Commission Regulation (EC) No 20/98 of 7 January 1998 laying down rules for the application of Council Regulation (EC) No 2200/96 as regards aid to producer organizations granted preliminary recognition
Date: 1998-01-07
Institutions: European Commission
Subjects: EAGGF Guidance Section, aid system, eligibility criteria, producer organisation, production aid

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COMMISSION REGULATION (EC) No 20/98

of 7 January 1998

laying down rules for the application of Council Regulation (EC) No 2200/96 as
regards aid to producer organizations granted preliminary recognition

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 2200/96 of
28 October 1996 on the common organization of the
amended by
and vegetables (1),
market
Commission Regulation (EC) No 2520/97 (2), and in par-
ticular Article 48 thereof,

in fruit

as

Whereas Article 14 of Regulation (EC) No 2200/96 states
that new producer organizations or those which have not
been recognized under Council Regulation (EEC) No
1035/72 (3), as last amended by Commission Regulation
(EC) No 1363/95 (4), may be allowed a transitional period
of no more than five years in which to meet the condi-
tions for recognition laid down in Article 11 of Regula-
tion (EC) No 2200/96; whereas Regulation (EC) No
478/97 (5) establishes the conditions for granting prelim-
inary recognition to producer organizations;

Whereas, in order to encourage the formation of producer
organizations, Article 14 of Regulation (EC) No 2200/96
also states that Member States may grant two sorts of aid
to producer organizations granted preliminary recognition
in the five years following such preliminary recognition,
one to cover the costs of their formation and administra-
tive operation and one to cover part of the investments
required to attain recognition and set out in their recogni-
tion plans;

Whereas, to facilitate the correct application of the system
of aid to cover the costs of formation and administrative
operation, that aid should be granted at a flat rate; whereas
that flat-rate aid should be subject to a ceiling in order to
to take
comply with budgetary constraints; whereas,
account of
the differing financial needs of producer
organizations of different sizes, that ceiling should be ad-
justed in line with the marketable production of
the
producer organizations; whereas, since the rules contained
in Commission Regulation (EEC) No 2118/78 (6) are no
longer applicable, that Regulation should accordingly be
repealed;

(1) OJ L 297, 21. 11. 1996, p. 1.
(2) OJ L 346, 17. 12. 1997, p. 41.
(3) OJ L 118, 20. 5. 1972, p. 1.
(4) OJ L 132, 16. 6. 1995, p. 8.
(5) OJ L 75, 15. 3. 1997, p. 4.
(6) OJ L 246, 8. 9. 1978, p. 11.

Whereas the selection criteria laid down by the Commis-
sion pursuant to Article 8 of Council Regulation (EC) No
951/97 of 20 May 1997 on improving the processing and
marketing conditions for agricultural products (7) should
be applied to investments eligible under this Regulation
to ensure consistency between the various
in order
measures financed by the Community, until such time as
the new agricultural policy guidelines for fruit and veget-
ables introduced by Regulation (EC) No 2200/96 are
implemented;

Whereas the aid provided for in this Regulation should be
discontinued once the producer organization is recog-
nized by the Member State; whereas, however, to take
account of
investments,
those qualifying for investment aid under this Regulation
can be carried over to operational programmes as referred
to in Article 15 of Regulation (EC) No 2200/96;

the multiannual

financing of

Whereas, in the event of mergers, the aid may continue to
be granted to the producer organizations resulting from
the merger;

Whereas, in order to ensure that the aid provided for in
this Regulation is applied properly, the Member State in
question should check that the grant of the aid is duly
justified, account being taken of any previous grants of aid
for the launching of producer organizations and of any
movements of producers between producer organizations;
whereas the Member States must also ensure that dupli-
cate Community or national financing is not granted for
measures qualifying for Community financing under this
Regulation;

Whereas procedures should be laid down for controls and
penalties;

Whereas Article 14 (7) of Regulation (EC) No 2200/96
provides a special scheme for Portugal; whereas provisions
should be laid down to ensure compliance with that
special scheme;

Whereas the Management Committee for fresh Fruit and
Vegetables has not delivered an opinion within the time
limit set by its chairman,

(7) OJ L 142, 2. 6. 1997, p. 22.

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HAS ADOPTED THIS REGULATION:

Article 2

Article 1

This Regulation lays down rules on the granting of
1.
aid as provided for in Article 14 (2) of Regulation (EC) No
2200/96 to producer organizations granted preliminary
recognition.

2.

For the purposes of this Regulation:

(a)

‘producer organization granted preliminary recogni-
tion’ means a new producer organization or one not
recognized under Regulation (EEC) No 1035/72
before the entry into force of Regulation (EC) No
2200/96,
to which a Member State has granted
preliminary recognition pursuant to Regulation (EC)
No 478/97;

(b)

‘producer’ means a producer as referred to in Article 1
(2) of Regulation (EC) No 412/97 (1);

(c)

‘recognition plan’ means a phased recognition plan in
line with Regulation (EC) No 478/97 presented by a
producer organization, acceptance of which signals the
start of the period of no more than five years referred
to in Article 14 (1) of Regulation (EC) No 2200/96;

(d)

‘marketed production’ means the production of a
producer organization’s members in the category for
which preliminary recognition is granted:

— delivered to the producer organization and actually
sold through the organization fresh or processed,

— sold under the terms of

the second and third
indents of Article 11 (1) (c) (3) of Regulation (EC)
No 2200/96 with the organization’s authorization,

— directly sold by the organization’s members in
accordance with the first and fourth indents of
Article 11 (1)
(3) of Regulation (EC) No
2200/96.

(c)

Marketed production shall not include the production
of members of other producer organizations marketed
through the organization in question in accordance
with the second and third indents of Article 11 (1) (c)
(3) of Regulation (EC) No 2200/96;

(e)

‘value of marketed production’ means the value of
marketed production at the ‘ex-producer organization’
stage, or, where appropriate, as a ‘wrapped or prepared
unprocessed product’.

1.
The aid provided for in Article 14 (2) (a) of Regula-
tion (EC) No 2200/96 shall be granted towards the costs
of setting up and running the producer organization, at a
flat rate.

The aid referred to in paragraph 1 shall be deter-
2.
mined for each producer organization on the basis of its
annual marketed production, and shall:

(a) amount, for the first, second, third, fourth and fifth
years, to 5 %, 5 %, 4 %, 3 % and 2 % respectively of
the value of marketed production up to a maximum
of ECU 1 000 000, and

(b) amount, for the first, second, third, fourth and fifth
to 2,5 %, 2,5 %, 2,0 %, 1,5 % and 1,5 %
the value of marketed production

years,
respectively of
exceeding ECU 1 000 000;

(c) be subject to a ceiling for each producer organization

of:

— ECU 100 000 for the first year,

— ECU 100 000 for the second year,

— ECU 80 000 for the third year,

— ECU 60 000 for the fourth year,

— ECU 50 000 for the fifth year;

(d) be paid in annual instalments for a period of not more
than seven years starting on 1 January following the
date on which preliminary recognition is granted.

Article 3

1.
Aid as provided for in Article 14 (2) (b) of Regulation
(EC) No 2200/96 shall be granted, directly or through
credit institutions, in the form of special loans to cover
part of the cost of investments linked to implementation
of
the measures in recognition plans as described in
Article 4 (1) of Regulation (EC) No 478/97.

Investments liable to distort competition where the other
economic activities of the organization are concerned and
investments not satisfying the selection criteria adopted
by the Commission on the basis of Article 8 (3) of Regu-
lation (EC) No 951/97 shall be excluded.

2.
Investments to the direct or indirect benefit of such
activities shall be financed pro rata to their use for the
sectors or products for which preliminary recognition is
granted.

Article 4

(1) OJ L 62, 4. 3. 1997, p. 16.

Aid as provided for in Articles 2 and 3 shall cease

1.
once recognition is granted.

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2. Where an operational programme is
submitted
pursuant to Commission Regulation (EC) No 411/97 (1),
the Member State shall ensure that there is no duplicate
financing of the measures financed under the recognition
plan.

3.
Investments qualifying for the aid for the costs
referred to in Article 3 may be carried over to operational
programmes provided they are in line with Regulation
(EC) No 411/97.

establish that the aid is duly justified, regard being had to
the conditions and the date on which any earlier public
aid was granted to the producer organizations from which
the members of the producer organizations in question
originate, and to any movements of members between
producer organizations.

Article 8

Article 5

Eligible expenditure incurred by Member States on aid as
provided for in Articles 2 and 3 shall qualify for assistance
from the EAGGF Guidance Section.

1.
Applications for reimbursement of the aid to meet
the costs referred to in Articles 2 and 3 and relating to
expenditure paid by the Member State to all the organiza-
tions concerned during the course of a calendar year shall
be submitted to the Commission in a single batch not
later than 30 June of the following year.

2.
All applications for aid shall be accompanied by a
written declaration from the organization to the effect
that the latter:

— complies, and will comply, with the provisions of
Regulations (EC) No 2200/96 and (EC) No 478/97
and this Regulation,

— does not benefit and has not benefited directly or
indirectly from duplicate Community or national
financing for measures for which Community finan-
cing is granted pursuant to this Regulation.

Article 6

1.
Aid as provided for in Articles 2 and 3 of this Regu-
lation may be given, or may continue to be given, to
producer organizations which have been granted prelim-
inary recognition under Regulation (EC) No 478/97 and
which result from the merger between a producer organ-
ization granted preliminary recognition under that Regu-
lation and one or more of the following:

Article 9

from the EAGGF
The Community
Guidance Section towards aid as provided for in Article 2
shall amount to:

contribution

— 75 % of eligible public expenditure for regions falling

within Objectives 1 and 6, and

— 50 % of eligible public expenditure for other regions.

Article 10

1.
The Community contribution from the EAGGF
Guidance Section, expressed in terms of capital grant
the
equivalent, shall not exceed, as a percentage of
eligible investment costs referred to in Article 3:

— 50 % in regions falling within Objectives 1 and 6,

— 30 % in other regions.

2.
The Member States concerned must undertake to
contribute at least 5 % of the eligible costs referred to in
Article 3.

Recipients of the aid towards the investment costs

3.
referred to in Article 3 shall pay at least:

(a) one or more producer organizations granted prelim-
inary recognition under Regulation (EC) No 478/97;

— 25 % of eligible costs in Objective 1 and Objective 6

regions, and

(b) one or more producer organizations recognized under

Regulation (EEC) No 1035/72;

(c) one or more producer organizations recognized under

Article 11 of Regulation (EC) No 2200/96.

2.
For the purpose of calculating the aid payable under
paragraph 1, the producer organization resulting from the
merger shall replace the merging organizations.

Article 7

Member States shall evaluate the eligibility of producer
organizations for the aid under this Regulation in order to

— 45 % of eligible costs in other regions.

Article 11

1.
The expenditure referred to in Article 8 shall form
part of the provisions contained in Article 31 of Council
Regulation (EC) No 950/97 (2). Article 33 of that Regula-
tion shall apply to the payment of Community aid.

2.
The Commission shall adopt rules governing appli-
cations for payment and reimbursement after consulting
the Committee referred to in Article 29 of Council Regu-
lation (EEC) No 4256/88 (3).

(1) OJ L 62, 4. 3. 1997, p. 9.

(2) OJ L 142, 2. 6. 1997, p. 1.
(3) OJ L 374, 31. 12. 1988, p. 25.

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3.
Checks on aid for the costs referred to in Articles 2
and 3 shall be carried out in accordance with Article 23 of
Council Regulation (EEC) No 4253/88 (1).

Article 12

1.
If a check made under Title VI of Regulation (EC)
No 2200/96 or Article 23 of Regulation (EEC) No
4253/88 shows that:

— the value of marketed production is less than the
amount used for the calculation of the Community’s
financial assistance, or

— aid covered by this Regulation has not been used in
accordance with the regulations applicable or with the
approved recognition plan,

the recipient shall be required to reimburse double the
amount unduly paid, plus interest for the period between
payment and reimbursement.

The rate of interest shall be that applied by the European
Monetary Institute to transactions in ecus, as published in
the ‘C’ series of the Official Journal of the European
Communities, in force on the date of undue payment,
plus three percentage points.

2.
If the difference between the aid actually paid and
that due is more than 20 % of the latter, the recipient
shall be required to reimburse all the aid received, plus
interest as indicated in paragraph 1.

3.
The share of amounts recovered by a Member State
which belongs to the Guidance Section of the EAGGF
and the relevant interest shall be deducted from the next
application for the balance of the reimbursement sent to

the Guidance Section of the EAGGF or credited to an
account of the Commission.

4.
In the event of a false declaration made deliberately
or as a result of serious negligence on a matter within the
scope of this Regulation, the organization concerned shall
be barred from Community financial assistance for the
remaining duration of the recognition plan in progress.

Paragraphs 1 to 4 shall apply without prejudice to
5.
other penalties to be set as provided for in Article 48 of
Regulation (EC) No 2200/96.

Article 13

Where the Portuguese authorities demonstrate that, in a
given year, the aid payable to a producer organization in
Portugal under this Regulation is less than that stipulated
in Article 14 (7) of Regulation (EC) No 2200/96, the aid
provided for in Article 2 (2) shall be increased so as to
satisfy the provisions of the aforesaid Article 14.

Article 14

Regulation (EEC) No 2118/78 is repealed.

However,
it shall continue to apply to the producer
organizations which have applied for the aid under Article
14 of Regulation (EEC) No 1035/72 before the entry into
force of Regulation (EC) No 2200/96, and to calculation
to be made in accordance with Article 13 of this Regula-
tion.

Article 15

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

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

Done at Brussels, 7 January 1998.

For the Commission

Franz FISCHLER

Member of the Commission

(1) OJ L 374, 31. 12. 1988, p. 1.