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DOCUMENTS "COM"
COM(74)212
Vol.1974/0042

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(74)212final
Brussels.21February1974
PROPOSAL FORA
REGULATION (EEC)OFTHECOUNCIL
V
amendingArticle4(a)ofRegulation(EEC)No974/71as
regardsthemonetarycompensatory amountsapplicable
toprocessedagricultural products
(submittedtotheCouncilbytheCommission)
COM(74)212final

VI/359/74-E
EXPLANATORY MEMORANDUM
There arcacertain number ofproducts which theimport charge ismade up
oftwocomponents :
Avariable component intended tocompensate fordifferences inthe
prices ofbasic products intheCommunity andinthird countries .
Afixed component fortheprotection oftheCommunity processing
industry . -
;(itshould berecalled ,that ingeneral ,thefixed component forthenewMember
States isnotthe same asthefixed component fortheCommunity asordinal ly
constituted ;inthis case ,alignment istobeeffected under article 61of
thoActannexed totheTreaty ofAccession ;thefixed component applies also
inintra-community trade with thenewMember States ).
Aproblem arises with regard tothis fixed component inapplying Article 4(a)
ofRegulation (EEC)No974/71-Forthopurposes ofthecomparison tobemade
forthe .application ofthis provision ,thetext speaks ofthiecompensatory amount
-andtheimport charge .This ,strictly speaking ,means thetotal charge ,
including thefixed component .1- '
Theresult ofthis isthat if,asforwheat forexample ,theapplication of
Article 4(a)gives a.zero compensatory amount ,acompensatory amount will
continue tobegranted onimportation ofproducts processed from wheat ,since a
fixed component isstill -applicable ;thecompensatory amount will thus be
equal tothefixed components .This result does notappear very logical :.
intrade with third countries ,theprotection oftheCommunity "
processing industry will benoi>-cxistenty since thefixed component
collected andthecompensatory amount granted will cancel each other
out ;
intrade between Member States ,where thefixed component does not
apply tthecompensatory amount will continue toapply ,being thesame
forallkinds oftrade ,with resultant distortions ofcompetition between
the Member States concerned .

νΐ/359/74-3
l«i* .• .
• 1*-2-
Itistherefore proposed that Article 4(a)(2 )ofRegulation (EEC)No974/71
should beamended soastoenable the results mentioned above tobeavoided .
Prom thefinancial point ofvievr itshould benoted that this proposal applies
only tocompensatory amounts covered byArticle 4(a)ofRegulation (EEC)No
974/711that istosaythose applicable inMember States with depreciated
currencies .Since itisproposed that ,fortheproducts concerned ,the
compensatory amounts referred toinArticle 4(a)(2)should bebrought down
tothelevel ofthevariable compononts ofcharge ,theresult canonly bea
decrease incompensatory amounts where this ceiling enters into force .
Intrade x*ith third countries ,inview oftheprovisions ofArticle 4(a)(1)
(deduction ofcompensatory amounts from theimport charge orexport refund ,as
thecase maybe),this decrease will bereflected byanincrease inimport
charges andexport refunds .Fortrade between Member States this decrease
will beshown directly inthecompensatory amounts charged orgranted (Article
792oftheBudget oftheEuropean Communities ).
Ingeneral ,thefinancial consequences oftherules under Regulation 974/71
depend ontherates atwhich currencies arefloating atthelevel ofprices .
These twodominant factors also determine whether theceiling enters into force .
Accordingly ,thefinancial consequences oftheproposed measure ,which inany
case aredifficult tocalculate ,will bovery ,limited bycomparison with the
possible financial consequence ofhedominant factors mentioned above .
There should however beaslight increase inrevenue (ownresources ).With
regard toexpenditure (refunds andinterventions ),there should beaslight
decrease forMember States which arenetimporters ;ontheother hand ,in
Member States which arenetexporters ,there could beaslight increase inthese
items ofexpenditure .Inview ofthese varying tendencies ,thefinancial
consequences ofthis proposal should notofthemselves necessitate anyamendment
totheamount entered inthe1974 budget andthe •oluriannual forecasts .

PROPOSAL FORA
REGULATION(ESC)OPTHECOUNCIL
amendingArticle4(a)ofRegulation(EEC)Ho974/71as
regardsthemonetarycompensatory amountsapplicableto
processedagricultural products.
THECOUNCILOFTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,.
andinparticularArticles23,43and235thereof;
HavingregardtotheproposalfromtheCommission ;
HavingregardtotheOpinionoftheEuropeanParliament ;
WhereasArticle4(a)ofRegulation(EEC)NO974/71oftheCouncilof12May
1971°Ncertainmeasuresofconjunctural policyto"betakeninagriculture
followingthetemporarywideningofthemarginsoffluctuationforthe,
currenciesofcertainMemberStates,aslastamendedbyRegulation(EEC)NO
3450/73,providesthatthemonetarycompensatory amountsapplicablein
MemberStateswithdepreciatedcurrenciesaretobedeductedfromtheimport
chargesandfromrefundsandmaynotbehigherthanthechargeonproducts
importedfromthirdcountries;
Whereasthereareacertainnumberofproductsinrespectofwhichtheimport
chargeismadeupofseveralcomponents ;whereasinviewoftheeconomic
purposeofcertainofthesecomponentsitmaynotbeappropriatetotakethem
intor-ccountforthepurposesoftheprovisionsinquestion;
Whereasanadditionshouldthereforebemadetotheprovisionsof
Article4(a)(2)tospecifythemannerinxtfhichitistoapplyinthecases
mentionedabove,
HASADOPTEDTHISREGULATION :

-2-
Article1
ThefollowingsubparagraphisaddedtoArticle4(a)toRegulation(EEC)No
974/71;
"Wheretheimportchargeismadeupofseveralcomponents,itracybeprovided,
inaccordancewiththeprocedurelaiddownbyArticle6,thatonlythe
componentintendedtoconpensateforthedifferenceinpricesofbasicproducts
•shallbetalcenintoaccountforthepurposesofthethirdsubparagraph".
Article2
ThisRegulationshallenterintoforceonthedayofitspublicationinthe
OfficialJournaloftheEuropeanCommunities .
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicableinall
MemberStates.:
DoneatBrussels, FortheCouncil,
ThePresident.