COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Simplification: Modification of Regulation (EEC) No 386/90 Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 386/90 on the monitoring carried out at the time of export of agricultural products receiving refunds or other amounts
Date: 2007-08-31
Institutions: Provisional data
Subjects: agricultural product, customs inspection, customs regulations, export, export refund, monetary compensatory amount

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 31.8.2007 
COM(2007) 489 final 

2007/0178 (CNS) 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

Simplification: Modification of Regulation (EEC) No 386/90 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EEC) No 386/90 on the monitoring carried out at the time of 
export of agricultural products receiving refunds or other amounts 

(presented by the Commission) 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

Simplification: Modification of Regulation (EEC) No 386/90 

In the framework of control on export refunds, Article 3(2) of Regulation (EEC) No 386/901 
requires Member States' authorities to execute physical checks on goods for a scrutiny rate of 
5% per customs office, per calendar year and per product sector. 

A  first  simplification  was  brought  in  by  Council  Regulation  (EC)  No  163/942:  when  a 
Member  State  applies  risk  analysis  in  accordance  with  (now  Regulation  (EC)  No  3122/94), 
the minimum rate may be set on 2% per sector and 5% covering all sectors. 

A  second  simplification  is  now  proposed,  by  which  a  Member  State  applying  risk  analysis 
according to Regulation (EC) No 3122/94 covering all exporters may opt for applying the 5% 
average rate covering all sectors for the complete Member State instead of setting the rate per 
customs office. 

The  measure  has  been  proposed  by  several  Member  States,  in  particular  those  who 
reorganised their customs services and processes by which centralised IT export declaration 
systems  and  a  considerable  reduction  in  the  number  of  customs  offices  caused  a  need  for 
better allocating the control efforts over their national territory. Summarising the control rate 
per  Member  State  as  a  whole  is  only  justified  when  risk  analysis  in  accordance  with 
Regulation  (EC)  No  3122/94  is  applied,  and  it  is  optional  in  order  to  allow  Member  States 
whose  customs  organisation  is  more  complex  to  continue  its  decentralised  control 
management. 

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2 

OJ  L  42,  16.2.1990,  p.6.  Regulation  as  last  amended  by  Regulation  (EC)  No  163/94  (OJ  L  24, 
29.1.1994, p.2) 
OJ l 24, 29.1.1994, P.2 

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EXPLANATORY MEMORANDUM 

Council Regulation (EEC) No 386/90 

Under  its  responsibilities  of  Article  8  of  Council  Regulation  (EEC)  No  729/90  of  21  April 
1970  on  the  financing  of  the  common  agricultural  policy3  the  Council  established  that 
Member States should execute physical checks on goods for which export refunds are claimed 
at  the  time  the  export  formalities  are  completed  and  before  authorisation  is  given  for  the 
goods in question to be exported. This situates at the customs office of export, which is often 
an inland office. The minimum control norm is 5% per customs office, per calendar year and 
per product sector, which may be summarised to 5% for all sectors with a minimum of 2% per 
sector  if  risk  analysis  is  applied  in  the  selection  procedures.  Moreover,  when  export 
declarations are accepted by an internal customs office, physical checks on substitution may 
be carried out by each customs office of exit from the Community (= at the outer border). 

Since  the  introduction  of  these  requirements  in  1990  by  Council  Regulation  (EEC)  No 
386/904  and  in  1994  by  Council  Regulation  (EC)  No  163/945,  customs  organisations 
underwent ongoing IT developments in export procedures, reorganisations due to the opening 
of the internal market and the enlargements of the Union, and they build up more experience 
in  applying  the  control  regulations.  These  developments  had  their  impact  on  the  number  of 
customs offices of export and of exit, their organisation of work and their know-how. 

Although all customs services apply some form of risk management technique, only 7 of the 
27 Member States apply risk analysis in accordance with Regulation (EC) No 3122/946. The 
following  measures  to  improve  the  use  of  risk  analysis  and  to  simplify  the  allocation  of 
physical controls and of substitution checks are proposed. 

5% Physical controls per Member State 

Article  3(2)  of  Regulation  (EEC)  No  386/90  requires  Member  States'  authorities  to  execute 
physical checks on goods for a scrutiny rate of 5% per customs office, per calendar year and 
per product sector. 

In  some  cases  the  customs  office  is  not  a  relevant  criterion  anymore  for  setting  the  annual 
control  rate.  In  some  Member  States  the  number  of  customs  offices  has  decreased,  the 
management  of  controls  has  been  centralised  and  the  use  of  risk  management  techniques 
could lead to proportionally spread physical checks amongst all exporters of refund products. 
Given these developments, Member States noticed that efficient attribution of controls to the 
sectors or exporters where they should be prioritised is hindered by the requirement to lay the 
minimum norm at the level of the customs office of export. For some offices 5% is a too high 
administrative  burden  for  the  few  exporters  concerned  and  for  the  administration,  while  in 
other offices the 5% norm hardly covers the real control needs. 

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6 

OJ  L  94,  28.4.1970,  p.13,  replaced  by  Article  9  of  Regulation  (EC)  No  1290/2005,  OJ  L  209, 
11.8.2005, P.1 
OJ  L  42,  16.2.1990,  p.6.  Regulation  as  last  amended  by  Regulation  (EC)  No  163/94  (OJ  L  24, 
29.1.1994, p.2) 
OJ l 24, 29.1.1994, P.2 
OJ L 330, 21.12.1994, p.31 

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For the sake of efficiency and simplicity and according to the shared management principle of 
controls on budget expenditure, the Member States applying risk analysis in conformity with 
Regulation (EC) No 3122/94 should have the option to apply the minimum control norm on 
national  level,  rather  than  on  the  level  of  the  customs  office  of  export.  Member  States  not 
applying  such  risk  analysis  will  not  benefit  this  summarised  control  rating  and  will  stay 
legally  bound  to  a  control  rate  per  customs  office  of  export.  Member  States  applying 
aforementioned  risk  analysis,  but  preferring  decentralised  control  management  via 
harmonised  legally  binding  rates,  may  continue  today's  standing  practice  in  applying  the 
legally required minimum control rate per customs office of export. 

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2007/0178 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EEC) No 386/90 on the monitoring carried out at the time of 
export of agricultural products receiving refunds or other amounts 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission7, 

Having regard to the opinion of the European Parliament8, 

Whereas: 

(1) 

Since  the  entry  into  force  of  Council  Regulation  (EEC)  No  386/909  a  number  of 
Member  States  have  reorganised  their  customs  services  leading  to  a  significant 
reduction  in  the  number  of  customs  offices.  The  introduction  of  customs  export 
procedures processed electronically with centralised control has reduced the relevance 
of the customs office of export as the basis for the application of checking rates. 

(2)  Moreover, the use of risk management techniques including risk analysis should lead 
to a spread of physical checks amongst all exporters. However, the efficient allocation 
of checks to the sectors or exporters where they should  be prioritised is hindered  by 
the requirement to apply minimum checking rates at the level of the customs office of 
export.  Therefore,  in  the  interests  of  efficiency  and  simplicity  and  according  to  the 
principle  of  shared  management,  those  Member  States  applying  risk  analysis  in 
conformity  with  Community law  should  have the opportunity to apply the minimum 
checking  rate  on  a  national  level,  rather  than  on  the  level  of  the  customs  office  of 
export. 

(3) 

Regulation (EEC) No 386/90 should therefore be amended accordingly, 

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8 
9 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 42, 16.2.1990, p. 6. Regulation as amended by Regulation (EC) No 163/94 (OJ L 24, 29.1.1994, p. 
2). 

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HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EEC) No 386/90 is amended as follows: 

In Article 3(2), the following third subparagraph is added: 

"Where the Member State applies the second subparagraph, it may also choose to replace the 
rate of 5% per customs office by a rate of 5% for its entire territory. The Member State shall 
notify the Commission before it applies or ceases to apply this subparagraph." 

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

Article 2 

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

Done at Brussels,  

For the Council 
The President 

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IMPACT ASSESSMENT FORM 

THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE 
TO SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) 

TITLE OF PROPOSAL 

Draft  Regulation,  modifying  Council  Regulation  (EEC)  No  386/90  of  12  February  1990  on 
the monitoring carried out at the time of export of agricultural products receiving refunds or 
other amounts 

DOCUMENT REFERENCE NUMBER 

COM(2007) 489 final 2007/0178 (CNS) 

THE PROPOSAL 

1. 

Taking  account  of  the  principle  of  subsidiarity,  why  is  Community  legislation 
necessary in this area and what are its main aims? 

The  proposal  does  not  affect  business,  as  it  only  re-arranges  the  management  of 
physical  and  substitution  checks  in  the  framework  of  export  refunds  by  customs 
authorities. 

Community  legislation  is  necessary  in  this  area,  in  order  to  adapt  existing  control 
provisions to changed control environments in some Member States.  

The  main  aims  are  to  simplify  centralised  allocation  of  physical  and  substitution 
controls by customs authorities. 

THE IMPACT ON BUSINESS 

2. 

Who will be affected by the proposal? 

No impact on business 

–  which sectors of business 

–  which  sizes  of  business  (what  is  the  concentration  of  small  and  medium-sized 

firms) 

–  are there particular geographical areas of the Community where these businesses 

are found 

3. 

What will business have to do to comply with the proposal? 

No changes for business 

4. 

What economic effects is the proposal likely to have? 

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–  on employment 

–  on investment and the creation of new businesses 

–  on the competitiveness of businesses 

No effects 

5. 

Does the proposal contain measures to take account of the specific situation of small 
and medium-sized firms (reduced or different requirements etc)? 

No effects 

CONSULTATION 

6. 

List the organisations which have been consulted about the proposal and outline their 
main views. 

Global pre-consultations of  Member States' technical specialists, being delegates in 
the Trade Mechanisms Management Committee. These specialists are in contact with 
exporters organisations.  

The organisations did not react. The Member States specialists' main views were that 
summarisation  of  control  norms  would  better  meet  the  modernised  IT  supported 
customs  control  management.  However,  as  some  (big)  Member  States  prefer  to 
continue  decentralised  control  management  via  harmonised  legal  control  rates  per 
customs  office  of  export,  the  opportunity  for  opting  in  the  summarised  norm  is 
introduced. 

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