Commission Regulation (EC) No 1433/2003 of 11 August 2003 laying down detailed rules for the application of Council Regulation (EC) No 2200/96 as regards operational funds, operational programmes and financial assistance
Date: 2003-08-11
Institutions: European Commission
Subjects: aid system, financial aid, fruit, fund (EU), operational programme, producer organisation, professional association, vegetable

12.8.2003

EN

Official Journal of the European Union

L 203/25

COMMISSION REGULATION (EC) No 1433/2003

of 11 August 2003

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

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 Commission Regula-
tion (EC) No 47/2003 (2), and in particular Article 48 thereof,

Whereas:

(1)

(2)

(3)

(4)

In view of the experience gained during last years, it is
necessary to amend 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 (3). In the interests of clarity
and rationality it is appropriate to repeal and replace
that Regulation.

Article 15 of Regulation (EC) No 2200/96 provides for
financial assistance to be granted to producer organisa-
tions setting up an operational fund in accordance with
certain rules and within certain limits. Article 16 of that
Regulation lays down certain rules for the implementa-
tion of operational programmes. 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 duplicate aid.

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 Regulation (EC) No 2201/96 on
the common organisation of the markets in processed

(5)

(6)

fruit (6), as

fruit and vegetable products (4), as last amended by
Commission Regulation (EC) No 453/2002 (5), and
Council Regulation (EC) No 2202/96 of 28 October
1996 introducing a Community aid scheme for produ-
cers of certain citrus
last amended by
Commission Regulation (EC) No 1933/2001 (7), 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 aid 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
this 12-month period. Additional
methods of calculation of marketable production should
also be made possible in case of yearly fluctuations or
the scheme,
insufficient data. To prevent misuse of
producer organisations
should not be permitted to
change reference periods within the duration of a
programme.

calculating

To ensure correct use of aid, rules should be laid down
for the management of operational funds and members'
financial contributions towards these funds. In particular
it should be specified that the financial contributions of
members of the producer organisation are based on the
marketed production used to calculate the aid. Member
States may authorise producer organisations to use their
own funds and to set different levels of contributions, on
condition that all producers contribute to and take
advantage of the operational fund.

of

and

approval

presentation

In the interests of sound management, procedures for
the
operational
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.

(1) OJ L 297, 21.11.1996, p. 1.
(2) OJ L 7, 11.1.2003, p. 64.
(3) OJ L 90, 30.3.2001, p. 4.

(4) OJ L 297, 21.11.1996, p. 29.
(5) OJ L 72, 14.3.2002, p. 9.
(6) OJ L 297, 21.11.1996, p. 49.
(7) OJ L 262, 2.10.2001, p. 6.

L 203/26

EN

Official Journal of the European Union

12.8.2003

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 should be possible
for measures and amounts of the operational fund to be
changed within the year of execution of a programme.
All such changes should be subject to certain limits and
to be defined by Member States and
conditions,
to the
including obligatory notification of changes
competent
approved
the
programmes maintain their overall objectives.

authorities,

ensure

to

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 exhaustive. For transparency and ease of
application of Community rules, eligibility criteria of
certain measures
follow
guidelines set in Council Regulation (EC) No 1260/1999
of 21 June 1999 laying down general provisions on the
Structural Funds (1), as amended by Regulation (EC) No
1105/2003 (2). Certain operations
and expenditure
should be permitted temporarily or within certain limits.

should, where appropriate,

In the case of investments on individual holdings, so as
to prevent the unjustified enrichment of a private party
who has severed links with the organisation during the
useful life of the investment, provisions should be laid
down to allow the organisation to recover the residual
value of the investment, whether such an investment is
owned by the member or by the organisation

recovery of advances, such payments should not exceed
the minimum level of aid. It should be possible for furn-
ished securities to be progressively released as implemen-
tation of the operational programme proceeds, to the
extent of up to 80 % of the advances paid, the remaining
amount being retained until the balance of the aid has
been paid. An alternative system should be available for
the reimbursement, at periods throughout the year, of
expenditure already incurred.

(13)

To ensure correct application of the scheme, the infor-
mation to be included in applications for aid 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 administra-
tive checks for verification.
In the interests of sound
financial management, penalties should be determined
for late submission of applications for aid.

(14)

The ceiling on aid should apply to all applications at the
level fixed by Article 15(5) of Regulation (EC) No 2200/
96.

(15)

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

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

(16)

To ensure the effective implementation of operational
programmes, producer organisations should receive noti-
fication of the decisions of the competent authorities on
operational programmes and the approved amount of
aid on 15 December of the year preceding implementa-
tion of the programme at the latest.

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
infringement. To ensure
conditions
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 aid paid,
in accordance
with the jurisprudence of the Court of Justice.

treatment,

fair

(7)

(8)

(9)

(10)

(11)

(12)

To prevent cash-flow difficulties, a system of advance
payments accompanied by appropriate securities should
It should be
be available to producer organisations.
the systematic
stipulated that,

to prevent

in order

(1) OJ L 161, 26.6.1999, p. 1.
(2) OJ L 158, 27.6.2003, p. 3.

(17)

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

12.8.2003

EN

Official Journal of the European Union

L 203/27

(18)

(19)

to all operational
This Regulation should apply
from 2004.
to
programmes
be
Programmes
application
already
continues into 2004 should be amended unless their
advanced state of
implementation makes this inap-
propriate.

implemented
approved whose

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

(20)

The Management Committee for fresh Fruit and Vegeta-
bles has not delivered an opinion within the time limit
set by its chairman,

HAS ADOPTED THIS REGULATION:

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter and scope

1.
This Regulation lays down rules applicable to Community
financial assistance, hereinafter referred to as ‘aid’, to opera-
tional funds and to operational programmes as provided for in
Articles 15 and 16 of Regulation (EC) No 2200/96.

2.
Producer organisations may qualify for aid on the terms
set out in Articles 15 and 16 of Regulation (EC) No 2200/96
and those laid down herein.

Article 2

Definitions

For the purposes of this Regulation,

1.
‘producer organisa-
tions’ means those recognised pursuant to Article 11 of Regula-
tion (EC) No 2200/96.

2.
For the purposes of this Regulation, a recognised ‘associa-
tion of producer organisations’ acting on behalf of its members
for the purposes of fully or partially managing their operational
funds and programmes in accordance with Article 16(3) of
Regulation (EC) No 2200/96 shall be considered as a producer
organisation.

CHAPTER II

VALUE OF MARKETED PRODUCTION

Article 3

Basis for calculation

The production shall include the amount of the aid as
2.
provided for in Article 2 of Regulation (EC) No 2201/96 and
Article 1 of Regulation (EC) No 2202/96 received by the
producer organisations for the same reference period referred
to in article 4.

3.
The production shall include the production of members
who leave or join the producer organisation. The Member
States
to avoid duplicate
counting.

shall determine the conditions

4.
The production shall include the value of products with-
drawn for free distribution within the meaning of Article
30(1)(a) and (b) of Regulation (EC) No 2200/96, estimated at
the average price of those products marketed by the producer
organisation.

The production shall be disposed of in accordance with
5.
the first and second subparagraphs of Article 11(1)(c)(3) of
Regulation (EC) No 2200/96.

However, the conditions laid down in the first indent of that
point and, in cases of marginal quantities of product marketed
fresh or to the processing industry by the producer members
themselves, in the second indent thereof shall not apply.

The production shall be invoiced at

6.
organisation’ stage:

the ‘ex-producer

(a) where applicable, as
processed product’;

‘packaged or prepared but not

(b) excluding VAT;

(c) excluding internal

transport costs, 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.

Member States shall provide for reductions to be applied to the
invoiced value for products invoiced at different stages of
processing or delivery or transport.

Article 4

Reference period

1.
The annual ceiling on aid referred to in the third subpara-
graph 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 deter-
mined by Member States.

2.

The reference period may be:

1.
For the purposes of this Regulation, the value of marketed
production is based on the production of members of producer
organisations, according to paragraphs 2 to 6.

(a) a 12-month period, starting no earlier than 1 January two
years preceding the year
in which the operational
programme is implemented and ending no later than 1 July
of the same year, or

L 203/28

EN

Official Journal of the European Union

12.8.2003

(b) the average value of three subsequent 12-month periods
starting no earlier than 1 January four years preceding the
year in which the operational programme is implemented
and ending no later than 1 July of the same year.

2. Member States shall ensure that operational funds are
managed in such a way that it is possible for external auditors
to identify, check and certify their expenditure and revenue
annually.

3. Member States may use different reference periods for
different producer organisations to take into account various
production, sales and accounting periods for different products
or groups of products.

Expenditures relating to the operational

3.
fund may be
executed by a producer organisation's subsidiary, within the
meaning of Article 2 of Regulation (EC) No 1432/2003 (1).

The reference period shall not vary during an operational
programme except in duly justified situations.

Article 6

4. Where a reduction in the value of a product has occurred
due to reasons, duly justified to the satisfaction of a Member
State,
the
falling outside the responsibility and control of
producer organisation, the value of the marketed production
referred to in paragraph 1 shall not be less than 65 % of the
value of
the product concerned in the previous reference
period.

The reasons referred to in the first subparagraph shall be duly
justified.

5. Where recently recognised producer organisations have
insufficient historical data on marketed production for the
application of paragraph 2 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.

6. Member States shall take the measures necessary to gather
information on the value of marketed production of producer
organisations which
operational
programmes.

submitted

have

not

CHAPTER III

OPERATIONAL FUNDS

Article 5

Management

Financing of operational funds

1.
The financial contributions of members to the operational
fund referred to in Article 15(1) of Regulation (EC) No 2200/
96 shall be determined on the basis of volume and/or value of
the marketed production.

2. Member States may authorise producer organisations to:

(a) use all or part of their own funds, generated by the sales of
fruit and vegetable products of their members related to the
recognition categories, with the exception of those coming
from other public support;

(b) set

individual

levies on producer members at different

levels.

In case of application of the first subparagraph, the following
conditions shall be respected:

(a) all producers shall contribute to the operational fund;

(b) all producers shall have the opportunity to benefit from the

operational fund;

(c) all producers shall have the opportunity to participate
democratically in decisions concerning the use of funds of
the producer organisation and the financial contributions
to the operational funds.

Article 7

Communication of estimated amount

Operational funds set up by producer organisations as
1.
referred to in Article 15(1) of Regulation (EC) No 2200/96 shall
be used solely for transactions connected with:

(a) the implementation of the operational programme;

(b) the administration of the operational fund;

The producer organisations shall communicate the estimated
amounts of the operational funds for the following year to the
Member States by 15 September at the latest, together with the
operational programmes or requests for amendments to be
approved.

Calculation of the estimated amount of operational funds shall
be based on the operational programmes, the estimated expen-
diture on withdrawals and the value of marketed production.

(c) Community compensation for withdrawals, in accordance

with Article 15(3) of Regulation (EC) No 2200/96.

(1) See page 18 of this Official Journal.

12.8.2003

EN

Official Journal of the European Union

L 203/29

CHAPTER IV

Article 10

OPERATIONAL PROGRAMMES

Partial operational programmes

Article 8

Contents of operational programmes

1.

Operational programmes shall include the following:

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

production, marketing and equipment;

(b) the objectives of

the programme, bearing in mind the

outlook for production and outlets;

(c) a detailed description of the measures, containing separate
actions, to be taken and the means for attaining those
objectives
the
programme;

implementation of

in each year of

(d) the duration of the programme;

(e) the financial aspects, namely:

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

contributions;

(ii) the procedure for financing the operational fund;

(iii) information necessary to justify different

levels of

contribution;

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

Operational programmes may

include points not
2.
provided for in paragraph 1, in particular the points set out in
Annex I.

Operational programmes shall not include operations or
3.
expenditure referred to in the list set out in Annex II or any
other ones included in measures adopted by Member States
under Article 25.

Article 9

Documents to be submitted

Operational programmes shall be accompanied by:

(a) evidence of the setting-up of an operational fund;

(b) a written undertaking from the producer organisation to
comply with Regulation (EC) No 2200/96 and this Regula-
tion;

(c) a written undertaking from the producer organisation and
its members that they have not received, directly or indir-
ectly, duplicate Community or national funding in respect
of measures and/or operations qualifying for aid under this
Regulation.

In case of application of Article 16(3) of Regulation (EC)
1.
No 2200/96, Member States may authorise recognised associa-
tions of producer organisations to present a partial operational
programme of their own, which shall consist of actions identi-
fied, but not implemented by the member producer organisa-
tions in their operational programmes.

The

rules

same

2.
apply to partial operational
programmes as to other operational programmes and they shall
be considered together with the operational programmes of the
member producer organisations.

shall

3. Member States shall ensure that:

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

(b) the 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 aid.

Article 11

Time limit for submission

Operational programmes shall be submitted by the producer
organisation for approval to the competent authority in the
Member State in which the producer organisation has its head-
quarters on 15 September of the year preceding that in which
they are to be implemented at the latest.

However, the Member States may postpone that date.

Article 12

Verification

The competent national authority shall verify by all appropriate
means, including on-the-spot inspections:

(a) the accuracy of information provided pursuant to Article

8(1)(a), (b) and (e);

(b) compliance of the objectives of programmes with Article

15(4) of Regulation (EC) No 2200/96;

(c) eligibility of the operations and the expenditure proposed,

account being taken of Article 8(2) and (3);

(d) the

economic

quality of
programmes, the soundness of the estimates and the aid
plan, and the planning of its implementation.

and technical

consistency

L 203/30

EN

Official Journal of the European Union

12.8.2003

Article 13

Decision

1.

The competent national authority shall, as appropriate:

(a) approve amounts of funds and programmes which meet
the requirements of Articles 15 and 16 of Regulation (EC)
No 2200/96 and those of this Chapter;

(b) approve the programmes, on condition that certain amend-

ments are accepted by the producer organisation; or

(c) reject the programmes.

The competent national authority shall take decisions on
2.
programmes and funds on 15 December of the year in which
they are submitted at the latest.

Member States shall notify the producer organisations of those
decisions on 15 December at the latest.

Article 14

Amendments to operational programmes for subsequent
years

to
Producer organisations may request amendments
1.
operational programmes on 15 September at the latest to be
applied from 1 January of the following year.

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

Requests

for amendments

2.
shall be accompanied by
supporting documents giving the reason, nature and implica-
tions of the changes.

3. Member States shall determine the conditions under
which operational programmes may be amended during the
year without prior approval by the competent national
authority.

fund
However, any increase in the amount of operational
approved for aid withdrawals as in Article 15(2)(a) of Regula-
tion (EC) No 2200/96 shall in all cases be the subject of prior
approval by the competent authority.

These changes are only eligible for aid if they are communi-
cated by the producer organisation to the competent authority
without delay.

Article 16

Operational programmes format

Operational programmes shall be implemented in annual

1.
periods running from 1 January to 31 December.

Operational programmes approved on 15 December at
the

2.
the latest shall be implemented as from 1 January of
following year.

implementation of programmes

The
December shall be postponed for one year.

approved after 15

CHAPTER V

AID

Article 17

Approved amount of aid

3.
The competent authority shall take decisions on requests
for amendments to operational programmes on 15 December
at the latest, after considering the documents supplied, and in
accordance with Article 12. Where a decision is not taken
within that time limit, the request shall be deemed to have been
rejected.

After the programmes have been approved, Member States
shall establish the approved amount of aid as referred to in the
first subparagraph of Article 16(2) of Regulation (EC) No 2200/
96.

Member States shall notify the producer organisations on 15
December at the latest of the approved amount of aid.

Article 15

Amendments to operational programmes during the year

1. Member States may authorise amendments to operational
programmes during the year, under conditions to be deter-
mined by them.

Producer organisations may be authorised by the compe-

2.
tent national authority, during the year to:

(a) implement their operational programmes in part only;

(b) change

the

contents of

the operational programme,
including the extension of its duration up to a total dura-
tion of five years;

(c) change the amount of
maximum of 20 % of
provided
programme are maintained.

the operational
the amount
the overall objectives of

fund up to a
initially approved
the operational

Article 18

Applications

1.
Producer organisations shall submit an application for aid
or the balance thereof to the competent authority for each
operational programme for which aid is requested on 31
January of
for which the aid is
following that
the year
requested at the latest.

Applications shall be accompanied by supporting docu-

2.
ments showing:

(a) the value of the marketed production;

(b) the financial contributions levied on members and paid into

the operational fund;

(c) the expenditure incurred in respect of

the operational

programme;

12.8.2003

EN

Official Journal of the European Union

L 203/31

(d) the proportion of the operational fund spent on the aid for

market withdrawals;

(e) the level of compensation and/or supplements paid to

members;

(f) compliance with the limits laid down in the third subpara-
graph of Article 15(3) and in Article 23(3), (4) and (5) of
Regulation (EC) No 2200/96.

Applications may cover expenditure programmed but not

3.
incurred if the following elements are proved:

(a) the operations concerned could not be carried out on 31
December at the latest of the year of implementation of the
operational programme for reasons beyond the control of
the producer organisation concerned;

(b) those operations can be carried out on 30 April of the

following year at the latest;

(c) an equivalent contribution from the producer organisation

remains in the operational fund.

implementation of

The aid shall be paid and the security lodged in accordance
with Article 20(3) shall be released only on condition that
proof of
the programmed expenditure
referred to in point (b) of the first subparagraph is provided on
30 April of the year following that for which the expenditure
in question was programmed at the latest, and on the basis of
the entitlement to the aid actually established.

4. Where applications are submitted after the date provided
for in paragraph 1, the aid shall be reduced by 1 % for each
day late.

In exceptional and duly justified cases, the competent authority
may accept applications after the date provided for in para-
graph 1, if the checks provided for in Article 23 have been
carried out and the time limit for payment provided for in
Article 19 is complied with.

Article 19

Payment of the aid

Member States shall pay the aid applied for on 30 June of the
year following the year of implementation of the programme at
the latest.

However, Member States may postpone this date until 15
October.

Article 20

Advance payments

Producer organisations may apply for

1.
the advance
payment of the part of the aid corresponding to the foreseeable
expenditure resulting from the operational programme during
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 initially approved amount of aid for the opera-
tional programme.

3.
Advances shall be paid subject to the lodging of a security
equivalent to 110 % thereof in accordance with Commission
Regulation No 2220/85 (1).

Conditions shall be provided for by the Member States to
ensure that financial contributions to the operational fund have
been levied in accordance with Article 5(2) and Article 6 and
previous advance payments have actually been spent.

Applications

securities may be
4.
submitted during the year and shall be accompanied by the
relevant supporting documents.

release of

the

for

Securities shall be released in respect of up to 80 % of advances
paid.

5.
The primary requirement within the meaning of Article
20 of Regulation (EC) No 2220/85 shall cover the performance
of the operations set out in the operational programmes subject
to the undertakings provided for in Article 9(b) and (c) of this
Regulation.

In the event of failure to comply with the primary requirement
or of serious failure to meet the obligations provided for in
Article 9(b) and (c) the security shall be forfeited, without preju-
dice to other penalties to be applied in accordance with Article
24.

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.

Article 21

Partial payments

1.
Producer organisations may apply for the payment of the
part of the aid corresponding to the expenditure resulting from
the operational programme incurred during the three preceding
months.

Applications shall be submitted in April,
They shall be accompanied by suitable supporting documents.

July and October.

Total payments in respect of applications for parts of the aid
may not exceed 90 % of the initially approved amount of aid
for the operational programme or of the real expenditure,
whichever is less.

Producer organisations may apply for the payment of part

2.
of the aid for market withdrawals.

Applications may be submitted together with applications
referred to in paragraph 1. They 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.

Applications for advance payments shall be made in

2.
January, April, July and October.

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

L 203/32

EN

Official Journal of the European Union

12.8.2003

CHAPTER VI

GENERAL PROVISIONS

Article 22

Producer organisation reports

Producer organisations

1.
reports,
accompanying applications for aid, on the implementation of
operational programmes and withdrawal operations eligible for
aid under an operational fund.

submit annual

shall

If the checks reveal significant irregularities in a region or part
of a region or for a specific producer organisation, the compe-
tent authority shall carry out additional checks during the year
in question and shall increase the percentage of corresponding
applications to be checked the following year.

3.
The competent authority shall determine which producer
organisations to check on the basis of a risk analysis and the
representativeness of the aid.

The risk analysis shall take account of:

(a) the amount of aid,

Those reports shall concern the following:

year,

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

(a) operational programmes implemented during the preceding

year and market withdrawals;

(b) main amendments to operational programmes;

(c) variances between estimated aid and aid applied for.

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

(d) other parameters to be determined by Member States, in
particular whether producer organisations are involved in a
quality approach officially recognised by the Member States
or by independent certifying bodies.

For

2.
the final year of application of an operational
programme, a final report shall replace the annual report
referred to in paragraph 1.

Final reports shall
include an assessment of the operational
programmes, which may be prepared with the aid of a specia-
lised consultancy office. They shall show to what extent the
objectives pursued by the programmes have been achieved.
They shall explain changes to operations and/or methods,
which have been or will be considered when subsequent opera-
tional programmes are drawn up, or when existing operational
programmes are amended.

Article 23

Checks

1. Member States shall carry out on-the-spot checks on
producer organisations, with little or no prior notification, so
as to ensure compliance with the conditions for grant of aid.

Those checks shall in particular concern:

(a) the implementation of the measures contained in the opera-
tional programme, paying particular attention to measures
relating to investments;

(b) real costs and expenses incurred compared with declared

aid.

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

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

Article 24

Recovery and penalties

Aid unduly paid or application for aid in accordance with
1.
paragraph 3 shall be recovered or withheld and penalties shall
be applied to the beneficiary/applicant concerned, where:

(a) the real value of marketed production is less than the

amount used to calculate the aid;

(b) the operational fund has been maintained in a manner
which does not comply with the second subparagraph of
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 prejudice
to Article 14 and 15 of this Regulation.

2. Without prejudice to 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 imple-
mented in conformity with an operational programme
approved by the Member State, the latter may pay the relevant
aid due, or 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 organisa-
tion has not acted negligently.

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

12.8.2003

EN

Official Journal of the European Union

L 203/33

3. Where paragraph 1 applies, the beneficiary of the aid/
applicant shall be required:

(a) where aid has already been paid:

(i) in the case of obvious error,

to reimburse the aid

unduly paid, plus interest;

2. Member States shall communicate to the Commission all
measures and conditions provided for by them in the frame-
work of this Regulation, and in particular:

(a) the method, procedure and information referred to in

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

(ii) in the case of

fraud,

to reimburse double the aid

(b) estimates of operational funds referred to in Article 7;

unduly paid, plus interest;

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

out, increased by 50 %, plus interest;

(b) where applications for aid have been submitted but no aid

has been paid:

(c) details on applications for aid;

(d) conditions set for allowing amendments to be made to
operational programmes during the year as provided for in
Article 15;

(i) in the case of fraud, to pay the aid unduly applied for;

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

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

pay 50 % of the aid unduly applied for.

24(2);

(f) provisions adopted under Article 25.

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 beneficiary;

(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 Union and in force on the
date on which the undue payment is made, plus three
percentage points.

5.
Aid recovered in accordance with paragraph 3 shall be
paid 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
not receive aid for the year following that in respect of which
the false declaration was discovered.

CHAPTER VII

REPEAL AND FINAL PROVISIONS

Article 27

Repeal

Regulation (EC) No 609/2001 is repealed.

References to the repealed Regulation shall be construed as
references to this Regulation.

Article 28

Transitional provisions

Article 25

Member State provisions

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

Operational programmes which were approved by Member
States before the entry into force of this Regulation and which
continue to apply in 2004 shall comply with this Regulation.
The producer organisations shall request the necessary amend-
ments on 15 September 2003 at the latest.

Member States may provide for the retention of programmes
approved before the entry into force of this Regulation.

Article 26

Member State reporting

Article 29

Entry into force

1.
By 1 June of each year, Member States shall report finan-
cial and qualitative data on producer organisations, operational
funds and operational programmes and checks and penalties as
set out in Annex III.

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

L 203/34

EN

Official Journal of the European Union

12.8.2003

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

Done at Brussels, 11 August 2003.

For the Commission

Franz FISCHLER

Member of the Commission

12.8.2003

EN

Official Journal of the European Union

L 203/35

ANNEX I

Optional contents of operational programmes

1. Costs of plants in the case of perennial crops (perennials, trees and shrubs).

2. For a maximum of 10 years per action, specific costs for:

(a) organic, integrated or experimental production (1);

(b) organic plant protection materials (2);

(c) environmental measures, including costs generated by the environmental management of packaging (3);

(d) quality improvement measures, including certified seeds, mycelium and plants.

For each category of eligible specific costs referred to above, in order to calculate additional costs compared with
conventional ones, Member States may fix standard flat rates in a duly justified way.

3. Overheads specifically related to the operational fund or programme (4) 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 (5). This 2 % consist of 1 %
of Community aid plus 1 % from the producer organisation.

In the case of an association of producer organisations as referred to in Article 9 of Regulation (EC) No 1432/
2003 (6), that lump sum may be multiplied for the number of producer organisations member of that association,
up to a maximum of EUR 1 250 000.

4. Personnel costs (including charges linked to wages and salaries, if these are borne by the producer organisation)

resulting from measures:

(a) to improve or maintain a high level of quality or environmental protection;

(b) to improve the level of marketing.

The implementation of those measures shall essentially involve the use of qualified personnel. If, in such cases, the
producer organisation uses its own employees or member producers, the time worked shall be documented.

If a Member State wishes to provide an alternative to restricting funding to the real costs, for all the eligible
personnel costs referred to above, it shall fix, ex ante and in a duly justified way, lump sums up to a maximum of
20 % of the approved operational fund. This percentage may be increased in duly justified cases.

In order to request those lump sums, producer organisations shall furnish proof of the implementation of the action
to the satisfaction of the Member State.

5. Investments in means of transport equipped with cold-storage or controlled-atmosphere transport.

6. 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.

7. Costs of meetings and training programmes related to implementation of actions in the operational programme,
including daily allowances of participants covering transport and accommodation costs (where appropriate on a
flat-rate basis).

8. Generic promotion and promotion of quality labels. Geographical names are allowed only:

(a) if they are a protected designation of origin or a protected geographical indication, covered by Council Regula-

tion (EEC) No 2081/92 (7), or

(b) if, in all cases where the provision of point (a) does not apply, these geographical names are secondary to the

principal message.

Promotional material shall bear the emblem of the European Community (in the case of visual media only) and
include the following legend: ‘Campaign financed with the aid of the European Community’.

(1) The competent national authority shall lay down the eligibility criteria for an experimental production taking account of the newness

of the procedure or concept and the risk involved.

(2) Organic plant protection materials (such as pheromones and predators), whether used in organic, integrated or conventional produc-

tion.

(3) The environmental management of packaging needs to be properly justified and follow the criteria of Annex II to Directive 94/62/EC

of the European Parliament and of the Council on Packaging and Packaging waste (OJ L 365, 31.12.1994, p. 10).

(4) Including management and personnel costs, reports and evaluation studies; the costs of keeping accounts and the management of

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

(5) Member States may restrict funding to the real costs, in which case they should define the eligible costs.
(6) See page 18 of this Official Journal.
(7) OJ L 27, 30.1.1997, p. 50.

L 203/36

EN

Official Journal of the European Union

12.8.2003

9. Promotion of producer organisations brands/trademarks.

10. Legal and administrative costs of mergers of producer organisations or their acquisition, as well as legal and admin-
istrative costs related to creating transnational producer organisations or transnational associations of producer
organisations; feasibility studies and proposals commissioned by producer organisations in this respect.

11. Second-hand equipment within the conditions laid down in Rule No 4 of Commission Regulation (EC) No 1685/

2000 (1).

12. 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(1.1)(a), (b) and (c) and 1.2 of Rule No 5 of Regulation (EC) No 1685/2000 (2).

13. 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.

14. Financial charges within the conditions laid down in Rule No 3 of Regulation (EC) No 1685/2000.

15. Hire as an alternative to purchase where economically justified, at the satisfaction of the Member States.

16. 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.

17. Investments or actions on individual holdings, on condition that they contribute to the objectives of the operational
programme. Member States shall ensure that appropriate provisions are made in order to recover the investment or
its residual value if the member leaves the organisation.

18. Investments in shares of companies if the investment contributes to the achievement of the goals of the operational

programme.

19. Replacements for investments, provided that the residual value of the replaced investments is:

(a) added to the operational fund of the producer organisation, or

(b) subtracted from the cost of the replacement.

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

(1) OJ L 242, 27.9.2000, p. 18.
(2) The competent national authority may set additional conditions to Rule No 5 of Regulation (EC) No 1685/2000 for the acceptance of
this type of expenditure in order to avoid all speculation; these conditions may include in particular forbidding the sale of the invest-
ment/land during a minimum period and the setting of a maximum correlation between the value of the land and the value of the
investment.

12.8.2003

EN

Official Journal of the European Union

L 203/37

ANNEX II

Ineligible operations and expenditure

1. General production costs, and in particular:

— seeds, mycelium and plants,

— plant protection products, including integrated control materials, fertilisers and other inputs,

— packing costs, storage costs, packaging costs, even as part of new processes, costs of packages,

— costs of collection or transport (internal or external),

— operating costs (in particular electricity, fuel and maintenance).

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
preparation of the product, in particular cleaning, cutting, trimming, drying and packaging, with a view to its
marketing, are not deemed processing).

L 203/38

EN

Official Journal of the European Union

12.8.2003

ANNEX III

MEMBER STATE REPORTING REQUIREMENTS

Information to be forwarded by Member States to the Commission, according to formats provided by the
Commission

Part 1: Producer organisations

1. Administrative information (including recognition number, legal form, number of physical and legal members).

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

products).

Part 2: Operational funds and operational programmes

1. Reference period(s) used.

2. Aid estimates.

3. Applications for aid and aid payments actually made,

including the percentage of operational fund spent on

withdrawals.

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

Part 3: Checks, recovery and penalties

1. Producer organisations checked.

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

3. Updated figures relating to aid payments actually made, submitted on 15 November at the latest.