Commission Regulation (EC) No 609/2001 of 28 March 2001 laying down detailed rules for the application of Council Regulation (EC) No 2200/96 as regards operational programmes, operational funds and Community financial assistance, and repealing Regulation (EC) No 411/97
Date: 2001-03-28
Institutions: European Commission
Subjects: common organisation of markets, fruit, legitimacy, producer organisation

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COMMISSION REGULATION (EC) No 609/2001

of 28 March 2001

laying down detailed rules for the application of Council Regulation (EC) No 2200/96 as regards
operational programmes, operational funds and Community financial assistance, and repealing
Regulation (EC) No 411/97

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 organisation of the market in
fruit and vegetables (1), as last amended by Regulation (EC) No
2826/2000 (2), and in particular Article 48 thereof,

Whereas:

(1)

(2)

(3)

Article 15 of Regulation (EC) No 2200/96 provides for
financial assistance to be granted to producer organ-
isations setting up an operational fund in accordance
with certain rules and within certain limits. Article 13
grants financial assistance to existing producer organ-
isations needing a transitional period in order to qualify
for recognition. Article 16 lays down certain rules for
the implementation of operational programmes, and
action plans in the case of producer organisations recog-
nised under Article 13. Detailed rules should be laid
down for the application of those provisions.

So as to promote regrouping of supply and facilitate the
implementation of certain measures within operational
programmes, producer organisations should be able to
confer the partial or total implementation of actions in
their operational programme to a recognised association
of producer organisations. However, specific provisions
are necessary in order
to avoid abuses or double
financing.

To facilitate the use of the scheme, the marketed produc-
tion of producer organisations should be clearly defined,
including the specification of the eligibility of product
and the marketing stage at which the value of produc-
tion is to be calculated. To guarantee equal treatment for
all products intended for processing eligible for an aid
system under Council Regulations (EC) No 2201/96 of
28 October 1996 on the common organisation of the
markets in processed fruit and vegetables (3), as last
amended by Regulation (EC) No 2699/2000 (4), and (EC)
No 2202/96 of 28 October 1996 introducing a
Community aid scheme for producers of certain citrus

(1) OJ L 297, 21.11.1996, p. 1.
(2) OJ L 328, 23.12.2000, p. 2.
(3) OJ L 297, 21.11.1996, p. 29.
(4) OJ L 311, 12.12.2000, p. 9.

fruits (5), as last amended by Regulation (EC) No 2699/
2000, the aid referred to in Article 2 of Regulation (EC)
No 2201/96 and Article 1 of Regulation (EC) No 2202/
96 should be added to the appropriate value of
marketed production. For consistency, the ceilings on
Community financial assistance should be calculated on
the basis of the value of production marketed during a
12-month period. To ensure flexibility of this system for
operators, Member States may define limited options for
calculating this 12-month period; additional methods of
calculation of marketable production should also be
made possible in case of yearly fluctuations or insuffi-
cient data. To prevent misuse of the scheme, producer
organisations should not be permitted to change refer-
ence periods within the duration of a programme.

To ensure correct use of Community funds, rules must
be laid down for the management of operational funds
financial contributions towards these
and members'
funds. In particular it should be specified that the finan-
cial contributions of members of the producer organ-
isation are based on the marketed production used to
calculate the Community financial assistance. Different
levels of contributions may be set to take into account
different
levels of participation in an operational
programme by different groups of members, on condi-
tion that
the operational
programme is not weakened.

the collective nature of

of

and

approval

presentation

In the interests of sound management, procedures for
operational
the
programmes, including deadlines, should be laid down
so as to enable the adequate evaluation of the informa-
tion by the competent authorities, and measures and
activities
to be included in or excluded from the
programmes. Since the programmes are managed on an
annual basis, it should be stipulated that programmes
not approved before a given date should be postponed
for one year.

There should be an annual procedure for amending
operational programmes for the following year, so that
they can be adjusted to take account of any new condi-
tions which could not have been foreseen when they
were initially presented. In addition, it must be possible
for measures to be changed within the year of execution
of a programme. All such changes should be subject to
certain limits and conditions, to be defined by Member
States and including obligatory notification of changes
to the competent authorities, to ensure the approved
programmes maintain their overall objectives.

(4)

(5)

(6)

(5) OJ L 297, 21.11.1996, p. 49.

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(7)

(8)

(9)

(10)

(11)

For reasons of financial and legal security, lists of opera-
tions and expenditure which may or may not be covered
by operational programmes should be drawn up; these
lists should be non-exhaustive. For transparency and
ease of application of Community rules, eligibility
criteria of certain measures should, where appropriate,
follow guidelines set
in Council Regulation (EC) No
1260/1999 of 21 June 1999 laying down general provi-
sions on the structural funds (1). Certain operations and
expenditure should be permitted temporarily or within
certain limits.

In the interests of sound management of Community
finances, a written undertaking should be made by the
itself and its
producer organisation, on behalf of
members, not
financing of
to receive duplicate
Community or national funding of in respect of meas-
ures qualifying for Community financing under this
Regulation.

To ensure the effective implementation of operational
programmes, producer organisations shall receive noti-
fication of the decisions of the competent authorities on
operational programmes and the approved amount of
financial assistance on or before 15 December of the
year preceding implementation of the programme.

in order

to prevent

To prevent cash-flow difficulties, a system of advance
payments accompanied by appropriate securities should
It should be
be available to producer organisations.
stipulated that,
the systematic
recovery of advances, such payments should not exceed
the minimum level of financial assistance. It should be
furnished securities to be progressively
possible for
operational
of
as
released
programme proceeds, to the extent of up to 80 % of the
advances paid,
the remaining amount being retained
until the balance of the assistance has been paid. An
alternative system should be available for the reimburse-
ment, at periods throughout the year, of expenditure
already incurred.

implementation

the

To ensure correct application of the scheme, the infor-
mation to be included in applications for assistance
should be specified. To provide against unforeseen
circumstances in the implementation of operational
programmes, applications for advances or payment may
be carried over to the following year for operations
which for reasons beyond the control of the producer
organisation could not be implemented within the time
limits laid down. All applications should be subject to
administrative checks for verification. In the interests of
sound financial management, penalties should be deter-
mined for late submission of applications for financial
assistance.

(12)

The ceiling on Community financial assistance applies to
all applications at the level fixed by Article 15(5) of
Regulation (EC) No 2200/96.

(1) OJ L 161, 26.6.1999, p. 1.

(13)

(14)

(15)

(16)

(17)

The activities of producer organisations and their effec-
tiveness should be monitored. This can be achieved by
means of periodical reports and an assessment.

Strict control procedures should be laid down, together
with deterrent penalties in the event of infringement,
given the high degree of responsibility and initiative
conferred on the producer organisations. These penalties
should be weighted according to the severity of the
conditions
infringement. To ensure
should be laid down to cover ineligible actions included
in error by the producer organisation in an operational
programme
and approved by the Member State,
whereby Member States should not be obliged to with-
hold aid payments or recover sums paid, in accordance
with the jurisprudence of the Court of Justice.

treatment,

fair

The competent authorities responsible for verifying the
eligibility of
in operational
the proposed measures
programmes and their execution must be provided with
the possibility of introducing complementary national
legislative measures to ensure the correct application of
this scheme.

to

all

to
be
already

apply
implemented
approved whose

operational
This Regulation must
from 2001.
programmes
Programmes
application
continues into 2001 must be amended unless their
implementation makes this inap-
advanced state of
propriate.

To ensure correct application of this scheme, Member
States should forward all details of complementary and
additional measures taken in the framework of
this
Regulation. An adequate record of
the activities of
producer organisations and use of the operational funds
should be made available to the Commission for statist-
ical, budget and control purposes.

(18)

The measures provided for in this Regulation are in
accordance with the opinion of
the Management
Committee for Fresh Fruit and Vegetables,

HAS ADOPTED THIS REGULATION:

CHAPTER I

SUBJECT MATTER AND SCOPE

Article 1

assistance,

The rules laid down herein shall apply to Community
1.
financial
operational
programmes as referred to in Article 15(1) and (2)(b) of Regu-
lation (EC) No 2200/96 and to action plans as referred to in
Article 13(2)(a) of that Regulation.

operational

funds

and

2.
For the purposes of this Regulation, unless it is stated
otherwise, action plans shall be treated in the same way as
operational programmes.

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Article 2

(i) the first indent thereof,

1.
‘Producer organisations’ as referred to in this Regulation
means those recognised pursuant to Article 11 of Regulation
(EC) No 2200/96 and those referred to in Article 13 of that
Regulation subject to the conditions therein.

2. Where a recognised ‘association of producer organisa-
tions’ acts on behalf of its members for the purposes of fully
managing their operational funds in accordance with Article
16(3) of Regulation (EC) No 2200/96, it shall be treated in the
same way as a producer organisation for the purposes of this
Regulation.

3.
A recognised association of producer organisations may
act on behalf of its members for the partial implementation of
their operational programmes. In such cases, Member States
may authorise such associations to present a partial operational
programme on their own:

(i) consisting of actions identified, but not implemented by the
member producer organisations within their operational
programmes;

(ii) in accordance with the provisions of Articles 4, 5, 6, 7 and
8; the partial programme shall be considered together with
the member producer
the operational programmes of
organisations.

In this case Member States shall ensure that:

(a) these actions are fully financed from contributions of
member producer organisations paid out of the operational
funds of these organisations;

(b) these actions and the corresponding financial participation
are listed in the operational programme of each partici-
pating producer organisation;

(c) there is no risk of duplicate financing.

(ii) the second indent thereof, in cases of marginal quant-
ities of product marketed fresh or to the processing
industry by the producer members themselves,

of Regulation (EC) No 2200/96;

(c) invoiced at the ‘ex-producer organisation’ stage:

(i) where applicable, as ‘packaged or prepared but not

processed product’,

(ii) excluding VAT,

(iii) excluding internal transport costs (1),

where applicable, Member States shall define reductions to
be applied to the invoiced value for products invoiced at
different stages of processing or delivery/transport;

(d) including, where relevant,

the aid as
provided for in Article 2 of Regulation (EC) No 2201/96
and Article 1 of Regulation (EC) No 2202/96 received by
producer organisations during the same period;

the amount of

(e) including, under conditions determined by Member States
to avoid duplicate counting, the production of members
who leave or join the producer organisation up to the time
of submission of the operational programme or of the
submission of changes to the programme as in Article 6(1)
of this Regulation.

The annual ceiling on financial assistance referred to in
6.
the third subparagraph of Article 15(5) of Regulation (EC) No
2200/96 shall be calculated each year on the basis of the value
of marketed production during a 12-month reference period to
be determined by Member States, which may be based on:

(a) an actual 12-month period, commencing no earlier than 1
January two years preceding the year in which the opera-
tional programme is implemented and ending no later than
30 June of the year preceding the operational programme
year; or

4.
Producer organisations may qualify for Community
financial assistance on the terms set out in Articles 15 and 16
of Regulation (EC) No 2200/96 and those laid down herein.

(b) the average value of three subsequent 12-month periods
between 1 January of the fourth year and 30 June of the
year preceding the operational programme year.

The provisions of Regulation (EC) No 2200/96 and of this
Regulation relating to verifications and penalties shall apply to
both the associations of producer organisations and the
member producer organisations.

For

the purposes of

5.
the ‘value of
marketed production’ is based on the production of members
of producer organisations:

this Regulation,

(a) for which the producer organisations are recognised;

Different

7.
reference periods may be defined by the
Member States for different producer organisations to take into
account various production, sales and accounting periods for
different products or groups of products. The reference period
shall not vary during an operational programme except in duly
justified situations.

8. Where a reduction in value of a product has occurred due
to reasons falling outside the responsibility and control of the
producer organisation, the value of the marketed production
referred to in paragraph 6 shall not be less than 65 % of the
value of the previous reference period.

(b) disposed of under the conditions laid down in the first and
second subparagraphs of Article 11(1)(c)(3), with the
exception of:

(1) Where the distance between the centralised collection or packing
points of the producer organisation and the point of distribution of
the producer organisation is significant.

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9. Where recently recognised producer organisations have
insufficient historical data on marketed production for the
application of paragraph 6, the value of marketed production
shall be considered to be the value of marketable production
provided by the producer organisation for the purposes of
recognition.

10. Member States shall
take the measures necessary to
gather information on the value of marketed production within
the meaning of paragraph 5 of producer organisations which
have not presented operational programmes.

CHAPTER II

OPERATIONAL FUNDS AND PROGRAMMES

Article 3

Operational funds

1.
Operational funds set up by producer organisations as
referred to in Article 15(1) of Regulation (EC) No 2200/96
shall:

(a) be used solely for transactions connected with:

1. the implementation of the operational programme,

2. the administration of the operational fund, and

3. the financing of withdrawals, in accordance with Article

15(3) of Regulation (EC) No 2200/96;

(b) be managed:

1.

in a bank account with a financial
institution in the
Member State in which the producer organisation has
its headquarters, or

the Member State,

2. at the request of a producer organisation and upon
decision of
in financial accounts
managed by the organisation, comprising accounts for
each operation in which each item of expenditure and
revenue relating to the operational fund can be identi-
fied and can be checked and certified annually by
external auditors.

Financial contributions to the operational fund shall be
2.
levied in accordance with Article 15(1) of Regulation (EC) No
2200/96. The producer organisation may set the levy:

(a) on the basis of volume or value of the marketed produc-

tion, or a combination of both;

(b) at different

levels for different products or groups of
members on the basis of objective criteria set by the
producer organisation, taking into account in particular
of participation in an operational
different
programme by different groups of members under the
following conditions:

levels

(i) if the collective nature of the operational programmes

is not weakened,

(ii) where the contribution of each individual member of
that group is calculated on the basis referred to in
paragraph 2(a).

An operational programme shall be deemed to be of a

3.
collective nature if its actions:

(i) involve a significant number or proportion of members;

and

(ii) are approved democratically by the members of

the

producer organisation.

4.
Under conditions set by Member States, producer organ-
isations may advance members' contributions to the fund for a
given year of implementation of the operational programme,
conditional to compensation against the levies collected from
their members by 31 January of the following year.

Any credit to the operational fund other than members
5.
contributions is not eligible for the financial assistance referred
to in Article 15(1) of Regulation (EC) No 2200/96.

Article 4

Operational programme submission to Member States

Proposed operational programmes
shall be submitted for
approval to the competent authorities in the Member State in
which the producer organisation has its headquarters on or
before 15 September of the year preceding that in which they
are to be implemented. However,
the Member States may
postpone that date.

Article 5

Operational programme approval by Member States

1.
The competent national authorities shall take decisions
on programmes and funds on or before 15 December of the
year in which they are submitted.

2.

The national competent authorities shall verify:

(a) by all appropriate means,

including on-the-spot inspec-
tions, the accuracy of information provided pursuant to
Article 8(1)(b)(c) and (e);

(b) compliance of the objectives of programmes with Article
15(4) of Regulation (EC) No 2200/96 or, in the case of
action plans, compliance of their objectives with Article
11(2) of that Regulation;

(c) eligibility of the operations and the expenditure proposed,
account being taken of the operations in Article 8(2) and
the non-exhaustive list of ineligible operations and expendi-
ture in Annex I;

(d) the economic consistency and technical quality of proposed
programmes,
the estimates and the
financing plan, and the planning of its implementation.

the soundness of

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3.

The competent national authorities shall, as appropriate:

(a) approve programmes which meet

the requirements of
Articles 15 and 16 of Regulation (EC) No 2200/96 and
those of this chapter;

(b) request changes to the proposed programmes,

in which
incorporate the changes

event only programmes
requested shall be approved;

that

(c) reject the programmes.

The competent national authorities
organisations of their decisions.

shall notify producer

4.
Operational programmes approved on or before 15
December shall be implemented as from 1 January of the
following year.

provided the overall objectives of the operational programme
are maintained and the amount of the operational fund referred
to in Article 9(1) is not exceeded.

4. Member States shall determine the conditions under
which in-year changes to operational programmes as in para-
graph 3(a) and (b) of this Article may go ahead without the
prior approval of Member States.

they are
These changes are only eligible for financing if
communicated by the producer organisation to the competent
authorities without delay.

Any increase of the amount of operational fund approved
5.
for financing withdrawals as in Article 15(2)(a) of Regulation
(EC) No 2200/96 must in all cases be the subject of prior
approval by the competent authorities.

The
implementation of programmes
December shall be postponed for one year.

approved after 15

Article 7

Article 6

Operational programme changes

1.
the
Producer organisations may request changes for
subsequent year(s) of operational programmes each year on or
before 15 September for implementation on 1 January of the
following year.

However, Member States may postpone the date for submitting
requests.

2.
Requests for changes shall be accompanied by supporting
documents justifying the reason, nature and implications of the
changes.

The competent authorities shall take decisions on requests for
changes
to operational programmes on or before 15
December, after considering the evidence supplied, and with
due regard for the verification of the authorities as in Article
5(2). Where a decision is not taken within the abovementioned
time limit, the request shall be deemed to have been rejected.

Operational programme format

Operational programmes shall be implemented in annual
periods running from 1 January to 31 December.

Article 8

Operational programme contents

Proposed operational programmes

1.
satisfy the
requirements of Article 15(4) of Regulation (EC) No 2200/96
or, in the case of action plans, those required, once the action
plan is completed, for compliance with Article 11(2) of that
Regulation.

shall

They shall cover at least the following:

(a) the duration of the operational programme;

(b) description of the initial situation, in particular as regards

production, marketing and equipment;

(c) the objectives of

the programme, bearing in mind the

outlook for production and outlets;

3.
Under conditions to be determined by Member States and
subject to approval by Member States, producer organisations
may be allowed, during any given year to:

(d) the operations to be undertaken and the means to be
employed for attaining those objectives in each year of
implementation of the programme;

(a) implement their operational programmes in part only;

(e) the financial aspects, namely:

(b) change

the

contents of

the operational programme.
Changes may include extending operational programmes
on condition that their total duration does not exceed five
years;

(c) change the amount of operational

fund approved for
financing withdrawals as in Article 15(2)(a) of Regulation
(EC) No 2200/96 within the limits laid down in the third
subparagraph of Article 15(3) and in Article 23(3),
(4)
and (5),

(i) the method of calculation and the level of financial

contributions;

(ii) the procedure for financing the operational fund as

referred to in Article 3;

(iii) if applicable, all necessary information to justify
different levels of contribution levied in accordance
with Article 3;

(iv) the budget and timetable for undertaking operations
for each year of implementation of the programme.

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Proposed operational programmes as in paragraph 1 may

2.
cover in particular:

(h) generic promotion and promotion of collective labels (5).

Geographical names are allowed only:

(a) costs of plants in the case of perennial crops (perennials,

trees and shrubs);

(b) specific costs for:

(i) organic,

integrated or experimental production (1),

(ii) organic plant protection materials (2),

(iii) environmental measures

(including

re-useable

packaging),

(iv) quality improvement measures

(including certified

seeds and plants),

for a maximum of 10 years per measure from the begin-
ning of the first operational programme;

(c) overheads specifically related to the operational fund or
programme (3) by means of the payment of a lump sum
equal to 2 % of the approved operational fund and up to a
maximum of EUR 180 000 (4);

(d) personnel costs (including charges linked to wages and
salaries, if these are borne by the producer organisation)
resulting from measures:

(i) to improve or maintain a high level of quality or

environmental protection,

(ii) to improve the level of marketing,

implementation of which essentially involves the use of
qualified personnel. If, in such cases, the producer organ-
isation uses its own employees or member producers, the
time worked must be documented;

(i) if covered by Council Regulation (EEC) No 2081/
92 (6), and which in particular use a protected desig-
nation of origin or a protected geographical indication,
or

(ii) if these geographical names are secondary to the prin-
cipal message and are not reserved for the use of the
producer organisation concerned.

Promotional material must bear the emblem of the Euro-
pean Community (in the case of visual media only) and
include the following legend: ‘Campaign financed with the
assistance of the European Community’;

(i) legal and administrative costs of mergers of producer
organisations or their acquisition; feasibility studies and
proposals commissioned by producer organisations in this
respect;

(j) second-hand equipment within the conditions laid down
in Rule No 4 of Commission Regulation (EC) No 1685/
2000 (7);

(k) land not built on where purchase is necessary to carry out
an investment
included in the programme, within the
conditions laid down in paragraphs 1.1(a), (b) and (c) and
1.2 of Rule No 5 of Regulation (EC) No 1685/2000 (8);

(l) leasing within the limits of the net market value of the
item and within the conditions laid down in paragraph 3
of Rule No 10 of Regulation (EC) No 1685/2000;

(m) hire as an alternative to purchase where economically

justified;

(e) investments in means of transport equipped with cold-

storage or controlled-atmosphere transport;

(n) real estate purchase within the conditions laid down in
paragraphs 2.1, 2.2 and 2.3 of Rule No 6 of Regulation
(EC) No 1685/2000;

(f) additional external transport costs, compared with road
haulage costs, incurred when using rail and/or ship as part
of a measure to respect the environment, set by Member
States per kilometre on a flat-rate basis;

(g) costs of meetings and training programmes related to
implementation of actions in the operational programme,
including daily allowances of participants covering trans-
port and accommodation costs (where appropriate on a
flat-rate basis);

(1) The competent national authority must

lay down the eligibility
the

criteria for an experimental production taking account of
newness of the procedure or concept and the risk involved.

(2) Organic plant protection materials (such as pheromones and preda-
integrated or conventional produc-

tors), whether used in organic,
tion.

(3) Including management and personnel costs, reports and evaluation
the costs of keeping accounts and the management of

studies;
accounts referred to in Article 3(1)(b).

(4) Member States may restrict funding to the real costs, in which case

they should define the eligible costs.

(o) investments or actions on individual holdings, on condi-

tion that:

(i) the collective nature of the operational programme in
the sense of Article 3(3) of this Regulation is not
weakened, and

(ii) appropriate provisions are made in order to recover
the investment or its value if the member leaves the
organisation;

(5) Collective labels must not be restricted to producer organisation
members and must not represent an individual producer organisa-
tion name or trademark
(6) OJ L 208, 24.7.1992, p. 1.
(7) OJ L 193, 29.7.2000, p. 39.
(8) The competent national authority may set additional conditions to
Rule No 5 of Regulation (EC) No 1685/2000 for the acceptance of
these
this type of expenditure in order to avoid all speculation;
conditions may include in particular
the
investment/land during a minimum period and the setting of a
maximum correlation between the value of the land and the value
of the investment.

forbidding the sale of

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(p) replacements for investments, provided that the residual

value of the replaced investments is either:

(i) added to the operational fund of the producer organ-

isation, or

(ii) subtracted from the cost of the replacement.

including those under leasing contracts, whose
Investments,
repayment period exceeds
the operational
the length of
programme may be carried over to a subsequent operational
programme on duly justified economic grounds, and in partic-
ular in cases where the fiscal depreciation period is longer than
five years.

3.
Proposed operational programmes shall not cover opera-
tions or expenditure on the non-exhaustive list of ineligible
operations and expenditure given in Annex I.

Proposed operational programmes shall be admissible

4.
only if accompanied by:

(a) evidence of

the setting-up of an operational

fund as

referred to in Article 3;

(b) a written undertaking from the producer organisation to
comply with Regulation (EC) No 2200/96 and this Regula-
tion, and for neither it nor its members to receive, directly
or indirectly, duplicate Community or national funding in
respect of measures and/or operations qualifying for
Community financing under this Regulation.

CHAPTER III

COMMUNITY FINANCIAL ASSISTANCE

Article 9

Estimates of operational funds

Each year on or before 15 September and, where applic-
1.
able, at the same time as proposed operational programmes as
referred to in Article 4 of this Regulation or requests for
changes as referred to in Article 6(2) are submitted, producer
shall
organisations
forward the estimated amounts of the operational funds for the
following year to the Member States in accordance with Article
16(2) of Regulation (EC) No 2200/96.

implementing operational programmes

approved,
2. When proposed programmes
Member States shall establish the approved amount of financial
assistance as referred to in the first subparagraph of Article
16(2) of Regulation (EC) No 2200/96.

are being

3. Member States shall notify the producer organisations on
or before 15 December of:

(a) the approved amount of financial assistance referred to in

paragraph 2 of this Article;

(b) the decisions on the operational programmes as referred to
in Article 5(1) or changes to the operational programmes
as in Article 6(2) of this Regulation, in accordance with
Article 16(2) of Regulation (EC) No 2200/96.

4. Member States shall report estimates of operational funds
to the Commission within the framework provided for under
Article 17 of this Regulation.

Article 10

Advance payments

Producer organisations may on application be granted
1.
advance payments on the proportion of the operational fund to
be used to finance an operational programme.

Applications for advance payments shall be made in January,
April, July and October. They shall cover foreseeable expendi-
ture arising from operational programmes for the three-month
period starting in the month in which the application is
submitted. Total advance payments made for a given year may
not exceed 90 % of the approved amount of financial assis-
tance for the operational programme.

2.
Advances shall be paid subject to the furnishing of a
security equivalent to 110 % thereof and according to condi-
tions to be set by Member States:

(i) to ensure that financial contributions to the operational
fund have been levied in accordance with Article 3(2), (3)
and (4);

(ii) to ensure previous advance payments have actually been

spent.

Applications for the release of securities may be submitted
during the year and shall be accompanied by the relevant
supporting documents. Securities shall be released in respect of
up to 80 % of advances paid.

Calculation of the estimated amount of operational funds shall
be based on:

Securities shall be furnished in accordance with the
3.
conditions laid down in Commission Regulation (EEC) No
2220/85 (1).

(a) the factors referred to in Article 16(2) of Regulation (EC)
No 2200/96 and contained in the proposed operational
programmes and on estimated expenditure on withdrawals
as referred to in Article 15(3) thereof;

The primary requirement within the meaning of Article 20 of
that Regulation shall cover the performance of the operations
set out in the operational programmes subject to the undertak-
ings set out in Article 8(4)(b) of this Regulation.

(b) the value of marketed production established in accordance

with Article 2(5) of this Regulation.

(1) OJ L 205, 3.8.1985, p. 5.

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In the event of failure to comply with the primary requirement
or of serious failure to meet the obligations referred to in
Article 8(4)(b) the security shall be forfeited, without prejudice
to other penalties to be applied in accordance with Article 48
of Regulation (EC) No 2200/96 and Article 15 of this Regula-
tion.

In the event of failure to comply with other requirements, the
security shall be forfeited in proportion to the gravity of the
irregularity that has been established.

Alternatively, at their request producer organisations may
the
for a system of applications for a proportion of

4.
opt
Community financial assistance covering:

(a) expenditure resulting from the operational programme.
Applications shall be submitted in April, July and October
and shall cover expenditure incurred during the three
preceding months. They shall be accompanied by suitable
supporting documents.

Total payments in respect of applications for a proportion
of the financial assistance may not exceed 90 % of the
approved amount of financial assistance for the operational
programme or of the real expenditure, whichever is less;

(b) withdrawals. Applications may, where

applicable, be
submitted together with applications as referred to in para-
graph 4(a). Such applications shall be subject to the limits
laid down in the third subparagraph of Article 15(3) and in
Article 23(3), (4) and (5) of Regulation (EC) No 2200/96.

Article 11

Producer organisation applications for aid

for

Applications

1.
the balance
thereof shall be submitted, one only in respect of each
programme, no later than 31 January of the year following that
to which they relate.

financial assistance or

Applications shall be accompanied by supporting docu-

2.
ments showing:

(a) the value of the marketed production within the meaning

of Article 2(5);

(b) the financial contributions levied on members and paid
into the operational fund, in accordance with the second
subparagraph of Article 15(1) of Regulation (EC) No 2200/
96 and Article 3 of this Regulation, for marketed produc-
tion within the meaning of Article 2(5) of this Regulation;

(c) the expenditure incurred in respect of

the operational

programme;

(d) the proportion of

fund spent on the
the operational
financing of market withdrawals in accordance with Article
15(3) of Regulation (EC) No 2200/96,
the level of
compensation and/or supplements paid to members, and
also compliance with the limits laid down in the third
subparagraph of Article 15(3) and in Article 23(3), (4) and
(5) of that Regulation.

for

Applications

the balance
3.
thereof may cover expenditure programmed but not incurred
relating to operations for which it is proved to the satisfaction
of the competent national authority that:

financial assistance or

(i) these operations could not be carried out on or before 31
December of the year of implementation of the operational
programme for reasons beyond the control of the producer
organisation concerned, and that they can be carried out on
or before 30 April of the following year;

(ii) an equivalent contribution from the producer organisation

is maintained in the operational fund.

The assistance shall be paid out and the security lodged in
accordance with Article 10(2) shall be released only on condi-
tion that proof of implementation of the programmed expendi-
ture referred to in the preceding subparagraph is provided on
or before 30 April of the year following that for which the
expenditure in question was programmed, and on the basis of
the entitlement to the assistance actually established.

4.
Applications and their supporting documents are subject
to administrative checks. Member States shall pay the financial
assistance due to the producer organisations at the latest on 30
June of the year following the year of implementation of the
programme. However Member States may postpone this date
until 31 August.

5. Where applications for financial assistance or the balance
thereof are submitted later than the date set in paragraph 1, the
aid is reduced by 1 % for each day late.

In exceptional and duly justified cases, Member States
6.
may accept applications for financial assistance or the balance
thereof after the date set in paragraph 1, and not apply the
provisions of paragraph 5, if this does not prejudice either the
carrying out of the checks or the payment deadline by Member
States set in paragraph 4.

Article 12

Reporting applications for aid

Member States shall report details on applications for aid to the
Commission within the framework provided for under Article
17 of this Regulation.

CHAPTER IV

GENERAL PROVISIONS

Article 13

Producer organisation reports

1.
The implementation of operational programmes and
withdrawal operations eligible for Community financing under
an operational fund shall be the subject of annual reports,
which shall:

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(a) accompany applications for

financial assistance or, as

(c) the findings of the checks in previous years;

appropriate, applications for the balance;

(d) other parameters to be determined by Member States.

(b) cover operational programmes implemented during the

preceding year and withdrawals;

(c) contain reasoned details of

(i) main changes to operational programmes, and

(ii) variances between estimated and actual aid applied for.

2.
Final reports shall replace the reports referred to in the
first paragraph for the final year of application of operational
programmes.

Such final reports shall be accompanied by an assessment of
the operational programmes, prepared, where applicable, with
the assistance of a specialised consultancy office. Such assess-
ments must verify attainment of the objectives pursued by the
programmes and, where appropriate, detail changes to opera-
tions and/or methods which have been or will be considered
when subsequent operational programmes are drawn up.

Article 14

Checks

1. Member States shall carry out checks on producer organ-
isations, with little or no prior notification and including
checks on the spot, so as to ensure effective verification of
compliance with the conditions for grant of assistance, and in
particular on:

(a) implementation of

the measures
programme, and in particular relating to investments;

in the operational

(b) real costs and expenses incurred compared with declared

amounts.

2.
The checks referred to in paragraph 1 shall relate at least
to a significant sample of applications each year. The sample
must represent at least 20 % of producer organisations and
30 % of total Community assistance.

Should the checks reveal significant irregularities in a region or
the
part of a region or a specific producer organisation,
competent authorities shall carry out additional checks during
the year in question and shall increase the percentage of corre-
sponding applications to be checked the following year.

The

authorities

competent

3.
determine which
producer organisations to check on the basis, in particular, of a
risk analysis and the representativeness of the assistance. The
risk analysis shall take account of:

shall

(a) the amount of assistance;

At least one check must be made on each producer
4.
organisation before the payment of aid or the balance thereof
relating to the final year of its operational programme.

5. Member States shall report details on checks to the
Commission within the framework provided for under Article
17 of this Regulation.

Article 15

Recovery and sanctions

1.
Amounts unduly paid shall be recovered and sanctions
shall be applied to the producer organisations concerned, in
particular where:

(a) the real value of marketed production within the meaning
of Article 2(5) is less than the amount used to calculate the
Community financial assistance; or

(b) the operational fund has been maintained in a manner
which does not comply with Article 15(1) of Regulation
(EC) No 2200/96 or has been used for purposes other than
those referred to in Article 15(2) of that Regulation; or

(c) the operational programme has been implemented in a
manner which does not comply with the conditions for its
approval by the Member State concerned, without preju-
dice to Article 6 of this Regulation.

2. Without prejudice to the provisions of Article 7(4) of
Council Regulation (EC) No 1258/1999 (1), in the case of a
measure which is subsequently found to be ineligible, and
which has been implemented in conformity with an opera-
tional programme approved by the Member State, the latter
may:

(a) pay the relevant aid due, or

(b) not proceed to the recovery of aid already paid out,

if
it would proceed in such a way for comparable cases
financed from the national budget and if the producer organ-
isation has not acted negligently.

3. Where recovery and/or sanctions apply as in paragraph 1,
the recipient/applicant shall be required:

(a) in cases where aid has already been paid:

(i) in the case of obvious error, to reimburse the amounts

unduly paid out, plus interest,

(ii) in the case of fraud, to reimburse double the amounts

unduly paid out, plus interest;

(iii) in all other cases, to reimburse the amounts unduly

paid out,

increased by 20 %, plus interest;

(b) the trend of annual programmes in relation to the previous

year;

(1) OJ L 160, 26.6.1999, p. 103.

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(b) in cases where applications for financial assistance have
been submitted according to Article 11 of this Regulation
but no aid has been paid:

(i) in the case of fraud, to pay the amounts unduly applied

for,

(ii) in all cases other than those of obvious error, to pay

20 % of the amounts unduly applied for.

The interest referred to in paragraph 3(a) shall be calcu-

4.
lated:

(a) on the basis of the period elapsing between payment and

reimbursement by the recipient;

(b) at the rate applied by the European Central Bank to its
main refinancing operations published in the ‘C’ series of
the Official Journal of the European Communities and in force
on the date on which the undue payment is made, plus
three percentage points.

Sums recovered, with the interest accrued, shall be paid
5.
to the responsible paying agency and deducted by it from
expenditure financed by the European Agricultural Guidance
and Guarantee Fund.

6.
In the event of a false declaration made deliberately or by
serious negligence, the producers' organisation concerned shall
be debarred from receiving Community financial assistance for
the year following that in respect of which the false declaration
was discovered.

7.
Paragraphs 1 to 6 shall apply without prejudice to other
penalties to be adopted in accordance with Article 48 of Regu-
lation (EC) No 2200/96.

Article 17

Member State reporting

1. Member States shall report financial and qualitative data
on producer organisations, operational funds and operational
programmes and controls as set out in Annex II.

2. Member States shall communicate to the Commission all
measures and conditions set by them in the framework of this
Regulation, and in particular:

(a) the procedure for financing the operational funds as in

Article 8(1)(e)(i), (ii) and (iii);

(b) conditions set for enabling in-year changes to be made to
operational programmes as in Article 6(3) and (4);

(c) provisions made, if relevant, for the application of Article

15(2);

(d) the provisions adopted under Article 16(1).

Article 18

Commission Regulation (EC) No 411/97 (1) is repealed.

However the provisions of Article 10 of Regulation (EC) No
411/97 shall continue to apply for operational funds relating
to the year 2000.

8. Member States shall report details on recovery and sanc-
tions to the Commission within the framework provided for
under Article 17 of this Regulation.

Article 19

CHAPTER V

Article 16

Member State provisions

1. Member States may adopt complementary rules to Regu-
lation (EC) No 2200/96 and to this Regulation concerning
operations or expenditure eligible for assistance.

2. Member States shall report details on provisions adopted
to the Commission within the framework provided for under
Article 17 of this Regulation.

This Regulation shall enter
into force on the third day
following its publication in the Official Journal of the European
Communities with the following provisions:

(a) operational programmes approved by Member States
before the entry into force of this Regulation and whose
application continues into 2001 must comply with this
Regulation, if necessary by means of an amendment to be
requested by producer organisations on or before 15
September 2001;

(b) member

States may provide

retention of
programmes approved before the entry into force of this
Regulation if adjusting them would be inappropriate given
their state of advancement;

the

for

(c) upon request by interested parties, the provisions of Article
15 may apply to cases occurring prior to the entry into
force of this Regulation.

(1) OJ L 62, 4.3.1997, p. 9.

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

Done at Brussels, 28 March 2001.

For the Commission

Franz FISCHLER

Member of the Commission

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ANNEX I

INELIGIBLE OPERATIONS AND EXPENDITURE

As far as they are not covered by Article 8(2), the following operations and expenditure are ineligible:

1. General production costs, and in particular:

— seeds and plants,
— plant protection products,
— packing costs, storage costs, packaging costs, even as part of new processes,
— costs of collection or transport (internal or external),
— operating costs (in particular electricity, fuel and maintenance).

including integrated control materials, fertilisers and other inputs,

2. Overheads.

3. Income or price supplements.

4. Insurance costs including individual or group insurance premiums and the creation of insurance funds within a

producer organisation.

5. Reimbursement (especially in the form of annual payments) of loans taken out for an operation carried out in full or

in part before the beginning of the operational programme.

6. Purchase of land not built on.

7. Payments to producers, participating in meetings and training programmes, to compensate for loss of income.

8. Operations or costs relating to the quantities produced by the members of the producer organisation outside the

Community.

9. Operations that could distort competition in the other economic activities of the producer organisation; operations or
measures which profit directly or indirectly other economic activities of the producer organisation should be financed
in proportion to their use by the sectors or products for which the producer organisation is recognised.

10. Second-hand equipment.

11. Investment in means of transport to be used for marketing or distribution by the producer organisation.

12. Hire as an alternative to purchase; the operating cost of the goods hired.

13. Expenditure linked to leasing contracts (taxes,

interest,

insurance costs, etc.) and operating costs.

14. Promotion of individual commercial

labels or containing geographic references.

15. Subcontracting contracts relating to the operations or expenditure mentioned in this list.

16. VAT and other taxes or charges within the conditions laid down in paragraph 4 of Rule No 7 of Regulation (EC) No

1685/2000.

17. Investments for the processing of fresh products (operations carried out by producer organisations concerning
in particular cleaning, cutting, trimming, drying and packaging, with a view to its

preparation of the product,
marketing, are not deemed processing).

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ANNEX II

MEMBER STATE REPORTING REQUIREMENTS

Information to be forwarded by Member States to the Commission by 1 June of each year, according to formats
to be provided by the Commission

PART 1:

Producer organisations

1. Administrative information (in particular concerning recognition number, legal form, number of physical and legal

members).

2. Production information (including the calculation of the value of marketed production calculation and information on

key products).

PART 2: Operational funds and operational programmes

1. Reference period(s) used.

2. Aid estimates (Article 9).

3. Applications for aid and final aid payments actually made (Article 11) including the percentage of operational fund

spent on withdrawals.

4. Main categories of expenditure (including significant changes made in-year).

PART 3: Checks (Article 14); recovery and sanctions (Article 15)

1. Producer organisations checked.

2. Checking authority and summary including results of controls (key points only).

Updated final figures relating to final aid payments actually made as in Part 2(3) may be submitted up to 1 October at the
latest.