Commission Regulation (EC) No 968/2006 of  27 June 2006  laying down detailed rules for the implementation of Council Regulation (EC) No 320/2006 establishing a temporary scheme for the restructuring of the sugar industry in the Community
Date: 2006-06-27
Institutions: European Commission
Subjects: EU financing arrangements, aid for restructuring, common agricultural policy, product diversification, sugar industry

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COMMISSION REGULATION (EC) No 968/2006

of 27 June 2006

laying down detailed rules for the implementation of Council Regulation (EC) No 320/2006
establishing a temporary scheme for the restructuring of the sugar industry in the Community

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 320/2006 of 20
February 2006 establishing a temporary scheme for the restruc-
turing of the sugar industry in the Community and amending
Regulation (EC) No 1290/2005 on the financing of
the
common agricultural policy (1), and in particular Article 12
thereof,

Whereas:

(1)

(2)

(3)

Regulation (EC) No 320/2006 provides for a restruc-
turing aid for those undertakings which decide to give
up their quota production, with part of the aid reserved
for beet, cane and chicory growers as well as machinery
contractors, in order to compensate for losses resulting
from the closure of sugar factories. It also provides for an
aid for diversification to Member States for diversification
measures in the regions concerned by factory closures,
for a transitional aid to full-time refiners and for a transi-
tional aid to certain Member States.

Before submitting an application for restructuring aid, the
undertakings are to consult sugar beet, cane and chicory
growers,
in accordance with Article 3(2) of Regulation
(EC) No 320/2006. In order to ensure that growers and
other interested parties are offered a fair opportunity to
give their views, detailed rules
the consultation
process should be established.

for

Restructuring aid is granted in respect of the marketing
year for which the quota is renounced. Hence, in the case
where sugar, isoglucose or inulin syrup is withdrawn or
carried forward from the previous marketing year and
becomes the first quota production of
the marketing
year for which an undertaking plans to renounce its
quota, the undertaking should be allowed to make one
single application for the renunciation of the quota in
two successive marketing years, receiving for each part of
the quota the amount of restructuring aid applicable to
the marketing year for which the quota is renounced.

(1) OJ L 58, 28.2.2006, p. 42.

(5)

(6)

(7)

(8)

In relation to the renunciation of quotas, Article 3 of
Regulation (EC) No 320/2006 sets out the options of
full or partial dismantling of the production facilities,
which give rise to different amounts of restructuring
aid. While the conditions applicable to those two
options should take into account that a higher amount
of restructuring aid is granted to full dismantling, because
of the higher costs involved, it is considered appropriate
to allow for the possibility to keep parts of the factory
which are not part of the production line, if they can be
used for other purposes foreseen in the restructuring
plan, especially when such use creates employment. On
the other hand, installations not directly linked to sugar
production should be dismantled if there is no alternative
use for them within a reasonable period of time and
maintaining them would be harmful to the environment.

In order to protect farmers and machinery contractors'
the undertakings should be required to pay
interests,
them their share of the restructuring aid according to
criteria established by the Member State and within a
reasonable period of time after having received the first
instalment of the restructuring aid.

Because of the financial limits of the temporary restruc-
turing fund, the granting of the aid should depend on the
chronological order of the lodging of applications. It is
thus necessary to establish the criteria for how this
chronological order should be determined.

The Member State's decision on the eligibility of an appli-
cation for restructuring aid is based on its acceptance of
the restructuring plan submitted together with the appli-
cation.
It is thus necessary to define the criteria and
procedure for the acceptance of the restructuring plan,
as well as for further amendments to such plan.

limits of

In cases where, due to the financial
the
temporary restructuring fund, the resources of the fund
are momentarily insufficient to grant restructuring aid to
an applicant whose application has been found eligible,
the applicant should be allowed to withdraw his appli-
cation within a certain period. In the absence of with-
drawal,
the application should remain valid with its
original date of lodging and become an application for
the following marketing year.

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(9)

(10)

(11)

The Commission should calculate the amount of aid for
diversification and additional aid for diversification, as
well as of the transitional aid to certain Member States
and inform each Member State of the amount available.
The Member States should inform the Commission about
their national restructuring programmes, detailing the
measures to be undertaken.

the markets

In order to make it easier for full-time refiners who have
lost certain benefits which they held under Council Regu-
lation (EC) No 1260/2001 of 19 June 2001 on the
common organisation of
in the sugar
sector (1) to adapt to the new situation following the
entry into force of Regulation (EC) No 318/2006 of
20 February 2006 on the common organisation of the
sector (2), Regulation (EC) No
markets
320/2006 introduces a transitional aid allocated in
those Member States where refiners within the meaning
of Regulation (EC) No 1260/2001 were established in the
past. The Member States concerned should award the aid
to the full-time refiners established on their territory on
the basis of a business plan prepared by the undertaking
concerned.

in the sugar

In order to enable Member States to control the restruc-
turing process, undertakings receiving an aid should
submit annual progress reports. Member States should
submit progress reports about
the restructuring plans
of those undertakings, refiners' business plans as well
as
to the
Commission.

restructuring programmes

their national

(12) Arrangements should be laid down for controls to be
carried out by Member States in order to ensure in
the restructuring plan related to the
particular
granting of
restructuring aid and the business plan
related to the granting of aid to full-time refiners are
being complied with.

that

HAS ADOPTED THIS REGULATION:

CHAPTER I

INTRODUCTORY PROVISIONS

Article 1

Scope and definitions

1.
This Regulation lays down detailed rules for the imple-
mentation of the measures provided for in Articles 3, 6, 7, 8
and 9 of Regulation (EC) No 320/2006 and financed by the
restructuring fund established by Article 1 of that Regulation.

For

the purposes of

2.
the definitions
provided for in Article 2 of Regulation (EC) No 320/2006
shall apply.

this Regulation,

The definition of ‘working day’ provided for in Article 2(2) of
Council Regulation (EEC, Euratom) No 1182/71 (3) shall also
apply.

CHAPTER II

CONDITIONS FOR GRANTING RESTRUCTURING AID

Article 2

Consultation in the framework of agreements within the
trade

1.
the
The consultation conducted in the framework of
relevant agreements within the trade as referred to in the
second subparagraph of Article 3(2) of Regulation (EC) No
320/2006 shall be based on a detailed timetable and a draft
restructuring plan drawn up by the undertaking concerned.

The relevant agreement with the trade shall be the one
concluded for the marketing year in which the consultation
takes place.

The representatives of the workers and other parties concerned
by the restructuring plan but not taking part in the relevant
agreement within the trade may be invited by the undertaking
to take part in the consultation as observers.

(13)

It is necessary to provide for penalties to be applied in
the case where an undertaking does not comply with its
obligations under the restructuring plan or the business
plan.

2.
The consultation shall involve all elements of the restruc-
turing plan referred to in Article 4(3) of Regulation (EC)
No 320/2006.

(14)

The Fund Committee has not delivered an opinion within
the time-limit set by its chairman,

(1) OJ L 178, 30.6.2001, p. 1. Regulation repealed by Regulation (EC)

No 318/2006.

(2) OJ L 58, 28.2.2006, p. 1.

3.
The invitation to the consultation shall be sent by the
undertaking concerned. It shall be accompanied by the draft
restructuring plan and a detailed agenda for the meeting to
be held. A copy of
the invitation and the accompanying
documents shall be sent at the same time to the competent
authority of the Member State.

(3) OJ L 124, 8.6.1971, p. 1.

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Unless an agreement can be found earlier, the consultation
4.
shall consist of at least two meetings and shall last for up to 30
days as from the day on which the invitation to the consul-
tation was sent.

facilities which are necessary to extract and process or
concentrate sugar from sugar beet or cane, starch from
cereals, glucose from starch or inulin from chicory;

The confirmation that

5.
the restructuring plan has been
prepared in consultation, as referred to in Article 4(2)(b) of
Regulation (EC) No 320/2006, shall be based on:

(a)

the invitation sent by the undertaking concerned and
received by the other parties;

(b) the part of the facilities other than those referred to in point
(a) which are directly related to the production of sugar,
isoglucose or
inulin syrup and necessary to deal with
production under the quota renounced, even if it could be
used in relation with the production of other products, such
as:
for
producing energy; facilities to deal with sugar beet pulp
or molasses; facilities for internal transport;

for heating or processing water, or

facilities

(b) the signatures of

the participants to the meetings or a
statement of the eventual abstention from participation of
any of the invited parties;

(c) all other facilities, such as packaging facilities,

left unused
and to be dismantled and removed for environmental
reasons.

(c)

the draft restructuring plan as amended by the undertaking
concerned after the consultation, specifying the elements
agreed by the parties, as well as the elements not agreed;

(d) if any, the position papers of the parties to the agreement
within the trade, the opinion of the workers' representative
and the opinions of the other invited parties.

6.
For the 2006/2007 marketing year, Member States may
take into account consultations conducted in the framework of
the relevant agreements within the trade which took place
before the entry into force of this Regulation, even if they do
not comply with the requirements of this Regulation.

Article 3

Renunciation of quota

As from the marketing year for which the quota is renounced in
accordance with Article 3 of Regulation (EC) No 320/2006, no
production of sugar, isoglucose or inulin syrup and no sugar,
isoglucose or inulin syrup carried forward or withdrawn from
the previous marketing year may be deemed as a production
under that quota as regards the factories concerned.

Article 4

Dismantling of production facilities

2.
In the case of partial dismantling referred to in Article
3(1)(b) of Regulation (EC) No 320/2006, the requirement to
dismantle the production facilities shall concern the facilities
referred to in paragraph 1 of
this Article that are not
intended to be used for other production or other use of the
factory site in accordance with the restructuring plan.

Article 5

Coherence between different sources of funding

The Member States shall ensure the coherence and the comple-
mentarity of measures or actions financed by the restructuring
fund and by other Community funds at regional or national
level, as well as the absence of duplication between them.

CHAPTER III

APPLICATION FOR AND GRANTING OF RESTRUCTURING AID

Article 6

Member States obligations

1.
Forty-five days after it has received the copy of the invi-
tation to the consultation as referred to in Article 2(3) at the
latest, the Member State shall inform the parties involved in the
restructuring plan of its decision on:

1.
In the case of full dismantling referred to in Article 3(1)(a)
of Regulation (EC) No 320/2006, the requirement to dismantle
the production facilities shall concern:

(a)

(a) all facilities which are necessary to produce sugar, isoglucose
or inulin syrup, as for example: facilities to store, analyse,
wash and cut sugar beet, cane, cereals or chicory; all

the percentage of the restructuring aid to be distributed to
the growers of beet, cane and chicory and to machinery
contractors,
the objective criteria for the distribution of
that part of the aid between the two groups and within
each group,
the
interested parties, and the period referred to in Article
3(6) of Regulation (EC) No 320/2006;

as determined after

consultation of

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(b) the period, expiring on 30 September 2010 at the latest, for
dismantling production facilities and for complying with the
social and environmental commitments
referred to in
Articles 3(3)(c) and 3(4)(c) of Regulation (EC) No 320/2006;

concluded by the social partners at sector or company level
related to the restructuring of the sugar industry.

(c)

if appropriate, the national specific requirements for the
social and environmental commitments, in the restructuring
plan, which go beyond the statutory minimum requirements
imposed by Community law, as referred to in Articles
3(3)(c) and 3(4)(c) of Regulation (EC) No 320/2006.

By way of derogation from paragraph 1, the Member State
2.
shall, in the case where Article 2(6) applies, inform the parties
of its decision no later than 15 July 2006.

Article 8

Receipt of the application for restructuring aid

1.
The granting of restructuring aid within the financial
limits referred to in Article 10(1) and (2) of Regulation (EC)
No 320/2006 shall be based on the chronological order of
lodging of
restructuring aid,
based on dates and hours at local time as stated by acknowl-
from the Member State concerned in
edgments of receipt
accordance with paragraph 3 of this Article.

the complete applications for

3. Machinery contractors shall be compensated for the loss
incurred following the loss of value of
specialised
machinery, which can not be used for other purposes.

their

An application for restructuring aid shall be deemed to be
2.
complete after the reception by the competent authority of the
Member State concerned of all
the elements referred to in
Article 4(2) and (3) of Regulation (EC) No 320/2006.

Article 7

Application for restructuring aid

Each application for restructuring aid shall cover one

1.
product and one marketing year.

3.
The competent authority of the Member State shall send
to the undertaking concerned an acknowledgment of receipt
indicating the date and hour of the lodging of a complete
restructuring aid, within five working days
application for
after the date on which the application is deemed to be
complete.

By way of derogation from paragraph 1, where a quota to
2.
be renounced has been partly fulfilled by a production carried
forward or withdrawn from the previous marketing year, the
undertaking may renounce the full quota for the factory or
in the
factories concerned, under full or partial dismantling,
following two steps:

4.
In the case of an incomplete application, the competent
authority of the Member State shall, within five working days
upon reception, return the application to the applicant and
specify the conditions that are not complied with.

the part of

(a) as from the first marketing year concerned by the appli-
the quota for which there is no
cation,
production shall be renounced with a request
the
amount of restructuring aid for full or partial dismantling
applicable to that marketing year;

for

5.
An application which is not deemed to be complete by
the deadline laid down in Article 4(1) of Regulation (EC) No
320/2006 shall not be taken into account for the marketing
year concerned.

(b) the remaining part of the quota concerned shall be subject
to the temporary restructuring amount provided for in
Article 11 of Regulation (EC) No 320/2006 and shall be
renounced as from the next marketing year with a request
for the amount of restructuring aid for full or partial
dismantling applicable to that marketing year.

In the case of application of this paragraph, the undertaking
may submit one single application for the two marketing years
concerned.

3.
The application for restructuring aid shall specify the
amount of allocated quota to be renounced for each of the
factories of the undertaking concerned and shall be consistent
including agreements
with the relevant collective agreements,

6. Within two working days after
issuing an acknowl-
edgment of receipt, the competent authority of the Member
State shall
inform the Commission thereof, using the model
table set out in the Annex. If applicable, a separate table shall
be used for each product and each marketing year concerned.

Article 9

Eligibility for the restructuring aid

1. Without prejudice to the provisions of Article 10, the
competent authority of the Member State shall decide on the
eligibility of an application for
restructuring aid and shall
inform the applicant of its decision within 30 working days
upon reception of the complete application, but at least 10
working days before the deadline provided for in Article 5(1)
of Regulation (EC) No 320/2006.

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For the application to be considered eligible, the restruc-

2.
turing plan shall:

(a)

include a summary of the main objectives, the measures and
actions as well as the estimated costs of these measures and
actions, the financial plan and the time schedules;

(b) specify for each factory concerned the amount of quota to
be renounced, which shall be lower than or equal to the
production capacity to be fully or partially dismantled;

(c)

include an attestation that the production facilities will be
fully or partially dismantled and removed from the
production site;

(d) take into account the losses or costs involved, between the
aid referred to in point (b) of paragraph 3 of Article 4 of
Regulation (EC) No 320/2006, the closure and dismantling
of the facilities referred to in point (c) of that paragraph, the
investments referred to in point (e) of that paragraph, the
social plan referred to in point (f) of that paragraph and the
environmental plan referred to in point
that
paragraph;

(g) of

(e) clearly determine all the actions and costs financed by the
restructuring fund and,
the other related
elements intended to be financed by other Community
funds.

if appropriate,

3.
If the conditions set out in paragraph 2 are not satisfied,
the Member State shall inform the applicant of the reasons for
this and fix a deadline within the time-limit referred to in
Article 4(1) of Regulation (EC) No 320/2006, by which the
restructuring plan may be adjusted accordingly.

The Member State shall decide on the eligibility of the adjusted
application within 15 working days after the deadline referred
to in the first subparagraph, but at least 10 working days before
the deadline provided for in Article 5(1) of Regulation (EC) No
320/2006.

If the adjusted application is not presented in due time or is
considered ineligible, the application for restructuring aid shall
be rejected and the Member State shall inform the applicant and
the Commission thereof within five working days. The lodging
of a new application from the same applicant shall be subject to
the chronological order referred to in Article 8.

4. Where an application is considered eligible, the Member
State shall notify the Commission within two working days
after its decision, using the model table set out in the Annex.

the eligibility of an application or an adjusted application at
least eight working days before the deadline provided for in
Article 5(1) of Regulation (EC) No 320/2006 and notify its
decision to the Commission on the same day.

Article 10

Granting of the restructuring aid

1.
The Commission shall establish a list of the complete
applications for restructuring aid in the chronological order of
their lodging as stated by acknowledgments of receipt from the
Member State concerned.

By the deadline provided for in Article 5(1) of Regulation
2.
(EC) No 320/2006,
the Commission shall determine the
estimated availability of the financial resources in the restruc-
turing fund for all the applications concerning the following
marketing year, or in the case of
the applications for the
2006/2007 marketing year, the applications concerning that
marketing year, received by the deadline set out
in Article
that Regulation and found eligible by the Member
4(1) of
State, as well as all the aids related to them.

The Commission shall inform the Committee on the Agri-
3.
cultural Funds referred to in Article 41(1) of Council Regulation
(EC) No 1290/2005 (1) on the decisions taken in accordance
with paragraph 1 of this Article. For the 2006/2007 marketing
year,
inform the Funds Committee
referred to in Article 13(1) of Council Regulation (EC)
No 1258/1999 (2).

the Commission shall

The Member States shall notify to the applicants the grant
4.
of the restructuring aid for their respective eligible restructuring
plan by the deadline provided for in Article 5(1) of Regulation
(EC) No 320/2006. A full copy of the approved restructuring
plan shall be sent by the competent authority of the Member
State to the Commission.

Article 11

Amendments to the restructuring plan

1.
As soon as the restructuring aid is granted, the beneficiary
shall carry out all measures detailed in the approved restruc-
turing plan and respect the commitments included in its appli-
cation for restructuring aid.

Any amendment to an approved restructuring plan shall
2.
be agreed by the Member State on the basis of a request from
the undertaking concerned:

(a) explaining

the

reasons

and

implementing

problems

encountered;

5.
By way of derogation from paragraphs 1, 3 and 4, for the
2006/2007 marketing year, the Member State shall decide on

(1) OJ L 209, 11.8.2005, p. 1.
(2) OJ L 160, 26.6.1999, p. 103.

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(b) presenting the adjustments or new measures proposed and

(b) the additional aid for diversification provided for in Article 7

the expected effects;

of Regulation (EC) No 320/2006;

(c) detailing the financial and the timing implications.

(c) the transitional aid to certain Member States provided for in

Article 9 of Regulation (EC) No 320/2006.

The amendments may not modify the total amount of the
restructuring aid to be granted or the temporary restructuring
amounts to be paid in accordance with Article 11 of Regulation
(EC) No 320/2006.

The Member State shall notify the amended restructuring plan
to the Commission.

Article 12

Withdrawal or postponement of a restructuring application

1.
Eligible applications for which the restructuring aid cannot
be granted for the marketing year for which the renunciation of
quota has been requested may be withdrawn by the applicant
within two months after the deadline provided for in Article
5(1) of Regulation (EC) No 320/2006.

The amounts referred to in paragraph 1(a) and (b) shall be

2.
based on:

(a)

the amount of the aid for diversification provided for in
Article 6(2) of Regulation (EC) No 320/2006 multiplied
by the amount of sugar quota renounced in the Member
State concerned for which a restructuring aid is to be
granted as from:

— the 2006/2007 marketing year

in the case of

the

amounts determined in October 2006,

— the 2007/2008 marketing year

in the case of

the

amounts determined in March 2007,

If the undertaking concerned does not withdraw its appli-
2.
cation in accordance with paragraph 1,
it shall, within the
period referred to in that paragraph, adjust the restructuring
plan concerned to take into account the amount of the restruc-
turing aid for the following marketing year as laid down in
Article 3(5) of Regulation (EC) No 320/2006.

— the 2008/2009 marketing year

in the case of

the

amounts determined in March 2008,

— the 2009/2010 marketing year
amounts determined March 2009;

in the case of

the

For the purposes of Article 8(1), the date of lodging of the
initial application shall be taken into account.

In the case referred to in the first subparagraph, the applicant
shall postpone the renunciation of his quota for one marketing
year and shall remain subject to the payment of the temporary
restructuring amount provided for in Article 11 of Regulation
(EC) No 320/2006.

(b) the amount of the additional aid for diversification corre-
sponding to the highest of
the percentages obtained in
accordance with Article 7(1) of Regulation (EC) No
320/2006, and multiplied by the total amount of sugar
quota referred to in point (a) of this paragraph, up to:

— the 2006/2007 marketing year

in the case of

the

amounts determined in October 2006,

CHAPTER IV

OTHER AIDS FROM THE RESTRUCTURING FUND

— the 2007/2008 marketing year

in the case of

the

amounts determined in March 2007,

Article 13

Amounts of aid per Member State

By 31 October 2006 for the 2006/2007 marketing year,
1.
by 31 March 2007 for the 2007/2008 marketing year, by 31
March 2008 for the 2008/2009 marketing year and by 31
March 2009 for
the
Commission shall fix the amounts attributed to each Member
State under the restructuring fund for:

the 2009/2010 marketing

year,

(a) the aid for diversification provided for in Article 6 of Regu-

lation (EC) No 320/2006;

— the 2008/2009 marketing year

in the case of

the

amounts determined in March 2008,

— the 2009/2010 marketing year

in the case of

the

amounts determined in March 2009.

The amount resulting from the calculation referred to in the
first subparagraph shall be reduced, if applicable, by all the
amounts of the additional diversification aid previously fixed
in accordance with the method set out in this point;

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(c)

if applicable, the amounts of the transitional aid to certain
Member States provided for in Article 9 of Regulation (EC)
No 320/2006.

The amounts resulting from the method laid down in
amounts
added to the

3.
paragraph 2 shall be
determined pursuant to paragraph 1 for the previous years.

respective

Article 14

National restructuring programmes

1.
By 31 December 2006 and by 30 September 2007, 2008
and 2009, the Member States concerned shall notify to the
Commission their national restructuring programmes, detailing
the measures to be undertaken within the limit of the amount
of the aid for diversification determined pursuant to Article
13(2)(a), the amount of the additional aid for diversification
determined pursuant
to Article 13(2)(b) and the amount
for transitional aid to certain member States referred to in
Article 13(2)(c).

National restructuring programmes shall

2.
the following elements:

include at least

(a) a summary of the main objectives, measures, actions, costs,
financing interventions and time schedules provided for in
each of the regions concerned;

(b) a description of the regions concerned and an analysis of
the problems linked to the restructuring of the sugar sector;

(c) a presentation of the purposes and the actions or measures
foreseen, demonstrating their consistency with the eligible
restructuring plans referred to in Article 9, the rural devel-
opment policy in the regions concerned and other measures
undertaken or foreseen in these regions, in particular under
other Community funds;

(d) a time schedule of all the actions or measures provided for
and the criteria followed to differentiate them from similar
actions or measures intended to be financed by other
Community funds;

(e)

if appropriate, the amount of the additional aid for diversi-
fication to be granted to growers of sugar beet or cane
giving up their production and the objective and non-discri-
minatory criteria to be followed to distribute that aid;

(f) a financial plan detailing all the costs by action or measure

and the timetable foreseen for the payments.

The actions or measures provided for

programme

shall

be

in a national
by

implemented

3.
restructuring
30 September 2010.

Article 15

Transitional aid to full-time refiners

A full-time refiner who, on 30 June 2006, was a refiner
1.
within the meaning of Article 7(4) of Regulation (EC) No
1260/2001 may apply for the transitional aid provided for in
Article 8(2) of Regulation (EC) No 320/2006, to be granted by
the Member State on whose territory it is situated.

The full-time refiner

2.
lodge the aid application,
shall
accompanied by the business plan referred to in Article 8(3)
of Regulation (EC) No 320/2006, by a deadline to be
determined by the Member State concerned, which shall be
no later than 30 September 2007.

3.
The business plan referred to in Article 8(3) of Regulation
(EC) No 320/2006 shall include at least the following elements:

(a) a summary of the main objectives, measures, actions, costs,

financing interventions and time schedules;

(b) a description and analysis of the problems encountered to
adapt to the reform of the Community sugar market orga-
nisation;

(c) a presentation of the actions or measures foreseen, demon-
strating their consistency with other measures undertaken or
foreseen under other Community funds
in the region
concerned under which the applicant is a beneficiary;

(d) a time schedule of all the actions or measures foreseen and
the criteria followed to differentiate them from similar
actions or measures intended to be financed by other
Community funds under which the applicant is a bene-
ficiary;

(e) a financial plan detailing all the costs by action or measure

and the timetable foreseen for the payments.

Actions or measures foreseen in the business plan shall
4.
include one or more of the following elements:
investments,
dismantling of production facilities, contributions to operational
costs, provisions for depreciation of equipment and other
provisions considered to be necessary in order to adapt to the
new situation.

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The Member State shall decide on the eligibility of the
5.
business plan within the financial limits of Article 8(2) of Regu-
lation (EC) No 320/2006 and shall notify the applicant and the
Commission of its decision within 30 working days after the
deadline referred to in paragraph 2 of this Article.

When a part of the additional aid for diversification is granted
to sugar beet or cane growers giving up their production in
accordance with Article 7(2) of Regulation (EC) No 320/2006,
the Member State shall ensure that the growers concerned have
definitively given up sugar beet or cane production.

The Member State shall, within the same period,
inform the
Commission of the amounts to be awarded to each refiner
the objective and non-discriminatory
and,
criteria used to distribute the aid between the different full-
time refiners located on their territory.

relevant, of

if

The actions or measures provided for in the business plan

6.
shall be implemented by 30 September 2010.

CHAPTER V

PAYMENT OF THE AIDS

Article 16

Payment of the restructuring aid

The payment of the each instalment of the restructuring
1.
aid, as referred to in Article 10(4) of Regulation (EC) No
320/2006, shall be subject to the lodging of a security of an
amount equal
the instalment
concerned.

the amount of

to 120 % of

2.
In the case where the payments to growers and machinery
contractors are carried out directly by the Member State in
accordance with Article 19(2), the amount of the instalment
concerned shall be reduced by the amounts to be paid to the
growers and machinery contractors.

The restructuring aid shall not be paid later than 30

3.
September 2011.

4.
If appropriate, the Commission shall fix, by 31 January
2008, 2009, 2010 and 2011, the percentage of the first and
second payments referred to in the second subparagraph of
Article 10(4) of Regulation (EC) No 320/2006, as well as the
provisional date for the second payment.

Article 17

2.
The first payment may be made in September 2007. The
aid for diversification, the additional aid for diversification and
the transitional aid to certain Member States shall not be paid
later than 30 September 2011.

Article 18

Payment of the transitional aid to full-time refiners

1. Within the limits referred to in Article 8(2) of Regulation
(EC) No 320/2006, the payments of the transitional aid to full-
time refiners, for eligible expenses on the basis of a business
plan, shall be made by the Member State to the beneficiaries in
two instalments:

(a) 40 % in September 2007;

(b) 60 % in March 2008.

The payment of each instalment shall be subject to the lodging
of a security of an amount equal to 120 % of the amount of the
instalment concerned.

By way of derogation from paragraph 1,

2.
expenses may be
covered by one
September 2007, provided that, before 15 September 2007:

single payment

the total
in

(a) all of the measures and actions foreseen in the business plan

have been executed;

(b) the final
submitted;

report

referred to in Article 24(2) has been

(c)

the Member State has carried out the controls referred to in
Article 25.

The payment shall in this case not be subject to the lodging of a
security.

Payment of the aid for diversification, the additional aid
for diversification and the transitional aid to certain
Member States

Article 19

Payment to growers and machinery contractors

1. Within the limit of the amounts determined in accordance
with Article 13(3), the payment of the aid for diversification, of
the additional aid for diversification and of the transitional aid
to certain Member States shall be made by the Member State to
the beneficiaries twice a year, in March and September for the
eligible expenses actually incurred, documented and controlled.

No later than two months after having received the first
1.
instalment of the restructuring aid and on the basis of the
information given by the Member State in accordance with
Article 6(1),
the undertakings shall make the payments to
growers of beet, cane and chicory as well as to machinery
contractors.

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The payments to growers and machinery contractors may
2.
be carried out directly by the Member State, by way of reducing
accordingly the amount of restructuring aid to be paid as
provided for in Article 16(2), within the limit set out
in
paragraph 3 of this Article. In that case, the payments shall
be made simultaneously with the payment of the part of the
restructuring aid due to the undertaking.

The amount of the payment referred to in paragraph 1
3.
and 2 shall not be higher than 50 % of the first instalment. If
this amount does not cover the entire sum to be paid, the
remaining part shall be paid:

(a) no later than two months after the undertaking has received
the second instalment of the aid, where the payment is
carried out by the undertaking;

(b) simultaneously with the payment of the second instalment
of the restructuring aid to be paid to the undertaking, where
the payment is carried out directly by the Member State.

Article 20

Decision to postpone payments

If the Commission decides to postpone the payments of the aid
for diversification, of the additional aid for diversification, of the
transitional aid to full-time refiners or of the transitional aid to
certain Member States in accordance with Article 10(5) of Regu-
lation (EC) No 320/2006, it shall inform the Member States of
its decision before 31 May and 31 January.

Article 21

Currency

For the temporary restructuring fund,

1.
the amounts of
commitments and payments by the Commission and the
amounts of the temporary restructuring amount, as well as
the amounts of expenditure in declarations of expenditure by
the Member States shall be expressed and paid in euro.

2.
For any payment made in a currency other than the euro,
the exchange rate shall be the most recent exchange rate set by
the European Central Bank prior to the first day of the month
of the operative event for the payment concerned.

(a) all of the measures and actions foreseen in the restructuring
and the

plan,
business plan, as appropriate, have been implemented;

restructuring programmes

the national

(b) the final
submitted;

report

referred to in Article 23(2) has been

(c)

the Member States have carried out the controls referred to
Article 25;

(d) for the restructuring aid, the aid to growers of sugar beet,
cane and chicory and machinery contractors has been paid
by the undertaking, unless these payments are carried out
directly by the Member State in accordance with Article
19(2);

(e)

if applicable, the surplus levy relating to the out of quota
sugar, isoglucose or inulin syrup in stocks at the beginning
of
from which the quota is
renounced, has been paid.

the marketing year as

By way of derogation paragraph 1, on request of the
2.
beneficiary, a security may be partially released for
the
amount of the expenditure actually incurred with regard to
the actions and measures under
the restructuring plan or
business plan, provided that
the inspection referred to in
Article 25(1) has been effectively carried out and the inspection
report referred to in Article 25(3) has been established.

Except in the case of force majeure, the security shall be
3.
forfeited if the conditions set out in paragraph 1 have not been
fulfilled on 30 September 2011 at the latest.

CHAPTER VI

REPORTING, CONTROLS AND PENALTIES

Article 23

Reporting by the undertakings

1.
inform
Undertakings applying for restructuring aid shall
the parties involved in the consultation process referred to in
Article 1 of:

(a)

the decisions taken by the Member State in accordance with
Articles 8, 9, 10 and 11;

The operative event shall be the date of payment.

(b) what has actually been carried out each year under the

approved restructuring plan.

Article 22

Release of securities

The securities referred to in Articles 16(1) and 18(2) shall

1.
be released provided that:

Undertakings receiving an aid under the restructuring fund
2.
shall submit an annual progress report
to the competent
authority of the Member State that granted the aid, no later
than three months after the end of the marketing year during
which the corresponding measures are carried out.

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the actions or measures taken and
The report shall detail
expenses
incurred during the preceding marketing year,
comparing them to the actions or measures and expenses
detailed in the
the business plan
concerned.

restructuring plan or

No later than three months after the implementation of all of
the actions and measures foreseen under the restructuring plan
or the business plan concerned, the undertaking shall submit to
the competent authority of the Member State a final report
summarising these actions and measures and the expenses
incurred.

Article 24

Reporting by the Member States

reports

1. Member States shall submit to the Commission annual
progress
the
national restructuring programmes and the business plans, no
later than six months after the end of
the marketing year
concerned.

restructuring plans,

concerning the

Those reports shall contain:

(a) a description of actions or measures undertaken and respect

of time-frame;

Article 25

Controls

1.
Each undertaking and production site in respect of which
an aid is received under the restructuring fund shall be inspected
by the competent authority of the Member State within three
months after the deadline referred to in Article 23(2).

The inspection shall check that
the restructuring plan or
business plan is being complied with and shall verify the
accuracy and completeness of the information given by the
undertaking in the progress report. The first inspection under
a restructuring plan shall also verify any additional information
given by the undertaking in its application for restructuring aid,
in particular the confirmation referred to in Article 4(2)(b) of
Regulation (EC) No 320/2006.

2.
The inspection shall in all cases cover the elements of the
restructuring plan referred to in Article 4(3) of Regulation (EC)
No 320/2006. For each inspection a report shall be established,
fully describing the work undertaken, the main findings and any
follow-up action required.

The inspection report shall be divided into the following

3.
parts:

(a) a general part, containing, in particular, the following infor-

mation:

(b) a statement of the facts according to at least one on-the-
spot check per factory site for each restructuring plan or
business plan;

(i)

the beneficiary and the production site subject to the
inspection;

(c) a comparison between expenses foreseen and incurred;

(ii)

the persons present;

(d) an analysis of the involvements of other Community funds
and their conformity with the aids financed by the restruc-
turing fund;

(iii) whether notice of the visit was given to the beneficiary

and, if so, the period of advance notification;

(e)

if applicable, any changes to a restructuring plan, reasons
therefore and implications for the future.

(b) for each of the elements of the restructuring plan listed in
Article 4(3) of Regulation (EC) No 320/2006 and for each
business plan, a part reflecting separately the checks carried
out and containing, in particular, the following information:

2.
By 30 June 2011, the Member State shall submit to the
Commission a final progress report comparing the actions or
measures implemented and the expenses incurred to the ones
foreseen in the restructuring plans, the national restructuring
programmes
and explaining the
reasons for deviations.

and the business plans

(i)

the requirements and the standards subject
inspection;

to the

(ii)

the nature and extent of the checks carried out;

The final progress report shall also include a list of the penalties
applied during the complete period as well as a statement that
no levies, penalties or amounts related to the sugar, isoglucose
or inulin syrup previously produced by factories partially or
fully dismantled have been left unpaid.

(iii) the findings;

(iv) the elements of the restructuring plan or business plan
in relation to which non-compliances are found;

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(c) an evaluation part giving an assessment of the importance
of the non-compliance in respect of each element on the
basis of
its severity, extent, degree of permanence and
previous history with an indication of any non-compliance
which has led or should lead to the adoption of measures in
accordance with Article 26 or 27.

The Member State may grant the beneficiary a period of
3.
two months to achieve compliance with the commitment under
the restructuring plan or the business plan.

Article 27

Penalties

The beneficiary shall be informed of any non-compliance

4.
found.

The inspection report shall be finalised within one month

5.
after the inspection.

1.
If a beneficiary does not comply with one or more of his
commitments under the restructuring plan, the business plan or
the national restructuring programme, as appropriate, it shall be
required to pay an amount equal to 10 % of the amount to be
recovered under Article 26.

Article 26

Recovery

1. Without prejudice to paragraph 3,
if a beneficiary does
not comply with one or more of his commitments under the
restructuring plan, the business plan or a national restructuring
the aid granted in
programme, as appropriate,
respect of
the commitment(s) concerned shall be recovered
except in the case of force majeure.

the part of

Interest shall be calculated for the period from the 60th
2.
day following that on which the beneficiary is notified of the
obligation to repay aid to the day on which the aid is actually
repaid.

The interest rate shall be the rate applied by the European
Central Bank to its principal
as
published in the C series of the Official Journal of the European
Union, in force on the first calendar day of the month in which
the due date falls,
increased by three and a half percentage
points.

refinancing operations,

2.
The penalties to be imposed pursuant to paragraph 1 shall
not be imposed if the undertaking can demonstrate, to the
satisfaction of
the non-
compliance is due to force majeure and if it has clearly identified
submitted in
the non-compliance in the progress
accordance with Article 23(2).

competent

authority,

report

that

the

3.
If the non-compliance has been committed intentionally
the beneficiary shall be
or as a result of grave negligence,
required to pay an amount equal to 30 % of the amount to
be recovered under Article 26.

CHAPTER VII

FINAL PROVISION

Article 28

Entry into force

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

It shall apply from 1 July 2006.

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

Done at Brussels, 27 June 2006.

For the Commission

Mariann FISCHER BOEL
Member of the Commission

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