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COM(73)1278
Vol.1973/0241

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COMMISSION OFTHEEUROPEAN COMMUNITIES
PROPOSAL FOR ACOM(73)1278 final.
Brussels.26July1973
REGULATION (EEC)OPTHECOUNCIL
amendingRegulation(EEC)No170/71asregardsthe
activitiesofproducers'organizations andthe
definitionoftheterm"producer"
(submittedtotheCouncil "bytheCommission)
COM(73)1278final

EXPLANATORY MEMORANDUM
Proposal foraCouncil Regulation amending Regulation (EEC)No170/71
asregards theactivities ofproducers' .organizations andthedefi­
nition oftheterm "producer "
Thepurpose ofthis proposal foraRegulation istodefine twonotions which ,
asexperience hasshown ,canlead todiffering interpretations .
These are :
l)theso-called "recognized activities ",
2)theterm "producer ". ,
l)"Recognized activities "
1'
Thepurpose offorming producers' organizations istohelp produoers im­
prove their position onthemarket .Theprincipal means ofachieving this
*
aim-which contributes totheattainment oftheobjectives ofArticle 39
ofthe ,Treaty -istoencourage producers ,rather than themselves pro­
cessing ,preparing andputting upfor sale andselling their goods ,to
place them atthedisposal ofaproducers' ,organization ,which will carry­
outthese activities ontheir hehalf -theeffect being toextend therange
ofand toconcentrate supply .Such activities areessential tothefunc­
tioning ofproducers' organizations andarethus toberegarded astalcing
precedence ever theprinciple oftheavoidance ofdistortions ofcompeti­
tion .Itistherefore justified toexoanpt them from the "general applica­
tion ©f -theprovisions oncompetition lc.id down inthe -Treaty .This isdone ,
inpursuance ofthebasic Regulation 0:1theorganization ofthemarket in
fishery products ,bymeans ofaprovision forrecognition ofproduoers' or­
ganizations which carry outtheabove mentioned actiyities aadsatisfy the
other requirements already laid down inCommunity provisions .
r.'v.i
However ,itmayhappen -ftid;producers' organizations also carry outacti­
vities which ,although economically justified ,donotdirectly contribute
totheattainment oftheobjectives ofArticle 39oftheTreaty .Such
activities donotmerit *exemption from theapplicability oftheTreaty
rules oncompetition .Itistherefore desirable tospecify what constitute
"recognized activities "indetail .This istobedone onthebasis ofthe
existing provisions ;these -,while specifying asaconditisn forrecogni­
tion ofaproducers' organization that inter alia itsh«uld carry onthe
activities referred toearlier ,also refer toother activities andthis re­
ference hasgiven rise tomisunderstandings ,particularly inthefollowing
two oases :

-2-
a)Article 1(2)ofRegulation (EEC)No170/71provides Inter alia that producers'
organizations shall herecognized iftheir activities cover oneormore of
i
theproducts falling within headings Nos03.01 toO3.O3 oftheCommon Customs
Tariff (excluding products smoked elsewhere than onfishing vessels ).Those
heading numbers include "both fish ,crustaceans andmolluscs inthefresh or
chilled state and thelike products after they have undergone certain pro­
cessing operations (filleting ,salting ,smoking ,drying ,freezing ).The
question could therefore arise astowhether itisonly themarketing ofsuch
products ,whether processed orunprocessed ,which istoberegarded asa
"recognized activity "ofaproducers' organization ,orwhether theprocessing
ofproduots supplied toitintheunprocessed state isalso tobesore­
garded .Thesecond alternative istobepreferred ,onthefollowing grounds :
r» v • .
For some years now ,andincreasingly soasregards freezing ,fishermen and
fishing vessel operators have been carrying outtheaforesaid types ofpro­
cessing themselves .Thepurpose ofsuoh processing istoimprove thekeeping
quantities ofperishable "fishery products ,thus making them less susceptible
tofalls inprice and ,asregards filleting ,tomeet thegrowing demand by
consumers forfoodstuffs requiring theminimum ofpreparation .
However ,such processing "requires costly installations ,which thesmaller'
fishing businesses either cannot afford ordannot operate economically .In
order togive those producers' organizations whose members oonsist ofsmall -
scale businesses' thesame opportunities andposition onthemarket aspro­
ducers' organizations whose members prooess their ownproducts andthen supply
them totheorganization forsale ,itisessential that theprocessing by
producers' organizations ofproducts supplied bytheir members bedesignated
"arecognized activity ".However ,thesmoking ofproducts elsewhere than on
fishing vessels should remain excluded ,forthis process hasalways been
carried ,outlargely byindustrial establishments anditsinclusion in .the
list of"recognized activities "would distort competition .
•••/«••

-3-
b)Thefirst indent ofArticle 2(2)ofRegulation NoI7O/7Iprovides that
sale through producers' organizations isto "beconfined tothefirst marke­
ting stage .Inpractice ,this provision hasledtodiffering interpreta­
tions .Inorder toavoid distortions ofcompetition inmarketing andhence
intrade ,itshould therefore beexpressly provided that only sale tothe
initial purchaser atthewholesale stage istoheregarded asa"recognized
activity ".
2)Produc er
Theexisting provisions relating toproducers' organizations contain node­
finition oftheterm "producer ".This could give rise todifficulties ,inthat ,
asalready explained ,tariff heading-No s03.01 toO3.O3 caver certain types
ofprocessing which arealso carried out "bybusinesses which donotthemselves
engage infishing ,butdevote themselves exiusively totheprocessing of
fishery products .
However ,theintention wasthat theformation ofproducers' organizations
should befacilitated only forbusinesses which actually engage infishing .
Insome Member States itisoustomary toregard asaproducer notonly the
owner ofafishing business but also allpersons working onboard fishing
vessels ,forthecrew notonly participate indecisions concerning the
conduct offishing operations andthesale ofthecatch ,butalso share the
financial risk .Thus their remuneration depends solely onthenetproceeds
•fsale after deduction ofallcosts inrespect offishing andsale (nets ,
ice,fuel ,fees ,etc.).Inerder toenable crew members totake anactive
part indecisions ofproducers' organizations ,itisprovided that they ,as
well astheowner ofthebusiness ,aretoberegarded asproducers andhence
asmembers oftheproducers' organizations concerned .
Thxs Regulación hasnofinancial ocnsequences *

Proposalfora
REGULATION (EEC)OFTTTC/COUITCIL
amendingRegulation(EEC)No170/71
asregardstheactivitiesofproducers'organizations andthe
definitionoftheterm"producer"
THECOUNCILOPTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity;
HavingregardtoCounoilRegulation(EEC)No2142/70^of20October1970
onthecommonorganization ofthemarketinfisheryproducts,aslastamended
"byRegulation(EEC)No220/73S
HavingregardtotheproposalfromtheCommission ^
Whereasthe©bjectiveinsettingupproducers'organizations istoimprove .
productionandmarketingconditionsf»rtheirmembers!
WhereasCouncilRegulation(EEC)NoI70/7I^of.26January1971there­
cognitionofproducers'organizations inthefishingindustryprovidesthat,
inorderforaproducers'organization toberecognizedandtherebytoenjoy
thefinancialadvantagesprovidedfor,itmustsatisfycertainminimumre­
quirementsandcarryononbehalf®fitsmemberscertainactivitiesessential
totheattainmentoftheabove-mentioned objective ^whereastheseinclude
inparticularthesaleoftheproductssuppliedtotheorganization byits
members,andthedrawingupandimplementation ofrulesconcerningproduction
andmarketing ?whereas,however,producers'organizations mayalsocarryon
otheractivitieswhich,althougheconomicallyjustifiable ,donotjustify
exemptionfromtherulesoncompetiti®nj whereasitisthereforedesirable
thatitshouldbeexpresslystatedwhichactivitiesqualifyforrecognition *
•••/•••
*0JNoL236,27October1970,p.5.
^OJNoL27,1February1973,p.1.J0JNoL23,29January1971,p.11.

Whereas theexisting provisions concerning producers' organizations donot
define theterm "producer "!whereas this eould -give rise todifficulties ,in
that tariff heading Nos .03.01 ,03.02 andO3.O3 cover oertain types ofpro­
cessing which arealso oarried outbybusinesses which donotthemselves en­
gage infishing ,hutdevote themselves exclusively totheprocessing offishery
products ?whereas ,however ,theintention wastothat theformation ofpro­
ducers' organizations should hefacilitated only "businesses
actually engaging infishing ,irrespective ofwhether they also engaged in
processingi
Whereas insome Member States itiscustomary toregard asaproducer notonly
theowner ofafishery business butalso all'persons working onboard
fishing vessels ,forthecrew notonly participate indecisions concerning
theeonduct *ffishery operations and „thesale ofthecatch ,butalso share
thefinancial risk ;whereas ,inorder toenable such crew members totake an
active part indecisions ofproducers' organizations ,itisprovided that
they ,aswell asthe®wner ofthebusiness ,aretoberegarded asproducers
andhence asmembers oftheproducers' organization concerned !
HASADOPTED THIS REGULATION i

Article 1(2)ofRegulation (S3C)Ko170/71i3replaced bythefollowing ;
"2.Meniber States g>=n recognize producers' organizations applying
forrecognition ifthey satisfy theconditions setoutinArticle 2.n
Article 2
Thefollowing Article laisinserted inRegulation (S3C)HoI7O/7Is
For thepurposes ofrecognition only thefollowing activities shall "be
taken into consideration s
–application oftheir concon rules forproduction ,
-filleting ,freezing ,salting anddrying ofproducts supplied "bymembers ,
–iheconcentration ofsupply ,
–preparation for sale ,
–sale through theintermediary oftheorganization tothewholesale
trade ,
–theapplication oftheir c0-330nmarketing rules toanysales by
Hesters direct tothe wholesale trade ."
Thefollowing provision isadied toArticle 2(l)ofRegulation (S3G)HoI7O/7I
"(e)they mayaccept asceabers cnly those persons specified inArticle
2a."
Article à.
Thefollowing Article 2aisinserted inRegulation (Z3C)NoI7O/7IS
"Artiçl e_2a
Inthis Eegulaxion "producer "means î
a)theoperator ofabusiness situated within theterritory ofthe
Cocounity which engages inthefishing orbreeding ofoneormore of
thespecies offish ,crutaceans ormolluscs listed under tariff
heading Lo03.01 orO3.O3 andsupplies totheproducers *organiza­
tion products falling within heading Ko.03.01 ,03.02 or03.03 ofthe
Cctrscn Casrtcns Tariff ;or
b)thefollowing persons taken together :
aa)those
–whowork onboard thefishing vessels belonging toabusiness
aadefined in(a),and

-participateindecisionsconcerningtheconductoffishery -
operationsandthesaleoftheoatchandsharestherelevant
financialrisksj
"b"b)andtheoperatorofabusinessasdefinedin(a).
Article5
ThisRegulationshallenterintoforceon.*.. ...(athree-
monthdelayshouldbeprovidedfortoenablerecognizedorganizations tomake
thenecessaryadjustment).
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicablein
allMemberStates. 1
DoneatBrusselsf
FortheCouncil
ThePresident