WRITTEN QUESTION E-1543/02

by Paulo Casaca (PSE) to the Commission

(3 June 2002)

Subject: Discrimination against Azores refinery promoted by the Commission

The Act of Accession of Portugal to the European Communities allows the sugar refinery in the Azores a production level of 20 000 tonnes, under market protection conditions compatible with those applying in the rest of the EU. This quantity was, already in 1986, approximately double the consumption level in the Azores themselves.

In 1991, the Commission introduced a new regime under which the maximum production level was reduced to 10 000 tonnes but, by way of compensation, the level of subsidy per tonne was increased by comparison with that applying in the rest of the EU, and a provision was introduced paving the way for competition with production from the rest of the EU on the basis of a supply authorisation for Azores sugar under the heading of traditional consignments.

The Commission has, however, astonishingly begun to contest the applicability of the concept of traditional consignments earlier proposed by itself, and has refused to take action against the blatant dumping being practised in the Azores by refineries located elsewhere in the EU.

Thanks to this situation of unlimited imports from the rest of the EU to the Azores, compounded by the virtual disappearance of the islands' food-processing industry, the Azores refinery's share of the local market has gone into free fall. The Commission's policy, as expressed in the prohibition of sugar consignments from the Azores under Regulation 20/2002, is effectively blocking the operations of the refinery, thus fulfilling the agenda of the EU sugar cartel.

The Commission:

1. Can it state whether or not it is true that its implementing legislation has led to a situation in which the concept of traditional consignments no longer applies to any Azorean products?

2. Does it not consider that it would have been preferable to ban consignments from the Azores for products subsidised under the supplies regime than to propose complex legislation to the Council, only for that legislation to be rendered totally meaningless by rules adopted later?

3. Does it not consider that the sole concrete effect of the authorisation of traditional consignments proposed by it in the EU legislation on Poseima was to mislead the Azorean authorities into giving up, in 1991, the rights acquired in the Act of Accession?

4. Does it not consider that what is involved is a concerted action by the sugar-refining cartel and itself to close down independent production in the Azores?

Answer given by Mr Fischler on behalf of the Commission

(5 July 2002)

1. Article 17(1) of Commission Regulation (EC) No 20/2002 of 28 December 2002(1) laying down detailed rules for implementing the specific supply arrangements for the outermost regions introduced by Council Regulations (EC) Nos 1452/2001 to 1454/2001 reads Processors who have declared their intention to export, in the context of regional trade, or dispatch, in the context of traditional trade flows, processed products containing raw materials which have benefited from the specific supply arrangements, may do so within the limits of annual quantities to be determined by the Commission in accordance with Article 35(2) of Regulation (EC) No 1453/2001.

In line with the above the Commission will adopt a Regulation authorising consignments or exports of processed products with which the Azores is supplied as a result of the workings of the specific supply arrangements. Its provisions will be based on the evidence of existence of exports or traditional consignments before entry into force of the specific supply arrangements introduced under the Poseima Regulation. To this end the Commission awaits statistics for 1989 to 1991 from the Portuguese authorities.

2. The rules adopted by the Commission aim at permitting exports and traditional consignments to be made within a clear legal framework. If the requirement of the Council Regulation (traditional trade flows) is not met the Commission cannot satisfy the Honourable Member's wishes.

3. The sugar sector rules for the Azores cover a quantity of some 20 000 tonnes as follows.

- where sugar production is concerned, Article 11 of Council Regulation (EC) No 1260/2001 of 19 June 2001 on common organisation of the markets in the sugar sector(2) allows the Azores a quota (A+B) of 9 953 tonnes. Within the limit of that quantity Azorean beetgrowers receive an aid per hectare and the sugar enterprise an aid for conversion into sugar;

- there is a limit of 10 000 tonnes a year on refining of raw beet sugar supplied to the Azores under the specific supply arrangements. The supply needs must also take account of Azorean sugar production from local beet.

4. It is clear from the foregoing that the provisions of both the Act of Accession of Portugal to the European Communities and the Regulations mentioned under 1 are applied by the Commission, which is certainly not engaged in concerted action with any party aimed at the closure of sugar plants in the Azores.

(1) OJ L 8, 11.1.2002.

(2) OJ L 178, 30.6.2001.