Commission Regulation (EC) No 1655/2004 of 22 September 2004 laying down rules for the transition from the optional modulation system established by Article 4 of Council Regulation (EC) No 1259/1999 to the mandatory modulation system established by Council Regulation (EC) No 1782/2003
Date: 2004-09-22
Institutions: European Commission
Subjects: EAGGF, agricultural guidance, agricultural product, aid system, common agricultural policy, farmers' income, production aid

23.9.2004

EN

Official Journal of the European Union

L 298/3

COMMISSION REGULATION (EC) No 1655/2004

of 22 September 2004

laying down rules for the transition from the optional modulation system established by Article 4
of Council Regulation (EC) No 1259/1999 to the mandatory modulation system established by
Council Regulation (EC) No 1782/2003

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,

establishing the European

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) No 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 155
thereof,

Whereas:

(1)

(2)

(3)

Regulation (EC) No 1782/2003 has
repealed and
replaced Council Regulation (EC) No 1259/1999 (2) as
from 1 May 2004. Member States may continue to
apply the voluntary modulation provided for in Article
4 of Regulation (EC) No 1259/1999 until 31 December
2004. A system of compulsory modulation introduced
under the new scheme starts to apply in 2005.

The rate of compulsory modulation under Article 10 of
Regulation (EC) No 1782/2003 will, at the initial stage,
be lower than the rate of optional modulation under
Article 4 of Regulation (EC) No 1259/1999 for certain
Member States. This could create a deficit as regards the
funding of accompanying measures under national or
regional
rural development programmes which are
being financed by additional Community support as
in Article 5(2) of Regulation
presently provided for
(EC) No 1259/1999.

The Member States concerned should thus be allowed to
continue
to apply optional modulation after 31
December 2004, in so far as this is necessary to cover
the financial needs arising from accompanying measures
approved before 1 January 2006.

(4)

(5)

(6)

(7)

(8)

(9)

Transitional rules are therefore required to facilitate the
transition from optional to compulsory modulation.

For the purpose of a harmonious transition between
programming periods, the time limits for the availability
of amounts resulting from optional modulation should
be extended to the end of
the fourth financial year
following that during which the amounts are withheld.
In this context it is appropriate,
legal
clarity, to amend Article 1(1) of Commission Regulation
(EC) No 963/2001 of 17 May 2001 on detailed rules for
the
(EC) No
application
additional Community
1259/1999 as
information to the
support and the transmission of
Commission (3).

of Council Regulation
regards

for reasons of

the

Taking into account the amendment to Article 1(1) of
Regulation (EC) No 963/2001,
it is also necessary to
amend Article 6 of Commission Regulation (EC) No
296/96 (4) concerning data to be transmitted by the
Member States and the monthly booking of expenditure
financed under the Guarantee Section of the EAGGF, in
order to ensure the full application of this Article to
funds resulting from optional modulation.

Regulations (EC) No 963/2001 and (EC) No 296/96
should therefore be amended accordingly.

To ensure traceability, the financing source of each multi-
annual action should remain the same until the action
expires. However, where
resulting from
optional modulation are exhausted, the Member State
must be allowed to finance multiannual actions which
are still running by other funds.

funds

the

In order to ensure that the funds resulting from optional
modulation are properly managed and supervised, the
Member States should keep a separate account for the
amounts withheld and their use,
in accordance with
Regulation (EC) No 296/96.

(10)

The measures provided for in this Regulation are in
the Management
accordance with the opinion of
Committee for Direct Payments,

(1) OJ L 270, 21.10.2003, p. 1. Regulation as last amended by Regu-

lation (EC) No 864/2004 (OJ L 161, 30.4.2004, p. 48).

(2) OJ L 160, 26.6.1999, p. 113. Regulation as last amended by Regu-

lation (EC) No 41/2004 (OJ L 6, 10.1.2004, p. 19).

(3) OJ L 136, 18.5.2001, p. 4.
(4) OJ L 39, 17.2.1996, p. 5. Regulation as last amended by Regulation

(EC) 2035/2003 (OJ L 302, 20.11.2003, p. 6).

L 298/4

EN

Official Journal of the European Union

23.9.2004

HAS ADOPTED THIS REGULATION:

Article 1

The Member States which have applied reductions of
1.
direct payments as provided for in Article 4 of Regulation
(EC) No 1259/1999 may, in addition to the reductions under
Article 10 of Regulation (EC) No 1782/2003, apply an addi-
tional reduction up to the rate estimated each year to be
required to cover the difference between the amount available
as a result of the reductions under that Article 10 of Regulation
(EC) No 1782/2003 and the amount necessary to finance the
expenditure for accompanying measures under Council Regu-
lation (EC) No 1257/1999 (1), for which the allocation and use
of additional Community support have been approved until 31
December 2005.

The overall reduction of support to a farmer in respect of
2.
resulting from the application of
a given calendar year,
paragraph 1, shall not exceed 20 % of
the total amount
which would, but for that paragraph and Article 10 of Regu-
lation (EC) No 1782/2003, be granted to the farmer in respect
of the calendar year concerned.

3.
The accompanying measures referred to in paragraph 1
shall be measures under Articles 10 to 12 (early retirement),
Articles 13 to 21 (less-favoured areas and areas with environ-
mental restrictions), Articles 21a to 21d (meeting standards),
Articles 22 to 24 (agri-environment and animal welfare),
Articles 24a to 24d (food quality) and Article 31 (afforestation)
of Regulation (EC) No 1257/1999.

support at the latest by the end of the fourth financial year
following that during which they are withheld.

2.
The percentage of Community contribution to measures
financed by amounts withheld in accordance with Article 1
shall be the same as that provided in the rural development
programming document for the measure concerned.

A multiannual action shall not be alternately funded one
3.
year by the Community support referred to in Article 48(1)(a)
of Regulation (EC) No 817/2004 and another year by funds
resulting from the additional reduction under this Regulation.

However, where the funds resulting from reduction under this
Regulation are exhausted, the Member State may finance the
EAGGF
multiannual
‘Guarantee’
(EC) No
1257/1999.

action until
Section

to Regulation

expires under

according

the

it

Article 4

The provisions laid down in Articles 2 and 3(6a)(b) of Regu-
lation (EC) No 296/96 shall apply, mutatis mutandis, to the
accounting of amounts withheld and expenditure generated
under this Regulation.

Article 5

Member States shall, by 30 September each year, submit to the
Commission an update of the allocation of amounts withheld in
accordance with Article 1 together with the statement of expen-
diture referred to in Article 55 of Regulation (EC) No
817/2004.

The additional reduction provided for in paragraph 1 may

4.
be applied at regional level.

Article 6

5.
The provisions set out in Article 48(2) of Commission
Regulation (EC) No 817/2004 (2) shall apply, mutatis mutandis,
for the approval of the allocation and use of amounts withheld
in accordance with paragraph 1.

Article 2

the additional

the amount of

Without prejudice to Article 77 of Commission Regulation (EC)
No 796/2004 (3),
reduction
provided for in Article 1 shall be calculated on the basis of
the amounts of direct payments to which a farmer would be
entitled before any reductions or exclusions are applied under
Articles 6 and 24 of Regulation (EC) No 1782/2003 or, in the
case of aid schemes listed in Annex I of that Regulation but not
falling under titles III and IV of that Regulation, under the
specific legislation applicable thereto.

Article 3

1.
Amounts withheld in accordance with Article 1 of this
Regulation and Article 4 of Regulation (EC) No 1259/1999
the payment of additional Community
shall be used for

(1) OJ L 160, 26.6.1999, p. 80. Regulation as last amended by Regu-

lation (EC) No 583/2004 (OJ L 91, 30.3.2004, p. 1).

(2) OJ L 153, 30.4.2004, p. 30.
(3) OJ L 141, 30.4.2004, p. 18.

Article 1(1) of Regulation (EC) No 963/2001 is replaced by the
following

‘1.
Amounts withheld in accordance with Article 3(2) of
Regulation (EC) No 1259/1999 shall be used for
the
payment of additional Community support provided for
in Article 5(2) of that Regulation at the latest by the end
of the third financial year following that during which they
are withheld.’.

Article 7

Article 6 of Regulation (EC) No 296/96 is replaced by the
following:

‘Article 6

Amounts withheld in accordance with Articles 3 and 4 of
Regulation (EC) No 1259/1999 or Article 1 of Commission
Regulation (EC) No 1655/2004 (*) and the possible interest
thereon which have not been paid pursuant to Article 1 of
Regulation (EC) No 963/2001 or Article 3(1) of Regulation
(EC) No 1655/2004 shall be deducted from the advances
related to the expenditure of October of the financial year
concerned.
___________
(*) OJ L 298, 23.9.2004, p. 3.’.

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Official Journal of the European Union

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Article 8

This Regulation shall enter into force on the third day following
the European
that of
Union.

its publication in the Official

Journal of

It shall apply from 1 January 2005. However, Articles 3(1) and
6 shall apply from 15 October 2004.

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

Done at Brussels, 22 September 2004.

For the Commission

Franz FISCHLER
Member of the Commission