Proposal for a COUNCIL REGULATION aiming to promote the conversion of vessels and of fishermen that were, up to 1999, dependent on the fishing agreement with Morocco

(presented by the Commission)

EXPLANATORY MEMORANDUM

Introduction

The agreement on the relations as regards sea fishing between the European Community and the Kingdom of Morocco became null and void on 30 November 1999; at that date, more than 400 ships and about 4300 fishermen were forced to stop their activities. Since then, they have benefited from the compensation provided for in Article 16(1), item b), of Regulation (EC) No 2792/1999 [1], with the assistance of the Financial Instrument for Fisheries Guidance (FIFG). The duration of the period for granting this compensation was extended until 31 December 2001 [2].

[1] Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (OJ L 337, 30.12.1999, p. 10).

[2] Regulation (EC) No 1227/2001 of the Council of 18 June 2001 derogating from certain provisions of Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (OJ L 168 of 23/06/2001, p. 1).

Apart from the payment of the allowances, a vast conversion operation must be concluded successfully. For this purpose, the Member States concerned drew up plans which were approved by the Commission on 18 October 2000 [3]; their implementation is possible thanks to the range of measures available at the Community level, whether it is with the FIFG for the vessels and the fishermen, or with the other Structural Funds for the socio-economic diversification of the areas affected by the reduction, or even disappearance, of the activity induced by the fishing agreement (landing, processing and marketing of goods, services to the ships, etc.).

[3] Commission Decisions C(2000)3059 and C(2000)3060 of 18 October 2000 on the conversion plans for the Spanish and Portuguese fleets operating in Moroccan waters.

Socio-economic diversification of the areas dependent on fishing

The socio-economic diversification of the coastal areas dependent on fishing fits by nature into the context of the integrated operational regional development programmes and of the multi-regional programmes arising from the Community Support Frameworks of the Objective No 1 of the Structural Funds for Spain and for Portugal, with the financial assistance of the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the European Agricultural Guidance and Guarantee Fund (EAGGF), "guidance" section. By way of example, several roles could be cited for these funds : under the ERDF, the financing of productive investments for the creation or maintenance of long term employment, the financing of investments in infrastructure, the development of endogenous potential and the development of tourism; under the ESF, the prevention and struggle against unemployment, the development of human resources and social integration in the job market; under the EAGGF-guidance, measures for rural development integrated with measures aiming to promote development and structural adjustment in under developed regions.

Thus, in the three Spanish regions most directly concerned (Andalucia, Galicia, Canary Islands), a priority axis of the regional operational programmes is dedicated to the "development of productive fabric". A simple proportional calculation suggests that Andalucia benefits from about 38 Mio EUR of structural Community credits (period 2000-2006) for this action in the coastal areas dependant on the fisheries agreement with Morocco. The same calculation indicates 19 Mio EUR for Galicia and 15 Mio EUR for Canary Islands respectively.

Under these conditions, no specific intervention for this diversification is proposed.

Derogation measures

In several respects, the situation is particular: the necessary conversion is of exceptional magnitude, it does not result from a deliberate choice by the economic players, and it is essential to act quickly. This array of constraints justifies that exemption conditions, more favourable than the standard conditions, are proposed for a limited period of time.

It is thus necessary to facilitate the permanent cessation of activity of the vessels, whether by demolition or by the transfer to a third country, including within the framework of joint enterprises; it is also proposed to facilitate the replacement of the fishing gear for the permanent conversion of the vessel to other fishing activities, whatever the age of the vessel and even if it had been the subject of public aid for construction.

Moreover, the vessels concerned underwent a forced temporary laying-up in 2000. In the event of withdrawal, it would be therefore unjustified to require on the one hand, refunding pro rata temporis the aid for temporary cessation granted within the twelve months preceding the withdrawal, and on the other hand, a minimum of 75-days of activity for each of the two twelve-month periods preceding the withdrawal. This is why it is proposed to cancel these two provisions.

Specific action

In addition, on 7 December 2000, the European Council of Nice "[asked] the Commission to propose, keeping within the financial perspective, a specific action programme for restructuring the Community fleet which has fished in the framework of the old agreement [ of fishing with Morocco ] and to extend the current system of aid for the inactivity of the fleet" [4]. In this spirit, the European Union must signal its solidarity with the Member States concerned, by means of an additional financial effort.

[4] document SN 400/00 (« conclusions of the Presidency »), point 59.

The "extension of the system of aid for the inactivity of the fleet" was adopted by the Council (see above).

With regard to the "restructuring of the fleet", there are opportunities for the redeployment of vessels in Community waters, in the context of other fishing agreements with third countries, as well as under private licence arrangements between vessel owners and third countries but this possibility does not cover all the fleet that has operated within the fisheries agreement with Morocco.

Concerning the fishermen, there is no doubt that a significant number of them will be unable to find a place on another vessel, and the Community should contribute to their reclassification or eventually help them to stop working. An existing provision of Regulation (EC) No 2792/1999 makes it possible to allocate public appropriations, with FIFG co-financing, to the implementation of individual or collective social plans for their conversion from sea fishing. The FIFG can also co-finance the existing early retirement schemes.

It is therefore proposed to implement these measures by instituting a specific action, by mobilising to this end the flexibility instrument in 2002 and to assign the appropriations corresponding to the heading 2 of the financial perspectives (2002 budget). However, as already explained in the Preliminary Draft Budget, it is proposed to set aside a corresponding amount under heading 4 of the financial perspective. The detailed modalities will be included in the proposal for mobilising the flexibility instrument.

It is proposed that the specific action in question covers 70% of the conversion plans, complementing the conversion measures implemented in the context of the current structural programmes with the assistance of the FIFG appropriations.

In light of the estimates provided by the Spanish and Portuguese Authorities, the Commission is of the opinion that a minimum of 40% of the amount must be used for scrapping of vessels and change to non-fishing activity, not more than 28% can be used for the export of vessels, joint ventures and modernisation of vessels and a minimum of 32% must be used for socio-economic measures. The Commission is of the opinion that these estimates are compatible with the new fishing opportunities offered by the recent negotiations with third countries and with the fishing opportunities in international waters.

The implementation of the specific action has to be coherent with that of the current structural programmes; in particular distortions with the provisions in force for the implementation of the FIFG appropriations must be avoided; an operational mechanism of management as close as possible to that in force for the Community Structural Funds, as fixed by Regulation (EC) No 1260/1999 [5], must also be envisaged. Concerning more particularly the budget management, the payment of an instalment as from the adoption of this regulation is envisaged, then the reimbursement of expenditure actually paid, and finally the payment of the balance, which must be requested by 30 June 2004 at the latest.

[5] Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ L 161 of 26.6.1999, p. 1).

The derogations mentioned above could be financed either by the FIFG in the context of the current structural programmes of the Member States concerned or, by means of a specific action. Under the first option, they will still be charged to the budget of the current programmes, without effect on the Community budget.

Legal bases

The proposed legal bases are Articles 36 and 37 of the treaty.

2001/0163 (CNS)

Proposal for a COUNCIL REGULATION aiming to promote the conversion of vessels and of fishermen that were, up to 1999, dependent on the fishing agreement with Morocco

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 36 and 37 thereof,

Having regard to the proposal from the Commission [6],

[6] OJ C , , p. .

Having regard to the opinion of the European Parliament [7],

[7] OJ C , , p. .

Having regard to the opinion of the Economic and Social Committee [8],

[8] OJ C , , p. .

Whereas:

(1) The agreement on the relations as regards sea fishing between the European Community and the Kingdom of Morocco (hereafter named « the fisheries agreement with Morocco »), became null and void on 30 November 1999; consequently, a significant number of Community vessels that operated within this framework were forced to stop their fishing activities at that date.

(2) The fishermen and owners of the vessels concerned benefited in this connection from the allowances provided for in Article 16(1), point b), of Regulation (EC) No 2792/1999 [9] with the assistance of the Financial Instrument for Fisheries Guidance (FIFG), under the derogation conditions laid down by Regulation (EC) No 1227/2001 [10].

[9] Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (OJ L 337 of 30.12.1999, p. 10)

[10] Regulation (EC) No 1227/2001 of the Council of 18 June 2001 derogating from certain provisions of Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (OJ L 168 of 23.06.2001, p. 1)

(3) It is justified to encourage, by appropriate measures at the Community level, the implementation of the conversion plans of the fleets concerned as approved by the Commission on 18 October 2000 [11].

[11] Commission Decisions No C(2000)3059 and C(2000)3060 of 18 October 2000 concerning the conversion plan for the Spanish and Portuguese fleets operating in the waters of Morocco

(4) It is necessary to facilitate the permanent cessation activity of the vessels, whether by demolition or by transfer to a third country, including within the framework of joint enterprises; it is also appropriate to facilitate the replacement of fishing gear for the permanent conversion towards other fishing activities, whatever the age of the vessel and even if it were the subject of public aid for construction.

(5) Consequently, there is a need for derogations from certain provisions of Regulation (EC) No 2792/1999.

(6) Moreover, in the spirit of the conclusions of the European Council of Nice [12], the European Union should signal its solidarity with the Member States concerned, by means of an additional financial effort, over and above the amounts made available inside heading 2 of the financial perspectives for the budget of the European Union, as fixed at the European Council of Berlin on 25 March 1999.

[12] document SN 400/00 (« conclusions of the Presidency »), point 59.

(7) Consequently, a specific measure of the Community should be instituted to execute the appropriations in question in order to implement part of the conversion plans, on the understanding that the other parts of the aforementioned plans will have to be carried out with the assistance of FIFG appropriations.

(8) The complementary appropriations available should be devoted to the specific measure, on the one hand to the restructuring of the fleet, and on the other hand to the fishermen's early retirement or retraining, away from sea fishing, under individual or collective social plans.

(9) The specific measure must be consistent with the general principles of the structural policy in the fisheries sector; in particular distortions must be avoided with the provisions in force for the implementation of the FIFG appropriations; an operational mechanism of management must also be envisaged as close as possible of that in force for the Community Structural Funds, as fixed by Regulation (EC) No 1260/1999 [13].

[13] Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ L 161 of 26.6.1999, p. 1).

(10) The vessels due to operate in international waters or in waters of third countries must fully respect the international law with regard to the conservation of fishing resources and in particular the United Nations Convention on the Law of Seas as well as the FAO Code or Conduct.

(11) The socio-economic diversification of the coastal areas dependent on fishing naturally fits into the context of the integrated operational regional development programmes and multi-regional programmes arising from the Community Support Frameworks of the Objective 1 of the Structural Funds for Spain and for Portugal, with the financial assistance of the European Regional Development Fund, of the European Social Fund and of the European Agriculture Guidance and Guarantee Fund, category "guidance"; under these conditions, it is not justified to envisage a specific intervention devoted to this diversification,

HAS ADOPTED THIS REGULATION:

TITLE I - GENERAL

Article 1

1. The fishermen and the vessel owners to whom, during 2000 and 2001, compensation was granted under Article 16(1) point b) of Regulation (EC) No 2792/1999, owing to the non-renewal of the fishing agreement with Morocco, for at least a nine-month cumulative period of temporary cessation of activity, can benefit from exceptional supporting measures, under the conditions and within the limits envisaged by the present regulation.

2. At the latest three months after the entry into force of this regulation, Member States shall communicate to the Commission the list of vessels, indicating their internal numbers, as well as the list of names of the fishermen meeting the conditions referred to in paragraph 1.

TITLE II - DEROGATION MEASURES

Article 2

1. By derogation from the provisions of Regulation (EC) No 2792/1999, public aid to the owners of the vessels referred to in Article 1(1), is granted according to the following rules:

a. where public aid is granted for the demolition of a vessel,

i) the scales referred to in Article 7(5), point a) are increased by 20%;

ii) the provisions of Article 10(3) point b) ii) as well as those of Annex III, point 1.1.a), are not applicable;

b. where a premium is granted for the permanent transfer of a vessel to a third country, including in the case of a joint enterprise,

i) the scales referred to in Article 7(5), point a) are increased by 20%;

ii) the provisions of Article 10(3) point b) ii) as well as those of Annex III, point 1.1.a), are not applicable;

iii) the minimum age of the vessels referred to in Article 7(2) is reduced to five years; for 5 to 9-year-old vessels, however, the reference premium, as referred to in Article 7(5), point a), is that applicable to vessels of 10 to 15 years old. This premium is reduced by part of the amount previously received in cases of aid granted for construction and/or modernisation; this part is calculated prorata temporis of the 10 year period (in the case of aid for construction) or 5 year period (in the case of aid for modernisation) preceding the permanent transfer;

c. in the event of permanent conversion of a vessel to another fishing activity requiring the change of fishing technique, the replacement of the fishing gear can be the subject of public aid as a modernisation of the vessel, under the following derogation conditions:

i) the last subparagraph of Annex III, point 1.4, is not applicable;

ii) the scales referred to in Article 9(4) point b), are increased by 30%;

iii) the provisions of Article 10(3) point a) are not applicable.

2. The derogation rules mentioned in paragraph 1 shall apply only to premiums and public aid that were granted under an administrative decision by the Authorities referred to in Article 6, taken between 1 July 2001 and 31 December 2002.

3. The vessel owners are no longer eligible to the compensation for temporary cessation of activity as of the date of the administrative decision granting a premium for the permanent cessation of activity or a public aid for the modernisation of the vessel concerned, which -when applicable- was taken pursuant to the modalities provided for in paragraph 1.

In the case of advance payment of this compensation, any amount overpaid will be deducted from the premium for permanent cessation or from the public aid for modernisation, granted for the boat concerned.

TITLE III - SPECIFIC MEASURE

Article 3

1. A specific action of the Community is instituted (hereafter named «this action») aiming to supplement actions taken in the context of the interventions of the Structural Funds in the Member States concerned due to the non-renewal of the fisheries agreement with Morocco.

2. This action:

a. is exclusively reserved for the vessel owners and for the fishermen referred to in Article 1(1) ;

b. covers respectively

i) measures of permanent cessation of vessels' fishing activities within the meaning of Article 7(3) of Regulation (EC) No 2792/1999

ii) measures of modernisation of vessels within the meaning of Article 9(1) of the same regulation, and

iii) measures of a socio-economic nature, within the meaning of Article 12(3) points a) and c), of the same regulation;

c. is subject to the conditions referred to in Article 12 of Regulation (EC) No 1260/1999.

3. The amount of the Community assistance allocated to the various measures of this action shall be as follows, expressed as a percentage of the global amount referred to in Article 5 (1):

a. scrapping of vessels and permanent reassignment of vessels for purposes other than fishing: minimum of 40% of the global amount;

b. permanent transfer of vessels to a third country, including within the framework of a joint enterprise, and modernisation of vessels: maximum of 28% of the global amount;

c. socioeconomic measures: minimum of 32% of the global amount.

Article 4

1. Mutatis-mutandis, the provisions of Regulation (EC) No 2792/1999 are to apply for the implementation of this action, under the provisions and the derogation conditions laid down in title II of this regulation, in particular with regard to:

a. the date limit of the administrative decision to grant the assistance,

b. the notification of the aid schemes,

c. the criteria of eligibility of the fishermen and of the vessels,

d. the maximum amount of the premium for a fisherman or for a given vessel,

e. the maximum amount of expenditure eligible for the granting of public aid for the modernisation of a given vessel;

f . the limits of the financial contribution of the Community and of all the public financial contributions (national, regional and other) of the Member State concerned.

2. However, in case of the granting of a premium for the creation of a joint enterprise within the framework of this action, the management authority shall pay the whole premium to the applicant when the vessel is transferred to the joint enterprise, after the applicant has provided proof that a bank guarantee for an amount equal to 40 % of the premium has been lodged.

3. The premiums for permanent cessation of fishing activities and the public aids for the modernisation of vessels, paid under this action, are regarded as public aid within the meaning of Article 6(1) of Regulation (EC) No 2792/1999.

The fishing capacity withdrawn pursuant to this measure contributes to the adjustment of the fishing effort of the Member States concerned, within the meaning of Article 7 of Regulation (EC) No 2792/1999.

The public aids for the modernisation of vessels, paid under this action, are subject to the provisions of Article 9 of Regulation (EC) No 2792/1999.

For the purposes of the implementation of this action, the compensation referred to in the first article is intended to have the same end result as the socio-economic measures referred to in article 12(3), points a) and c) of Regulation (EC) No 2792/1999.

4. Premiums or public aid granted under this action cannot be cumulated with another premium or public aid having the same purpose, and in particular that granted in the context of the structural funds in the Member States concerned.

The Member States concerned shall take all the measures necessary to conform to the provisions of this paragraph, and at the latest three months after the entry into force of this regulation, they shall communicate them to the Commission.

Article 5

1. The amount of the Community participation allocated to this action is set within the framework of the budgetary procedure of the year 2002. It is distributed according to the following percentages:

a. Spain: 94.6%,

b. Portugal: 5.4%.

2. The payment of the Community participation referred to in paragraph 1 shall be carried out by the Commission in accordance with the budgetary commitments and shall be addressed to the payment authority referred to in Article 6.

At from 1 January 2002, the Commission shall carry out the commitment of the totality of the appropriations concerned, at the latest three months after the adoption of this regulation, and in any case before 31 December 2002.

3. Subject to the budgetary resources, the Commission shall carry out the payments according to the following provisions:

a. An instalment, representing at most 20 % of the amounts referred to in paragraph 1, is paid at the time of the commitment referred to in paragraph 2.

b. The intermediate payments are carried out at the request of the Member State to refund the expenditure actually paid and certified by the payment authority referred to in Article 6.

The cumulated total of the payments referred to in point a) and the present point amounts at most to 80% of the amounts referred to in paragraph 1.

c. The payment of the balance is carried out at the request of the Member State, after completion of this measure, if

i) the payment authority has submitted to the Commission a certified statement of expenditure actually incurred;

ii) the final implementation report has been submitted to the Commission and has been approved by it;

iii) the Member State has sent to the Commission the statement referred to in Article 38(1) point f), of Regulation (EC) No 1260/1999.

4. Eligible for the Community participation under the present action are the expenses actually paid by the final beneficiary from 1 July 2001. The deadline for eligibility of the expenditure is fixed at 31 December 2003.

The last date for submission to the Commission of the request for payment of the balance is fixed at 30 June 2004.

5. The requests for intermediate payments and for payment of the balance have to be drawn up in accordance with the model appearing in Annex II of Regulation (EC) No 438/2001 [14].

[14] Commission Regulation (EC) No 438/2001 of 2 March 2001, laying down detailed rules for the implementation of Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds (OJ L 63 of 3.3.2001, p. 21)

They have to be supported by the production of progress reports, in electronic form, in accordance with the model appearing in Annex I of Regulation (EC) No 366/2001 [15].

[15] Commission Regulation (EC) No 366/2001 of 21 February 2001, laying down detailed rules for implementing the measures provided for in Council Regulation (EC) No 2792/1999 (OJ L 55 of 24.2.2001, p. 3)

Article 6

For the purposes of implementation of this action, the management authorities and the payment authorities operating in the context of structural funds interventions in favour of fisheries in Spain and in Portugal during the period 2000-2006, shall fulfil the functions attributed to them by the relevant provisions of Regulation (EC) No 1260/1999.

Except in the case of contrary provisions arising from this regulation, the provisions of Articles 31 and 33 to 39 of Regulation (EC) No 1260/1999, as well as derived legislation, are in force.

Article 7

If necessary, the detailed rules for the application of this title shall be adopted by the Commission according to the procedure referred to in Article 23(2) of Regulation (EC) No 2792/1999.

For this purpose the Commission is assisted by the committee on structures for fisheries and aquaculture established by Article 51 of Regulation (EC) No 1260/1999.

TITLE IV - FINAL PROVISIONS

Article 8

This Regulation enters into force the third day following its publication in the Official Journal of the European Communities.

It is applicable as from 1st July 2001.

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

Done at Brussels, [date]

For the Council

The President

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): FISHERIES

Activity(ies): structural policy

Title of action: Specific measure aiming to promote the conversion of vessels and of fishermen that were, up to 1999, dependent on the fishing agreement with Morocco

1. BUDGET LINE(S) + HEADING(S)

B2-200: "Specific measure aiming to promote the conversion of vessels and of fishermen that were, up to 1999, dependent on the fishing agreement with Morocco"

2. OVERALL FIGURES

2.1. Total allocation for action (Part B): 197 Mio EUR for commitment

2.2. Period of application: 2002 Budget (engagement in only one year)

2.3. Overall multiannual estimate on expenditure:

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

Mio EUR (to 3rd decimal place)

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b) Technical and administrative assistance and support expenditure(see point 6.1.2)

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c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

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2.4. Compatibility with the financial programming and the financial perspective

X This proposal will entail reprogramming of the relevant heading in the financial perspective, as well as the mobilisation of the flexibility instrument.

X This may entail application of the provisions of the Interinstitutional Agreement.

2.5. Financial impact on revenue:

X No financial implications (involves technical aspects regarding implementation of a measure).

3. BUDGET CHARACTERISTICS

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4. LEGAL BASIS

Proposal for a Council Regulation aiming to promote the conversion of vessels and fishermen that were, up to 1999, dependent on the fishing agreement with Morocco.

5. DESCRIPTION AND GROUNDS

5.1. Need for Community intervention

5.1.1. Objectives pursued

The agreement on the relations as regards sea fishing between the European Community and the Kingdom of Morocco became null and void on 30 November 1999; at that date, more than 400 vessels and about 4300 fishermen were forced to stop their activities. Since then, they have benefited from the compensation provided for in Article 16(1), point b), of Regulation (EC) No 2792/1999 [16], with the assistance of the Financial Instrument for Fisheries Guidance (FIFG). Beyond the payment of compensation, a broad conversion operation must be successfully concluded. The Council noted the rupture of the negotiations on a new fishing agreement, and thus the vessels and fishermen mentioned above are permanently deprived of fishing opportunities in the Moroccan waters.

[16] Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector (OJ L 337 of 30.12.1999, p.10)

On 7 December 2000, the European Council of Nice. "[asked] the Commission to propose, keeping within the financial perspective, a specific measure programme for restructuring the Community fleet which has fished in the framework of the old agreement [ of fishing with Morocco ]..." [17].

[17] conclusions of the Presidency , document SN 400/00 point 59

With regard to the "restructuring of the fleet" , there are opportunities for a redeployment in Community waters, in the context of other fishing agreements with third countries, as well as under private licence arrangements between vessel owners and third countries but this possibility does not cover all the fleet that has operated within the fisheries agreement with Morocco.

Concerning the fishermen, there is no doubt that a significant number of them will be unable to find a place on another vessel, and the Community should contribute to their reclassification or eventually help them to stop working. An existing provision of Regulation (EC) No 2792/1999 makes it possible to allocate public appropriations, with FIFG co-financing, to the implementation of individual or collective social plans for their conversion from sea fishing. The FIFG can also co-finance the existing early retirement schemes.

This measure aims to follow up the request of the European Council, respecting the constraints of the common fisheries policy.

5.1.2. Measures taken in connection with ex ante evaluation

The Spanish and Portuguese Authorities estimated that 219 vessels should be permanently decommissioned, 112 other vessels could continue their activities under the flag of a third country, and the remaining, i.e. 75 vessels, could continue their activities keeping their flag, thanks to a change in their fishing techniques which would require investments for modernisation. The Commission is of the opinion that these estimates need to be slightly adjusted in respect of scrapping and transfer of vessels. In addition, some 4300 fishermen should, in a way or another, benefit from requalification (in fisheries or outside fisheries) or early retirement scheme measures.

On the basis of the derogation conditions included in the legislative proposal, and by applying the rates of interventions that are applicable in the Regions of the Objective No 1 of the Structural Funds, the Community assistance necessary for the reconversion of the whole fleet and all fishermen is estimated at approximately 281 Mio EUR.

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* Community aid

It is proposed that the supplementary Community effort - outside FIFG - takes in charge some 70% of total Community effort, thus the estimated amount necessary for the execution of the present action is 197 Mio EUR in supplementary credits.

The Commission has the detailed data concerning each of the vessels which has operated under the fisheries agreement with Morocco (age, tonnage and therefore amount of the reference scrapping premium), which allows to recalculate average values for any age range. On this basis at is estimated that the specific action should allow

- the scrapping or reassignment for purposes other than fishing of about 176 vessels representing a global tonnage of some 24 300 GT (on the basis of the tonnage of all the vessels of 20 years and over: 139 GT/vessel), for a total of Community aid of 79 Mio EUR (3 238 EUR/GT or 453 000 EUR/vessel),

- the permanent transfer to third countries, including in the framework of joint enterprises, of about 60 vessels representing a global tonnage of some 9 600 GT (on the basis of the tonnage of all the vessels of 5 to 15 years: 155 GT/vessel), for a total of Community aid of 37 Mio EUR (3 870 EUR/GT or 600 000 EUR/vessel)

- to modernise about 50 boats representing a global tonnage of some 8 000 GT (on the basis of the tonnage of all the boats of 8 to 25 years: 160 GT/boat), for a total of Community aid of 18 Mio EUR (2 250 EUR/GT or 360 000 EUR/boat),

- to retrain or to benefit from pre-retirement about 3 000 fishermen for a total of Community aid of 63 Mio EUR (on the basis of indicators supplied by Spain: 21 000 EUR/fisherman).

The breakdown of these credits between Spain and Portugal is calculated from the lists of boats having operated under the fishing agreement with Morocco. The calculation based on the respective tonnages of the two fleets and the calculation based on the tonnages weighted by the number of licences give the same result, that is, 186.36 Mio EUR (94.6%) for Spain and 10.64 Mio EUR (5.4%) for Portugal.

With regard to the cost effectiveness aspect, it should be pointed out that the supplementary Community effort (197 Mio EUR spread over three budgetary exercises) represents some 32% of the financial compensation that the Community would have paid to Morocco, spread over five budgetary exercises, in the context of the new fishing agreement (by taking as hypothesis an annual compensation equivalent to the last agreement).

5.1.3. Measures taken following ex post evaluation

The Commission analyses regularly the development of fishing effort, in relation to the development of the fishery resource (last publications to date: mid term report on the MGP IV, COM(2000)272; annual report on the MGP IV, COM(2000)738; "green paper" on the future of the common fisheries policy, COM(2001)135). All the ideas conclude that the reduction of the fishing effort of the Community fleet, implemented for more than ten years, is an absolute priority; while the results obtained go in the right direction, they are however insufficient, and much remains to be done halt the decline of the resource.

With this in mind, the conversion of vessels which cannot fish in waters under the sovereignty of Morocco must lead to their redeployment in Community waters in a limited proportion only. The pure and simple elimination of the surplus capacity is the most effective manner of translating measures into the essential reduction of fishing effort.

In addition to what precedes, the Community must also to deal with the retraining of the fishermen who are victims of the situation.

5.2. Actions envisaged and arrangements for budget intervention

The message delivered by the European Council of Nice (point 5.1.1 supra) is clear: an additional Community financial effort is required, but the respect of the financial perspectives remains imperative.

The financing of specific expenditure items can be carried out only within the ceiling envisaged in this respect (institutional agreement of 9 May 1999, item 10 subparagraph 3).

The structural programmes in the fisheries sector, governed by Council Regulation (EC) No 2792/1999, make it possible to withdraw vessels in overcapacity, in particular by their demolition, and also to retrain fishermen. This measure should therefore normally be placed in the programmes concerned, covered by heading 2 of the financial perspectives. However, no margin exists under this heading.

It is therefore proposed to establish a specific measure, with 197 Mio EUR of Community appropriations (maximum amount). For these, it is proposed to mobilise the flexibility instrument in 2002 and to allocate the corresponding appropriations to heading 2 of the financial perspectives (budget 2002). However, as already explained in the Preliminary Draft Budget, it is proposed to set aside a corresponding amount under heading 4 of the financial perspective. The detailed modalities will be included in the proposal for mobilising the flexibility instrument.

As mentioned above (item 5.1.2), the Community funds have to cover only a part of the total cost of the action (between 75 % and 35 % of each measure), the balance remaining the responsibility of the Member States.

5.3. Methods of implementation

This action concerns the permanent cessation of activities of vessels, the modernisation of vessels and the retraining or early retirement of fishermen (items 5.1.1 and 5.1.2 above).

Its implementation should be simple to follow and control : since the conditions of use of the additional appropriations have to be created ex nihilo and since one must minimise as much as possible the additional administrative cost for the Member States concerned, it is advisable to limit the number of measures eligible to this action.

In any event, the other restructuring measures remain available in the context of the FIFG structural programmes. The measures for socio-economic diversification of the areas dependent on fishing can be implemented in the context of the integrated operational regional development programmes arising from the Community Support Frameworks of the Objective n°1 of the Structural Funds for Spain and for Portugal, with the financial assistance of the European Regional Development Fund and of the European Social Fund.

This measure will be managed as two structural programmes (one for Spain, the other for Portugal) in a single round, where the implementation criteria of the FIFG and the provisions in force for the Structural Funds will apply.

The application of the scales and of FIFG/Member State co-financing rates in force for the structural programme measures (item 5.1.2 above) will avoid creating a distortion with the conditions applicable to the same measures in the context of the structural programmes.

The management / payment authorities designated by the Member States for the implementation of the Spanish and Portuguese FIFG structural programmes will be charged with the implementation of this measure, with the same duties and responsibilities.

The payment of an instalment is envisaged as from adoption of the regulation, then the reimbursement of expenditure actually paid (item 8.1 below), and finally the payment of the balance, which must be requested 30 June 2004 at the latest.

6. FINANCIAL IMPACT

6.1. Total financial impact on Part B - (over the entire programming period)

6.1.1. Financial intervention

Commitments in Mio EUR (to the 3rd decimal place)

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6.2. Calculation of costs by measure envisaged in Part B (over the entire programming period)

Commitments in Mio EUR (to the 3rd decimal place)

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7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

None

8. FOLLOW-UP AND EVALUATION

8.1. Follow-up arrangements

The follow-up will respect the provisions in force for the FIFG, namely the production of an implementation report giving fundamental information concerning each individual project: the registration number of the demolished vessel, its tonnage, the amount of the premium paid, the Community participation, the national public counterpart as well as the date of the administrative decision to grant aid (decision falling within the competence of the management authority).

The implementation report will also serve as support at the time of a request for reimbursement of the Community share of expenditure actually paid.

8.2. Arrangements and schedule for the planned evaluation

Owing to the specific character of the measure and to its limited duration, no intermediate evaluation is envisaged. An a posteriori evaluation, based on objective and reliable data, must measure if the objectives were achieved.

9. ANTI-FRAUD MEASURES

The anti-fraud measures are those envisaged in the general Regulation of the Structural Funds, period 2000-2006 (Regulation (EC) No 1260/1999 and derived legislation). The legislative proposal (the Council Regulation instituting this measure) refers to this explicitly.

More specifically, cross reference between the information resulting from the follow-up system (item 8.1 above) with other sources of information already accessible to the services of the Commission (Community register of fishing vessels; register of the individual licences granted under the fishing agreement with Morocco; report of implementation of the FIFG programmes) will make it possible to detect possible irregularities.