Proposal for a Council Decision establishing the Community position with respect to the prolongation of the International Agreement on Olive Oil and Table Olives, 1986
Date: 2004-10-14
Institutions: European Commission
Subjects: commodity agreement, international agreement, olive, olive oil, renewal of an agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 14.10.2004 
COM(2004)665 final 

2004/0236 (ACC) 

Proposal for a 

COUNCIL DECISION 

establishing the Community position with respect to the prolongation  
of the International Agreement on Olive Oil and Table Olives, 1986 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

1. 

2. 

The  International  Agreement  on  Olive  Oil  and  Table  Olives  of  1986,  of  which  the 
Community is a member, entered into force on 1 July 1986. It was amended in 1993 
and its application prolonged to 1998. It has been extended for further periods until 
31 December  2004,  when.  it  will  expire.  However,  under  Article 61  of  the 
International Agreement on Olive Oil and Table Olives of 1986 and Article 9 of the 
Protocol amending and extending the Agreement, the International Olive Oil Council 
(IOOC)  may  decide  either  to  prolong  the  Agreement  for  successive  periods  not 
exceeding two years on each occasion or to put an end to that Agreement. 

The  IOOC  members  are  now  negotiating  a  new  Agreement.  However,  it  is  not  yet 
clear  if  consensus  of  all  current  IOOC  members  on  the  new  text  will  be  achieved 
before expiry of the existing Agreement. On the other hand, there is not yet consensus 
of IOOC members on the adoption of a package of measures proposed by the EC and 
intended  to  finally  solve  management  problems  identified  at  the  Secretariat  of  this 
organization.  A  decision  in  the  course  of  its  91st  session  to  either  prolong  the 
Agreement for a further period of one year, until 31 December 2005, or to put an end 
to this Agreement will have therefore to take place in December 2004. 

3. 

The budgetary implications are as follows: 

The European Community participation share pertaining to the IOOC Administrative 
Budget  amounts  to  750/1000,  i.e.  75 %,  which  is  paid  under  budget-item  05 06 01. 
The Community share of the IOOC-budget for 2004 as foreseen in the Draft General 
Budget of the European Commission for the financial year 2004 has been estimated at 
€ 3 923 000.  Starting  from  the  assumption  of  an  increase  of  a  maximum  of  4 %  for 
the  year  2005  the  Community  share  could,  at  the  most,  increase  to  € 4 080 000  for 
that financial year. 

Moreover, the Agreement foresees an obligatory contribution of € 500 000/year to the 
Promotion  Fund  to  be  paid  under  budget  line  05 08 05.  The  European  Community 
share  is  802.8/1000,  i.e.  80.28 %  and,  therefore,  amounts  to  € 401 400/year.  This 
amount is fixed and will stay the same for the years 2004 and 2005. 

4. 

The  purpose  of  this  proposal  is  to  authorise  the  Commission  on  behalf  of  the 
Community  to  either  vote  in  favour  of  the  prolongation  of  the  Agreement  until 
31 December 2005 if IOOC Members achieve consensus on the need to sufficiently 
improve the functioning of the IOOC Secretariat or to reject further extensions of the 
current  Agreement,  pending  the  results  of  ongoing  negotiations  on  both  a  new 
Agreement  and  a  package  of  management  measures  proposed  by  the  EC.  The 
Commission does, however, reserve the right to alter this proposal once these results 
are available. 

EN 

2 

   EN 

 
2004/0236 (ACC) 

Proposal for a 

COUNCIL DECISION 

establishing the Community position with respect to the prolongation  
of the International Agreement on Olive Oil and Table Olives, 1986 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 133, in conjunction with the second subparagraph of Article 300(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

The  International  Agreement  on  Olive  Oil  and  Table  Olives,  1986,  (hereafter:  the 
Agreement),  was  concluded  by  the  Community  by  Council  Decision  87/401/EEC1, 
amendments  thereof  were  approved  in  1993  by  Council  Decision  93/622/EC2.  It  was 
prolonged  thereafter  for  additional  periods  of  two  years  and  remains  in  force  until 
31 December  2004  unless  the  International  Olive  Oil  Council  (hereafter:  IOOC) 
decides on a prolongation for a further period or a  new  Agreement  is  adopted  before 
that date. 

The main objectives of the Agreement are to promote international co-operation in the 
field  of  olive  oil  and  table  olives,  to  promote  consumption  of  olive  products  in  third 
countries  and  to  harmonise  quality  standards  of  olive  products  amongst  its  members. 
The prolongation of the Agreement or the adoption of a new Agreement can, therefore, 
be  in  the  interest  of  the  Community  if,  as  a  result  of  ongoing  negotiations,  a  sound 
management of the IOOC Secretariat can be ensured. 

(3) 

IOOC  members  are  currently  negotiating  the  text  of  a  new  Agreement  which  should 
replace the existing Agreement and, at the same time, the adoption of various measures 
intended to ensure a sound functioning of the IOOC Executive Secretariat. 

(4)  Whilst  both  the  negotiations  on  the  new  Agreement  and  the  measures  aimed  at 
ensuring  a  sound  functioning  of  the  Executive  Secretariat  are  being  conducted  in 
parallel, the situation could emerge in which only the latter measures would be ripe for 
adoption whilst the negotiations on the new Agreement would still have to be carried 
on beyond the expiry of the current Agreement. 

1 
2 

OJ L 214, 4.8.1987, p. 1. 
OJ L 298, 3.12.1993, p. 36. 

EN 

3 

   EN 

 
                                                 
(5) 

The  Commission,  representing  the  Community  in  the  IOOC,  should,  therefore,  be 
authorised either to be in favour of a prolongation or to reject a further extension of the 
current Agreement, 

HAS DECIDED AS FOLLOWS: 

Sole Article 

The Commission, depending on the results of ongoing negotiations between the members of 
the International Olive Oil Council as established by the Agreement, shall hereby be 
authorised to express the following positions representing the European Community:  

(a) 

either to be in favour of the prolongation of the Agreement for a period of one year 
until  31  December  2005  taking  into  account  the  prospects  of  improvement  of  the 
organisation and management of the Secretariat, 

(b) 

or to be against a further prolongation of the Agreement. 

Done at Brussels,  

For the Council 
The President 

EN 

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LEGISLATIVE FINANCIAL STATEMENT 

Policy areas: Agriculture and Rural Development 

Activities:  External  Relations  (05 06 01  –  ex  B 7-8210)  and  Policy  Strategy  and 
Coordination of Policy area "Agriculture" (05 08 05 – ex B 1-3811) 

TITLE  OF  ACTION:  INTERNATIONAL  AGREEMENT  ON  OLIVE  OIL  AND  TABLE  OLIVES,  1986 

(05 06 01 –EX B 7-8210); PROMOTION MEASURES (05 08 05 – EX B 1-3811) 

1. 

BUDGET LINES + HEADINGS 

05 06 01 (ex B 7-8210): 
05 08 05 (ex B 1-3811): 
Community 

International Agricultural Agreements 
Promotion  measures/Direct  payment  by  the  European 

2. 

OVERALL FIGURES 

2.1. 

Total allocation for action (Part B): € million for commitment 

a) 

2004: 

€ 3.923 (budget-line 05 06 01 –ex B 7-8210)  
€ 0.401 (budget-line 05 08 05 -ex B 1-3811) 

b) 

2005: 

€ 4.320 (budget-line 05 06 01 -ex B 7-8210)  
€ 0.401 (budget-line 05 08 05 -ex B 1-3811) 

2.2. 

Period of application 

Calendar year 2005 

2.3. 

Overall multi-annual estimate of expenditure 

(a) 

Schedule  of 
intervention) 

commitment 

appropriations/payment 

appropriations 

(financial 

Commitments 

Payments 

2004 

€ 3.923 (05 06 01) 
€ 0.401 (05 08 05) 

€ 3.923 (05 06 01) 
€ 0.401 (05 08 05) 

EUR million (to three decimal places) 
2005 

Total 

€ 4.320 (05 06 01) 
€ 0.401 (05 08 05) 

€ 4.320 (05 06 01) 
€ 0.401 (05 08 05) 

€ 8.243 (05 06 01) 
€ 0.803 (05 08 05) 

€ 8.243 (05 06 01) 
€ 0.803 (05 08 05) 

(b) 

Technical and administrative assistance and support expenditure 

Commitments 

Payments 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

EN 

5 

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2.4. 

Compatibility with financial programming and financial perspective 

X 

Proposal is compatible with existing financial programming. 

3. 

BUDGET CHARACTERISTICS (WITH REGARD TO BUDGET-LINE 05 06 01) 

Type of 
expenditure 

New 

EFTA 
contribution 

Contributions from 
applicant countries 

Heading in financial 
perspective 

Comp 

Diff 

NO 

NO 

NO 

No 4 
External Relations 

BUDGET CHARACTERISTICS (WITH REGARD TO BUDGET-LINE 05 08 05) 

Type of 
expenditure 

New 

EFTA 
contribution 

Contributions from 
applicant countries 

Heading in financial 
perspective 

Comp 

Non-diff 

NO 

NO 

NO 

No 1a 
Agric. Expenditure 

4. 

LEGAL BASIS 

Article  133  in  conjunction  with  the  second  paragraph  of  Article  300(2)  of  the  Treaty 
establishing the European Community 

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention 

5.1.1.  Objectives pursued 

Due  to  its  economic  importance  in  the  agricultural  sector  the  Community  should  be 
represented  in  international  agricultural  organisations.  Being  a  member  of  the  International 
Olive  Oil  Council,  in  particular,  enables  the  Community  to  pursue  the  developments  of  the 
markets  for  olive  oil  and  table  olives  and,  thus,  to  defend  its  interest  with  regard  to  these 
products.  The  International  Agreement  on  Olive  Oil  and  Table  Olives  1986  supports 
international co-operation and contributes to the development and the stability of the markets 
for these products. 

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  Community  pays  its  annual  membership  contribution  as  fixed  in  accordance  with  the 
International Agreement and the obligatory contribution to the Promotion Fund of the IOOC 
as fixed in the International Agreement. These obligations continue as long as the Community 
is a signatory of the International Agreement. 

EN 

6 

   EN 

 
 
The  Commission,  representing  the  Community,  as  well  as  the  other  members  of  the  IOOC 
participates  actively  in  the  IOOC-activities  and  profits  fully  of  the  advantages  of  being  a 
member of the IOOC. 

6. 

FINANCIAL IMPACT 

6.1. 

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

6.1.1.  Financial intervention 

Breakdown 

Action 1 (05 06 01) 

Action 2 (B 1-3811) 

TOTAL 

Commitments (in EUR million to three decimal places) 

2004 

€ 3.923 

€ 0.401 

€ 4.324 

2005 

€ 4.320 

€ 0.401 

€4.721 

Total 

€ 8.243 

€ 0.803 

€ 9.046 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE 

7.1. 

Impact on human resources 

Staff to be assigned to management  
of the action using existing and/or 
additional resources 

Number of 
permanent posts 

Number of 
temporary posts 

Total 

Description of tasks deriving  
from the action 

. 

Types of post 

Officials or 
temporary staff 

A 
B 
C 

Other human resources 

Total 

7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (€) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

The amounts are total expenditure for twelve months. 

Total 

7.3. 

Other administrative expenditure deriving from the action 

Budget line (number and heading) 

Amount € 

Method of calculation 

Overall allocation (Title A7) 

A0701 – Missions 

EN 

Total 

7 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The amounts are total expenditure for twelve months. 

I. 

II. 

III. 

8. 

Annual total (7.2 + 7.3) 

Duration of action 

Total cost of action (I x II) 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

1 year (2005) 

The IOOC-activities are closely followed by its members and there are regular meetings which 
are attended by Commission staff. 

8.2. 

Arrangements and schedule for the planned evaluation 

Activity  reports  are  regularly  distributed  by  the  IOOC  which  allows  an  evaluation  of  the 
activities. Commission staff reports back to the PROBA-group of the Council and the IOOC 
activities are followed up in that context, too. 

9. 

ANTI-FRAUD MEASURES 

Article 17(10) and 24 of the International Agreement on Olive Oil and Table Olives 1986 and 
Article 28, lit d) of the Internal Rules of the IOOC provide for control and audit mechanisms. 
The accounts have to be certified by an independent account commissioner. 

With regard to the contributions to the Promotion Fund the Commission carries out controls of 
the accounts by own staff, as the case may be, on-the spot, and monitors the contracts. 

Moreover,  the  IOOC-members  have  recently  agreed  upon  an  in-depth  reform  of  the  overall 
financial management of the IOOC. 

EN 

8 

   EN