Commission Regulation (EC) No 2237/2003 of 23 December 2003 laying down detailed rules for the application of certain support schemes provided for in Title IV of Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers
Date: 2003-12-23
Institutions: European Commission
Subjects: agricultural product, aid system, common agricultural policy, farmers' income, production aid

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COMMISSION REGULATION (EC) No 2237/2003

of 23 December 2003

laying down detailed rules for the application of certain support schemes provided for in Title IV
of Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes
under the common agricultural policy and establishing certain support schemes for farmers

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 1782/2003 of 29
September 2003 establishing common rules for direct support
schemes under the common agricultural policy and establishing
certain support schemes for farmers and amending Regulations
(EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001,
(EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC)
No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and
(EC) No 2529/2001 (1), and in particular Article 145(c), (e), (f),
(q) and Article 155 thereof,

Whereas:

Title IV of Regulation (EC) No 1782/2003 establishes
certain support schemes for farmers. For the sake of
simplification it is appropriate to provide for one single
regulation laying down the implementing rules of those
schemes which enter into force in 2004.

Starting from 2005 the integrated administration and
control system provided for in Title II, Chapter 4 of
Regulation (EC) No 1782/2003 (hereinafter referred as
‘the IACS’) shall apply to those support schemes. Some
of
the
those support schemes as well as some of
products receiving direct payments under some of those
support schemes are already covered by the IACS. In
order to facilitate the transition from the arrangements
provided for by Council Regulation (EEC) No 3508/92
of 27 November 1992 establishing an integrated admin-
istration and control system for certain Community aid
schemes (2)
to the arrangements provided for by the
IACS, it is appropriate to make applicable the existing
rules under Regulation (EEC) No 3508/92 and its imple-
menting rules provided for in Commission Regulation
(EC) No 2419/2001 (3) to those support schemes.

For
the
the efficiency and good administration of
schemes, the area payments must be restricted to certain
areas and conditions to be specified.

(1)

(2)

(3)

(4)

The sowing of land for the sole purpose of qualifying for
area payments should be prevented. Certain conditions
relating to the sowing and cultivation of crops must be
specified, in particular as regards durum wheat, protein

(8)

(1) OJ L 270, 21.10.2003, p. 1.
(2) OJ L 355, 5.12.1992, p. 1. Regulation as last amended by Commis-

sion Regulation (EC) No 495/2001 (OJ L 72, 14.3.2001, p. 6).

(3) OJ L 327, 12.12.2001, p. 11. Regulation as amended by Regulation

(EC) No 2550/2001 (OJ L 341, 22.12.2001, p. 105).

(5)

(6)

(7)

plants and rice. Local standards must be respected in
the diversity of agricultural practice
order to reflect
within the Community.

Only one application for an area payment should be
permitted in respect of any parcel cultivated in a given
year except in the cases where the area payment is given
as a supplement to the same crop or the aid concerns
the production of seeds. Area payments can be granted
on crops subsidised under a scheme falling within the
Community's structural or environmental policies.

Support schemes based on area aid provide that where
the area for which aid is claimed exceeds the maximum
guaranteed area or base areas or subbase areas, the area
per farmer for which aid is claimed shall be reduced
proportionately in that year. It is therefore appropriate
to establish the modalities and deadlines
the
exchange of information between the Commission and
the Member States in order to establish the coefficient of
reduction and to inform the Commission of the areas for
which the aid has been paid. The same provisions shall
apply for the reduction of the total amount of individual
reference quantities in case of application of Article
95(4) of Regulation (EC) No 1782/2003.

for

According to Article 73 of Regulation (EC) No 1782/
2003, granting of
the specific quality premium for
durum wheat is subject to the use of certain quantities
of certified seeds of varieties recognised, in the produc-
tion zone, as being of high quality for the production of
semolina or pasta. In order to ensure that those require-
ments are respected, the criteria for the variety screening
method in each Member States should be fixed and the
procedure for the establishment of the eligible varieties
list as well as the minimum quantity of certified seeds to
be used should be fixed.

The short time between the adoption of Regulation (EC)
No 1782/2003 and the entry into force of the specific
quality premium for durum wheat makes it impossible
to establish a list of eligible varieties for the granting of
the aid in the years 2004 and 2005 according to the
envisaged screening method. It is therefore necessary for
Member States to establish a transitional list based on a
selection of current varieties.

(9)

(10)

(11)

(12)

(13)

(14)

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In view of the obligation, for the purpose of the elig-
ibility to the specific quality premium for durum wheat,
to use a certain quantity of certified seeds, an appro-
priate control procedure should be set up in order to
verify that the eligible seeds and the required quantities
are effectively used.

In some regions, the protein crops are traditionally sown
in a mixture with cereals for agronomical reasons. The
resulting crop principally consists of protein crops. For
the purpose of granting the protein crop premium, the
areas thus sown should therefore be considered as areas
of protein crops.

In the interest of efficiency and good management of the
aid scheme for nuts, the area aid granted should not be
used to finance marginal plantations or isolated trees. A
minimum plot size and a minimum tree density of a
specialised orchard should therefore be defined. In order
to facilitate the transition between the existing improve-
ment plans which expire later than the introduction of
the new aid scheme, it is appropriate to provide for tran-
sitional measures.

The terms of payment as well as the crop-specific
payment for rice calculation depend not only on the
base area or areas fixed for each producing Member
State fixed by Regulation (EC) No 1782/2003, but also
on the possible subdivision of those base areas into
subbase areas and on the objective criteria chosen by
each Member State to perform this subdivision, on
conditions in which the cultivated parcels are put into
cultivation and on the minimum size of the latter. As a
consequence, detailed rules should be set for the estab-
lishment, the management and the cultivation modalities
applicable to base areas and subbase areas.

the aid
for granting compensatory payments under
scheme for rice producers (1). That Regulation becomes
without object and should therefore be repealed.

(16) Articles 93 and 94 of Regulation (EC) No 1782/2003
provide for an aid to farmers producing potatoes
intended for the manufacture of potato starch subject to
a cultivation contract and within the quota limit estab-
lished by Council Regulation (EC) No 1868/94 of 27
July 1994 establishing a quota system in relation to the
production of potato starch (2). The conditions for the
granting of the aid should therefore be established and,
where the case may be, cross references should be made
to the existing provisions concerning the quota system
provided for in Regulation (EC) No 1868/94. Taking
into account that the potatoes are delivered progressively
to starch undertaking and, until now, the aid has been
paid on the quantities delivered,
it is appropriate to
maintain for the year 2004 the current payment system.
In the interest of efficiency and good management of the
aid scheme, provisions on checks should be provided
for.

(17) Articles 95 and 96 Regulation (EC) No 1782/2003
provide that the dairy premium and additional payment
are paid to producers. Council Regulation (EC) No 1788/
2003 of 29 September 2003 establishing a levy in the
milk and milk products sector (3) provides for specific
provisions in case of inactivity. It is therefore appro-
priate to provide, when a natural or legal person holding
an individual reference quantity no longer meets the
conditions referred to in Article 5(c) of Council Regu-
lation (EC) No 1788/2003 during the 12-month period
preceding 31 March of the year concerned, for an exclu-
sion from the benefiting of the premium and payment.
In the interest of efficiency and good management of the
aid scheme, provisions on checks should be provided
for.

The observation of a possible overrun of the base area
referred to in Article 82 of Regulation (EC) No 1782/
2003 implies a reduction of the crop-specific payment
for rice. In order to set the calculation modalities for this
reduction, criteria to be taken into consideration as well
as applicable coefficients should be defined.

(18) Articles 88 to 92 of Regulation (EC) No 1782/2003
provide for a new aid scheme for energy crops to be
granted to farmers. As this is a new aid scheme requiring
complex management and control measures, the imple-
menting rules should be limited to 2004 to permit a
review, in the light of experience, in subsequent years.

The follow-up of
the crop-specific
the payments of
payment for rice presumes that the Commission has
been forwarded certain information related to the culti-
vation of base areas and subbase areas. For this purpose,
the detailed information that the Member States should
communicate to the Commission as well as the deadlines
for those communications should be determined.

(15)

The crop-specific payment for rice replaces the compen-
satory payments whose detailed rules where provided for
in Commission Regulation (EC) No 613/97 of 8 April
1997 laying down rules for the application of Council
Regulation (EC) No 3072/95 as regards the conditions

(19)

In line with Commission Regulation (EC) No 2461/1999
of 19 November 1999 laying down detailed rules for the
application of Council Regulation (EC) No 1251/1999 as
regards the use of land set aside for the production of
raw materials for the manufacture within the Com-
munity of products not primarily intended for human or
animal consumption (4), which excludes sugar beet from
the aid, the cultivation of sugar beet should be excluded
from the aid scheme for energy crops.

(1) OJ L 94, 9.4.1997, p. 1. Regulation as last amended by Regulation

(EC) No 1127/98 (OJ L 157, 30.5.1998, p. 86).

(2) OJ L 197, 30.7.1994, p. 4. Regulation as last amended by Regu-

lation (EC) No 1782/2003 (OJ L 270, 21.10.2003, p. 1).

(3) OJ L 270, 21.10.2003, p. 123.
(4) OJ L 299, 20.11.1999, p. 16. Regulation as last amended by Regu-

lation (EC) No 345/2002 (OJ L 55, 26.2.2002, p. 10).

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(20)

(21)

The terms of eligibility for this aid must be laid down.
To this end it should be laid down that a contract must
be concluded between the producer and the first
processor with respect to the agricultural raw materials
concerned. The conditions where processing is carried
out by the farmer on the holding should also be defined.

To ensure that the raw material
is processed into the
specified energy product, first processors must lodge a
security, despite the fact that the aid is granted not to
first processors but to farmers. The security must be
high enough to prevent any risk that the raw materials
are ultimately diverted from their destination. In addi-
tion, in order to make the control system for the scheme
effective, sales of raw materials and of semi-processed
products should be limited to a maximum of two before
final processing.

(22) An explicit distinction must be made between the appli-
cant's obligations, which end once the total quantity of
raw material harvested is delivered, and the obligations
incumbent on first processors, which commence on
delivery and end with the final processing of the raw
materials into energy products.

(23)

Certain transport operations within Community territory
involving raw materials and products derived therefrom
should be subject to controls entailing the use of T5
control copies to be issued in accordance with Commis-
sion Regulation (EEC) No 2454/93 of 2 July 1993 laying
down provisions for the implementation of Council
Regulation (EEC) No 2913/92 establishing the Com-
munity Customs Code (1). Provision should be made for
alternative evidence should the T5 control copy be lost
as a result of circumstances for which the first processor
is not responsible. In the interest of efficiency and good
management of the aid scheme, provisions on checks
should be provided for.

(24)

The Management Committee for Direct Payments has
not delivered an opinion within the time limit set by its
chairman,

HAS ADOPTED THIS REGULATION:

CHAPTER 1

SCOPE AND GENERAL PROVISIONS

Article 1

Subject matter and scope

(c) crop-specific payment

for rice provided for in Title IV

Chapter 3 of that Regulation;

(d) area payment for nuts provided for in Title IV Chapter 4 of

that Regulation;

(e) for 2004, aid for energy crops provided for in Title IV

Chapter 5 of that Regulation;

(f) aid for starch potato provided for in Title IV Chapter 6 of

that Regulation;

(g) dairy premium and additional payments provided for in

Title IV Chapter 7 of that Regulation.

Article 2

Application of the integrated administration and control
system

Regulation (EEC) No 3508/92 and Regulation (EC) No 2419/
2001 shall apply to the applications, for the calendar year
2004, for direct payments referred to in Article 1(a) to (e), save
as otherwise provided.

For the calendar year 2004, Articles 11 to 15, 17, 20, 44 and
46 to 51 of Regulation (EC) No 2419/2001 shall apply to the
applications for direct payments referred to in Article 1 (f) and
(g).

For the calendar year 2004, Articles 2(r), 4, 22 and 23 of Regu-
lation (EC) No 2419/2001 shall apply to the applications for
direct payments referred to in Article 1(f).

Article 3

Date for applications

Farmers shall apply to the support schemes referred to in
Article 1 by a date to be fixed by Member States, but not later
than 15 May. In Finland and in Sweden, the date of 15 May
may be postponed, but not later than 15 June.

However, the Commission, in accordance with the procedure
referred to in Article 144(2) of Regulation (EC) No 1782/2003,
may allow the dates referred to in the first subparagraph to be
postponed in certain zones where exceptional climatic condi-
tions render the normal dates inapplicable.

Article 8 of Regulation (EC) No 2419/2001 shall only apply
with regard to area-related aid applications. For starch potato,
in Finland and Sweden amendments to the aid application may
be done up to 30 June.

This Regulation lays down detailed rules for the implementa-
tion of the following support schemes provided for in Title IV
of Regulation (EC) No 1782/2003:

(a) specific quality premium for durum wheat provided for in

Title IV Chapter 1 of that Regulation;

(b) protein crop premium provided for in Title IV Chapter 2 of

that Regulation;

(1) OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regu-

lation (EC) No 1335/2003 (L 187, 26.7.2003, p. 16).

Article 4

Conditions for the payment

1.
The direct payment referred to in Article 1(a), (b), (c) and
(e) shall be granted only for the areas, per each type of crop,
which have been the subject of application in respect of at least
0,3 hectare, where each cultivated parcel exceeds the minimum
size set by the Member State within the limit set up in Article
4 of Regulation (EC) No 2419/2001.

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The direct payment referred to in Article 1(a), (b) and (c)
2.
shall be granted only for the areas entirely sown and on which
all normal cultivation conditions have been performed in
accordance with local standards.

application for seed aid referred to in Article 3 of Regu-
lation (EEC) No 2358/71 or in Title IV Chapter 9 of Regu-
lation (EC) No 1782/2003.

However, in the case of the specific quality premium for durum
wheat provided for in Title IV Chapter 1 of Regulation (EC) No
1782/2003, crops grown on areas which are fully sown and
which are cultivated in accordance with local standards, but
which do not attain the stage of flowering as a result of excep-
tional weather conditions recognised by the Member State
concerned, shall remain eligible for aid provided that the areas
in question are not used for any other purpose up to this
growing stage.

3. Without prejudice to the time period provided for in
Article 28(2) of Regulation (EC) No 1782/2003, direct
payments under this Regulation shall be paid after the checks
made pursuant to Regulation (EC) No 2419/2001 and this
Regulation are carried out.

4.
In a given year, no more than one application for an area
payment under a scheme financed under Article 1(2)(b) of
Council Regulation (EC) No 1257/1999 (1) may be made in
respect of any cultivated parcel.

However, any cultivated parcel which is covered in respect of
the same year by an application for:

(a) specific quality premium for durum wheat provided for in
Title IV Chapter 1 of Regulation (EC) No 1782/2003 or
protein crop premium provided for in Title IV Chapter 2 of
Regulation (EC) No 1782/2003 may be the subject of an
application for arable crops payments referred to in Articles
2, 4 and 5 of Council Regulation (EC) No 1251/1999 (2) or
in Title IV Chapter 10 of Regulation (EC) No 1782/2003;

(b) crop-specific payment

for rice provided for in Title IV
Chapter 3 of Regulation (EC) No 1782/2003 or protein
crop premium provided for in Title IV Chapter 2 of Regu-
lation (EC) No 1782/2003 may be the subject of an appli-
cation for seed aid referred to in Article 3 of Council Regu-
lation (EEC) No 2358/71 (3) or in Title IV Chapter 9 of
Regulation (EC) No 1782/2003;

(c) aid for energy crops provided for in Title IV Chapter 5 of
Regulation (EC) No 1782/2003 may be the subject of an
application for arable crops payments referred to in Articles
2, 4 and 5 of Regulation (EC) No 1251/1999 or in Title IV
Chapter 10 of Regulation (EC) No 1782/2003, without
prejudice to the second subparagraph of Article 90 of
Regulation (EC) No 1782/2003 or crop-specific payment
for rice provided for in Title IV Chapter 3 of Regulation
(EC) No 1782/2003;

(d) arable crops payments referred to in Articles 2, 4 and 5 of
Regulation (EC) No 1251/1999 or in Title IV Chapter 10 of
Regulation (EC) No 1782/2003 may be the subject of an

(1) OJ L 160, 26.6.1999, p. 103.
(2) OJ L 160, 26.6.1999, p. 1.
(3) OJ L 246, 5.11.1971, p. 1.

Land used to produce raw materials cultivated under the energy
crop aid provided for in Title IV Chapter 5 of Regulation (EC)
No 1782/2003 shall not be eligible for Community aid as
provided for in Chapter VIII of Council Regulation (EC) No
1257/1999 (4), with the exception of support granted in respect
of the costs of planting fast-growing species as provided for in
the second subparagraph of Article 31(3) thereof.

Article 5

Communications

The Member States shall communicate, by electronic transmis-
sion, to the Commission,
in accordance with the following
timetable:

(a) by 15 September of the year concerned, at the latest: the
areas, or the quantities in the case referred to in Articles 95
and 96 of Regulation (EC) No 1782/2003, for which the
aid has been claimed for that calendar year, where the case
may be subdivided for each subbase area;

(b) by 31 October, at the latest: definitive data, on the areas or
quantities, obtained taking into account checks already
carried out;

(c) by 31 July of the following year, at the latest: the final data
corresponding to the areas or quantities for which the aid
has actually been paid for that calendar year, after, where
applicable, deduction of the reductions in area provided for
in Article 32 of Regulation (EC) No 2419/2001.

The areas shall be expressed in hectares to two decimal places.
The quantities shall be expressed in tonnes to three decimal
places.

Article 6

Coefficient of reduction

The coefficient of reduction of area in the case referred to
1.
in Articles 75, 78(2), 82, 85 and 89(2) of Regulation (EC) No
1782/2003 or of the quantities and the objective criteria in the
case referred to in Article 95(4) of that Regulation shall be fixed
at the latest by 15 November of the year concerned on the
basis of the data communicated in accordance with Article 5(b)
of this Regulation.

2.
In the cases referred to in Articles 75, 82, 85 and 95(4)
of Regulation (EC) No 1782/2003, the Member States shall
communicate to the Commission, by 1 December of the year
concerned at the latest, the coefficient of reduction applied and,
in the case referred to in Article 95(4) of that Regulation, the
objective criteria applied.

(4) OJ L 160, 26.6.1999, p. 80.

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CHAPTER 2

SPECIFIC QUALITY PREMIUM FOR DURUM WHEAT

Article 7

Variety screening

1. Member States listed in Article 74(1) of Regulation (EC)
No 1782/2003 shall establish the list of durum wheat varieties
eligible for the special quality premium referred to in Article
72 of Regulation (EC) No 1782/2003 in accordance with the
variety screening method laid down in paragraphs 2 to 5 of
this Article.

2. Member States shall, at least every two years, identify at
least two representative varieties. The representative varieties
shall be the most certified durum wheat varieties.

shall analyse durum wheat varieties
3. Member States
according to the following quality parameters and assign to
each parameter the relevant weighting:

(a) protein content (40 %),

(b) gluten quality (30 %),

(c) yellow index (20 %),

(d) specific weight or weight of one thousand kernels (10 %).

The sum of the averages of the quality parameters referred to
in (a) to (d), multiplied by the indicated value in percentage,
shall constitute the quality index of the varieties.

Each Member State shall compare, over a period of at least two
years, the quality indexes of the durum wheat varieties with
those of the representative varieties at regional level. The vari-
eties to be examined shall be those which are registered in the
national catalogue of each Member State, with the exclusion of
those varieties for which no analytical data are available for the
last three years because they are not used or certified any more.

To that end, based on the average quality index of 100 attrib-
uted to the representative varieties, each Member State shall
calculate, for each of quality parameters referred to in (a) to (d),
the percentage to be assigned to the other durum wheat vari-
eties in comparison with the index of 100. Only durum wheat
varieties with an index equal to or higher than 98 shall be
eligible for the quality premium for durum wheat.

4.
A Member State may exclude from the list of eligible vari-
eties the varieties which have an average rate of loss of vitreous
aspect of durum wheat (mitadinage) exceeding 27 %.

5.
Varieties, which are registered in the national catalogue of
another Member State, may also be examined for their elig-
ibility.

Article 8

Analysis methods

The analysis methods of

1.
the protein content, specific
weight and the rate of loss of vitreous aspect of durum wheat
(mitadinage) shall be those laid down in Commission Regu-
lation (EC) 824/2000 (1).

The yellow index shall be measured according to the ICC

2.
152 method or an equivalent recognised method.

The gluten quality shall be measured according to the ICC

3.
158 method or according to the ICC 151 method.

Article 9

Quantity of certified seeds

Member States shall fix, before 1 October of the year preceding
the year in respect of which the premium is granted,
the
minimum quantity of seed, certified in accordance with Council
Directive 66/402/EEC (2), to be used in accordance with the
zone
current
concerned.

agricultural

production

practices

the

in

Article 10

Publications and communications

1. Member States shall publish the list of selected varieties
which are eligible at national or regional level to the special
quality premium for durum wheat, not later than 1 October,
for winter varieties, and not later than 31 December, for spring
varieties, of the year preceding the year in respect of which the
premium is granted.

2. Member States shall communicate to the Commission,
not later than one month after the dates provided for in para-
graph 1, the list referred to in paragraph 1 as well as, if modi-
fied, the minimum quantity of certified seed to be used.

Article 11

Validity

1.
The varieties admitted in the list referred to in Article
10(1) shall be eligible for the special quality premium for
durum wheat for periods of five years starting from the date of
their first admission in that list.

2.
The eligibility of each variety may be extended for a
period of five years, based on the results of the qualitative
analyses carried out during the second and third year of the
five-year eligibility period.

Article 12

Transitional measures

1. Member States shall publish before 15 May 2004 the list
of the varieties, which are eligible for the premium only in
2004 and 2005 and shall communicate the list to the Commis-
sion before 30 June 2004.

2. Member States shall establish the list referred to in para-
graph 1 by eliminating from the list of varieties which are
registered in the national catalogue the varieties which have
not been certified in 2002 and 2003 and those which do not
satisfy at least two of the following parameters:

(a) a minimum protein content of 11,5 %;

(b) a minimum specific weight of 78 kg/hl;

(1) OJ L 100, 20.4.2000, p. 31.

(2) OJ 125, 11.7.1966, p. 2309/1966.

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(c) a minimum weight of 1 000 kernels of 42 g;

(d) a maximum rate of loss of vitreous aspect of durum wheat

(mitadinage) of 27 %;

(e) a minimum gluten content of 10 %.

3.
The lists of varieties which are eligible for the premium
in 2004, 2005 and 2006 may include varieties which are in
the list of selected varieties of another Member State on the
basis of the results of the qualitative analyses carried out by this
other Member State.

Article 13

Control measures

The aid application for the specific quality premium for
1.
durum wheat shall be accompanied by proof, given according
to the rules fixed by the Member State, that the minimum
quantity of certified seed has been used.

In case a difference is established between the minimum
2.
quantity of certified seeds fixed by the Member State and the
quantity effectively used,
the determined area within the
meaning of Article 2(r) of Regulation (EC) No 2419/2001 shall
be calculated by dividing the total quantity of certified seeds,
for which proof of use was given by the farmer, by the
minimum quantity of certified seeds per hectare fixed by the
Member State in the production zone concerned.

CHAPTER 3

PROTEIN CROP PREMIUM

Article 14

Article 16

Dates for sowings

To be eligible for the crop-specific payment
declared area shall be sown at the latest:

for rice,

the

(a) on 30 June preceding the harvest in question, for Spain and

Portugal,

(b) on 31 May for the other producing Member States referred
to in Article 80(2) of Regulation (EC) No 1782/2003.

However,
in French Guiana, the areas shall be sown respec-
tively for each of the two sowing cycles, at the latest on 31
December and 30 June preceding each of them and the crop-
specific payment for rice shall be granted on the basis of the
average of the areas sown for each of the two sowing cycles.

Article 17

Coefficient of reduction

The coefficient of reduction of the crop-specific payment for
rice referred to in Article 82 of Regulation (EC) No 1782/2003
shall be calculated according to Annex I.

Article 18

Communications

1. Member States shall communicate, by electronic transmis-
sion, to the Commission, before 15 May 2004, the measures
taken for the application of this Chapter and, as the case may
be:

(a) the subdivision of their base area or areas in subbase areas,

Mixture of cereals and protein crops

(b) the objective criteria on which those subdivisions are based.

In regions where protein crops are traditionally sown in a
mixture with cereals, the protein crop premium shall be paid at
the request of the applicant provided that he proves, to the
satisfaction of the competent authorities, that the protein crops
are predominant in the mixture. The areas concerned shall not
be eligible for the specific regional aid for arable crops referred
to in Article 98 of Regulation (EC) No 1782/2003.

CHAPTER 4

CROP-SPECIFIC PAYMENT FOR RICE

Article 15

Application

In the aid application, the farmers shall specify the variety of
rice sown for each cultivated parcel for which he claims the
crop-specific payment for rice referred to in Article 79 of Regu-
lation (EC) No 1782/2003.

2. Member States shall communicate to the Commission,
according to Article 5, the following information:

(a) by 15 September at the latest:

(i) the list of the varieties registered in the national cata-
logue, classified according to the criteria defined in
Annex I, item 2, of Council Regulation (EC) No 1785/
2003 (1),

(ii) the sown areas for which applications for crop-specific
payment for rice have been submitted, by variety of rice
and by base area and subbase area, in accordance with
the table in Annex II(A) to this Regulation, including
the base areas and subbase areas,
the overruns of
defined by each Member State in accordance with para-
graph 1 of this Article;

(b) by 31 October at the latest, the modifications with regard
to the sown areas for which applications for the crop-
specific payment for rice have been submitted, communi-
cated according to subparagraph 1, in accordance with the
table in Annex II(B) to this Regulation;

(1) OJ L 270, 21.10.2003, p. 96.

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(c) by 31 July at the latest, the information concerning the
sown areas for which the crop-specific payment for rice
has actually been paid for
the past marketing year,
according to the calculation method defined in Annex I to
this Regulation, in accordance with the table in Annex II(C)
to this Regulation.

4. Member States may fix the minimum plot size and tree
density at a higher level than those laid down in paragraph 3
according to objective criteria and in order to take into account
the
the areas and productions
concerned.

characteristic of

specific

3.
For French Guiana, the information concerning the sown
areas is communicated on the basis of the average of the areas
sown during the two sowing cycles.

Article 20

Eligibility conditions for national aid

4. Member States may revise annually the base sub-areas
and the objective criteria referred to in paragraph 1. They shall
communicate this information to the Commission at the latest
on 15 May preceding the harvest in question.

CHAPTER 5

AREA PAYMENT FOR NUTS

Article 19

Eligibility conditions for the Community aid

For the purposes of this Chapter, an orchard shall mean a
1.
homogeneous and cohesive area planted with nut trees which
is not intersected by other crops or plantations and which is
geographically continuous. Isolated trees or a single row of nut
trees planted alongside roads or other crops shall not be
considered an orchard.

By way of derogation from the first subparagraph, Member
States may allow the presence of trees other than nut trees
within a limit corresponding to 10 % of the number of trees
laid down in paragraph 3. Moreover, Member States may allow
the presence of chestnut trees if the number of trees laid down
in paragraph 3 is respected by the eligible nut trees.

Only orchards producing nuts and meeting the conditions
2.
referred to in paragraphs 3 and 4 at the date to be fixed in
conformity with Article 3 of this Regulation are eligible for the
area payment provided for in Article 83 of Regulation (EC) No
1782/2003.

In the case of an orchard where different types of nuts are
grown and when the aid is differentiated in function of the
products, the eligibility conditions and/or the level of the aid
specific to the nut type which is predominant shall apply.

The minimum plot size of orchards may not be less than

3.
a surface area of 0,10 hectare.

The number of nut trees per hectare of orchards may not be
less than:

— 125 for hazelnuts,

— 50 for almonds,

— 50 for walnuts,

— 50 for pistachios,

— 30 for locust beans.

Article 19 of this Regulation shall apply to the national aid
referred to in Article 87 of Regulation (EC) No 1782/2003.

Without prejudice to Article 87 of Regulation (EC) No 1782/
2003, a Member State may establish further eligibility criteria,
provided that such criteria are consistent with the environ-
mental, rural, social and economic objectives of the aid scheme
and do not
introduce discrimination between producers.
Member States shall establish the necessary arrangements in
order to control those criteria.

Article 21

Application

In the aid application, farmers shall specify the number of nut
trees per type and per agricultural parcel.

Article 22

Communications

1. Member States shall communicate to the Commission
before the date referred to in Article 3 and at the latest by 15
May 2004:

(a) where a Member State applies for Community aid under
Article 83(2) of Regulation (EC) No 1782/2003, the level of
the area payment per products and/or the modified national
guaranteed area (hereinafter referred to as ‘NGA’);

(b) the higher levels and the criteria referred to in Article 19(4)

of this Regulation;

(c) the additional criteria referred to in Article 20 of this Regu-

lation,

and, in the following years, by 31 March the data referred to in
points (b) and (c) and by 15 May the date referred to in point
(a).

Any modification of the communications referred to in
2.
paragraph 1 shall apply to the following year and shall be
immediately communicated by the Member States to the
Commission accompanied by the objective criteria justifying
such changes.

Article 23

Transitional measures

1. Member States may determine whether and on what
conditions the improvement plans referred to in Article 86(2)
of Regulation (EC) No 1782/2003 may be ceased before their
normal expiry and relative areas become eligible under this
scheme.

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2. When setting the conditions referred to in paragraph 1,
the Member State shall ensure that:

(a) the plan is not ceased before the complete implementation

of an annual period,

(b) the initial objectives of the plan have been reached to the

satisfaction of the Member State.

CHAPTER 6

AID FOR STARCH POTATO

Article 24

Eligibility

The aid for starch potato provided for in Article 93 of Regu-
lation (EC) No 1782/2003 shall be granted for potatoes which
are covered by a cultivation contract provided for in Article 3
of Regulation (EC) No 2236/2003 (1), of sound and fair market-
able quality, on the basis of the net weight of the potatoes
determined by one of the methods described in Annex I of
Regulation (EC) No 2235/2003 (2) and the starch content of the
potatoes delivered, in accordance with the rates fixed in Annex
II of Regulation (EC) No 2235/2003.

No aid for starch potato shall be granted for potatoes which
are not of sound and fair marketable quality nor for potatoes
whose starch content is below 13. %, except where the second
subparagraph of Article 5(3) of Regulation (EC) No 2236/2003
applies.

Article 25

Application

For 2004, the farmer shall submit an aid application containing
all information necessary to establish eligibility for the aid, in
particular:

(a) the identity of the farmer;

(b) a copy of the cultivation contract referred to in Article 24;

(c) a statement from the farmer that he is aware of the require-

ments pertaining to aid in question.

shall be paid to the farmers by the Member State on whose
territory the potato starch was manufactured for the quantities
delivered to the starch-producing undertaking within four
months after the date on which the proof referred to in Article
26 of this Regulation has been provided and the conditions
referred to in Article 24 of this Regulation have been respected.

2.
The conversion rate to be used to express aid for starch
potato in national currency shall be the one applied under
Article 20 of Regulation (EC) No 2236/2003.

Article 28

Checks and reductions

1. Member States shall provide each other with mutual assis-
tance as necessary for the purposes of checks provided for by
this Article as well as in the event that potatoes intended for
the manufacture of potato starch are the subject of intra-Com-
munity trade.

2.
On-the-spot checks shall cover for 2004 at least 3 % of
the producers having concluded cultivation contracts with
starch-producing undertakings.

On-the-spot checks shall be selected on the basis of a risk

3.
analysis which takes account of:

(a) quantities of potatoes intended for the manufacture of
potato starch with regard to the surfaces as declared in the
cultivation contract referred to in Article 24;

(b) other parameters to be defined.

4.
If it is found that the area actually cultivated is more than
10 % lower than the declared surface, the aid to be paid to the
producer concerned for the current harvest shall be reduced by
twice the difference found.

CHAPTER 7

DAIRY PREMIUM AND ADDITIONAL PAYMENTS

Article 26

Minimum price

Article 29

Aid application

The aid for starch potato shall be subject to the requirement
that proof is provided that a price not less than that referred to
in Article 4(a) of Regulation (EC) No 1868/94 has been paid at
the delivered-to-factory stage in accordance with the rates fixed
in Annex II of Regulation (EC) No 2235/2003.

the producer

For 2004,
submit an aid application
shall
containing all information necessary to establish eligibility for
the aid, in particular the identity of the producer and a state-
ment of the producer that he is aware of the requirements
pertaining to aid in question.

The proof referred to in Article 10(2) of Regulation (EC) No
2236/2003 shall apply.

Article 27

Payment

1.
By way of derogation from Article 28(2) of Regulation
(EC) No 1782/2003 and without prejudice to the time period
fixed in the same Article, for 2004, the aid for starch potato

(1) See page 45 of this Official Journal.
(2) See page 36 of this Official Journal.

Article 30

Cases of inactivity

1. When a natural or legal person holding an individual
reference quantity does not meet the conditions referred to in
Article 5(c) of Regulation (EC) No 1788/2003 during the 12-
month period ending on 31 March of the year concerned, no
dairy premiums and additional payment shall be paid for the
year concerned, unless he proves before the deadline for the
application and to the satisfaction of the competent authority
that production has been taken up.

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Paragraph 1 shall not apply in cases of force majeure and
2.
in duly justified cases temporarily affecting the production
capacity of the producers concerned and recognised by the
competent authority.

(b) ‘first processor’ means any user of agricultural raw materials
who undertakes the first processing thereof with a view to
obtaining one or more of the products referred to in Article
88 of Regulation (EC) No 1782/2003.

Article 31

Checks and sanctions

1.
At least 2 % of all applicants shall be subject each year of
on-the-spot checks. On-the-spot checks shall cover the condi-
tions for the eligibility to the dairy premium and to the addi-
tional payment, notably on the basis of the farmers' accounting
or other registers.

Articles 31, 32(1) and 33 of Regulation (EC) No 2419/
2.
2001 shall apply to the extent that ‘area’ is read as ‘individual
reference quantity’.

Where in the case referred to in Article 30(1) of this Regulation
the person concerned does not take up production by the dead-
line for the application, the individual reference quantity deter-
mined within the meaning of the preceding sub-paragraph shall
be deemed to be zero. In this case, the aid application of the
person concerned for the year in question shall be refused. An
amount equal to the amount covered by the refused application
shall be set-off against aid payments under any of the aid
schemes referred to in Article 1(1) of Regulation (EEC) No
3508/92 to which the person is entitled in the context of appli-
cations he lodges in the course of the calendar year following
the calendar year of the finding.

3.
The reference to Article 1(1) of Regulation (EEC) No
3508/92 contained in Article 32(2) and in the second sub-
paragraph of Article 33 of Regulation (EC) No 2419/2001 as
well as in paragraph 2 of this Article shall be read as referring
to the aid schemes established under Titles III and IV of Regu-
lation (EC) No 1782/2003.

CHAPTER 8

AID FOR ENERGY CROPS

SECTION 1

Definitions

Article 32

Definitions

SECTION 2

Contract

Article 33

Use of raw material

Any agricultural raw material with the exception of sugar
1.
beet may be grown on the areas covered by the aid provided
for in Article 88 of Regulation (EC) No 1782/2003 provided
that they are intended primarily for use in the production of
the energy products referred to in the said Article.

The economic value of the energy products referred to in the
first subparagraph obtained by processing raw materials shall
be higher than that of all other products intended for other
uses and obtained by such processing, as determined by the
valuation method set out in Article 49(3).

The raw materials referred to in paragraph 1 must be
2.
covered by a contract in accordance with Article 90 of Regu-
lation (EC) No 1782/2003 under the conditions laid down
below.

3.
Applicants shall deliver all raw materials harvested to a
first processor who shall take delivery of them and ensure that
an equivalent quantity of such raw materials is used within the
Community for
the manufacture of one or more energy
products as referred to in Article 88 of Regulation (EC) No
1782/2003.

Where the first processor uses the raw material actually
harvested to manufacture an intermediate product or a by-
product, he may use an equivalent quantity of such inter-
mediate products or by-products to manufacture one or more
end products as referred to in the first subparagraph.

In the case referred to in the second subparagraph, the first
processor shall so inform the competent authority with whom
the security is lodged. Where such equivalent quantity is used
in a Member State other than that in which the raw material is
harvested,
the Member States
concerned shall inform each other of the details of such trans-
action.

the competent authorities of

For the purposes of this Chapter:

(a) ‘applicant’ means any farmer cultivating the areas referred
to in Article 88 of Regulation (EC) No 1782/2003 with a
view to obtaining the aid referred to in that Article;

4. Within the context of national provisions governing
contractual relations, the first processor may delegate to a third
party the collection of
from the farmer
applying for the aid. The delegate must act in the name and on
behalf of the processor who remains solely responsible with
regard to the obligations laid down by this Chapter.

the raw material

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Article 34

Derogations

Notwithstanding Article 33(2) and (3), Member States

1.
may permit applicants to:

(a) use all

the cereals or oilseeds covered by CN codes

1201 00 90, ex 1205 00 90 and 1206 00 91 harvested:

(i) as fuel for heating their agricultural holding;

(ii) for the production on the holding of power or biofuels;

(b) process into biogas (CN code 2711 29 00) on their hold-

ings all raw materials harvested.

2.
In the cases referred to in paragraph 1 applicants shall
undertake, by way of a declaration in place of the contract
referred to in Article 35, to use or process directly the raw
material covered by the declaration. Articles 35 to 50 shall
apply mutatis mutandis.

In addition, applicants must have all the raw material harvested
weighed by a body or an undertaking designated by the
Member State and must keep separate accounts for the raw
material used and the products and by-products resulting from
its processing.

However, in the case of cereals and oilseeds, and of straw, and
where the entire plant is used, weighing may be replaced by
volumetric measurement of the raw material.

3. Member States applying paragraph 1 shall
introduce
adequate control measures to ensure that the raw material is
directly used on the holding or is processed into biogas falling
within CN code 2711 29 00.

4.
Cereals and oilseeds used in accordance with paragraph
1(a) must be denatured in accordance with the method laid
down by the Member State. The Member States may authorise
the oil produced by processing oilseeds in accordance with
paragraph 1(a)(ii) to be denatured instead of the oilseeds them-
selves, provided that such denaturing takes place immediately
after the seeds are processed into oil and that the use to which
the seeds are put is checked.

Article 35

Contract

In support of

1.
their aid applications, applicants shall
submit to their competent authorities the contracts they have
concluded with a first processor.

Applicants shall ensure that such contracts specify the

2.
following:

(a) the names and addresses of the parties to the contract;

(b) the duration of the contract;

(c) the species of all raw materials concerned and the area

planted with each species;

(d) any conditions applicable to the delivery of the forecast

quantities of raw materials;

(e) an undertaking to fulfil their obligations pursuant to Article

33(3);

(f) the intended primary end uses for the raw material, each
end use complying with the conditions laid down in Arti-
cles 33(1) and 49(3).

Applicants shall ensure that the contracts are concluded
3.
in time to allow the first processor to deposit a copy with the
competent authority of the applicant within the time limits laid
down in Article 44(1).

4.
For the purposes of control, Member States may require
each applicant to conclude a single supply contract for each
raw material.

SECTION 3

Amendment and termination of contract

Article 36

Amendment and termination of contract

Where the parties to the contract amend or terminate the latter
after applicants have lodged an aid application, applicants may
maintain such aid applications only on condition that, with a
view to allowing the requisite inspections to be carried out,
they inform their competent authority of such amendment or
termination, no later than the closing date set in the Member
State concerned for amendment of the application.

Article 37

Exceptional circumstances

Without prejudice to Article 36, where applicants inform their
competent authorities that, owing to exceptional circumstances,
they will be unable to supply all or part of the raw materials
specified in the contract, the competent authorities may, after
obtaining sufficient evidence of such exceptional circumstances,
authorise such amendments to contracts as appear justified, or
may authorise their termination.

Where the land covered by contracts is reduced as a result of
amendments thereto or where contracts are terminated, appli-
cants shall forfeit their right to the aid referred to in this
Chapter for the areas withdrawn from the contract.

Article 38

Changes in end uses

Without prejudice to Article 36, first processors may alter the
intended primary end uses of raw materials, as referred to in
Article 35(2)(f), once the raw materials under contract have
been delivered to them and once the conditions laid down in
Article 40(1) and in the first subparagraph of Article 44(3) have
been fulfilled.

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Changes in end uses shall be made in compliance with the
conditions laid down in the second subparagraph of Article
33(1) and Article 49(3).

SECTION 5

Conditions of payment of the aid

The first processors shall give prior notice to their competent
authorities with a view to the requisite controls.

Article 42

Payment

SECTION 4

Representative yields and quantities delivered

Article 39

Representative yields

Each year the Member States shall establish, using an appro-
priate procedure, representative yields which must be attained,
and shall inform the applicants concerned thereof.

Article 40

Quantities to be delivered

1.
Applicants shall declare the total quantity of raw mate-
rials harvested by species to their competent authorities and
shall confirm the quantities of raw materials delivered and the
parties to whom such deliveries are made.

2.
The actual quantities to be delivered by the applicants to
the first processors must at least correspond to the representa-
tive yield.

However,
in duly justified cases, the Member States may, by
way of an exception, accept a quantity up to 10 % below the
representative yield.

Furthermore, where the competent authorities have authorised
the amendment or termination of contracts in accordance with
Article 37, they may, where it seems justified to do so, reduce
the quantities that applicants are required to deliver under the
first subparagraph.

Article 41

Reduction of the aid

Where applicants fail to deliver the requisite quantity of any
given raw material pursuant to this Chapter, they shall be
deemed, for the purposes of Article 32 of Regulation (EC) No
2419/2001, to have failed to fulfil their obligations as regards
parcels intended for energy purposes in respect of an area
calculated by multiplying the area of land cultivated and used
by them for the production of the raw materials in accordance
with the criteria laid down in this Chapter by the percentage
shortfall in deliveries of that raw material.

The aid may be paid to applicants before the raw material
1.
is processed. However, such payments shall be made only
where the requisite quantities of raw materials pursuant to this
Chapter have been delivered to the first processor and where:

(a) the declaration referred to in Article 40 has been made;

(b) a copy of the contract has been deposited with the first
processor's competent authority and the conditions referred
to in Article 33(1) have been fulfilled;

(c) the competent authority has received proof that the full
security provided for in Article 45(2) has been lodged;

(d) the competent authority responsible for the payment has
checked that the conditions laid down in Article 35 have
been met in respect of each application.

2.
In the case of biennial crops, where the raw materials are
harvested, and hence delivered, in the course of the second year
of cultivation only, payment shall be made in each of the two
years following the conclusion of the contract as provided for
in Article 35, on condition that
the competent authorities
establish that:

(a) the obligations laid down in paragraph 1(b), (c) and (d) of
this Article are fulfilled as from the first year of cultivation;
and

(b) the obligations laid down in paragraph 1(a) of this Article
are fulfilled, and the information referred to in the first sub-
paragraph of Article 44(3) is communicated, in the second
year of cultivation.

Payments shall be made only in respect of the first year of culti-
vation if the competent authorities have received proof that the
security as provided for in Article 45(2) has been lodged. In
respect of the second year of cultivation, the security does not
have to be lodged for the payment to be made.

3.
the
In the case of permanent or multiannual crops,
payment of the aid shall be made each year from the conclu-
sion of the contract. The conditions laid down in paragraph 2
shall be applied mutatis mutandis.

SECTION 6

Contract and obligations on applicants and first processors

Article 43

Number of processors

Energy products must be obtained at most by a second
processor.

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Article 44

Contract and obligations on applicants and first processors

First processors shall deposit a copy of the contract with
1.
their competent authorities no later than the closing date for
the submission of aid applications for the year in question in
the Member State concerned.

Where applicants and first processors amend or terminate
contracts prior to the date referred to in Article 36 in a given
year, the first processors shall deposit with their competent
authorities a copy of the amended or terminated contract, no
later than that date.

2.
First processors shall provide their competent authorities
with the requisite information on the processing chain in ques-
tion, in particular as regards prices and the technical processing
coefficients to be used for determining the quantities of end
products that may be obtained. The coefficients shall be those
set out in Article 50(1).

3.
First processors who have taken over the raw materials
from applicants shall inform their competent authorities of the
quantities of raw materials received, specifying the species, the
name and address of the party to the contract who delivered
the raw materials, the place of delivery and the contract refer-
ence, within a time limit to be set by the Member States that
allows the payments to be made within the period specified in
Article 28 of Regulation (EC) No 1782/2003.

in question has been processed in
quantity of raw material
compliance with the requirement laid down in Article 35(2)(f),
account being taken, where necessary, of any changes pursuant
to the Article 38.

Article 46

Primary and subordinate requirements

The

following obligations

1.
constitute primary
requirements within the meaning of Article 20 of Commission
Regulation (EEC) No 2220/85 (1):

shall

(a) the obligation to process the quantities of raw materials
principally into the end products specified in the contract.
The raw materials shall be processed by 31 July of the
second year following that of harvest;

(b) the obligation that products be accompanied by a T5

control copy in accordance with Articles 47 and 48.

2.
The following obligations, incumbent on first processors,
shall constitute subordinate requirements within the meaning
of Article 20 of Regulation (EEC) No 2220/85:

(a) the obligation to take delivery of all raw materials delivered

by applicants pursuant to Article 33(3);

(b) the obligation to deposit copies of contracts in accordance

with Article 44(1);

Where the Member States of the first processors are not the
same as the Member States in which the raw materials have
been grown, then, within 40 working days of receipt of the
information referred to in the first subparagraph, the compe-
tent authorities concerned shall inform the authorities of the
applicants of the total quantities of raw materials delivered.

(c) the obligation to provide the information required in
accordance with the first and second subparagraphs of
Article 44(3);

(d) the obligation to lodge a security in accordance with Article

45(1).

SECTION 7

Securities

Article 45

First processors

SECTION 8

Documents for sale in, transfer to or delivery to another
Member State or export

Article 47

T5 control copy

1.
First processors shall lodge a full security as provided for
in paragraph 2 with their competent authorities by the closing
date for submission of payment applications for the year in
question in the Member State concerned.

2.
The securities to be lodged in respect of each raw material
shall be calculated by multiplying the sum of all areas cultivated
under this scheme, covered by a contract signed by the first
processor concerned and used to produce that raw material, by
the rate of EUR 60 per hectare.

3. Where contracts are amended or terminated in accord-
ance with Articles 36 or 37, the securities lodged shall be
adjusted accordingly.

4.
A percentage of the security shall be released for each
raw material on condition that the competent authority of the
first processor concerned is in possession of proof that that the

Where first processors sell or transfer to second processors in
other Member States
covered by
contracts as provided for in Article 35, the products shall be
accompanied by T5 control copies issued in accordance with
Regulation (EEC) No 2454/93.

intermediate products

One of the following shall be entered under the heading ‘Other’
in box 104 of the T5 control copies:

— Producto destinado a su transformación o entrega de
acuerdo con lo establecido en el artículo 34 del Reglamento
(CE) no 2237/2003 de la Comisión

— Skal anvendes til forarbejdning eller levering i overensstem-
melse med artikel 34 i Kommissionens forordning (EF) nr.
2237/2003

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

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— Zur Verarbeitung oder Lieferung gemäß Artikel 34 der
Verordnung (EG) Nr. 2237/2003 der Kommission zu
verwenden

(b) the quantities of raw materials processed and the quantities
and types of end products, co-products and by-products
obtained therefrom;

— Προς χρήση για µεταποίηση ή παράδοση σύµφωνα µε το άρθρο
34 του κανονισµού (ΕΚ) αριθ. 2237/2003 της Επιτροπής

(c) wastage during processing;

— To be used for processing or delivery in accordance with
Article 34 of Commission Regulation (EC) No 2237/2003

(d) the quantities destroyed and the

reasons

for

such

destruction;

— À utiliser pour transformation ou livraison conformément
aux dispositions de l'article 34 du règlement (CE) no 2237/
2003 de la Commission

— Da consegnare o trasformare conformemente all'articolo 34
del regolamento (CE) n. 2237/2003 della Commissione

— Te gebruiken voor verwerking of aflevering overeenkomstig
artikel 34 van Verordening (EG) nr. 2237/2003 van de
Commissie

— A utilizar para transformação ou entrega em conformidade
com o artigo 34.o do Regulamento (CE) n.o 2237/2003 da
Comissão

— Käytetään jalostamiseen tai

toimittamiseen komission

asetuksen (EY) N:o 2237/2003 mukaisesti

— Används till bearbetning eller

leverans i enlighet med

kommissionens förordning (EG) nr 2237/2003.

Article 48

Alternatives to the T5 control copy

Notwithstanding Article 46(1)(b), if the T5 control copy is not
returned to the office of departure of the body responsible for
control
in the Member State in which the first processor is
established three months before expiry of the deadline provided
for in Article 46(1)(a), as a result of circumstances for which
the first processor is not responsible, the following documents
may be accepted as alternatives to the T5 control copy:

(a) purchase invoices for the intermediate products;

(b) statements by the second processor verifying the final
processing of the raw materials into energy products as
referred to in Article 88 of Regulation (EC) No 1782/2003;
and

(c) certified photocopies

second processor of
from the
accounting documents proving that processing has been
carried out.

SECTION 9

Checks

Article 49

Record keeping

The competent authority of

the Member State shall
1.
specify the records to be kept by processors and the frequency
thereof, which shall be at least monthly. Such records shall
comprise at least the following:

(a) the quantities of different raw materials purchased for

processing;

(e) the quantities and types of products sold or transferred by

the processor and the prices obtained;

(f) where applicable, the names and addresses of the subse-

quent processors.

2.
The competent authority of the first processor shall check
that the contract submitted complies with the conditions laid
down in Article 33(1). Where those conditions are not met, the
applicants' competent authorities shall be notified.

3. With a view to calculating the economic value of the
products referred to in Article 33(1), the competent authorities
concerned shall, on the basis of the information referred to in
Article 44(2), compare the sum of the values of all energy
products with the sum of the values of all other products
intended for other uses and obtained from the same processing
operation. Each value shall equal the relevant quantity multi-
plied by the average of the ex-factory prices recorded during
the previous marketing year. Where such prices are not avail-
able, the competent authorities shall determine the relevant
prices, in particular on the basis of the information referred to
in Article 44(2).

Article 50

Checks at the premises of processors

1.
The competent authorities of the Member States in which
processing takes place shall verify compliance with Article
33(1) at the premises of at least 25 % of the processors installed
in their territory, selected on the basis of a risk analysis. Such
controls shall involve at least:

(a) a comparison of the sum of the values of all the energy
products with the sum of the values of all other products
intended for other uses and obtained from the same proces-
sing operation;

(b) analysis of the processor's production system, comprising
physical checks and inspections of commercial documents,
with a view to verifying,
in the case of processors, that
deliveries of raw materials, end products, co-products and
by-products tally.

For the purpose of the controls referred to in point (b) of the
first subparagraph, the competent authorities shall base them-
selves in particular on the technical processing coefficients for
the raw materials concerned. Where such coefficients exist for
exports in Community legislation, they shall be applied. Where
they do not but other coefficients do exist in Community legis-
lation, they shall be applied. In all other cases, inspection shall
rely mainly on the coefficients generally accepted by the
processing industry.

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Notwithstanding paragraph 1, for the processing opera-
2.
tions referred to in Article 34, checks shall be carried out on
10 % of applicants selected on the basis of a risk analysis taking
account of:

As far as necessary or as required by this Chapter, the
2.
Member States shall assist one another mutually to ensure
effective controls, and enable the authenticity of documents
submitted and the accuracy of the data exchanged to be veri-
fied.

(a) aid amounts;

(b) the number of agricultural parcels and the area covered by

an aid application;

SECTION 10

(c) developments since the previous year;

(d) the findings of checks made in past years;

Exclusion from the scheme and evaluation

Article 53

(e) other parameters to be defined by the Member States, based

on the representativeness of the contracts submitted.

Exclusion of raw materials from the scheme

3. Where the checks referred to in paragraph 2 reveal irre-
gularities in at least 3 % of cases, the competent authority shall
carry out additional checks during the year and shall conse-
quently increase the percentage of farmers to be subject to an
on-the-spot check the following year.

The Member States may exclude any agricultural raw material
from the scheme established by this Chapter where such mate-
rials raise difficulties from the viewpoint of controls, public
health, the environment, criminal law, or a reduced rate of final
energy products.

4.
If it has been provided that certain elements of the checks
referred to in paragraphs 1 and 2 may be carried out on the
basis of a sample, that sample must guarantee a reliable and
representative level of control.

Every on-the-spot check shall be the subject of an inspec-
5.
tion report signed by the inspector giving the details of the
checks carried out. The report shall indicate in particular:

(a) the date of the check;

(b) the persons present;

(c) the period checked;

(d) the checking techniques used including, where applicable,

reference to sampling methods;

(e) results of the check.

Article 54

Evaluation

Before 15 October following the end of the marketing year in
question, the Member States shall forward to the Commission
all the information needed to evaluate the scheme introduced
by this Chapter.

Such information shall include, in particular:

(a) the areas corresponding to each species of raw material;

(b) the quantities of each type of raw material, end product,
by-product and co-product obtained, with details of the
type of raw material used;

(c) the measures taken under Article 34;

(d) the raw materials excluded from the scheme under Article

Article 51

53.

Hemp production

The provisions relating to hemp referred to in Article 3(1a), the
third paragraph of Article 5 and Article 21a of Regulation (EC)
No 2461/1999 shall apply.

Article 52

Additional measures and mutual assistance

CHAPTER 9

FINAL PROVISIONS

Article 55

Repeals

take all

The Member States

1.
further measures
shall
required for the proper application of this Chapter and shall
give the mutual assistance needed for the purposes of checks
required pursuant to this Chapter. In this respect the Member
States may, where this Chapter does not provide for appro-
priate
reductions and exclusions, also apply appropriate
national sanctions against market participants involved in the
procedure for granting aid.

Regulation (EC) No 613/97 is repealed.

Article 56

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

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

Done at Brussels, 23 December 2003.

For the Commission

Franz FISCHLER

Member of the Commission

ANNEX I

CROP-SPECIFIC PAYMENT FOR RICE

Calculation of the coefficient of reduction referred to in Article 17

1. For the observation of a possible overrun of the base area referred to in Article 82 of the Regulation (EC) No 1782/
2003, the competent authority of the Member State shall take into account, on the one hand, the base areas or
subbase areas, fixed in Article 81 of the aforementioned Regulation, and on the other hand, the total of the areas for
which aid applications have been submitted for these base areas and subbase areas.

2. In establishing the total area for which aid applications have been submitted, account shall not be taken of applica-

tions or parts of applications that a check has shown to be clearly unjustified.

3. If an overrun is observed for certain base areas or subbase areas, the Member State shall establish for these, the
percentage of overrun, calculated with two decimal places according to the deadline fixed in Article 18(2) of this
Regulation. When an overrun can be foreseen, the Member State shall inform the producers forthwith.

4. The coefficient of reduction of the crop-specific payment for rice shall be calculated, in accordance with Article 82 of

Regulation (EC) No 1782/2003, according to the following formula:

Reduction coefficient = reference area of the subbase area divided by the total area for which aid applications have
been submitted for this subbase area.

The reduced crop-specific payment for rice, shall be calculated according to the following formula:

reduced crop-specific aid for rice = crop-specific aid for rice multiplied by the reduction coefficient.

This reduction coefficient and this reduced crop-specific payment for rice shall be calculated for each subbase area,
after application of the redistribution provided for in Article 82(2) of the aforementioned Regulation. Redistribution
shall be done to the profit of the subbase areas for which limits have been exceeded. It shall be done proportionally
to the overruns noted in the subbase areas for which limits have been exceeded.

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ANNEX II

Crop-specific payment for rice

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