EUROPEAN COMMUNITIES – EXPORT SUBSIDIES ON SUGAR
Document: Status Report by the European Communities Addendum
Date: 2 June 2006
Document codes: WT/DS265/35/Add.1; WT/DS266/35/Add.1; WT/DS283/16/Add.1
Complainant: Thailand
Respondent: EU
Third parties: Australia, Barbados, Belize, Brazil, Canada, China, Colombia, Cuba, Fiji, Guyana, India, Jamaica, Kenya, Madagascar, Malawi, Mauritius, New Zealand, Paraguay, Saint Kitts and Nevis, Eswatini, Tanzania, Trinidad and Tobago, U.S., Côte d’Ivoire
Dispute stage: Appellate Body
Agreements cited: Art. 3.3, 8, 9.1, 10.1  AgricultureArt. 3.1, 3.2  Subsidies and Countervailing Measures (SCM)

French/
 Spanish

EUROPEAN COMMUNITIES – EXPORT SUBSIDIES ON SUGAR

Status Report by the European Communities

Addendum

 The following communication, dated 24 May 2006, from the delegation of the European
Communities to the Chairman of the Dispute Settleme nt Body, is circulated pursuant to Article 21.6
of the DSU.

Status Report Regarding Implementation of the

DSB Recommendations and Rulings in the Dispute

(WT/DS265, WT/DS266, WT/DS283)

 The European Communities submits this second report in accordance with Article 21.6 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"). A first
status report was submitted on 5 May 2006.

 On 19 May 2005 the Dispute Settlement Body (t he "DSB") adopted the Panel and Appellate
Body Reports in .

 On 28 October 2005 the arbitrator acting under Article 21.3(c) of the DSU determined the
“reasonable period of time” for the European Co mmunities to implement the recommendations and
rulings of the DSB to be 12 months and 3 days, thus expiring on 22 May 2006.

 Council Regulation (EC) No 318/2006 of 20 February 2006 on the common organization of
the markets in the sugar sector sets out the framework for a comp rehensive reform of the EU sugar
sector. The sugar reform is expected to bring dow n the EU support price by 36%, EU production by
8 million tons and exports by more than 5 million t ons. In a similar fashion to the provision of
Article 27(14) of Regulation (EC) 1260/2001 in relation to exports with refunds, Article 34 of
Regulation (EC) No 318/2006 provides for the respect of commitments in relation to all exports on
the basis of export licences issued for the relevant marketing years. This regulation no longer requires
C sugar (now termed "out-of quota sugar") to be exported.

 Regulation (EC) No 318/2006 also gives the necessary powers to the Commission to adopt
the relevant implementing and transitional measures inter alia to ensure compliance for the purpose of
this dispute. Article 44(b) provides in particular for transitional measures to ensure compliance with
international obligations in rela tion to C sugar referred to in Article 13 of Regulation (EC)
No 1260/2001.

 Following the discontinuation of the obligation to export provided in Article 13 of Regulation
(EC) No 1260/2001, Commission Regulation (EC) No 493/2006 of 27 March 2006 laying down
transitional measures within the framework of the reform of the common organization of the markets
in the sugar sector, and amending Regulatio n (EC) No 1265/2001 and (EC) No 314/2002 allows for
carrying forward of C sugar to the 2006/2007 marketi ng year and provides that the remaining C sugar
shall be considered as out-of-quota sugar for the ma rketing year 2006/2007 and thus subject to a
surplus amount if not used in accordance with Article 12 of Regulation (EC) No 318/2006.

 In addition, Commission Regulation (EC) No 769/2006 of 19 May 2006 suspending the
lodging of applications for export licences fo r C sugar from 23 May 2006 and amending Regulation
(EC) No 493/2006 as regards the transitional measures applicable to C sugar allows for the return of
export licences for C sugar issued but not used by 22 May 2006 and suspends further issuance of
export licences for C sugar from 23 May 2006.

 On the basis of the above legal provisions, the European Communities is now in a position to
maintain its subsidized exports of sugar with in its commitments as from the marketing year
2006/2007, as well as applied on a pro rata basis for the remaining of the marketing year 2005/2006.

 The European Communities has thus fully complied with the DSB rulings and
recommendations in this dispute within the reasonable period of time specified for this purpose.

COUNCIL REGULATION (EC) No 318/2006
of 20 February 2006
on the common organisation of the markets in the sugar sector

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the Europe an Community, and in particular Article 36 and
the third subparagraph of Article 37(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the Opinion from the European Parliament
1,

Having regard to the Opinion from the European Economic and Social Committee2,

Whereas:

(1) The operation and development of the common market for agricultural products should be
accompanied by the establishment of a common agri cultural policy to include, in particular, a
common organisation of agricultural markets which may take various forms depending on the
product.

(2) The sugar market in the Community is b ased on principles which for other common market
organisations have been substantially reformed in the past. In order to pursue the objectives
set out in Article 33 of the Treaty, and notably in order to stabilise the markets and to ensure a
fair standard of living for the agricultural community within the sugar sector, it is necessary to
fundamentally review the common organisation of the market in the sugar sector.

(3) In the light of these developments, Counc il Regulation (EC) No 1260/2001 of 19 June 2001
on the common organisation of the markets in the sugar sector
3 should be repealed and
replaced by a new Regulation.

(4) Reference prices should be fixed for standa rd qualities of white sugar and raw sugar. Such
standard qualities should be average qualities representative of sugar produced in the
Community and defined on the basis of criteria used by the sugar trade. It should also be
possible to review the standard qualities to take account, in particular, of commercial
requirements and developments in technical analysis.

(5) In order to achieve reliable information on Community market prices for sugar, a price
reporting system should be set up on the basis of which market price levels for white sugar
should be determined.

 1 Opinion delivered on 19 January 2006 (not yet published in the Official Journal).
2 Opinion delivered on 26 October 2005 (not yet published in the Official Journal).
3 OJ L 178, 30.6.2001, p. 1. Regulation as last amended by Commission Regulation (EC) No 39/2004
(OJ L 6, 10.1.2004, p. 16).

(6) A minimum price should be fixed for quota beet corresponding to a standard quality which
should be defined, in order to ensure a fair standard of living for the Community growers of
sugar beet and sugar cane.

(7) Specific instruments are need ed to ensure a fair balance of rights and obligations between
sugar undertakings and sugar beet growers. Th erefore, standard provisions should be laid
down to govern the contractual relations betw een buyers and sellers of sugar beet. The
diversity of natural, economic and technical situations makes it difficult to provide for
uniform purchase terms for sugar beet throughout the Community. Agreements within the
trade already exist between associations of sugar beet growers and sugar undertakings.
Therefore, framework provisions should onl y define the minimum guarantees required by
both sugar beet growers and the sugar industry to ensure a smooth functioning of the sugar
market with the possibility to derogate from some rules in the context of an agreement within
the trade.

(8) The reasons which in the past led the Community to adopt a production quota system for
sugar, isoglucose and inulin syrup still remain valid. However, due to developments within
the Community and internationally, it is necessar y to adjust the production system in order to
provide for new arrangements and reductions of the quotas. In line with the previous quota
system, a Member State should allocate quotas to the undertakings established within its
territory. The new common organisation of the markets in the sugar sector should maintain
the legal status of the quotas in so far as, accordi ng to the case-law of the Court of Justice, the
system of quotas constitutes a mechanism for regul ating the market in the sugar sector which
aims to ensure the attainment of public interest objectives.

(9) Following the recent decisions on export subs idies of the World Trade Organisation Panel and
the Appellate Body on EU export subsidies for sugar and in order for Community operators to
ensure a smooth change-over from the previous quota system to the present system, it should
be possible during the marketing year 2006/2007 for sugar undertakings to be allocated an
additional quota under conditions that take into account the lower value of C sugar.

(10) To counterbalance the effects on isoglucose of the fall in sugar prices, as well as to avoid
penalizing the production of some isoglucose qualities, additional quotas should be allocated
to the current isoglucose beneficiaries. More over, supplementary quotas should be available
for adjustments of the sweet eners sector of some Member States under the conditions
provided for granting additional sugar quota.

(11) To ensure that the Community’s production of sugar, isoglucose and inulin syrup is reduced
sufficiently, the Commission should be entitled to adjust the quotas to a sustainable level after
the termination of the restructuring fund in 2010.

(12) Given the need to allow for a certain na tional flexibility in relation to the structural
adjustment of the processing industry and of beet and cane growing during the period in
which the quotas are to be applied, Member St ates should be allowed to alter the quotas of
undertakings within certain limits whilst not restricting the operation of the restructuring fund
established by Council Regulation (EC) No 320/ 2006 of 20 February 2006 establishing a
temporary scheme for the restructuring of the sugar industry in the Community
4 as an
instrument.

4 See page 42 of this Official Journal.

(13) The sugar quotas are allocated or reduced follo wing a merger or transfer of undertakings, the
transfer of a factory, or the lease of a fact ory. The conditions for adjustment by the Member
States of the quotas of the undertakings in question should be established while ensuring that
changes to the quotas of sugar undertakings are not detrimental to the interests of the beet
growers or cane growers concerned.

(14) Since allocating quota production to undertak ings is a way of ensuring that sugar beet and
cane growers are paid Community prices and have an outlet for their production, the interests
of all parties concerned, in particular b eet and cane growers, should be taken into
consideration when quotas are transferred inside production regions.

(15) To expand the outlets for sugar, isogluco se and inulin syrup on the Community’s internal
market, it should be possible to consider s ugar, isoglucose and inulin syrup used for
manufacture in the Community of certain produc ts such as chemical, pharmaceutical, alcohol
or rum, as out-of-quota production under conditions to be laid down.

(16) A part of the out of quota production should be used to ensure the adequate supply to the
outermost regions or could be exported under the Community’s WTO commitments.

(17) Should the production of sugar, isoglucose or inulin syrup exceed the quotas, it should be
possible to provide for a mechanism to carry fo rward the surplus sugar, isoglucose or inulin
syrup to be treated as quota production of the following marketing year, in order to avoid the
surplus sugar distorting the sugar market.

(18) Certain mechanisms are available for out of quota production. If, for certain quantities, the
applicable conditions are not met, a levy on the surplus should be imposed in order to avoid
the accumulation of these quantities threatening the market situation.

(19) A production charge should be introduced to contribute to the financing of the expenditure
occurring under the common organisation of the markets in the sugar sector.

(20) In order to provide for an efficient cont rol of the production of ope rators producing sugar,
isoglucose or inulin syrup, an approval sy stem for operators should be established and
detailed information in relati on to their production should be submitted to the Member State
concerned.

(21) A temporary and limited buying-in interventi on system should be kept in place in order to
contribute to stabilising the market for cases wher e market prices in a given marketing year
would fall below the reference price fixed for the following marketing year.

(22) New market tools to be managed by the Commission should be introduced. Firstly, if market
prices fall below the reference price for white s ugar, it should be possible for operators, under
conditions to be determined by the Commission, to benefit from a private storage scheme.
Secondly, to maintain the structural balance of the markets in sugar at a price level close to
the reference price, it should be possible for the Commission to decide to withdraw sugar
from the market for as long as it takes for the market to rebalance.

(23) The creation of a single Community market for sugar involves the introduction of a trading
system at the external borders of the Community. That trading system should include import
duties and export refunds and should, in prin ciple, stabilise the Community market. The

trading system should be based on the undert akings accepted under the Uruguay Round of
multilateral trade negotiations.

(24) In order to monitor the volume in trade in sugar with third countries, provision should be
made for an import and export licence scheme with the lodging of a security to ensure that the
transactions for which such licences are issued are actually carried out.

(25) To ensure that those trading arrangement s can function properly, provision should be made
for regulating or, when the situation on the mark et so requires, prohibiting the use of inward
processing arrangements.

(26) The customs duty system makes it possible to dispense with all other protective measures at
the external frontiers of the Community. The in ternal market and duty mechanism could, in
exceptional circumstances, prove to be inadequa te. In such cases, in order not to leave the
Community market without defence against dist urbances that might ensue, the Community
should be able to take all necessary measures without delay. Such measures should comply
with the international commitments of the Community.

(27) For the most part, the customs duties app licable to agricultural products under the WTO
agreements are laid down in the common custom s tariff. However, for some products falling
within the scope of this Regulation, the introduction of additional mechanisms makes it
necessary to provide for the possibility to adopt derogations.

(28) In order to prevent or counteract advers e effects on the Community market which could result
from imports of certain agricultural products, im ports of such products should be subject to
payment of an additional duty, if certain conditions are fulfilled.

(29) It is appropriate, under certain conditions, to confer on the Commission the power to open and
administer tariff quotas resulting from internati onal agreements concluded in accordance with
the Treaty or from other acts of the Council.

(30) The Community has several preferential market access arrangements with third countries
which allow those countries to export cane sugar to the Community under favourable
conditions. Therefore, it is necessary to evaluate refiners’ need for sugar for refining and,
under certain conditions, to reserve import licences to specialised users of notable quantities
of imported raw cane sugar, deemed as being full-time refiners in the Community.

(31) Provisions for granting refunds on exports to third countries, based on the difference between
prices within the Community and on the world mark et, and falling within the limits set by the
EC’s commitments in the WTO, should serve to safeguard the possible Community
participation in international trade in sugar. S ubsidised exports should be subject to limits in
terms of quantity and budgetary outlay.

(32) Compliance with the limits in terms of va lue should be ensured at the time when the export
refunds are fixed through the monitoring of payments under the rules relating to the European
Agricultural Guidance and Guarantee Fund. Moni toring can be facilitated by the compulsory
advance fixing of export refunds, while allowing the possibility, in the case of differentiated
refunds, of changing the specified destination within a geographical area to which a single
export refund rate applies. In the case of a cha nge of destination, the export refund applicable
to the actual destination should be paid, with a ceiling of the amount applicable to the
destination fixed in advance.

(33) Compliance with the quantity limits should be ensured by a reliable and effective system of
monitoring. To that end, the granting of expor t refunds should be made subject to an export
licence. Export refunds should be granted up to the limits available, depending on the
particular situation of each product concerned. Exceptions to that ru le should be permitted
only for processed products not listed in Annex I to the Treaty, to which volume limits do not
apply. Provision should be made for deroga ting from strict compliance with management
rules where exports benefiting from export refunds are not likely to exceed the quantity laid
down.

(34) The proper working of the single market based on common prices would be jeopardised by
the granting of national aid. Therefore, the provisions of the Treaty governing State aid
should apply to the products covered by this co mmon market organisation. However, with a
view to attenuating the effects the reform of the sugar sector is expected to have in certain
circumstances the granting of certain State aid should be allowed.

(35) In Member States with a significant reduc tion of sugar quota sugar beet producers will face
particularly severe adaptation problems. In such cases the transitional Community aid to sugar
beet growers will not suffice to fully address the beet growers’ difficulties. Therefore,
Member States having reduced their quota by more than 50 % should be authorised to grant
State aid to sugar beet growers during the application period of the transitional Community
aid. To avoid Member States granting State aid exceeding the needs of their sugar beet
growers the determination of the total amount of the State aid concerned should be made
subject to Commission approval, except in the case of Italy where the maximum need for
most productive sugar beet to adapt to the market conditions after the reform can be estimated
at EUR 11 per tonne of sugar beet produced. Moreover, due to the particular problems
expected to arise in Italy provision should be made for arrangement s allowing sugar beet
growers to benefit directly or indirectly from the State aid granted. 28.2.2006 EN Official
Journal of the European Union L 58/3

(36) In Finland sugar beet growing is subject to particular geographical and climatic conditions
which will adversely affect the growing beyond the general effects of the sugar reform. For
this reason provision should be made for author ising that Member State on a permanent basis
to grant its sugar beet growers an adequate amount of State aid.

(37) It is appropriate to provide for measures to be taken when a substantial rise or fall in prices
disturbs or threatens to disturb the Comm unity market. These measures may include the
opening of a quota at reduced tariff for imports of sugar from the world market for the time
necessary.

(38) Since the common market in sugar is c ontinuously evolving, the Member States and the
Commission should keep each informed of relevant developments.

(39) The measures necessary for the implementation of this Regulation should be adopted in
accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures
for the exercise of implementing powers conferred on the Commission
5.

(40) The Commission should be authorised to a dopt necessary measures to solve specific practical
problems in case of emergency.

5 OJ L 184, 17.7.1999, p. 23.

(41) The characteristics of sugar production in the outermost regions of the Community
distinguish that production from sugar production in the rest of the Community. Financial
support should therefore be given to the sector by allocating resources to farmers in those
regions after the entry into force of the support programmes to assist local production which
Member States draw up under Council Regula tion (EC) No 247/2006 of 30 January 2006
laying down specific measures for agriculture in the outer most regions of the Union
6. For the
same reason, France should be authorised to gran t a fixed amount of State aid to its outermost
regions.

(42) Expenditure incurred by the Member States as a result of the obligations arising from the
application of this Regulation should be fi nanced by the Commun ity in accordance with
Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common
agricultural policy
7, and, as from 1 January 2007 in acco rdance with Council Regulation (EC)
No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy.

(43) The change-over from the arrangements in Regulation (EC) No 1260/2001 to those provided
for in this Regulation as well as the change-ove r from the market situation in the marketing
year 2005/2006 to the market situation in the marketing year 2006/2007 and in order to ensure
compliance by the Community with its interna tional commitments with regard to C sugar
referred to in Article 13 of Regulation (EC) No 1260/2001 could give rise to difficulties
which are not dealt with in this Regulation. In order to deal with such difficulties, the
Commission should be enabled to adopt transitional measures,

HAS ADOPTED THIS REGULATION:

6 OJ L 42, 14.2.2006, p. 1.
7 OJ L 160, 26.6.1999, p. 103. Regulation as repealed by Regulation (EC) N° 1290/2005 OJ L 209,
11.8.2005, p. 1.

TITLE I

SCOPE AND DEFINITIONS

Article 1

Scope

1. The common organisation of the markets in the sugar sector established by this Regulation shall
cover the following products:

CN Code Description
(a) 1212 91

1212 99 20
Sugar beet

Sugar cane

(b) 1701 Cane or beet sugar and chemically purse sucrose, in
solid form
(c)

1702 20

1702 60 95
and
1702 90 99

1702 90 60

1702 90 71

2106 90 59
Maple sugar and maple syrup

Other sugars in solid fo rm and sugar syrups, not
containing added flavouring or colouring matter, but
not including lactose, glucose, maltodextrine and
isoglucose

Artificial honey, whether or not mixed with natural
honey

Caramel containing 50 % or more by weight of
sucrose in the dry matter

Flavoured or coloured isoglucose syrups (h) 2303 20
Beet pulp, bagasse and other waste of sugar
undertakings

(d) 1702 30 10
1702 40 10
1702 60 10
702 90 30
Isoglucose
(e) 1702 60 80
1702 90 80
Inulin syrup

(f) 1703 Molasses resulting from the extraction or refining of
sugar
(g) 2106 90 30 Flavoured or coloured isoglucose syrups
(h) 2303 20 Beet pulp, bagasse and other waste of sugar
undertakings

 2. The marketing year for the products listed in paragraph 1 shall begin on 1 October and end on
30 September of the following year.

However, the marketing year 2006/2007 shall begin on 1 July 2006 and end on 30 September 2007.

Article 2

Definitions

For the purposes of this Regulation, the following definitions shall apply:

1) ‘white sugars’ means suga rs, not flavoured or coloured or containing any other added
substances, containing, in the dry state, 99,5 % or more by weight of sucrose, determined by
the polarimetric method;

2) ‘raw sugars’ means sugars, not flavoured or coloured or containing any other added
substances, containing, in the dry state, less than 99,5 % by weight of sucrose, determined by
the polarimetric method;

3) ‘isoglucose’ means the product obtained fro m glucose or its polymers with a content by
weight in the dry state of at least 10 % fructose;

4) ‘inulin syrup’ means the immediate product obtained by hydrolysis of inulin or
oligofructoses, containing in the dry state at least 10 % fructose in free form or as sucrose,
and expressed as sugar/isoglucose equivalents. In order to avoid restrictions on the market for
products with low sweetening power produced by inulin fibre processors without inulin syrup
quota, this definition may be amended in accordan ce with the procedure referred to in Article
39(2);

5) ‘quota sugar’, ‘quota isoglucose’ and ‘quota inulin syrup’ mean any quantity of sugar,
isoglucose or inulin syrup production attributed to a specific marketing year under the quota
of the undertaking concerned;

6) ‘industrial sugar’ means any quantity of suga r production attributed to a specific marketing
year over and above the sugar quantity referred to in point (5), intended for the production by
the industry of one of the products referred to in Article 13(2);

7) ‘industrial isoglucose’ and ‘i ndustrial inulin syrup’ mean any quantity of isoglucose or inulin
syrup production attributed to a specific marketing year, intended for the production by the
industry of one of the products referred to in Article 13(2);

8) ‘surplus sugar’, ‘surplus is oglucose’ and ‘surplus inulin syrup’ mean any quantity of sugar,
isoglucose or inulin syrup production attributed to a specific marketing year over and above
the respective quantities referred to in points (5), (6) and (7);

9) ‘quota beet’ means all sugar beet processed into quota sugar;

10) ‘delivery contract’ means a contract conc luded between a seller and an undertaking for the
delivery of beet for the manufacture of sugar;

11) ‘agreement within the trad e’ means one of the following:

 (a) an agreement concluded at Community le vel, prior to the conclusion of any delivery
contract, between a group of national undert akings’ organisations on the one hand
and a group of national sellers’ organisations on the other;

 (b) an agreement concluded, prior to th e conclusion of any delivery contract, between
undertakings or an undertakings’ organisation recognised by the Member State
concerned on the one hand and a sellers’ association recognised by the Member State
concerned on the other;

 (c) in the absence of any agreement as refe rred to in point (a) or (b), the law on
companies and the law on cooperatives, in so far as they govern the delivery of sugar
beet by the shareholders or members of a company or cooperative manufacturing
sugar;

 (d) in the absence of any agreement as refe rred to in point (a) or (b), the arrangements
existing before the conclusion of any deliver y contract, provided the sellers accepting
the arrangement supply at least 60 % of th e total beet bought by the undertaking for
the manufacture of sugar in one or more factories;

12) ‘ACP/Indian sugar’ means sugar falling within CN code 1701 originating in the States listed
in Annex VI and imported into the Community under:

 — Protocol 3 to Annex V to th e ACP-EC Partnership Agreement,

 or

 — the Agreement on cane sugar between th e European Community and the Republic of
India
8;

 13) ‘full-time refiner’ means a production unit:

 — of which the sole activity consists of refining imported raw cane sugar,

 or

 — which refined in the marketing year 2004/2005 a quantity of at least 15 000 tonnes of
 imported raw cane sugar.

8 OJ L 190, 23.7.1975, p. 36.

TITLE II

INTERNAL MARKET

CHAPTER 1

Prices

Article 3

Reference prices

1. For white sugar, the reference price shall be:

(a) EUR 631,9 per tonne for each of the marketing years 2006/2007 and 2007/2008;

(b) EUR 541,5 per tonne for the marketing year 2008/2009;

(c) EUR 404,4 per tonne as from the marketing year 2009/2010.

2. For raw sugar, the reference price shall be:

(a) EUR 496,8 per tonne for each of the marketing years 2006/2007 and 2007/2008;

(b) EUR 448,8 per tonne for the marketing year 2008/2009;

(c) EUR 335,2 per tonne as from marketing year 2009/2010.

3. The reference prices referred to in paragra phs 1 and 2 shall apply to unpacked sugar, ex
factory. They shall apply to white sugar and raw sugar of the standard quality described in Annex I.

Article 4

Price reporting

The Commission shall set up an information system on prices in the sugar market, including a system
for the publication of price levels for the sugar market.

The system shall be based on information submitte d by undertakings producing white sugar or by
other operators involved in the sugar trade. This in formation shall be treated with confidentiality. The
Commission shall ensure that the information publ ished shall not permit to identify the prices of
individual undertakings or operators.

Article 5

Minimum beet price

1. The minimum price for quota beet shall be:

(a) EUR 32,86 per tonne for the marketing year 2006/2007;

(b) EUR 29,78 per tonne for the marketing year 2007/2008;

(c) EUR 27,83 per tonne for the marketing year 2008/2009;

(d) EUR 26,29 per tonne as from the marketing year 2009/2010.

2. The minimum price referred to in paragraph 1 shall apply to sugar beet of the standard quality
described in Annex I.

3. Sugar undertakings buying quota beet suita ble for processing into sugar and intended for
processing into quota sugar shall be required to pay at least the minimum price, adjusted by price
increases or reductions to allow for deviations from the standard quality.

4. For the quantities of sugar beet corresponding to the quantities of industrial sugar or surplus
sugar that are subject to the surplus amount pr ovided for in Article 15, the sugar undertaking
concerned shall adjust the purchase price so that it is at least equal to the minimum price for quota
beet.

Article 6

Interprofessional agreements

1. Agreements within the trade and delivery contracts shall conform to paragraph 3 and to
purchase terms laid down in Annex II, in particular as regards the conditions governing the purchase,
delivery, taking over and payment of beet.

2. The terms for buying sugar beet and sugar cane shall be governed by agreements within the
trade concluded between Community growers of these raw materials and Community sugar
undertakings.

3. In delivery contracts, a distinction shall be made according to whether the quantities of sugar
to be manufactured from sugar beet will be:

— quota sugar,

— out-of-quota sugar.

 4. Each sugar undertaking shall provide the Member State in which it produces sugar with the
following information:

(a) the quantities of beet referred to in the firs t indent of paragraph 3, for which they have
concluded pre-sowing delivery contracts and the sugar content on which those contracts are
based;

(b) the corresponding estimated yield.

Member States may require additional information.

5. Sugar undertakings which have not signed pre-sowing delivery contracts at the minimum
price for quota beet for a quantity of beet equivalent to their quota sugar shall be required to pay at
least the minimum price for quota beet for all the sugar beet they process into sugar.

6. Subject to the approval of the Member Stat e concerned, agreements within the trade may
derogate from paragraphs 3 and 4.

7. If no agreements within the trade exist, th e Member State concerned shall take the necessary
steps under this Regulation to protect the interests of the parties concerned.

CHAPTER 2

Quota production

Article 7

Quota allocation

1. The quotas for the production of sugar, isogl ucose and inulin syrup at national or regional
level are fixed in Annex III.

2. The Member States shall allocate a quota to each undertaking producing sugar, isoglucose or
inulin syrup established in its territory and approved under Article 17.

For each undertaking, the allocated quota shall be equal to the total of the A and B quotas under
Regulation (EC) No 1260/2001 which were allocate d to the undertaking for the marketing year
2005/2006.

3. In case of allocation of a quota to a sugar undertaking having more than one production unit,
the Member States shall adopt the measures they cons ider necessary in order to take due account of
the interests of sugar beet and cane growers.

Article 8

Additional sugar quota

1. By 30 September 2007 at the latest, any sugar undertaking may request from the Member
State where it is established the allocation of an additional sugar quota.

The maximum additional sugar quotas per Member State are fixed in point I of Annex IV.

2. On the basis of the requests, the Member State shall determine according to objective and
non-discriminatory criteria the quantities which ar e acceptable. If the sum of these demands for
additional quantities exceeds the available nationa l quantity, the Member State concerned shall
provide for a proportional reduction of the acceptabl e quantities. The resulting quantities shall be the
additional quota allocated to the undertakings concerned.

3. A one-off amount of EUR 730 shall be levi ed on the additional quotas that have been
allocated to undertakings in accordance with paragra phs 1 and 2. It shall be collected per tonne of
additional quota allocated.

4. The totality of the one-off amount paid in acco rdance with paragraph 3 shall be charged by
the Member State to the undertakings on its territory that have been allocated an additional quota.

The payment of the one-off amount by a sugar undert aking concerned shall be made by a deadline to
be determined by the Member States. The deadline shall not be later than 28 February 2008.

5. If the sugar undertaking has not paid th e one-off amount before 28 February 2008 the
additional quotas shall not be considered as allocated to the sugar undertaking concerned.

Article 9

Additional and supplementary isoglucose quota

1. In the marketing year 2006/2007 an isoglucose quota of 100 000 tonnes shall be added to the
total of the isoglucose quota fixed in Annex III. In each of the marketing years 2007/2008 and
2008/2009 a further isoglucose quota of 100 000 tonnes shall be added to the quota of the preceding
marketing year.

Member States shall allocate the additional quotas to undertakings, proportionately to the isoglucose
quotas that have been allocated in accordance with Article 7(2).

2. Italy, Lithuania and Sweden may allocate, upon request by any undertaking established on
their respective territories a supplementary isogl ucose quota in the period from the marketing year
2006/2007 until the marketing year 2009/2010. Th e maximum supplementary quotas are fixed per
Member State in point II of Annex IV.

3. A one-off amount of EUR 730 shall be levied on the quotas that have been allocated to
undertakings in accordance with paragraph 2. It shal l be collected per tonne of supplementary quota
allocated.

Article 10

Quota management

 1. In accordance with the procedure referred to in Article 39(2), the quotas set out in Annex III
shall be adjusted by 30 September 2006 at the latest for the marketing year 2006/2007 and by the end
of February at the latest of the previous marke ting year for each of the marketing years 2007/2008,
2008/2009, 2009/2010 and 2010/2011. The adjustments shall result from the application of Articles 8
and 9, of paragraph 2 of this Artic le, and of Articles 14 and 19 of this Regulation and of Article 3 of
Regulation (EC) No 320/2006.

2. Taking into account the results of the rest ructuring scheme provided for in Regulation (EC)
No 320/2006, the Commission shall decide by the end of February 2010 at the latest, in accordance
with the procedure referred to in Article 39(2), th e common percentage needed to reduce the existing
quotas for sugar, isoglucose and inulin syrup per Member State or region with a view to avoid market
imbalances in the marketing years as from 2010/2011.

3. The Member States shall adjust th e quota of each undertaking accordingly.

Article 11

National quota reallocation

1. A Member State may reduce the sugar or isoglucose quota as allocated to an undertaking
established on its territory:

 — by up to 25 % for the marketing years 2006/2007 and 2007/2008 whilst respecting the
freedom of undertakings to participate in th e mechanisms established by Regulation (EC)
No 320/2006,

 and

— by up to 10 % for the marketing year 2008/2009 and following.

2. Member States may transfer quotas between undertakings in accordance with the rules laid
down in Annex V and taking into consideration the interests of each of the parties concerned,
particularly sugar beet and cane growers.

3. The quantities reduced pursuant to paragraphs 1 and 2 shall be allocated by the Member State
in question to one or more undertakings on its territory, whether or not holding a quota.

CHAPTER 3

Out-of-quota production

Article 12

Scope

The sugar, isoglucose or inulin syrup produced during a marketing year in excess of the quota referred
to in Article 7 may be:

(a) used for the processing of certain products as referred to in Article 13;

(b) carried forward to the quota production of the next marketing year, in accordance with
Article 14;

 (c) used for the specific supply regime for th e outermost regions, in accordance with Title II of
Regulation (EC) No 247/2006;

 or

(d) exported within the quantitative limit fixed in accordance with the procedure referred to in
Article 39(2) respecting the commitments resulting from agreements concluded under
Article 300 of the Treaty.

Other quantities shall be subject to the surplus amount referred to in Article 15.

Article 13

Industrial sugar

1. Industrial sugar, industrial isoglucose or in dustrial inulin syrup shall be reserved for the
production of one of the products referred to in paragraph 2 when:

(a) it has been subject to a delivery contract concluded before the end of the marketing year
between a producer and a user which have both been granted approval under Article 17;

 and

(b) it has been delivered to the user by 30 November of the following marketing year at the latest.

2. In accordance with the proce dure referred to in Article 39(2) the Commission shall draw up a
list of products for the production of which industria l sugar, industrial isoglucose or industrial inulin
syrup is used.

The list shall in particular include:

(a) bioethanol, alcohol, rum, live yeast and quan tities of syrups for spreading and those to be
processed into ‘Rinse appelstroop’;

(b) certain industrial products without sugar c ontent but the processing of which uses sugar,
isoglucose or inulin syrup;

(c) certain products of the chemical or pharmac eutical industry which contain sugar, isoglucose
or inulin syrup.

3. A production refund may be granted on the products listed in Article 1(1)(b) to (e) if surplus
sugar or imported sugar, surplus isoglucose or surplus inulin syrup is not available at a price
corresponding to the world price for the manufacturing of products referred to in paragraph 2(b) and
(c) of this Article.

The production refund shall be fixed taking into acc ount in particular the costs arising from the use of
imported sugar which the industry would have to bear in the event of supply on the world market and
the price of the surplus sugar ava ilable on the Community market or th e reference price if there is no
surplus sugar.

Article 14

Carry forward of surplus sugar

 1. Each undertaking may decide to carry forwar d all or part of its production in excess of its
sugar quota, its isoglucose quota or its inulin syrup q uota to be treated as part of the next marketing
year’s production. Without prejudice to paragraph 3, that decision shall be irrevocable.

2. Undertakings which take the deci sion referred to in paragraph 1 shall:

(a) inform the Member State concerned before a da te to be determined by this Member State:

 — between 1 February and 30 June of the current marketing year for quantities of cane
sugar being carried forward,

 — between 1 February and 15 April of th e current marketing year for others quantities
 of sugar or inulin syrup being carried forward;

(b) undertake to store such quantities at their ow n expense until the end of the current marketing
year.

 3. If an undertaking’s definitive production in the marketing year concerned was less than the
estimate made when the decision in accordance with paragraph 1 was taken, the quantity carried
forward may be adjusted retroactively by 31 October of the following marketing year at the latest.

4. The quantities carried forward shall be deem ed to be the first quantities produced under the
quota of the following marketing year.

Article 15

Surplus amount

 1. A surplus amount shall be levied on quantities of:

(a) surplus sugar, surplus is oglucose and surplus inulin syrup produced during any marketing
year, except quantities carried forward to th e quota production of the following marketing
year and stored in accordance with Article 14 or quantities referred to in Article 12(c) and (d);

(b) industrial sugar, industrial isoglucose and industrial inulin sy rup for which no proof has been
supplied, by a date to be determined, that it has been processed in one of the products referred
to in Article 13(2);

c) sugar, isoglucose and inulin syrup withdraw n from the market in accordance with Article 19
and for which the obligations provided for in Article 19(3) are not met.

2. The surplus amount shall be fixed in accordance with the procedure referred to in
Article 39(2) at a sufficiently high level in order to avoid the accumulation of quantities referred to in
paragraph 1.

3. The surplus amount paid in accordance with paragraph 1 shall be charged by the Member
State to the undertakings on its territory according to the quantities of production referred to in
paragraph 1 that have been established for the undertakings for the marketing year concerned.

CHAPTER 4

Market management

Article 16

Production charge

1. As from the marketing year 2007/2008, a pr oduction charge shall be levied on the sugar
quota, the isoglucose quota and the inulin syrup quota held by undertakings producing sugar,
isoglucose or inulin syrup.

2. The production charge shall be set at EUR 12, 00 per tonne of the quota sugar and quota inulin
syrup. For isoglucose, the production charge shall be set at 50 % of the charge applicable to sugar.

3. The totality of the production charge paid in accordance with paragraph 1 shall be charged by
the Member State to the undertakings on its terr itory according to the quota held during the marketing
year concerned.

Payments shall be made by the undertakings by the en d of February of the relevant marketing year at
the latest.

4. Community sugar and inulin syrup undert akings may require sugar-beet or sugar-cane
growers or chicory suppliers to bear up to 50 % of the production charge concerned.

Article 17

Approved operators

 1. On request, Member States shall grant an approval to an undertaking producing sugar,
isoglucose or inulin syrup or to an undertaking that processes these products into a product included
in the list referred to in Article 13(2) provided that the undertaking:

(a) proves his professional production capacities;

(b) agrees to provide any information and to be s ubject to controls related to this Regulation;

(c) is not subject to suspension or withdrawal of the approval.

2. The approved undertakings shall provide the Me mber State in whose territory the harvest of
beet, cane or the refining takes place, with the following information:

(a) the quantities of beet or cane for which a de livery contract has been concluded, as well as the
corresponding estimated yields of beet or cane, and sugar per hectare;

(b) data regarding provisiona l and actual sugar beet, sugar cane and raw sugar deliveries, and
regarding sugar production and statements of sugar stocks;

(c) quantities of white sugar sold a nd corresponding prices and conditions.

Article 18

Private storage and intervention

1. If the average Community price recorded is below the reference price, during a representative
period, and is likely to remain at that level, taki ng into account the market situation, aid for private
storage of white sugar may be granted to undertakings which are allocated a sugar quota.

2. Throughout the marketing years 2006/2007, 2007/2008, 2008/2009 and 2009/2010, the
intervention agency designated by each sugar-producing Member Stat e shall buy in, up to a total
quantity of 600 000 tonnes, expressed in white suga r, per marketing year for the Community, any
white or raw sugar offered to it provided that the sugar concerned:

— has been produced under quota and manufactu red from beet or cane harvested in the
Community,

— has been the subject of a storage contract concluded between the seller and the intervention
agency.

Intervention agencies shall buy in at 80 % of the re ference price fixed in Article 3 for the marketing
year following the marketing year during which the offer is lodged. If the quality of the sugar differs
from the standard quality for whic h the reference price is fixed, this price shall be increased or
reduced accordingly.

3. Intervention agencies may sell sugar only at a price which is higher than the reference price
fixed for the marketing year in which the sale takes place.

However, it may be decided in accordance with the procedure referred to in Article 39(2), whilst
respecting the commitments resulting from agreemen ts concluded under Article 300 of the Treaty,
that intervention agencies:

(a) may sell sugar at a price equal to or lower th an the reference price referred to in the first
subparagraph if the sugar is intended:

 — for use as animal feed,

 o r

 — for export, either without further proces sing or after processing into products listed in
Annex I to the Treaty or into goods listed in Annex VII to this Regulation.

(b) are to make unprocessed sugar held by them available, for human consumption on the internal
market of the Community, to charitable orga nisations — recognised by the Member State
concerned or by the Commission in cases where a Member State has not recognised any such
organisation — at a price which is lower than the current reference price or free of charge for
the distribution as part of individual emergency aid operations.

Article 19

Withdrawal of sugar

 1. In order to preserve the structural balance of the market at a price level which is close to the
reference price, taking into acc ount the commitments of the Comm unity resulting from agreements
concluded in accordance with Article 300 of the Treat y, a percentage, common to all Member States,
of quota sugar, quota isoglucose and quota inulin syrup may be withdrawn from the market until the
beginning of the following marketing year.

In that case, the traditional supply need for refining imported raw sugar referred to in Article 29(1) of
this Regulation shall be reduced by the same percentage for the marketing year concerned.

2. The withdrawal percentage referred to in paragraph 1 shall be dete rmined by 31 October of
the marketing year concerned at the latest on th e basis of expected market trends during that
marketing year.

3. Each undertaking provided with a quota shall store at its own expense during the period of
withdrawal the quantities of sugar corresponding to the application of the percentage referred to in
paragraph 1 to its production under quota for the marketing year concerned.

The sugar quantities withdrawn during a marketing year shall be treated as the first quantities
produced under quota for the following marketing ye ar. However, taking into account the expected
sugar market trends, it may be decided, in accordan ce with the procedure referred to in Article 39(2),
to consider, for the current and/or the following mark eting year, all or part of the withdrawn sugar,
isoglucose or inulin syrup as:

— surplus sugar, surplus isoglucose or surplus i nulin syrup available to become industrial sugar,
industrial isoglucose or industrial inulin syrup,

 or

— temporary quota production of which a pa rt may be reserved for export respecting
commitments of the Community resulting from agreements conclude d under Article 300 of
the Treaty.

4. If sugar supply in the Community is inade quate, it may be decided, in accordance with the
procedure referred to in Article 39(2), that a cer tain quantity of withdrawn sugar, isoglucose and
inulin syrup may be sold on the Community market before the end of the period of withdrawal.

Article 20

Storage under different measures

Sugar stored under one of the measures referred to in Article 14, Article 18 or Article 19 during a
marketing year may not be subject to private or public storage under any other of those provisions.

TITLE III

TRADE WITH THIRD COUNTRIES

CHAPTER 1

Common provisions on imports and exports

Article 21

Combined Nomenclature

The general rules for interpreting the Combined Nome nclature and the special rules for its application
shall apply to the tariff classification of products covered by this Regulation. The tariff nomenclature
resulting from the application of this Regulation shall be included in the Common Customs Tariff.

Article 22

General principles

 Unless otherwise provided for in this Regulation or in provisions adopted pursuant thereto, the
following shall be prohibited in trade with third countries:

(a) the levying of any charge having equivalent effect to a customs duty;

(b) the application of any quantitative restri ction or measure having equivalent effect.

Article 23

Export and import licences

1. Imports into the Community, or exports th erefrom, of any of the products listed in
Article 1(1), except those under point (h), shall be subject to presentation of an import or export
licence. However, derogations may be provided for if licences are not required for the management of
certain imports of sugar.

2. Licences shall be issued by the Member Stat es to any applicant, irrespective of his place of
establishment in the Community, and without prejud ice to measures taken for the application of
Articles 28 and 32 of this Regulation, of Article 12(5) of Council Regulation (EC) No 980/2005 of
27 June 2005 applying a scheme of generalised tariff preferences
9 and the application of agreements
concluded in accordance with Article 133 or Article 300 of the Treaty.

9 OJ L 169, 30.6.2005, p. 1.

3. Import and export licences shall be valid throughout the Community.

Licences shall be issued subject to the lodging of a security guaranteeing that the products are
imported or exported during the term of validity of the licence. Except in cases of force majeure, the
security shall be forfeited in whole or in part if the import or export is not carried out, or is carried out
only partially, within that period.

4. The terms of validity of the licences shall be fixed in accordance with the procedure referred
to in Article 39(2).

Article 24

Inward processing arrangements

To the extent necessary for the proper functioning of the common organisation of the markets in the
sugar sector, the use of inward processing arrangement s for the products listed in Article 1(1) may be
fully or partially prohibited in accordance with the procedure referred to in Article 39(2).

Article 25

Safeguard measure

1. If, by reasons of imports or exports, the Co mmunity market in one or more of the products
listed in Article 1(1) is affected by, or is threat ened with, serious disturbance likely to jeopardise the
achievement of the objectives set out in Article 33 of the Treaty, appropriate measures respecting the
Communities’ international engagements may be applied in trade until such disturbance or threat has
ceased.

2. If the situation referred to in paragraph 1 ar ises, the Commission shall, at the request of a
Member State or on its own initiative, decide upon the necessary measures.

If the Commission receives a request from a Member State, it shall take a decision thereon within
three working days following receipt of the request.

The Member States shall be notified of such measures, which shall be immediately applicable.

3. Measures decided on by the Commission pursuant to paragraph 2 may be referred to the
Council by any Member State within three working da ys of the date on which they were notified. The
Council shall meet without delay. It may, acting by qualified majority, amend or repeal the measures
in question within one month following the date on which they were referred to the Council.

4. However measures applying to Members of the WTO adopted pursuant to this Article shall be
applied on the basis of Council Regulation (EC) No 3285/94 of 22 December 1994 on the common
rules for imports
10.

10 OJ L 349, 31.12.1994, p. 53. Regulation as last amended by Regulation (EC) No 2200/2004 (OJ
L 374, 22.12.2004, p. 1).

CHAPTER 2

Provisions applicable to imports

Article 26

Import duties

1. Unless this Regulation provides otherwise, the rates of import duty in the Common Customs
Tariff shall apply to the products listed in Article 1(1).

2. Notwithstanding paragraph 1, the Commission ma y suspend in whole or in part for certain
quantities the application of import duties on the foll owing products to ensure that the Community
market is adequately supplied by means of imports from third countries:

— raw sugar for refining falling within CN codes 1701 11 10 and 1701 12 10,

— molasses falling within CN code 1703.

3. In order to guarantee the supply necessary fo r the manufacturing of products referred to in
Article 13(2), the Commission may suspend in whole or in part for certain quantities the application
of import duties on sugar falling within CN code 1701 and isoglucose falling within CN codes 1702
30 10, 1702 40 10, 1702 60 10 and 1702 90 30.

Article 27

Management of imports

1. In order to prevent or counteract adverse effects on the market of the Community which may
result from imports of certain products listed in Article 1(1), imports of one or more of such products
at the rate of duty laid down in the Common Custom s Tariff shall be subject to the payment of an
additional import duty if the conditions to be dete rmined pursuant to Article 40(1)(e) are fulfilled,
unless the imports are unlikely to disturb the Comm unity market, or where the effects would be
disproportionate to the intended objective.

2. Imports made at a price below the level notified by the Community to the World Trade
Organisation (‘the trigger price’) may be subject to an additional import duty.

The import prices to be taken into consideration for imposing that additional import duty shall be
determined on the basis of the cif import prices of the consignment under consideration.

Cif import prices shall be checked to that end agai nst the representative prices for the product on the
world market or on the Community import market for that product.

3. If the volume of imports in any year in whic h the adverse effects referred to in paragraph 1
arise or are likely to arise exceeds a level b ased on market access opportunities defined as the
percentage of the corresponding domestic consumpti on during the three previous years (‘the trigger
volume’), an additional import duty may also be imposed.

Article 28

Tariff quotas

1. Tariff quotas for imports of products liste d in Article 1(1) resulting from agreements
concluded in accordance with Article 300 of the Tr eaty or from any other act of the Council shall be
opened and administered by the Commission under detailed rules adopted in accordance with the
procedure referred to in Article 39(2) of this Regulation.

2. Tariff quotas shall be administered in a ma nner which avoids any discrimination between the
operators concerned, by applying one of the followi ng methods or a combination of them or another
appropriate method:

(a) a method based on the chronological order of the lodging of applications (‘first come, first
served’ principle);

(b) a method of distribution in proportion to the quantities requested when the applications were
lodged (using the ‘simultaneous examination method’);

(c) a method based on taking traditional trade pa tterns into account (using the ‘traditional/new
arrival method’).

3. The method of administration adopted shall, where appropriate, give due weight to the supply
requirements of the Community market and the need to safeguard the equilibrium of that market.

Article 29

Traditional supply need for refining

1. Notwithstanding Article 19(1), a traditional suppl y need of sugar for refining is fixed for the
Community at 1 796 351 tonnes per marketing year, expressed in white sugar.

During the marketing years 2006/2007, 2007/2008 and 2008/2009, the traditional supply need shall be
distributed as follows:

— 296 627 tonnes for France,

— 291 633 tonnes for Portugal,

— 19 585 tonnes for Slovenia,

— 59 925 tonnes for Finland,

— 1 128 581 tonnes for the United Kingdom.

2. The traditional supply need referred to in the first subparagraph of paragraph 1 shall be
increased:

(a) by 50 000 tonnes in the marketing year 2007/2008 and by 100 000 tonnes as from the
marketing year 2008/2009. These quantities shall be made available to Italy in the marketing
years 2007/2008 and 2008/2009;

(b) by 30 000 tonnes as from the marketing year 2006/2007 and by a supplementary
35 000 tonnes as from the marketing year in wh ich the sugar quota has been reduced by at
least 50 %.

The quantities referred to in point (b) of the first subparagraph shall concern raw cane sugar and shall
be reserved for the marketing years 2006/2007, 200 7/2008 and 2008/2009 for the sole sugar beet
processing plant at work in 2005 in Portugal. This processing plant is deemed to be a full time refiner.

3. Import licences for sugar for refining shall be issued only to full-time refiners provided that
the concerned quantities do not exceed the quantities th at may be imported in the framework of the
traditional supply need referred to in paragraphs 1 and 2. The licences in question may be transferred
only between full-time refiners and their validity expi res at the end of the marketing year for which
they have been issued.

This paragraph shall apply for the marketing y ears 2006/2007, 2007/2008 and 2008/2009, and for the
first three months of each of the following marketing years.

4. The application of import duties on cane suga r for refining falling within CN code 1701 11 10
originating in the States referred to in Annex VI shall be suspended for the complementary quantity
which is needed to allow an adequate supply of th e full-time refiners for each of the marketing years
2006/2007, 2007/2008 and 2008/2009.

The complementary quantity shall be fixed in acco rdance with the procedure referred to in
Article 39(2), based on the balance between the traditi onal supply need referred to in paragraph 1 of
this Article and the forecast supply of sugar for refining for the marketing year concerned. This
balance may be revised in accordance with the pr ocedure referred to in Article 39(2) during the
marketing year and may be based on historic flat-rate estimates of the raw sugar intended for
consumption.

Article 30

Guaranteed price

1. The guaranteed prices fixed for the ACP/Indi an sugar shall apply for import of standard
quality raw and white sugar from:

(a) the least developed countries under the arra ngements referred to in Articles 12 and 13 of
Regulation (EC) No 980/2005;

(b) the States listed in Annex VI to this Regula tion for the complementary quantity referred to in
Article 29(4).

2. Applications for import licences for sugar benefiting from a guaranteed price shall be
accompanied by an export licence issued by the authorities of the exporting country certifying the
compliance of the sugar with the rules provided for in the agreements concerned.

Article 31

Sugar Protocol Commitments

In accordance with the procedure referred to in Ar ticle 39(2), measures may be adopted to ensure that
the ACP/Indian sugar is imported into the Community under the conditions set out in Protocol 3 to
Annex V to the ACP-EC Partnership Agreemen t and the Agreement on cane sugar between the
European Community and the Republic of India. Th ose measures may, if necessary, derogate from
Article 29 of this Regulation.

CHAPTER 3

Provisions applicable to exports

Article 32

Scope of export refunds

1. To the extent necessary to en able the products listed in Article 1(1) (b) and (c) to be exported
without further processing or in the form of pro cessed products listed in Annex VII, on the basis of
world market quotations or prices of sugar and with in the limits resulting from agreements concluded
in accordance with Article 300 of the Treaty, the difference between those quotations or prices and
prices in the Community may be covered by export refunds.

2. Provision may be made for export refunds to be granted on the products listed in
Article 1(1)(d) and (g) and exported without furthe r processing or in the form of processed products
listed in Annex VII.

 In that case, the amount of the refund per tonne of dry matter shall be fixed taking particular account
of:

(a) the refund applicable to exports of products falling within CN code 1702 30 91;

(b) the refund applicable to exports of the products listed in Article 1(1)(c);

(c) the economic aspects of the planned exports.

3. The export refund for raw sugar of the sta ndard quality defined in Annex I may not exceed
92 % of that granted for white sugar. However, this limit shall not apply to export refunds to be fixed
for candy sugar.

4. Export refunds on the products exported in the form of processed products listed in
Annex VII may not be higher than those applicable to the same products exported without further
processing.

Article 33

Export refund fixation

1. The quantities which may be exported with an export refund shall be allocated by the method
which:

(a) is most suited to the nature of the produc t and the situation on the market in question,
allowing the most efficient possible use of the resources available, account being taken of the
efficiency and structure of Community exports without creating discrimination between the
operators concerned and notably between large and small operators;

(b) is least cumbersome administratively for operators, account being taken of administration
requirements.

2. Export refunds shall be the same for th e whole Community. They may vary according to
destination, where the world market situation or the specific requirements of certain markets make
this necessary.

Export refunds shall be fixed in accordance with the procedure referred to in Article 39(2).

Refunds may be fixed:

(a) at regular intervals;

(b) by invitation to tender for products in respect of which provision was made for that procedure
in the past.

Export refunds fixed at regular intervals, may, if necessary, be amended in the interval by the
Commission, at the request either of a Member State or on its own initiative.

3. Export refunds on products referred to in Article 32(1) and (2) and exported without further
processing shall be granted only on application and on presentation of an export licence.

The export refund applicable to pr oducts referred to in Article 32(1) and (2) exported without further
processing shall be that applicable on the day of application for the licence and, in the case of a
differentiated refund, that applicable on the same day:

(a) for the destination indicated on the licence,

 or

(b) where appropriate, for the actual destination if this differs from the destination indicated on
the licence, in which case, the amount applicable shall not exceed the amount applicable to
the destination indicated on the licence.

4. The scope of paragraph 3 may be extended to apply to the products in question that are
exported in the form of processed products listed in Annex VII, in accordance with the procedure
referred to in Article 16(2) of Council Regulati on (EC) No 3448/93 of 6 December 1993 laying down
the trade arrangements applicable to certain goods resulting from the processing of the agricultural
products
11. Detailed implementing rules shall be adopted in accordance with that procedure.

Article 34

Export limits

Observance of the volume commitments resulting fro m the agreements concluded in accordance with
Article 300 of the Treaty shall be ensured on the basi s of the export licences issued for the reference
periods which apply to the products concerned.

Article 35

Export restrictions

1. When the quotations or prices on the world ma rket of one or more of the products listed in
Article 1(1) reach a level that disrupts or threat ens to disrupt the availa bility of supply on the
Community market and where that situation is lik ely to continue and deteriorate, appropriate
measures may be taken in case of extreme emergency.

2. Measures adopted pursuant to this Article sha ll be applied having regard to the obligations
arising from agreements concluded in accordance with Article 300(2) of the Treaty.

11 OJ L 318, 20.12.1993, p. 18. Regulation as last amended by Regulation (EC) No 2580/2000 (OJ
L 298, 25.11.2000, p. 5).

TITLE IV

GENERAL, TRANSITIONAL AND FINAL PROVISIONS

CHAPTER 1

General provisions

Article 36

State aid

1. Unless this Regulation provides otherwise, Articles 87, 88 and 89 of the Treaty shall apply to
the production of and trade in the products listed in Article 1(1), except for the State aid laid down in
paragraphs 2 and 3 of this Article.

2. Member States which reduce their sugar quota by more than 50 %, may grant temporary State
aid during the period for which the transitional aid fo r beet growers is being paid in accordance with
chapter 10f of Council Regulation (EC) No 319/20 06 of 20 February 2006 amending Regulation (EC)
No 1782/2003 establishing common rules for direct support schemes under the common agricultural
policy and establishing certain support scheme for farmers
12. The Commission shall, on the basis of
an application by any Member State concerned, decide on the total amount of the State aid available
for this measure.

For Italy, the temporary aid referred to in the firs t subparagraph, shall not exceed a total of EUR 11
per marketing year per tonne of sugar beet to be gr anted to sugar beet growers and for the transport of
sugar beet.

3. Finland may grant aid up to EUR 350 per hectar e per marketing year to sugar beet growers.

4. The Member States concerned shall inform th e Commission within 30 days of the end of each
marketing year of the amount of State aid actually granted in that marketing year.

Article 37

Disturbance clause

When a substantial rise or fall in prices is recorded on the Community market and:

— all measures available under the other Articl es of this Regulation have been taken,

 and

— the situation is likely to continue disturbing or threatening to disturb the market,

12 See page 32 of this Official Journal.

further necessary measures may be taken.

Article 38

Communication

Member States and the Commission shall provide each other with any information necessary for the
application of this Regulation and for complying with the international ob ligations concerning the
products referred to in Article 1(1).

Article 39

Management Committee for Sugar

1. The Commission shall be assisted by a Management Committee for Sugar (hereinafter
referred to as ‘the Committee’).

2. Where reference is made to this paragr aph, Articles 4 and 7 of Decision 1999/468/EC shall
apply.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at one month.

3. The Committee shall adopt its Rules of Procedure.

Article 40

Implementing rules

1. Detailed rules for the implementation of this Regulation shall be adopted in accordance with
the procedure referred to in Article 39(2). They shall include in particular:

(a) detailed rules for the application of Articles 3 to 6, in particular those concerning increases
and reductions of prices to be applied for devia tions from the standard of the reference price
referred to in Article 3(3) and the minimum price referred to in Article 5(3);

(b) detailed rules for the application of Articles 7 to 10;

(c) detailed rules for the application of Articles 12, 13, 14 and 15, and in particular the conditions
for granting production refunds, the amounts of such refunds and the eligible quantities;

(d) detailed rules regarding the establishment and the communications of the amounts referred to
in Articles 8, 9, 15 and 16;

(e) detailed rules for the application of Artic les 26, 27 and 28. These rules may include in
particular:
 (i) any suspension referred to in Article 26( 2) and (3) which could be determined by a
tendering procedure;

 (ii) the specification of the products to which additional import duties may be applied
under Article 27;

 (iii) the annual tariff quotas under Article 28(1), if necessary suitably phased over the
year, and the determination of the admini strative method to be used which, where
appropriate, shall include:

 — guarantees covering the nature, pr ovenance and origin of the product;

 — recognition of the document used for verifying the guarantees referred to in
the first indent;

 — the conditions under which import licences shall be issued and their term of
validity;

(f) detailed rules for the applic ation of Articles 36 and 38;

(g) detailed rules for the application of the pr ovisions of Chapter 3 of Title III. These rules may
include in particular:

 (i) detailed rules on the redistribution of exportable quantities which have not been
allocated or utilised;

 (ii) the appropriate measures as referred to in Article 35.

2. The following may in addition be adopted in accordance with the procedure referred to in
Article 39(2):

(a) criteria to be applied by the sugar unde rtakings when allocating among beet sellers the
quantities of beet to be covered by pre-sowing delivery contracts as referred to in Article 6(4);

(b) amendments to Annexes I and II;

(c) a derogation from the dates laid down in Article 14(2);

(d) detailed rules for the application of Articles 16 to 19 and, in particular:

 (i) the supplementary information to be submitted by the approved operators;

 (ii) the criteria for sanctions, suspensions and withdrawal of approval of the operators;

 (iii) the granting of aids and the amount of aids for private storage provided for in
Article 18(1);

 (iv) the minimum quality and quantity re quirements, the price increases and reductions
applicable, and the procedures and require ments for taking over by the intervention
agencies, and for intervention buying in provided for in Article 18(2);

 (v) the percentage of withdrawn quot a sugar referred to in Article 19(1);

 (vi) the conditions for the payment of the minimum price in case the withdrawn sugar is
being sold on the Community market under Article 19(4);

(e) rules for the application of the derogation provided for in Article 23(1);

(f) detailed rules for the application of Articles 29 and 30 and, in particular, to comply with
international agreements:

 (i) amendments to the definition provided for in Article 2(11);

 (ii) amendments to Annex VI;

(g) measures in application of Article 37.

Article 41

Amendment to Regulation (EC) No 247/2006

Regulation (EC) No 247/2006 is hereby amended as follows:

1) The following paragraph sh all be added to Article 16:

 ‘3. France may grant national aid for the sugar sector in the French outermost regions, of up
to EUR 60 million for the marketing year 2005/2006 and up to EUR 90 million for the
marketing years 2006/2007 onwards.

 Articles 87, 88 and 89 of the Treaty shall not appl y to the aid referred to in this paragraph.

 France shall inform the Commission within 30 days of the end of each marketing year of the
amount of aid actually granted’.;

2) Article 23(2) shall be replaced by the following:

 ‘2. The Community shall finance the measure s provided for in Titles II and III of this
 Regulation up to an annual maximum as follows:

(million EUR)
 Financial year
2007
Financial year
2008
Financial year
2009
Financial year
2010 and further
French overseas
departments

Azores and
Madeira

 Canary Islands

126,6

77,9

127,3

133,5

78,0

127,3

140,3

787,1

127,3

143,9

78,2

127,3’

Article 42

Specific measures

Measures which are both necessary and justifiable in an emergency, in order to resolve practical
specific problems shall be adopted in accordance with the procedure referred to in Article 39(2).

Such measures may derogate from provisions of this Regulation, but only to the extent that, and for
such a period, as is strictly necessary.

Article 43

Financial provisions

Regulation (EC) No 1258/1999 and, as from 1 January 2007, Regulation (EC) No 1290/2005, and the
provisions adopted for the implementation thereof shall apply to the expenditure incurred by the
Member States in carrying out obligations under this Regulation.

CHAPTER 2

Transitional and final provisions

Article 44

Transitional measures

In accordance with the procedure referred to in Article 39(2), measures may be adopted:

(a) to facilitate the transition from the market situation in the marketing year 2005/2006 to the
market situation in the marketing year 2006/2007 , in particular by reducing the quantity that
may be produced under quota, and the transiti on from the rules provided for in Regulation
(EC) No 1260/2001 to those established by this Regulation,

 and

(b) to ensure compliance by the Community with its international obligations with regard to C
sugar referred to in Article 13 of Re gulation (EC) No 1260/2001 while avoiding any
disruption of the sugar market in the Community.

Article 45

Repeal

Regulation (EC) No 1260/2001 shall be repealed.

Article 46

Entry into force

This Regulation shall enter into force on the th ird day following that of its publication in the Official
Journal of the European Union.

It shall apply from the marketing year 2006/2007. However, Articles 39, 40, 41 and 44 shall apply
from the date of entry into force of this Regulation. Title II shall apply until the end of marketing year
2014/2015.

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

Done at Brussels, 20 February 2006.

For the Council
 The President
 J. PRÖLL

ANNEX I

STANDARD QUALITIES

POINT I

Standard quality for sugar beet

Standard quality beet shall:

(a) be of sound and fa ir merchantable quality;

(b) have a sugar content of 16 % at the reception point.

POINT II

Standard quality for white sugar

1. White sugar of the standard quality sh all have the following characteristics:

 (a) be of sound, genuine and merchantable quality; dry, in homogeneous granulated
crystals, free-flowing;

 (b) minimum polarisation: 99,7°;

 (c) maximum moisture content: 0,06 %;

 (d) maximum invert sugar content: 0,04 %;

 (e) the number of points determined under para graph 2 shall not exceed a total of 22, nor:

 15 for the ash content,

 9 for the colour type, determined using the method of the Brunswick Institute of
Agricultural Technology (hereinafter referred to as ‘the Brunswick method’),

 6 for the colouring of the solution, determined using the method of the International
Commission for Uniform Methods of Sugar Anal ysis (hereinafter referred to as ‘the
ICUMSA method’).

2. One point shall correspond to:

 (a) 0,0018 % of ash content determined using the ICUMSA method at 28° Brix,

 (b) 0,5 units of colour type determined using the Brunswick method,

 (c) 7,5 units of colouring of the solution determined using the ICUMSA method.

3. The methods for determining the factors refe rred to in paragraph 1 shall be those used for
determining those factors under the intervention measures.

POINT III

Standard quality for raw sugar

1. Raw sugar of the standard quality shall be sugar with a yield in white sugar of 92 %.

2. The yield of raw beet sugar shall be calcula ted by subtracting from the degree of polarisation
of that sugar:

 (a) its percentage ash content multiplied by four;

 (b) its percentage invert s ugar content multiplied by two;

 (c) the number 1.

3. The yield of raw cane sugar shall be calculated by subtracting 100 from the degree of
polarisation of that sugar multiplied by two.

ANNEX II

PURCHASE TERMS FOR BEET

POINT I

For the purposes of this Annex ‘Contracting Parties’ means:

(a) sugar undertakings (hereinafter referred to as ‘manufacturers’),

 and

(b) beet sellers (hereinafter referred to as ‘sellers’).

POINT II

1. Delivery contracts shall be made in wr iting for a specified quantity of quota beet.

2. Delivery contracts shall specify whether an additional quantity of beet may be supplied, and
under what terms.

POINT III

1. Delivery contracts shall indicate the purchase prices for the quantities of beet referred to in
the first indent and, if appropriate, second inde nt, of Article 6(3). In the case of the quantities
referred to in the first indent of Article 6(3) , those prices may not be lower than the minimum
price for quota beet referred to in Article 5(1).

2. Delivery contracts shall lay down a fixed sugar content for beet. They shall include a
conversion scale showing the different sugar contents and factors for converting the quantities
of beet supplied into quantities corresponding to the sugar content shown in the delivery
contract.

 The scale shall be based on the yields co rresponding to the different sugar contents.

3. Where a seller has signed a delivery contract with a manufacturer for the delivery of beet as
referred to in the first indent of Article 6(3), all deliveries by that seller, converted in
accordance with paragraph 2 of this Point, sha ll be considered to be deliveries within the
meaning of the first indent of Article 6(3), up to the quantity of beet specified in the delivery
contract.

4. Manufacturers producing a quantity of sugar lo wer than their quota beet for which they have
signed pre-sowing delivery contracts under the firs t indent of Article 6(3), shall distribute the
quantity of beet corresponding to any additiona l production up to the amount of their quota

among the sellers with whom they have signe d pre-sowing delivery contracts within the
meaning of the first indent of Article 6(3).

 Agreements within the trade may derogate from this provision.

POINT IV

1. Delivery contracts shall contain provisions concerning the staggering and normal duration of
beet deliveries.

2. Provisions referred to in paragraph 1 shall be those applicable during the previous marketing
year, taking account of the level of actual production; agreements within the trade may
derogate therefrom.

POINT V

1. Delivery contracts shall provide for beet collection places.

2. Where sellers and manufacturers have already signed a delivery contract for the previous
marketing year, the collection places agreed upon by them for deliveries during that
marketing year shall remain in operation. Agreements within the trade may derogate from this
provision.

3. Delivery contracts shall provide that loadi ng and transport costs from the collection places are
to be borne by the manufacturer subject to speci al agreements based on local rules or usages
in operation before the previous marketing year.

4. However, in Denmark, Greece, Spain, Ireland, Portugal, Finland and the United Kingdom,
where beet is delivered freeat- factory, deliv ery contracts shall require manufacturers to
contribute to loading and transport costs and shall stipulate the percentage or amounts.

POINT VI

1. Delivery contracts shall provide for reception points for beet.

2. Where sellers and manufacturers have already signed a delivery contract for the previous
marketing year, the reception points agreed upon by them for deliveries during that marketing
year shall remain in operation. Agreements within the trade may derogate from this provision.

POINT VII

1. Delivery contracts shall provide for the sugar content to be determined using the polarimetric
method. A sample of the beet shall be drawn at the time of reception.

2. Agreements within the trade may provide for samples to be drawn at another stage. In such
cases, the delivery contract shall provide for a correction to compensate for any drop in the
sugar content between the reception and the drawing of the sample.

POINT VIII

Delivery contracts shall provide for gross weight, tare and sugar content to be determined using one of
the following procedures:

(a) jointly, by the manufacturer and the beet grow ers’ trade organisation, if an agreement within
the trade so provides;

(b) by the manufacturer, under the supervision of the beet growers’ trade organisation;

(c) by the manufacturer, under the supervision of an expert recognised by the Member State
concerned, provided the seller defrays the costs thereof.

POINT IX

1. Delivery contracts shall require manufacturer s to do one or more of the following for the
whole quantity of beet delivered:

 (a) to return the fresh pulp from the tonnage of beet delivered free of charge to the seller,
ex factory;

 (b) to return part of that pulp, pressed, dried or dried and molassed, free of charge to the
seller, ex factory;

 (c) to return the pulp, pressed or dried, to the seller, ex factory; in this case, the
manufacturer may require the seller to pay the pressing or drying costs;

 (d) to pay the seller compensation which ta kes account of the possibilities of selling the
pulp concerned.

 When parts of the whole quantity of beet de livered are subject to different treatment, the
delivery contract shall impose more than one of the obligations provided for in the first
subparagraph.

2. Agreements within the trade may provide for pulp to be delivered at a stage other than that
referred to in paragraph 1(a), (b) and (c).

POINT X

1. Delivery contracts shall fix the time limits for any advance payments and for payment of the
purchase price for beet.

2. The time limits referred to in paragraph 1 sh all be those valid during the previous marketing
year. Agreements within the trade may derogate from this provision.

POINT XI

Where delivery contracts lay down rules covering ma tters which are dealt with in this Annex, or
where they contain provisions governing other matte rs, their provisions and effects shall not conflict
with this Annex.

POINT XII

1. Agreements within the trade as described in Article 2(11)(b) shall contain arbitration clauses.

2. Where agreements within the trade at Co mmunity, regional or local level lay down rules
covering matters which are dealt with in this Regulation, or where they contain provisions
governing other matters, their provisions and effects shall not conflict with this Annex.

3. Agreements referred to in paragraph 2 lay down, in particular:

 (a) rules on the distribution to sellers of quantities of beet which the manufacturer
decides to buy prior to sowing, for the manufacture of sugar within the limits of the
quota;

 (b) rules on distribution as referred to in Point III(4);

 (c) the conversion scale referred to in Point III(2);

 (d) rules on the choice and supply of seeds of the varieties of beet to be produced;

 (e) the minimum sugar content of beet to be delivered;

 (f) a requirement for consultation between the manufacturer and the sellers’
representatives before the starting date of beet deliveries is fixed;

 (g) the payment of premiums to sellers for early or late deliveries;

 (h) details of:

 (i) the part of the pulp referred to in Point IX(1)(b),

 (ii) the costs referred to in Point IX(1)(c),

 (iii) the compensation referred to in Point IX(1)(d);

 (i) the removal of pulp by the seller;

 (j) without prejudice to Article 5(1), rul es on how any difference between the reference
price and the actual selling price of the sugar is to be allocated between the
manufacturer and sellers.

POINT XIII

Where there is no set agreement within the trade as to how the quantities of beet intended for the
manufacture of sugar within the quota limits which the manufacturer offers to buy before sowing
should be allocated among the sellers, the Member St ate concerned may itself lay down rules for such
allocation.

Those rules may also grant to traditional sellers of beet to cooperatives delivery rights other than those
which they would enjoy if they belonged to such cooperatives.

ANNEX III

NATIONAL AND REGIONAL QUOTAS

(tonnes)
Member States or
regions (1)
Sugar (2) Isoglucose (3) Inulin Syrup (4)
Belgium
Czech Republic
Denmark
 Germany
Greece
Spain
France (metropolitan)
French overseas
 departments
Ireland
Italy
Latvia
Lithuania
Hungary
Netherlands
Austria
Poland
Portugal (mainland.)
The autonomous region
 of the Azores
Slovakia
Slovenia
Finland
Sweden
United Kingdom

819 812
454 862
420 746
3 416 896
317 502
996 961
 3 288 747

480 245
199 260
1 557 443
66 505
103 010
401 684
864 560
387 326
1 671 926
69 718

9 953
207 432
52 973
146 087
368 262
1 138 627
71 592
—
—
35 389
12 893
82 579
19 846

—
—
20 302
—
—
137 627
9 099
—
26 781
9 917

—
42 547
—
11 872
—
27 237

215 247
—
—
—
—
—
24 521

—
—
—
—
—
—
80 950
—
—
—

—
—
—
—
—
—

Total 17 440 537 507 680 320 718

ANNEX IV

POINT I

ADDITIONAL QUOTAS FOR SUGAR

(tonnes)
Member states Additional quota
Belgium
Czech Republic
Denmark
Germany
Greece
Spain
France (metropolitan)
Ireland
Italy
Latvia
Lithuania
Hungary
Netherlands
Austria
Poland
Portugal (mainland)
Slovakia
Slovenia
Finland
Sweden
United Kingdom

62 489
20 070
31 720
238 560
10 000
10 000
351 695
10 000
10 000
10 000
8 985
10 000
66 875
18 486
100 551
10 000
10 000
10 000
10 000
17 722
82 847
Total 1 100 000

POINT II

SUPPLEMENTARY QUOTAS FOR ISOGLUCOSE

(tonnes)
Member states Supplementary quota
Italy
Lithuania
Sweden
60 000
8 000
35 000

ANNEX V

DETAILED RULES ON TRANSFERS OF SUGAR OR ISOGLUCOSE QUOTAS

POINT I

For the purposes of this Annex:

(a) ‘merger of undertakings’ means the consolida tion of two or more undertakings into a single
undertaking;

(b) ‘transfer of an undertaking’ means the tran sfer or absorption of the assets of an undertaking
having quota to one or more undertakings;

(c) ‘transfer of a factory’ means the transfer of ownership of a technical unit, including all the
plant required to manufacture the product con cerned, to one or more undertakings, resulting
in the partial or total absorption of the production of the undertaking making the transfer;

(d) ‘lease of a factory’ means the leasehold contract of a technical unit including all the plant
required for the manufacture of sugar, with a view to its operation, concluded for a period of
at least three consecutive marketing years, which the parties agree not to terminate before the
end of the third marketing year, with an undertaking which is established in the same Member
State, as the factory concerned, if, after the lease takes effect, the undertaking which rents the
factory can be considered a solely sugar-producing undertaking for its entire production.

POINT II

1. Without prejudice to paragraph 2, in the even t of the merger or transfer of sugar-producing
undertakings or the transfer of sugar factories, the quota shall be adjusted as follows:

 (a) in the event of the merger of sugar-p roducing undertakings, the Member States shall
allocate to the undertaking resulting from the merger a quota equal to the sum of the
quotas allocated prior to the merger to the sugarproducing undertakings concerned;

 (b) in the event of the transfer of a suga r-producing undertaking, the Member State shall
allocate the quota of the transferred undert aking to the transferee undertaking for the
production of sugar or, if there is more than one transferee undertaking, the allocation
shall be made in proportion to the sugar production absorbed by each of them;

 (c) in the event of the transfer of a sugar factory, the Member State shall reduce the quota
of the undertaking transferring ownership of the factory and shall increase the quota
of the sugar-producing undertaking or undertakings purchasing the factory in
question by the quantity deducted in proportion to the production absorbed.

2. Where a number of the sugar-beet or cane grower s directly affected by one of the operations
referred to in paragraph 1 expressly show their willingness to supply their beet or cane to a

sugar-producing undertaking which is not party to those operations, the Member State may
make the allocation on the basis of the producti on absorbed by the undertaking to which they
intend to supply their beet or cane.

3. In the event of closure, in circumstances ot her than those referred to in paragraph 1, of:

 (a) a sugar-producing undertaking;

 (b) one or more factories of a sugar-producing undertaking,

 the Member State may allocate th e part of the quotas involved in such closure to one or more
sugar-producing undertakings.

 Also in the case referred to in point (b) of the preceding subparagraph, where some of the
producers concerned expressly show their willingness to supply their beet or cane to a given
sugar-producing undertaking, the Member State may allocate the proportion of the quotas
corresponding to the beet or cane concerned to the undertaking which they intend to supply
with those products.

4. Where the derogation referred to in Article 6(6) is invoked, the Member State concerned may
require the beet growers and the sugar undertak ings concerned by that derogation to include
in their agreements within th e trade special clauses enabling the Member State to apply
paragraphs 2 and 3 of this Point.

5. In the event of the lease of a factory be longing to a sugar-producing undertaking, the Member
State may reduce the quota of the undertaking offering the factory for rent and allocate the
portion by which the quota was reduced to the unde rtaking which rents the factory in order to
produce sugar in it.

 If the lease is terminated during the period of th ree marketing years referred to in Point I (d)
the adjustment of quota under the first subparagr aph of this paragra ph shall be cancelled
retroactively by the Member State as at the da te on which the lease took effect. However, if
the lease is terminated by reason of force majeure, the Member State shall not be bound to
cancel the adjustment.

6. Where a sugar-producing undertaking can no lo nger ensure that it meets its obligations under
Community legislation towards the sugar-beet or cane producers concerned, and where that
situation has been ascertained by the competent authorities of the Member State concerned,
the latter may allocate for one or more marketi ng years the part of the quotas involved to one
or more sugar-producing undertakings in proportion to the production absorbed.

7. Where a Member State grants a sugar pr oducing undertaking price and outlet guarantees for
processing sugar beet into ethyl alcohol, that Member State may, in agreement with that
undertaking and the beet growers concerned, allocate all or part of the sugar production
quotas to one or more other undertakings for one or more marketing years.

POINT III

In the event of the merger or transfer of isogluc ose-producing undertakings or the transfer of an
isoglucose-producing factory, the Member State may allocate the quotas involved for the production
of isoglucose to one or more other undertakings, whether or not they have a production quota

POINT IV

The measures taken pursuant to Points II and III may take effect only if the following conditions are
met:

(a) the interests of each of the parties concerned are taken into consideration;

(b) the Member State concerned considers that they are likely to improve the structure of the
beet, cane and sugarmanufacturing sectors;

(c) they concern undertakings established in th e same territory for which the quota is set in
Annex III.

POINT V

When the merger or transfer occurs between 1 October and 30 April of the following year, the
measures referred to in Points II and III shall take effect for the current marketing year.

When the merger or transfer occurs between 1 Ma y and 30 September of the same year, the measures
referred to in Points II and III shall take effect for the following marketing year.

POINT VI

Where Article 10(3) is applied, Member States shall allocate the adjusted quotas by the end of
February at the latest with a view to applying them in the following marketing year.

POINT VII

Where Points II and III are applied, Member Stat es shall inform the Commission of the adjusted
quotas not later than 15 days after the expiry of the periods referred to in Point V.

ANNEX VI

STATES REFERRED TO IN ARTICLE 2(12)

Barbados
Belize
Côte d’Ivoire
Republic of the Congo
Fiji
Guyana
India
Jamaica
Kenya
Madagascar
Malawi
Mauritius
Mozambique
Saint Kitts and Nevis — Anguilla
Suriname
Swaziland
Tanzania
Trinidad and Tobago
Uganda
Zambia
Zimbabwe

ANNEX VII

PROCESSED PRODUCTS

CN Code Description
ex 0403 Buttermilk, curdled milk and cream, yoghurt, kephir and other fermented or
acidified milk and cream, whether or not concentrated or containing added sugar
or other sweetening matter or flavoured or containing added fruit, nuts or cocoa:
0403 10 – Yoghurt:
0403 10 51 to
0403 10 99
– – Flavoured or containing added fruit, nuts or cocoa
0403 90 – Other:
0403 90 71 to
0403 90 99
– – Flavoured or containing added fruit, nuts or cocoa
ex 0710 – Vegetables (uncooked or cooked by steaming or by boiling in water), frozen:
0710 40 00 – Sweetcorn
ex 0711 – Vegetables provisionally preserved (for example, by sulphur dioxide gas, in
brine, in sulphur water or in other preservative solutions), but unsuitable in that
state for immediate consumption:
0711 90 – Other vegetables; mixtures of vegetables:
 – – Vegetables:
0711 90 30 – Sweetcorn
1702 50 00 Chemically pure fructose
ex 1704 Sugar confectionery (including white chocolate), not containing cocoa, except
liquorice extract of subheading No 1704 90 10
1806 Chocolate and other food preparations containing cocoa
ex 1901 Malt extract: food preparations of flour, meal, starch or malt extract, not
containing cocoa or containing less than 40 % by weight of cocoa calculated on a
totally defatted basis, not elsewhere specified or included; food preparations of
goods of heading Nos 0401 to 0404, not containing cocoa or containing less than
5 % by weight of cocoa calculated on a totally defatted basis, not elsewhere
specified or included:
1901 10 00 – Preparations for infant use, put up for retail sale
1901 20 00 – Mixes and doughs for the preparations of bakers’ wares of heading No 1905
1901 90 – Other:
 – – Other:
1901 90 99 – – – Other
ex 1902 Pasta, whether or not cooked or stuffed (with meat or other substances) or
otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi,
ravioli, cannelloni; couscous, whether or not prepared:
1902 20 – Stuffed pasta, (whether or not cooked or otherwise prepared):
 – – Other:
1902 20 91 – – – Cooked
1902 20 99 – – – Other
1902 30 – Other pasta
1902 40 – Couscous:

CN Code Description
1902 40 90 – – Other
1904 Prepared foods obtained by the swelling or roasting of cereals or cereal products
(for example, cornflakes); cereals (other than maize (corn)) in grain form or in
the form of flakes or other worked grains (except flour and meal), pre-cooked, or
otherwise prepared, not elsewhere specified or included
ex 1905 Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing
cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical
use, sealing wafers, rice paper and similar products:
1905 10 00 – Crispbread
1905 20 – Gingerbread and the like
1905 31 – – Sweet biscuit
1905 32 – – Waffles and wafers
1905 40 – Rusks, toasted bread and similar toasted products
1905 90 – Other:
 – – Other:
1905 90 45 – – – Biscuits
1905 90 55 – – – Extruded or expanded products, savoury or salted
1905 90 60 – – – – With added sweetening matter
1905 90 90 – – – – Other
ex 2001 Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by
vinegar or acetic acid:
2001 90 – Other:
2001 90 30 – – Sweetcorn (Zea mays var. saccharata)
2001 90 40 – – Yams, sweet potatoes and similar edible parts of plants containing 5 % or
more by weight of starch
ex 2004 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid,
frozen, other than products of heading No 2006:
2004 10 – Potatoes:
 – – Other:
2004 10 91 – – – In the form of flour, meal or flakes
2004 90 – Other vegetables and mixtures of vegetables:
2004 90 10 – – Sweetcorn ( Zea mays var. saccharata)
ex 2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid,
not frozen, other than products of heading No 2006):
2005 20 – Potatoes:
2005 20 10 – – In the form of flour, meal or flakes
2005 80 00 – Sweetcorn ( Zea mays var. saccharata)
ex 2101 Extracts, essences and concentrates of co ffee, tea or mate and preparations with a
basis of these products or with a basis of coffee, tea or mate; roasted chicory and
other roasted coffee substitutes, and extracts, essences and concentrates thereof:
 – Extracts, essences and concentrates of co ffee and preparations with a basis of
these products or with a basis of these extracts, essences or concentrates or with a
basis of coffee:
 – – Preparations with a basis of these extracts, essences or concentrates or with a
basis of coffee:
2101 12 98 – – – Other
 – Extracts, essences and concentrates, of tea or mate, and preparations with a
basis of these extracts, essences or concentrates, or with a basis of tea or mate:

CN Code Description
 – – Preparations:

2101 20 98 – – – Other
 – Roasted chicory and other roasted coffee substitutes, and extracts, essences and
concentrates thereof:
 – – Roasted chicory and other roasted coffee substitutes:
2101 30 19 – – – Other
 – – Extracts, essences and concentrates of roasted chicory and other roasted
coffee substitute:
2101 30 99 – – – Other
2105 00 Ice cream and other edible ice, whether or not containing cocoa
ex 2106 Food preparations not elsewhere specified or included:
2106 90 – Other:
2106 90 10 – – Cheese fondues
 – – Other:
2106 90 92 – – – – – Containing no milk fats, sucrose, isoglucose, glucose or starch or
containing, by weight, less than 1,5 % milk fat, 5 % sucrose or isoglucose, 5 %
glucose or starch
2106 90 98 – – – – – Other
2202 Waters, including mineral waters and aerated waters, containing added sugar or
other sweetening matter or flavoured, and other non-alcoholic beverages, not
including fruit or vegetable juices of heading No 2009
2205 Vermouth and other wine of fresh grapes flavoured with plants or aromatic
substances
ex 2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 %
vol.; spirits, liqueurs and other spirituous beverages:
2208 20 – Spirits obtained by distilling grape wine or grape marc:
2208 50 91 to
2208 50 99
Geneva
2208 70 Liqueurs and cordials
2208 90 41 to
2208 90 78
– Other spirits and spirituous beverages
2905 43 00 Mannitol
2905 44 D-glucitol (sorbitol)
ex 3302 Mixtures of odoriferous substances and mixtures (including alcoholic solutions)
with a basis of one or more of these substances of a kind used as raw materials in
industry; other preparations based on odoriferous substances, of a kind used for
the manufacture of beverages:
3302 10 – Of a kind used in the food or drink industries:
 – – Of a kind used in the drink industries:
 – – – Preparations containing all flavouring agents characterising a beverage:
 – – – – – Other (of an actual alcoholic strength by volume not exceeding 0,5 %):
3302 10 29 Other
ex Chapter 38 Miscellaneous chemical products
3824 60 Sorbitol other than that of subheading 2905 44

COMMISSION REGULATION (EC) No 493/2006

of 27 March 2006

laying down transitional measures within the framework of the reform
of the common organisation of the markets in the sugar sector,
and amending Regulations (EC) No 1265/2001 and (EC) No 314/2002

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 318/2006 of 20 February 2006 on the common
organisation of the markets in the sugar sector
1, and in particular Article 44 thereof,

Having regard to Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common
organisation of the markets in the sugar sector
2, and in particular Articles 7(5), 15(8) and 16(5)
thereof,

Whereas:

(1) The necessary measures should be taken to fac ilitate the transition in the sugar sector from the
rules provided for in Regulation (EC) No 1260/2001 to the new regime established by
Regulation (EC) No 318/2006.

(2) Following the deletion of the obligation to export provided for in Article 13 of Regulation
(EC) No 1260/2001, measures should be laid down to manage the quantities of sugar resulting
from the disappearance of this obligation and of the C sugar arrangements from 1 July 2006.
These measures should comply with the Community’s international obligations.

(3) To improve management of the quantiti es of sugar produced in excess of the quota
attributable to the 2005/2006 marketing year, undertakings should be allowed to carry
forward some of these quantities to the 2006/2007 ma rketing year. To this end, it should be
laid down that the carry forward in question is subject to the application of Commission
Regulation (EEC) No 65/82 of 13 January 198 2 laying down detailed rules for carrying
forward sugar to the following marketing year
3, while allowing a certain degree of flexibility
on the decision to carry forward in order to facilitate the transition between the existing
regime and the new regime.

(4) The quantity of non-quota sugar in the 2005/ 2006 marketing year, which may be neither
carried over nor exported, should be consid ered to be non-quota sugar in the 2006/2007
marketing year in order to allow its disposal th rough the uses provided fo r in respect of this
sugar by Regulation (EC) No 318/2006, as well as, taking into account the exceptional
conditions of the transition between those marketing years, its use in animal feed.

1 OJ L 58, 28.2.2006, p. 1.
2 OJ L 178, 30.6.2001, p. 1. Regulation as last amended by Commission Regulation (EC) No 39/2004
(OJ L 6, 10.1.2004, p. 16).
3 OJ L 9, 14.1.1982, p. 14. Regulation as last amended by Regulation (EC) No 2223/2000 (OJ L 253,
7.10.2000, p. 15).

(5) For control purposes and, where applicable, the application of penalties, the proportion of C
sugar production in the 2005/2006 marketing year not carried over and not considered to be in
excess of the quota in the 2006/2007 marketing ye ar should continue to be subject to the
application of Commission Regulation (EEC) No 2670/81 of 14 September 1981 laying down
detailed implementing rules in respect of sugar production in excess of the quota
4 .

(6) In order to improve the market balance in the Community without creating new stocks of
sugar in the 2006/2007 marketing year, provision should be made for a transitional measure to
reduce eligible production under quota in respect of that marketing year. A threshold should
be fixed above which the pr oduction under quota of each undertaking is considered
withdrawn within the meaning of Article 19 of Regulation (EC) No 318/2006 or, at the
request of the undertaking, as production in excess of the quota within the meaning of
Article 12 of that Regulation. In view of the transition between the two regimes, this threshold
should be obtained by a combination, in equal pa rts, of the method laid down in Article 10 of
Regulation (EC) No 1260/2001 and that laid down in Article 19 of Regulation (EC)
No 318/2006 and take into account the special e fforts made by some Member States within
the framework of the restructuring fund set up by Council Regulation (EC) No 320/2006 of
20 February 2006 establishing a temporary scheme for the restructuring of the sugar industry
in the Community and amending Regulation (EC) No 1290/2005 on the financing of the
common agricultural policy
5.

(7) In order to comply with the marketing conditions for the 2005/2006 marketing year, it should
be laid down that the aid for disposal and add itional aid for sugar produced in certain regions
of the Community in the 2005/2006 marketing y ear and, within the limits of the quantities set
by Commission Regulation (EC) No 180/2006 of 1 February 2006
6, the refining aid for
certain preferential sugars imported and re fined in the 2005/2006 delivery period may
continue to be paid beyond 30 June 2006. To this end, Commission Regulation (EC)
No 1554/2001 of 30 July 2001 laying down detailed rules for the application of Council
Regulation (EC) No 1260/2001 as regards marke ting sugar produced in the French overseas
departments and equalising the price c onditions with preferential raw sugar
7 and Commission
Regulation (EC) No 1646/2001 of 13 August 2001 laying down detailed implementing rules
for the grant of adjustment aid to the prefer ential raw sugar refining industry and adjusting
both the adjustment aid and additional b asic aid for the sugar refining industry 8 (8) should
continue to apply to the granting of these ai ds. For the sugar concerned the refining of
preferential sugars by certain refineries shoul d continue to be limited and the control on
presumed maximum supply needs should be main tained, and provision should be made for
the continued application of Commission Regul ation (EC) No 1460/2003 of 18 August 2003
setting for the 2003/2004 to 2005/2006 marketing years rules of application for Council
Regulation (EC) No 1260/2001 as regards the pr esumed maximum raw sugar supply needs of
refineries
9.

4 OJ L 262, 16.9.1981, p. 14. Regulation as last amended by Regulation (EC) No 95/2002 (OJ L 17,
19.1.2002, p. 37).
5 OJ L 58, 28.2.2006, p. 42.
6 OJ L 29, 2.2.2006, p. 28.
7 OJ L 205, 31.7.2001, p. 18. Regulation as amended by Regulation (EC) No 1442/2002 (OJ L 212,
8.8.2002, p. 5).
8 OJ L 219, 14.8.2001, p. 14. Regulation as amended by Regulation (EC) No 1164/2002 (OJ L 170,
29.6.2002, p. 48).
 9 OJ L 208, 19.8.2003, p. 12.

(8) To carry out the calculation, fixing and collecting of production levies in the 2005/2006
marketing year, certain provisions of Commission Regulation (EC) No 314/2002 of
20 February 2002 laying down detailed rules for the application of the quota system in the
sugar sector
10 (10) and of Commission Regulation (EC) No 779/96 of 29 April 1996 laying
down detailed rules for the application of Council Regulation (EEC) No 1785/81 as regards
communications in the sugar sector 11 should continue to apply beyond 30 June 2006. The
levies are calculated on the basis of statistical da ta which are regularly updated. As it is the
last time that levies are to be fixed for the entire period between the 2001/2002 marketing
year and the 2005/2006 marketing year, without a subsequent possibility, as in previous years,
to adjust the calculations on the basis of upda ted figures, the calculation should be deferred
and the levies should be fixed on 15 Februa ry 2007 to guarantee the reliability of the
calculations and the relevance of the statistical data used.

(9) In order to ensure the supply to the chemical industry in the context of the transition between
the existing regime and the new regime intr oduced on 1 July 2006, certain provisions of
Commission Regulation (EC) No 1265/2001 of 27 June 2001 laying down detailed rules for
the application of Council Regulation (EC) No 1260/2001 as regards granting the production
refund on certain sugar products used in the chemical industry12 (12) should continue to apply
beyond 30 June 2006 to the refund certificates issu ed before that date. Since the new regime
allows the use by the chemical industry of nonquota sugar, the period of validity of the export
certificates should be reduced and the granti ng of the refund should be limited to the
production under quota in the 2005/2006 marketing year.

(10) Under Article 1(2) of Regulation (EC) No 318/2006, the period covered by the marketing
year begins on 1 October and ends on 30 Se ptember of the following year. However, the
2005/2006 marketing year, as laid down by Regulation (EC) No 1260/2001, ends on
30 June 2006. The 2006/2007 marketing year ther efore begins on 1 July 2006 and ends on
30 September 2007, and thus extends over 15 months. For the 2006/2007 marketing year,
therefore, provision should be made for an in crease in the quotas and the traditional refining
requirements which previously corresponded to a 12-month period and which will, after this
marketing year, again apply to a 12-month period, by taking the extra three months into
account so as to ensure an allocation whic h corresponds to that of the preceding and
subsequent marketing years. These transitional quotas should cover sugar production from the
start of the 2006/2007 marketing year, from sugar beet sown before 1 January 2006.

(11) Regulations (EC) No 314/2002 and (EC) No 1265/2001 should therefore be amended
accordingly.

(12) The measures provided for in this Regula tion are in accordance with the opinion of the
Management Committee for Sugar,

HAS ADOPTED THIS REGULATION:

10 OJ L 50, 21.2.2002, p. 40. Regulation as last amended by Regulation (EC) No 1665/2005 (OJ L 268,
13.10.2005, p. 3).
11 OJ L 106, 30.4.1996, p. 9. Regulation as last amended by Regulation (EC) No 1159/2003 (OJ L 162,
1.7.2003, p. 25).
12 OJ L 178, 30.6.2001, p. 63

CHAPTER I

TRANSITIONAL MEASURES

Article 1

Carrying forward of quotas

1. Notwithstanding Article 14 of Regulation (E C) No 1260/2001, and within the limits laid
down in the second subparagraph of Article 2(1) of Regulation (EEC) No 65/82, each undertaking
may decide by 31 October 2006 on the quantity of C sugar production attributable to the 2005/2006
marketing year that it is to carry forward to the 2006/2007 marketing year, or amend its decision made
before the entry into force of this Regulation to carry forward a certain quantity.

2. Undertakings which make a decision to carry forward as referred to in paragraph 1, or which
amend their decision, shall:

(a) inform the Member State concerned, before 31 October 2006, of the quantity of sugar carried
forward;

(b) undertake to store the quantity carried forward until 31 October 2006.

3. Regulation (EEC) No 65/82 shall apply to B and C sugar from the 2005/2006 marketing year
carried forward to the 2006/2007 marketing year.

4. Member States shall inform the Commission, not later than 30 November 2006 and for each
undertaking, of the quantity of B and C sugar carried forward from the 2005/2006 marketing year to
the 2006/2007 marketing year.

Article 2

C sugar

1. Without prejudice to decisions to carry forw ard taken in accordance with Article 1 of this
Regulation, and to exports under licences issued in accordance with Article 4 of Commission
Regulation (EC) No 1464/95
13, C sugar from the 2005/2006 marketing year shall be considered to be
non-quota sugar, as referred to in Article 12 of Re gulation (EC) No 318/2006, produced in respect of
the 2006/2007 marketing year.

2. Notwithstanding Article 15 of Regulation (EC) No 318/2006, the levy shall not be charged on
the quantities of C sugar referred to in paragraph 1 of this Article which are used in animal feed under
the same control conditions as those laid down by the Commission for the industrial sugar referred to
in Article 13(2) of Regulation (EC) No 318/2006.

 13 OJ L 144, 28.6.1995, p. 14. Regulation as last amended by Regulation (EC) No 96/2004
(OJ L 15, 22.1.2004, p. 3).

3. Regulation (EEC) No 2670/81 shall apply to C sugar production in the 2005/2006 marketing
year, with the exception of the sugar carried forward or considered to be non-quota sugar in the
2006/2007 marketing year as referred to in paragraph 1 of this Article.

The minimum price for A sugar for the 2005/2006 marketing year shall apply to the beet equivalent to
the quantity of sugar referred to in Article 3 of Regulation (EEC) No 2670/81.

Article 3

Preventive withdrawal

1. For each undertaking, the share of the productio n of sugar, isoglucose or inulin syrup in the
2006/2007 marketing year which is produced under th e quotas listed in Annex III to Regulation (EC)
No 318/2006 and which exceeds the threshold establis hed in accordance with paragraph 2 of this
Article shall be considered withdrawn within the m eaning of Article 19 of that Regulation or, at the
request of the undertaking concerned before 31 January 2007, shall be considered fully or partially to
be produced in excess of the quota within the meaning of Article 12 of that Regulation.

2. For each undertaking, the threshold referre d to in paragraph 1 shall be established by
multiplying the quota allocated to the undertaking under Article 7(2) of Regulation (EC) No 318/2006
by the sum of the following coefficients:

(a) the coefficient fixed for the Member Stat e concerned in Annex I to this Regulation;

(b) the coefficient obtained by dividing th e sum of the quotas renounced in the 2006/2007
marketing year in the Member State concerned under Article 3 of Regulation (EC)
No 320/2006 by the sum of the quotas fixed for that Member State in Annex III to Regulation
(EC) No 318/2006. The Commission shall fix this coefficient not later than 15 October 2006.

However, where the sum of the coe fficients exceeds 1,0000, the thr eshold shall be equal to the quota
referred to in paragraph 1.

3. The minimum price applicable to the quan tity of beet equivalent to the sugar production
withdrawn in accordance with paragraph 1 shall be that of the 2007/2008 marketing year.

4. The obligation referred to in Article 6(5) of Regulation (EC) No 318/2006 shall concern the
quantity of beet equivalent to the threshold referred to in paragraph 1 of this Article.

5. Before 1 July 2006, Member States shall se nd the Commission an estimate of the quantities of
sugar, isoglucose and inulin syrup to be considered withdrawn under this Article.

Article 4

Aid for sugar produced in the French overseas departments

1. Aid for disposal and additional aid shall be granted to sugar produced under quota in the
2005/2006 marketing year in the French overseas de partments, refined and/or transported between
1 July 2006 and 31 October 2006.

They shall apply to the quantities of sugar concerne d, in replacement for the aids referred to in
Articles 7(4) and 38(3) and (4) of Regulation (EC) No 1260/2001.

The aid for disposal shall concern:

— refining in refineries in the European regions of the Community of the sugars produced in the
French overseas departments, in particular on the basis of their output,

— the transport of sugar produced in the French overseas departments to the European regions of
the Community and, where appropriate, its storage in these departments.

2. Regulations (EC) No 1554/2001 and (EC) No 1646/2001 shall apply to the sugar produced
under quota in the 2005/2006 marketing year for the ai d for disposal and the additional aid referred to
in paragraph 1 of this Article.

3. For the purposes of this Article, ‘refinery’ means a production unit whose sole activity
consists in refining either raw sugar or syrups produced prior to the crystallising stage.

Article 5

Refining aid

1. Adjustment aid shall be granted to the i ndustry refining preferential raw cane sugar imported
under Protocol 3 on ACP sugar attached to Annex IV to the ACP-EC Partnership Agreement signed
in Cotonou on 23 June 2000
14 (14), and refined in the 2005/2006 delivery period between 1 July 2006
and 30 September 2006.

This aid shall be paid to refineri es. It shall apply to the quantiti es referred to in Regulation (EC)
No 180/2006 and not refined by 1 July 2006, as a replace ment for the aid referred to in Article 38(1),
(2) and (4) of Regulation (EC) No 1260/2001.

2. Regulation (EC) No 1646/2001 shall apply to the preferential sugar refined in the 2005/2006
delivery period.

3. Except in cases of force majeure, where the presumed maximum supply needs for a Member
State as laid down in Article 39(2) of Regulation (EC) No 1260/2001 are exceeded in the course of
the 2005/2006 marketing year, a quantity corresponding to the excess shall be subject to the payment

14 OJ L 317, 15.12.2000, p. 3.

of an amount corresponding to the full rate of import duty in force for the marketing year in question,
increased by EUR 115,40 per tonne of white sugar equivalent.

4. Regulation (EC) No 1460/2003 shall apply to control and, where appropriate, the
consequences of exceeding the presumed maximu m supply needs for the refining industries as
referred to in paragraph 3 of this Article.

5. For the purposes of this Article, ‘refinery’ means a production unit whose sole activity
consists in refining either raw sugar or syrups produced prior to the crystallising stage.

Article 6

Levies

Regulation (EC) No 314/2002, as amended by this Regul ation, shall apply to the fixing and collecting
of production levies in the 2005/2006 marketing y ear, including the corrections relating to the
calculation of the levies in the 2001/2002, 2002/2003, 2003/2004 and 2004/2005 marketing years as
laid down in Article 15(2) of Regulation (EC) No 1260/2001.

Article 7

Production refunds

Articles 1, 2, 3, 11, 14, 15, 17 18, 19, 20 and 21 of Regulation (EC) No 1265/2001, as amended by
this Regulation, shall apply to the refund certificates issued until 30 June 2006.

Article 8

Notifications

Regulation (EC) No 779/96 shall apply until 30 September 2006.

Article 9

Transitional quotas

1. For the 2006/2007 marketing year, a tran sitional sugar quota of 497 780 tonnes shall be
allocated to the Member States in accordance with the breakdown in part A of Annex II.

The quota referred to in the first subparagraph sha ll be reserved for sugar produced from beet sown
before 1 January 2006. The minimum price of this b eet, within the meaning of Article 5 of Regulation
(EC) No 318/2006, shall be EUR 47,67 per tonne.

2. For the 2006/2007 marketing year, a transitional isoglucose quota of 126 921 tonnes of dry
matter shall be allocated to the Member States in accordance with the breakdown in part B of
Annex II.

3. For the 2006/2007 marketing year, a transitional inulin syrup quota of 80 180 tonnes of dry
matter, expressed as white sugar/isoglucose equivale nt, shall be allocated to the Member States in
accordance with the breakdown in part C of Annex II.

4. The transitional quotas laid down in paragraphs 1, 2 and 3:

(a) shall not be subject to the payment of th e temporary restructuring amount provided for in
Article 11(2) of Regulation (EC) No 320/2006;

(b) may not benefit from the payment of the aid provided for in Regulation (EC) No 320/2006.

5. The Member States shall allo cate transitional quotas, on the basis of objective criteria and in a
manner ensuring equal treatment of producers and to avoid market and competition distortion, to
undertakings producing sugar, isoglucose and inulin syrup established in their territory and approved
in accordance with Article 17 of Regulation (EC) No 318/2006.

6. The Member States shall introduce a control sy stem and shall take all the necessary steps to
verify the production of the products referred to in pa ragraphs 1, 2 and 3, and in particular that the
sugar corresponds to sugar beet sown before 1 January 2006.

The Member States shall communicate to the Commission, not later than 15 July 2006, the breakdown
by undertaking of the transitional quotas allocated under this Article.

The Member States shall notify the Commission, no t later than 31 December 2006, of the control
measures taken and the results thereof.

Article 10

Traditional refining requirements

For the 2006/2007 marketing year, the traditional refini ng requirements referred to in Article 29(1) of
Regulation (EC) No 318/2006 shall be increased by the quantities laid down in Annex III.

CHAPTER II

AMENDMENTS OF REGULATIONS (EC) NO 1265/2001 AND (EC) NO 314/2002

Article 11

Amendment of Regulation (EC) No 1265/2001

Regulation (EC) No 1265/2001 is hereby amended as follows:

1. The following paragraph is added to Article 11:

 ‘5. At the request of the interested party, th e competent authority of the Member State shall
cancel refund certificates which have not been fu lly used and have not passed their final date
of validity. The relevant security shall be released for the amount unused.

 Member States shall inform the Commission at the end of each month of the quantity of
refund certificates cancelled in the course of the previous month, broken down by month of
issue of the refund certificate.’

2. The following paragraph is added to Article 14

 ‘3. The refund certificate shall be valid only fo r the basic products referred to in Article 1
which are produced under quota in the 2005/2006 marketing year or previous marketing
years.’

3. The following sentence is added to Article 15:

 ‘However, the refund certificates shall no longer be valid after 31 August 2006.’

4. The following paragraph is added to Article 17:

 ‘3. Member States shall take the necessary add itional steps to ensure the proper application of
the provisions of Article 14(3).’

Article 12

Amendment of Regulation (EC) No 314/2002

Regulation (EC) No 314/2002 is hereby amended as follows:

1. Article 4a(5) is deleted;

2. The following sentence is added to th e third subparagraph of Article 4c(1):

 ‘The notification for the 2005/2006 marketing y ear shall be made before 1 December 2006.’

3. Article 8 is amended as follows:

 (a) The following subparagra ph is added to paragraph 1:

 ‘In respect of the 2005/2006 marketing y ear, the amounts and the coefficients referred
to in points (a) and (b) of the firs t subparagraph shall be fixed before
15 February 2007.’;

 (b) paragraph 2 is amended as follows:

 (i) the following sentence is added to the first subparagraph:

 ‘For the 2005/2006 marketing year, these balances shall be determined before
28 February 2007.’;

 (ii) the following sentence is added to the second subparagraph:

 ‘For the 2005/2006 marketing year, this payment shall be made before
15 April 2007.’

CHAPTER III

FINAL PROVISION

Article 13

Entry into force

This Regulation shall enter into force on the third day following that of its publication in the Official
Journal of the European Union.

It shall apply from 1 July 2006. However, Articles 1, 3, 11(3) and 12(1) shall apply from the date of
its entry into force.

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

Done at Brussels, 27 March 2006.

 For the Commission
Mariann FISCHER BOEL
Member of the Commission

ANNEX I

Coefficients referred to in Article 3(2)(a)

Member State Coefficients
Belgium
Czech Republic
Denmark
Germany
Greece
Spain
France (mainland)
France (French overseas departments)
Ireland
Italy
Latvia
Lithuania
Hungary
Netherlands
Austria
Poland
Portugal (mainland)
Portugal (Azores)
Slovenia
Slovakia
Finland
Sweden
United Kingdom
0,8558
0,9043
0,8395
0,8370
0,8829
0,8993
0,8393
0,8827
0,8845
0,8621
0,9136
0,9141
0,9061
0,8475
0,8522
0,8960
0,8852
0,884
0,8844
0,8833
0,8841
0,8845
0,8834

ANNEX II

Part A: Transitional quotas for sugar referred to in Article 9(1)

Member State Transitional quota for sugar 2006/2007 (tonnes of
white sugar)
Spain
Italy
Portugal
324 000
121 187
52593
Total 497 780

Part B: Transitional quotas for isoglucose referred to in Article 9(2)

Member State Transitional quota isoglucose 2006/2007 (in
tonnes of dry matter)

Belgium
Germany
Greece
Spain
France
Italy
Hungary
Netherlands
Poland
Portugal
Slovakia
Finland
United Kingdom

17 898
8 847
3 223
20 645
4 962
5 076
34 407
2 275
6 695
2 479
10 637
2 96
6 809
Total 126 921

Part C: Transitional quotas for inulin syrup referred to in Article 9(3)

Member State Transitional quota inulin syrup 2006/2007 (in
tonnes of dry matter sugar/isoglucose equivalent)
Belgium
France
Netherlands
53 812
6 130
20 238
Total 80 180

ANNEX III

Transitional traditional refining requirements referred to in Article 10

Member State Transitional traditional refining requirements
2006/2007 (tonnes of white sugar)
France
Portugal
Slovenia
Finland
United Kingdom

74 157
72 908
4 896
14 981
282 145

Total 479 087

COMMISSION REGULATION (EC) No 769/2006

of 19 May 2006

suspending the lodging of applications for export licences for C sugar from 23 May 2006 and
amending Regulation (EC) No 493/2006
as regards the transitional measures applicable to C sugar

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 318/2006 of 20 February 2006 on the common
organisation of the markets in the sugar sector
1, and in particular Article 44 thereof,

Whereas:

(1) The Agreement on Agriculture conclude d under the Uruguay Round of multilateral trade
negotiations
2 in accordance with Article 300 of the Treaty contains limits on the quantity and
value of exports subsidised by the Community. As a result of the conclusions of the World
Trade Organisation’s (WTO) Appellate Body of 19 May 2005, exports of C sugar must be
taken into account in those limits. The Commun ity has been granted a period ending on
22 May 2006 to comply with its WTO obligations.

(2) Article 13(1) of Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common
organisation of the markets in the sugar sector 3 provides in particular for an obligation to
export C sugar not carried forward. Regul ation (EC) No 318/2006, which applies from
1 July 2006, no longer includes such an obligation for non-quota sugar produced in respect of
the 2006/07 marketing year. Article 44 of that Regulation provides for the possibility of
adopting transitional measures to facilitate th e transition from the market situation in the
2005/06 marketing year to the market situation in the 2006/07 marketing year, and the
derogations required to ensure compliance by the Community with its international
obligations with regard to C sugar produced in respect of the 2005/06 marketing year.

(3) In accordance with Article 44 of Regulation (EC) No 318/2006, Article 2(1) of Commission
Regulation (EC) No 493/2006 of 27 March 2006 laying down transitional measures within the
framework of the reform of the common organi sation of the markets in the sugar sector, and
amending Regulations (EC) No 1265/2001 and (EC) No 314/2002
4, from 1 July 2006 C sugar
produced in respect of the 2005/06 marketing year which cannot be carried forward or
exported is to be considered non-quota sugar as referred to in Regulation (EC) No 318/2006,
produced in respect of the 2006/07 marketing year.

(4) Article 27(14) of Council Regulation (EC) No 1260/2001 provides that compliance with the
restrictions on volume resulting from agreements concluded under Article 300 of the Treaty is

1 OJ L 58, 28.2.2006, p. 1.
2 OJ L 336, 23.12.1994, p. 22.
3 OJ L 178, 30.6.2001, p. 1. Regulation as repealed by Regulation (EC) No 318/2006.
4 OJ L 89, 28.3.2006, p. 11.

to be ensured by means of export licences issued for the reerence periods provided for in such
agreements.

(5) As a result, taking into account the obliga tions of the European Community under the WTO
agreements, a derogation from the obligation to export C sugar should be laid down by
suspending the lodging of applications for export licences for C sugar from 23 May 2006, and
the transitional arrangements provided for in Article 2 of Regulation (EC) No 493/2006
should be applied to C sugar not exported under an export licence issued before 23 May 2006.

(6) Regulation (EC) No 493/2006 should therefore be amended accordingly.

(7) The measures provided for in this Regula tion are in accordance with the opinion of the
Management Committee for Sugar,

HAS ADOPTED THIS REGULATION:

Article 1

The lodging of applications for export li cences for C sugar in accordance with Commission
Regulation (EC) No 1464/95
5 (5) is hereby suspended from 23 May 2006. Applications for export
licences submitted during the period of suspension shall be inadmissible.

Export licences for C sugar issued but not used by 22 May 2006 may be returned to the issuing body
during their period of validity. In such cases, not withstanding Article 35 of Commission Regulation
(EC) No 1291/2000
6, the security shall be released immediately.

Article 2

Regulation (EC) No 493/2006 is hereby amended as follows:

1. Article 2(1) is replaced by the following:

 ‘1. Without prejudice to decisions to carry forw ard taken in accordance with Article 1 of this
Regulation, C sugar from the 2005/06 marketing year not exported under an export licence
issued before 23 May 2006 shall be considered , from that date, to be non-quota sugar, as
referred to in Article 12 of Regulation (EC) No 318/2006, produced in respect of the 2006/07
marketing year.’;

2. the following sentence is added to the second paragraph of Article 13:

 ‘Article 2 shall apply from 23 May 2006.’

5 OJ L 144, 28.6.1995, p. 14.
6 OJ L 152, 24.6.2000, p. 1.

Article 3

This Regulation shall enter into force on the day following its publication in the Official Journal of
the European Union.

It shall apply from 23 May 2006.

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

Done at Brussels, 19 May 2006.

 For the Commission
Mariann FISCHER BOEL
Member of the Commission