Proposal for a Council Decision on the conclusion of the Agreements in the form of an exchange of letters between the European Community and, on the one hand, Barbados, Belize, the Republic of Congo, Fiji, the Cooperative Republic of Guyana, the Republic of the Ivory Coast, Jamaica, the Republic of Kenya, the Republic of Madagascar, the Republic of Malawi, the Republic of Mauritius, the Republic of Surinam, Saint Kitts and Nevis, the Kingdom of Swaziland, the United Republic of Tanzania, the Republic of Trinidad and Tobago, the Republic of Uganda, the Republic of Zambia, the Republic of Zimbabwe and, on the other hand, the Republic of India on the supply of raw cane sugar to be refined
Date: 2001-11-09
Institutions: European Commission
Subjects: ACP countries, India, Protocol (EU), cane sugar, guaranteed price, ratification of an agreement

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 09.11.2001
COM(2001) 670 final

2001/0269 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of the Agreements in the form of an exchange of letters between the
European Community and, on the one hand, Barbados, Belize, the Republic of Congo,
Fiji, the Cooperative Republic of Guyana, the Republic of the Ivory Coast, Jamaica, the
Republic of Kenya, the Republic of Madagascar, the Republic of Malawi, the Republic
of Mauritius, the Republic of Surinam, Saint Kitts and Nevis, the Kingdom of
Swaziland, the United Republic of Tanzania, the Republic of Trinidad and Tobago, the
Republic of Uganda, the Republic of Zambia, the Republic of Zimbabwe and, on the
other hand, the Republic of India on the supply of raw cane sugar to be refined

(presented by the Commission)

1.

2.

EXPLANATORY MEMORANDUM

Article  39  together  with  Article  26  of  Council  Regulation  (EC)  No  1260/2001
provide  for  agreements  with  the  ACP  States  referred  to  in  Protocol  No  3  on  ACP
sugar of Annex V to the ACP-EG Partnership Agreement and India and other States
on  the  opening  of  a  tariff  quota  at  a  reduced  rate  of  duty  for  raw  cane  sugar  to  be
refined.

By  this  agreement  it  is  aimed  at  ensuring  adequate  supplies  to  the  Community
refineries  in  conformity  with  the  presumed  maximum  needs  fixed  by  the  said
Article 39.

In  conducting  the  negotiations  on  access  to  this  tariff  quota,  it  was  considered
appropriate to try to reach an agreement first with the ACP countries and India which
have supplied the Community market on a regular basis. As a result, the Commission
has,  in  conformity  with  the  negotiating  directives  adopted  by  the  Council  on
23 July 2001  concluded  negotiations  with  the  ACP  States  referred  to  and  India.
These negotiations have resulted in a tariff quota with varying quantities for the ACP
countries  and  10 000  tonnes  for  India  to  which  a  minimum  purchase  price  applies.
The reduced duty is set at zero in view of the fact that other concessions are going to
reduce  the  quantities  supplied  until  now  by  the  ACP  countries  and  that  the  net
earnings  per  tonne  based  on  the  guaranteed  price,  are  supposed  to  remain  stable
during the five year period of the current sugar market organisation.

3.

It is agreed by the negotiating parties to approve the results of the negotiations in the
form of an exchange of letters.

The  Commission  therefore  proposes  that  the  Council  adopt  the  proposal  for  a
decision on the conclusion of the agreements in the form of an exchange of letters as
set out in Annexes 1 and 2.

4.

Financial impact

The financial consequences are set out in the financial statement.

2

2001/0269 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of the Agreements in the form of an exchange of letters between the
European Community and, on the one hand, Barbados, Belize, the Republic of Congo,
Fiji, the Cooperative Republic of Guyana, the Republic of the Ivory Coast, Jamaica, the
Republic of Kenya, the Republic of Madagascar, the Republic of Malawi, the Republic
of Mauritius, the Republic of Surinam, Saint Kitts and Nevis, the Kingdom of
Swaziland, the United Republic of Tanzania, the Republic of Trinidad and Tobago, the
Republic of Uganda, the Republic of Zambia, the Republic of Zimbabwe and, on the
other hand, the Republic of India on the supply of raw cane sugar to be refined

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Article 133 in conjunction with the first sentence of Article 300(2), thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

Negotiations with the ACP States referred to in Protocol 3 on ACP sugar of Annex V
to the ACP-EC Partnership Agreement and India1 have taken place in order to define
the conditions under which imports of raw cane sugar from those countries under the
additional quota will take place.

Article  26(1)  of  Council  Regulation  (EC)  No  1260/2001  of  19  June  2001  on  the
common  organisation  of  the  markets  in  the  sugar  sector2,  provides  that  tariff  quotas
resulting  from  agreements  concluded  in  the  framework  of  the  Uruguay  Round  of
multinational trade negotiations shall be opened and administered in accordance with
detailed rules adopted under the procedure laid in Article 42 of the Regulation.

Article  39(3)  of  Regulation  (EC)  No  1260/2001  states  that  a  shortfall  to  fill  the
maximum  needs  of  the  Community  refineries  shall  be  covered  by  importing  special
preferential sugar at a special rate of duty under agreements with States referred to in
Article  35  of  that  Regulation  and  other  States  with  whom  agreements  have  been
concluded.  These  negotiations  have  resulted  in  a  tariff  quota  with  varying  quantities
for the ACP countries and 10 000 tonnes for India to which a minimum purchase price
applies. The reduced duty is set at zero in view of the fact that other concessions are
going to reduce the quantities supplied until now by the ACP countries and that the net
earnings per tonne based on the guaranteed price, are supposed to remain stable during
the five year period of the current sugar market organisation.

1

2

OJ L 195, 1.8.2000, p. 46.
OJ L 178, 30.6.2001, p. 1.

3

                                                
(4)

(5)

(6)

The  said  negotiations  have  resulted  in  agreements  which  are  subject  to  confirmation
by the Governments of the ACP States concerned, on the one hand, and the Republic
of India, on the other hand, and by the Community.

It  is  appropriate  to  open  such  a  tariff  quota  for  raw  cane  sugar  to  be  refined  for
maintaining  the  current  access  for  ACP  referred  to  in  Protocol  3  of  Annex  V  to  the
ACP-CE Partnership Agreement and the Republic of India.

It  is  appropriate  to  approve  the  Agreements  in  the  form  of  an  Exchange  of  Letters
between the European Community and, on the one hand, the States referred to in the
Protocol and, on the other hand, the Republic of India on the supply of raw cane sugar
to refined.

HAS DECIDED AS FOLLOWS:

Article 1

The Agreements in the form of an Exchange of letters between the European Community and,
on the one hand, Barbados, Belize, the Republic of Congo, Fiji, the Cooperative Republic of
Guyana,  the  Republic  of  the  Ivory  Coast,  Jamaica,  the  Republic  of  Kenya,  the  Republic  of
Madagascar,  the  Republic  of  Malawi,  the  Republic  of  Mauritius,  the  Republic  of  Surinam,
Saint  Kitts  and  Nevis,  the  Kingdom  of  Swaziland,  the  United  Republic  of  Tanzania,  the
Republic  of  Trinidad  and  Tobago,  the  Republic  of  Uganda,  the  Republic  of  Zambia,  the
Republic  of  Zimbabwe  and,  on  the  other  hand,  the  Republic  of  India  on  the  supply  of  raw
cane sugar to be refined are hereby approved on behalf of the Community.

The texts of Agreements are attached to this Decision.

The President of the Council is hereby authorised to designate the person empowered to sign
the Agreements referred to in Article 1 in order to bind the Community.

Article 2

Article 3

This Decision will be published in the Official Journal of the European Community.

Done at Brussels,

For the Council
The President

4

ANNEX 1

Agreement

in the form of an Exchange of Letters between the European Community and Barbados,
Belize, the Republic of Congo, Fiji, the Co-operative Republic of Côte d'Ivoire, Jamaica,
the Republic of Kenya, the Republic of Madagascar, the Republic of Malawi, the
Republic of Mauritius, the Republic of Suriname, Saint Kitts and Nevis, the Kingdom
of Swaziland, the United Republic of Tanzania, the Republic of Trinidad and Tobago,
the Republic of Uganda, the Republic of Zambia and the Republic of Zimbabwe
on the supply of raw cane sugar to be refined

A. Letter No 1

Brussels, ……….

Sir,

The representatives of the ACP States and the European Communities have agreed as follows:

“1.

For the period 1 July 2001 to 30 June 2006:

2.

3.

4.

– 

– 

the European Community undertakes to open annually a special tariff quota for
the import of raw cane sugar for refining which originates in the ACP States,
on  the  basis  of  the  needs  determined  by  the  Commission  in  accordance  with
paragraph 3,

the  ACP  States  undertake  to  supply  the  said  quantities  under  the  conditions
fixed by this agreement and by the measures taken by the Commission for the
application of this agreement within the framework of the management of the
common organisation of the markets of the sugar sector.

The  European  Commission  and  the  ACP  States  shall  establish  the  co-operation
procedures  necessary  to  enable  the  two  parties  to  this  agreement  to  meet  the
commitments entered into.

The import needs of raw sugar for refining under this agreement shall be established
by marketing year on the basis of a Community forward estimate taking account of:

– 

– 

the  provision  of  Council  Regulation  (EC)  No  1260/2001,  and  in  particular
Article 39 thereof, concerning the system of preferential imports.

the quantities which will be offered within the framework of other agreements
or other unilateral concessions and which will actually be imported.

The Commission shall establish a first estimate of the total needs for imports of raw
sugar for refining at the latest on 30 May preceding the marketing year concerned.

The  Commission  shall  fix  at  the  same  time  the  quantities  to  cover,  as  a  first
instalment, the import needs of the Community’s refineries for the longest practical
period  and  at  least  eight  months  broken  down  between  the  tariff  quotas  opened
within  the  framework  of  other  agreements  or  other  unilateral  concessions  and  this
special ACP quota.

5

The  ACP  States  shall  notify  their  final  export  potential  to  the  Commission  at  the
latest  on  1  February,  before  a  second  regular  fixing  shall  be  made  for  the  further
instalment to be covered by imports under the special ACP quota.

The special reduced rate of duty shall be fixed for the 2001/02 – 2005/06 marketing
years at EUR 0/100 kg raw sugar of standard quality.

The refiners which want to participate in this special reduced duty system must pay a
minimum  purchase  price  which  is  equal  to  the  guaranteed  price  for  raw  sugar
reduced by the adjustment aid fixed for the marketing year concerned in accordance
with the provisions of Article 38 of Regulation (EC) No 1260/2001 mentioned under
paragraph 3.

The  ACP  States  shall  undertake  collectively  to  implement  between  themselves
procedures  for  the  allocation  of  the  quantities  under  this  ACP  quota  in  order  to
ensure the appropriate supplying of the refineries.

Before 1 January 2006, the two parties to this agreement shall open discussion on its
possible continuation.”

5.

6.

7.

I should be obliged if you would acknowledge receipt of this letter and confirm that this letter
and  your  reply  constitute  an  Agreement  between  the  Governments  of  the  abovementioned
ACP States and the Community.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the Council
of the European Union

6

Sir,

B. Letter No 2

I have the honour to acknowledge receipt of your letter of today which reeds as follows:

“…………………………………………………………………………………………………
………………………………………………………………………………………………”

I have the honour to confirm the agreement to the Governments of the ACP states referred to
in this letter with the foregoing.

Please accept, sir, the assurance of my highest consideration.

For the Governments

7

ANNEX 2

Agreement

in the form of an exchange of letters between the European Community
and the Republic of India on the supply of raw sugar to be refined

A. Letter No 1

INDIA SPECIAL PREFERENTIAL SUGAR

The representatives of India and the European Community have agreed as follows:

“1.

For the period 1 July 2001 to 30 June 2006

– 

– 

the European Community undertakes to open annually a special tariff quota for
the import of raw cane sugar for refining which originate in India, on the basis
of the needs determined by the Commission in accordance with paragraph 3,

in the event  of an import needs  being  established,  India  undertakes  to  supply
10 000  tonnes  (white  sugar  equivalent)  under  this  tariff  quota  and  under  the
conditions  fixed  by  this  agreement  and  by  the  measures  taken  by  the
Commission for the application of this agreement within the framework of the
management  of  the  common  organisation  of  the  markets  in  the  sugar  sector.
Nothing  in  this  indent  should  prevent  the  community  offering  to  India  the
possibility to supply more than 10 000 tonnes in the event of a shortfall in the
total supplies obtained under other agreements.

The  European  Commission  and  India  shall  establish  the  cooperation  procedures
necessary  to  enable  the  two  parties  to  this  agreement  to  meet  the  commitments
entered into.

The import needs of raw sugar for refining under this agreement shall be established
by marketing year on the basis of a Community forward estimate taking account of:

– 

– 

the  provisions  of  Council  Regulation  (EC)  No  1260/2001,  and  in  particular
Article 39 thereof, concerning the system of preferential import.

the quantities which will be offered within the framework of other agreements
or other unilateral concessions and which will actually be imported.

The special reduced rate of duty shall be fixed for the 2001/02 – 2005/06 marketing
years at EUR 0 per 100 kg raw sugar of standard quality.

The refiners which want to participate in this special reduced duty system must pay a
minimum  purchase  price  which  is  equal  to  the  guaranteed  price  for  raw  sugar
reduced by the adjustment aid fixed for the marketing year concerned in accordance
with the provisions of Article 38 of Regulation (EC) No 1260/2001 mentioned under
paragraph 3.

2.

3.

4.

8

5.

Before 1 January 2006, the two parties to this agreement shall open discussions on its
possible continuation.”

I should be obliged if you would acknowledge receipt of this letter and confirm that this letter
and  your  reply  constitute  an  Agreement  between  the  Government  of  India  and  the
Community.

Please accept, sir, the assurance of my highest consideration.

On behalf of the Council
of the European Union

9

Sir,

B. Letter No 2

I have the honour to acknowledge receipt of your letter of today which reads as follows:

“…………………………………………………………………………………………………
………………………………………………………………………………….……………..”

I  have  the  honour  to  confirm  the  agreement  of  the  Government  of  the  Republic  of  India
referred to in this letter with the foregoing.

Please accept, Sir, the assurance of my highest consideration.

For the Government of
the Republic of India

10

1.

2.

3.
4.

5.

5.0

5.1

6.0

6.1

FINANCIAL STATEMENT

APPROPRIATIONS:
EUR 1 180 million

BUDGET HEADING:
Chapter 1 0 – Agricultural duties
TITLE:
Council  Decision  on  the  conclusion  of  Agreements  in  the  form  of  an  exchange  of  letters  between  the
European Community and, on the one hand, Barbados, Belize, the Republic of Congo, Fiji, the Cooperative
Republic  of  Guyana,  the  Republic  of  the  Ivory  Coast,  Jamaica,  the  Republic  of  Kenya,  the  Republic  of
Madagascar, the Republic of Malawi, the Republic of Mauritius, the Republic of Surinam, Saint Kitts and
Nevis, the Kingdom of Swaziland, the United Republic of Tanzania, the Republic of Trinidad and Tobago,
the  Republic  of  Uganda,  the  Republic  of  Zambia,  the  Republic  of  Zimbabwe  and,  on  the  other  hand,  the
Republic of India on the supply of raw cane sugar to be refined.
LEGAL BASIS: Article 133 of the Treaty
AIMS:
To establish tariff concessions for special preferential sugar originating in the ACP countries and India
FINANCIAL IMPLICATIONS

PERIOD OF
12 MONTHS

(EUR million)
84.03

CURRENT
FINANCIAL
YEAR 2001
(EUR million)
14.01

FOLLOWING
FINANCIAL
YEAR 2002
(EUR million)
84.17

CHARGED TO THE EC BUDGET

NATIONAL ADMINISTRATION
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTION)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
-

NATIONAL

OWN RESOURCES OF THE EC

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE
5.2 METHOD OF CALCULATION:
Loss of own resources

- 11.9

- 1.98

- 11.2

2003
78.53
- 10.5

2004
72.03
- 9.6

2005
64.57
- 8.6

2006
27.99
- 3.7

EUR 11 877 600/year
EUR 1 979 600.

1)
In 2001
202 000 tonnes x EUR 58.8/t =
EUR 11 877 600 x 2/12 months =
In 2002 et seq.:
Where  quantities  are  concerned  account  must  be  taken  of  the  annual  increase  granted  to  EBA  sugar
(15%/year)  which  will  be  deducted  from  the  quantities  imported  under  the  special  preferential  ACP/India
sugar scheme (Regulation (EC) No 416/2001 of 28.2.2001).
2002: 202 000 t – 11 176 t = 190 872 x EUR 58.8/t = EUR 11 223 288
2003: 190 872 t – 12 804 t = 178 068 x EUR 58.8/t = EUR 10 470 389
2004: 178 068 t – 14 725 t = 163 343 x EUR 58.8/t = EUR 9 604 568
2005: 163 343 t – 16 933 t = 146 410 x EUR 58.8/t = EUR 8 608 849
2006: 146 410 t – 19 473 t = 126 937 x EUR 58.8/t = EUR 7 463 896 x 6/12 months = EUR 3 731 948.
2)
Refund  expenditure  should  not  change  because  the  overall  quantity  to  be  exported  remains  unchanged.
There  is  therefore  no  additional  expenditure  and,  for  2002,  this  is  included  in  the  LA  to  the  2002  PDB.
Estimated  expenditure  is  calculated  on  the  basis  of  a  refund  rate  of  EUR 416/t  applicable  in  2001  and
EUR 441/t in 2002 and following years (estimates).
CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN
THE RELEVANT CHAPTER OF THE CURRENT BUDGET?
CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS
OF THE CURRENT BUDGET?
IS A SUPPLEMENTARY BUDGET NECESSARY?

Expenditure

YES / NO

YES / NO
YES / NO
YES / NO

6.2
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?
OBSERVATIONS:

11