European Parliament resolution on the European Court of Auditors’ Special Reports Nos 1/1999 concerning the aid for the use of skimmed-milk and skimmed-milk powder as animal feed, 2/1999 on the effects of the CAP reform in the cereals sector, 1/2000 on classical swine fever and 8/2000 on the Community measures for the disposal of butterfat, together with the Commission's replies (C5-0236/2000, C5-0237/2000, C5-0238/2000, C5-0239/2000 — 2000/2130(COS))
Date: 2001-01-16
Institutions: Committee on Budgetary Control, European Parliament
Subjects: EAGGF, EU aid, agricultural production policy, agricultural quota, animal nutrition, animal plague, butter, cereals, common organisation of markets, discount sale, implementation of the budget, market support, milk fat, reform of the CAP, sales aid, skimmed milk, skimmed milk powder, swine, veterinary legislation

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Tuesday 16 January 2001

13.
Notes that there are significant differences in opinion between the Member States over what con-
stitutes a secured debt, or the conditions indicating that such a debt has been challenged; considers that
these differences in opinion may be reduced through a legislative initiative, advice to the Member States’
accounting departments or the issuing of new instructions; calls on the Commission to continue the
appropriate initiatives already undertaken, monitoring them closely;

14.
Questions the extent to which the Member States’ national law regarding appeals is consistent with
the relevant provisions of the Community Customs Code or legislation with the relevant Community reg-
ulations; calls on the Commission to investigate this matter;

15.
Considers that the protection of the Community’s financial interests should be done on the basis of
a single body of law and not, as is presently the case, on the basis of vague, disjointed and contradictory
legislation, which deals with the protection of the Community’s financial interests on a piecemeal basis;

16.
Considers that harmonisation in the area of the application of national criminal law and of the
administration of justice in the Member States requires the harmonisation of legislation on fighting fraud
and other illegal activity in the Community;

17.
Notes that the European Commission can only have recourse to the Court of Justice in the case of
repeated infringements by a Member State in matters of customs duties, unlike with the Structural Funds
and the common agricultural policy, where Community legislation establishes the discretionary power of
the European Commission to take financial corrective measures;

Reiterates, to the Commission and the Council, its position adopted on 13 April 2000 (1) on amend-
18.
ing Regulation (EC) No 723/97 that Community legislation for the protection of its financial interests
should be in compliance with Article 280 of the Treaty, and should therefore ensure effective and equiva-
lent protection against fraud and any other illegal activities committed against the Community’s financial
interests in the Member States;

Instructs its President to forward this resolution to the Council, the Commission and the Court of

19.
Auditors.

(1)

‘Texts Adopted’, Item 6.

8. Court of Auditors’ Special Report: EAGGF (budgetary implementation)

A5-0396/2000

European Parliament resolution on the European Court of Auditors’ Special Reports Nos 1/1999
concerning the aid for the use of skimmed-milk and skimmed-milk powder as animal feed, 2/1999
on the effects of the CAP reform in the cereals sector, 1/2000 on classical swine fever and 8/2000
on the Community measures for the disposal of butterfat, together with the Commission’s replies
(C5-0236/2000, C5-0237/2000, C5-0238/2000, C5-0239/2000 1 2000/2130(COS))

The European Parliament,

: having regard to the Court of Auditors’ Special Reports Nos1/1999, 2/1999, 1/2000 and 8/2000

(C5-0236/2000 (1), C5-0237/2000 (2), C5-0238/2000 (3), C5-0239/2000) (4),

: having regard to Article 248(4), second subparagraph, of the EC Treaty,

: having regard to Rule 47(2) of its Rules of Procedure,

: having regard to the report of the Committee on Budgetary Control (A5-0396/2000),

(1) OJ C 147, 27.5.1999.
(2) OJ C 192, 8.7.1999.
(3) OJ C 85, 23.3.2000, p. 1.
(4) OJ C 132, 12.5.2000.

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Special Report No 1/1999 (skimmed milk)

1.
Regrets the numerous occasions on which the Commission had to resort to recoveries through the
clearance of accounts procedure as a result of the Court’s observations, which shows the flaws of the
system in force until the end of 1999;

2.
Notes that in 4 out of 5 Member States where the Court of Auditors carried out on-the-spot checks
on skimmed milk, a reliable system of control was not enforced (points 32 and 33 of the Court’s observa-
tions);

3.
Notes that 20 % of the tests undertaken in 1996 for the detection of the presence of whey in
skimmed-milk powder in one Member State were positive and that an audit of the Court of Auditors in
another Member State found that 3 350 kg of skimmed-milk powder had been treated as eligible, despite
the fact that the analysis report indicated that whey was present (point 42); notes furthermore that while
the Commission, in its replies, stated that payments made for 3 350 kg of ineligible skimmed-milk powder
have already been recovered, it has remained silent with regard to the first case;

4.
Notes that 40 % of skimmed-milk powder produced in the EU, e.g. 500 000 tonnes, is disposed of in
the internal market for animal feedstuffs via aid (ECU 386 million in 1997 for skimmed-milk powder and
skimmed-milk, see point 54);

5.
Deplores the Council’s inability to take the necessary steps either in 1989 or in 1993 to address a
number of loopholes, including the lack of proper guarantees against the falsification of skimmed-milk
powder (point 41), which had given rise to numerous irregularities detrimental to Community finances;

6.
Notes that the new regime, which entered into force on 1 January 2000, on the common organisa-
tion of the market (COM) in milk and milk products, including the specific rules on the granting of aid for
skimmed milk and skimmed-milk powder intended for animal feed and the sale of such skimmed-milk
powder, took the Court of Auditors’ observations into account;

7.
Asks the Commission to ensure that the level of aid granted for skimmed milk and skimmed-milk
powder is closely linked to the quality of the product, with particular reference to the minimum protein
content;

8.
Requests the Commission to consider the possibility of introducing a tender procedure for the fixing
of the aid level for the use of skimmed-milk powder, as it does already in connection with the sales of that
product from public storage under Commission Regulation (EC) No 2799/1999 (1);

9. Welcomes the decision of the Commission to undertake a major evaluation of the common organi-
sation of the market in milk and milk products including the regulation relating to milk quotas, which will
focus on the analysis of the effectiveness and efficiency of the different measures in force in the sector, in
particular judging their impact with respect to the desired aims and the methods used to achieve them;
notes that the procedures for the employment of consultants are at an advanced stage; asks the Commi-
ssion to forward to Parliament the conclusions of this evaluation upon its completion; asks, moreover, the
Commission to address the situation in the milk sector in its mid-term review of the Agenda 2000
reforms;

Invites the Court of Auditors to include an assessment of the new measures in its annual report of

10.
2002;

Special Report No 8/2000 (butterfat)

Regrets the persistent structural surplus in the milk sector due, in part, to a reduction in consump-
11.
tion; notes that the situation is being made worse by the decision of the Berlin European Council to
increase quota levels until 2005; asks that measures be taken at Community and national level to promote
demand for milk and various milk products, as is the case in other sectors (olive oil, beef, etc.);

(1) OJ L 340, 31.12.1999, p. 3.

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12.
Asks the Commission to ensure that Member States introduce the necessary improvements to the
administration of the disposal measures, as highlighted by the Court of Auditors’ report, with particular
emphasis on control and monitoring mechanisms; asks, in this respect, the Commission to use its powers
under the Treaty to deal with protracted inadequate implementation of the regulations;

13.

Notes that:

: 92 % of appropriations available in 1998 under the disposal measure ‘butter for non-profit organisa-
tions’ was spent in just three Member States, none of which is among the poorest in the Union, and

: appropriations available in 1998 under the disposal measures of Regulations (EC) No 2571/97 (1) and
(EEC) No 570/88 (2) (subventions to food industry for the use of butter) represented ECU 511,1 mil-
lion (88 % of the disposal measures) and that 92 % of this total was spent in just five Member States;

asks, consequently, the Commission to include the implementation of the entire series of disposal measures
in the current overall evaluation of the market organisation in milk;

Asks the Commission to ensure that subsidies for butterfat are not subject to VAT throughout the

14.
Union and to indicate the timetable of the future action aimed at simplifying the VAT system;

Calls on the Commission to give thorough consideration to the Court of Auditors’ observations

15.
concerning improvements to the tendering system by which the level of aid is fixed;

Special Report No 2/1999 (cereals)

16.
Notes with satisfaction the Court of Auditors’ assertion that the reform introduced in 1992 (intro-
duction of the set-aside scheme and cutting prices) achieved its objectives during the transitional period,
i.e. the ending of the cereal crisis and the establishment of market balance;

17.
Shares the Court of Auditors’ view that the global production trend in cereals, as well as the diver-
gent trends in Member States, make it unlikely that the reform will have any lasting effects on production
levels;

18.
Regrets the Council’s failure to endorse proposals aimed at building on the 1992 reform (further
reduction in institutional prices, reduction of compensation payments, temporary extension of the co-
responsibility levy, etc.); asks the Commission to address the situation in the cereals sector in its mid-
term review of the Agenda 2000 reforms;

19.
Notes the Court of Auditors’ observations, according to which support for farmers could switch
away from elements such as prices, production or area and instead be based on a standard net income
per farm household or working unit, with farm support only triggered to make good any fall in that
income (paragraph 5.8 of the Court’s observations); proposes that, in improving market situations, a sub-
sidy-reduction mechanism should be triggered, which would avoid over-generous aid in good market situa-
tions;

20.
Notes that both the Commission and the Court of Auditors insist that there has been over-compen-
sation for income losses in the cereals sector, estimated by the former at ECU 8,5 billion (excluding the
effect of the abolition of the co-responsibility levy) and by the latter at ECU 13,1 billion for the 1993 to
1997 period;

21.

Takes the view that future proposals for the sector should:

: address the need to improve the position of smaller producers by differentiating support according to

farm size or yield,

: explore with Member States the possibilities of cofinancing certain income support,

(1) OJ L 350, 20.12.1997, p. 3.
(2) OJ L 55, 1.3.1988, p. 31.

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: tackle the present situation according to which support for the cereals sector is concentrated in the

more prosperous regions of the Union,

: endeavour to redress the uneven distribution of incomes, whereby in 1995 about 40 % of the com-
pensatory payments were made to less than 3 % of the beneficiaries, while small farmers representing
57 % of the beneficiaries received only 4,5 % (paragraph 4.45 of the Court’s observations);

Special Report No 1/2000 (classical swine fever)

22.
Attaches great importance to the speedy conclusion of the procedure for amending Council Direc-
tive 80/217/EEC on the control of classical swine fever (1), drawing from the experience of the most recent
epidemics, which inflicted heavy losses on the Community budget, Member States and the pig farmers
concerned;

Asks the Commission to ensure that the Animal Movement System (ANIMO) is managed and devel-

23.
oped under the full control of the Commission;

24.
Regrets that three years after consideration of an assessment of the ANIMO system, improvements
have yet to be introduced; asks the Commission to table without delay proposals for the amendment of
Council Directive 90/425/EEC (2), taking into consideration the Court of Auditors’ observations and the
abovementioned assessment undertaken by the Commission itself;

25.
Shares the Commission’s and the Court of Auditors’ view that pig producers should carry a greater
share of the financial burden of measures to combat the epidemic in question, as is the case in other types
of epidemics and as was already pointed out in the context of the 1995 discharge procedure; asks the
Commission to carry out a comparative study of alternative forms of financing measures to combat animal
diseases, such as a private sector fund to which farmers and other interested parties would contribute, or
other types of insurance schemes;

Expects the Commission, through its Food and Veterinary Office, to ensure that Member States

26.
implement effective contingency plans for dealing with classical swine fever;

*

*

*

Instructs its President to forward this resolution to the Council, the Commission and the Court of

27.
Auditors.

(1) OJ L 47, 21.2.1980, p. 11.
(2) OJ L 224, 18.8.1990, p. 29.

9. Court of Auditors’ Special Report: EU aid to Bosnia-Herzegovina

A5-0389/2000

European Parliament resolution on the Court of Auditors Special Report No 2/2000 on aid given
by the European Union to Bosnia-Herzegovina with a view to restoring peace and the rule of law,
together with the Commission’s replies (C5-0229/2000 1 2000/2131(COS))

The European Parliament,

: having regard to the Court of Auditors Special Report No 2/2000 (C5-0229/2000) (1),

: having regard to Articles 248(4), second subparagraph, and 276(1) and (3) of the EC Treaty,

(1) OJ C 85, 23.2.2000, p. 29.