•-•"•^^ggaEE 
Rt< ' . srf-anWiat 
fêiËàÉ^ÉërâëÉ^ COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(93) 13 final 
Brussels, 25 January 1993 
'Report on the application of Regulation (EEC) No 386/90 
on the monitoring carried out at the time of export of 
agricultural products receiving refunds or other amounts 
(presented by the Commission) 
Report on the applIcatlon of ReoulatIon (EEC) No 386/9Q 
on the monitoring carried out a^JJMLAliML_of exPQrt_M 
agricultural products receiving refunds or other amounts 
Table of contents 
ntreduction 1 c-
Part One: The monitoring system instituted by Regulation 
(EEC) No 386/90 2 
I. The main provisions of Regulation (EEC) No 386/90 2 
II. The monitoring system resulting from Regulations 
(EEC) No 386/90 and No 2030/90 3 
1. Scope 3 
2. Exemptions 3 
(a) Community food aid 3 
(b) Certain deliveries similar to exports 3 
(c) De minimis rule 4 
(d) Application of such authorizations in the Member States 4 
(e) National provisions to counter abuses 4 
3. Determining the basis for calculating the scrutiny rate 5 
(a) Customs office 5 
(aa) Possibility of aggregation 5 
(bb) Use of this authorization in the Member States 6 
(b) Product sectors 6 
4. Period during which the checks are to be carried out 6 
(a) Normal cases 6 
(b) Simplified procedures in accordance with Council Directive 
81/177/EEC (Directive on exports of Community goods) 7 
(c) Cases of payment in advance 7 
5. Transitional measures 7 
C. Part Two: Evaluation of the application of the monitoring system 8 
I. The Member States' initial experience of the system 8 
1. The system in operation 8 
2. The number of inaccurate export declarations 8 
-\ Y>-
11. Review of the monitoring system 8 
1. Risk analysis as an alternative to the strict 5% rule 8 
(a) General statement of reasons 8 
(b) Member States' suggestions 9 
(c) Comments 9 
2. Problems when checking non-Annex II products 10 
(a) Recourse to previous checks 10 
(b) Comments 10 
3. (a) Extension of the cases of non-appIIcatlon of the checking 
procedure as provided for by Regulation (EEC) No 2030/90 10 
(b) Comments 10 
0. Part Three: Conclusions 11 
Annexes: Regulation (EEC) No 386/90 
Regulation (EEC) No 2030/90 
^6_ _ 
Rarer t on thfl aoblicat'pn of Regulation (EEC) No 386/eo 
on the monitoring carried put at the tif» of oxoort of 
agricultural products receiving refunds or other amounts 
A. introduction 
Article 7(2) of CpunciI Regulation (EEC) No 386/90 of 12 February 1990 on 
the monitoring carried out at the time of export of agricultural products 
receiving refunds or other amounts^1) lays down that the Commission is to 
submit a progress report on the application of this Regulation to the 
Council before 1 January 1992 and, in the light of experience gained, 
propose any necessary amendments to the monitoring system. 
The Commission is presenting this report on the basis of the Member States' 
contributions and the experience which has now been gained. Unfortunately, 
some Member States replied^2) relatively late(3) while others^4) have not 
yet replied, despite several reminders*5*. 
The report could not be submitted until now for the above reason. 
(1) 0J No L 42, 16.2.1990, p.6. 
(2) The letter in which the Member States were asked to make their comments or 
suggestions on the possible improvement of the monitoring system was sent on 
11 June 1991. Replies were requested by 15 September, at the latest. 
(3) The reply from the Netherlands was not received until 12 December 1991 and 
that from Luxembourg not until 21 January 1992. 
(4) France and the United Kingdom. 
(5) The last being in connection with the meeting of the Management Committee on 
Exchange Mechanisms held on 13 October 1992. 
2 -
B. Part One: The monitoring system Instituted by Regulation (EEC) No 386/90 
i. The main provisions of Regulation (EEC) No 386/9Q 
Regulation (EEC) No 386/90 was adopted to ensure that export transactions 
giving rise to payments of amounts funded by the EAGGF are actually carried 
out and are executed correctly. 
To this end, the Regulation requires that at least 5% of the export 
declarations in respect of which applications for the payment of refunds or 
all other amounts In respect of export transactions have been submitted are 
monitored by spot checks conducted frequently and without warning. The 
scrutiny rate generally applies by customs office, by calendar year and by 
product sector. These checks are to be carried out at the time the customs 
export formalities are completed and before authorization Is given to export 
the agricultural products qualifying for the abovementloned amounts. 
In accordance with the Management Committee procedure, a higher scrutiny 
rate may, by way of exception, be fixed for specific cases on the basis of 
objective findings of an Increased risk of fraud. 
The Regulation also provides for transitional measures which however require 
an implementing regulation. The detailed rules of application were laid down 
by Commission Regulation (EEC) No 2030/90<6> of 17 July 1990 which 
specifies In detalI : 
the exports to which the Regulation Is applicable, 
the basis upon which the scrutiny rate is calculated, 
the period In which the checks must be carried out and 
the transitional measures for 1990 and 1991 
particular account being taken of the declarations in the Council 
minutes*7) as regards the clarifications to be made in the detailed rules 
of applicatIon. 
(6) 0J No L 186, 18.7.1990, p. 6. 
(7) Doc. NO 4580/90, 2.2.1990. 
- 3 -
The monitoring system resulting from Regulations (EEC) No 386/90 and 
No 2030/90 
On the basis of these Regulations, the monitoring system is as follows: 
1. Scope 
The monitoring system covers all agricultural products attracting export 
refunds, monetary compensatory amounts (MCAs) and accession compensatory 
amounts (ACAs) upon export. Regulation (EEC) No 2030/90 clarifies what 
is meant by "exports": this term covers exports to third countries and 
similar operations as referred to in Articles 34 and 42 of Regulation 
(EEC) No 3665/87(Q) (In particular deliveries within the Community to 
International organizations and to the armed forces as well as supplies 
for the victualling of ships or aircraft). 
2. Exemptions 
Exemptions from the monitoring system are provided for In the following 
cases (Article 1(2) to (4) of Regulation (EEC) No 2030/90): 
(a) Exports In the form of Community food aid as referred to In 
Regulation (EEC) No 2200/87(9). 
(b) Furthermore, the Member States are authorized not to take Into 
account deliveries under Articles 34 and 42 of Regulation (EEC) 
No 3665/87 (the deliveries mentioned In paragraph 1 above) if the 
exporter qualifies for the procedure referred to In Article 35 of 
Regulation (EEC) No 3665/87. 
(8) 0J No L 351, 14.12.1987, p.1 
(9) 0J No L 204, 25.7.1987, p. 1 
- 4 -
(c) A de minimis rule is also laid down whereby the Member States are 
autnorlzed not to take account for scrutiny purposes of exports not 
exceeding 5 000 kg In the case of cereals or rice or 500 kg in the 
case of other products. 
(d) The following Member States apply the exemptions mentioned in (b) 
and (c) above: 
Denmark 
Belgium 
Germany 
Greece 
Spain 
France 
I re1 and 
Italy 
Netherlands 
Portugal 
Luxembourg 
United Kingdom (b) 
<-) 1 (+3 
(-) <+) 
<+) (*> 
no concrete data 
<+) 
<-) 
(-) 
(-) 
(-) 
(+) <«) 
{+) 
(-) 
(-) 
(+) 
<+) 
(-) 
(+ - yes / - - no) 
(e) National provisions to counter abuses 
- In the case under (b) above, the strict conditions for the 
authorization of more flexible procedures pursuant to Article 35 
of Regulation (EEC) No 3665/87, in particular the obligation to 
maintain a register containing the particulars permitting 
Identification of the products concerned, the means of transport 
and the date of loading, the obligation to facilitate the checks 
considered necessary and to keep the register for a certain 
length of time, guarantee in general that there Is no abuse in 
this area, given that these procedures are only granted to 
credible operators. 
- 5 -
In the case under (c) above, the deliveries In question are 
usually checked, either sporadically and without warning or on 
the basis of a risk analysis using the documents accompanying 
the goods. 
3. Determining the basis for calculating the scrutiny rate 
The export declarations In respect of which app11 cat ions for refunds, 
MCAs and ACAs are submitted form the basis for the determination of the 
scrutiny rate. 
The rate Is appI led: 
by customs office 
by calendar year 
by product sector. 
(aa) in general, customs office means all offices competent to accept an 
export declaration for the products In question. However, the 
Member states are authorized to aggregate the data relative to 
several customs offices where the number and volume of exports do 
not reach a significant level In a calendar year. 
- 6 -
(bb) On the basis of the Information communicated by the Member States, 
the application of this authorization is as follows: 
Denmark 
Belgium 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Netherlands 
Luxembourg 
Portugal 
United Kingdom (-) 
(-) 
(-) 
no concrete data 
<-> 
(+) 
<-> 
(-) 
(-) 
(+) 
(+ - yes / - - no) 
(b) A product sector corresponds in principle to the scope of each 
common market organization. Nevertheless, rice and cereal products 
form a single product sector. This also applies to products not 
IIsted In Annex 11. 
4. Period during which the checks are to be carried out 
(a) The checks are normally carried out in the period between the 
lodging of the export declaration and the issuing of the 
authorization to export the goods. 
- 7 -
(b) Particular rules are laid down to specify the monitoring period in 
the case of transactions carried out in accordance with the 
simplified procedures referred to In Articles 18 and 19 of 
Directive 81/177/EEC(1°) (Directive on the export of Community 
goods) under which the export declaration may be replaced by other 
documents or formalities. In such cases, the replacement measures 
mark the beginning of the monitoring period. 
(c) Provision is made In exceptional cases to take previous checks Into 
account in calculating the scrutiny rate. This applies In two 
cases: 
- where the physical checks are carried out at the time of storage 
or processing, the refund having been paid in advance in 
accordance with Articles 24 to 29 of Regulation (EEC) 
No 3665/87; 
- where analyses or other physical checks are carried out prior to 
the completion of the customs export formalities under Community 
or national provisions governing the customs arrangements in 
question or the manufacturing processes which the products and 
goods have undergone. 
5. Transitional measures 
For a two-year transitional period, the 5% rate is reduced to 3% in 1990 
and 4% In 1991. 
These reduced rates apply to all sectors taken together for each customs 
office, or for all customs offices In one region where aggregation has 
been appI led. 
Nevertheless, on the basis of the Information supplied by the Member 
States, It can be seen that the reduced scrutiny rates have been 
exceeded by some Member States. 
(10) OJ No L 83, 30.3.1981, p.40. 
- 8 -
C. Part Two: Evaluation of the application of the monitoring system 
I. The Member States' Initial experience of the system 
1. The system In operation 
At the present stage, it is difficult to make a firm judgement on the 
difficulties encountered during this period of progressive 
Implementation of the new system. 
Nevertheless, some Member States have indicated that compliance with the 
scrutiny rates, particularly following the Introduction of the strict 5% 
rule by customs office and by sector, has - or will have - a negative 
effect on the other customs Inspection tasks, given that budgetary 
constraints do not permit an Increase In the number of inspectors. 
2. The number of Inaccurate export declarations 
On the basis of the Information supplied by the Member States, only 
about 1% of all exports scrutinized under the monitoring system was 
Inaccurate. 
I I. Review of the monitoring system 
1(a) Risk analysis as an alternative to the strict 5% rule 
In the context of the remarks made under C.I.1., the most significant 
criticism made by some Member States was the fact that observance of the 
strict requirements of the scrutiny rate In each sector did not meet the 
aims of the system. The Regulation as It stood would thus result in a 
- 9 -
mobilization of monitoring resources, even In the sectors not at risk. 
A system based on a prior "risk analysis" would result In a more 
targeted monitoring operation and a more efficient use of resources as 
the check would be centred on the sectors and exports which should be 
considered especially at risk. 
(b) Some Member States proposed replacing the strict 5% rule by sector: 
either by Commission guidelines given to the Member States and 
allowing them to determine for themselves at national level a plan 
for priority checks on the basis of a "risk analysis" drawn up by 
the Member States themselves, 
or by making It possible for Member States to carry out the checks 
on the basis of the results of a risk analysis at national level 
and to concentrate, where appropriate, their efforts on a 
particular sector while not observing the scrutiny rate in other 
sectors, as long as the 5% rate for all exports is observed. 
(c) Comments 
Aside from the general conclusions set out at the end of the report, the 
Commission would stress that risks exist with all sectors, although for 
certain of them the 5% threshold could be too high. 
- 10 -
2. Problems when checking non-Annex li products 
(a) Recourse to prior checks 
Some Member States propose that a special provision should be laid 
down for the products not Included in Annex II which derogates from 
the principle that a physical check Is required when the 
classification or quality cannot be verified by means of a simple 
visual check, but only by a detailed check or an analysis. 
For such products, a reliable check as to their quality Is possible 
only at the time of their manufacture. 
(b) Comments 
The Commission will examine whether it is appropriate to make 
specific provisions for products not included In Annex II. 
3. Extension of the cases of non-applIcatIon of the checking procedure 
provided for by Regulation (EEC) No 2030/90 
(a) Some Member States propose not to limit the flexibility provided 
for in Article 1(3) of Regulation (EEC) No 2030/90 to cases of 
del I ver les within the Community similar to export (supplies for 
victualling), but to extend such flexibility to all cases which are 
exempt from the requirement to submit goods to a customs office. 
(b) Comments 
Exemption from the requirement to submit goods to a customs office 
concerns a procedure which is not comparable with the case of 
specific deliveries similar to an export operation. Furthermore, 
such exemption could In Itself constitute an element of risk. 
- 11 -
D. Part Three: Conclusions 
1. For a number of Member States the Introduction of the monitoring system has 
not resulted In major difficulties, apart from the transitional problems 
associated with Introducing a new system. 
2. The main criticism of the Regulation concerns the strict 5% rule. In the 
view of certain Member States, the inflexibility of this rule could 
jeopardize more effective checking based on risk analysis, their staff 
resources being gerared to compliance with the 5% rule. 
3. It should be noted that, from 1 January 1993, the abolition of customs 
formalities In intra-Communlty trade In Community products, which will 
Involve the discontinuance of a substantial number of checks, Is likely to 
affect staff availability levels In the Member States. 
In addition, the principle Is laid down In the Community customs code 
whereby the export declaration must be submitted at the customs office 
responsible for surveillance at the place where the exporter Is based or 
where the goods are packed or loaded for transportation. The application of 
this provision should facilitate physical checking of the products. 
4. The EAGGF Is currently carrying out checks to verify the Implementation of 
Regulation (EEC) No 386/90. Once conclusions have been drawn and In the 
light of the changes referred to In paragraph 3, a supplementary report, 
possibly containing an amendment to Regulation (EEC) No 386/90, will be sent 
to the CounclI. 
M 
1 
II. 
i ISSN 0254-1475 
COM(93) 13 final 
DOCUMENTS 
EN 03 
Catalogue number : CB-CO-93-017-EN-C 
ISBN 92-77-52094-9 
DfSce for Officiai Publications of the European Communities 
À j-2985 Luxembourg 
"