Amended proposal for a COUNCIL DECISION on a Community financial contribution towards certain expenditures incurred by the Member States in implementing the monitoring and control system applicable to the commom fischeries policy
Date: 1995-10-30
Institutions: European Commission
Subjects: EU financing, common fisheries policy, conservation of fish stocks, fishery management, fishing controls

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  30.10.1995 
COM(95) 515 final 

95/0142  (CNS) 

Amended  proposal  for  a 

COUNCIL  DECISION 

on a Gbmnmnity financial  contribution towaids certain expenditures inclined by 
the Member States in implementing the monitoring and control system applicable 
to the common fisheries policy 

(presented  by the Commission  pursuant to Article  189 a (2) 
of the  EC-Treaty) 

EXPLANATORY MEMORANDUM 

In June  1995, the Commission sent the Council  a proposal for  a Council  Decision on a 

Community financial contribution towards certain expenditures  incurred by the Member 

States  in  implementing  the  monitoring  and  control  system  applicable  to  the  common 
fisheries  policy1. 

On  13 October  1995, Parliament adopted a resolution delivering a favourable  opinion on 

the proposal, with  11 amendments. 

To improve the etfectiveness  of the Community's financial contribution, the Commission 

agreed to include the following amendments in its current proposal, which stipulate that: 

the control programme  must be based on a risk analysis (amendment  3) 

the Community  contribution  must be significant  (amendment  4) 

a financial commitment statement must be sent to the Commission by the Member 

States  subsequent  to an application  for  funding  (amendment  8); 

the Commission is to set a time limit on the inquiries carried out by the Member 

States  if  it  feels  that  the  facilities  are not being used  for  the purposes  intended 

(amendment  11). 

These amendments clarify  the initial proposal. 

The  Commission  did  not  agree  to  the  other  amendments  because  they  could  formally 

harm the content of the proposal. 

Adoption  of  Parliament's  amendments  by  the  Council  will  show  that  the  political 

authorities  unanimously  agree  on  the  need  for  a  Community  financial  contribution  to 

implement the monitoring and control system applicable to the common fisheries policy. 

COM(95) 243  final. 

> 

AMENDED PROPOSAL FOR A COUNCIL DECISION 
on a Community  financial  contribution towards certain expenditures  incurred by 
the Member  States  in implementing the monitoring and control  system  applicable 
to the common fisheries  policy 

The proposal  is amended  as  follows: 

Whereas the control programme must be based on a risk analysis of the  areas most  likely to be 

the subject  of fraudulent or irregular activity; 

Recital 4a (new) 

Récitai 6 

Whereas,  in order to ensure supervision of all  the catches and landings required  if the common 

fisheries policy is to be really implemented. Member States must, in all maritime waters, monitor 

the  activities  of  Community  and  third-country  vessels,  whereas  a  significant  Community 

contribution  towards  certain  inspection  and  monitoring  expenditures  incurred  by  the  Member 

States  is therefore  required. 

Article 5, paragraph 1 

Member  States  wishing  to  benefit  from  a  Community  financial  contribution  towards  the 

expenditure  referred  to  in Article 2  shall  forward  to the Commission,  on the  first  occasion 

before  15 November  1995 and subsequently  before  31 May of each year,  an application  for 

funding  for the following year containing the information  specified  in points  1, 2 and 3 of the 

Annex hereto.  In order to take account  of the constraints  of the Member  States'  budgetary 

procedures,  an  annex  updating  the  original  application  including  a  financial  commitment 

statement,  should be forwarded  to the Commission before  30 September of each year. 

ir_ 

Article  10, third paragraph 

If the Commission considers that the facilities  are not being used for the intended purpose or in 

accordance  with  the  conditions  set  out  in  this  Decision,  it  shall  inform  the  Member  State 

accordingly.  The  Member  State  shall  then  conduct  an  inquiry  in which  Commission  officials 

sMI participate whenever possible.  Within a time limit decided by the Commission, the Member 

State  shall  inform  it  of  the  progress  and  results  of  the  inquiry  and  provide  the  Commission 

without  delay  with  a copy  of the report  of the  inquiry  and the principal  data used  in  preparing 

it. 

I ll 

FINANCIAL STATEMENT 

Heading R2-901: financial  participation  in inspection  and monitoring  operations 

1. 

Title of operation 

Financial participation  in inspection and monitoring operations. 

2. 

Budget heading involved 

B2-901. 

3. 

Legal basis 

Article 43 of the Treaty  and Council  Decision 89/631/EEC. 

4. 

Description of operation 

4.1 

General  objective  of operation 

The question  of financial assistance  for  inspection  operations  carried out by  the 
Member  States  was  raised  when  the  CFP  was  introduced.  After  a  preliminary 
stage, assistance of an initial amount of ECU 22 million per annum was  granted 
for the period from 1991 to  1995 on the basis of Decision 89/631/EEC, allowing 
the Commission to contribute up to 50% of expenditure on equipment incurred by 
the Member  States. The Council undertook to decide on future  provisions  before 
30 June  1995 on the basis of a report drawn up by the Commission. In the mean 
time, the Council has taken other decisions which have a bearing on this question. 

When the new control Regulation was adopted, the Council  said that the current 
system  of  inspections  would  now  extend  to  new  areas  and  required  the 
implementation  of  additional  measures  not  covered  by  the  previous  Decision 
(89/631/EEC)1. The range of operations for which  a financial  contribution  could 
be  made  to  the  expenditure  of  the  Member  States  would  therefore  have  to  be 
widened: 

OJ No  L 364,  14.12.1989, p.64. 

- 

. 

Support  for  investment  expenditure  must  continue  to  be  a  priority  for 
financial assistance.  The  acquisition  of  heavy  equipment  is  particularly 
difficult to finance from national budgets. Moreover, the investments made 
during the period  1989 to  1995 have not fully  covered needs as shown by 
the assessments made by the Member States for the period  1996 to 2000. 
The working life of the equipment concerned ranges from several decades 
(seagoing  equipment)  to  several  years  (motor  vehicles,  computer 
equipment, technical inspection equipment), airborne inspection equipment 
coming somewhere in between. The equipment with a short working  life 
will  have  to  be  replaced  within  the  next  five  years.  Even  amongst  the 
seagoing  equipment  there  will  have  to  be  additions,  replacements  and 
renewals.  A  greater  priority  will  furthermore  have  to  be  given  to 
investments in modern technology. Investment will have to cover not only 
the  acquisition  of  equipment  but  also  other  types  of  expenditure,  in 
particular  on  software. 

If rapid progress is to be made, integrated projects may need to be set up, 
the financing of which, like that of the satellite pilot projects, may require 
expenditure  over  and  above  the  cost  of  investments.  The  setting-up  of 
information networks depends on such integrated projects. The agreement 
reached in the Council  in December  1994 on fisheries  inspection west of 
longitude 4°W requires very rapid  implementation  and  specific  financial 
arrangements. 

The  serious  problem  of  training  needs  to  be  stressed.  Support  must  be 
permitted for the Member States' initiatives in this area. Priority must also 
be given to assistance for exchanges between Member States and between 
Member  States  and  the  Commission,  both  for  the  initial  training  of 
officials  responsible  for  control  and  subsequently  to  promote  temporary 
detachments and exchanges. 

4.2  Duration  of operation  and provisions  for renewal 

The operation forms part of a measure planned to cover the period  1996 to 2000. 
Any subsequent action will have to be decided upon before the end of the period. 

5. 

Classification  of expenditure or  revenue 

5.1  Non-compulsory expenditure. 

5.2 

Differentiated  appropriations. 

5.3  No revenue. 

6. 

Type of expenditure or  revenue 

Subsidy for joint financing  with other sources in the public  and/or private sector 

Subsidy  in the form  of a reimbursement.  Possibility  of paying advances. 

7. 

Financial impact 

7.1  Method  of calculating the total cost of the scheme 

The  financial.contribution  to  investment  expenditure  is,  inter  alia,  for  the 
acquisition  or modernization  of: 

vessels,  aircraft,  and  land  vehicles  employed  in  the  monitoring  and 
supervision  of fishing activities; 
systems  for  the  detection  and  recording  of  fishing  activities  (including 
equipment  installed  on fishing vessels); 
systems  for  recording,  managing  and  transmitting  inspection  data, 
including computer applications and  software. 

The  contribution  should  be  limited  to  35%, as  against  50% under  the  previous 
Decision. 

The financial  contribution to expenditure intended to  improve the application  of 
the  common  fisheries  policy  as  part  of  specific  measures  and  projects  not 
exceeding two years is limited to 50%. 

The  same  limit  applies  for  expenditure  on  the  training  of  national  officials 
involved  in  inspection  work,  in particular  in  a Member  State  other than that  in 
which they are employed. 

The Commission  may, however,  decide on higher rates, in particular: 

to permit the implementation of a coordinated measure by Member States 
and the Commission to overcome difficulties  with inspection in an area of 
Community  interest; 
to permit experimentation with and the introduction of new technology to 
improve the control  of fishing and related activities; 
to permit  an additional  Community financial contribution  not necessarily 
limited  to  expenditure  on  investments  in  favour  of  Ireland  for  the 
improvement of inspection work. 

7.2  Breakdown by type of measure 

Commitment appropriations in ECU million 

(at  1996 prices) 

Type of measure 

Total budget over  five  years 

1. Investment  in  equipment 
2.  Operating  expenditure 
3.  Information  networks 
4.  Training  and exchanges 

(Ireland) 

Total 

140 
10 
50 
5 

205 

A more detailed breakdown of expenditure is not possible since it is up to the Member States to 
submit  applications.  Priority  should nevertheless be  given to new technology  and to  seagoing 
inspection equipment for those Member States which are still underequipped. 

7.3  Operating expenditure on studies, meetings of experts, etc. included in Part B 

The nature of this heading excludes operating expenditure of this type. 

7.4  Schedule to be completed for multiannual operations whose basic instrument contains 

"an amount deemed necessary" 

- 

period:  1996 to 2000 

Commitment appropriations / payment appropriations in ECU million 

(at  1996 prices) 

Indicative plan 

1996 

1997 

1998 

1999 

2000 

2001 

Total 

CA 
PA 

30 
10 

45 
40 

45 
40 

45 
40 

40 
40 

35 

205 
205 

8. 

Fraud-prevention measures; results of measures taken 

Under the scheme, the Commission  must take a decision every year on the Community 
contribution to expenditure incurred by the Member States. A prior appraisal  is made of 
the  proposals  submitted  by  the  Member  States  and  the  Commission  decides  on  the 
eligibility  of applications  on the basis  of the documentation  submitted.  Each year,  after 
an 
interdepartmental  consultation,  the  selected  proposals  are  examined  by  the 
Management Committee for Fisheries and Aquaculture. The Commission then decides on 
the eligibility  of the applications  and the size of the Community  contribution. 

Payment  of  the  Commission  contribution  is  made  on  presentation  of  duly  receipted 
invoices relating to eligible expenditure actually incurred and on presentation of the duly 
completed  "public contract  questionnaire". 

To enable the best use to be made of assistance granted from the Community budget, the 
Member  States  must  ensure the effectiveness  of all  their  arrangements  for  controls  and 
penalties  and  complete transparency  of all procedures. 

The  importance  of  inspection  missions  carried  out  by  officials  on  behalf  of  the 
Commission  in  the  Member  States  should  be  stressed.  They  enable  verification  of  the 
conformity  of equipment with the administrative documents which the authorities of the 
Member  States are obliged to submit to the Commission and the effective  use of all the 
control  facilities  part-financed  by  the  Community.  Joint  missions  by  the  Authorizing 
Office  and Financial  Control  are planned  in the beneficiary  Member States. 

The above provisions will enable the Commission to evaluate the actual application of the 
Decision which will  succeed Decision  89/631/EEC. 

9. 

Elements of cost-effectiveness  analysis 

Expenditure on fisheries enforcement  must be set against the value of fish stocks and the 
damage caused by non-declaration (estimated at  10% of the value of the catches landed) 
and poor management  (resulting in the loss of an estimated  potential  annual revenue of 
ECU 3 000 million). 

9.1 

Specific  and quantifiable  objectives; target population 

Specific  objectives: links with general objective 

To provide  inspection authorities with efficient,  modern  equipment. 
To set up the mechanisms and computer networks necessary for the exchange 
of  information  relating to enforcement  operations. 
To promote the training of those involved  in enforcement  operations. 

Target population: distinguish as applicable for  each objective; indicate the end-
beneficiaies  of  the  Community's financial contribution and  the intermediaries 
involved. 

The direct targets are the national fisheries inspection authorities, but it is all those 
involved  in fishing  and related activities, often  in regions where other  economic 
activities  are limited, who will benefit from efficient  fisheries  enforcement.  It  is 
not only the fisheries  sector which is concerned - the ecological impact of poorly 
controlled  fishing  activities  affects  the whole of the Union  as do the  diplomatic 
consequences when there are inadequate controls in international or third country 
waters. 

9.2 

Grounds for the operation 

Need for  Community financial assistance 

If  the  inadequacies  in  fisheries  inspection  are  to  be  overcome,  the 
Commission must take political, regulatory and budgetary action. None of 
these  areas  can  be  neglected;  they  are  in  any  case  linked.  Progress  has 
been  made  on  regulatory  provisions,  essentially  at  the  initiative  of  the 
Commission.  The  corresponding  political  decisions  have  financial 
consequences which the Commission  cannot ignore. 

The existence of the common fisheries policy and the interdependence of 
the  fisheries  sectors  in  the  different  Member  States  resulting  from  the 
movement  of fish stocks  makes fisheries control  a Community  problem. 
Cost-benefit  analyses of fisheries control cannot be carried out at Member-
State  level.  Community  financial  solidarity  is therefore  essential  and  the 
budget heading permitting assistance towards expenditure incurred by the 
Member  States  is  the  expression  and  the  instrument  of  that  solidarity. 
Furthermore, the growth of that heading is the result of decisions  already 
taken. 

Choice of  ways and means 

* 
* 

advantages over alternative measures (comparative advantages), 
analysis of  any  simila" measures implemented at  Community  or 
national level. 

The  budget  required  for  effective  control  is  small  when  set  against  the 
economic  importance  of  fisheries,  the  losses  from  fraud  and  the  waste 
arising  from  the  current  ineffectiveness  of  the  CFP.  It  is  also  small 
compared with the amounts spent in this area by other countries. 

The Community  budget  for  control will remain  small  compared  with  the 
expenditure of Member States, but that budget is the key to any progress. 
Reference  has  been  made  to  the  obligations  arising  from  the  decisions 
taken since  1991, particularly those taken by the Council. Assistance with 
the expenditure  incurred by the Member  States is essential. 

Community financial assistance accounts for 2.7% of the 1995 Community 
budget  for  fisheries  and  is less than  10% of the almost  ECU 230 million 
per year spent by the Member States on inspection and monitoring. Of that 
amount,  ECU 54 million  is  for  investment,  the  rest  to  cover  operating 
costs. That expenditure can be compared with the expenditure on controls 
by  certain  third  countries.  The  annual  estimated  cost  of  enforcement 
operations  carried  out by Norway  is NOK  500 million  (ECU 60  million) 
and Canada spends CAD 85 million (ECU  58 million). The  1995 budget 
of the US Coast Guard for policing fishing  activities  is USD  500 million 
(ECU 390  million).  Ihe  Community  budget  for  fisheries  control  is 
therefore  modest when measured  against  a range of criteria. 

Main factors  of  uncertainty  which could affect the specific results of the 
operation 

The most  serious risk is that Member  States will be unable to meet their 
commitments  as  regards  part-financing  and  their  other  obligations 
(organization, personnel, penalties, etc.). 

In order for equipment towards which financial assistance has been granted 
to  be  used  effectively,  it  must  be  used  in  a  suitable  context.  Operating 
budgets,  staffing,  administrative  organization  and  penalties  are,  without 
exception, the responsibility  of the Member  States. If the Member  States 
do  not  adopt  the  appropriate  measures,  Community  assistance  will  not 
produce the desired results. National  authorities,  although well-equipped, 
will not be fully  effective. 

9.3  Monitoring and evaluation of the operation 

Evaluation  of costs 

The major  difficulty  is that the authorities  involved  in fisheries enforcement  are 
often also carrying out other duties. Costs have therefore to be allocated. The most 
obvious example is operations at sea. Where these involve the armed forces,  and 
even  where  an  operation  is  mainly  concerned  with  fisheries  enforcement,  they 
could  possibly  include  other  activities  (sea  rescue,  demonstrating  a  security 
presence). 

Whatever  the  difficulties,  the  expenditure  required  for  effective  controls  is  such 
that  appropriate  accounting  measures  must  be  taken  to  permit  an  effective 
breakdown  of costs. 

Assessment  of the results 

The initial  indicators are a measure of the means employed: the number of days 
at sea of inspection vessels or flying hours of airplanes and helicopters, the area 
covered,  the  number  of  inspections  carried  out  on  land  and  at  sea.  These  are 
indicators of activity  and not a measure of effectiveness.  They must nevertheless 
be part  of any  system for  monitoring progress  in enforcing  the CFP. 

The  second  set  of  indicators  is the number  of  suspected  infringements  detected 
and the penalties  imposed.  This information, together with the activity  indicators 
referred  to  above,  are vital  for  any  appraisal  of the thoroughness  of  inspections 
and penalties.  They  do not,  however,  give a complete picture,  since the  number 
of suspected  infringements  depends on both the effectiveness  of inspections  and 
the actual number of  infringements. 

As  regards  resource-conservation  policy,  the  actual  effectiveness  of  the 
enforcement  of the  CFP should be assessed in the light of two criteria:  limits on 
the rate of exploitation and protection of the smallest fish (juveniles). This means 
making  a  comparison  between  actual  catches  and  authorized  catches  for  each 
stock  and calculating the proportion  of undersized fish taken.  Paradoxically,  this 
is technically  easier than proving individual  infringements  on a  legally  accepted 
basis. Procedures can be worked out for carrying out checks to verify  the catches 
of a group of vessels. However statistically lax the procedures, it will be possible 
to  assess  the  reliability  of  such  estimates  and  to  improve  that  reliability  as 
required by adjusting the size of the samples taken. It will often be more  difficult 
to acquire legally acceptable proof against a probable fraudster. On the one hand, 
the so-called "law of large numbers" facilitates the estimation of overall quantities, 
and,  on  the  other,  the  burden  of  proof  placed  on  the  prosecution  makes  the 
penalization of individual infringements  difficult.  This duality must be an element 
in any consideration of the effectiveness  of controls. It shows that it is easier than 
it  is  sometimes  thought  to  measure  the  actual  overall  result  of  infringements. 
Scientists  have  regularly  done  this  by  comparing  the  official  statistics  with 
estimates  based  on  research  work.  The  unreliability  of  certain  official  statistics 
forces  research  institutes to devote a considerable part  of their  limited  resources 
to  non-scientific  work.  However,  in  terms  of  enforcement,  the  possibility  of 
quantifying fraud permits us not only to have immediate composite indicators of 
efficiency  but also to target  inspections  in the most  important  areas. It  therefore 

becomes  possible  to  rationalize  inspections  so  that  the  means  devoted  to 
prevention  and  dissuasion  and  to  the  gathering  of  evidence  necessary  for  the 
imposition  of  penalties  are  concentrated  on  the  most  serious  problems.  Such 
rationalization would not only permit a direct improvement in the effectiveness  of 
controls but would also increase the credibility of controls with those working in 
the sector, who are often  well-informed  about large and recurrent cases of fraud. 

On  an  operational  level,  it  would  be  useful  if  each  Member  State were  able  to 
verify  certain  catches  on the  basis  of  random  checks.  DG XTV should  use  the 
assessments made by  international  scientific  bodies. 

(Items for  internal  information  purposes) 

9.4 

Consistency  with financial  programming 

Is  the operation incorporated in the DG's financial programming for  the 
relevant years? 

The operation  is to be implemented under a Council  Decision covering the 
period  1996 to 2000. 

To which broader objective defined in the DG's financial programming does 
the objective of  the proposed operation correspond? 

The question of enforcement  concerns the whole of the CFP. 

10 

Administrative expenditure (paît A of the budget) 

This section of the financial statement  must be sent to DGs XIX and IX; DG IX will 
then forward  it to DG XIX with its opinion. 

10.1  Will the proposed operation involve an increase in the number of  Commission 

staff? If  so,  how many? 

An  increase is necessary to  intensify  anti-fraud  controls, monitoring and 
assessment.  The estimated  increase is 0.5 A and  1 B grade  staff. 

10.2 

Indicate the amount of staff  and administrative expenditure involved  in the 
proposed operation.  Explain the method of calculation. 

Mission  expenses: ECU  15 000 

Staffing 

-  75% of the time of an A  grade  official 
-  150% of the time of a B grade  official 
-  150% of the time of a C grade  official 
-  translation work (correspondence, proposed programmes, 

Commission  Decision) 

In the medium term, after  the transitional  phase, the additional  resources might 
no  longer be required. 

10 

ISSN 0254-1475 

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