Proposal for a Regulation of the European Parliament and of the Council establishing accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar regime {SEC(2005) 828}
Date: 2005-06-22
Institutions: European Commission
Subjects: ACP countries, agreement (EU), common organisation of markets, cooperation agreement, development aid, protocol on sugar, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.6.2005 
COM(2005) 266 final 

2005/0117 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing accompanying measures for Sugar Protocol countries affected by the 
reform of the EU sugar regime 

(presented by the Commission) 

{SEC(2005) 828} 

EN 

   EN 

 
 
 
  
 
 
EXPLANATORY MEMORANDUM 

The  EU  sugar  reform,  with  its  proposed  price  cuts,  may  lead  to  significant  impacts  and 
adjustment  needs,  with  broad  socio-economic  consequences  in  ACP  countries  that  are 
signatories  to  the  Sugar  Protocol  and  have  been  relying  on  preferential  sugar  exports  to  the 
EU,  in  most  cases  since  1975.  In  the  context  of  the  future  sugar  regime,  market  conditions 
may further evolve due to internal as well as external factors, such as trade flows under the 
“Everything  But  Arms”  initiative.  Therefore,  in  its  proposal  for  reform,  “Accomplishing  a 
sustainable agricultural model for Europe through the reformed CAP – sugar sector reform”1, 
the  Commission  committed  to  accompanying  the  adaptation  process  required  in  these 
countries. 

Indeed,  in  the  framework  of  the  Cotonou  Agreement,  the  Community  is  committed  to 
supporting  ACP  countries  on  their  path  to  poverty  reduction  and  sustainable  development. 
Moreover, through the EU Action Plan for Agricultural Commodities2 adopted in April 2004, 
the EU is engaged in helping economies dependent on commodities, such as sugar, to address 
the  challenges  related  to  these  sectors.  Finally,  the  ACP  countries  themselves,  in  their 
responses  to  the  Commission's  reform  proposal,  called  for  adjustment  programmes  to  be 
established. 

The  Commission  produced  a  staff  working  paper  in  January  2005,  “Action  Plan  on 
accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar 
regime”3. It laid out the broad lines along which the Commission could propose to support the 
Sugar Protocol countries, while providing a basis for dialogue with them. This dialogue, held 
at all-ACP, regional and national levels, has generally shown that these countries support the 
Commission’s approach. Member States, consulted through the ACP Group of Council, were 
also generally supportive. 

The Commission committed itself to offering both trade measures and development assistance 
to  help  the  Sugar  Protocol  countries  to  adapt.  The  trade  measures  are  being  established  in 
negotiations  on  the  Economic  Partnership  Agreements.  The  development  assistance  is  the 
subject  of  this  Commission  proposal  to  the  European  Parliament  and  the  Council  for  a 
regulation establishing accompanying measures for Sugar Protocol countries affected by the 
reform of the EU sugar regime. 

This  regulation  will  supply  the  legal  basis  for  delivering  assistance  in  2006.  In  order  to 
maximise  chances  of  a  successful  transition,  it  is  essential  to  facilitate  opportunities  for  the 
Sugar  Protocol  countries  to  anticipate  as  much  as  possible  the  impacts  of  the  sugar  reform, 
which is proposed to be implemented as early as July 2006. Restructuring and reconversion 
can  best  mitigate  the  likely  impacts  of  the  reform  if  they  succeed  in  preventing  major 
disruptions  of  the  level  of  economic  activity.  Similarly,  social  measures,  for  example 
favouring  labour  mobility,  need  to  be  implemented  as  much  as  possible  in  preparation  of 
significant changes. 

1 
2 

3 

Commission Communication COM(2004) 499. 
Commission  Communication  COM(2004)  89,  and  General  Affairs  Council  conclusions  of  27  April 
2004. 
SEC(2005) 61. 

EN 

2 

   EN 

 
                                                 
Considering the complexity of restructuring and diversification processes to be undertaken in 
Sugar  Protocol  countries,  this  assistance  scheme  should  cover  a  relatively  long  term.  The 
Commission  has  proposed  eight  years.  The  regulation  will  hence  be  followed  by  a  specific 
appropriation  in  the  2007-2013  Financial  Perspectives,  covered  by  the  development  part  of 
the “Development Cooperation and Economic Cooperation Instrument”. In the event that this 
instrument does not enter into force on 1 January 2007, an extension of the regulation will be 
enacted. 

The countries to be covered by this scheme are the 18 ACP countries that are signatories to 
the Sugar Protocol and export sugar at present to the EU. In the two ACP countries that are 
signatories  to  the  Sugar  Protocol,  but  have  not  exported  sugar  to  the  EU  in  recent  years 
(namely  Uganda  and  Suriname),  the  EU  sugar  reform  will  not  require  specific  adjustments. 
LDC countries, which are not signatories to the Sugar Protocol, have not historically relied on 
sugar exports to the EU. Further market access under EBA, even at lower levels of EU market 
prices,  should  allow  several  sugar  producing  LDC  to  increase  their  revenues  from  sugar 
exports to the EU. These LDC are hence not covered here. 

Considering the differences between the different Sugar Protocol countries, in terms of types 
of issues to face and possible responses, a broad range of support options should be offered, to 
be adapted to each specific situation. In terms of areas of support, the range should cover the 
needs of countries which will aim to upgrade the competitiveness of their sugar sector, as well 
as  of  those  for  which  the  adaptation  process  requires  diversifying  into  alternative  economic 
activities,  around  or  instead  of  the  sugar  sector.  Considering  the  multifunctional  role  of  the 
sugar  sector  especially  in  certain  areas,  these  accompanying  measures  should  also  cover 
broader social, economic, and environmental consequences of the reform, if necessary. 

EC  support  will  be  based  on  a  country-specific,  multi-annual,  comprehensive  adaptation 
strategy,  to  be  devised  in  the  country  concerned,  in  dialogue  with  the  Commission.  Some 
important criteria for eligibility of this strategy to Community assistance are its justification in 
terms  of  long  term  sustainability,  considering  in  particular  the  relative  prospects  for 
profitability of sugar or alternative sectors in future market conditions, within an overall goal 
of  developing  an  enabling  environment  for  economic  growth  and  poverty  reduction.  In  the 
process and in the outcome of the strategy elaboration exercise, careful consideration should 
be given to the different stakeholders which are affected by and which can contribute to the 
adjustment  process,  including  both  the  public  and  the  private  sector,  and  with  a  specific 
poverty  reduction  focus.  The  environmental  impact  of  alternative  options  will  also  require 
adequate consideration. The strategy should also be linked to and consistent with the overall 
development strategy of the country. 

The  preferred  delivery  mechanisms  will  be  (sectoral)  budget  support,  although  programme 
support will also be possible, depending on the situation of a given country. This support will 
need to be complementary to other assistance instruments, in terms of development assistance 
and  of  trade  measures,  in  particular  the  Economic  Partnership  Agreements.  Its  efficiency 
should be enhanced by seeking synergies with other instruments. 

The  national  strategy  elaboration  process  has  already  progressed  in  several  Sugar  Protocol 
countries.  However,  countries  which,  in  2006,  have  not  yet  devised  a  suitable  adaptation 
strategy should be eligible in that year for financial assistance with the aim of developing such 
a strategy. For countries in political crisis, the Commission will evaluate whether the situation 
allows effective use of sugar-related assistance, and may decide to reallocate the share of the 
budget envisaged for that country to the other eligible countries. 

EN 

3 

   EN 

 
In  terms  of  budget,  the  sugar  reform  creates  specific,  new  challenges  to  Sugar  Protocol 
countries, which require additional support for their adaptation process. As the 9th European 
Development  Fund  has  been  reserved  for  other  purposes,  and  as  in  the  case  of  a  similarly 
motivated  programme,  the  special  assistance  framework  for  ACP  banana  producers,  the 
Commission  proposes  that  expenses  linked  to  the  present  proposal  be  covered  by  the 
Community budget. In 2006, the total budget for the assistance scheme needs to allow the 18 
Sugar Protocol countries to undertake priority investment and programmes in the framework 
of  the  above-mentioned  adaptation  strategy.  It  will  be  divided  amongst  the  countries 
according  to  their  different  needs,  which  depend  in  particular  on  the  impact  of  the  sugar 
reform  on  their  sugar  industry  and  on  the  historical  importance  of  sugar  exports  in  their 
economy.  A  limited  amount  should  also  be  reserved  to  ensure  adequate  administrative 
capacity to manage the assistance scheme effectively. 

It  is  also  essential  to  establish  implementation  modalities  which  ensure  the  effectiveness  of 
Community  assistance.  Committee  procedures  will  take  this  into  account,  and  budgetary 
procedures will follow those of the Financial Regulation applicable to the Community budget. 
In line with the Communication on Reform of the Management of Community Aid (16 May 
2000)  the  responsibility  of  the  management  of  the  actions  will  be  devolved  to  the  EC 
delegations in the beneficiary countries. 

EN 

4 

   EN 

 
2005/0117 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing accompanying measures for Sugar Protocol countries affected by the 
reform of the EU sugar regime 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission3, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty4, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

3 
4 
5 
6 

7 

The European Community is committed, in the framework of the ACP-EC Partnership 
Agreement5, to supporting the ACP countries on their path to poverty reduction and to 
sustainable development, and recognises the importance of the commodity sectors and 
their related Protocols. 

The provisions the common organisation of the market in sugar established by Council 
Regulation (EEC) No 1260/2001 of 19 June 20016 are to be reformed, as proposed by 
the Commission to the Council in Communication COM(2005) 2637. 

Under  the  Sugar  Protocol,  attached  to  Annex  V  of  the  ACP-EC  Partnership 
Agreement, some ACP countries have been relying on the EU market to export sugar. 
The reform will in all likelihood significantly alter their market conditions. 

The adjustment process of the Sugar Protocol countries to these new market conditions 
may be complex, considering the socio-economic importance of the sugar sector and 
its significant degree of reliance on the EU market, for several of these states. 

The  Commission  committed  itself  in  Communication  COM(2004)  499  to  supporting 
the adjustment process of Sugar Protocol countries, and laid out the principles for its 
support proposals in the Staff Working Document SEC(2005) 61, which was discussed 
with the Sugar Protocol countries. 

OJ C [...], p. [...]. 
OJ C [...], p. [...]. 
OJ L 317, 15.12.2000, p. 3. 
OJ  L  178,  30.6.2001,  p.  1;  Regulation  as  last  amended  by  Commission  Regulation  (EC)  No  39/2004 
(OJ L 6, 10.1.2004, p. 16). 
OJ C [...], p. [...]. 

EN 

5 

   EN 

 
                                                 
(6) 

(7) 

(8) 

(9) 

Sugar Protocol countries require early support to maximise the chances of successful 
adaptation to the new conditions, in full complementarity with existing assistance. 

Financial  and  technical  assistance,  including  budget  support  where  appropriate, 
additional  to  that  provided  for  in  the  framework  of  the  ACP-EC  Partnership 
Agreement, should therefore be granted to Sugar Protocol countries to enable them to 
adapt to new market conditions, offering a broad range of support to take into account 
heterogeneity of situations between countries and within a country. It should include 
upgrading  the  competitiveness  of  their  sugar  cane  sector,  developing  alternative 
economic  activities,  and  coping  with  broader  social,  environmental  and  economic 
consequences of a reduction of the contribution of the sugar sector to their economies, 
or a combination of several of these. 

As  this  assistance  should  reflect  the  specific  adjustment  efforts  required  by  each  of 
these ACP suppliers as a consequence of the reform, objective criteria should be fixed 
to determine the extent of such assistance. 

Such assistance should be provided for a period of one year, with continued support to 
be made available until 2013, by means of the development part of the Development 
Cooperation and Economic Cooperation Instrument. 

(10)  The objective of the action to be taken, namely to accompany the adaptation process of 
Sugar  Protocol  countries  affected  by  the  EU  sugar  reform,  cannot  be  sufficiently 
achieved by the Member States and can therefore, by reason of the scales and effects 
of the proposed action, be better achieved at Community level, in accordance with the 
principle  of  subsidiarity  set  out  in  Article  5  of  the  Treaty.  In  accordance  with  the 
principle  of  proportionality,  as  set  out  in  that  Article,  this  Regulation  does  not  go 
beyond what is necessary to achieve that objective. 

(11)  Since  the  measures  necessary  for  the  implementation  of  the  Regulation  are 
management  measures  within  the  meaning  of  Article  2  of  Council  Decision 
1999/468/EC  of  28  June  1999  laying  down  the  procedures  for  the  exercise  of 
implementing powers conferred on the Commission8, they should be adopted by use of 
the management procedure provided for in Article 4 of that Decision. 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Subject 

1. 

A  scheme  for  financial  and  technical  assistance,  including  budget  support  where 
appropriate,  is  hereby  established  to  accompany  the  adjustment  process  of  Sugar 
Protocol  countries,  faced  with  new  conditions  on  the  sugar  market  due  to  the 
forthcoming reform of the common organisation of the market in sugar. 

2. 

Subject to Article 11(3), this scheme shall be implemented for the year 2006. 

8 

OJ L 184, 17.7.1999, p. 23. 

EN 

6 

   EN 

 
                                                 
Article 2 

Definitions 

For the purpose of this Regulation: 

– 

– 

« Sugar Protocol countries » means the ACP countries listed in Annex I, 

« sugar » means raw or white cane sugar. 

Article 3 

Eligibility for assistance; procedure 

1. 

2. 

3. 

4. 

Sugar  Protocol  countries  shall  be  eligible  for  financial  and  technical  assistance, 
including budget support, where appropriate. 

Financial  and  technical  assistance  shall  be  granted  at  the  request  of  each  Sugar 
Protocol  country.  Requests  for  financial  and  technical  assistance  shall  be  presented 
no later than 60 days after the entry into force of this regulation.  

The  requests  shall  be  based  on  a  comprehensive  multi-annual  adaptation  strategy, 
defined by the country concerned in accordance with Article 4, in consultation with 
all stakeholders. 

Sugar  Protocol  countries  which  table  a  request,  which  is  not  based  on  a 
comprehensive,  multi-annual  adaptation  strategy,  shall  only  be  eligible  in  2006  to 
financial  and  technical  assistance  aiming  to  contribute  to  the  elaboration  of  such  a 
strategy. 

Article 4 

Multi-annual adaptation strategy 

1. 

The  multi-annual  adaptation  strategy  shall  pursue  one  or  more  of  the  following 
objectives: 

(a) 

to  enhance  the  competitiveness  of  the  sugar  and  cane  sector,  where  this  is  a 
sustainable  process,  in  particular  in  terms  of  long-term  economic  viability  of 
the sector, taking into account the situation of the different stakeholders in the 
chain, 

(b) 

to promote the economic diversification of sugar-dependent areas, 

(c) 

to  address  broader  impacts  generated  by  the  adaptation  process,  possibly 
related,  but  not  restricted,  to  employment  and  social  services,  land  use  and 
environmental  restoration,  the  energy  sector,  research  and  innovation  and 
macro-economic stability. 

EN 

7 

   EN 

 
2. 

The  strategy  shall  at  least  define  the  objectives  pursued,  the  approach  and  means 
identified to achieve them, the responsibilities of the different stakeholders, and the 
financial plan to implement the strategy. 

It  shall  assess  its  sustainability  under  present  and  future  market  conditions,  and  in 
social  and  environmental  terms.  It  shall  demonstrate  its  consistency  with  general 
development strategies of the country and its poverty focus. 

3. 

Within the multi-annual strategy, a specific assistance plan for 2006 shall be defined. 
In the design of this plan, particular attention shall be given to: 

– 

– 

the pursuit of cost effectiveness and sustainable impact, 

the clear definition and monitoring of objectives and indicators of achievement. 

Article 5 

Measures adopted by the Commission 

1. 

2. 

3. 

4. 

After  consultation  with  the  Sugar  Protocol  country,  the  multi-annual  adaptation 
strategy  shall  be  adopted  under  the  procedure  referred  to  in  Article  7(2),  and  in 
accordance with Article 4. 

Special  account  will  be  taken  of  the  individual  situation  of  each  Sugar  Protocol 
country.  For  countries  finding  themselves  in  a  political  crisis,  unrelated  to  the 
evolution of the sugar sector, the delivery of assistance under this Regulation will be 
assessed by the Commission on a case by case basis. 

Assistance  to  Sugar  Protocol  countries  without  a  multi-annual  adaptation  strategy 
shall be subject in 2006 to an annual work programme, adopted under the procedure 
referred to in Article 7(2). 

The  assistance  provided  for  under  this  Regulation  shall  complement  and  reinforce 
assistance provided under other instruments of development cooperation. 

Article 6 

Implementation of measures 

The  measures  financed  under  this  Regulation  shall  be  implemented  in  accordance  with 
general  rules  as  set  out  in  Council  Regulation  (EC)  No  1605/20029,  namely  the  Financial 
Regulation  applicable  to  the  general  budget  of  the  European  Communities.  As  regards 
management  procedures,  this  refers  in  particular  to  Article  53(1a)  and  (2)  of  the  Financial 
Regulation  and  Article  36  of  Commission  Regulation  (EC)  No  2342/2002,  namely  the 
implementing rules of the Financial Regulation10. 

9 
10 

OJ L 248, 16.9.2002. 
OJ L 357, 31.12.2002. 

EN 

8 

   EN 

 
                                                 
Article 7 

Committee procedure 

1. 

2. 

The  Commission  shall  be  assisted  by  the  geographically  competent  committee  for 
development. 

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision 
1999/468/EC  shall  apply,  having  regard  to  the  provisions  of  Article  8  thereof.  The 
period laid down in Article 4(3) of Decision 1999/468/EC shall be set at 30 days. 

3. 

The Committee shall adopt its rules of procedure. 

Article 8 

Overall amount 

The financial reference amount for implementation of this Regulation for 2006 is EUR 40 
million. 

Article 9 

Allocation of overall amount 

1. 

2. 

3. 

4. 

1. 

Within  the  overall  amount  available  for  the  year  of  validity  of  this  Regulation,  the 
Commission shall fix the maximum amount available to each Sugar Protocol country 
for financing the actions referred to in Article 4(3) and 3(3), on the basis of the needs 
of each country, related in particular to the impact of the reform on the sugar sector 
in the country concerned and to the importance of the sugar sector in the economy. 
The  measurement  of  the  allocation  criteria  shall  be  based  on  data  of  campaigns 
preceding 2004. 

Further  instructions  regarding  the  allocation  of  the  overall  amount  between  Sugar 
Protocol countries shall be defined by a Commission decision in accordance with the 
procedure referred to in Article 7(2). 

The financial reference amount for the implementation of the financial and technical 
assistance  referred  to  in  Article  3(4),  aiming  to  contribute  to  the  elaboration  of  a 
multi-annual strategy, is EUR 300 000. 

Within  the  overall  amount,  an  indicative  amount  of  3%  will  be  used  to  cover  the 
human  and  material  resources  required  for  effective  administration  and  supervision 
of the assistance. 

Article 10 

Protection of the financial interests of the Community 

Any agreements resulting from this Regulation shall contain provisions ensuring the 
protection of the Community’s financial interests, in particular with respect to fraud, 
corruption and any other irregularities, in accordance with Council Regulations (EC, 
Euratom) No 2988/95, (Euratom, EC) No 2185/96 and (EC, Euratom) No 1073/1999. 

EN 

9 

   EN 

 
2. 

3. 

1. 

2. 

3. 

Agreements  shall  expressly  entitle  the  Commission  and  the  Court  of  Auditors  to 
perform a document audit or an on-the-spot audit of any contractor or subcontractor 
who  has  received  Community  funds.  They  shall  also  expressly  authorise  the 
Commission  to  carry  out  on-the-spot  checks  and  inspections,  as  provided  for  in 
Regulation (Euratom, EC) No 2185/96. 

All contracts resulting from the implementation of assistance shall ensure the rights 
of the Commission and the Court of Auditors under paragraph 2 during and after the 
performance of the contracts. 

Article 11 

Period of validity 

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

It  shall  apply  until  31  December  2006.  It  shall  continue  to  apply  for  legal  acts  and 
commitments relating to the implementation of the 2006 budget year. 

In  the  event  that  the  Development  Cooperation  and  Economic  Cooperation 
Instrument  has  not  entered  into  force  on  1  January  2007,  the  Commission  shall  be 
permitted  to  extend  the  validity  of  this  Regulation  and  to  adopt  further  requisite 
measures. 

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

10 

   EN 

 
Annex I 

List referred to in Article 2 

« Sugar Protocol countries » 

1. Barbados 

2. Belize 

3. Guyana 

4. Jamaica 

5. Saint Kitts and Nevis 

6. Trinidad and Tobago 

7. Fiji 

8. Congo 

9. Côte d’Ivoire 

10. Kenya 

11. Madagascar 

12. Malawi 

13. Mauritius 

14. Mozambique 

15. Swaziland 

16. Tanzania 

17. Zambia 

18. Zimbabwe 

EN 

11 

   EN 

 
LEGISLATIVE FINANCIAL STATEMENT 

This document is intended to accompany and complement the Explanatory Memorandum. As 
such,  when  completing  this  Legislative  Financial  Statement,  and  without  prejudice  to  its 
legibility,  an  attempt  should  be  made  to  avoid  repeating  information  contained  in  the 
Explanatory  Memorandum.  Before  filling  in  this  template,  please  refer  to  the  specific 
Guidelines that have been drafted to provide guidance and clarification for the items below.  

1. 

NAME OF THE PROPOSAL : 

Proposal  for  a  regulation  of  the  European  Parliament  and  of  the  Council,  establishing 
accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar 
regime 

2. 

ABM / ABB FRAMEWORK 

Policy  Area(s)  concerned  and  associated  Activity/Activities:  21  03  -  Development  and 
relations  with  African,  Caribbean  and  Pacific  (ACP)  States  -  Relations  with  sub-Saharan 
Africa, the Caribbean, Pacific and Indian Ocean and overseas countries and territories. 

3. 

BUDGET LINES 

3.1. 

3.2. 

Budget  lines  (operational  lines  and  related  technical  and  administrative  assistance 
lines  (ex-  B.A  lines))  including  headings:  operational  budget  line  21  03  19  and 
administrative assistance line under chapter 21 01 04.  

Duration  of  the  action  and  of  the  financial  impact:  assistance  for  Sugar  Protocol 
countries has been proposed to last 8 years, since they involve complex restructuring 
and diversification processes. From 2007 to 2013, the legal basis for this assistance 
will  be  the  Development  Cooperation  and  Economic  Cooperation  Instrument 
(DCECI).  The  present  regulation  is  hence  needed  for  1  year  only  (2006),  until  the 
DCECI  enters  into  force.  If  the  DCECI  were  not  in  force  on  1  January  2007,  the 
validity of the present regulation could be extended. As the sugar reform is expected 
to  be  implemented  in  2006,  it  is  important  for  the  Sugar  Protocol  countries  to 
undertake as early as possible their adaptation process.  

3.3. 

Budgetary characteristics (add rows if necessary) : 

Budget 
line 

21 03 19  

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

Non-
comp 

Diff4/ 
5 

YES 

/NO 

NO 

No [4…] 

21 01 04…  

Non-

Non-

YES/  

/NO 

/NO 

No [4] 

4 
5 

Differentiated appropriations. 
Non-differentiated appropriations hereafter referred to as NDA. 

EN 

12 

   EN 

 
 
 
 
                                                 
comp 

diff 

EN 

13 

   EN 

 
4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1.  Summary of commitment appropriations (CA) and payment appropriations (PA) 

Section 
no. 

Expenditure type 

Operational expenditure6 

Commitment 
Appropriations (CA) 

8.1 

Payment  Appropriations 
(PA) 

a 

b 

EUR million (to 3 decimal places) 

n + 1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
later 

Total 

Year 
n 

38,8 

20 

18,8 

Administrative expenditure within reference amount7 

& 
Technical 
administrative  assistance 
(NDA) 

8.2.4 

c 

 1,2 

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT  

Commitment 
Appropriations (*) 

Payment 
Appropriations (*) 

a+c  40 

b+c  21,2  18,8 

Remark: The Regulation covers the year 2006. However the programme is 
expected to continue until 2013 (8 years duration), and will be based on the 
proposed DCEC instrument as from 2007. Future annual amounts will most 
probably exceed the 2006 level. The reasons are that the reform of the CAP 
for  sugar  only  begins  mid-2006  (hence  the  impact  on  Sugar  protocol 
countries  will  be  lower  the  first  year),  and  2006  essentially  target 
preparatory activities and priority investments.  
Administrative expenditure not included in reference amount8 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

Administrative  costs,  other 
than  human  resources  and 
not 
associated 
included in reference amount 
(NDA) 

costs, 

0,398 

0,08 

8.2.5 

d 

8.2.6 

e 

6 
7 
8 

Expenditure that does not fall under Chapter xx 01 of the Title xx concerned. 
Expenditure within article xx 01 04 of Title xx. 
Expenditure within chapter xx 01 other than articles xx 01 04 or xx 01 05. 

EN 

14 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Total indicative financial cost of intervention  

TOTAL  CA 
cost 
Resources 

of 

TOTAL  PA 
cost 
Resources 

of 

including 
Human 

including 
Human 

Co-financing details 

40,478 

21,678 

18,8 

a+c
+d+
e 

b+c
+d+
e 

If  the  proposal  involves  co-financing  by  Member  States,  or  other  bodies  (please  specify 
which),  an  estimate  of  the  level  of  this  co-financing  should  be  indicated  in  the  table  below 
(additional  lines  may  be  added  if  different  bodies  are  foreseen  for  the  provision  of  the  co-
financing): 

EUR million (to 3 decimal places) 

n + 1 

n + 2 

n + 3 

n + 4 

Year 
n 

n  +  5 
and 
later 

Total 

Co-financing body 

…………………… 

TOTAL CA including co-
financing 

F 

a+c
+d+
e+f 

The adaptation process of Sugar Protocol countries will be based on comprehensive national 
strategies.  The  cost  of  their  implementation  will  be  covered  not  only  by  EC  assistance,  but 
also likely by the national governments, the sugar industry, and/or other donors or financial 
institutions. The process of elaboration of these strategies is however on-going in 2005, which 
does not allow at this stage to quantify co-financing commitments. 

4.1.2.  Compatibility with Financial Programming 

(cid:133) 

(cid:133) 

× 

Proposal is compatible with existing financial programming. 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 
perspective. 

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement9 (i.e. flexibility instrument or revision of the financial perspective). 

4.1.3.  Financial impact on Revenue 

× 

Proposal has no financial implications on revenue 

(cid:133) 

Proposal has financial impact – the effect on revenue is as follows: 

9 

See points 19 and 24 of the Interinstitutional agreement. 

EN 

15 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
NB: All details and observations relating to the method of calculating the effect on 
revenue should be shown in a separate annex. 

Budget line 

Revenue 

EUR million (to one decimal place) 

Situation following action 

[Yea
r n] 

[n+1] [n+2] [n+3

] 

[n+4]  [n+5]

10 

Prior to
action 
[Year 
n-1] 

a) Revenue in absolute terms 

b) Change in revenue 

 ∆ 

(Please specify each revenue budget line involved, adding the appropriate number 
of rows to the table if there is an effect on more than one budget line.) 

4.2. 

Human Resources FTE (including officials, temporary and external staff) – see detail 
under point 8.2.1. 

Annual requirements 

Year n 

n + 1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
later 

Total 
number 
human resources 

of 

5. 

CHARACTERISTICS AND OBJECTIVES 

Details  of  the  context  of  the  proposal  are  required  in  the  Explanatory  Memorandum. 
This section of the Legislative Financial Statement should include the following specific 
complementary information: 

5.1. 

Need to be met in the short or long term 

The  adjustments  required  from  the  ACP  Sugar  Protocol  countries,  due  to  the  EU  sugar 
reform, will be significant in many cases. This is why an 8 year assistance scheme is being 
proposed  (although  the  present  regulation  covers  only  1  year  –  see  point  3.2).  It  is  also 
important to support their adjustment process in the short term, i.e. 2006, because the impacts 
of the reform on certain countries will be felt immediately (the reform is expected to enter in 
force in 2006), because the likelihood of success in mitigating the impacts of the reform will 
be enhanced if adaptation takes place as early as possible, and also because this confirms the 
commitment of the EC to address the needs of the ACP in relation to trade shocks in a broader 
context (i.a. the Doha Development Agenda). 

10 

Additional columns should be added if necessary i.e. if the duration of the action exceeds 6 years. 

EN 

16 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
                                                 
5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal  with  other 
financial instruments and possible synergy 

•  The need for this assistance scheme is linked to a Community policy (the CAP, as well as 
indirectly EC trade policy since a recent WTO panel requires the EU to modify its sugar 
regime).  The  sugar  reform  creates  specific,  new  challenges  to  Sugar  Protocol  countries, 
which require additional support for their adaptation process. The EC is ready to provide 
such  a  temporary  financial  assistance  This  support  is  to  be  provided  in  full  consistency 
with the  country’s overall  development  strategy,  as well  as with the  existing cooperation 
strategy of the EC in these countries. 

•  The Sugar Protocol is part of the Cotonou agreement and the countries concerned mostly 
receive financial assistance from the Community through the EDF. As 9th EDF funds have 
already been reserved for other purposes, the Commission proposes that expenses linked to 
the  present  proposal  be  covered  by  the  Community  budget.  For  a  similar  programme, 
which support ACP banana producers, the budget authority also decided to fund it out of 
the Community budget, so that the programme became additional to other EDF resources. 
The Commission has already announced this to the ACP. 

5.3. 

Objectives, expected results and  related indicators of the  proposal in the  context of 
the ABM framework 

The objectives of these accompanying measures is to help Sugar Protocol countries to adjust 
to the changing market conditions on the sugar market, by enhancing the competitiveness of 
their  sugar  sector,  by  diversifying  into  other  economic  activities,  and/or  by  addressing  the 
broader  social,  economic,  and/or  environmental  impacts  of  these  changes.  The  expected 
results  depend  on  the  type  of  objective  pursued  in  a  given  country,  but  can  include  more 
competitive  sugar  exports  (including  lower  production  costs)  and  increased  value  of 
alternative  sectors,  leading  to  avoid  or  limit  the  loss  of  export  revenues,  employment  and 
other economic and social parameters, and to more sustainable development in the long term. 

5.4. 

Method of Implementation (indicative) 

Show below the method(s)11 chosen for the implementation of the action. 

(cid:133)x Centralised Management 

(cid:133)x  Directly by the Commission 

(cid:133) 

Indirectly by delegation to: 

(cid:133)  Executive Agencies 

(cid:133)  Bodies set up by the Communities as referred to in art. 185 of the 

Financial Regulation 

(cid:133)  National public-sector bodies/bodies with public-service mission 

11 

If  more  than  one  method  is  indicated  please  provide  additional  details  in  the  "Relevant  comments" 
section of this point. 

EN 

17 

   EN 

 
                                                 
(cid:133) x Shared or decentralised management 

(cid:133)  With Member states 

(cid:133)x  With Third countries 

(cid:133) Joint management with international organisations (please specify) 

Relevant comments: 

The  assistance  scheme  may  be  implemented  under  different  modalities  in  different  Sugar 
Protocol  countries:  through  budget  support  as  far  as  possible,  or  in  through  programme 
support. Centralised management through EC delegations applies in the first case, while the 
second  case  may  require  shared  or  decentralised  management  with  third  countries.  The 
management  of  the  actions  will  be  devolved  to  the  EC  delegations  in  the  beneficiary 
countries. 

MONITORING AND EVALUATION 

5.5. 

Monitoring system 

This  will  depend  on  the  type  of  delivery  mechanism  of  support  in  each  country  (budget  or 
programme support). 

5.6. 

Evaluation 

5.6.1.  Ex-ante evaluation 

The likely impact of the EU sugar reform on ACP Sugar Protocol countries has been analysed 
in  the  overall  Extended  Impact  Assessment  made  in  2003  for  the  sugar  reform,  as  well  as 
specifically for the Protocol countries in a more in-depth analysis by Commission services. A 
price reduction of the order of magnitude of the ones to be tabled by the Commission in its 
sugar reform proposals of July 2004 and June 2005 (reduction in the institutional price for raw 
sugar between 35% and 45%) would likely lead several of the less competitive Sugar Protocol 
countries to stop their sugar exports to the EU, and in some cases could lead to the closure of 
their  sugar  industry.  In  other  countries,  the  sugar  sector  could  adjust  with  more  or  less 
significant restructuring efforts. 

The total annual loss of export revenues of Sugar Protocol countries is likely to be significant, 
with consequences on the social, economic and land use situation of the countries, especially 
where the impact of the reform is expected to be greater, and where the sector relies on the 
EU market. The budget of € 40 million in the first year is of a preparatory nature, to allow the 
ACP  countries,  which  are  already  developing  an  adaptation  strategy,  to  launch  immediate 
investments  and  programmes,  in  order  to  anticipate  as  much  as  possible  the  impacts  of  the 
reform. In the following years, the budget to be programmed will likely be influenced by the 
final shape of the sugar reform, yet to be decided. 

5.6.2.  Measures  taken  following  an  intermediate/ex-post  evaluation  (lessons  learned  from 

similar experiences in the past) 

Not applicable (first intervention of this kind in this sector so no evaluations are available). 

EN 

18 

   EN 

 
5.6.3.  Terms and frequency of future evaluation 

The  assistance  scheme  should  be  evaluated  after  a  period  of  implementation  of  three  years, 
but this will be done under the DCECI, rather than under this regulation. 

6. 

Anti-fraud measures  

The  financing  agreement  with  the  beneficiary  country  shall  include  amongst  others  the 
following provisions: 

-  The  beneficiary  undertakes  to  check  regularly  that  the  operations  financed  with  the 
Community  funds  have  been  properly  implemented.  It  shall  take  appropriate  measures  to 
prevent irregularities and fraud and, if necessary, bring prosecutions to recover funds wrongly 
paid. 

-  The  beneficiary  shall  immediately  inform  the  Commission  of  any  element  brought  to  its 
attention which arouses suspicions of irregularities or fraud and of any measure taken to deal 
with them. 

-  The  beneficiary  undertakes  to  take  every  appropriate  measure  to  remedy  any  practices  of 
active  or  passive  corruption  whatsoever  at  any  stage  of  the  procedure  for  the  award  of 
contracts or grants or in the implementation of the related contracts. 

- The beneficiary agrees to the Commission, OLAF and the Court of Auditors of the European 
Communities  conducting  documentary  and  on-the-spot  checks  on  the  use  made  of 
Community funding under the financing agreement. The checks and audits shall also apply to 
contractors and subcontractors who have received Community funding. 

EN 

19 

   EN 

 
8. DETAILS OF RESOURCES 

8.1 Objectives of the proposal in terms of their financial cost 

(Headings of Objectives, actions 
and 
be 
provided) 

outputs 

should 

Type of 
output 

Av. 
cost 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 and 
later 

TOTAL 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

Commitment appropriations in EUR million (to 3 decimal places) 

OPERATIONAL  OBJECTIVE 
No.1 
Enhancing 
competitiveness  of 
sugar 
the 
sector 

12 

 Action 1………………. 

 - Output 1 

 - Output 2 

Action 2………………. 

 - Output 1 

Sub-total Objective 1 

OPERATIONAL  OBJECTIVE 
1…  Diversifying 
No.2 
into 
alternative economic activities  

 Action 1………………. 

 - Output 1 

Sub-total Objective 2 

12 

As described under Section 5.3. 

EN 

20 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
OPERATIONAL  OBJECTIVE 
No.3 1 Addressing broader social, 
economic,  and/or  environmental 
impacts 

Sub-total Objective n 

OPERATIONAL  OBJECTIVE 
No.4 1 Supporting the elaboration 
of  country  specific  adaptation 
strategies 

Sub-total Objective n 

TOTAL COST 

Recognising the diversity of situations of Sugar Protocol countries, in terms of impact of the reform and of responses, this assistance 
scheme emphasises the need for each country to develop country-specific strategies, pursuing one or a combination of the objectives 
mentioned in the table. These strategies are in the process of being elaborated in each country. It is hence not possible at this stage, to 
specify the amounts to be directed to each one of these objectives. Budget envelopes per country are however likely to be in a range of 
€ 1 to 4 million in 2006, taking into account the different levels of needs. 

EN 

21 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.2 

Administrative Expenditure 

8.2.1  Number and type of human resources 

Types of 
post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTEs) 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 

A*/AD 

1(a) + 1(b) 

B*, 
C*/AST 

0 

Officials 
or 
temporary 
staff13 
(XX 01 
01) 

Staff  financed14  by 
art. XX 01 02 

1(c) 

staff15 
Other 
financed  by  art.  XX 
01 04/05 

10(d) 

TOTAL 

13 

8.2.2  Description of tasks deriving from the action 

a 

b 

c 

d 

=>  DEV:  support  to  delegations  in  the  dialogue  with  beneficiary 
countries on and assessment of the adaptation strategies, management of 
different proposals i.a. referred to in Articles 5 and 9. 

=>  AIDCO  (management  and  presentation  of  various  proposals 
according to procedures referred to in Article 7) 

=> AIDCO support to b 

=>  Contractual  Agents  in  delegations:  management  of  the  budget  line 
and assistance programmes 

8.2.3 Sources of human resources (statutory) 

(When more than one source is stated, please indicate the number of posts originating from 
each of the sources) 

(cid:133) 

Posts currently allocated to the management of the programme to be replaced 
or extended 

a ×  Posts pre-allocated within the APS/PDB exercise for year n 

13 
14 
15 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount. 

EN 

22 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:133) 

(cid:133) 

Posts to be requested in the next APS/PDB procedure 

Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 
(internal redeployment) 

b x  Posts required for year n although not foreseen in the APS/PDB exercise of the 

year in question 

8.2.4  Other  Administrative  expenditure  included  in  reference  amount  (XX  01  04/05  – 

Expenditure on administrative management) 

Budget line 

(number and heading) 

EUR million (to 3 decimal places) 

Year 
n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n+5  

and 
later 

TOTAL 

Technical 

1 
and 
assistance (including related staff costs) 

administrative 

 Executive agencies16 

 Other 

technical 

and 

administrative 

assistance 

 - intra muros  

 - extra muros 

1,200 

 Total  Technical  and  administrative 
assistance 

1,200 

8.2 .5  Financial cost of human resources and associated costs not included in the reference 

amount 

Type of human resources 

Year n 

Year n+1  Year n+2  Year n+3  Year n+4 

Year n+5 

and later 

EUR million (to 3 decimal places) 

Officials and temporary staff (XX 01 
01) 

0,306 

16 

Reference should be made to the specific legislative financial statement for the Executive Agency(ies) 
concerned. 

EN 

23 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Staff  financed  by  Art  XX  01  02 
(auxiliary, END, contract staff, etc.) 

0,092 

(specify budget line) 

Total cost of Human Resources 
and associated costs (NOT in 
reference amount) 

0,398 

Calculation– Officials and Temporary agents 

Reference should be made to Point 8.2.1, if applicable 

The average cost of an official is € 108.000. 

Calculation– Staff financed under art. XX 01 02 

Reference should be made to Point 8.2.1, if applicable 

The average cost of a contractual agent is € 91.680. 

8.2.6 Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n+5 

and 
later 

TOTAL 

Year 
n 

0,030 

0 

 XX 01 02 11 01 – Missions 

 XX 01 02 11 02 – Meetings & Conferences 

 XX 01 02 11 03 – Committees17  

 XX 01 02 11 04 – Studies & consultations 

0,050 

 XX 01 02 11 05 - Information systems 

 2 

Total 

Other  Management 

Expenditure (XX 01 02 11) 

3 

Other 

expenditure 

administrative 
including reference to budget line) 

nature 

of 

an 
(specify 

0 

0 

0 

17 

Specify the type of committee and the group to which it belongs. 

EN 

24 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Total Administrative expenditure, other 
than human resources and associated 
costs (NOT included in reference 
amount) 

0,080 

Calculation - Other administrative expenditure not included in reference amount 

Total required amount for missions: € 30.000 

2 missions to the Pacific: (average cost/mission € 6.000) = € 12.000  

2 missions to Austral Africa (average cost/ mission; € 5.000) = € 10.000 

2 missions to the Caribbean (average cost/mission: € 4.000) = € 8.000 

A study will be required for an amount of € 50.000 

EN 

25 

   EN