Proposal for a Council Regulation (EC) on the conclusion of Protocol I to the Agreement on fisheries relations between the European Community and the Republic of Latvia laying down the conditions relating to joint enterprises provided for in the said agreement
Date: 1997-06-24
Institutions: European Commission
Subjects: EU financing, Latvia, fishing agreement, protocol to an agreement

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  24.06.1997 
COM(')7)  323  final 

97/0177  (CNS) 

Proposal  for  a 

COUNCIL  REGULATION (MC) 

on the conclusion of Protocol  I to the Agreement on Fisheries Relations between the 
European Community and the Republic of Latvia laying down the conditions relating to 
joint enterprises provided for in the said agreement 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

The purpose of the attached proposal for a Council Regulation  is to obtain the approval of 
the Council  for Protocol  I to the Agreement on Fisheries Relations between the European 
Community  and  the  Republic  of  Latvia  laying  down  the  conditions  relating  to  joint 
enterprises provided for in the said agreement. 

In the light of the mandate given by the Council of December  1995, the Commission, on 
behalf  of  the  Community,  negotiated  with  the  Republic  of  Latvia  a  new  Fisheries 
Agreement which was initialed on 24 April  1996 and signed on  19 December 1996. 

The new Agreement  foresees  that the Parties will undertake to cooperate with the aim of 
establishing joint  enterprises  in the fisheries  sector in Latvia.  For this purpose, Article 5 
provides  for  the possibility  of concluding,  at  a later  stage, a Protocol  implementing  the 
elements of the so-called "second generation" Agreement. 

During  the  fisheries  consultations  between  the  Community  and  Latvia,  held  on  7 and  8 
November  1996  in  Brussels,  the  Parties  agreed  on  the  final  text  of  this  "second 
generation" Protocol, as drafted  during the negotiations of the Agreement in April  1996. 
Protocol I was initialled in Riga on  14 February  1997. 
The  Protocol  implements  the  basic  rules  for  the  creation  of joint  enterprises  between 
Latvian  and  Community  shipowners  in  Latvia  and  establishes  the  level  of  the financial 
assistance at ECU 2.5 million  for its three-year period of validity. 

On  this  basis,  the  Commission  proposes  that  the  Council,  after  having  consulted  the 
Parliament,  should  approve  the proposal  for  a Council  Regulation  on the  conclusion  of 
Protocol  I  to  the  Agreement  on  Fisheries  Relations  between  the  European  Community 
and  the  Republic  of  Latvia  laying  down  the  conditions  relating  to  joint  enterprises 
provided for in the said agreement. 

2. 

Proposal  for  a 

COUNCIL  REGULATION  (EC)  No.  .../97 

of 

1997 

on the conclusion  of Protocol  I to the Agreement  on Fisheries Relations between  the 
European  Community  and the Republic  of Latvia laying  down the conditions  relating  to 
joint enterprises provided  for  in the  said  agreement 

THE  COUNCIL  OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  43  thereof,  in  conjunction  with  the  first  sentence  of  Article  228  (2)  and  the  first 
subparagraph  of Article 228 (3), 

Having  regard to the proposal  from  the  Commission, 

Having  regard  to the opinion  of the  Parliament, 

Whereas  the  Community  and  the  Republic  of  Latvia  have  negotiated  and  initialed  a 
Protocol  laying  down  the  conditions  relating  to  joint  enterprises  provided  for  in  the 
Agreement  on  Fisheries  Relations  between  the  European  Community  and  Latvia,  signed 
in Brussels  on  19 December  1996  ; 

Whereas  it is in the  interest  of the Community  to approve  this  Protocol, 

HAS ADOPTED  THIS  REGULATION: 

Article  1 

Protocol  I  to  the  Agreement  on  Fisheries  Relations  between  the  European  Community 
and  the  Republic  of  Latvia  laying  down  the  conditions  relating  to  joint  enterprises 
provided  for  in  the  said  agreement  is hereby  approved  on  behalf  of  the  Community.  The 
text of the  Protocol  is annexed  to this  Regulation. 

Article  2 

The  President  of  the  Council  is  hereby  authorised  to  designate  the  persons  authorised  to 
sign the Protocol  for the purpose  of committing  the  Community. 

O.J. No. L 332 of 20.12.1996, p. 2 

2> 

Article 3 

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

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

Done at Brussels, on 

For the Council 
The President 

4-

PROTOCOLI 

Laying down the conditions relating to joint enterprises provided for  in the Agreement  on 
Fisheries Relations between the European Community  and the Republic of Latvia. 

For the purposes of this Protocol, a joint enterprise shall be defined  as: 

Article  1 

A company  regulated  by  Latvian  law comprising  one  or more  Community  shipowners  and  one 
or  more  partners  in  Latvia,  with  the  aim  of  fishing  for  and  possibly  exploiting  Latvian  fishing 
quotas by vessels flying the flag of  Latvia with a view to the priority  supply  of the  Community 
market. 

Article  2 

1. 

2. 

3. 

4. 

The  Parties  shall  create  suitable  conditions  for  the  creation  of  joint  enterprises  in  the 
fisheries  sector  between  Latvian  and  Community  shipowners  with  the  aim  of  jointly 
exploiting  Latvian fishery  resources under the conditions laid down in this  Protocol. 

Latvia  shall  ensure  a  non-discriminatory,  fair  and  equitable  treatment  to  such  joint 
enterprises  to  operate  in  Latvian  waters  and  shall  provide  them  with  access  to  Latvian 
fisheries  resources on the same basis as Latvian fishing  vessels. 

To encourage the establishment  of joint enterprises in Latvia, and as part of its policy  for 
the restructuring  of its fleet, the Community  shall facilitate  the reflagging  of  Community 
vessels to Latvia. 
These  reflagged  vessels  that  have  been  integrated  in  the  Latvian  fishing  fleet  with  the 
financial  assistance  foreseen  in  Annex  II  shall  not  be  re-integrated  in  the  Community 
fleet. 

The  integration  of  reflagged  vessels  originating  from  the  Community  shall  not  result  in 
an  increase  of  the  overall  capacity  of  the  Latvian  fishing  fleet.  Therefore,  as  part  of  its 
policy  for  the  technical  renovation  of  its  fishing  industry,  Latvia  shall  transfer  the 
existing  fishing  licences  withdrawn  from  the  replaced  vessels  to  the  newly  integrated 
vessels. 

Article  3 

The  Parties  shall  select  the  projects  for  joint  enterprises  provided  for  in  Article 2.  For  this 
purpose, a Joint Committee  shall be set up which duty shall be to: 

evaluate  the  projects  presented  by  the  Parties  for  the  establishment  of joint  enterprises 
provided  for  in Article 2 of the Protocol, in accordance  with the criteria  set out  in Annex 
I; 

check  that  the  projects  are  being  properly  administered  and  oversee  the  use  of  the 
financial  assistance given to projects in accordance with Article 5 of this Protocol; 

The Joint Committee shall meet once a year alternately in Riga and Brussels, and exceptionally 
at the request of either Party; each Party shall decide on the composition of its Delegation. 

Article 4 

1. 

2. 

3. 

In order to encourage the establishment of joint enterprises referred  to in Article 2, the 
projects  selected  by the Parties  shall be eligible for financial assistance  in  accordance 
with the conditions laid down in Annex II. 

The financial assistance referred to in paragraph 1  shall be paid to the Community vessel 
owner to cover part of his financial contribution to the establishment of a joint enterprise 
in Latvia, after the removal of the vessel in question from the Community register. 

The  Community  shall  grant to joint  enterprises  newly  established  in Latvia a  financial 
support  of  fifteen  (15)  per  cent  of  the  amount  paid  to  the  Community  owner.  This 
financial support in the form of operating capital shall be paid by the Community to the 
.Latvian National Board of Fisheries of the Ministry of Agriculture which is empowered 
by  the  Latvian  Government  to  lay  down  the  terms  governing  its  use  and  its 
administration. 
The Latvian National Board of Fisheries of the Ministry of Agriculture shall inform  the 
Joint Committee of how these funds are used. 

Article 5 

For  the  purpose  of financial assistance  to the establishment  of joint  enterprises  referred  to  in 
Article  5  of  the  Agreement  and  Article  4  of  this  Protocol,  the  European  Commission  shall 
contribute ECU 2,500,000 for the duration of this Protocol. 

Article 6 

1. 

2. 

The  crew  and captain  of  reflagged  vessels  operating  under joint  enterprises  shall  be 
citizens or permanent residents of Latvia. 

The  said  crew  members'  work  contracts  shall  be  concluded  in  Latvia  between  the 
representatives of the shipowners and the crew members concerned, and must include 
social security arrangements and life and accident insurance in accordance with Latvian 
legislation. 

Article 7 

1. 

2. 

This Protocol shall enter into force on the date on which the Parties notify  each other of 
the completion of the procedures necessary for this purpose. 

-  This Protocol is valid for a period of three years. Before the end of the period of validity 
of  this  Protocol,  the  Parties  shall  begin  negotiations  in  order  to  decide  upon  any 
amendments to the Protocol and/or annexes which may be necessary for the subsequent 
period. 

Article 8 

This  Protocol  shall be  drawn  up  in duplicate  in the  Danish,  Dutch, English,  Finnish,  French, 
German,  Greek,  Italian, Latvian, Portuguese,  Spanish and  Swedish  languages, each text  being 
equally authentic. 

For the European Community 

For the Republic of Latvia 

i 
I 
I 
i 
\ 

• 

.• 
i 

I 

i 
I 

v 

ANNEXI 

METHODS AND CRITERIA FOR PROJECT SELECTION 

1. 

2. 

3. 

4. 

5. 

The  Parties  shall exchange  information  on the projects  presented  for  the  formation  of 
joint  enterprises  according  to  Article  2  of  this  Protocol  which  are  liable  to  receiv.e 
financial assistance from the Community. 

The projects  shall be presented to the Community  via the competent  authorities  of the 
Member State or Member States concerned. 

The  Community  shall  submit  to  the  Joint  Committee  the  list  of  projects  eligible  for 
financial  assistance  as provided  for  in Article  5 of this Protocol. The Joint  Committee 
shall evaluate the projects in accordance with the following criteria: 

a) 
b) 
c) 
d) 

technology appropriate to the proposed fishing operations; 
target species and fishing zones; 
age of the vessel; 
previous  experience  of  the  Community  shipowner  and  the  Latvian 
partner in the fisheries sector. 

The Joint Committee shall recommend to the Parties the projects selected in accordance 
with the criteria set out in point 3. 

Once the projects  have been approved by the Parties, the Community  shall  forward  to 
the Latvian Party the list of selected projects for implementation. 

« 

ANNEX1I 

SCALES OF ASSISTANCE TO JOINT ENTERPRISES 

Class of vessel, by gross 

Maximum amount of premium for a 15-* 

registered tonnage (GRT) 

year-old vessel (in ECU) 

0 

25 

50 

100 

400 

< 

< 

< 

< 

and 

25 

50 

100 

400 

over 

6,215/GRT 

5,085/GRT 

4,520/GRT 

2,260/GRT 

1,130/GRT 

+ 

+ 

+ 

+ 

28,250 

56,500 

282,500 

734,500 

The premiums for setting up joint enterprises paid to beneficiaries may not exceed the following 
amounts: 

15-year-old vessels: see table above; 

vessels less than  15 years old: scale from table above increased by 1.5% per year less than 
15;  however,  deduction  pro  rata  temporis shall  be  made  for  any  construction  and/or 
modernization aid received by the vessel in the  10 years preceding the establishment of the 
joint enterprise and no financial assistance shall be granted for vessels of 5 years old or less. 

vessels more than 15 years old: scale from table above decreased by 1.5% per year over 15. 

Member States of the European Community shall contribute 25% of the above mentioned sums 
to projects  involving vessels  reflagging from the Member  State concerned to the Republic  of 
Latvia. 

^ 

1. 

TITLE: 

FINANCIAL STATEMENT 

Proposal for a Council Regulation on the conclusion of Protocol I 
to  the  Agreement  on  Fisheries  Relations  between  the  European 
Community  and  the  Republic  of  Latvia  laying  down  the 
conditions  relating  to  joint  enterprises  provided  for  in  the  said 
agreement 

2. 

3. 

BUDGETARY LINE CONCERNED: 

B7-800 

LEGAL BASIS: 

Article 43 of the EC Treaty  in conjunction  with the first  sentence of Article 228 (2) 
and the first  subparagraph of Article 228 (3) 

4. 

DESCRIPTION: 

4.1. 

General objective: 

to  implement  Article  5 of the Agreement  on  Fisheries  Relations  between 
the European Community and the Republic of Latvia 

to  establish  the  conditions  for  the  constitution  of joint  enterprises  in  the 
fisheries  sector between Latvian and Community  shipowners 

5.  CLASSIFICATION OF EXPENDITURE: 

5.1. 

DO 

5.2. 

CD 

6. 

TYPE OF  EXPENDITURE: 

Financial  assistance  for  the  creation  of  joint  enterprises  between  Latvian  and 
Community  shipowners 

7.  AMOUNT OF EXPENDITURE: 

The financial  compensation for joint enterprises has been fixed at ECU 2.5 
million for the three-year duration of the Protocol. 

7.1.  Method of calculation : 

The  financial  assistance  provided  for  in  Article  5  of  the  Agreement,  in 
order  to encourage  the establishment  of joint  enterprises,  is  based  on  the 
sliding  scale  scheme  fixed  on 
(EEC) 
No. 3699/93. 

the  Structures  Regulation 

[O 

7.2. 

Likely schedule of payment vis-à-vis commitments: 

j = s = = s = = s s = = = s ; s ^ = = = = = = = = = a . __  . 

• 

j a s s s s a a s a i s s s a B s s s s a s s s g s - -. 

, 

- 

Commitment 

Payment 

1998 

1999 

2000 

1,250,000 

1,250,000 

• 

1,250,000 

1,250,000 

8.  ANTI-FRAUD PROVISIONS: 

The Annual Agreed Records of Consultations will require that information  is given 
to  the  Community  on  how  this  financial  compensation  and  contribution  will  be 
used. 

9. 

ELEMENTS OF COST/BENEFIT ANALYSIS: 

The Community fleet in the Baltic Sea has been severely hit by reductions in catch 
possibilities,  mainly  due  to  biological  factors  (low  salinity  of  the  water,  M-74 
disease)  and  pollution  of  the  water.  Any  increase  in  fishing  possibilities  above 
current  critical  catch  levels will contribute towards preventing  the fleet, connected 
industries  and  services  ashore  from  collapsing  and  disappearing.  This  will  also 
avoid, to a certain extent, payments under lay-up schemes or social programmes. 

The "second  generation" Protocol  I will provide  for  a reduction  of capacity  in the 
Western  Baltic  and  a  modernization  of  the  fleet  in  the  Eastern  Baltic,  without 
increasing the capacity in that area. 

10.  ADMINISTRATIVE EXPENSES: 

None. 

ii 

ISSN 0254-1475 

COM(97) 323 final 

DOCUMENTS 

EN 

03  11  08 

Catalogue number  :  CB-CO-97-317-EN-C 

ISBN 92-78-21740-9 

Office  for Official  Publications of the European  Communities 

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