Proposal for a Council Regulation amending Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of Central and Eastern Europe in the pre-accession period
Date: 2004-03-11
Institutions: European Commission
Subjects: EU aid, accession negotiations, accession to the European Union, aid to agriculture, enlargement of the Union, rural development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.3.2004 
COM(2004) 163 final 

2004/0054 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1268/1999 on Community support for pre-accession 
measures for agriculture and rural development in the applicant countries  
of Central and Eastern Europe in the pre-accession period 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
 
EXPLANATORY MEMORANDUM 

The accession negotiations in December 2002 provided for accession in 2004 of eight of the 
countries currently benefiting from the provisions of this Regulation. 

The  Commission  considers  the  Regulation  should  be  modified  in  favour  of  beneficiary 
countries not due to join the European Union in 2004, to take account of experience with the 
instrument it setup, whilst respecting its underlying objectives. 

Modifications should be made to align certain provisions on those applicable to new Member 
States.  The  proposed  modifications  are  the  following:  (i)  an  inclusion  of  a  new  eligible 
measure which would enable the rural communities of Bulgaria and Romania to prepare and 
implement local rural development strategies; (ii) an adaptation of the aid intensities to levels 
similar to those granted to countries acceding the Union in 2004 and (iii) further clarification 
of the limits on aid rates. The latter modification shall have retrospective effect vis-à-vis all 
beneficiary countries. These are the objectives of the present proposal. 

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2004/0054 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1268/1999 on Community support for pre-accession 
measures for agriculture and rural development in the applicant countries  
of Central and Eastern Europe in the pre-accession period 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 308 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

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

Having regard to the opinion of the Committee of the Regions, 

Whereas: 

(1) 

(2) 

The  support  possibilities  to  prepare  rural  communities  to  conceive  and  implement 
local rural development strategies in beneficiary countries, which are not acceding to 
the  Union  in  2004,  namely  Bulgaria  and  Romania,  should  be  aligned  on  those  in 
beneficiary  countries  acceding  to  the  Union  on  1  May  2004.  Therefore  a  suitable 
measure  should  be  introduced  corresponding  to  Article  33f  of  Council  Regulation 
(EC)  No  1257/1999  of  17  May  1999  on  support  for  rural  development  from  the 
European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF)  and  amending  and 
repealing  certain  Regulations1,  as  amended  by  the  act  of  accession  of  the  Czech 
Republic,  Estonia,  Cyprus,  Latvia,  Lithuania,  Hungary,  Malta,  Poland,  Slovenia  and 
Slovakia. 

The  provisions  of  Council  Regulation  (EC)  No  1268/19992  as  regards  limits  on  aid 
rates should be clarified. At the same time those provisions should be amended in such 
a  way  that  subsidies  of  a  nature  to  facilitate  access  to  credits  granted  under  other 
instruments  are  not  taken  into  account  in  the  application  of  those  aid  limits.  As  this 
would remove a possible ambiguity, that amendment should apply with retrospective 
effect for all beneficiary countries. It is however necessary to ensure that in all cases 
the ceilings laid down in the Europe Agreements are complied with. 

1 
2 

OJ L 160, 26.6.1999, p. 80. 
OJ  L  161,  26.6.1999,  p.  87.  Regulation 
(OJ L 99, 17.4.2003, p. 24). 

last  amended  by  Regulation  (EC)  No 696/2003 

3 

 
 
  
 
                                                 
(3) 

(4) 

The aid intensity limits in hill and mountain regions of Bulgaria and Romania should 
be aligned from 1 January 2004 on those in Less Favoured Areas of countries acceding 
to the Union  on 1 May  2004,  for investments in agricultural holdings and for young 
farmers, as provided for in Article 33l(2) of Regulation (EC) No 1257/1999. 

The aid intensities and the proportion of the Community contribution in total eligible 
public expenditure for rural development measures involving infrastructure and certain 
other measures in beneficiary countries which are not acceding to the Union in 2004, 
namely Bulgaria and Romania, should be aligned on those in countries acceding to the 
Union on 1 May 2004. 

(5) 

It is therefore appropriate to amend Regulation (EC) No 1268/1999 accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1268/1999 is hereby amended as follows: 

1. 

In Article 2, the following indent is added: 

"–  with  regard  to  Bulgaria  and  Romania,  preparation  of  rural  communities  to 
conceive  and  implement  local  rural  development  strategies,  and  integrated 
territorial rural development strategies of a pilot nature, within the limits set by 
Article 33f of Council Regulation (EC) No 1257/1999*. 

____________________________________ 

* 

OJ L 160, 26.6.1999, p. 80" 

2 

Article 8 is replaced by the following: 

"Article 8 
Rate of Community contribution and aid intensities 

The Community contribution shall  not  exceed the ceiling of 75% of the total 

1. 
eligible public expenditure. 

However, that ceiling shall be: 

(a) 

80%  for  measures  referred  to  in  the  fourth,  seventh,  eleventh  and  sixteenth 
indents of Article 2, and any project concerning infrastructure; 

(b)  85%  for  relevant  projects  under  any  measure  where  the  Commission 

determines that exceptional natural disasters have occurred; 

(c) 

100%  for  the  measure  referred  to  in  the  fiftheenth  indent  of  Article  2  and  in 
Article 7(4). 

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Public aid shall not exceed the ceiling of 50% of the total eligible cost of the 

2. 
investment. 

However, that ceiling shall be: 

(a) 

55% for investments in agricultural holdings made by young farmers; 

(b)  60% for investments in agricultural holdings in mountain areas; 

(c) 

65%  for  investments  in  agricultural  holdings  in  mountain  areas  made  by  a 
young farmer; 

(d)  75% for investments referred to in paragraph 1(b); 

(e) 

100%  for  investments  in  infrastructure  not  of  a  nature  to  generate  substantial 
net revenue; 

(f) 

100% for measures referred to under the sixteenth indent of Article 2  

In determining the rate of public aid for the purposes of this paragraph, account shall 
not be taken of national aid of a nature to facilitate access to credits granted without 
the benefit of any Community contribution provided under the present instrument. 

In  any  case  the  Community  contribution  shall  comply  with  the  ceilings  on  rates  of 
aid and cumulation laid down for State aid in the Europe Agreements. 

3. 

The amount of the Community contribution shall be expressed in euro." 

Article 2 

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

It shall apply from 1 January 2004. 

However, point 2 of Article 1 shall apply from 1 January 2000 as far as the newly introduced 
second last subparagraph of Article 8(2) of Regulation (EC) No 1268/1999 is concerned. 

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

Done at Brussels,  

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

Policy area: Agriculture and Rural Development 

Activity: The SAPARD pre-accession instrument 

TITLE  OF  ACTION:  COUNCIL  REGULATION  AMENDING  REGULATION  (EC)  NO  1268/1999  ON 
COMMUNITY  SUPPORT  FOR  PRE-ACCESSION  MEASURES  FOR  AGRICULTURE  AND  RURAL 
DEVELOPMENT  IN  THE  APPLICANT  COUNTRIES  OF  CENTRAL  AND  EASTERN  EUROPE  IN 
THE PRE-ACCESSION PERIOD 

1. 

BUDGET LINE + HEADING 

05 05 01 01 (B7-010) Heading 7 – The SAPARD Pre-accession instrument 

2. 

OVERALL FIGURES 

2.1. 

Total allocation for action in 2004 

€225,2 million for commitment. 

2.2. 

Period of application 

From entry into force till end of SAPARD programmes. 

2.3. 

Overall multi-annual estimate of expenditure 

(a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.) 

(financial 

Commitments 

Year 2004 
226,7 

Year 2005 
250,3 (*) 

Year 2006 
(**) 

€ million 

Total 

Subject to the amount, which will be proposed in the PDB 2005. 

(*) 
(**)  The  proposed  measures  will  be  financed  within  the  SAPARD  envelopes,  as  annually 
determined  in  the  framework  of  the  budgetary  procedure  in  application  of  the  "road  maps" 
endorsed by the Copenhagen summit. 

(b) 

Technical and administrative assistance and support expenditure 

N.A. 

(c) 

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure 
(see points 7.2 and 7.3) 

N.A. 

2.4. 

Compatibility with financial programming and financial perspective 

Proposal is compatible with existing financial programming. 

2.5. 

Financial impact on revenue 

N.A. 

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3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions form 
applicant countries 

Heading in financial 
perspective 

Non-comp 

Diff 

NO 

NO 

YES 

No 7 

4. 

LEGAL BASIS 

EC Treaty – Article 308 and Council Regulation (EC) No 1268/1999. 

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention 

5.1.1.  Objectives pursued 

The existing regulation should be modified in favour of beneficiary countries not due to join 
the  European  Union  in  2004,  to  take  account  of  experience  with  the  instrument  it  set  up, 
whilst respecting its underlying objectives. 

Modifications  should  also  be  made  to  align  certain  provisions  on  those  applicable  to  new 
Member  States  and  in  a  limited  case  with  retrospective  effect  vis-à-vis  all  beneficiary 
countries. 

5.1.2.  Measures taken in connection with ex ante evaluation 

N.A. 

5.1.3.  Measures taken following ex post evaluation 

N.A. 

5.2. 

Action envisaged and budget intervention arrangements 

The  proposed  modifications  include  a  new  measure  to  provide  an  opportunity  for  the 
beneficiary  countries  to  start  preparing  for  the  implementation  of  local  rural  development 
initiatives.  It  also  includes  provisions  to  (enable  the  Commission  to  adjust  the  annual 
financial allocations in accordance with the relative need and absorption capacity), to adapt 
the  rate  of  Community  contribution  and  aid  intensities  to  those  agreed  for  the  acceding 
countries, to allow for national aid not to be taken into account in determining the public aid 
rate without prejudice to the state aid provisions of the Europe Agreements in order to permit 
national  measures,  such  as  loan  guarantee  or  credit  schemes  to  facilitate  access  of 
beneficiaries to credits. 

Rate  and  form  of  the  implicated  financial  assistance  will  not  be  different  to  those  of  the 
measures already included in the approved programmes. 

5.3.  Methods of implementation 

The actions under SAPARD are implemented on a decentralised basis by the beneficiary third 
countries (Article 163 of the Financial Regulation). 

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6. 

FINANCIAL IMPACT 

6.1. 

Total financial impact on Part B (over the entire programming period) 

The total financial impact is shown under 2.3. 

6.2. 

Calculation  of  costs  by  measure  envisaged  (over  the  entire  programming 
period) 

N.A. 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE 

7.1. 

Impact on human resources 

There is no impact on human resources. 

7.2. 

Overall financial impact of human resources 

N.A. 

7.3. 

Other administrative expenditure deriving from the action 

N.A. 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

The  indicators  for  inputs,  outputs  and  results  as  well  as  the  provisions  for  the  collection  of 
data are laid down in the approved programmes. 

8.2. 

Arrangements and schedule for the planned evaluation 

In accordance with Article 12 of Regulation (EC) No 1268/1999 and Article 42 of Regulation 
(EC) No 1260/1999 mid-term evaluation of the SAPARD programmes shall be carried out no 
later than 31 December 2003 and ex-post evaluation not later than three years after the end 
of the programming period (Article 43 of Regulation (EC) No 1260/1999). 

9. 

ANTI-FRAUD MEASURES 

Under  Article  15  of  Regulation  (EC)  No  2222/2000  the  provisions  of  Regulation  (EC) 
No 2185/96  and  of  Article  8(1)  and  (2),  and  Article  9(1)  and  (2)  of  Regulation  (EC) 
No 1258/1999  shall apply mutatis mutandis for  the  control of  the execution of the SAPARD 
programmes. 

Concerning irregularities the applicant countries are required to apply the rules contained in 
Regulation (EC) No 1681/94. 

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