Council Regulation (EC) No 670/2003 of 8 April 2003 laying down specific measures concerning the market in ethyl alcohol of agricultural origin
Date: 2003-04-08
Institutions: Council of the European Union
Subjects: State aid, ethanol, exchange of information, export licence, import licence, inward processing, tariff quota, trade policy

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COUNCIL REGULATION (EC) No 670/2003

of 8 April 2003

laying down specific measures concerning the market in ethyl alcohol of agricultural origin

(6)

(7)

(8)

(9)

(10)

(11)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity, and in particular Articles 36 and 37 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parliament (2),

Having regard to the opinion of the European Economic and
Social Committee (3),

Whereas:

(1)

(2)

(3)

(4)

(5)

The operation and development of the common market
in agricultural products should be accompanied by the
establishment of a common agricultural policy to
include in particular appropriate measures, which may
take various forms depending on the product.

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.

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 their value
economic and social
importance for the economy of
certain regions of the Community or may be a signifi-
cant source of income for the producers of the raw
It also permits the disposal of
materials concerned.
products of unsatisfactory quality
and short-term
surpluses that may cause temporary problems in certain
sectors.

It
is necessary to establish a framework of specific
measures for ethyl alcohol of agricultural origin so that
economic data can be collected and statistical informa-
tion analysed for the purpose of monitoring the market;
in so far as the market in ethyl alcohol of agricultural
origin is linked to the market in ethyl alcohol in general,
information also needs to be made available concerning
the market in ethyl alcohol of non-agricultural origin.

For the purpose of monitoring developments on the
market in ethyl alcohol, Member States should send the
Commission the information necessary to draw up a
balance for that market.

(1) OJ C 180 E, 26.6.2001, S. 146.
(2) Opinion delivered on 13 June 2002 (not yet published in the Offi-

cial Journal).

(3) OJ C 260, 17.9.2001, p. 33.

ethyl

alcohol

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

The introduction of specific measures for the Commu-
nity in the sector of ethyl alcohol of agricultural origin
requires the establishment of trade arrangements at the
Community's
arrangements
external borders. Trade
involving a system of import duties should, in principle,
stabilise the Community market. Those trade arrange-
ments should be based on the agreements concluded
during the Uruguay Round of multilateral trade negotia-
tions.

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. These
arrangements should also be extended to products in
bulk form based on ethyl alcohol of agricultural origin
imported under certain CN 2208 codes and presenting
all
the characteristics of ethyl alcohol of agricultural
origin, for the purposes of effective control of imports of
such products.

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.

In addition to the system described above, and to the
extent necessary for
its proper working, provision
should be made for regulating the use of inward proces-
sing arrangements or, when the situation on the market
so requires, prohibiting the use of such arrangements.

The system of customs duties makes it possible to
the
dispense with all other protective measures at
Community's external borders. However,
the internal
in exceptional
market and duty mechanism could,
circumstances, prove defective. In such cases, so as not
to leave the Community market without defence against
disturbances that might ensue, the Community should
be able to take all necessary measures without delay. All
should comply with the obligations
such measures
arising from the World Trade Organisation Agreements.

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(12)

(13)

(14)

(15)

(16)

The achievement of a single market would be jeopar-
dised by the granting 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 ethyl
alcohol of agricultural origin. Given the particular situa-
tion in Germany, where national support is currently
granted to a large number of smaller producers of such
alcohol under the specific conditions of the German
alcohol monopoly, it is necessary to permit, during a
limited period of time, the continuation of the granting
of such support. It is also necessary to foresee a report
on the functioning of this derogation, at the end of that
period, accompanied with appropriate proposals.

The measures necessary for the implementation of this
Regulation should be adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (1).

The measures laid down by this Regulation should take
proper and simultaneous account of the objectives set
out in Articles 33 and 131 of the Treaty.

The measures laid down by this Regulation should also
comply with the agreements concluded in accordance
with Article 300(2) of the Treaty,
in particular those
forming part of the Agreement establishing the World
Trade Organisation and more specifically the Agreement
on Technical Barriers to Trade.

the
In order to guarantee the smooth operation of
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)

The measures for applying this Regulation should not
lead to any discrimination between ethyl alcohol of agri-
cultural and non-agricultural origin,

HAS ADOPTED THIS REGULATION:

Article 1

Scope

1.
Specific measures in the sector of ethyl alcohol of agricul-
tural origin covering the following products are hereby estab-
lished:

CN code

Description

ex 2207 10 00

ex 2207 20 00

Undenatured ethyl alcohol of an alcoholic strength
by volume of 80 % vol. or higher, obtained from
the agricultural products listed in Annex I to the
Treaty

Ethyl alcohol and other spirits, denatured, of any
strength, obtained from the agricultural products
listed in Annex I to the Treaty

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

CN code

ex 2208 90 91
and
ex 2208 90 99

Description

Undenatured ethyl alcohol of an alcoholic strength
by volume of less than 80 % vol., obtained from
the agricultural products listed in Annex I to the
Treaty

2.
Article 4 shall apply also to products based on ethyl
alcohol of agricultural origin falling within CN code 2208 put
up in containers of more than two litres and presenting all the
characteristics of ethyl alcohol as described in paragraph 1.

Article 2

Method of production

The method of production and the characteristics of an ethyl
alcohol obtained from a specific agricultural product listed in
Annex I to the Treaty may be laid down in accordance with
the procedure referred to in Article 12(2).

Article 3

Information

The Member States shall communicate to the Commis-

1.
sion the following information:

— the production of ethyl alcohol of agricultural origin
expressed as hectolitres of pure alcohol, broken down by
alcohol-producing product used,

— the volume of ethyl alcohol of agricultural origin disposed
of, expressed as hectolitres of pure alcohol, broken down
by sector of destination,

— the stocks of ethyl alcohol of agricultural origin available in

the Member State at the end of the previous year,

— forecast production for the current year.

Rules for communicating this information and, in particular,
the frequency of communication and the definition of
the
sectors of destination shall be adopted in accordance with the
procedure referred to in Article 12(2).

2.
On the basis of this information and any other informa-
tion available, the Commission shall draw up a Community
balance for the market in ethyl alcohol of agricultural origin
for the previous year and an estimated balance for the current
year.

3.
The Community balance shall also contain information
on ethyl alcohol of non-agricultural origin. The precise content
and means of collecting such information shall be laid down in
accordance with the procedure referred to in Article 12(2).

‘Ethyl alcohol of non-agricultural origin’ means products falling
within CN codes 2207, 2208 90 91 and 2208 90 99 not
obtained from a specific agricultural product listed in Annex I
to the Treaty.

The Commission shall notify the Member States of the

4.
balances in question.

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Article 4

Import and export licences

1.
All imports into the Community of the products referred
to in Article 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, irre-
spective 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 Commu-
nity.

Licences shall be issued subject

to the lodging of a
3.
security guaranteeing that
the products are imported or
exported during the period 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 period 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).

The detailed rules referred to in paragraph 1 shall provide
4.
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 period of validity.

Article 7

Inward processing arrangements

To the extent necessary for the proper working of the market
in
in ethyl alcohol of agricultural origin,
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 products listed in Article 1.

the Commission,

Article 8

Article 5

Interpretation of the combined nomenclature

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.

Article 6

Tariff quotas

1.
Tariff quotas for the products listed in Article 1 resulting
from agreements concluded in accordance with Article 300 of
the Treaty, or from any other act 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).

Tariff quotas may be administered using one of

2.
following methods or a combination thereof:

the

(a) a method based on the chronological order in which appli-
cations are lodged (the first come, first served method);

(b) a method of distribution in proportion to the quantities
requested when the applications are lodged (the simulta-
neous examination method);

(c) a method taking traditional trade patterns into account (the

traditional importers/new arrivals 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 multilat-
eral trade negotiations.

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

this Regulation is

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

2.
provisions adopted pursuant hereto,
prohibited in trade with third countries:

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

customs duty;

(b) the application of any quantitative restriction or measure

having equivalent effect.

Article 9

Emergency measures

If, by reason of

imports or exports,

1.
the Community
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
with third countries until such disturbance or threat of distur-
bance has ceased.

In deciding whether the situation warrants the application of
such measures, account shall be taken,
in particular, of the
quantities for which import
licences have been issued or
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.

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If the situation referred to in paragraph 1 arises, the
2.
Commission shall, at the request of a Member State or on its
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 communication. 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 obliga-
tions arising from agreements concluded in accordance with
Article 300(2) of the Treaty.

Article 10

National aid

Articles 87, 88 and 89 of

the Treaty shall apply to
1.
production of and trade in the products covered by this Regula-
tion.

2. Without prejudice to Regulation (EEC) No 26/62 applying
certain rules of competition to production of and trade in agri-
cultural products (1), paragraph 1 does not apply to aid granted,
until 31 December 2010, by Germany in the framework of the
German Alcohol Monopoly for products marketed, after further
transformation, by the Monopoly, as ethyl alcohol of agricul-
tural origin listed in Annex I to the Treaty. The total amount of
this aid must not exceed EUR 110 million per year.

Germany shall present each year, before 30 June, a report
3.
to the Commission on the functioning of the system. Before 31
December 2009, the Commission shall present a report to the
European Parliament and the Council on the application of the
derogation, including an evaluation of the aids granted in the
framework of the German Alcohol Monopoly, together with
any appropriate proposals.

Article 12

Committee procedure

The Commission shall be assisted by the Management
1.
Committee for Wine (hereafter referred to as the Committee),
established by Article 74 of Regulation (EC) No 1493/1999 (2).

2. Where reference is made to this Article, Articles 4 and 7
of Decision 1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/
EC shall be set at one month.

3.

The Committee shall adopt its Rules of Procedure.

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.

Article 14

Compliance with the Treaty and international agreements

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

Article 15

Transitional measures

The Commission shall adopt, in accordance with the procedure
referred to in Article 12(2):

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

ments established by this Regulation;

(b) measures which are both necessary and duly justified to
resolve, in an emergency, practical, specific and unforesee-
able problems.

Article 11

Exchange of information

Article 16

Entry into force

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,
including the nature and presentation of that information, the
deadlines for transmission and the distribution of the informa-
tion received, shall be adopted in accordance with the proce-
dure referred to in Article 12(2).

(1) OJ C No 30, 20.4.1962, p. 993/62.

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

It shall apply from 1 January 2004.

(2) Council Regulation (EC) No 1493/1999 of 17 May 1999 on the
common organisation of the market in wine (OJ L 179, 14.7.1999,
p. 1). Regulation as last amended by Regulation (EC) No 2585/2001
(OJ L 345, 29.12.2001, p. 10).

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

Done at Luxembourg, 8 April 2003.

For the Council

The President

G. DRYS