
(EEC)  No 2052/69,  (EEC)  No 1703/72  and  (EEC)  No 
2681/74  on  Community  financing  of expenditure 
incurred  in respect  of the  supply  of agricultural 
products  as  food  aid,  and  repealing  Decision 
72/335/EEC, 
Observing  that,  with  regard  to  food  aid,  the 
Commission  proposals  contained  in Doc.  COM(79)  1 
final  do not  take  into  account  the audit  responsibilities 
of the Court  of Auditors,  which  the latter  had  already 
stressed  in its opinion  given  on 26 October  1978, 
Whereas  the Commission's  new  proposal  aims  to allow 
Community  food  aid  to  fulfil  the  humanitarian 
objectives  set,  and  to integrate  food  aid  into  general 
Community  policy  on  cooperation  with  developing 
countries; Whereas  close  cooperation  between  the Member  States 
and the  Commission  should  be established  within  the 
Committee  on Food  Aid,  while  observing  the respective 
responsibilities  and  in a common  desire  for efficiency; 
Whereas,  in order  to make  food  aid more  effective  and 
the better  to meet  certain  exceptional  situations,  the 
Commission  should  be in a position  to decide,  on its 
own authority,  upon  the extent  of aids  to be granted  to 
the various  recipients,  the mobilization  procedures,  the 
conditions  of delivery  and  the financing  procedures; 
Whereas,  by referring  to Articles  43 and  235  of the 
Treaty,  the  new  proposals  intend  to maintain  th£  link 
between  food  aid policy  and  the  common  agricultural 
policy; 
Whereas,  as a result  of the combination  of the new  texts 
and the texts  amended  by the said  proposals,  it appears 
that this  link  should  be maintained  both  with  regard  to 
management  and  with  regard  to financing; 
Whereas  the  charging  to Title  9 of the  budget  of the 
expenditure  relating  to Community  food  aid operations 
improves  the clarity  of the budget  and  enables  a more 
accurate  assessment  of the  action  undertaken  by the 
Community  to the benefit  of developing  countries, 
No C 139/16 Official  Journal  of the European  Communities 5. 6. 79 
HAS  ADOPTED  THE  FOLLOWING  OPINION: 
I 
Draft  Regulation  on the management  of food  aid 
The Court  of Auditors: 
— Considers  that  the  preamble  to the  Regulation 
should  be  completed  by  the  following  phrase: 
'Having  regard  to the  opinion  of the  Court  of 
Auditors'. 
Article  2 (1) and  (2) 
— Considers  that  in order  for  food  aid  to fulfil  its 
humanitarian  objectives,  all  the  Community 
authorities  responsible  should  be able  to establish 
the extent  to which  its implementation  complies 
with  the objective  criteria  upon  which  it is based. 
Article  2 (3) 
— Recalls  that,  in the  past,  the  carrying  out  of 
development  projects  financed  by the  counterpart 
funds  derived  from  marketing  the aids,  has met  with 
serious  difficulties.  It is therefore  essential  that  the 
Commission  demand  that  all information  provided 
for in the  agreements  be forwarded,  in order  to 
satisfy  itself  that  these  projects  are  implemented. 
Consequently,  the  Community  rules  should  lay 
down  that  the Commission  provide,  in agreements 
to be concluded  with  recipient  countries  or bodies, 
for a clause  stipulating  that  it is compulsory  for 
information  relating  to the implementation  of these 
projects  to be forwarded  on a regular  basis,  making 
it possible  for the Community  to satisfy  itself  that 
they are implemented. 
Article  2 (4) 
— Considers  that  the  establishment  of stocks  of 
foodstuffs  intended  to meet  emergency  situations 
could  result  in recipient  countries  having  storage 
facilities  which  guarantee  that  the goods  will  be well 
preserved.  In view  of the situation  which  exists  in 
many  recipient  countries,  it is necessary,  in order  to 
establish  such  stocks,  to build  storage  warehouses 
which  ensure  the safety  and  preservation  of cereals. 
Moreover,  this  situation  obliges  the Community  to 
draw  up rules  on the management  and  supervision 
of these  stocks  in advance. Article  3 (2) and  (3) 
— Considers  that  as the  rules  and  procedures  laid 
down  within  the  framework  of the  common 
organization  of markets  do  not  apply  to the 
purchase  of foodstuffs  on non-Community  markets, 
the Community  authorities  should  adopt  rules 
which  would  make  it possible  to check  the quality 
and the price  of products  purchased. 
Articles  3 (3),  5 and  7 to 10 
— Questions  the respective  responsibilities  and  roles  of 
the management  committees  involved  in  the 
common  market  organizations  and  of the  new 
Committee  on Food  Aid,  and  in particular  the way 
in which  reference  is made  to them  and  the way  in 
which  disputes  arising  from  any  differing  opinions 
are settled. 
Article  4, third  indent 
— Observes  that,  up to now,  the  aid  agreements 
concluded  with  specialized  international 
organizations  have  not made  it possible  to carry  out 
a satisfactory  audit  on the use  of Community  aid. 
Consequently,  the Community  rules  should  oblige 
the Commission  to include  in future  conventions  to 
be concluded  with  all international  organizations,  a 
provision  authorizing  the Community  authorities  to 
carry  out  a thorough  audit  on the implementation 
of aid agreements  in accordance  with  the provisions 
of the Financial  Regulation  applicable  to the budget 
of the European  Communities. 
Article  5 
— Observes  that,  at present,  there  is no rule  regarding 
the transportation  of food  aid.  It therefore  considers 
that the  Commission  should  lay  down  the 
conditions  of transportation  of Community  food 
aid. 
With  regard  to the choice  of shippers,  and,  in any 
case,  where  the  Community  takes  charge  of the 
transport  beyond  the fob  stage,  the Court  suggests 
that,  by analogy  with  the  mobilization  of aids, 
priority  could  first  be given  to ships  registered  in a 
Member  State  of the Community,  then  to those  of 
the beneficiary  country;  only  in exceptional  and 
justified  cases  may  ships  of a different  nationality  be 
used. 
5. 6. 79 Official  Journal  of the European  Communities No C 139/17 
Article  6 (b) 
— Recommends  that  the  general  conditions  under 
which  aid  is supplied,  as well  as the  clauses 
applicable  to the recipients  of Community  aid,  make 
explicit  reference  to the  audit  responsibilities 
conferred  upon  the Court  by Article  206  (a) of the 
EEC  Treaty. 
Articles  6 and  8 
— Considers  that,  with  regard  to emergency  aid,  the 
procedure  laid  down  in Article  8 (2) and  (3) leads  to 
an excessive  time  required  for  implementation 
which  is not  compatible  with  the  urgent  nature  of 
these  operations  as defined  in Article  6. 
II 
Proposal  amending  Regulations  (EEC)  No  2052/69, 
(EEC)  No  1703/72  and  (EEC)  No  2681/74  on 
Community  financing  of expenditure  incurred  in respect 
of food  aid and  repealing  Decision  72/335/EEC 
Article  5 
— Observes  that  Council  Regulation  (EEC)  No 
2681/74  of 21  October  1974  has  only  been 
amended  with  regard  to the  charging  of refunds 
relating  to Community  food  aid  operations  to 
Chapter  92 of the budget, 
— Considers  that  in order  for  an analysis  of the 
expenditure  of the EAGGF  guarantee  section  to be 
made  from  one  year  to the  next,  such  refund 
expenditure  should  remain  itemized  within  Chapter 
92, 
— Observes  that  the  other  provisions  of Regulation 
(EEC)  No  2681/74  will  remain  in force,  and  in 
particular  those  which  refer  to the consultation  of the EAGGF  Committee  prior  to advances  being 
granted  to the  Member  States  and  their  accounts 
being  cleared, 
— Also  questions  the  respective  responsibilities  and 
roles  of the  EAGGF  Committee  and  the  new 
Committee  on Food  Aid,  and  the  way  in which 
disputes  arising  from  any  differing  opinions  are 
settled. 
Articles  2 and  3 
— Observes  that  there  is a contradiction  between,  on 
the one  hand,  Article  2 amending  Article  8 (b) of 
Regulation  (EEC)  No  1703/72  which,  without  the 
slightest  restriction,  allows  expenditure  relating  to 
the delivery  of aids  to be financed  in full  or in part 
and, on the other  hand,  Article  3, which  considers 
that this  same  expenditure,  may,  in  certain 
exceptional  or urgent  cases,  be financed  in full  or in 
part by the Community. 
Articles  1, 2 and  3 
— Considers  that  the  concept  'port  of embarkation', 
which  replaces  the concept  'fob'  in the amendments 
proposed  to Regulations  (EEC)  No  2052/69  and 
(EEC)  No 1703/72,  lacks  precision  and  is therefore 
likely  to give  rise  to differing  interpretations.  It 
observes,  moreover,  that  only  Article  3 of the draft 
Regulation  on the  financing  of food  aid maintains 
the concept  of the value  of goods  delivered  fob.  It is 
therefore  necessary  that  the  texts  governing  this 
point  be aligned. 
Adopted  on 8 March  1979. 
Michael  N. MURPHY 
President  of the Court  of Auditors