Proposal for a Council Regulation on the common organisation of the market in ethyl alcohol of agricultural origin
Date: 2001-02-21
Institutions: European Commission
Subjects: EU agriculture committee, State aid, common organisation of markets, ethanol, export licence, import licence, inward processing, protective clause, statistics, tariff quota

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Proposal for a Council Regulation on the common organisation of the market in ethyl alcohol of
agricultural origin

(2001/C 180 E/09)

COM(2001) 101 final (cid:151) 2001/0055(CNS)

(Submitted by the Commission on 23 February 2001)

THE COUNCIL OF THE EUROPEAN UNION,

should send the Commission the information necessary
to draw up a market balance for agricultural alcohol.

Having regard to the Treaty establishing the European
Community, and in particular Articles 36 and 37 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of
Committee,

the Economic and Social

Whereas:

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

(2) The aim of the common agricultural policy is to achieve
the objectives set out in Article 33 of the Treaty. This can
be accomplished through the introduction of
tools to
improve monitoring of developments both on the
internal market and in trade with third countries.

their

value

(3) The processing of certain agricultural raw materials into
ethyl alcohol is closely linked with the economy of those
It can contribute in large measure to
raw materials.
and may be of particular
enhancing
economic and social
importance for the economy of
certain regions of the Community or may be a significant
source of income for the producers of the raw materials
concerned.
It also permits the disposal of products of
unsatisfactory quality and short-term surpluses that may
cause temporary problems in certain sectors.

(4) A common organisation of the market in ethyl alcohol of
agricultural origin should be established for the first time.

(5) The marketing of

alcohol

from alcohol-producing
intervention
products which have been the subject of
is covered by
measures or other
special procedures under
relating to
those products in order to ensure adequate competition
and to prevent any disturbance of the traditional alcohol
market.

specific measures

the regulations

(6) For the purpose of monitoring developments on the
market in alcohol of agricultural origin, Member States

external

(7) The creation of a single Community market in alcohol
requires the establishment of trade arrangements at the
Community’s
arrangements
involving a system of import duties should, in principle,
trade
Community market.
stabilise
arrangements must
agreements
concluded during the Uruguay Round of multilateral
trade negotiations.

borders. Trade

on the

Those

based

the

be

(8) In order to be able to monitor trade movements on a
permanent basis, 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 requested are actually carried out.

(9) It is appropriate to confer on the Commission the power
to open and administer tariff quotas resulting from inter-
national agreements concluded in accordance with the
Treaty or from other legislative acts of the Council.

(10) In addition to the system described above, and to the
extent necessary for
its proper working, provision
should be made for regulating or, when the situation on
the market so requires, prohibiting the use of inward and
outward processing arrangements.

(11) The system of customs duties makes

it possible to
the
dispense with all other protective measures at
Community’s external borders. However,
the internal
market and duty mechanism could, in exceptional circum-
stances, prove defective. In such cases, so as not to leave
the Community market without defence against distur-
bances that might ensue, the Community should be able
to take all necessary measures without delay. All such
measures must comply with the obligations arising from
the World Trade Organisation Agreements.

(12) The achievement of a single market would be jeopardised
by the grant of certain types of aid. The Treaty provisions
governing the appraisal of aid granted by Member States
and the prohibition of aid incompatible with the common
market should be extended to alcohol of agricultural
origin.

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(13) Since the measures required for the implementation of
this Regulation are management measures within the
meaning of Article 2 of Council Decision 1999/468/EC
of 28 June 1999 laying down the procedures for the
conferred on the
exercise of
Commission (1),
concerned should be
adopted in accordance with the procedure laid down in
Article 4 of that Decision.

implementing powers
the measures

(14) The common organisation of the market in alcohol of
agricultural origin must
take proper and simultaneous
account of the objectives set out in Articles 33 and 131
of the Treaty.

(15) The common organisation of the market in alcohol of
agricultural origin must also comply with the agreements
concluded in accordance with Article 300(2) of the Treaty,
in particular those forming part of the Agreement estab-
lishing
and more
specifically the Agreement on Technical Barriers to Trade.

the World Trade Organisation

(16) In order

to guarantee the smooth operation of

the
arrangements, the Commission should be permitted to
adopt
transitional measures. The Commission should
also be authorised to resolve specific practical problems
on a temporary and exceptional basis.

(17) In applying this Regulation, account should be taken of
the fact that, with the exception of the spirit drinks sector,
the Community ethyl alcohol market
is supplied with
ethyl alcohol of both agricultural and non-agricultural
origin without
the
measures for applying this Regulation must not lead to
any discrimination between the two types of alcohol,

restriction. Consequently,

any

HAS ADOPTED THIS REGULATION:

Article 1

Products covered

1.
A common organisation of the market in ethyl alcohol of
agricultural origin covering the following products is estab-
lished.

CN code

Description

ex 2207 10 00

Undenatured ethyl alcohol of an alcoholic
strength by volume of 80 % vol. or higher,
of agricultural origin

ex 2207 20 00

Ethyl alcohol and other spirits, denatured, of
any strength, of agricultural origin

ex 2208 90 91 and
ex 2208 90 99

Undenatured ethyl alcohol of an alcoholic
strength by volume of less than 80 % vol., of
agricultural origin

2.

For the purposes of this Regulation:

(a)

(cid:145)Ethyl alcohol of agricultural origin(cid:146) means
the liquid
obtained by distillation or osmosis, after fermentation of
certain sugars under the action of yeast or other ferments,
of alcohol-producing agricultural products, excluding spirit
drinks as defined in Council Regulation (EEC) No 1576/89
of 29 May 1989 laying down general rules on the defi-
nition, description and presentation of spirit drinks (2);

(b) (cid:145)Ethyl alcohol and other spirits, denatured, of agricultural
origin(cid:146) means liquids to which certain substances have
deliberately been added, making them unfit
for human
consumption but not affecting their suitability for industrial
use;

(c)

(cid:145)Alcohol-producing agricultural products(cid:146) means products
falling within Chapters 7, 8, 10, 11, 12 and 23 and
headings Nos 1701, 1702, 1703, 2008, 2009, 2204,
2205 and 2206 of the combined nomenclature.

TITLE I

INTERNAL MARKET

Article 2

Definitions

The method of production and the characteristics of alcohol
obtained from a specific alcohol-producing product of agri-
cultural origin may be laid down in accordance with the
procedure referred to in Article 12(2).

Article 3

Information

The Member States

1.
following information:

shall

send the Commission the

(cid:151) before the end of the month following a quarter and for the
quarter in question:
the production of alcohol of agri-
cultural origin expressed as hectolitres of pure alcohol,
broken down by alcohol-producing product used,

(cid:151) before the end of March and for the previous year: the
volume of alcohol of agricultural origin disposed of
expressed as hectolitres of pure alcohol, broken down by
sector of destination (spirit drinks, perfumes-cosmetics,
pharmaceuticals, vinegar industry, other industrial uses),

(1) OJ L 184, 17.7.1999, p. 23.

(2) OJ L 160, 12.6.1989, p. 1. Regulation last amended by Regulation

(EC) No 3378/94 (OJ L 366, 31.12.1994, p. 1).

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(cid:151) before the end of March: the stocks of alcohol of agri-
cultural origin available in the Member State at the end
of the previous year,

(cid:151) before the end of March:

forecast production for

the

current year.

2.
On the basis of the information referred to in paragraph
1 and any other information available, the Commission shall
draw up a Community balance for the market in alcohol of
agricultural origin for the previous year and an estimated
balance for the current year.

Before the end of April, the Commission shall notify the

3.
Member States of the balances referred to in paragraph 2.

TITLE II

TRADE WITH THIRD COUNTRIES

Article 4

Import and export licences

1.
All imports into the Community of the products referred
to in Article 1(1) may be subject to the presentation of an
import licence. All exports of those products may be subject
to the presentation of an export licence.

2. Member States shall issue licences to all applicants, irres-
pective of their place of establishment within the Community,
without prejudice to the provisions adopted for the application
of Article 6.

Licences shall be valid throughout the Community.

Licences shall be issued subject

to the lodging of a
3.
security guaranteeing that
the products are imported or
exported during the term of validity of the licence and, save
in cases of force majeure, the security shall be forfeited in whole
or in part if import or export is not carried out, or is only
carried out partially, within that period.

4.
The term of validity of the licences and other detailed
rules for the application of this Article shall be laid down in
accordance with the procedure referred to in Article 12(2).

In accordance with that same procedure, the Commission
5.
may decide that the arrangements provided for in this Article
shall also cover products falling within CN code 2208 put up
in containers of more than 2 litres and presenting all the
characteristics of neutral alcohol as defined in Annex I
to
Regulation (EEC) No 1576/89.

Article 5

Application of Common Customs Tariff duties

Save as otherwise provided in this Regulation, the rates of duty
in the Common Customs Tariff shall apply to the products
listed in Article 1(1).

Article 6

Tariff quotas

1.
Tariff quotas for the products covered by this Regulation
resulting from agreements concluded in accordance with
Article 300 of
the
Council shall be opened and administered by the Commission
in accordance with detailed rules adopted in accordance with
the procedure referred to in Article 12(2).

the Treaty or from any other act of

Quotas may be administered using one of the following

2.
methods or a combination thereof:

(a) a method based on the chronological order in which
applications are lodged (on a (cid:145)first come, first served(cid:146) basis);

(b) a method of distribution in proportion to the quantities
requested when the applications are lodged (the (cid:145)simul-
taneous examination(cid:146) method);

(c) a method taking traditional

trade patterns into account

((cid:145)traditional importers/new arrivals(cid:146) method).

Other suitable methods may be used. Such methods must avoid
any discrimination among the traders concerned.

3. Where necessary, the method of administration shall take
account of the supply needs of the Community market and of
the need to preserve its equilibrium and may be based on
methods used in the past for quotas similar to those referred
to in paragraph 1, without prejudice to rights arising under the
agreements concluded during the Uruguay Round of multi-
lateral trade negotiations.

4.
The detailed rules referred to in paragraph 1 shall provide
for annual quotas, if necessary suitably phased over the year,
and shall determine the administrative method to be used and
where appropriate include provisions on:

(a) the guarantees covering the nature, provenance and origin

of the product;

(b) the recognition of the document used for verifying the

guarantees referred to in (a);

(c)

the terms and conditions on which import licences are to
be issued and their term of validity.

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Article 7

Inward processing arrangements

the market

To the extent necessary for the proper working of the common
in
organisation of
accordance with the procedure referred to in Article 12(2),
may prohibit in whole or in part the use of inward processing
arrangements for the manufacture of the products listed in
Annex I to the Treaty.

the Commission,

in alcohol,

Article 8

Interpretation of the combined nomenclature

1.
The general rules for the interpretation of the combined
nomenclature and the detailed rules for its application shall
apply to the tariff classification of products covered by this
from the
the
Regulation;
application of
in the
Common Customs Tariff.

tariff nomenclature
this Regulation is

resulting
incorporated

Save as otherwise provided for in this Regulation or in
the following shall be

2.
provisions adopted pursuant hereto,
prohibited:

own initiative, decide upon the necessary measures, which shall
be communicated to the Member States and be immediately
applicable. The Commission shall take decisions on requests
from Member States within three working days of their receipt.

3. Measures decided upon by the Commission may be
referred to the Council by any Member State within three
working days of
their notification. The Council shall meet
immediately. It may, acting by a qualified majority, confirm,
amend or repeal the measure in question within one month of
the date of referral.

4.
This Article shall be applied having regard to the obli-
gations arising from agreements concluded in accordance with
Article 300(2) of the Treaty.

TITLE III

GENERAL PROVISIONS

Article 10

National aid

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

customs duty;

Articles 87, 88 and 89 of the Treaty shall apply to production
of and trade in the products covered by this Regulation.

(b) the application of any quantitative restriction or measure

having equivalent effect.

Article 11

Article 9

Emergency measures in the event of serious disturbance

If, by reason of

imports or exports,

the Community
1.
market in one or more of the products listed in Article 1 is
affected by, or is threatened with, serious disturbance likely to
jeopardise the achievement of the objectives set out in Article
33 of the Treaty, appropriate measures may be applied in trade
threat of
with third countries until
disturbance has ceased.

such disturbance or

In deciding whether the situation warrants the application of
in particular, of the
such measures, account shall be taken,
licences have been issued or
quantities for which import
applied for and the figures given in the balance for
the
marketing year concerned.

The Council, acting in accordance with the procedure laid
down in Article 37(2) of the Treaty, shall adopt general rules
for the application of
this paragraph and shall define the
circumstances and limits within which Member States may
adopt protective measures.

Communication between the Member States and the
Commission

The Member States and the Commission shall exchange all
information necessary for the application of this Regulation.
Detailed rules for the communication of such information,
information,
including the nature and presentation of
the deadlines for transmission and the distribution of
the
information received, shall be adopted in accordance with the
procedure referred to in Article 12(2).

that

Article 12

Management Committee

1.
The Commission shall be assisted by the Management
Committee for Wine (hereafter referred to as (cid:145)the Committee(cid:146)),
established by Article 74 of Regulation (EC) No 1493/1999.

reference

2. Where
the
management procedure laid down in Article 4 of Decision
in compliance with Article 7(3)
1999/468/EC shall apply,
thereof.

to this paragraph,

is made

2.
If the situation referred to in paragraph 1 arises, the
Commission shall, at the request of a Member State or on its

The period provided for in Article 4(3) of Decision

3.
1999/468/EC shall be one month.

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Article 13

The Committee may consider any other question referred to it
by its Chairman either on his or her own initiative or at the
request of the representative of a Member State.

(a) the measures required to facilitate the transition to the

arrangements established by this Regulation;

Article 14

(b) the measures required to resolve specific problems. Such
if duly justified, may derogate from certain

measures,
provisions of this Regulation.

Compliance with the Treaty and international agreements

This Regulation shall be applied taking proper and simul-
taneous account of the objectives set out in Articles 33 and
131 of the Treaty.

Article 16

Entry into force

TITLE IV

TRANSITIONAL AND FINAL PROVISIONS

Article 15

Transitional measures

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

It shall apply from . . .

The Commission shall adopt, in accordance with the procedure
referred to in Article 12:

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