Table of contents

INTRODUCTION || 1

1. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES || 2

1.1. EX-POST ANALYSES OF THE EU SYSTEM OF OFFICIAL CONTROLS || 2

1.2. DATA COLLECTION BY OR ON BEHALF OF THE COMMISSION || 3

1.3. CONSULTATIONS || 4

1.3.1. MEMBER STATES || 4

1.3.2. STAKEHOLDERS || 4

1.3.3. SUMMARY OF THE CONSULTATION OF THE INTERESTED PARTIES || 4

1.4. INTER-SERVICE STEERING GROUP (ISSG) || 4

1.5. IAB OPINION || 5

2. PROBLEM DEFINITION || 6

2.1. BACKGROUND || 6

2.1.1. THE EU SYSTEM OF OFFICIAL CONTROLS ALONG THE AGRI-FOOD CHAIN || 6

2.1.2. THE INTERNATIONAL DIMENSION || 7

2.2. PROBLEM IDENTIFICATION 2.2.1. DESIGN OF THE OFFICIAL CONTROLS' FRAMEWORK 2.2.2. DIFFICULTIES AND INEQUITIES IN FINANCING OFFICIAL CONTROL ACTIVITIES || 8 8 12

2.3. PARTIES AFFECTED || 15

2.4. HOW WOULD THE PROBLEM EVOLVE, ALL THINGS BEING EQUAL? || 16

2.5. DOES THE EU HAVE THE RIGHT TO ACT (SUBSIDIARITY)? || 17

2.5.1. RIGHT OF THE EU TO ACT (LEGAL BASIS) || 17

2.5.2. NECESSITY FOR THE EU TO ACT (SUBSIDIARITY) || 17

3. OBJECTIVES || 18

3.1. GENERAL OBJECTIVES || 18

3.2. SPECIFIC OBJECTIVES 3.2.1. OBJECTIVES RELATED TO THE DESIGN OF THE OFFICIAL CONTROLS' FRAMEWORK 3.2.2. OBJECTIVES RELATED TO THE FINANCING OF OFFICIAL CONTROLS || 18 19 19

3.3. OPERATIONAL OBJECTIVES || 20

3.4. CONSISTENCY WITH THE OTHER EU POLICIES AND HORIZONTAL OBJECTIVES || 20

4. POLICIY OPTIONS || 21

4.1. POLICY OPTIONS INCLUDED IN THE ANALYSIS || 21

4.2. DISCARDED POLICY OPTIONS || 26

5. ANALYSIS OF IMPACTS || 28

6. COMPARING THE OPTIONS IN LIGHT OF THE OBJECTIVES || 41

6.1. COMPARING THE OPTIONS IN LIGHT OF THE OBJECTIVES || 41

6.2. COST-BENEFIT ANALYSIS 6.3. PREFERRED OPTION || 43 44

7. MONITORING AND EVALUATION || 45

ANNEXES ||

ANNEX I || GLOSSARY || 47

ANNEX II || OVERVIEW OF THE EXISTING LEGISLATIVE FRAMEWORK || 48

ANNEX III || PROBLEM DEFINITION – DETAILS AND EXAMPLES || 53

ANNEX IV || PROCEDURE – DETAILS OF THE CONSULTATION || 59

ANNEX V || PROCEDURE – SPECIFIC DATA COLLECTION ACTIVITIES || 63

ANNEX VI || PROCEDURE – LIST OF CONSULTED STAKEHOLDERS || 64

ANNEX VII || PROCEDURE – LIST OF FVO AUDITS SINCE 2007 || 66

ANNEX VIII || REVISION OF REGULATION 882/2004 – SUMMARY OF THE MS’ OPINIONS || 75

ANNEX IX || REVISION OF REGULATION 882/2004 – SUMMARY OF THE STAKEHOLDERS’ OPINIONS || 79

ANNEX X || FEES – EXECUTIVE SUMMARY OF FCEC STUDY || 88

ANNEX XI || FEES – STUDY CARRIED OUT BY GHK TO SUPPORT THE IMPACT ASSESSMENT AS REGARDS THE FINANCING OF OFFICIAL CONTROLS || 94

ANNEX XII || FEES – SUMMARY OF STAKEHOLDERS’ OPINIONS || 103

ANNEX XIII || FEES – SUMMARY OF MS’ OPINIONS || 110

ANNEX XIV || FEES – EVIDENCE CONCERNING PROBLEMS OF INTERPRETATION || 117

ANNEX XV || FEES – EXAMPLES OF STATED LIMITED AVAILABILITY OF RESOURCES IN FVO REPORTS || 136

ANNEX XVI || FEES – VALIDATED BASELINE SCENARIO || 151

ANNEX XVII || FEES – SUPPORTING DATA || 179

ANNEX XVIII || LABORATORIES – MS’ CONSULTATIONS ON THE ACCREDITATION OF OFFICIAL LABORATORIES || 189

ANNEX XIX || LABORATORIES – COSTS RELATING TO THE INTRODUCTION OF A MANDATORY ACCREDITATION OF OFFICIAL LABORATORIES CARRYING OUT PLANT HEALTH TESTS AND TO THE CREATION OF EURLs || 200

ANNEX XX || DIRECTIVE 96/23/EC – MS’ CONSULTATIONS ON THE IMPACT OF DIFFERENT OPTIONS || 203

ANNEX XXI || DIRECTIVE 96/23/EC – COSTS REDUCTIONS RELATING TO THE REPEAL OF THE DIRECTIVE 96/23/EC || 228

ANNEX XXII || DIRECTIVE 96/23/EC – ADMINISTRATIVE BURDEN REDUCTION || 231

ANNEX XXIII || MAIN CHANGES TO THE EXISTING LEGISLATIVE FRAMEWORK || 237

ANNEX XXIV || SIMPLIFICATIONS GAINS || 244

ANNEX XXV || EXEMPTIONS AND REDUCTIONS FOR MICRO-ENTERPRISES || 247

ANNEX XXVI || INVASIVE ALIEN SPECIES – ONGOING INITIATIVE || 252

Introduction

In order to afford European Union (EU) citizens a high level of human, animal and plant health, and guarantee the functioning of the internal market, Union legislation provides for a set of harmonised rules to prevent, eliminate or reduce the level of health risk to humans, animals and plants, which may arise along the agri-food chain. The risks addressed include health risks sensu stricto (risks to the integrity of humans, animals and plants from pests, diseases, microbial and chemical contaminants and other hazards) but also the preservation of inherent qualities required to ensure a safe start of plant production and regulated production methods (i.e. animal welfare, organic farming, geographical indications).

In particular, the EU has established rules governing all the activities, from primary production to retail and catering, which may affect:

- the health of animals and plants,

- the safety of food and feed for EU citizens,

- the welfare of animals,

- the quality of plant reproductive material and other quality aspects such as organic production and geographical indications.

In addition, rules have also been established to ensure the provision of information to consumers and to guarantee fair commercial practices in agri-food chain products' trade. This wide ranging set of rules is referred to in this Impact Assessment (IA) as "agri-food chain rules".

To ensure agri-food chain rules are enforced by Member States (MS) across the EU in a harmonised manner, a legislative framework for the organisation of official controls has been established. This IA considers the possible impacts of reviewing such a framework.

Figure 1 – application of EU rules across the agri-food chain

1. Procedural issues and consultation of interested parties

1.1. Ex-post analyses of the EU system of official controls

In July 2009 the Commission issued a report for the European Parliament and the Council[1] to review the experience gained throughout the first years of application of Regulation (EC) No 882/2004 (hereafter "the Regulation")[2]. The report showed that the new rules have introduced important changes to the way competent authorities ("CA") organise and carry out official controls, establishing a more integrated approach which ensures confidence in the agri-food chain across the EU. However, given the increasing integration of business operators along the agri-food chain, it indicated that improvements could be made to meet the Commission’s Smart Regulation Agenda objective of simplifying regulation. This would also address issues of administrative burden reduction and fostering competitiveness.

The report also indicated that in order to rationalise and simplify the overall legislative framework, whilst simultaneously pursuing the objective of better regulation, consideration should be given to the possibility of integrating the rules currently applicable to official controls in specific areas (e.g. residues of veterinary medicines in live animals and animal products[3]; and plant health[4]) into the framework of the Regulation.

Additional research[5] carried out to evaluate the application of the Regulation outlined the existence of problems regarding the application of the rules (Articles 26 to 29) governing the financing of official controls. The report concluded that the overall objective of ensuring Member States allocate adequate financial resources to official controls is not being met throughout the EU. It recommended reviewing Articles 26 to 29 of the Regulation.

The Regulation also establishes the overall principles for MS’ controls carried out on third country imports to the EU (import controls). In December 2010, the Commission adopted a report on the effectiveness and consistency of sanitary and phytosanitary controls on imports of food, feed, animals and plants[6]. Whilst concluding that the comprehensive body of legislation currently in place allows the EU to deal with emerging risks or emergency situations without causing distortions to trade, the report also found that import controls could be made more coherent by reviewing and consolidating existing acts[7]. It concluded that this improvement would bring benefits for MS and operators handling goods from third countries (importers). The review of the Regulation was considered a good opportunity to take account of the findings of the report and consolidate controls where possible.

Besides the above, DG Health and Consumers (DG SANCO) has conducted further analysis on the alignment of EU sectoral legislation on official controls[8] with the overarching principles established in the Regulation.

The review of the Regulation is part of a package which also includes three other major reviews to modernise the animal health, plant health and plant reproductive material (hereafter 'PRM') acquis[9]. Its aim is therefore to modernise and integrate the system of official controls in a manner that also consistently accompanies the upgrade of EU policies in these sectors. The package is scheduled for adoption in 2012.

All the information, data and evidence collected as part of the reviews above, including evaluations of the existing regimes, has been used throughout this IA to define problems, assess impacts and appraise options.

1.2. Data collection by or on behalf of the Commission

· The Food and Veterinary Office (FVO)

The Commission is responsible for ensuring that Union legislation is properly implemented and enforced by the competent authorities of the MS. The Food and Veterinary Office (''FVO'') is a Commission's service which contributes to the fulfilment of this task, by in particular carrying out audits in the MS to verify the implementation of agri-food chain legislation and the functioning of national control systems, and to collect information on implementation practices.

The findings of each audit are set out in an audit report[10]. Information on the realities and difficulties of day-to-day implementation of agri-food chain legislation comes from such audit reports, in particular the ones assessing the functioning of national control systems along the agri-food chain. This IA draws on the findings of these reports and the data contained within them. Within a task force established by DG SANCO, feedback from national authorities and stakeholders gathered across all sectors (notably through the audit activities of the FVO) was studied to identify problems and shortcomings of the EU system of official controls.

· Studies on the system of financing official controls

In addition to the 2009 study on "Fees or charges collected by Member States to cover the costs occasioned by official controls" (see foot note 5), DG SANCO commissioned from another external contractor[11] a study to support the assessment of the options identified (2011)[12]. Whilst the contractor reported that there was difficulty in obtaining exact figures from MS to quantify the problem, the report did highlight the diverse spread of cost recovery within MS and certain problems with the application of EU rules which corresponded with previous studies and the Commission's own findings.

· Other data sources

In addition to the data mentioned above, further information was collected on specific issues (i.e. official controls in the Plant Health area and official controls on residues of veterinary medicines) to contribute to the analysis[13].

1.3. Consultations[14]

1.3.1. Member States

The key issues to be addressed by the review of the system of official controls as well as the changes to be included in the legislative framework have been extensively discussed within the Working Group on the general application of the Regulation set up within the Standing Committee on the Food Chain and Animal Health (SCFCAH)[15].

The main problems identified and the provisional options were also presented and discussed at meetings of the Heads of Food Safety Agencies on 29 June-1 July 2011 and on 8 December 2011.

Moreover, MS were consulted in the context of the two studies contracted out by the Commission in the area of the financing of official controls.

Finally, MS have been consulted within other fora and frameworks on the following specific issues relating to official controls: accreditation of official laboratories, official controls on residues of veterinary medicines in live animals and animal products, veterinary border controls, animal health, plant health and plant reproductive material.

1.3.2. Stakeholders

Stakeholders (industry association representatives and NGOs) have been consulted during the evaluation studies and the preparation of the IA. Two ad hoc Working groups, on the review of the system of official controls and the review of the rules governing the financing of such controls respectively, were convened under the Advisory Group on the Food Chain and Animal Health and Plant Health. Progress was also presented and discussed in the plenaries of the aforementioned Advisory Group and on invitation at meetings of several industry representative bodies. In addition to discussions with MS, stakeholder consultation was a key element of the two studies contracted out to external consultants in the field of the financing of official controls.

1.3.3. Summary of consultation with interested parties

Annexes VIII, IX, XII and XIII give an overview of the positions expressed by MS and stakeholders at different stages of the review; Annex VI lists all the stakeholders that have been consulted during the process.

1.4. Inter-Service Steering Group (ISSG)

A Commission Inter-Service Steering Group on the IA for the review of the EU system of official controls along the agri-food chain was established. The group was led by DG Health and Consumers (SANCO) with the participation of the following Commission Directorates General and Services: Agriculture and Rural Development, Budget, Environment, Enterprise and Industry, Research and Innovation, Taxation and Customs Union, Trade, Development and Cooperation, Maritime Affairs and Fisheries, Legal Service, Justice and the Secretariat-General. The group met seven times. A final draft was sent to the group, whose members provided comments at a last meeting on 27 January 2012 which have been incorporated into the IA.

1.5. IAB opinion

The IA report was submitted to the IA board on 29 February 2012 and was formally presented on 28 March 2012. Following this meeting the board issued an opinion on 30 March 2012 emphasising four main points as well as some presentational issues to be addressed in the final version of the report. Following re-submission on 16 May, a revised opinion was issued on 8 June clarifying the points to be addressed:

1) Improve presentation of the problem definition:

- section 2.2. presents now in a clearer and balanced manner the two main issues at stake: the deficiencies in the design of the official controls' framework (2.2.1.), and the uncertainties as regards the financing of such controls (2.2.2.); evidence as well as examples supporting both sets of issues are inserted;

- a better distinction has been drawn between problems, underlying causes and consequences.

- More thorough evidence on the design of the official controls and their efficiency across MS has been introduced by, where possible, quantifying the costs of inefficient controls to MS and operators. Where this is not possible, due to a lack of relevant data caused by short-comings in the current regime, this has been identified.

- The problem definition is supported by clearer, referenced examples and is presented in table 1.

2) Better define objectives and strengthen the intervention logic:

- the objectives in section 3.2. are now explained in light of the problem definition and the link between objectives and key problem issues is made explicit by a new table;

- operational criteria in section 3.3 are reformulated in order to make them more appropriate and quantifiable;

- the notion of safety has been reinforced in the intervention logic (problem definition, objectives, options, analysis of impacts), including by explaining why it is important that SMEs and micro-enterprises are subject to official controls without exceptions;

- section 4.1. now explains how the policy options included in the analysis relate to the specific objectives.

3) Reformulate the options and include options that address SME/micro enterprise issues

- options to address micro-enterprises issues are now included in sections 4.1. and 5 (under option 1B, exempting them from fees) and in section 4.2. (reducing controls on them);

- The text better explains the effect of fees on micro-enterprises by integrating into section 2.2.2, additional relevant examples and findings from the referenced studies;

- options 2 to 4 include and assess a mechanism to alleviate the burden of fees on micro-enterprises while taking into account competition and sustainability concerns;

- the presentation of the logic flow in the assessment of impacts has been improved by separating the two steps of the assessment and explaining their sequence (section 4.1.);

- the earmarking element, presented in the original report, was eliminated from options 2 to 4 (and is no longer analysed in detail in the report) as the same objective could be achieved through less prescriptive tools (transparency, accountability) (section 5, under option 2).

4) Present a clear overview of costs and benefits and make comparison of options more transparent

- a new table 4 in section 6.2. provides an overview of costs and benefits that could be estimated through the assessment and which are referenced in boxes 6, 7 and 9. It presents figures as both benefits and costs to MS and industry, and calculations are explained in footnotes. An explaination of the table now makes it clearer to which sectors the costs and benefits apply under the different options.

- section 6.2. presents in a more transparent fashion the comparative advantages of the different options, with regard also to the views of stakeholders. The figures and results presented in the analysis of costs and benefits are explained, supported by verifiable evidence, and clearly referenced.

- With regards to MS which already apply full cost recovery, Box 6 in section 5, presents examples of practices which are currently undertaken.

5) Procedure and presentation:

- references to MS and stakeholders' opinions are now systematically made throughout the report. All examples and evidence are clearly referenced;

- Annex XI includes the executive summary of the GHK study only, and relevent findings are drawn out in a separate annex (XVII) so that it is clear that the Commission does not endorse the study as a whole;

- Annexes XXVII was removed because it is not relevant for the report.

2. Problem Definition

2.1. Background

2.1.1. The EU system of official controls along the agri-food chain

The responsibility to enforce EU agri-food chain legislation lies with the MS, whose authorities monitor and verify that the relevant requirements are effectively implemented, complied with and enforced across the Union. In doing that they verify that operators' activities and goods placed on the EU market (either EU produced or imported from third countries) are in compliance with the relevant EU agri-food chain standards and requirements.

Harmonised EU rules to govern control activities performed by MS are established in the Regulation with the aim of creating an integrated and uniform approach to official controls along the agri-food chain. The Regulation provides for a general framework for official controls in the sectors of feed and food law, animal health and animal welfare rules, laying down rules governing both the organisation and the financing of such controls.

Despite the above integrated approach, for historical reasons controls for animal health purposes (both on domestic and imported goods) and controls on residues of veterinary medicines, remained regulated separately. Moreover, certain sectors pertaining to the agri-food chain were not included in the scope of the Regulation - i.e. plant health, PRM, animal by-products (hereafter 'ABP') - and specific sectoral regimes were developed for them.[16]

Competent authorities are required to perform official controls on all business operators active in the agri-food chain. Given that the emergence of food safety risks does not necessarily depend on the size of an operator, the current system is based on the principle that all should be subject to official controls, without exception, as this is the only way to ensure a risk-based prioritisation of controls, an efficient use of resources and the safety of the agri-food chain.

As regards the number of business operators concerned, figures suggest that they amount to approximately 25 million[17]. As highlighted in section 5 below, in a majority of Member States, micro-enterprises[18] represent more than half of the total number of business operators (at least in the four industries which are subject to the most intensive official control activities)[19]. In this context, the significance of controlling smaller businesses, including micro-enterprises, becomes apparent. This need is further reinforced by the fact that, notwithstanding their size, such enterprises are equally likely to conceal serious food safety risks/concerns. The recent E.Coli crisis, which spread across several Member States due to contaminated sprouted seeds, originated in a micro-enterprise. The crisis not only resulted in dramatic human losses with a death toll of 55 people and 4000 cases of serious human disease, but also caused huge economic damage which, in the first two weeks alone, amounted to approximately €812 million.

2.1.2. The international dimension

The efficient operation of the EU system of official controls is important for both EU exports and imports.

The EU is the world's largest exporter and importer of food and drink products. In 2010 EU27 food and beverages imports were worth €78 billion, and exports €73 billion. The EU27 imported 79.3 million tonnes of food and live animals and 3.4 million tonnes of beverages in 2010, with a trade deficit of 14 million tonnes for food and live animals, but a surplus of 6 million tonnes for beverages[20].

The EU's ability to export towards third countries relies on the reputation of the high production standards and added value that the EU goods can prove to have compared to the ones produced outside Europe. This can only be achieved by a reliable and trusted official controls system which ensures that the EU agri-food chain safety and quality standards are consistently enforced and corresponding expectations from trade partners met.

As regards imports, it is essential that all food on the EU market is safe. Controls perfomed by the MS CAs on goods arriving from third countries ensure that the latter offer adequate guarantees that they meet equivalent safety levels. The relevant import control rules must comply with the WTO Sanitary and Phytosanitary (SPS) Agreement, in particular with the provisions laid down in Annex C to the SPS Agreement.

2.2. Problem identification

MS ensure a good level of implementation of official controls across the agri-food chain, and progress can be recorded in the use of the enforcement tools established by Regulation 882/2004 (e.g. control planning and coordination, verification of effectiveness, auditing[21]). However, evidence gathered over the last five years of application (feedback from MS' CAs and FVO audits reports) has shown shortcomings stemming,

Ø on the one hand, from the design of the official controls framework (notably from the incomplete implementation of certain principles/objectives laid down in Regulation 882/2004, and from the fact that the integrated approach to official controls across the agri-food chain is consolidated only partly), and

Ø on the other hand, from uncertainties as to the availability of sufficient resources to adequately finance official controls.

2.2.1. Design of the official controls' framework

2.2.1.1. Inconsistencies, gaps in control requirements

Despite the increasingly integrated operation of activities along the agri-food chain, the integration of the EU system of official controls still suffers inconsistencies and legal gaps, in particular as regards controls carried out for plant health, PRM and ABP purposes. Controls in these areas are in fact not aligned fully with the framework laid down in the Regulation. On the other hand, overlapping requirements subsist also in the animal health area, already covered by the scope of the Regulation, because of the co-existence of sectoral legislation which survived the adoption of the general framework in 2004.

i) While certain differences in the design of official controls are justified because of the peculiarities of the concerned sectors (e.g. the certification procedure in the plant health area differs from that of the veterinary area), others appear to be arbitrary and result in inconsistencies in those cases where the same approach would be justified across sectors (e.g. the mechanism for delegating plant health control tasks differs from that regulated upon by the Regulation; also, laboratories performing official tasks are required to be accredited under ISO standards in all areas except plant health and PRM). Control authorities thus operate on the basis of different approaches and under different conditions depending on the specific agri-food chain rules they are called upon to enforce, without differences being justified.

ii) Some of the implementation tools or mechanisms established in Regulation 882/2004 are not available for the performance of official controls in the plant health, PRM and ABP areas (e.g. transparency requirements in relation to enforcement activities do not apply to controls on ABP rules; in the same area, no FVO audits are foreseen; EU rules on PRM do not provide for FVO audits on the functioning of national control systems, nor do they regulate upon competent authorities and their duties in this sector). As a result, CAs are not provided with the complete set of tools meant to ensure accountability, soundness and effectiveness of their enforcement activities.

iii) Certain requirements or procedures regulated upon by the Regulation in a horizontal manner are also present in sectoral legislation, in particular in pre-existing veterinary legislation. For example, the mechanism for administrative assistance and cooperation is regulated upon by the Regulation and by Directives 89/662[22] and 89/608[23]. This has resulted in different interpretations of similar procedures by MS who undertake different activities to verify compliance.

Inconsistencies and legal gaps are due to the fact that EU legislation on official controls has in the areas of plant health, PRM and ABP developed separately from the general framework established by the Regulation, and overlap in control requirements derived from the co-existence, for animal health related controls, of the Regulation with pre-existing sectoral legislation.

Whilst it is not always possible to quantify the cost to MS CA and operators of such inconsistencies and gaps it stands to reason that the inefficiencies so caused will lead to official control enforcement regimes which are unnecessarily costly for CAs to operate and are overly burdensome on operators.

2.2.1.2. Inconsistent implementation of risk-based approach

Regulation 882/2004 is based on the principle that official controls should be risk-based in order to maximise the efficiency of control activities directed at protecting health.

Box 1: Risk based approach to official controls

The risk based approach to official controls

In a situation where resources are finite these are to be used selectively and the selection should be based on a series of criteria which include: the hazard and risks associated with the specific business activity, or product, the operator's record of compliance and reliability, indications of possible non-compliance.

Failure to do so would result in resources being allocated on the basis of non-risk related criteria and in situations where official controls which are more relevant for the protection of public health are not receiving appropriate attention.

The analysis focuses on the areas where the risk-based approach is still not fully used (controls at the border and controls on residues of veterinary medicines).

i) EU border controls on certain goods from third countries

To ensure harmonised verification of compliance with EU agri-food chain rules, MS are required to carry out official controls on certain goods coming from third countries at the external borders of the EU (EU border controls). According to the risk-based approach, also EU border controls should be limited and proportionate to what is necessary to contain potential risks for humans, animals or plants.

However, the continuous and timely adjustment of the control effort at the EU border to the needs dictated by the actual risk is hampered by the rigidity and fragmentation of existing rules governing border checks in the different areas. E.g. current rules require MS to take samples and perform physical checks on 100% of consignments of animals, products of animal origin and plants intended to be introduced into the EU. Existing arrangements to reduce the frequency of costly and time consuming physical checks do not allow for the continuous adjustment necessary to take account of situations where the potential risk of the consignment spreading an animal disease or otherwise endangering public health is reduced.

In addition, the prioritarisation of the controls is carried out in a sectoral manner (animal health, public health, plant health) and not by comparing the levels of risk of all commodities of relevance for the agri-food chain across sectors: in other words, prioritarisation is carried out within sectors and not across sectors.

ii) Official controls on residues of veterinary medicines

MS are required by the provisions of Directive 96/23/EC to take samples of animals and foods for the presence of residues of veterinary medicines. Legal requirements are very strict, dictating the number of samples, which animals/tissues to analyse and for which substances. The result of such rigidity is that currently MS are demanded to carry out checks and laboratory analysis for substances for which over the past years there has been little or no evidence of actual risks.

Examples[24] Stilbenes: MS are required to take samples of all animals and animal products to check the presence of 'stilbenes'. The chart below shows that no non-compliance has been detected for several years now but, despite this, between 21000 and 24000 samples are analysed each year across the EU for stilbenes, their derivatives, salts and esters. Year Total number of samples analysed Number of non compliances 2007 23 411 0 2008 21 664 0 2009 21 815 0 2010 23 455 0 Resorcylic acid lactones (including zeranol): Samples taken on pigs to detect resorcylic acid lactones. More than 6000 samples continue to be analysed each year across the EU. Year Total number of samples analysed Number of non compliances 2007 6234 0 2008 5594 0 2009 6237 0 2010 6166 0

The reason for official controls not being aligned to the risk-based approach in the areas above is that such controls are currently prescribed by EU rules[25], pre-existing the Regulation and not repealed by it, which do not establish appropriate mechanisms to take into account the actual risk a given good, business activity or third country might present. In addition, as regards the area of EU border controls, the lack of prioritarisation of controls across all sectors is due to the fact that existing legislation is highly fragmented, and different sets of rules apply to different sectors (food and feed of non animal origin, live animals and their products, plants)[26].

This results in resources being allocated – in all MS - to controls that are not justified by the risk and consequently are a significant waste of public resources (time and money) that could be better used where risks are higher. The inefficient use of resources also results in unnecessary burdens on operators (time, staff, equipment and facilities mobilised to allow controls). Indeed, it is estimated that the result of the current regime for residues of veterinary medicines may be the lost opportunity to save between €12.4 million and €98.5 million/year (see Box 4 in Section 5 below).

2.2.1.3. Administrative burden and disproportionate requirements

Unnecessary administrative burdens are placed on MS' CAs. It is the case for the obligation for annual updates to MS monitoring plans of residues of veterinary medicines that these be transmitted to and approved by the Commission. In the same area, also redundant are the specific reporting obligations, as they duplicate the general reporting requirement in the Regulation. These burdens result from obligations on MS laid down in Directive 96/23/EC.

In addition, while requiring official laboratories to be accredited in accordance with EN ISO/IEC 17025[27], the Regulation does not allow temporary arrangements for emergencies or cases where laboratories have to use a new method not yet included in the accreditation.

Example: no or nearly no official laboratory in the EU was accredited according to ISO 17025 for the detection of mineral oil in sunflower oil or for the detection of melamine in food when respectively the crisis on sunflower oil from Ukraine or the one on melamine in food from China broke out. This lack of ability to allow temporary arrangements for emergencies could have weakened the legitimacy of controls (and analyses) carried out during the emergency, and of any measure taken by MS on that basis.

Similarly, no flexibility is foreseen for small laboratories carrying out extremely basic types of tests).

Example: soon after the adoption of Regulation 882/2004 several MS brought to the attention of the Commission that accreditation is very burdensome and disproportionate in the case of smallest Trichinella laboratories, which are attached to a slaughterhouse or a game handling establishment and only perform a very simple type of test.

2.2.1.4. Uneven enforcement of cooperation and transparency requirements

The Regulation includes some important principles and mechanisms which are currently underused by MS' CAs or applied according to divergent practices among MS.

In particular, it calls for administrative cooperation i) between MS for cross-border enforcement action, and ii) between sanitary authorities and customs services. However, MS are not making full use of this tool and/or they encounter difficulties in understanding the conditions for its application.

Examples: - the Commission received a complaint against a MS from a business operator, alleging that the MS's CAs, although aware of a violation of agri-food chain rules perpetrated by the supplier of the complainant (from a second MS), failed to contact the MS of dispatch as requested by Article 38 of Regulation 882/2004 to request their cooperation, and held the complainant solely responsible and liable for the violation. The receiving MS's CAs were acting under the wrong assumption that the notification in the Rapid Alert system for food and feed (RASFF) had satisfied its obligation under Article 38. - Another MS recently sent a complex interpretation query asking whether national customs authorities, in case of food and feed, can trigger the mechanisms foreseen in Articles 27/29 of Regulation 765/2008 (requirements for accreditation and market surveillance relating to the marketing of products) allowing them to suspend release of a product for free circulation on the Union market and inform the sanitary authority any time the product seems to present a serious risk to health, safety. In both cases, uncertain interpretation of the rules has the potential to result in CAs not taking appropriate action (to pursue cross-border violations, to prevent the release of unsafe goods).

Another requirement laid down in the Regulation which is open to divergent practices in MS is the obligation for the MS' CAs to ensure a 'high level of transparency' of control activities with regards to operators and the public at large.

The uneven enforcement of the principles and mechanisms above is mainly due to the fact that the Regulation foresees no comprehensive guidance on how cooperation should take place (timing, information to be exchanged, etc.) and what information should be made available to the public. In addition, the Commission is not empowered to lay down further details and uniform implementation modalities.

Whilst it is not possible to quantify the shortcomings identified in financial terms, it is clear that the regime established by the legislation is not serving the public to its full potential.

2.2.2. Difficulties and inequities in financing official control activities

Another area in which the objective of the Regulation is not fully achieved by MS is the financing of official controls.

MS are requested to ensure that adequate financial resources are available for official controls.

However, information from MS and FVO audits indicates widespread difficulties in the MS to appropriately resource control services. Annex XV lists a number of significant cases where, during the last 4 years, EU inspectors have reported that the reason for identified shortcomings in control activities or for unsatisfactory or insufficient levels of controls is attributed to the lack or shortage of resources. In some cases the lack of resources leads to under-implementation of control plans or to a violation of established control requirements. For example an FVO audit in a MS, to evaluate controls on residues and contaminants in live animals and animal products and veterinary medicinal products, revealed that the CA could not afford to have samples, which had been taken from 'suspect' slaughterhouses, analysed urgently, so as to allow detention of the carcasses pending the result of the analysis. During a similar audit in another MS it was revealed that the insufficient provision of staff, equipment and reagents was a significant obstacle to the proper functioning of the laboratory network meaning that the MS's CAs were not meeting their legal obligations) . All cases reported, point to serious difficulties faced by CAs in maintaining an appropriate level of controls (e.g. of veterinary checks on imported goods at the border inspection posts, of farm level controls on the use of veterinary medicines[28]). Further examples are presented in Annex XV.

Such difficulties are exacerbated by the ongoing economic and financial crisis and there is a risk that further pressure on public finances and on funds made available for official controls might increasingly adversely affect MS' capacity to deliver efficient official controls, and consequently the level of protection offered by EU law.

To reduce the dependency of the financing of controls on public finances, the Regulation identifies a number of control activities (mainly on meat, milk, fishery production, and on controls carried out at EU borders) for which MS shall collect a fee from operators (mandatory fee) to recover control costs[29]. For other control activities, MS can choose whether to charge a fee on operators or not.

However, mandatory fees as currently regulated do not enable CA to recover all their costs and thus to ensure a stable influx of resources to finance the performance of controls. On the one hand, fees are only collected for certain controls, whereas on the other hand, presently collected fees do not necessarily enable CA to recover their costs fully (MS typically recover between 20% and 80% of costs with respect to controls subject to mandatory fees resulting in the lost opportunity to mobilise an estimated €0.9bn – €3.4bn per year across the MS for official control activities[30]).

Limited scope of mandatory fees, lack of consistency/fairness

Current rules only require mandatory fees to be charged for official control activities on businesses handling meat, fishery products, and milk, for the approval of feed establishments and for most controls at the borders. With the new framework for official controls established by the Regulation, and the requirement that MS carry out such controls at all the stages of the agri-food chain, the current list of mandatory fees no longer appears justified and fair. Indeed, the Commission is consistently informed by those sectors currently subject to mandatory fees that they view the limitation of mandatory fees to particular sectors as being manifestly unfair. Additionally, by limiting the collection of mandatory fees to particular sectors, the opportunity is lost to mobilise a guaranteed flow of resources of official control activities the amount of which can be estimated to be between €2.3bn and €37bn/year across the MS (see table 4 below - these figures correspond to the two extreme hypothesis of all operators being charged at rates currently used for the smallest and largest scale businesses).

Box 2: Control activities covered/ not covered by mandatory fee under Regulation 882/2004

Control activities covered by a mandatory fee: Ø controls on slaughter, cutting operations and cold storage of meat, production and placing on the market of fishery products, and milk production; Ø controls carried out to grant feed establishments approval; Ø controls carried out at a border on consignments of live animals and their products; certain food and feed of non animal origin. Examples of control activities not covered by a mandatory fee: Ø controls carried out in production of food other than meat, fishery products and milk; that is: eggs and egg products, honey and all foods of non animal origin. Ø controls carried out in distribution (including wholesale, retail and restaurants) of all food; Ø controls carried out in production and distribution (including wholesale and retail) of feed; Ø controls carried out in production and distribution of animal by-products; Ø controls carried out during import of products originating from third countries that need to be checked at the border other than those already covered by a mandatory fee (for example products subject to a safeguard measure).

Failure to achieve sustainable funding in the sectors subject to mandatory fees

Current rules are based on the principle of cost recovery where fees are mandatory. However, in most cases, full cost recovery is not achieved, due to the fact that, for most activities for which a fee is due, the current system gives the MS the choice between a cost based fee and a standard, or minimum fee, whose amount is fixed in the Regulation[31]: given the wide variations of control costs across MS, such EU fees may be higher or lower than the real costs of the activities they are meant to remunerate[32].

Furthermore, resources obtained through fees are not required to be earmarked for the needs of the control authorities which collect them. This, coupled with the fact that the modalities of calculation of the fees, and figures on the amounts collected through the system and on the use made of such revenues, contributes to the perceived unfairness of the fees system in the eyes of those currently charged as was repeatedly noted in consultation with stakeholders.

Compliance / efficiency drivers are not being used / are not working

A number of mechanism included in Articles 26 to 29, with the aim of promoting efficiency of the fees system and compliance by operators fail to deliver:

· despite the obligation laid down in Article 27(12), many MS fail to provide the public and the Commission with the calculation method they use to "cost" their controls and establish fee levels; when they do, cost categories, and other details that would ensure full transparency of the costing exercise are missing. Thus, on the one hand it is not clear whether fees do cover the actual costs of official controls (and if so in which areas / MS / regions) and, on the other hand, operators are not provided with the information and data that would allow them to fully appreciate the modalities of the calculation of fees and their fair implementation;

· the results of the external studies demonstrate that there is a widespread perception (in particular among operators) that the current system should (but does not) effectively reward compliant businesses by ensuring that they bear a reduced share of the cost of official controls compared to non-compliant businesses.

Acceptance of the system by business operators is undermined by the perceived unfairness of the system, notably by the lack of "penalising" mechanisms for the less compliant actors.

Micro-enterprises

As noted in section 2.1.1, official controls are necessarily performed in accordance with the same principles regardless of the size of the operator concerned, and there is no evidence to-date to suggest that this results in a disproportionate burden being placed upon micro-enterprises in terms of time and staff being invested because of the controls.

On the other hand, where operators are required to pay mandatory fees for official controls carried out by competent authorities, stakeholders say that the impact of such fees may be greater on micro-enterprises by reason of their lower turnover/throughouput, in particular where standard/minimum fees are applied instead of cost based fees. Cost based fees are in fact proportional to the resources deployed during the performance of official controls and when levied on micro-enterprises, all other things being equal, they should be comparatively lower than those charged on larger operators. A risk based approach to the organisation of official controls means that costs on compliant operators, including micro-enterprises, are kept at a minimum.

This (the fact that cost based fees currently collected are comparatively lower for microbusinesses) is part of reason why the contractor studies performed on behalf of the Commission show that there is currently no evidence to suggest that the mandatory fees charged on the basis of Regulation 882/2004 have, in actual fact, given rise to adverse or disproportionate effects on micro-enterprises. This is supported by the fact that, with the exception of some small businesses' representatives, all stakeholders consulted (be they CAs or businesses) have not called for an exemption of micro-enterprises (or SME) from the fees system established by Regulation 882/2004.

Notwithstanding the above, the need to enable control authorities to recover costs so as to ensure sufficient resources for official controls should be balanced and weighed against the need to lower the burden on very small businesses, in line with the new Commission policy on "Minimizing regulatory burden for SMEs – Adapting EU regulation to the needs of micro-enterprises"[33]. According to this policy, micro-enterprises should in principle be excluded from regulatory burdens, unless the necessity and proportionality of their being covered can be demonstrated.

2.3. Parties affected

Rules on official controls are primarly addressed to national control authorities and impact on their activities. Thus, national CAs responsible for the implementation and enforcement of agri-food chain rules are mainly affected by the present review[34] (currently, there are over 100 000 FTE staff involved in the delivery of official controls within the 27 MS). This initiative will indirectly impact on business operators within the EU (the agri-food chain is a significant sector within the EU, generating €751 008 million of added value – 6% of the EU27’s GDP, and employing over 48 million people) because of the time, staff, equipment and facilities being mobilised during controls. This burden is inversely proportional to the efficiency and effectiveness of controls carried out by the MS CAs.

Moreover, the review of the rules applicable to the financing of official controls (with the possibility to shift a larger share of the cost burden from the Member State CA to business) will also affect business operators.

The review will look not only at the extent to which operators participate in the financing of the control system but also at the mechanisms to ensure that operators (and citizens at large) are provided with information on how inspection fees are established and used and at the mechanism intended to reward compliance with agri-food chain rules by business operators.

The efficient operation of the EU system of official controls is of paramount importance both for EU exports and imports. Businesses (both in the EU and in third countries exporting to the EU) will also be affected by changes aimed at improving the efficency of the control system as a whole, and in particular of the import controls.

Consumers both in the EU and outside the EU, are not directly concerned by the review although they are the ultimate beneficiaries of measures to ensure the safety and quality of the agri-food chain. With the increased cost of controls for operators it is possible that some of the additional costs will be passed on to them through the price of final products, however by comparison with the overall cost of food production such an increase is expected to be small (see Box 6 and Box 8).

2.4. How would the problem evolve, all things being equal?

All identified shortcomings in the problem definition would remain. Potential under-enforcement of agri-food chain rules due to the suboptimal design of the legislative framework or to underperformances of the control system could result in a loss of confidence in the EU market in the long term. Inefficient use of control resources (including at the EU borders) could imply the perpetuation of avoidable administrative costs and burdens for operators.

As for the sectors pertaining to the agri-food chain but currently outside the scope of this Regulation (plant health, PRM and ABP), separate systems would continue to operate and develop according to sectoral logics and priorities; here again the opportunity for efficiency gains would be lost while existing gaps in the available range of enforcement tools in those areas and differences in national practices would persist.

As regards the financing of official controls, if the legislation is not revised the current regime would remain with its recognised limits and shortcomings[35]. None of the problems identified can evolve favourably and most could worsen without legislative change. In particular, uncertainty would remain as regards the availability of sufficient resources to finance official control activities.

The capacity of national control systems to prevent and counter risks which might arise along the agri-food chain (for humans, animals and plants) would inevitably be affected by the said shortcomings. This would represent potential obstacles to the objective of ensuring that national control systems are well equipped and capable of anticipating/preventing risks and may therefore adversely impact on the safety of the agri-food chain and its products. In particular, less efficient controls will increase the probability of health crises, and reduce the capacity of competent authoritires to remedy them, which may in turn lead to significant economic and human losses. Therefore, although cutbacks in relation to the financing of official controls may seem justified in the short term, given relevant savings and reduced public expenditure, in the long term they may actually result in higher costs for citizens and industry where controls are unable to prevent large scale emergencies[36].

With the current discriminatory treatment between those operators which must be charged (mandatory fees) for official controls they receive and those which can be charged, depending on whether Member States decide to collect non-mandatory fees, failure to address the perceived unfairness of the financing system might also increase the reluctance of industry to remunerate official control activities.

2.5. Does the EU have the right to act (subsidiarity)?

2.5.1. Right of the EU to act (legal basis)

The Regulation was based on Articles 37, 95 and 152(4)(b) of the EC Treaty, now Article 43, 114 and 168(4)(b) respectively of the TFEU.

Article 43 is implementing the Common Agricultural Policy (CAP), policy qualified by the Lisbon Treaty as shared competence between the EU and its MS. It is obvious, however, that to a very large extent all fields of agricultural activity as well as ancillary activities upstream and downstream, have been regulated at the EU level. This means that legislation is predominantly a role for the institutions of the European Union.

Article 114 provides the legal basis for the establishment and functioning of the internal market for food products while ensuring a high level of protection of consumers and the approximation of provisions laid down by the law, regulation or administrative actions in this respect.

Article 168(4)(b) stipulates that in order to meet common safety concerns 'measures in the veterinary and phytosanitary fields which have as their direct objective the protection of public health' should be adopted by the EU.

2.5.2. Necessity for the EU to act (subsidiarity)

Necessity – The existence of a harmonised EU legislative framework to govern the organisation and performance of official controls along the agri-food chain is necessary to ensure the uniform implementation of agri-food chain rules across the EU and the smooth functioning of the internal market. This rationale, which is still valid, underpins the existing rules on official controls. As the problems identified by this review are linked to the current design of the EU legislative framework, its reform cannot be achieved by MS acting alone. The intervention of the European legislator is required.

European added value test – The added value of a single, uniform set of EU rules to govern official controls lies in the fact that it offers national enforcers (and their operators) a framework within which CAs can rely on enforcement activities carried out in another MS, and on the reproducibility and scientific and technical soundness of control results. It also ensures that EU agri-food chain standards necessary for the functioning of the single market are applied uniformly and consistently in the different MS and sectors.

As to the financing of controls, common EU rules ensure that CAs can count on a reliable flux of resources to maintain the control effort at a level justified by the risks and by enforcement needs (e.g. level of non-compliance). Provisions on fees in particular ensure that businesses, which benefit directly from efficiently performed controls, participate to the financing of the latter, so as to minimise the dependency of control funding on public finances. Common EU rules are necessary also to prevent discriminatory treatment between operators located in a MS where the user-pays rule (and thus fees) applies and those located in a MS where this is not the case. Only common EU rules can ensure a uniform approach to pursue this objective.

EU action should not go beyond what is necessary to achieve the objectives set. The present exercise has looked at a broad range of options, including that of harmonising fee levels across MS, and that of de-regulating the matter. The analysis sought to design the most proportionate solution to ensure a sufficient and steady flux of dedicated resources for official controls, whilst leaving MS the time and flexibility necessary to cater for their internal arrangements and the specificities of their business population.

3. Objectives

3.1. General objectives

The main purpose of this exercise is to reinforce the safety of the agri-food chain (in its broadest meaning) by strengthening the enforcement mechanisms of the relevant EU rules and enable a more efficient implementation of the harmonised framework which applies to food, feed, animals, seeds and plants . Thus the general objectives of this initiative broadly coincide with the Treaty objectives to safeguard the single market while ensuring delivery of a high level of health protection. They also reflect the Commission's objective of ensuring proper enforcement of EU law, as this is the original objective of the Regulation on official controls. In particular, the following general objectives are envisaged:

· contribute to promote the smooth functioning of internal market rules applicable to the agri-food chain;

· maintain a high level of human, animal and plant health protection and animal welfare throughout the length of the agri-food chain and prevent that this is undermined by potential non-implementation of EU legislation;

· ensure proper and uniform implementation of EU legislation.

3.2. Specific objectives

The specific objectives were set with the aim of eliminating the specific obstacles identified during the analysis which prevent or hamper the achievement of the general objectives in this area[37]. The specific objectives address the two sets of obstacles mentioned above, i.e. those resulting from shortcomings in the design of the official controls' framework and those resulting from the difficulties and inequities in financing of official controls.

3.2.1. Objectives related to the design of the official controls' framework

· Ensure a comprehensive and consistent approach to official controls along the agri-food chain, by eliminating fragmentations and inconsistencies of the current legal framework:

- the system of official controls should be consistent across all agri-food chain sectors avoiding differences which are not justified by the peculiarities of a given sector;

- this system should provide for all tools necessary to ensure accountability, soundness and effectiveness of the enforcement activities performed in all agri-food chain sectors;

- this system should avoid duplications and overlaps which result in divergent interpretations and implementation.

· Allow for a more efficient use of national control resources, by eliminating residual non risk based mechanisms for the allocation of control resources:

- the system of official controls should require MS to allocate, in all agri-food chain sectors, finite control resources on the basis of the actual risk in order to achieve the most efficient use of such resources.

· Reduce administrative burden and remove unnecessary requirements:

- unnecessary administrative burden, in particular on MS' CAs, should be eliminated;

- the system should allow for the necessary flexibility so that important requirements (the accreditation of official laboratories) can be derogated where appropriate.

· Foster closer cooperation between MS to improve official control delivery:

- the system of official controls should enable swift and effective cooperation, and synergies, among MS' competent authorities (including customs) which are tasked with controls over the agri-food chain.

· Improve transparency:

- rules on official controls should provide MS with clear guidance on how a 'high level of transparency' should be ensured so that the European citizens can benefit from the same level of transparency across the EU.

3.2.2. Objectives related to the financing of official controls

· Ensure the availability of adequate resources:

- The system of financing of official controls should ensure the availability of the resources necessary to maintain an adequate level of controls and, consequently, the level of protection offered by EU agri-food chain rules.

· Ensure equity and fairness in the financing of official controls

- The system of financing of official controls should ensure that the burden on agri-food chain operators is distribuited in a fair and equitable manner to avoid distortions.

· Improve transparency

- The fees system should be transparent and allow the public and, more specifically, the operators to understand how the fees are calculed and how revenue therefrom is employed; so that transparency can act as a driver to accountability and efficiency of the system of financing official controls.

3.3. Operational objectives

· Establish a single, simpler legislative framework for official controls along the agri-food chain;

· all controls, including border controls, to be risk based;

· increase the number of cases where cross-border enforcement cases are resolved through administrative assistance and cooperation;

· increase the number of formalised instruments between the CAs and customs (and/or other) authorities for the performance of official controls;

· reduce the occurrence of unsatisfactory enforcement results attributed to resources shortages.

Table 1: Link between the objectives and the problems

|| Problem at stake || Specific objectives

Design of official controls' framework || Inconsistencies, gaps and overlaps in control requirements || Ensure a comprehensive and consistent approach to official controls along the agri-food chain

Inconsistent implementation of risk based approach || Allow for an efficient use of national control resources

Administrative burden and disproportionate requirements || Reduce administrative burden and remove unnecessary requirements

Uneven enforcement of cooperation mechanisms || Improve transparency

Foster cooperation between MS to improve official control delivery

Financing of official controls || Difficulties and inequities in financing official controls activities || - Ensure the availability of adequate resources - Ensure equity and fairness in the financing of official contrls - Improve transparency of the system of financing of official controls

3.4. Consistency with other EU policies and horizontal objectives

The review requires consistency with the reviews of the animal health law, the plant health law and the PRM legislation, the four proposals being adopted by the Commission together as a package (along with a fifth proposal establishing a multiannual programme for EU financing of actions aimed at ensuring a high level of health for humans, animals and plants along the agri-food chain). The review is also intended to ensure that the provisions of Regulation 882/2004 complement in a consistent manner those applicable to official controls in the field of veterinary medicines, also currently under review.

Moreover, the review preserves synergies between the current system and relevant aspects of agricultural legislation and creates the possibility for new ones by enabling environmental legislation on Invasive Alien Species (IAS) to be supported in its implementation through the control mechanisms established by the amended Regulation. In order to do so the present review will take into account the outcome of the ongoing work to develop the EU legislation on IAS.

The review also seeks to align the framework of official controls, in particular the terminology used, to the modernised customs code.

With a view to the Europe 2020 strategy, the provision of effective controls along the agri-food chain is to ensure safe food and feed while fostering competitiveness of business operators, rewarding complaint business operators and ensuring user-pays principles across all sectors.

This initiative pursues the objectives of the Communication on Smart Regulation in the European Union. One of the aims of the review is to simplify legislative burdens in light of comments made by MS and food business operators on the existing regime.

4. Policy options

4.1. Policy options included in the analysis[38]

The analysis of options available to address the problems and achieve the objectives above was carried out in two stages:

1. first, the potential impact of deregulating the matter of the financing of official controls and of exempting micro-enterprises from the fees system was considered;

2. the outcome of the analysis under 1 was then used to design options 2 to 4, which combine the following elements:

Ø expand the scope of the Regulation to agri-food chain sectors currently outside its scope (i.e. plant health, PRM and ABP);

Ø improve and simplify the legislative framework;

Ø ensure full cost recovery through fees;

Ø expand the list of control activities for which the collection of a fee from operators is obligatory.

Table 2: Summary of the options included in the analysis

|| Scope of the Regulation || Legislative framework || Cost recovery || Scope of mandatory fees

Baseline || partial (plant health, PRM, ABP out) || deficiencies and shortcomings || partial || partial (meat, milk, fishery, imports)

Option 1A || status quo || status quo || No (deregulation) || /

Option 1B || status quo || status quo || status quo || exemption for micro-enterprises

Option 2 || status quo || improved || full || status quo

Option 3 || expand to plant health and PRM || improved || full || ADD plant health and PRM

Option 4 || expand to plant health and PRM || improved || full || ALL registered food and feed operators

Base line (status quo) The integration of the system of official controls along the food agri-chain is partial, some agri-food chain sectors being outside the scope of the Regulation. Official controls carried out at EU external borders on certain goods arriving from third countries, and official controls on residues of veterinary medicines are not aligned to the risk based approach. This will continue to generate avoidable costs (for rigidly prescribed, non risk-based controls). Inconsistency and inefficencies in the deployment of efforts by, and in cooperation between, national authorities will derive from the lack of uniform guidance on how to implement administrative cooperation and deliver a high level of transparency. No derogation is foreseen from the requirement of accrediting official laboratories.

The collection of fees is mandatory for a limited number of control activities (control activities on businesses handling meat, fishery products, and milk; for the approval of feed establishments; at EU borders on certain goods from third countries). MS can choose to charge a standard EU fee fixed in the Regulation, which does not correspond to the actual cost of the control. This results in potential under-resourcing of control authorities and in the risk that the capacity of the EU control system as whole to prevent and contain health risks along the agri-food chain is undermined.

Box 3: Financing of official controls: baseline[39]

Collection of mandatory fees: Twenty-one MS (AT, BE, BG, CY, CZ, DE, DK, EE, IE, EL, FI, FR, HU, IT, LT, NL, PL, PT, RO, SI, SK) collect fees for all official control activities for which mandatory fees apply[40]; however, five (ES, SE, LV, MT, UK) only partly collect such fees (in other words, in these MS, certain mandatory fees are not collected). Fees for milk production controls and fees for residue controls are the two types of control activities for which several of these MS do not collect fees. Data is not available for LU. Twenty-two MS (AT, BE, BG, CY, CZ, DK, EE, EL, ES, FI, HU, IE, IT, LT, LV, NL, MT, PT, RO, SK, SI, UK) collect fees for activities for which fees are not mandatory[41]. On the other hand, two MS (FR, PL) do not collect fees for activities beyond those which are mandatory[42], and two MS (DE, ES i.e. countries with a decentralised management of fees) collect such fees in some regions but not in others. Full cost recovery: Eight MS (NL, IT, AT, PL, LT, LV, PT, SI) currently achieve full or almost full cost recovery of mandatory fees for official control activities whilst eight MS (BG, CZ, EE, ES, FI, SE, EL, IE) achieve a low level of recovery. Eight MS (BE, DK, FR, HU, MT, RO, SK, UK) recover between 34 – 66% of the cost of official controls for which mandatory fees apply. Levels of cost recovery are unknown for three MS. Fee rates: Across the EU fee rates vary considerably, not necessarily in relation with variances in costs. For example, fees paid for controls on the slaughter of adult bovine animals can vary from €2.3/head in some autonomous communities in Spain, to €8.2/head in Denmark and between €10-20/head in Sweden (against a minimum fee of €5/head in Annex IV). Even within MS the scale of the variation can be significant. For example, in Bavaria (Germany) fee rates for the slaughter inspection of adult bovine animals range from €9.4/head to €12.9/head depending on district.

Should the status quo be maintained, the shortcomings identified in Section 2.2 would remain.

Options 1A and 1B

A preliminary analysis focuses on two possible changes to the status quo which would specifically aim to A) repeal Union rules on control fees (thus leaving it to MS to decide how to ensure the appropriate funding of control activites), and B) maintain current EU rules on fees, exempting micro-enterprises therefrom.

The outcome of such analysis is then reflected in the design of subsequent options (2 to 4).

Although in theory both Options 1A and 1B could be combined with other elements of Options 2 to 4, they are presented and assessed individually given the significance of the changes they purport to introduce. Both would, in fact, substantially alter the current framework as regards the financing of national control systems and call into question established principles. Moreover, the combination of Options 1A and 1B with other elements of Options 2-4 would not result in significant trade-offs and would therefore not modify the cost/benefit analysis of the former to an appreciable extent.

Option 1A - Repeal Union rules on control fees

(Existing mandatory inspection fees are repealed; other provisions of the legislative framework remain unchanged)

Under this Option each MS is given the possibility to determine the approach it follows as regards the funding of official control activities, provided that it ensures a level of resources which allows the correct implementation of control requirements and the efficient enforcement of EU law. It would require repeal of Articles 27-29 of the Regulation and in particular of the mandatory collection of fees in certain areas.

Option 1B - Mandatory exemption of micro-enterprises from the application of fees

(Existing mandatory inspection fees are maintained but not applied to micro-enterprises; other provisions of the legislative framework remain unchanged)

Option 1B was selected in view of the Commission's continued efforts to promote the competitiveness of micro-enterprises, as highlighted in the Commission policy on "Minimizing regulatory burden for SMEs – Adapting EU regulation to the needs of micro-enterprises".

This Option would provide for the mandatory exemption of micro-enterprises from the application of mandatory fees and would require the breadth of operators upon which mandatory fees are levied to be appositely restricted.

Option 2 – Streamline

(The legislative framework is improved and streamlined, full cost recovery is ensured where mandatory fees are already provided, with the possibility for MS to refund fees paid by micro-enterprises)

Option 2 would aim to improve the legislative framework on official controls by clarifying, simplifying and streamlining existing provisions on controls in sectors currently covered by Regulation 882/2004, and by ensuring full cost recovery in the areas where mandatory fees are already provided. The main changes would be:

a) repeal redundant and obsolete pre-existing legislation in the area of veterinary checks in intra-EU trade so that overlaps in control requirments would be eliminated and the system would become more consistent because less open to divergent interpretation[43];

b) repeal existing sectoral provisions[44] in the area of border controls and establishing, in the Regulation, a single set of rules applicable to border controls on all goods requiring special attention at the external borders of the EU because of risks to human, animal, plant health. This system would be aligned to the risk based approach underpinnying Regulation 882/2004 so that the allocation of control resources would be made on this basis. In addition, the elimination of the legislative fragmentation in this area would allow MS to prioritise the controls across all sectors covered by the Regulation.

c) repeal Directive 96/23/EC applicable to official controls on residues of veterinary medicines, with additional rules established in line with the Regulation; as a consequence, these controls would be governed by Regulation 882/2004 only on the basis of the risk. In addition, the repeal of this Directive would eliminate the obligations identified as administrative burden.

d) clarify the obligation of cooperation between sanitary authorities and customs services, and include the possibility of setting control coordination mechanisms with other national authorities (at borders and elsewhere) so as to take advantage of all potential operational synergies at borders (including with customs and on controls on IAS).

e) clarify the rules applicable to the methods used by official laboratories and providing derogations from the obligation to accredit the laboratories in certain cases in order to avoid this requirement to be applied in a disproportionate manner;

f) introduce new empowerments to enable the Commission to i) specify the modalities of the administrative cooperation's mechanism so as to ensure its uniform application across MS; ii) provide guidance on how to deliver a 'high level of transparency';

g) require MS to calculate existing mandatory fees in manner which enables them to fully recover the costs of, and appropriately finance, official controls, and eliminate current obstacles to full recovery resulting from the provision of minimum fees;

h) improve transparency and introduce incentives for compliant businesses;

i) provide MS with the possibility to refund fees to micro-enterprises in accordance with State Aid rules[45] (current rules include the prohibition to refund, directly or indirectly, fees collected for the financing of official controls; Option 2 would repeal it insofar as micro-enterprises could benefit from the refund).

As the establishment and application of a full cost recovery system would require some adjustments in the Member States' current systems, a transition period of 2 years would be provided.

Option 3 – Streamline + Integrate

(The legislative framework is improved and streamlined, plant health and PRM, and ABP are included in its scope, full cost recovery is ensured where mandatory fees are already provided with the possibility for MS to refund fees paid by micro-enterprises)

In addition to the elements of option 2, option 3 would widen the scope of the Regulation to cover sectors of the agri-food chain acquis that are currently excluded (plant health law[46], PRM legislation, ABP rules) and complete the 'integration' of agri-food chain official controls. This would be done by repealing pre-existing provisions governing official controls in the sectors being integrated into the Regulation[47]. Appropriate transitional periods would be provided for new obligations (such as the laboratories' accreditation for plant health tests). The inclusion of the sectors above under Regulation 882/2004 would aim to ensure that, in principle, competent authorities operate on the basis of the same approach and under the same conditions no matter the agri-food chain rules they are called to enforce. Some adjustments would be introduced to account for specificities of those sectors, in particular as regards the certification procedure and the accreditation of official laboratories.

As regards the financing of official controls, the control activities covered by a mandatory fee would remain unchanged with the only exceptions being in the field of plant health, where mandatory fees will be introduced for official controls linked to plant passport obligations, and in the field of PRM, where it is envisaged that the principle of full cost recovery through fees would be established for certification.

Option 4 – Streamline + Integrate + broader cost recovery

(The legislative framework is improved and streamlined, plant health and PRM, and ABP are included in its scope, mandatory fees are extended to cover key areas of the agri-food chain with the possibility for MS to refund fees paid by micro-enterprises)

In addition to the elements of option 3, option 4 would expand the list of mandatory inspection fees to all controls carried out on feed and food business for which a registration requirement is established in accordance with food safety and feed safety rules, i.e. on all activities for which an obligation for operators to be registered exists in accordance with Regulation (EC) No 852/2004 (food hygiene) and/or Regulation (EC) No 183/2005 (feed hygiene). Although responsibility for the safety of food and feed on the EU market lies primarily with food and feed business operators, in these areas an increased control effort is also required from CA to ensure that food and feed business operators comply with safety requirements, and, ultimately, that food and feed placed on the market is safe.

Compared to the baseline, fees would also become mandatory for the following activities:

- production of food other than meat, fishery products and milk (already subject to mandatory fees): eggs and egg products, honey and all foods of non animal origin;

- distribution (including wholesale, retail and restaurants) of all food;

- production and distribution (including wholesale and retail) of feed;

- production and distribution of ABP in so far as the concerned operators have to be registered under Regulation (EC) No 852/2004 or Regulation (EC) No 183/2005;

- import of goods from third countries that need to be checked at the border other than those already covered by a mandatory fee (e.g. goods subject to a safeguard measure).

As the establishment and application of cost based fees in all areas would require some adjustments in the MS current systems, a transition period of 3 years would be provided.

4.2. Discarded policy options

· Reducing controls on micro-enterprises or SME's

Given the new Commission policy on "Minimizing regulatory burden for SMEs – Adapting EU regulation to the needs of micro-enterprises", the possibility of exempting micro-enterprises or SME's from the performance of official controls was considered. This option was discarded as it ran counter to the basic principles underlying Regulation 882/2004 and would also not have addressed the problems identified in section 2.2.

In particular, micro-enterprises represent a very high proportion of the business population subject to official control activities[48] and, given that food safety risks/concerns arise regardless of the size of an operator, their exemption from official controls would lead to the non-compliance of numerous goods placed on the EU market with relevant EU agri-food chain standards and requirements. The safety of the agri-food chain would be undermined and the number of food crises would increase. Furthermore, as highlighted with regards to the E. Coli crisis (see section 2.1.1), the gravity of food crises stemming from micro-enterprises/SME's should not be underestimated.

· Non-legislative option (e.g. development and use of electronic systems, adoption of informal guidelines at EU level etc.)

A general option based on the development of "soft law instruments" to increase the clarity of the existing legal text. The option was discarded as the non-binding nature of soft law instruments was considered insufficient to address the interpretation and implementation difficulties linked to The Regulation and the shortcomings of the rules governing inspection fees.

Further options relating exclusively to the availability of adequate resources for official controls were also excluded:

· Imposing mandatory fees on all operators subject to official controls

The option of requiring MS to apply mandatory fees to all the operators subject to controls in accordance with the Regulation was discarded. Instead, the option of charging food and feed operators subject to a specific registration requirement laid down in Regulation 852/2004 (food hygiene) or in Regulation 183/2005 (feed hygiene) was retained (see option 4). The discarded all-inclusive option would have required the application of mandatory fees also on operators not directly concerned with the production of handling of food or feed (e.g. keepers of non food producing animals, plant nurseries) and on operators only marginally involved in the production of food for commercial purposes (e.g. farmers producing for domestic consumption, or for the direct supply of small quantities to final consumers or to local retailers supplying final consumers). These operators do not have to be registered under EU food/feed hygiene rules, and some of them would be subject to official controls organised in accordance with the Regulation only after the intended changes to its scope (options 3 and 4). Considering the absence of registration requirements for these operators, the great numbers and the fragmentation of the business population potentially concerned, which would further increase with the present review, it would have been very difficult to accurately assess the impact of this option (particularly in relation to those areas where Regulation (EC) No 882/2004 would become applicable only following the review).

· Full harmonisation of fees

An option based on full harmonisation of fees across MS (i.e. the establishment of EU standard fees for each type of control carried out, irrespective of the actual cost in each MS). This option was discarded since it fails to achieve the objective of full cost recovery (harmonised fees would in most cases either 'under' or 'over' compensate costs). Furthermore, the development of EU-uniform cost models for each of the types of controls would be a very burdensome exercise. Monitoring and maintaining appropriate harmonised fee levels would also create a disproportionately heavy burden for Member States and the Commission.

The option of adjusting harmonised fees to the cost of living in each MS was also excluded, as although adjusted fees could be somewhat closer to the actual costs, they would not be fully accounted by accurate and actual costing of control activities, and thus would not guarantee full cost recovery or the absence of overcompensation. Furthermore, they could only be obtained through a complex mechanism for the calculation of standard EU costs (and fees) for each type of control, for the update and application of the chosen adjustment index, and appropriate monitoring tools to constantly update the EU fees.

· Harmonised fees for certain import controls

During the consultation phase, some respondents argued in favour of a specific, fully harmonised fee (i.e. not adjusted to cost-of-living or any other index) to be applied only for the performance of border controls on goods arriving from third countries. The argument for harmonised fees for import controls is that it would create a ‘level playing field’ across the EU-27 for such fees and remove the potential for trade distortions derived from importers seeking out border points with lower fees. Although several of those consulted through the 2011 Impact Assessment Study see this as an issue, evidence of such distortions has not been found in two successive contractor studies.

Section 5: Analysis of impacts

This IA analyses the likely social, economic and environmental impacts – be they direct or indirect – of the different policy options. Each option has been assessed against the theoretical baseline of 'do nothing' and therefore the impacts outlined are additional to the current status quo. Economic impacts are assessed through the following criteria: competitiveness, innovation, sustainability, simplification, and administrative burden reduction. Equally important for the analysis are social impacts (safety in particular, but also accountability). The assessment of each option in terms of environmental impacts and of impacts on employment rates has not identified significant impacts (either negative or positive).

To help comparisons between options the impacts have been rated (0: no impact; +, ++, +++: small, medium or large positive impact; ‑, ‑‑, ‑‑‑: small, medium or large negative impact).

Option 1A – Repeal Union rules on control fees

The repeal of the existing EU framework on inspection fees is likely to result in an increased variance of national approaches, and possible cuts in resources allocated to controls.

Sustainability - Although the impact on the level of resources actually deployed will depend on the policy choices that each MS will make and so cannot be fully predicted and analysed, the problems identified in relation to the current fees regime, such as the failure to ensure proper cost recovery, and thus appropriate and stable resourcing of controls are unlikely to be solved. On the contrary, stakeholders and MS argue that, given the current economic crisis, the problems affecting the sustainability of controls could worsen if MS decisions result in fewer resources being allocated to the operation of national control systems.

Simplification - The repeal of the EU framework would result in a more complex legislative landscape as differences in national rules on the financing of controls are likely to increase. Under the current system MSs already exhibit significantly wide variance (see tables 1-4 in Annex XVII) in cost recovery levels, bonus malus arrangements and availability of information to the public. In the absence of a harmonised framework, national approaches to the financing of official controls are likely to vary even further over time as MS make different policy choices.

Competitiveness - Wider disparities amongst MSs might result in distortions of competition, if operators in one MS are charged for controls while competitors in another MS are not, with adverse impacts on the operation of the single market.

Accountability - This option would repeal the obligation for MSs to publish and communicate to the Commission the method of calculation of the fees, thus leaving MS free to decide the level of transparency (and of accountability) of their domestic regimes.

Safety – A decrease in the availability of resources would inevitably reduce the resources available to CAs to perform official controls potentially leading to fewer controls being carried out. CA may have difficulties maintaining an effective oversight of compliance by food business operators and, ultimately, the safety of the agri-food chain, especially when faced with large scale crises.

Summary of the key impacts under Option 1A

Criteria || Impacts

Competitiveness || -

Innovation || 0

Sustainability || -

Simplification || -

Administrative Burden || 0

Accountability || -

Safety || -

Based on the above analysis, the option to repeal current EU rules on fees as established in Regulation 882/2004 was not considered further.

Option 1B – Mandatory exemption of micro-enterprises from the application of fees

The mandatory exemption of micro-enterprises from the application of fees would reduce the financial burden on micro-enterprises However, the exemption would undermine the objective of ensuring the sustainability of the control system, and through it the safety of the agri-food chain.

Sustainability: Figure 3 gives an overview of the percentage of micro-enterprises on the total number of operators in the major industries subject to official controls (and to mandatory fees) under on Regulation 882/2004. In 16 of the 23 Member States for which data is available, micro-enterprises represent more than half of all businesses, and in 9 such States (AT, BE, CY, FI, IT, NL, PL, SE, SI) the percentage of micro-enterprises rises to two thirds (or more) of all business operators[49].

Figure 3 Share of Micro-enterprises in total number of business operators in the four major European

industries affected by official control activity (2008)*

*Industry sectors include: processing and preserving of meat and production of meat products; processing and preserving of fish, crustaceans and molluscs; manufacture of dairy products; manufacture of prepared animal feeds. Greece and Malta are not included in Eurostat dataset. Data for the Czech Republic and France are not available.

In those MS where micro-enterprises represent an overwhelwing majority of businesses subject to fees, exempting them from the payment of the latter will have a severe negative impact on the proportion of costs recovered by CA. The objective of ensuring a sustainable financing of controls via full cost recovery would, in most (if not all) Member States, be undermined, as controls will still need to be carried out on all operators at a frequency dictated by the risk.

While the CAs' loss in revenue represented by the exemption could be compensated by transfers from the general budget, this would again create a strong dependency of the control action on public resources and thus create a situation – in particular in times of crisis and budget restrictions - of financial uncertainty which can not be reconciled with the objective of ensuring consistent, efficient and risk commensurate control activities across the agri-food chain.

Competitiveness - The mandatory exemption of micro-enterprises from the application of fees would reduce the financial burden upon them and help to encourage the development of small businesses, including artisanal establishments.

However, a mandatory exemption for micro-enterprises would result in the unfair treatment of larger operators who might be charged more to fill in the cost recovery 'void' left by the exemption of micro-enterprises. The impact on larger businesses would be particularly disproportionate in those Member States and those sectors with a large percentage of micro-enterprises.

Safety – Lower cost recovery by reason of the exemption of micro-enterprises would result in a lower revenue income for competent authorities. Over time, unless competent authorities were otherwise subsidised, this may lead to fewer official controls and result in a higher probability of food products not complying with EU agri-food chain legislation. The safety of the agri-food chain could ultimately be jeopardised and the risk of food crises would increase[50].

The analysis carried out above is fully in line with the views of competent authorities and industry. Throughout the consultation process both firmly opposed a mandatory exemption for micro-enterprises highlighting, amongst other things, that it would have a negative impact on the sustainable performance of official controls[51] and on competition. Similarly, stakeholders did not request that data on ways to support micro-enterprises be obtained.

Summary of the key impacts under Option 1B

Criteria || Impacts

Competitiveness || 0/-

Innovation || 0

Sustainability || --

Simplification || 0

Administrative Burden || -

Accountability || 0

Safety || --

Based on the above analysis, it is considered that an automatic exemption of micro-enterprises (or SME's in general) from the application of fees would, on the one hand, undermine the policy objective of ensuring the long term sustainability of national control systems and, on the other hand, create potential distortions of competition. This conclusion also holds true in cases where other possible changes to the status quo are considered and, in particular, if mandatory fees are imposed on all registered food and feed operators (as per Option 4) as the proportion of micro-enterprises in the different areas of the agri-food chain is very significant (data published in April 2012 by Fooddrinkeurope shows that 79% of operators in the food and drink industry are micro-enterprises).[52][53]

In the options considered below, the exemption of micro-enterprises from the application of fees is therfore replaced by a mechanism which aims to respond to both the abovementioned shortcomings (i.e. sustainability and competition).

Option 2 – Streamline

Increased efficiency of the risk based use of control resources and mobilisation of dedicated financial resources reducing pressure on national finances allow progress towards the primary objective of maintaining efficient controls and safety of the agri-food chain. MS may refund fees paid by micro-enterprises, conforming to State Aid rules.

Competitiveness - Option 2 would allow for the full implementation of the risk based approach to official controls in sectors where MS CAs are currently not allowed to adjust their control efforts to the actual risks (i.e. official controls carried out at EU border on certain goods from third counties, and official controls on residues of veterinary medicines). This would result in a better allocation of control resources and, thus, in a more efficient control system[54].

Box 4: Reduced costs for official controls on residues and other substances

A risk based approach to controls on residues of veterinary medicines would lead to a decrease of the number of samples ranging from 49 753 to 394 280, thus to a decrease of costs (for CA and ultimately for operators through the corresponding mandatory fee) ranging from € 12.4 million to € 98.5 million when considering the average total cost per sample for laboratory analysis (staff, consumables, overheads, etc.). MS in general expect the sampling capacity that will be freed to be used to increase the sampling of other substances/residues and/or on higher risk matrices.

Moreover, enabling national authorities to focus their control efforts where non compliances and risks are higher would minimise the burden of official controls on compliant businesses and have, therefore, a positive impact on their competitiveness.

However, the benefits in terms of increased efficiency and competitiveness would be only partial because plant health, PRM and ABP are not included within the scope of the Regulation according to option 2. In fact, the best allocation of control resources can only be achieved by ensuring that the risk prioritisation is carried out by MS CAs across all sectors of the agri-food chain, including those above. This is prevented by the current fragmentation of official controls legislation.

Fees charged on the basis of actual costs would be (and be perceived as) fairer across the MS since at present the use of standard fees and the varying recovery rates applied across and within MS means that fees recovered by some MS may be either higher or lower than the cost incurred by the CA performing official controls. Under the current regime, where a MS is charging a standard fee which is higher than the actual cost whereas other MS do not, or where a MS recovers a higher percentage of fees than other MS, the operators in the territory of that MS will be at a competitive disadvantage in relation to operators in the other MS. Option 2 will create a level playing field for all operators charged with mandatory fees.

Importantly, the bonus malus principles which are already inherent in the current legislation (and which will be retained in the revised legislation), and new provisions (which will allow businesses currently charged a flat rate fee regardless of the level of enforcement activity to benefit from recognition of good performance), will ensure that costs on well-performing, low risk businesses are comparatively lower than those on non-compliant operators. Consultation results demonstrate that Industry is very keen to see this taken forward.

The possibility for MS to alleviate the impact of full cost recovery on micro-entreprises by refunding them the mandatory fees paid, on condition that this is in conformity with State aid rules (i.e. does not unduly affect competition), would ensure that the benefit for the recipients of the refund does not result in unfair competition for other businesses and does not deprive CA of the resources which are necessary to perform their control tasks. The 'refund' mechanism means that the benefit for micro-enterprises is not to be afforded at the expenses of full cost recovery by CA[55].

Innovation - By allowing in certain cases the use of methods not yet included in the scope of the accreditation of an official laboratory, Option 1 would remove legal obstacles to the introduction and development of new analytical methods.

Simplification - The repeal of pre-existing sectoral acts or provisions would streamline all rules dealing with official controls along the agri-food chain in a single legislative framework, eliminating duplications and overlaps with the Regulation[56].

Simplification gains would also come from the streamlining of border official controls on goods from third countries. CAs, instead of using different sets of rules depending on the type of goods to be controlled at the border, would refer to a single framework governing the mechanism of border controls for both live animals and their products, and food and feed of non animal origin. In practice, they will find the goods subject to such controls included in one consolidated list (based as much as possible on CN codes) and will be able to designate single border control posts where all such goods could be checked; a single and harmonised entry document will be used for all concerned goods. Economic operators would benefit from such simplification as they will us the same set of procedures and requirements, and a harmonised entry document independently of the goods they introduce into the Union.

Box 5: Simplification gains under option 2

Acts or provisions to be repealed under option 2 Ø Directive 89/662/EEC concerning veterinary checks in intra-Community trade Ø Directive 90/425/EEC concerning veterinary and zootechnical checks applicable in intra- Community trade in certain live animals and products (except for the provisions concerning zootechnical controls); Ø Directive 89/608/EEC on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of legislation on veterinary and zootechnical matters (except for the provisions concerning zootechnical controls); Ø Directive 96/93/EC on the certification of animals and animal products; Ø Directive 96/23/EC on measures to monitor certain substances and residues thereof in live animals and animal products; Ø Directive 97/78/EC laying down the principles governing the organisation of veterinary checks on products entering the Community from third countries; Ø Directive 91/496/EEC laying down the principles governing the organization of veterinary checks on animals entering the Community from third countries.

The legislative framework for the financing of official controls will become simpler at EU level, as only cost based fees will be permitted as opposed to the current system which allows the possibility of choosing between actual costs and standard fees (see Table 5 of Annex XVII, which summarises data in the baseline scenario to illustrate the variety and combination of calculation methods employed across the MSs). Moreover by clarifying the list of activities for which fees are mandatory and the cost elements to factor in to calculations for each control activity, it is envisaged that implementation of EU provisions will become more uniform and transparent.[57]

Sustainability - Requiring MS to fully recover the costs of controls when mandatory fees are used would mobilise a steadier flux of financial resources collected through such fees, thus reducing the pressure on national budgets.

In the majority of MS, control costs are only partly recovered through fees, the re