WRITTEN QUESTION P-4012/98

by Gérard d'Aboville (UPE) to the Commission

(22 December 1998)

Subject: System of export refunds - Amendment of Community Regulation No 3665/87

Growing constraints are being imposed on Community exporters to obtain the refunds sought by the Community legislative authority which permit European agricultural products and food industry products to be exported outside the EU.

This increased regulatory burden is jeopardising the dynamism of the EU's principal industrial sector, which has a turnover of ECU 500 billion, provides 2,5 million jobs, adds value to more than 70 % of European agricultural production, has an economic spill-over impact on a host of sectors and, in population terms, constitutes an industrial fabric acting as a factor of social stability. The viability of many SMEs is at stake, and the relocation of international firms outside the EU is a further, equally serious thereat.

The reduction in refunds, following the GATT accords, has been made worse by increased administrative measures, by a process of institutionalising advance fixing certificates by stepped-up checks on operations. This is understandable in order to combat fraud and thus safeguard the Community budget, but, by going so far as to systematically insist on proof of arrival at destination, the authorities are placing an excessive burden of proof on operators while at the same time simplifying rules on exports.

What measures does the Commission intend to adopt to:

- enable exporters acting in good faith to be sufficiently protected,

- ensure that the call for proof of arrival at destination is not automatic, but based on a risk analysis, so as not to handicap our exporters at a time when the United States and the Cairns Group countries are asserting their wish to increase their exports of processed food products?

In particular, how does the Commission propose to respond to the request put to it by Minister Glavany at the meeting of the EU Council of Agriculture Ministers of 23/24 November 1998?

Answer given by Mr Fischler on behalf of the Commission

(26 January 1999)

The redrafted version of Commission Regulation (EEC) 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products(1) does not require systematic proof of arrival at destination for payment of the export refund. The principle is that the refund is paid on the production of proof of exit from the Community customs territory where one rate of refund has been fixed for all non-member countries and on the production of proof of import into a third country where the refund fixed for that country is higher than the lowest refund.

The Commission is careful to avoid a situation where Community funds may be allocated to economic operations which do not meet the requirements of the export refund scheme. For instance, cases have been found where products in bulk have been exported out of the Community in receipt of a refund, bagged in an OCT and subsequently reimported with a zero-rated preferential duty. Such operations may be organised with several successive parties, even if the exporters are acting in good faith.

At the request of the minister in question and of several other ministers at the Agriculture Council on 23 and 24 November 1998, there was discussion of whether proof of import into a third country should be requested automatically where the export refund is higher than the non-preferential import duty. The wording has been made more flexible as a result and proof must no longer be produced automatically. The redraft also gives the authorities in the Member States a certain degree of leeway with respect to the risk of deflection of trade.

(1) OJ L 351, 14.12.1987.