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96/493/EC: Council Decision of 29 March 1996 concerning the signing and provisional application of the International Tropical Timber Agreement 1994 on behalf of the European Community

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L_1996208EN. 01000101. xml 17. 8. 1996    EN Official Journal of the European Communities L 208/1 COUNCIL DECISION of 29 March 1996 concerning the signing and provisional application of the International Tropical Timber Agreement 1994 on behalf of the European Community (96/493/EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to the proposal from the Commission, Whereas the International Tropical Timber Agreement 1994 negotiated on the basis of Resolution 93 (IV) of the text entitled ‘A new partnership for development: Cartagena Commitment’ and the relevant objectives in the final document ‘Cartagena Spirit’ adopted by the United Nations Trade and Development Conference was opened for signing from 1 April 1994 until one month after the date of its entry into force; Whereas the said Agreement has not yet entered into force; Whereas, pursuant to Article 42 (3) of the 1983 International Tropical Timber Agreement, that Agreement was extended until the provisional or definitive entry into force of the new Agreement; Whereas the objectives pursued by the new Agreement fit into the context of the common commercial policy; Whereas the Member States participate, through financial contributions, in the measures provided for in that Agreement; Whereas all the Member States have expressed their intention to sign and to contribute towards the provisional application of the Agreement; whereas the Community therefore should sign the Agreement lodged with the United Nations Secretary-General and, as soon as possible, notify its intention to apply the Agreement provisionally, HAS DECIDED AS FOLLOWS: Article 1 1. The Community shall sign the International Tropical Timber Agreement 1994 lodged with the United Nations Secretary-General. The text of the Agreement is attached to this Decision. 2. The Community shall notify the United Nations Secretary-General of its intention to apply the Agreement referred to in paragraph 1 provisionally, in accordance with Articles 40 and 41 (2) thereof. Article 2 The President of the Council is hereby authorized to designate the persons empowered to sign the Agreement on behalf of the Community and deposit the notification of its provisional application by the Community, together with the declaration attached to this Decision. Done at Brussels, 29 March 1996. For the Council The President T. TREU ANNEX Declaration by the European Community and its Member States The European Community and its Member States interpret the terms of the International Tropical Timber Agreement 1994 as follows: (a) unless the scope of the Agreement is changed pursuant to Article 35 of the Agreement, the Agreement shall refer solely to tropical timber and tropical forests; (b) any financial contribution other than the contribution to the administrative budget provided for in Article 19 of the Agreement shall be entirely voluntary. INTERNATIONAL TROPICAL TIMBER AGREEMENT, 1994 UNITED NATIONS New York and Geneva, 199 INTERNATIONAL TROPICAL TIMBER AGREEMENT, 1994 CONTENTS Preamble 7 Chapter I — Objectives Articles 1. Objectives 7 Chapter II — Definitions 2. Definitions 8 Chapter III — Organization and administration 3. Headquarters and structure of the Internationa Tropical Timber Organization 9 4. Membership in the Organization 9 5. Membership by intergovernmental organizations 9 Chapter IV — International Tropical Timber Council 6. Composition of the International Tropical Timber Council 10 7. Powers and functions of the Council 10 8. Chairman and Vice-Chairman of the Council 10 9. Sessions of the Council 10 10. Distribution of votes 10 11. Voting procedure of the Council 11 12. Decisions and recommendations of the Council 11 13. Quorum for the Council 11 14. Cooperation and coordination with other organizations 11 15. Admission of observers 12 16. Executive Director and staff 12 Chapter V — Privileges and immunities 17. Privileges and immunities 12 Chapter VI — Finance 18. Financial accounts 13 19. Administrative account 13 20. Special account 13 21. The Bali Partnership Fund 14 22. Forms of payment 15 23. Audit and publication of accounts 15 Chapter VII — Operational activities 24. Policy work of the Organization 15 25. Project activities of the Organization 15 26. Establishment of committees 15 27. Functions of the committees 16 Chapter VIII — Relationship with the Common Fund for Commodities 28. Relationship with the Common Fund for Commodities 17 Chapter IX — Statistics, studies and information 29. Statistics, studies and information 18 30. Annual report and review 18 Chapter X — Miscellaneous 31. Complaints and disputes 19 32. General obligations of members 19 33. Relief from obligations 19 34. Differential and remedial measures and special measures 19 35. Review 19 36. Non-discrimination 19 Chapter XI — Final Provisions 37. Depositary 20 38. Signature, ratification, acceptance and approval 20 39. Accession 20 40. Notification of provisional application 20 41. Entry into force 20 42. Amendments 21 43. Withdrawal 21 44. Exclusion 21 45. Settlement of accounts with withdrawing or excluded members or members unable to accept an amendment 21 46. Duration, extension and termination 21 47. Reservations 22 48. Supplementary and transitional provisions 22 Annexes A. List of producing countries with tropical forest resources and/or net exporters of tropical timber in volume terms, and allocation of votes for the purposes of Article 41 23 B. List of consuming countries and allocation of votes for the purposes of Article 41 23 PREAMBLE THE PARTIES TO THIS AGREEMENT, RECALLING the Declaration and the Programme of Action on the Establishment of a New International Economic Order; the Integrated Programme for Commodities; A New Partnership for Development; the Cartagena Commitment and the relevant objectives contained in the Spirit of Cartagena, RECALLING the International Tropical Timber Agreement, 1983, and RECOGNIZING the work of the International Tropical Timber Organization and its achievements since its inception, including a strategy for achieving international trade in tropical timber from sustainably managed sources, RECALLING FURTHER the Rio Declaration on Environment and Development, the Non-legally Binding Authoritative Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of all Types of Forests, and the relevant chapters of Agenda 21 as adopted by the United Nations Conference on Environment and Development in June 1992, in Rio de Janeiro; the United Nations Framework Convention on Climate Change; and the Convention on Biological Diversity, RECOGNIZING the importance of timber to the economies of countries with timber-producing forests, FURTHER RECOGNIZING the need to promote and apply comparable and appropriate guidelines and criteria for the management, conservation and sustainable development of all types of timber-producing forests, TAKING INTO ACCOUNT the linkages of tropical timber trade and the international timber market and the need for taking a global perspective in order to improve transparency in the international timber market, NOTING the commitment of all members, made in Bali, Indonesia, in May 1990, to achieve exports of tropical timber products from sustainably managed sources by the year 2000 and RECOGNIZING Principle 10 of the Non-legally Binding Authoritative Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of all Types of Forests which states that new and additional financial resources should be provided to developing countries to enable them to sustainably manage, conserve and develop their forests, including through afforestation, reforestation and combating deforestation and forest and land degradation, NOTING ALSO the statement of commitment to maintain, or achieve by the year 2000, the sustainable management of their respective forests made by consuming members who are parties to the International Tropical Timber Agreement, 1983 at the fourth session of the United Nations Conference for the Negotiation of a Successor Agreement to the International Tropical Timber Agreement, 1983 in Geneva on 21 January 1994, DESIRING to strengthen the framework of international cooperation and policy development between members in finding solutions to the problems facing the tropical timber economy, HAVE AGREED AS FOLLOWS: CHAPTER I OBJECTIVES Article 1 Objectives Recognizing the sovereignty of members over their natural resources, as defined in Principle 1 (a) of the Non-legally Binding Authoritative Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of all Types of Forests, the objectives of the International Tropical Timber Agreement, 1994 (hereinafter referred to as ‘this Agreement’) are: (a) to provide an effective framework for consultation, international cooperation and policy development among all members with regard to all relevant aspects of the world timber economy; (b) to provide a forum for consultation to promote non-discriminatory timber trade practices; (c) to contribute to the process of sustainable development; (d) to enhance the capacity of members to implement a strategy for achieving exports of tropical timber and timber products from sustainably managed sources by the year 2000; (e) to promote the expansion and diversification of international trade in tropical timber from sustainable sources by improving the structural conditions in international markets, by taking into account, on the one hand, a long-term increase in consumption and continuity of supplies, and, on the other, prices which reflect the costs of sustainable forest management and which are remunerative and equitable for members, and the improvement of market access; (f) to promote and support research and development with a view to improving forest management and efficiency of wood utilization as well as increasing the capacity to conserve and enhance other forest values in timber-producing tropical forests; (g) to develop and contribute towards mechanisms for the provision of new and additional financial resources and expertise needed to enhance the capacity of producing members to attain the objectives of this Agreement; (h) to improve market intelligence with a view to ensuring greater transparency in the international timber market, including the gathering, compilation, and dissemination of trade-related data, including data related to species being traded; (i) to promote increased and further processing of tropical timber from sustainable sources in producing member countries with a view to promoting their industrialization and thereby increasing their employment opportunities and export earnings; (j) to encourage members to support and develop industrial tropical timber reforestation and forest management activities as well as rehabilitation of degraded forest land, with due regard for the interests of local communities dependent on forest resources; (k) to improve marketing and distribution of tropical timber exports from sustainably managed sources; (l) to encourage members to develop national policies aimed at sustainable utilization and conservation of timber-producing forests and their genetic resources and at maintaining the ecological balance in the regions concerned, in the context of tropical timber trade; (m) to promote the access to, and transfer of, technologies and technical cooperation to implement the objectives of this Agreement, including on concessional and preferential terms and conditions, as mutually agreed; (n) to encourage information-sharing on the international timber market. CHAPTER II DEFINITIONS Article 2 Definitions For the purposes of this Agreement: 1. ‘tropical timber’ means non-coniferous tropical wood for industrial uses, which grows or is produced in the countries situated between the Tropic of Cancer and the Tropic of Capricorn. The term covers logs, sawn wood, veneer sheets and plywood. Plywood which includes in some measure conifers of tropical origin shall also be covered by this definition; 2. ‘further processing’ means the transformation of logs into primary wood products, semi-finished and finished products made wholly or almost wholly of tropical timber; 3. ‘member’ means a government or an intergovernmental organization referred to in Article 5 which has consented to be bound by this Agreement whether it is in force provisionally or definitively; 4. ‘producing member’ means any country with tropical forest resources and/or a net exporter of tropical timber in volume terms which is listed in Annex A and which becomes a Party to this Agreement, or any country with tropical forest resources and/or a net exporter of tropical timber in volume terms which is not so listed and which becomes a Party to this Agreement and which the Council, with the consent of that country, declares to be a producing member; 5. ‘consuming member’ means any country listed in Annex 3 which becomes a Party to this Agreement, or any country not so listed which becomes a Party to this Agreement and which the Council, with the consent of that country, declares to be a consuming member; 6. ‘organization’ means the International Tropical Timber Organization established in accordance with Article 3; 7. ‘Council’ means the International Tropical Timber Council established in accordance with Article 6; 8. ‘special vote’ means a vote requiring at least two thirds of the votes cast by producing members present and voting and at least 60 % of the votes cast by consuming members present and voting, counted separately, on condition that these votes are cast by at least half of the producing members present and voting and at least half of the consuming members present and voting; 9. ‘simple distributed majority vote’ means a vote requiring more than half of the votes cast by producing members present and voting and more than half of the votes cast by consuming members present and voting, counted separately; 10. ‘financial year’ means the period from 1 January to 31 December inclusive; 11. ‘freely usable currencies’ means the German mark, the French Franc, the Japanese yen, the pound sterling, the United States dollar and any other currency which has been designated from time to time by a competent international monetary organization as being in fact widely used to make payments for international transactions and widely traded in the principal exchange markets. CHAPTER III ORGANIZATION AND ADMINISTRATION Article 3 Headquarters and structure of the International Tropical Timber Organization 1. The International Tropical Timber Organization established by the International Tropical Timber Agreement, 1983 shall continue in being for the purposes of administering the provisions and supervising the operation of this Agreement. 2. The Organization shall function through the Council established under Article 6, the committees and other subsidiary bodies referred to in Article 26 and the Executive Director and staff. 3. The headquarters of the Organization shall be in Yokohama, unless the Council, by special vote, decides otherwise. 4. The headquarters of the Organization shall at all times be located in the territory of a member. Article 4 Membership in the Organization There shall be two categories of membership in the Organization, namely: (a) producing, and (b) consuming. Article 5 Membership by intergovernmental organizations 1. Any reference in this Agreement to ‘governments’ shall be construed as including the European Community and any other intergovernmental organization having responsibilities in respect of the negotiation, conclusion and application of international agreements, in particular commodity agreements. Accordingly, any reference in this Agreement so signature, ratification, acceptance or approval, or to notification of provisional application, or to accession shall, in the case of such intergovernmental organizations, be construed as including a reference to signature, ratification, acceptance or approval, or to notification of provisional application, or to accession, by such intergovernmental organizations. 2. In the case of voting on matters within their competence, such intergovernmental organizations shall vote with a number of votes equal to the total number of votes attributable to their Member States in accordance with Article 10. In such cases, the Member States of such intergovernmental organizations shall not be entitled to exercise their individual voting rights. CHAPTER IV INTERNATIONAL TROPICAL TIMBER COUNCIL Article 6 Composition of the International Tropical Timber Council 1. The highest authority of the Organization shall be the International Tropical Timber Council, which shall consist of all the members of the Organization. 2. Each member shall be represented in the Council by one representative and may designate alternates and advisers to attend sessions of the Council. 3. An alternate representative shall be empowered to act and vote on behalf of the representative during the latter's absence or in special circumstances. Article 7 Powers and functions of the Council 1. The Council shall exercise all such powers and perform or arrange for the performance of all such functions as are necessary to carry out the provisions of this Agreement. 2. The Council shall, by special vote, adopt such rules and regulations as are necessary to carry out the provisions of this Agreement and as are consistent therewith, including its own rules of procedure and the financial rules and staff regulations of the Organization. Such financial rules shall, inter alia, govern the receipt and expenditure of funds under the administrative account, the special account and the Bali Partnership Fund. The Council may, in its rules of procedure, provide for a procedure whereby it may, without meeting, decide specific questions. 3. The Council shall keep such records as are required for the performance of its functions under this Agreement. Article 8 Chairman and Vice-Chairman of the Council 1. The Council shall elect for each calendar year a Chairman and a Vice-Chairman, whose salaries shall not be paid by the Organization. 2. The Chairman and the Vice-Chairman shall be elected, one from among the representatives of producing members and the other from among the representatives of consuming members. These offices shall alternate each year between the two categories of members, provided, however, that this shall not prohibit the re-election of either or both, under exceptional circumstances, by special vote of the Council. 3. In the temporary absence of the Chairman, the Vice-Chairman shall act in his place. In the temporary absence of both the Chairman and the Vice-Chairman, or in the absence of one or both of them for the rest of the term for which they were elected, the Council may elect new officers from among the representatives of the producing members and/or from among the representatives of the consuming members, as the case may be, on a temporary basis or for the rest of the term for which the predecessor or predecessors were elected. Article 9 Sessions of the Council 1. As a general rule, the Council shall hold at least one regular session a year. 2. The Council shall meet in special session whenever it so decides or at the request of: (a) the executive Director, in agreement with the Chairman of the Council; or (b) a majority of producing members or a majority of consuming members; or (c) members holding at least 500 votes. 3. Sessions of the Council shall be held at the headquarters of the Organization unless the Council, by special vote, decides otherwise. If on the invitation of any member the Council meets elsewhere than at the headquarters of the Organization, that member shall pay the additional cost of holding the meeting away from headquarters. 4. Notice of any sessions and the agenda for such sessions shall be communicated to members by the Executive Director at least six weeks in advance, except in cases of emergency, when notice shall be communicated at least seven days in advance. Article 10 Distribution of votes 1. The producing members shall together hold 1 000 votes and the consuming members shall together hold 1 000 votes. 2. The votes of the producing members shall be distributed as follows: (a) four hundred votes shall be distributed equally among the three producing regions of Africa, Asia-Pacific and Latin America. The votes thus allocated to each of these regions shall then be distributed equally among the producing members of that region; (b) three hundred votes shall be distributed among the producing members in accordance with their respective shares of the total tropical forest resources of all producing members; and (c) three hundred votes shall be distributed among the producing members in proportion to the average of the values of their respective net exports of tropical timber during the most recent three-year period for which definitive figures are available. 3. Notwithstanding the provisions of paragraph 2 of this Article, the total votes allocated to the producing members from the African region, calculated in accordance with paragraph 2 of this Article, shall be distributed equally among all producing members from the African region. If there are any remaining votes, each of these votes shall be allocated to a producing member from the African region: the first to the producing member which is allocated the highest number of votes calculated in accordance with paragraph 2 of this Article, the second to the producing member which is allocated the second highest number of votes, and so on, until all the remaining votes have been distributed. 4. For purposes of the calculation of the distribution of votes under paragraph 2 (b) of this Article, ‘tropical forest resources’ means productive closed broadleaved forests as defined by the Food and Agriculture Organization (FAO). 5. The votes of the consuming members shall be distributed as follows: each consuming member shall have 10 initial votes: the remaining votes shall be distributed among the consuming members in proportion to the average volume of their respective net imports of tropical timber during the three-year period commencing four calendar years prior to the distribution of votes. 6. The Council shall distribute the votes for each financial year at the beginning of its first session of that year in accordance with the provisions of this Article. Such distribution shall remain in effect for the rest of that year, except as provided for in paragraph 7 of this Article. 7. Whenever the membership of the Organization changes or when any member has its voting rights suspended or restored under any provision of this Agreement, the Council shall redistribute the votes within the affected category or categories of members in accordance with the provisions of this Article. The Council shall, in that event, decide when such redistribution shall become effective. 8. There shall be no fractional votes. Article 11 Voting procedure of the Council 1. Each member shall be entitled to cast the number of votes it holds and no member shall be entitled to divide its votes. A member may, however, cast differently from such votes any votes which it is authorized to cast under paragraph 2 of this Article. 2. By written notification to the Chairman of the Council, any producing member may authorize, under its own responsibility, any other producing member, and any consuming member may authorize, under its own responsibility, any other consuming member, to represent its interests and to cast its votes at any meeting of the Council. 3. When abstaining, a member shall be deemed not to have cast its votes. Article 12 Decisions and recommendations of the Council 1. The Council shall endeavour to take all decisions and to make all recommendations by consensus. If consensus cannot be reached, the Council shall take all decisions and make all recommendations by a simple distributed majority vote, unless this Agreement provides for a special vote. 2. Where a member avails itself of the provisions of Article 11 (2), and its votes are cast at a meeting of the Council, such member shall, for the purposes of paragraph 1 of this Article, be considered as present and voting. Article 13 Quorum for the Council 1. The quorum for any meeting of the Council shall be the presence of a majority of members of each category referred to in Article 4, provided that such members hold at least two thirds of the total votes in their respective categories. 2. If there is no quorum in accordance with paragraph 1 of this Article on the day fixed for the meeting and on the following day, the quorum on the subsequent days of the session shall be the presence of a majority of members of each category referred to in Article 4, provided that such members hold a majority of the total votes in their respective categories. 3. Representation in accordance with Article 11 (2) shall be considered as presence. Article 14 Cooperation and coordination with other organizations 1. The Council shall make arrangements as appropriate for consultations and cooperation with the United Nations and its organs, including the United Nations Conference on Trade and Development (Unctad) and the Commission on Sustainable Development (CSD), intergovernmental organizations, including the General Agreement on Tariffs and Trade (GATT) and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and non-governmental organizations. 2. The Organization shall, to the maximum extent possible, utilize the facilities, services and expertise of existing intergovernmental, governmental or non-governmental organizations, in order to avoid duplication of efforts in achieving the objectives of this Agreement and to enhance the complementarity and the efficiency of their activities. Article 15 Admission of observers The Council may invite any non-member government or any of the organizations referred to in Article 14, Article 20 and Article 29, interested in the activities of the Organization to attend as observers any of the meetings of the Council. Article 16 Executive Director and staff 1. The Council shall, by special vote, appoint the Executive Director. 2. The terms and conditions of appointment of the Executive Director shall be determined by the Council. 3. The Executive Director shall be the chief administrative officer of the Organization and shall be responsible to the Council for the administration and operation of this Agreement in accordance with decisions of the Council. 4. The Executive Director shall appoint the staff in accordance with regulations to be established by the Council. The Council shall, by special vote, decide the number of executive and professional staff the Executive Director may appoint. Any changes in the number of executive and professional staff shall be decided by the Council by special vote. The staff shall be responsible to the Executive Director. 5. Neither the Executive Director nor any member of the staff shall have any financial interest in the timber industry or trade, or associated commercial activities. 6. In the performance of their duties, the Executive Director and staff shall not seek or receive instructions from any member or from any authority external to the Organization. They shall refrain from any action which might reflect adversely on their positions as international officials ultimately responsible to the Council. Each member shall respect the exclusively international character of the responsibilities of the Executive Director and staff and shall not seek to influence them in the discharge of their responsibilities. CHAPTER V PRIVILEGES AND IMMUNITIES Article 17 Privileges and immunities 1. The Organization shall have legal personality. It shall in particular have the capacity to contract, to acquire and dispose of movable and immovable property, and to institute legal proceedings. 2. The status, privileges and immunities of the Organization, of its Executive Director, its staff and experts, and of representatives of members while in the territory of Japan shall continue to be governed by the Headquarters Agreement between the Government of Japan and the International Tropical Timber Organization signed at Tokyo on 27 February 1988, with such amendments as may be necessary for the proper functioning of this Agreement. 3. The Organization may conclude, with one or more countries, agreements to be approved by the Council relating to such capacity, privileges and immunities as may be necessary for the proper functioning of this Agreement. 4. If the headquarters of the Organization is moved to another country, the member in question shall, as soon as possible, conclude with the Organization a headquarters agreement to be approved by the Council. Pending the conclusion of such an agreement, the Organization shall request the new host government to grant, within the limits of its national legislation, exemption from taxation on remuneration paid by the Organization to its employees, and on the assets, income and other property of the Organization. 5. The Headquarters Agreement shall be independent of this Agreement. It shall, however, terminate: (a) by agreement between the host government and the Organization; (b) in the event of the headquarters of the Organization being moved from the country of the host government; or (c) in the event of the Organization ceasing to exist. CHAPTER VI FINANCE Article 18 Financial accounts 1. There shall be established: (a) the administrative account; (b) the special account; (c) the Bali Partnership Fund; and (d) such other accounts as the Council shall deem appropriate and necessary. 2. The Executive Director shall be responsible for the administration of these accounts and the Council shall make provision therefore in the financial rules of the Organization. Article 19 Administrative account 1. The expenses necessary for the administration of this Agreement shall be brought into the administrative account and shall be met by annual contributions paid by members in accordance with their respective constitutional or institutional procedures and assessed in accordance with paragraphs 3, 4 and 5 of this Article. 2. The expenses of delegations to the Council, the committees and any other subsidiary bodies of the Council referred to in Article 26 shall be met by the members concerned. In cases where a member requests special services from the Organization, the Council shall require that member to pay the costs of such services. 3. Before the end of each financial year, the Council shall approve the administrative budget of the Organization for the following financial year and shall assess the contribution of each member to that budget. 4. The contribution of each member to the administrative budget for each financial year shall be in the proportion which the number of its votes at the time the administrative budget for that financial year is approved bears to the total votes of all the members. In assessing contributions, the votes of each member shall be calculated without regard to the suspension of any member's voting rights or any redistribution of votes resulting therefrom. 5. The initial contribution of any member joining the Organization after the entry into force of this Agreement shall be assessed by the Council on the basis of the number of votes to be held by that member and the period remaining in the current financial year, but the assessment made upon other members from the current financial year shall not thereby be altered. 6. Contributions to administrative budgets shall become due on the first day of each financial year. Contributions of members in respect of the financial year in which they join the Organization shall be due on the date on which they become members. 7. If a member has not paid its full contribution to the administrative budget within four months after such contribution becomes due in accordance with paragraph 6 of this Article, the Executive Director shall request that member to make payment as quickly as possible. If that member has still not paid its contribution within two months after such request, that member shall be requested to state the reasons for its inability to make payment. If at the expiry of seven months from the due date of contribution, that member has still not paid its contribution, its voting rights shall be suspended until such time as it has paid its contribution in full, unless the Council, by special vote, decides otherwise. If, on the contrary, a member has paid its full contribution to the administrative budget within four months after such contribution becomes due in accordance with paragraph 6 of this Article, the member's contribution shall receive a discount as may be established by the Council in the financial rules of the Organization. 8. A member whose rights have been suspended under paragraph 7 of this Article shall remain liable to pay its contribution. Article 20 Special account 1. There shall be established two subaccounts under the special account: (a) the pre-project subaccount; and (b) the project subaccount. 2. The possible sources of finance for the special account may be: (a) the Common Fund for Commodities; (b) regional and international financial institutions; (c) voluntary contributions. 3. The resources of the special account shall be used only for approved pre-projects or projects. 4. All expenditures under the pre-project subaccount shall be reimbursed from the project subaccount if projects are subsequently approved and funded. If within six months of the entry into force of this Agreement the Council does not receive any funds for the pre-project subaccount, it shall review the situation and take appropriate action. 5. All receipts pertaining to specific identifiable pre-projects or projects under the special account shall be brought into that account. All expenditures incurred on such pre-projects or projects, including remuneration and travel expenses of consultants and experts, shall be charged to the same account. 6. The Council shall, by special vote, establish terms and conditions on which it would, when and where appropriate, sponsor projects for loan financing, where a member or members have voluntarily assumed full obligations and responsibilities for such loans. The Organization shall have no obligations for such loans. 7. The Council may nominate and sponsor any entity with the consent of that entity, including a member or members, to receive loans for the financing of approved projects and to undertake all the obligations involved, except that the organization shall reserve to itself the right to monitor the use of resources and to follow up on the implementation of projects so financed. However, the Organization shall not be responsible for guarantees voluntarily provided by individual members or other entities. 8. No member shall be responsible by reason of its membership in the Organization for any liability arising from borrowing or lending by any other member or entity in connection with projects. 9. In the event that voluntary unearmarked funds are offered to the Organization, the Council may accept such funds. Such funds may be utilized for approved pre-projects and projects. 10. The Executive Director shall endeavour to seek, on such terms and conditions as the Council may decide, adequate and assured finance for pre-projects and projects approved by the Council. 11. Contributions for specified approved projects shall be used only for the projects for which they were originally intended, unless otherwise decided by the Council in agreement with the contributor. After the completion of a project, the Organization shall return to each contributor for specific projects the balance of any funds remaining pro rata to each contributor's share in the total of the contributions originally made available for financing that project, unless otherwise agreed to by the contributor. Article 21 The Bali Partnership Fund 1. A Fund for sustainable management of tropical timber producing forests is hereby established to assist producing members to make the investments necessary to achieve the objective of Article 1 (d) of this Agreement. 2. The Fund shall be constituted: (a) by contributions from donor members; (b) by 50 % of income earned as a result of activities related to the special account; (c) by resources from other private and public sources which the Organization may accept consistent with its financial rules. 3. Resources of the Fund shall be allocated by the Council only for pre-projects and projects for the purpose set out in paragraph 1 of this Article and approved in accordance with Article 25. 4. In allocating resources of the Fund, the Council shall take into account: (a) the special needs of members whose forestry sectors' contribution to their economies is adversely affected by the implementation of the strategy for achieving the exports of tropical timber and timber products from sustainably managed sources by the year 2000; (b) the needs of members with significant forest areas who establish conservation programmes in timber-producing forests. 5. The Council shall examine annually the adequacy of the resources available to the Fund and endeavour to obtain additional resources needed by producing members to achieve the purpose of the Fund. The ability of members to implement the strategy referred to in paragraph 4 (a) of this Article will be influenced by the availability of resources. 6. The Council shall establish policies and financial rules for the operation of the Fund, including rules covering the settlement of accounts on termination or expiry of this Agreement. Article 22 Forms of payment 1. Constributions to the administrative account shall be payable in freely usable currencies and shall be exempt from foreign-exchange restrictions. 2. Financial contributions to the special account and the Bali Partnership Fund shall be payable in freely usable currencies and shall be exempt from foreign-exchange restrictions. 3. The Council may also decide to accept other forms of contributions to the special account or the Bali Partnership Fund, including scientific and technical equipment or personnel, to meet the requirements of approved projects. Article 23 Audit and publication of accounts 1. The Council shall appoint independent auditors for the purpose of auditing the accounts of the Organization. 2. Independently audited statements of the administrative account, of the special account and of the Bali Partnership Fund shall be made available to members as soon as possible after the close of each financial year, but not later than six months after that date, and be considered for approval by the Council at its next session, as appropriate. A summary of the audited accounts and balance sheet shall thereafter be published. CHAPTER VII OPERATIONAL ACTIVITIES Article 24 Policy work of the Organization In order to achieve the objectives set out in Article 1, the Organization shall undertake policy work and project activities in the areas of economic information and market intelligence, reforestation and forest management and forest industry, in a balanced manner, to the extent possible integrating policy work and project activities. Article 25 Project activities of the Organization 1. Bearing in mind the needs of developing countries, members may submit pre-project and project proposals to the Council in the fields of research and development, market intelligence, further and increased wood processing in producing member countries, and reforestation and forest management. Pre-projects and projects should contribute to the achievement of one or more of the objectives of this Agreement. 2. The Council, in approving pre-projects and projects, shall take into account: (a) their relevance to the objectives of this Agreement; (b) their environmental and social effects; (c) the desirability of maintaining an appropriate geographical balance; (d) the interests and characteristics of each of the developing producing regions; (e) the desirability of equitable distribution of resources among the fields referred to in paragraph 1 of this Article; (f) their cost-effectiveness; (g) the need to avoid duplication of efforts. 3. The Council shall establish a schedule and procedure for submitting, appraising, and prioritizing pre-projects and projects seeking funding from the Organization, as well as for their implementation, monitoring and evaluation. The Council shall decide on the approval of pre-projects and projects for financing or sponsorship in accordance with Article 20 or Article 21. 4. The Executive Director may suspend disbursement of the Organization's funds to a pre-project or project if they are being used contrary to the project document or in cases of fraud, waste, neglect or mismanagement. The Executive Director will provide to the Council at its next session a report for its consideration. The Council shall take appropriate action. 5. The Council may, by special vote, terminate its sponsorship of any pre-project or project. Article 26 Establishment of committees 1. The following are hereby established as committees of the Organization: (a) Committee on Economic Information and Market Intelligence; (b) Committee on Reforestation and Forest Management; (c) Committee on Forest Industry; (d) Committee on Finance and Administration. 2. The Council may, by special vote, establish such other committees and subsidiary bodies as it deems appropriate and necessary. 3. Participation in each of the committees shall be open to all members. The rules of procedure of the committees shall be decided by the Council. 4. The committees and subsidiary bodies referred to in paragraphs 1 and 2 of this Article shall be responsible to, and work under the general direction of, the Council. Meetings of the committees and subsidiary bodies shall be convened by the Council. Article 27 Functions of the committees 1. The Committee on Economic Information and Market Intelligence shall: (a) keep under review the availability and quality of statistics and other information required by the Organization; (b) analyse the statistical data and specific indicators as decided by the Council for the monitoring of international timber trade; (c) Keep under continuous review the international timber market, its current situation and short-term prospects on the basis of the data mentioned in subparagraph (b) above and other relevant information, including information related to undocumented trade; (d) Make recommendations to the Council on the need for, and nature of, appropriate studies on tropical timber, including prices, market elasticity, market substitutability, marketing of new products, and long-term prospects of the international tropical timber market, and monitor and review any studies commissioned by the Council; (e) carry out any other tasks related to the economic, technical and statistical aspects of timber assigned to it by the Council; (f) assist in the provision of technical cooperation to developing member countries to improve their relevant statistical services. 2. The Committee on Reforestation and Forest Management shall: (a) promote cooperation between members as partners in development of forest activities in member countries, inter alia, in the following areas: (i) reforestation; (ii) rehabilitation; (iii) forest management; (b) encourage the increase of technical assistance and transfer of technology in the fields of reforestation and forest management to developing countries; (c) follow up ongoing activities in this field, and identify and consider problems and possible solutions to them in cooperation with the competent organizations; (d) review regularly the future needs of international trade in industrial tropical timber and, on this basis, identify and consider appropriate possible schemes and measures in the field of reforestation, rehabilitation and forest management; (e) facilitate the transfer of knowledge in the field of reforestation and forest management with the assistance of competent organizations; (f) coordinate and harmonize these activities for cooperation in the field of reforestation and forest management with relevant activities pursued elsewhere, such as those under the auspices of the Food and Agricultural Organization (FAO), the United Nations Environmental Programme (UNEP), the World Bank, the United Nations Development Programme (UNDP), regional development banks and other competent organizations. 3. The Committee on Forest Industry shall: (a) promote cooperation between member countries as partners in the development of processing activities in producing member countries, inter alia, in the following areas: (i) product development through transfer of technology; (ii) human resources development and training; (iii) standardization of nomenclature of tropical timber; (iv) harmonization of specifications of processed products; (v) encouragement of investment and joint ventures; (vi) marketing including the promotion of lesser known and lesser used species; (b) promote the exchange of information in order to facilitate structural changes involved in increased and further processing in the interests of all member countries, in particular developing member countries; (c) follow up ongoing activities in this field, and identify and consider problems and possible solutions to them in cooperation with the competent organizations; (d) encourage the increase of technical cooperation for the processing of tropical timber for the benefit of producing member countries. 4. In order to promote the policy and project work of the Organization in a balanced manner, the Committee on Economic Information and Market Intelligence, the Committee on Reforestation and Forest Management and the Committee on Forest Industry shall each: (a) be responsible for ensuring the effective appraisal, monitoring and evaluation of pre-projects and projects; (b) make recommendations to the Council relating to pre-projects and projects; (c) follow up the implementation of pre-projects and projects and provide for the collection and dissemination of their results as widely as possible for the benefit of all members; (d) develop and advance policy ideas to the Council; (e) review regularly the results of project and policy work and make recommendations to the Council on the future of the Organization's programme; (f) review regularly the strategies, criteria and priority areas for programme development and project work contained the Organization's action plan and recommend revisions to the Council; (g) take account of the need to strengthen capacity-building and human resource development in member countries; (h) carry out any other task related to the objectives of this Agreement assigned to them by the Council. 5. Research and development shall be a common function of the Committees referred to in paragraphs 1, 2, and 3 of this Article. 6. The Committee on Finance and Administration shall: (a) examine and make recommendations to the Council regarding the approval of the Organization's administrative budget proposals and the management operations of the Organization; (b) review the assets of the Organization to ensure prudent asset management and that the Organization has sufficient reserves to carry out its work; (c) examine and make recommendations to the Council on the budgetary implications of the Organization's annual work programme, and the actions that might be taken to secure the resources needed to implement it; (d) recommend to the Council the choice of independent auditors and review the independent audited statements; (e) recommend to the Council any modifications it may judge necessary to the Rules of Procedure or the Financial Rules; (f) review the Organization's revenues and the extent to which they constrain the work of the Secretariat. CHAPTER VIII RELATIONSHIP WITH THE COMMON FUND FOR COMMODITIES Article 28 Relationship with the Common Fund for Commodities The Organization shall take full advantage of the facilities of the Common Fund for Commodities. CHAPTER IX STATISTICS, STUDIES AND INFORMATION Article 29 Statistics, studies and information 1. The Council shall establish close relationships with relevant intergovernmental, governmental and non-governmental organizations, in order to help ensure the availability of recent reliable data and information on the trade in tropical timber, as well as relevant information on non-tropical timber and on the management of timber-producing forests. As deemed necessary for the operation of this Agreement, the Organization, in cooperation with such organizations, shall compile, collate and, where relevant, publish statistical information on production, supply, trade, stocks, consumption and market prices of timber, the extent of timber resources and the management of timber-producing forests. 2. Members shall, to the fullest extent possible not inconsistent with their national legislation, furnish, within a reasonable time, statistics and information on timber, its trade and the activities aimed at achieving sustainable management of timber-producing forests as well as other relevant information as requested by the Council. The Council shall decide on the type of information to be provided under this paragraph and on the format in which it is to be presented. 3. The Council shall arrange to have any relevant studies undertaken of the trends and of short- and long-term problems of the international timber markets and of the progress towards the achievement of sustainable management of timber-producing forests. Article 30 Annual report and review 1. The Council shall, within six months after the close of each calendar year, publish an annual report on its activities and such other information as it considers appropriate. 2. The Council shall annually review and assess: (a) the international timber situation; (b) other factors, issues and developments considered relevant to achieve the objectives of this Agreement. 3. The review shall be carried out in the light of: (a) information supplied by members in relation to national production, trade, supply, stocks, consumption and prices of timber; (b) other statistical data and specific indicators provided by members as requested by the Council; (c) information supplied by members on their progress towards the sustainable management of their timber-producing forests; (d) such other relevant information as may be available to the Council either directly or through the organizations in the United Nations system and intergovernmental, governmental or non-governmental organizations. 4. The Council shall promote the exchange of views among member countries regarding: (a) the status of sustainable management of timber producing forests and related matters in member countries; (b) resource flows and requirements in relation to objectives, criteria and guidelines set by the Organization. 5. On request, the Council shall endeavour to enhance the technical capacity of member countries, in particular developing member countries, to obtain the data necessary for adequate information-sharing, including the provision of resources for training and facilities to members. 6. The results of the review shall be included in the reports of the Council's deliberations. CHAPTER X MISCELLANEOUS Article 31 Complaints and disputes Any complaint that a member has failed to fulfil its obligations under this Agreement and any dispute concerning the interpretation or application of this Agreement shall be referred to the Council for decision. Decisions of the Council on these matters shall be final and binding. Article 32 General obligations of members 1. Members shall, for the duration of this Agreement, use their best endeavours and cooperate to promote the attainment of its objectives and to avoid any action contrary thereto. 2. Members undertake to accept and carry out the decisions of the Council under the provisions of this Agreement and shall refrain from implementing measures which would have the effect of limiting or running counter to them. Article 33 Relief from obligations 1. Where it is necessary on account of exceptional circumstances or emergency or force majeure not expressly provided for in this Agreement, the Council may, by special vote, relieve a member of an obligation under this Agreement if it is satisfied by an explanation from that member regarding the reasons why the obligation cannot be met. 2. The Council, in granting relief to a member under paragraph 1 of this Article, shall state explicitly the terms and conditions on which, and the period for which, the member is relieved of such obligation, and the reasons for which the relief is granted. Article 34 Differential and remedial measures and special measures 1. Developing importing members whose interests are adversely affected by measures taken under this Agreement may apply to the Council for appropriate differential and remedial measures. The Council shall consider taking appropriate measures in accordance with Section III, paragraphs 3 and 4, of resolution 93 (IV) of the United Nations Conference on Trade and Development. 2. Members in the category of least-developed countries as defined by the United Nations may apply to the Council for special measures in accordance with Section III, paragraph 4, of resolution 93 (IV) and with paragraphs 56 and 57 of the Paris Declaration and Programme of Action for the Least-Developed Countries for the 1990s. Article 35 Review The Council shall review the scope of this Agreement four years after its entry into force. Article 36 Non-discrimination Nothing in this Agreement authorizes the use of measures to restrict or ban international trade in, and in particular as they concern imports of and utilization of, timber and timber products. CHAPTER XI FINAL PROVISIONS Article 37 Depositary The Secretary-General of the United Nations is hereby designated as the depositary of this Agreement. Article 38 Signature, ratification, acceptance and approval 1. This Agreement shall be open for signature, at United Nations Headquarters from 1 April 1994 until one month after the date of its entry into force, by governments invited to the United Nations Conference for the Negotiation of a Successor Agreement to the International Tropical Timber Agreement, 1983. 2. Any government referred to in paragraph 1 of this Article may: (a) at the time of signing this Agreement, declare that by such signature it expresses its consent to be bound by this Agreement (definitive signature); or (b) after signing this Agreement, ratify, accept or approve it by the deposit of an instrument to that effect with the depositary. Article 39 Accession 1. This Agreement shall be open for accession by the governments of all States upon conditions established by the Council, which shall include a time limit for the deposit of instruments of accession. The Council may, however, grant extensions of time to governments which are unable to accede by the time limit set in the conditions of accession. 2. Accession shall be effected by the deposit of an instrument of accession with the depositary. Article 40 Notification of provisional application A signatory government which intends to ratify, accept or approve this Agreement, or a government for which the Council has established conditions for accession but which has not yet been able to deposit its instrument, may, at any time, notify the depositary that it will apply this Agreement provisionally either when it enters into force in accordance with Article 41, or, if it is already in force, at a specified date. Article 41 Entry into force 1. This Agreement shall enter into force definitively on 1 February 1995 or on any date thereafter, if 12 governments of producing countries holding at least 55 % of the total votes as set out in Annex A to this Agreement, and 16 governments of consuming countries holding at least 70 % of the total votes as set out in Annex B to this Agreement have signed this Agreement definitively or have ratified, accepted or approved it or acceded thereto pursuant to Article 38 (2) or Article 39. 2. If this Agreement has not entered into force definitively on 1 February 1995, it shall enter into force provisionally on that date or on any date within six months (1) thereafter, if 10 governments of producing countries holding at least 50 % of the total votes as set out in Annex A to this Agreement, and 14 governments of consuming countries holding at least 65 % of the total votes as set out in Annex B to this Agreement, have signed this Agreement definitively or have ratified, accepted or approved it pursuant to Article 38 (2) or have notified the depositary under Article 40 that they will apply this Agreement provisionally. 3. If the requirements for entry into force under paragraph 1 or paragraph 2 of this Article have not been met on 1 September 1995, the Secretary-General of the United Nations shall invite those governments which have signed this Agreement definitively or have ratified, accepted or approved it pursuant to Article 38 (2) or have notified the depositary that they will apply this Agreement provisionally, to meet at the earliest time practicable to decide whether to put this Agreement into force provisionally or definitively among themselves in whole, or in part. Governments which decide to put this Agreement into force provisionally among themselves may meet from time to time to review the situation and decide whether this Agreement shall enter into force definitively among themselves. 4. For any Government which has not notified the depositary under Article 40 that it will apply this Agreement provisionally and which deposits its instrument of ratification, acceptance, approval or accession after the entry into force of this Agreement, this Agreement shall enter into force on the date of such deposit. 5. The Executive Director of the Organization shall convene the Council as soon as possible after the entry into force of this Agreement. Article 42 Amendments 1. The Council may, by special vote, recommend an amendment of this Agreement to members. 2. The Council shall fix a date by which members shall notify the depositary of their acceptance of the amendment. 3. An amendment shall enter into force 90 days after the depositary has received notifications of acceptance from members constituting at least two thirds of the producing members and accounting for at least 75 % of the votes of the producing members, and from members constituting at least two thirds of the consuming members and accounting for at least 75 % of the votes of the consuming members. 4. After the depositary informs the Council that the requirements for entry into force of the amendment have been met, and notwithstanding the provisions of paragraph 2 of this Article relating to the date fixed by the Council, a member may still notify the depositary of its acceptance of the amendment, provided that such notification is made before the entry into force of the amendment. 5. Any member which has not notified its acceptance of an amendment by the date on which such amendment enters into force shall cease to be a party to this Agreement as from that date, unless such member has satisfied the Council that its acceptance could not be obtained in time owing to difficulties in completing its constitutional or institutional procedures, and the Council decides to extend for that member the period for acceptance of the amendment. Such member shall not be bound by the amendment before it has notified its acceptance thereof. 6. If the requirements for the entry into force of the amendment have not been met by the date fixed by the Council in accordance with paragraph 2 of this Article, the amendment shall be considered withdrawn. Article 43 Withdrawal 1. A member may withdraw from this Agreement at any time after the entry into force of this Agreement by giving written notice of withdrawal to the depositary. That member shall simultaneously inform the Council of the action it has taken. 2. Withdrawal shall become effective 90 days after the notice is received by the depositary. 3. Financial obligations to the Organization incurred by a member under this Agreement shall not be terminated by its withdrawal. Article 44 Exclusion If the Council decides that any member is in breach of its obligations under this Agreement and decides further that such breach significantly impairs the operation of this Agreement, it may, by special vote, exclude that member from this Agreement. The Council shall immediately so notify the depositary. Six months after the date of the Council's decision, that member shall cease to be a party to this Agreement. Article 45 Settlement of accounts with withdrawing or excluded members or members unable to accept an amendment 1. The Council shall determine any settlement of accounts with a member which ceases to be a party to this Agreement owing to: (a) non-acceptance of an amendment to this Agreement under Article 42; (b) withdrawal from this Agreement under Article 43; or (c) exclusion from this Agreement under Article 44. 2. The Council shall retain any contribution paid to the administrative account, to the special account or to the Bali Partnership Fund by a member which ceases to be a party to this Agreement. 3. A member which has ceased to be a party to this Agreement shall not be entitled to any share of the proceeds of liquidation or the other assets of the Organization. Nor shall such member be liable for payment of any part of the deficit, if any, of the Organization upon termination of this Agreement. Article 46 Duration, extension and termination 1. This Agreement shall remain in force for a period of four years after its entry into force unless the Council, by special vote, decides to extend, renegotiate or terminate it in accordance with the provisions of this Article. 2. The Council may, by special vote, decide to extend this Agreement for two periods of three years each. 3. If, before the expiry of the four-year period referred to in paragraph 1 of this Article, or before the expiry of an extension period referred to in paragraph 2 of this Article, as the case may be, a new agreement to replace this Agreement has been negotiated but has not yet entered into force either definitively or provisionally, the Council may, by special vote, extend this Agreement until the provisional or definitive entry into force of the new agreement. 4. If a new agreement is negotiate and enters into force during any period of extension of this Agreement under paragraph 2 or paragraph 3 of this Article, this Agreement, as extended, shall terminate upon the entry into force of the new agreement. 5. The Council may at any time, by special vote, decide to terminate this Agreement with effect from such date as it may determine. 6. Notwithstanding the termination of this Agreement, the Council shall continue in being for a period not exceeding 1 8 months to carry out the liquidation of the Organization, including the settlement of accounts, and, subject to relevant decisions to be taken by special vote, shall have during that period such powers and functions as may be necessary for these purposes. 7. The Council shall notify the depositary of any decision taken under this Article. Article 47 Reservations Reservations may not be made with respect to any of the provisions of this Agreement. Article 48 Supplementary and transitional provisions 1. This Agreement shall be the successor to the International Tropical Timber Agreement, 1983. 2. All acts by or on behalf of the Organization or any of its organs under the International Tropical Timber Agreement, 1983, which are in effect on the date of entry into force of this Agreement and the terms of which do not provide for expiry on that date shall remain in effect unless changed under the provisions of this Agreement. IN WITNESS WHEREOF the undersigned, being duly authorized thereto, have affixed their signatures under this Agreement on the dates indicated. DONE at Geneva, on twenty-six January, one thousand nine hundred and ninety-four, the text of this Agreement in the Arabic, Chinese, English, French, Russian and Spanish languages being equally authentic. (1)  ‘six months’ shall be replaced by ‘seven months’ (see procès-verbal of rectification of the original of the Agreement, drawn up at the headquarters of the UN at New York on 12 April 1995). ANNEX A LIST OF PRODUCING COUNTRIES WITH TROPICAL FOREST RESOURCES AND/OR NET EXPORTERS OF TROPICAL TIMBER IN VOLUME TERMS, AND ALLOCATION OF VOTES FOR THE PURPOSES OF ARTICLE 41 Bolivia. 21 Brazil. 133 Cameroon. 23 Colombia. 24 Congo. 23 Costa Rica. 9 Côte d'Ivoire. 23 Dominican Republic. 9 Ecuador. 14 El Salvador. 9 Equatorial Guinea. 23 Gabon. 23 Ghana. 23 Guyana. 14 Honduras. 9 India. 34 Indonesia. 170 Liberia. 23 Malaysia. 139 Mexico. 14 Myanmar. 33 Panama. 10 Papua New Guinea. 28 Paraguay. 11 Peru. 25 Philippines. 25 Thailand. 20 Togo. 23 Trinidad and Tobago. 9 United Republic of Tanzania. 23 Venezuela. 10 Zaire. 23 TOTAL 1 000 ANNEX B LIST OF CONSUMING COUNTRIES AND ALLOCATION OF VOTES FOR THE PURPOSES OF ARTICLE 41 Afghanistan. 10 Algeria. 13 Australia. 18 Austria. 11 Bahrain. 11 Bulgaria. 10 Canada. 12 Chile. 10 China. 36 Egypt. 14 European Community. (302) Belgium/Luxembourg. 26 Denmark. 11 France. 44 Germany. 35 Greece. 13 Ireland. 13 Italy. 35 Netherlands. 40 Portugal. 18 Spain. 25 United Kingdom. 42 Finland. 10 Japan. 320 Nepal. 10 New Zealand. 10 Norway. 10 Republic of Korea. 97 Russian Federation. 13 Slovakia. 11 Sweden. 10 Switzerland. 11 United States of America. 51 TOTAL 1 000

Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and Ukraine

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COMMISSION OI l l ll I UKOIM AN COMMUNIMI S Brussels, 29. 03. 1996 COM(%)133 final 96/0090 (AVC) Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and Ukraine (presented by the Commission) Explanatory memorandum 1. 2. 3. The Partnership and Cooperation Agreement between the European Communities and their Member States and Ukraine takes the Agreement on trade and commercial and economic cooperation concluded by the EEC and Euratom with the Soviet Union on 18 December 1989 a step further for the Communities. This Agreement is based on Articles 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235, in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) of the EC Treaty, Article 101 of the Euratom Treaty and on the ECSC Treaty. A need arose for a protocol to the text of the Agreement signed on 14 June 1994 and amended on 8 May 1995. The accession to the European Union and thereby to the Communities of Austria, Finland and Sweden on 1 January 1995 means these three new Member States have to be added to the list of contracting parties and the list of signatories. Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and Ukraine THE COUNCIL OF THE EUROPEAN UNION, THE EUROPEAN COMMISSION, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to the Treaty establishing the European Community, and in particular Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular the second paragraph of Article 101 thereof, Having regard to the assent of the European Parliament, Having regard to the approval of the Council given in accordance with Article 101 of the Treaty establishing the European Atomic Energy Community, Having consulted the ECSC Consultative Committee and the Economic and Social Committee, and with the unanimous agreement of the Council, Whereas, the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States and Ukraine signed in Luxembourg on 14 June 1994 would contribute to achieving the European Communities' objectives; Whereas that Agreement seeks to strengthen existing links, notably those established by the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community *and the USSR, signed on 18 December 1989; Whereas some of the obligations provided for in the Agreement in fields other than the arrangements established by Community acts, Community trade policy affect particularly acts relating to the right of establishment and to transport; Whereas the Agreement imposes on the Community certain obligations relating to the movement of capital and payments between the Community and Ukraine; Whereas in the case of certain measures provided for in the Agreement and failing within the Community's powers the EC Treaty provides no basis for action other than Article 235: HAVE DECIDED AS FOLLOWS : Article 1 The protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and Ukraine introducing the name of the three new Member States - Austria, Finland and Sweden - which joined the European Union on 1. 1. 1995 is hereby approved on behalf of the European Community, the European Coal and Steel Community, and the European Atomic Energy Community. Article 2 The President of the Council shall give the notification provided for in Article 102 of the Agreement on behalf of the European Community. The President of the Commission shall give such notification on behalf of the European Coal and Steel Community and the European Atomic Energy Community. Done at Brussels, <i PROTOCOL to the Agreement on Partnership and Cooperation, establishing a Partnership between the European Communities and their Member States, of the one part, and Ukraine, of the other part. THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE PORTUGUESE REPUBLIC, THE REPUBLIC OF FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND Contracting Parties to the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as the "Member States", and of the European Community, the European Coal and Steel Community and the European Atomic Energy Community, hereinafter referred to as "the Communities", of tht one part anri Ukraine taking info account the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the European Union and thereby to the Communities on 1. 01. 1995, have agreed as follows : Article 1 The Republic of Austria, the Republic of Finland and the Kingdom of Sweden are Parties to the Agreement on Partnership and Cooperation, establishing a Partnership between the European Communities and their Member States, of the one part, and Ukraine, of the other part, signed in Luxembourg on 14 June 1994, and respectively adopt and take note of, as other Member States of the Community, the texts of the Agreement, as well as of Joint Declarations, Exchanges of Letters annexed to the Final Act signed on the same date. Article 2 The texts of the mentioned Agreement, the Final Act and all documents annexed to it are drawn up in. the Finnish and Swedish languages. They are annexed to the present protocol •2nd are equally authentic with the texts in the other languages in which the Agreement, ' the Final Act and the documents annexed to it are drawn up. Article 3 This protocol is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Ukrainian laïiguages, each of these texts being equally authentic. Article 4 The protocol will be approved by the Parties in accordance with their own procedures. This protocol shall enter into force on the first day of the second month following the day on which the Parties notify each other of the completion of the procedures referred to in the first paragraph. Done at Brussels on For the KINGDOM OF BELGIUM, For the UKRAINE For the KINGDOM OF DENMARK, For the FEDERAL REPUBLIC OF GERMANY, For the HELLENIC REPUBLIC, For the KINGDOM OF SPAIN, For the FRENCH REPUBLIC, For IRELAND, For the ITALIAN REPUBLIC, For the GRAND DUCHY OF LUXEMBOURG, For the KINGDOM OF THE NETHERLANDS, For the REPUBLIC OF AUSTRIA, For the PORTUGUESE REPUBLIC, For the REPUBLIC OF FINLAND, For the KINGDOM OF SWEDEN, For the UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND For the COMMUNITY * ISSN 0254-1475 COM(96) 133 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-142-EN-C ISBN 92-78-01952-^ Office for Official Publications of the European Communities L-2985 Luxembourg ?

Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Moldova

http://publications.europa.eu/resource/cellar/b8f7a4b7-14f9-44a8-997d-10e5c3a33f58

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, * ir ; COMMISSION OF THE EUROPEAN COMMUNITIES ir -k I £ A Brussels, 29. 03. 1996 COM(%) 132 final 96/0088 (AVC) Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Moldova (presented by the Commission) Explanatory, memorandum 1. 2. 3. The Partnership and Cooperation Agreement between the European Communities and their Member States and Moldova takes the Agi cement on luulr ami commercial and economic cooperation concluded by the EEC and Euratom with the Soviet Union on 18 December 1989 a step further for the European Communities. This Agreement is based on Articles 54(2), the closing sentence of Article 57(2), Articles 73c(2), 75, 84(2), 113 and 235, in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) of the EC Treaty, Article 101 of the Euratom Treaty, and on the ECSC Treaty. A need arose for a protocol to the text of the Agreement signed on 28 November 1994. The accession to the European Union and thereby to the Communities of Austria, Finland and Sweden on 1 January 1995 means these three new Member States have to be added to the list of contracting parties and the list of signatories. <L Proposai for a COUNCIL AND COMMISSION DECISION OF on the conclusion of a Protocol to the Partnership and Cooperation Agreement between Che Kuropcjtit CoittuimitCictt ami ihciv Mvmbvt Si<*i&* and the Republic of Moldova (EC/EURATOM/ECSC) THE COUNCIL OF THE EUROPEAN UNION, THE EUROPEAN COMMISSION, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to the Treaty establishing the European Community, and in particular Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular the second paragraph of Article 101 thereof, Having regard to the assent of the European Parliament, Having regard to the approval of the Council given in accordance with Article 101 of the Treaty establishing the European Atomic Energy Community, Having consulted the ECSC Consultative Committee and the Economic and Social Committee, and with the unanimous agreement of the Council, Whereas, the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Moldova signed in Brussels on 28 November 1994 would contribute to achieving the European Communities' objectives; Whereas that Agreement seeks to strengthen existing links, notably those established by the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community and the USSR, signed on 18 December 1989; Whereas some of the obligations provided for in the Agreement in fields other than the arrangements established by Community acts, Community trade policy affect particularly acts relating to the right of establishment and to transport; Whereas the Agreement imposes on the Community certain obligations relating to the movement of capital and payments between the Community and the Republic of Moldova; 2> Whereas in the case of certain measures provided for in the Agreement and failing within the Community's powers the EC Treaty provides no basis for action other than Article 235; HAVE DECIDED AS FOLLOWS : Article 1 The protocol to the Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Moldova introducing the name of the three new Member States - Austria, Finland and Sweden - which joined the European Union on 1. 1. 1995 is hereby approved on behalf of the European Community, the European Coal and Steel Community, and the European Atomic Energy Community. Article 2 The President of the Council shall give the notification provided for in Article 87(a) of the Agreement on behalf of the European Community. The President of the Commission shall give such notification on behalf of the European Coal and Steel Community and thé European Atomic Energy Community. Done at Brussels, <^ PROTOCOL to the Agreement on Partnership and Cooperation, establishing a Partnership between the European Communities and their Member States, of the one part, and the Republic of Moldova, of the other part. THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE PORTUGUESE REPUBLIC, THE REPUBLIC OF FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND Contracting Parties to the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as the "Member States", and of the European Community, the European Coal and Steel Community and the European Atomic Energy Community, hereinafter referred to as "the Communities", of the one part and the Republic of Moldova of the other part, S taking into account the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the European Union and thereby to the Communities on 1. 01. 1995, have agreed as follows : Article 1 The Republic of Austria, the Republic of Finland and the Kingdom of Sweden are Parties to the Agreement on Partnership and Cooperation, establishing a Partnership between the European Communities and their Member States, of the one part, and the Republic of Moldova, of the other part, signed in Brussels on 28 November 1994, and respectively adopt and take note of, as other Member States of the Community, the texts of the Agreement, as well as of Joint Declarations, Exchanges of Letters annexed to the Final Act signed on the same date. Article 2 The texts of the mentioned Agreement, the Final Act and all documents annexed to it are drawn up in the Finnish and Swedish languages. They are annexed to the present protocol and are equally authentic with the texts in the other languages in which the Agreement, the Final Act and the documents annexed to it are drawn up. Article 3 This protocol is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish and Swedish and Moldovan languages, each of these texts being equally authentic. Article 4 The protocol will be approved by the Parties in accordance with their own procedures. This protocol shall enter into force on the first day of the second month following the day on which the Parties notify each other of the completion of the procedures referred to in the first paragraph. Done at Brussels on For the KINGDOM OF BELGIUM, For the REPUBLIC OF MOLDOVA For the KINGDOM OF DENMARK, For the FEDERAL REPUBLIC OF GERMANY, For the HELLENIC REPUBLIC, For the KINGDOM OF SPAIN, For the FRENCH REPUBLIC, G For IRELAND, For the ITALIAN REPUBLIC, For the GRAND DUCHY OF LUXEMBOURG, For the KINGDOM OF THE NETHERLANDS, For the REPUBLIC OF AUSTRIA, For the PORTUGUESE REPUBLIC, For the REPUBLIC OF FINLAND, For the KINGDOM OF SWEDEN, For the UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND For the COMMUNITY > ISSN 0254-1475 COM(96) 132 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-141-EN-C ISBN 92-78-01941-0 Office for Official Publications of the European Communities L-2985 Luxembourg •3

Amended proposal for a COUNCIL REGULATION (EC) laying down certain conservation and control measures applicable to fishing activities in the Antarctic

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COMMISSION OF THE bUROPEAN COMMUNITIES Brussels, 28. 03. 1996 COM(96> 117 final 95/0252 (CNS) Amended proposal for a COUNCIL REGULATION (EC) laying down certain conservation and control measures applicable to fishing activities in the Antarctic (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) EXPLANATORY MEMORANDUM The proposal for the regulation COM (95) 0475, regarding the fishing activities in the CCAMLR Convention Area was submitted to Council on 17 October 1995. The purpose of this proposal was to revise the conservation measures currently in force, including those adopted at the 1994 Annual Meeting and thereby replace regulation 2245/85, the clarity of which had been affected by numerous annual modifications. In the meantime, the 1995 Annual Meeting of the Commission for the Conservation of the Antarctic Marine Living Resources (CCAMLR) took place in Hobart in the period of 24 October to 3 November 1995. On 7 November 1995, CCAMLR notified Contracting Parties of the conservation measures adopted at this Meeting. Pursuant to Article IX (6) (b) of the Convention these measures have become binding on all Contracting Parties on May 7 1995 These conservation measures are based on the scientific advice submitted by CCAMLR's Scientific Committee and reflect conservation measures adopted by CCAMLR in the past. They involve in particular the fixing of TACs for the species of Euphausia superba, Dissostichus eleginoides, Champsocephalus gunnari, Eleclrona carslbergi, Lepidonotothcn squamifrons and crab. The purpose of this modification is therefore threefold and would consist of factual changes, taking into account the new TACs and fishing seasons established during the 1995 CCAMLR Annual Meeting procedural changes, aiming at the lightening of the administrative procedures on catch and data reporting changes pertaining to the future modifications of this regulation. Given that the changes will be of technical nature, modifying the TACs and fishing seasons, future modifications will be made through a standing committee chaired by the Commission In view of the agreement between the members of CCAMLR and the importance of these conservation measures for the fish stocks concerned, the Community is called upon to apply these measures immediately. { Amended proposal for a CWNCU REGULATION (,EO No OF 1996 laying down certain conservation and control measures applicable to fishing activities in the Antarctic THE COUNCIL OF THE EUROPEAN UNION Having regard to the Treaty establishing the European Community, and in particular Article 43, Having regard to the proposal from the Commission(,) Having regard to the opinion of the European Parliament^, to Article 4 of Council Regulation (EEC) N° 3760/92 of Whereas pursuant 20 December 1992(3), establishing a Community system for fisheries and aquaculture, the Council may determine certain conditions for access by Community fishing vessels to waters and resources; Whereas Council Regulation (EEC) N° 2847/93 of 12 October 1993(4) establishing a control system applicable to the common fisheries policy, applies to all fishing activities and to all associated activities carried out within the territory and within the maritime waters subject to sovereignty or jurisdiction of the Member States, and to all activities of Community fishing vessels which operate in the waters of non-member countries and on the high seas, without prejudice to the special provisions contained in fisheries agreements concluded between the Community and third countries, or in International Conventions to which the Community is a party; Whereas the Convention on the Conservation of Antarctic Marine Living Resources, hereinafter called 'the Convention', was approved by Council decision 8l/691/EEC(5) whereas it entered into force for the Community on 21 May 1982; (i) (2) (3) (4) (5) O. J O. J O. J. NoL 389, 31. 12. 92, p. 1 O. J. No L 261, 20. 10. 93, p. 1 O. J. No L 252, 5. 9. 81, p. 26 Whereas the Commission on the Conservation of Antarctic Marine Living Resources, hereinafter referred to as 'CCAMLR', established by the Convention, adopted on the recommendation of its Scientific Committee, certain conservation measures applicable, in particular, to fish stocks occurring in the waters off South Georgia. Whereas (EEC) Council Regulation 2245/85, of 2 August 1985(6), laying down certain technical measures for the conservation offish stocks in the Antarctic has implemented these conservation measures and has been subject to annual modifications which have affected the clarity of the legislation; Whereas it is therefore necessary to replace Regulation 2245/85 with a new regulation reflecting CCAMLR conservation measures currently in force. Whereas the members of CCAMLR stated that they intended to apply the latest conservation measures, adopted on 4 November 1995, on a provisional basis, without waiting for them to become binding, in view of the fact that some of the conservation measures relate to fishing seasons which commenced on or after 1 July 1995; Whereas the European Community, as a Contracting party to CCAMLR, is bound to ensure that the measures adopted by CCAMLR are applied to Community fishermen with effect from relevant dates; Whereas it is necessary to provide for a mechanism allowing the Commission to implement further conservation measures adopted by CCAMLR according to the procedures of the standing committee on fisheries and aquaculture; Recognising the world importance of the Antarctic as an environmentally sensitive area, largely untouched by human activity; (6) O. J. No L 210, 07. 08. 85, p. 2 HAS ADOPTED THIS REGULATION Scope Article 1 1. 2. 3. This Regulation applies to Community fishing vessels who take and retain on board fish from marine living resources of the area south of 60 South latitude and of the area between that latitude and the Antarctic convergence which forms part of the Antarctic marine ecosystem with the exception of those resources occurring within waters subject to such coastal state jurisdiction as may exist in accordance with international law. This Regulation shall be without prejudice to the provisions of the Convention and shall operate in furtherance of these objectives and principles and the provisions of the Final Act of the Conference at which it was adopted. The Antarctic convergence referred to in paragraph 1 is deemed to be a line joining the following points along parallels of latitude and meridians of longitude: 50°S, O - 50°S, 30°E - 45° S, 30° E - 45° S, 80°E - 55°S, 80°E - 55°S, 150° E - 60°S, 150°E - 60°S, 50°W - 50°S, 50°W - 50°S, 0°. Right to Fish Article 2 1. Only those vessels named in the list mentioned in paragraph 2 shall have the right to carry out fishing or scientific fisheries research activities in the area defined in Article 1. 2. Member States shall notify to the Commission the list of all vessels flying their flag and registered within the Community which wish to carry out fishing or scientific fisheries research activities in the area defined in Article 1, twenty days after this Regulation has entered into force, and afterwards at least thirty days in advance of the beginning of these activities. 3. This list, transmitted to the Commission shall mention, in the case of a vessel carrying out fishing activities, the internal number fleet register in accordance with the Article 1 of the Commission Regulation (CE) n° 109/94 of 19 January 1994(7) concerning the fishing vessel register of the Community. O. J. N °L 19, 22. 01. 94, p. 5 Article 3 A Member State shall notify, four months in advance, the Commission of the intention of their fishermen to prosecute a crab fishery in FAO Antarctic sub-area 48 3 The Commission will then issue a special fishing permit to the vessel, in conformity with Article 7 of EC Regulation 1627/94 of 27 June 1994(8). Prohibition on fishing Article 4 1. Directed fishing of Notothenia rossii in FAO Antarctic sub-area 48. 1 in the Peninsula area, in FAO Antarctic sub-area 48. 2 around the South Orkneys and in FAO Antarctic sub-area 48. 3 around South Georgia is prohibited. 2. Directed fishing of finfish in FAO Antarctic sub-areas 48. 1 and 48. 2 except for scientific research purposes, is prohibited. 3. fishing Directed Pseudochaenichthys georgianus, Lepidonotothen guntheri, in FAO Antarctic sub-area 48. 3 is prohibited until 2 November 1996. aceralus, squamifrons and Patagonotothen gibberifrons, Chaenocephalus of Gobionotothen Catch limitations Article 5 1. The Total Allowable Catch (TAC) of Euphausia superba in any fishing season is fixed at: a) 1. 5 million tonnes in FAO Antarctic area 48 b) 450 000 tonnes in FAO Antarctic division 58. 4. 2 A fishing season is defined as beginning on I July and finishing on 30 June of the following year. 2. The Total Allowable Catch (TAC) of Dissostichus eleginoides is fixed at: a) 4 000 tonnes, in FAO Antarctic sub-area 48. 3 from 1 March to 31 August 1996. b) 28 tonnes in the FAO Antarctic sub-area 48. 4 from 1 March to 31 August 1996 or until the TAC specified in 5 2 (a) is reached. c) 297 tonnes, in FAO Antarctic division 58. 5. 2 from 4 November 1995 to 30 June 1996. (8) O. J. L171, 06. 07. 94, p. 7 3. The Total Allowable Catch (TAC)of Champsocephalus gunnari is fixed at: a) 311 tonnes in FAO Antarctic division 58. 5. 2 from 4 November 1995 to 30 June 1996. tonnes b) 1000 in FAO Antarctic sub-area 48. 3 from 4 November 1995 to 31 March 1996. Directed fishery for Champsocephalus gunnari in FAO Antarctic sub-area 48. 3 and in the Shag Rocks region will be closed, if the by-catch of any species named in paragraph 6. (i) below exceeds the fixed limits. If in the course of the directed fishery for Champsocephalus gunnari, the by-catch of any one haul of any of the species named in paragraph 6(i) below exceeds 5%, the fishing vessel shall move to another fishing location not closer than 5 nautical miles distant. The fishing vessel shall not fish within 5 nautical miles of the location in which the by-catch exceeded 5% for a period of 5 days. 4. The Total Allowable Catch (TAC) of Crab, pamlomis spp. (order Decapoda, suborder Reptantia), is fixed at: 1 600 2 November 1996. tonnes in FAO Antarctic sub-area 48. 3 from 4 November 1995 to 5. The Total Allowable Catch of Electrona carlsbergi is fixed at: 109 000 tonnes in FAO Antarctic sub-area 48. 3 from 4 November 1995 to 2 November 1996, of which a maximum of 14 500 tonnes in the Shag Rocks region, defined as the area bounded by 52° 30' S, 40° W; 52° 30' S, 44° W; 54° 30' S, 40° W and 54° 30' S, 44° W. Directed fishery for Electrona carlsbergi in FAO Antarctic sub-area 48. 3 and in the Shag Rocks region will be closed, if the by-catch of any species named in paragraph 6. (i) below exceeds the fixed limits. If in the course of the directed fishery for Electrona carlsbergi, the by-catch of any one haul of any of the species named in paragraph 6 below exceeds 5%, the fishing vessels shall move to another fishing location not closer than 5 nautical miles distant. The fishing vessel shall not fish within 5 nautical miles of the location in which the by-catch exceeded 5%, for a period of at least five days. 6. (i) the course of fishing In in FAO Antarctic sub-area 48. 3, by-catches of Gobionotothen gibbcrrifrons shall be limited to 1 470 tonnes; by-catches of Chaenocephalus aceratus shall be limited to 2 200 tonnes; and the by-catch of Pseudochaenichthys georgianus, Notothenia rossii and Lepidonotothen squamifrons shall be limited to 300 tonnes each species. (ii) If in fishing the course of a directed for Dissostichus eleginoides or Champsocephalus gunnari FAO Antarctic division 58. 5. 2, the by-catch in any haul of any of the species Lepidonotothen squamifrons, Notothenia rossii, Channichthys rhinoceratus or Bathyrajja spp. exceeds 5%, the fishing vessels shall move to another fishing location not closer than 5 nautical miles distant. The fishing vessel shall not fish within 5 nautical miles of the location in which the by- catch exceeded 5%, for a period of at least five days. 7. 8. 1. 2. 3 4. The Total Allowable Catch (TAC) of Lepidonotothen squamifrons in the two-year period from 5 November 1994 to 2 November 1996 in FAO Antarctic division 58. 4. 4 (Ob and Lena Banks) is fixed at: 715 tonnes on Lena Bank and 435 tonnes on Ob Bank. Catches of any of the above species taken by a Community vessel for scientific fisheries research purposes will be considered as part of the catch limitations in force for each species taken, as described in the above paragraphs. Article 6 The fishery of Dissostichus eleginoides if undertaken by trawling. in Antarctic division 58. 5. 2 is prohibited except For crab fishing as defined in Article 5(4), only crab pots (traps) are authorized. This fishery shall be limited to sexually mature male crabs; all female and undersized male crabs shall be released. In the case of Paralomis spinosissima and P formosa, males with a minimum carapace width of 102 mm and 90 mm respectively, may be retained on board. Crab processed at sea shall be frozen as crab sections (minimum size of crabs can be determined using crab sections). The fishery of Dissostichus eleginoides in FAO Antarctic sub-areas 48 3 and 48. 4 is prohibited except if undertaken by longlines. The fishery of Chamsocephalus gunnari if undertaken by bottom trawls. in FAO Antarctic sub-area 48. 3 is prohibited Control Measures Article 7 Community vessels shall be subject to three different catch and effort reporting systems: 1. 2. 3. For the purposes of the Monthly Catch and Effort Reporting System, the reporting period is defined as a calendar month. For the purposes of the Ten-day Catch and Effort Reporting System, the calendar month is divided into three reporting periods, designated by the letters A, B, C and running form day 1 to day 10, day 11 to day 20, day 21 to the last day of the month respectively. For the purposes of reporting the catches under the Five-day Catch and Effort Reporting System, each calendar month is divided into six reporting periods, designated by the letters A, B, C, D and F and running from day 1 to day 5, day 6 to day 10, day 11 to day 15, day 16 to day 20, day 21 to day 25 and day 26 to the last day of the respective month. 1. The Five-day Catch and Effort Reporting system applies to: Article 8 - the fisheries of Dissostichus eleginoides in FAO Antarctic sub-area 48. 3 and 48. 4 beginning in 1 March 1996; - the fishery of Chamsocephalus gunnari in FAO Antarctic sub-area 48. 3. - the fishery of Lepidonotothen squamifrons in FAO Antarctic division 58 4. 4. 2. The Ten-day Catch and Effort report system referred applies to: - the fishery crab, pamlomis spp. (order Decapoda, suborder reptania) in FAO Antarctic sub-area 48. 3. Data on catches taken between 31 July and 25 August 1996 shall be reported to the Commission by 25 September 1996 - the fisheries of Champsocephalus gunnari and Dissostichus eleginoides and other deep-water species in FAO Antarctic division 58. 5. 2. 3. The Monthly Catch Reporting system applies to: - the fishery for Electrona Carlsbergi in FAO Antarctic sub-area 48. 3. - the fishery of Euphausia superba in FAO Antarctic area 48 and FAO Antarctic division 58. 4. 2. The Catch and Effort Reporting systems shall apply to all species fished for scientific research purposes, whenever the catch within a specific period exceeds 5 tonnes. Article 9 Masters of Community fishing vessels shall submit a catch and effort report to the competent authorities of the flag Member State, at the latest one day after the end of the relevant reporting period. Member States shall notify the Commission at the latest within three days of each reporting period, the catch and effort report transmitted by each fishing vessel flying their flag and registered in the Community Each catch and effort report shall specify the reporting period concerned The Commission shall notify to CCAMLR, at the latest within five days after the end of each reporting period, the catch and effort reports received in accordance with the paragraph 2. Article 10 The Catch and Effort Reporting system shall contain the following information, pertaining to the preceding period: the name, the external identification mark of the vessel in question, the total catches of the species concerned, the total days and hours fished, the retained catch of all species and by-catch species during that reporting period in the case of longline fisheries, the number of hooks. Article 11 Member States shall notify to the Commission the total catches, broken down by vessels, which were made by fishing vessels flying its flag and registered in the Community, in the period between 1 July 1995 and the end of the first month following the month in which the Regulation enters into force. This notification shall be made within 10 days of the end of this period. 2. All vessels fishing for crab (j>aralomis spp. ) in FAO Antarctic sub-area 48 3 arid FAO Antarctic Division 58. 4. 2 shall report the following data to the Commission by 25 August 1996 for crabs caught prior to 31 July 1996. the location, date, depth, the number and spacing of pots and soak time, and catch (number and weight) of commercially sized crabs ( reported on as fine a scale as possible, but no longer than 0. 5° latitude and 1. 0° longitude) for each 10-day period: the species, size and sex of a representative sample of crab sampled according to the procedure set out in Annex 1 (between 35 and 50 crabs shall be sampled every day from the line hauled just prior to noon) and by- catch caught in traps; and other relevant data, as possible, according to the requirements set out in Annex 1. Biological Data Reporting System Article 12 1. 2. 3. Community vessels fishing Dissostichus eleginoides and Electrona carlsbergi opérai;ng in FAO Antarctic sub-area 48. 3 and 48. 4 and vessels fishing in 48. 3 in the 1995/96 fishing season shall notify to the competent authority of the Member State whose flag they fly not later than the 15th of each month, following the month of fishing, an Effort and Biological Data Reporting System report Pursuant to this notification, Member States shall transmit this information to the Commission at the end of each month. The Commission shall immediately transmit these data to CCAMLR. The information contained in the Effort and Biological Data Reporting System report shall include the following: - the haul by-haul data required to complete the CCAMLR fine-scale catch and effort data form for longline fisheries (form C2 latest version for Dissostichus eleginoides and Electrona carlsbergi and form CI for Chamsocephalus gunnari). These data shall include the numbers of seabirds or marine mammals of each species caught and killed. - a representative sample on length composition measurements from the fishery (form B2, latest version). Length measurements of fish should be of total length to the nearest centimetre below and, representative samples of the length composition should be taken from a single fishing ground. In the event that a vessel moves from a fishing ground to another during the course of a month, then separate length compositions be submitted for each fishing ground Article 13 Suspension of Fishing Activities Following notification from CCAMLR to the Commission concerning the exhaustion of the TAC of a stock or a group of stocks fixed in Article 5, or after the expiration of the fishing season set out in Article 5, it shall be prohibited for any Community fishing vessel to fish for that stock or group of stocks, to retain on board, to tranship or to land fish taken after that date. Mesh Sizes Article 14 1. No trawl Danish seine or similar net any part of which is composed of meshes of a size smaller than those laid down in Annex 3, shall be used when engaging in directed fishery for the species or groups of species Notothenia rossii, Dissostichus eleginoides, Gobionotothen gibberifrons, Notothenia kempi, Lepidonotolhcn squamifrons and Champsocephalus gunnari. It is prohibited to use any means or device which would obstruct or diminish the size of the meshes. 2. For the nets referred to in the above paragraph, the minimum mesh size provided for in Annex 3 shall be determined in accordance with the following rules: A. Description of gauges ' (a) The gauges to be used for determining mesh size shall be 2 mm thick, flat, of durable material and capable of retaining their shape. They shall have either a series of parallel-edged sides connected by intermediate tapering edges with a taper of one to eight on each side, or only tapering edges with the taper specified above. They shall have a hole at the narrowest extremity. (b) Each gauge shall be inscribed on its face with the width in millimetres both of the parallel-sided section, if any, and of the tapering section. In the case of the latter, the width shall be inscribed at intervals of 1 mm and shall be indicated at regular intervals. B. Use of the gauge (a) The net shall be stretched in the direction of the long diagonal of the meshes. (b) A gauge as described in point A shall be inserted by its narrowest extremity into the mesh opening in a direction perpendicular to the plane of the net. (c) The gauge, shall be inserted into the mesh opening either manually or using a weight or dynamometer, until it is stopped at the tapering edges by the resistance of the mesh. 10 Selection of meshes to be measured (a) Meshes to be measured shall form a series of 20 consecutive meshes running in the direction of the long axis of the net. (b) Meshes less than 50 cm from lacings, ropes or codline shall not be measured. This distance shall be measured perpendicular to the lacings, ropes or codline with the net stretched in the direction of that measurement. Nor shall any mesh be measured which has been mended or broken or has attachments to the net fixed at that mesh. (c) By way of derogation from (a), the meshes to be measured need not be consecutive if the conditions set out in (b) apply. (d) Nets shall be measured only when wet and unfrozen. D. Measurements of each mesh The size of each mesh shall be the width of the gauge at the point where the gauge is stopped when it is used in accordance with point B E. Determination of the mesh size of the net The mesh size of the net shall be the arithmetical mean, in millimetres, of the measurements of the total number of meshes selected and measured as provided for in points C and D, the arithmetical mean being rounded off to the nearest millimetre The total number of meshes to be measured is specified in point F below. Sequence of inspection procedure (a) The inspector shall measure one series of 20 meshes, selected in accordance with point C above, inserting the gauge manually without using a weight or dynamometer. The mesh size of the net shall then be determined in accordance with point E above If the calculation of the mesh size shows that the mesh size does not appear to comply with the rules in force, two additional series of 20 meshes selected in accordance with point C above shall be measured. The mesh size shall then be recalculated in accordance with point E, taking into account the 60 meshes already measured. Without prejudice to (b) below, this shall be the mesh size of the net. 11 (b) If the master of the vessel contests the mesh size determined in accordance with (a), such measurement shall not be considered for the determination of the mesh size and the net shall be remeasured A weight or dynamometer attached to the gauge shall be used for the purposes of rcmcasurement The choice of weight or dynamometer shall be left to the discretion of the inspector. The weight shall be fixed (using a hook) to the hole in the narrowest extremity of the gauge. The dynamometer may either be fixed to the hole in the narrowest extremity of the gauge or be applied at the widest extremity of the gauge. The accuracy of the weight or dynamometer shall be certified by the appropriate national authority For nets of a mesh size of 35 mm or less as determined in accordance with (a) above, a force of 19. 61 newton (equivalent to a mass of two kilograms) shall be applied and a force of 49. 03 newton (equivalent to a mass of five kilograms), shall be applied for other nets. For the purposes of determining the mesh size in accordance with point E above (when a weight or dynamometer is used), only one series of 20 meshes shall be measured, wherever a weight of dynamometer is used. The measures applicable to reduce the incidental mortality of seabirds during longline fisheries are set out in Annex 4 Notification of a New Fishery Article 15 1 For the purposes of this Article a new fishery is a fishery on a species using a particular fishing method in a FAO Antarctic sub-area, except for FAO Antarctic sub-areas 58. 6, 58. 7 and FAO Antarctic division 58. 5. 1, for which: (a) (b) (c) information on distribution abundance, demography, potential yield and stock identity from comprehensive research/surveys or exploratory fishing have not been submitted to CCAMLR; or catch and effort data have never been submitted to CCAMLR; or catch and effort data from the two most recent seasons in which fishing occurred have not been submitted to CCAMLR The exercise of a new fishery in the CCAMLR Convention Area shall be prohibited unless authorised in accordance with paragraph 6. Any operator of a community vessel who intends to develop a new fishery in the CCAMLR Convention Area shall inform the competent authorities of the Member State whose flag the vessel flies of that intention and shall submit to those authorities the information defined in paragraph 4 to the best of his ability. 2 3 12 4. A Member State who has been informed of the intention to develop a new fishery in CCAMLR Convention Area shall notify the Commission without delay and not later than 4 months in advance of the Annual Meeting of CCAMLR. The notification shall be accompanied by as much of the following information as the Member State is able to provide: (a) (b) (c) (d) the nature of the proposed fishery including target species, methods of fishing, proposed region and any minimum level of catches that would be required to develop a viable fishery; biological information from comprehensive research/survey cruises, such as distribution, abundance, demographic data and information on stock identity; details of dependent and associated species and the likelihood of them being affected by the proposed fishery; information from other fisheries in the region or similar fisheries elsewhere that may assist in the valuation of potential yield. 5. The Commission shall forward to CCAMLR for consideration the information provided in accordance with paragraph 4, together with any other relevant information it has at its disposal. 6. As soon as CCAMLR has taken a decision, the new fishery shall be authorised by the Commission. Exploratory Fisheries Article 16 An exploratory fishery is defined as a fishery that was previously classified as a new fishery, as defined in Article 15. An exploratory fishery shall continue to be classified as such until sufficient information is available: (a) (b) (c) to evaluate the distribution, abundance and demography of the targeted species, leading to an estimate of the fishery's potential yield, to review the fishery's potential impacts on dependent and related species, and to allow CCAMLR's Scientific Committee to formulate and provide advice on appropriate harvest catch levels, as well as effort levels and fishing gear where appropriate. The information to be submitted for an exploratory fishery is set out in Annex 5. 13 Article 17 Application of Conservation Measures to Scientific Fisheries Research Activities 1 Member states whose vessels intend to conduct scientific fisheries research when the estimated catch is expected to be less than 50 tonnes, shall submit directly to CCAMLR with a copy to the Commission the following data: - name and external identification mark of vessel - division and subarea in which research is to be carried out - estimated dates of entering and leaving CCAMLR Convention Area - purpose of research - fishing equipment likely to be used 2. Community vessels referred to in paragraph 1 shall be exempted from conservation measures relating to mesh size regulations, prohibition of types of gear, closed areas, fishing seasons and size limits, and reporting system requirements other than those specified in Article 5 (8) and Article 8 (4). 3. Member States whose vessels intend to conduct scientific fisheries research where the estimated total catch is expected to be more than 50 tonnes, shall submit to CCAMLR for review, with copy to the Commission, and at least six months in advance of the planned starting date for research, the research plans using the form provided by CCAMLR. Until the review process is completed by CCAMLR and its decision notified, the planned fishing for research purposes shall not proceed 4 Member States should report catch and effort data resulting from any scientific fisheries research subject to these provisions to CCAMLR, with a copy to the Commission, according to the haul-by-haul reporting format for research vessels (form C4). A summary of the results shall be provided by the Member State to CCAMLR, with a copy to the Commission, within 180 days of the completion of the research. A full report of the results of the research shall be provided to CCAMLR, with a copy to the Commission within twelve months. Article 18 Annex 2 fixes the rules for the Experimental Harvest Regime for the Crab Fishery in FAO Antarctic sub-area 48. 3 for the seasons 1995-96 to 1997-98, and the authorised fishing areas. 14 Article 19 Community fishing vessels shall have at least one CCAMLR designated scientific observer on board when the said vessels are engaged in a fishery for: Lepidonotothen 5 November 1995 to 2 November 1996. squamifrons, in FAO Antarctic sub-area 58. 4. 4 from Dissostichus eleginoides 31 August 1996. in FAO sub-area 48. 3 and 48. 4 from 1 March to Champsocephalus gunnari in FAO sub-area 48. 3 from 4 November 1995 to 31 March 1996. Any vessel intending to participate in the fishery is required to undertake a scientific survey carried out in accordance with the survey design The Member State concerned shall transmit a list of proposed trawl survey stations to CCAMLR with a copy to the Commission at least one month before the start of the survey. Article 20 Provisions relating to the reduction in use of plastic Packaging Bands The use by fishing vessels of plastic packaging bands to secure bait boxes shall be prohibited in the 1996/1997 season. The use of packaging bands for other purposes on fishing vessels which do not use on-board incinerators shall be prohibited in the 1996/1997 season. Article 21 The changes of this Regulation necessary to implement the recommendations adopted by CCAMLR shall be made by the Commission according to the procedure laid down in Article 18 of Council Regulation 3760/92. Regulation (EEC) No 2245/85 is formally repealed. Article 22 15 Article 23 This Regulation shall enter into force on the seventh day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council The President 16 ANNEX 1 DATA REQUIREMENTS ON THE EXPLORATORY CRAB FISHERY IN FAO ANTARCTIC SUB-AREA 48. 3 Catch and Effort Data: Cruise Descriptions cruise code, vessel code, permit number, year, Pot Descriptions diagrams and other information, including pot shape, dimensions, mesh size, funnel position, aperture and orientation, number of chambers, presence of an escape port Effort Descriptions date, time, latitude and longitude of start of the set, compass bearing of the set, total number of pots set, spacing of pots on the line, number of pots lost, depth, soak time, bait type. Catch Descriptions retained catch in numbers and weight, by catch of all species (see Table 1), incremental record number for linking with sample information. Table 1 Species Data requirements Dissostichus eleginoides Notothenia rossii Other species Biological Data: Numbers and estimated total weight Numbers and estimated total weight Estimated total weight For these data, crabs are to be sampled from the line hauled just prior to noon, by collecting the entire contents of a number of pots spaced at intervals along the line so that between 35 and 50 specimens are represented in the subsample. Cruise Descriptions cruise code, vessel code, permit number. Sample Description date, position at start of the set, compass of the set, line number. Data species, sex, length of at least 35 individuals, presence/absence of rhizocephalan parasites, record of the destination of the crab (kept, discarded, destroyed), record of the pot number from which the crab comes. 17. ANNEX 2 Experimental Harvest Regime for the Crab Fishery in FAO Antarctic Sub-area 48. 3 for the 1995/96 season The following measures apply to all crab fishing within Statistical Subarea 48 3 for the 1995/96 fishing season. Every vessel participating in the crab fishery in Subarea 48. 3 shall conduct fishing operations in accordance with an experimental fishing regime as outlined below: 1. 2 The experimental regime shall consist of three phases. Each vessel participating in the fishery shall complete all three phases. Phase 1 shall be conducted during the first season that a vessel participates in the experimental regime. Phases 2 and 3 shall be completed in the next season of fishing. Vessels shall conduct Phase I of the experimental regime at the start of their first season of participation in the experimental regime For the purposes of Phase I, the following conditions shall apply: (i) (ii) Phase 1 shall be defined as a vessel's first 200 000 pot hours of effort at the start of its first fishing season. Every vessel conducting Phase I shall expend its first 200 000 pot hours of effort within a total area delineated by twelve 0. 5° latitude by 1° longitude blocks. For each string, pot hours shall be calculated by taking the total number of pots on the string and multiplying by the soak time (in hours) for that string. Soak time shall be defined for each string as the time between start of setting and start of hauling (iii) Vessels shall not fish outside the area delineated by the twelve 0 5° latitude by 1° longitude blocks prior to completing Phase 1 (iv) During Phase 1, vessels shall not expend more than 30 000 pot hours in any single 0. 5° latitude by 1° longitude block. (v) If a vessel returns to port before it has expended 200 000 pot hours in Phase 1, the balance of remaining pot hours shall be expended before the vessel can consider Phase 1 to be completed. (vi) After completing 200 000 pot hours of experimental fishing, vessels shall consider Phase 1 to be completed and commence fishing in a normal fashion. 3 Normal fishing operations shall be conducted in accordance with the regulations set out in Articles 3 and 5(4), 6(2) and 8(2) 4. For the purposes of implementing normal fishing operations after Phase I of the experimental regimen, the Ten-day catch and effort reporting system set out in 7(2) shall apply. 5. Vessels shall conduct Phase 2 of the experimental regime at the start of their second season of participation in the experimental regime. For the purposes of Phase 2, the following conditions shall apply: (i) (ii) Every vessel conducting Phase 2 shall fish in three small squares measuring approximately 26 square nautical miles in area (the dimensions of these squares shall be 6 0' latitude by 7. 5' longitude). These squares shall be subdivisions of the blocks delineated in Phase 1 of the experimental regime. The captains of vessels shall determine the location of the 3 squares that will be fished, but selected squares may not be contiguous and the distance between the boundaries of any 2 squares must be at least 4 nautical miles. (iii) Vessels shall fish continuously in emergencies or foul weather (except conditions) within a single square until the average catch per pot has been reduced to 25 percent or less of its initial value and then continue fishing for an additional 7 500 pot hours. No more than 50 000 total pot hours shall be expended each square. For the purposes of Phase 2, the initial catch rate for a particular square shall be defined as the average catch per pot calculated from the first five sets made in that square. Soak times for these initial sets shall be at least 24 hours. (iv) Vessels shall finish fishing in one square before starting operations in another square. (v) Vessels shall attempt to distribute effort throughout the entire square and not fish the gear in the same location on every set, the distance between the boundaries of any two squares being at least 4 nautical miles. (vi) After completing fishing operations in the third square, fishing vessels shall consider Phase 2 to be completed and commence fishing in a normal fashion. >. For the purposes of implementing normal fishing operations after Phase 2 of the experimental regime, the Ten-day Catch and Effort Reporting system shall apply. 1. Vessels shall conduct Phase 3 of the experimental regime at the end of their second season of participation in the experimental regime. For the purposes of Phase 3, the following conditions shall apply: (i) A vessel shall begin conducting Phase 3 of regime approximately one week prior to the conclusion of KS second fishing season A leaves the fishery vessel's fishing season shall be concluded voluntarily or if the fishery is closed because the TAC has been attained. the experimental if the vessel 19 (ii) If a Master of Community vessel voluntarily concludes fishing operations, the vessel shall begin implementing Phase 3 approximately one week prior to the conclusion of its fishing operations. (iii) CCAMLR will notify (according to the guidelines set out in Ten-day Catch and Effort Reporting system) all Contracting Parties that are conducting operations in their second experimental fishing season to begin Phase 3 when approximately one week remains before the TAC is attained and the fishery is closed. (iv) To conduct Phase 3, every vessel shall return to the three squares it depleted during Phase 2 of the experimental regime and expend between 10 000 and 15 000 pot hours of effort in each square. 8. To facilitate analysis of data collected during Phases 2 and 3, vessels shall report the coordinates defining the boundaries of the square where fishing occurred, date, number and spacing of pots and soak time, and catch (numbers and weight) for each haul. 9. Data collected during the experimental harvest regime up to the 30 June in any split year shall be submitted to CCAMLR by 31 August of the following split-year, a split year being defined as the period from 1 July to 30 June of the following year. 10. Vessels that complete all three phases of the experimental regime shall not be required to conduct experimental fishing in future seasons However, these vessels shall abide by the guidelines set forth in Articles 3, "5(4), 6 (2) and 8 (2). 11. Fishing vessels shall participate in the experiment independently (e. g. vessels may not cooperate to complete phases of the experiment). 12. Crabs captured during the experimental regime shall be considered part of the prevailing TAC for the current fishing season [e. g. for 1995/96, experimental catches shall be considered part of the 1 600 tonnes TAC outlined in Article 5 (4)]. 13. The experimental regime shall be instituted for a period of three split-years (1995/96 to 1997/98), and the details of the regime may be revised by the Commission during this period of time. Fishing vessels that begin experimental fishing in the 1996/97 split-year must complete the regime during 1998/1999 split-year, a split year being defined as the period from 1 July to 30 June of the following year. 20 ANNEX 3 Minimum mesh size provided for in Article 14 Species Type of net Notothenia rossii Dissostichus eleginoides Gobionotothen gibberifrons Notothenia kempi Lepidonotothen squamifrons Champsocephalus gunnari Trawls, Danish seines and similar nets Trawls, Danish seines and similar nets Trawls, Danish seines and similar nets Trawls, Danish seines and similar nets Trawls, Danish seines and similar nets Minimum mesh size 120 mm 120 mm 80 mm 80 mm 80 mm Trawls, Danish seines and similar nets 90 mm 21 ANNEX 4 Measures to Reduce the Incidental Mortality of Seabirds during Longline Fishing in the CCAMLR Convention Area, except for FAO Antarctic sub-areas 58. 6, 58. 7 and FAO Antarctic division 58. 5. 1: Fishing operations shall be conducted in such a way that the baited hooks sink as soon as possible after they are put in the water. Only thawed bait shall be used. Longlines shall be set at night only (between the times of nautical twilight). During longline fishing at night, only the minimum ship's lights necessary for safety shall be used. The dumping of offal should be avoided while longlines are being set or hauled; if discharge of offal is unavoidable, this discharge shall take place as far as possible and/or on the opposite side of the vessel from the area of the vessel where longlines are set or hauled. Every effort should be made to ensure that birds captured alive during longlining are released alive and that wherever possible hooks are removed without jeopardising the life of the bird concerned. A streamer line designed to discourage birds from settling on baits during deployment of longlines shall be towed. Specification of the streamer line and its method of deployment is given in the Appendix to this measure. Details of the construction relating to the member and placement of swivels may be varied so long as the effective sea surface covered by the streamer is no less than that covered by the currently specified design. Details of the device dragged in the water in order to create tension in the line may also be varied. The use of net monitor cables on harvesting vessels in the CCAMLR Convention Area is prohibited from the 1994/1995 fishing season. Data on the numbers of sea-birds of each species killed or injured in incidents involving the net monitor cable in the directed fishery of Lepidonotothen squamifrons in FAO Antarctic sub-area 58. 4. 4 for the 1995-96 season shall also be reported. Other variation in the design of streamer lines may be tested on vessels carrying two the CCAMLR scheme of observers at least one appointed International Scientific Observation. in accordance with Appendix attached. 22 Appendix to ANNEX 4 The streamer line is to be suspended at the stern from a point approximately 4 5 m above the water and such that the line is directly above the point where the baits hit the water. The streamer line is to be approximately 3 mm diameter, have a minimum length of 150 m and have a device at the end to create tension so that the main line streams directly behind the ship even in cross winds. At 5 m intervals commencing from the point of attachment to the ship five branch streamers each comprising two strands of approximately 3 mm diameter cord should be attached. The length of the streamer should range between approximately 3. 5 m nearest the ship to approximately 1. 25 m for the fifth streamer When the streamer line is deployed the branch streamers should reach the sea surface and periodically dip into it as the ship heaves Swivels should be placed in the streamer line at the towing point, before and after the point of attachment of each branch streamer and immediately before any weight placed on the end of the streamer line Each branch streamer should also have a swivel at its attachment to the streamer line ",nf. prti'H (if}>• m O l t i 'i , !' 23 Information to be submitted for an Exploratory Fishery: ANNEX 5 1. (i) To ensure that adequate information is made available to CCAMLR's Scientific Committee for evaluation, during the period when a fishery is classified as exploratory. the Scientific Committee will develop and (update annually as appropriate) a Data Collection Plan, which will identify the data needed and describe the actions necessary to obtain the relevant data from the exploratory fishery (ii) each Member State active in the fishery shall annually by the (specified date) submit to CCAMLR the data specified by the Data Collection Plan developed by the Scientific Committee; (iii) each Member State active in the fishery or intending to authorize a vessel to enter the fishery shall annually prepare and submit to CCAMLR by a specified date a Research and Fishery Operations Plan for review by the Scientific Committee and the Commission. (iv) prior to any Member State authorising its vessels to enter an exploratory fishery that is already in progress, that Member shall notify the Commission not less than three months in advance of the next regular meeting of the Commission and the Member shall not enter the exploratory fishery until the conclusion of that meeting. (v) if the data specified in the Data Collection Plan have not been submitted to CCAMLR for the most recent season in which fishing occurred, continued exploratory fishing by the Member State which failed to report its data shall be prohibited until the relevant data have been submitted to CCAMLR and the Scientific Committee has been allowed an opportunity to review the data; (vi) fishing capacity and effort shall be limited by a precautionary catch limit at a level not substantially above the necessary to obtain the information specified in the Data Collection Plan and required to make the evaluations outlined in paragraph l(ii) (vii) the name, type, size, registration number and radio call sign of each vessel participating in the exploratory fishery shall be registered with the CCAMLR Secretariat at least three months in advance of starting each fishing season; and (viii) each vessel participating in the exploratory fishery shall carry a scientific observer to ensure that the data is collected in accordance with the agreed Data Collection Plan and to assist in collecting biological and other relevant data. 24 The Data Collection Plan to be formulated and updated by the Scientific Committee shall include, where appropriate: (i) (ii) the catch effort and related biological, ecological and a description of environmental data required to undertake the evaluations described in Article 16 and the date by which the agreed data is to be annually reported to CCAMLR; a plan for directing fishing effort during the exploratory phase to permit the acquisition of relevant data to evaluate the fishery potential and the ecological relationships among harvested, dependent, and related populations and the likelihood of adverse impacts; and (iii) an evaluation of the time-scales involved in determining the responses of harvested, dependent and related populations to fishing activities. Research and Fisheries Operations Plan to be prepared by Member States' participating or intending to participate in the exploratory fishery shall include as much of the following information as the Member is able to provide: (i) (ii) (iii) (iv) (v) a description of how the Member States' activities will comply with the Data Collection Plan developed by the Scientific Committee; the nature of the exploratory fishery, including target species, methods of fishing, proposed region and maximum catch levels proposed for the forthcoming season; biological information from comprehensive research/survey cruises, such as distribution, abundance, demographic data, and information on stock identity; details of dependent and related species and the likelihood of them being affected by the proposed fishery; and information from other fisheries in the region or similar fisheries elsewhere that may assist in the evaluation of potential yield. 25 ISSN 0254-1475 COM(96) 117 final DOCUMENTS EN 03 11 Catalogue number : CB-CO-96-128-EN-C ISBN 92-78-01798-1 Office for Official Publications of the European Communities L-2985 Luxembourg X

Proposal for a COUNCIL DIRECTIVE amending Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions

http://publications.europa.eu/resource/cellar/fdc0eb34-4910-45c5-b6b6-d09d78613134

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 93 final 96/0095 (CNS) Proposal for a COUNCIL DIRECTIVE amending Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (presented by the Commission) EXPLANATORY MEMORANDUM 1. Introduction On 17 October, 1995, the European Court of Justice delivered its judgment in Case C-450/93, (Eckhard Kalanke v Freie Hansestadt Bremen), which has given rise to a great deal of controversy throughout Europe. This controversy was caused by the uncertainty created by the judgment concerning the legitimacy of quotas and other forms of positive action aimed at increasing the numbers of women in certain sectors or levels of employment. Equal treatment between men and women at work constitutes a fundamental right, as has been acknowledged by the European Court of Justice in its judgment in Case 149/77, Defrenne III. The Commission considers that, at a time when equality of opportunity for women has been recognized at the highest level (Essen, Cannes and Madrid European Councils) to be a task of paramount importance - together with the fight against unemployment - it is crucial to reaffirm the need to use, where appropriate, "positive action" measures to promote equal opportunities for women and men, in particular by removing existing factors of inequality which affect women's opportunities in the employment area. The Commission has always adopted a very favourable attitude towards positive action. In 1984, it put forward a proposal for a recommendation on the promotion of positive action(1) which was adopted by the Council. In the Kalanke case, the issue was whether a German law on positive action was compatible with Directive 76/207/EEC(2) or whether it exceeded the exception for positive action laid down therein. The law of the Land of Bremen on equal opportunities in the public sector provides that, as regards both recruitment and promotion in sectors where women are under-represented, namely if they do not represent 50% of the personnel in the different grades of the category concerned, a woman having the same qualifications as a male applicant must be given preference over him. The Court had to decide whether it was lawful to give women preference over male candidates in the event of a promotion in sectors where they were under-represented provided that their qualifications were the same. The Commission, in its Communication of. has made clear its interpretation of this judgment, as well as its own appreciation of positive action. In its judgment, the European Court of Justice makes it clear, amongst other points, that "national rules which guarantee women absolute and unconditional priority for appointment or promotion go beyond promoting equal opportunities and overstep the limits of the exception in Article 2(4) of the Directive". (i) (2) Council Recommendation 84/635/EEC of 13 December 1984 on the promotion of positive action for women (OJ No L 331, 19. 12. 1984, p. 34). Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ No L 39, 14. 2. 1976, p. 40). The Commission considers that the Court has only condemned the special feature of tht Bremen law which consists in the automaticity of the measure, giving women absolute and unconditional right to appointment or promotion. Therefore, the Commission takes the position that the only type of quota system which is unlawful is one which is completely rigid and does not leave any possibility of taking account of individual circumstances Member States and employers are thus free to have recourse to all other forms of positive actions, including flexible quotas. The Commission is anxious that the controversy to which the Kalanke case has given rise should be ended definitively. Therefore, notwithstanding the limited nature of the impaa of this judgment as properly construed, the Commission believes that it is necessary to amend the wording of Article 2(4) of Directive 76/207/EEC so that the text of the provision specifically permits the kinds of positive action which remain untouched by Kalanke. Thus, all kinds of positive action will be permitted, provided they allow for the assessment of the particular circumstances of the individual case. The amendment is of an interpretative nature. II. Comments on the Articles Article 1 The text reflects the interpretation of the Kalanke judgment by the Commission according to which a wide range of action (see Communication on the Kalanke judgment) to promote access to employment and promotion of members of the under-represented sex continues to be legal. "Positive action" measures have to leave the possibility for the employer to assess particular factors that justify the choice of a person who does not belong to the under-represented sex. The wording takes account of the fact that equality policy is a policy to promote equal opportunities for men and women. Articles 2 and 3 These Articles contain the usual provisions for transposai into the national law of the Member States. III. Justification for the proposal with regard to the principle of subsidiarity The proposal for an amendment of Directive 76/207/EEC complies with the principle of subsidiarity as regards its two criteria, namely necessity and proportionality as laid down in Article 3b of the Maastricht Treaty. The first criterion, namely the necessity to undertake Community action, is satisfied in that action is required in order to avoid possible confusion on the part of national and Community authorities at all levels that are called upon to apply Community law and particularly Article 2(4) of the existing Directive 76/207/EEC. The Kalanke judgment has given rise to diverging interpretations that threaten the effectiveness of positive action in favour of the under-represented sex. As it is generally recognized that equal access to employment is one of the most important conditions for the implementation of the principle of equal treatment which is one of the fundamental rights forming part of the general principles of Community law*3*, the amendment will help to enable the implementation of the Directive in a consistent and uniform manner. As for the second criterion, the proposed Directive corresponds to the requirement of proportionality in so far as the amendment is only of a declaratory nature and does not alter the scope of the Directive. Consultation process The Commission has consulted the social partners on the Communication on the Kalanke case. This proposal for an amendment of Directive 76/207/EEC reflects the interpretation given in the Communication and transforms the contents of the Communication into a legally-binding document. Application in the EEA States Directive 76/207/EEC is part of the acquis communautaire of the Agreement on the European Economic Area that entered into force with effect from 1 January 1994. Directive 76/207/EEC features in the list of the instruments of secondary legislation agreed by the EEA States (Annex XVIII, point 18). (3) See inter alia Case C-149/77 (Defrenne III, judgment of 15 June 1978). 4 Proposal for a COUNCIL DIRECTIVE amending Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament0*, Having regard to the opinion of the Economic and Social Committee<2), Whereas Article 2(4) of Council Directive 76/207/EEC(3) states that "this Directive shall be without prejudice to measures to promote equal opportunity for men and women, in particular by removing existing inequalities which affect women's opportunities in the areas referred to in Article 1(1)"; Whereas the Member States have undertaken various forms of positive action in order to achieve the implementation of the principle of equal treatment for men and women in respect of access to employment and vocational training and promotion, as well as in respect of working conditions; Whereas in the light of the case law of the Court of Justice of the European Communities, notably in its judgment of 17 October 1995 in Case C-450/93 (Kalanke v Freie Hansestadt Brernen(4>) concerning Article 2(4) of Directive 76/207/EEC, positive action measures may favour the access of the under-represented sex to employment, appointment and promotion to particular posts, including the giving of preference to the under-represented sex, provided that any system providing for such preference allows account to be taken of the particular circumstances in a given case; Whereas it is appropriate to clarify Article 2(4) of Directive 76/207/EEC in a manner consistent with the case law; Whereas positive action measures should be capable of benefiting members of whichever sex is under-represented in a given sector or level of employment; Whereas the Treaty provides no powers other than those in Article 235 for the adoption of this Directive, (i) (2) (3) (4) O J N o L 3 9, 14. 2. 1976, p. 40. [1995] ECR 1-3051. HAS ADOPTED THIS DIRECTIVE: Article 1 Article 2(4) of Directive 76/207/EEC is replaced by the following: " 4. This Directive shall be without prejudice to measures to promote equal opportunity for men and women, in particular by removing existing inequalities which affect the opportunities of the under-represented sex in the areas referred to in Article 1(1). Possible measures shall include the giving of preference, as regards access to employment or promotion, to a member of the under-represented sex, provided that such measures do not preclude the assessment of the particular circumstances of an individual case. " Article 2 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 1 December 1998 at the latest or will ensure by that date at the latest that management and labour have introduced the necessary measures by agreement, the Member States being required to take any necessary measure enabling them at any time to be in a position to guarantee the results imposed by this Directive. They shall immediately inform the Commission thereof. When Member States adopt these provisions, these shall contain a reference to this Directive or shall be accompanied by such reference at the time of their official publication. The procedure for such reference shall be adopted by Member States. Article 3 This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. This Directive is addressed to the Member States. Article 4 Done at Brussels, For the Council The President IMPACT ASSESSMENT FORM IMPACT OF THE PROPOSAL ON BUSINESS, WITH SPECIAL REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES Taking account of the principle of subsidiarity, why is Community legislation necessary in this area and what are its main aims? The objective is to clarify an act of secondary legislation (Directive 76/207EEC) as interpreted by the Court of Justice. A proposal for an amended Directive is the only way to do this. Who will be affected by the proposal? As the amendment has a clarifying character only, employers are no more affected than they already are by Directive 76/207/EEC. What will businesses have to do to comply with the proposal? In so far as businesses have plans for preferential access of the under-represented sex, they have to provide for a clause that allows for the assessment of the individual case. ISSN 0254-1475 COM(96) 93 final DOCUMENTS EN 04 Catalogue number : CB-CO-96-152-EN-C ISBN 92-78-02458-9 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and the Republic of Azerbaijan, of the other part

http://publications.europa.eu/resource/cellar/5a9032f1-54ff-4a04-b094-0b726a55b555

eng

"r «J'iS'1!) •M » * *v V. <- z 4 COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 137 final 96/094 (AVC) MÉBAft m MS Proposai for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and the Republic of Azerbaijan, of the other part (presented by the Commission) WW Kl -. - ,#£' _. ' S li "•" < * ^ Art" 2i ,® 'it"' *' f* £ ï' "? ' 31»-' Î J - T3 « mm Explanatory memorandum 1. The attached proposal for a Council and Commission Decision constitutes the legal instrument for the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States, on the one hand, and the Republic of Azerbaijan, on the other. 2. Following the Council's adoption of the negotiating directives on 5 October 1992, negotiations with the Republic of Azerbaijan were held in the course of 1995. After two rounds of negotiations, the Agreement was initialled on 18 December 1995. 3. The Agreement is a mixed agreement covering areas for which both the Communities and the Member States are competent, and is concluded for an initial period often years. It establishes a political dialogue. The Agreement also covers trade in goods, labour conditions, establishment and operation of companies, cross-border supply of services, payments and capital, competition, intellectual, industrial and commercial property protection, legislative cooperation, economic cooperation, cooperation on human rights and democracy, cooperation in combatting illegal activities and illegal immigration, cultural cooperation and financial cooperation. The Agreement contains a clause which allows it to be suspended, even unilaterally, if it is considered that there has been a breach of the essential elements underlying the Agreement i. e. respect for democracy, human rights and the principles of the market economy. The Agreement sets out an institutional framework for its implementation with a Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation Committee. Customs cooperation is covered by a separate protocol. IK The Agreement will, as far as trade relations between the Community and the Republic of Azerbaijan are concerned, replace the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community, and the USSR, signed on 18 December 1989. 5. The procedures of the three Communities (EC, EAEC and ECSC) for signing and concluding the Agreement differ. In the case of the EC, account will have to be taken of Opinion 1/94 delivered by the Court of Justice on 15 November 1994 on the competence of the European Community to conclude the agreements reached during the Uruguay Round. For the purpose of concluding the Agreement:. the Council will conclude the Agreement, with the assent of the European Parliament and having consulted the Economic and Social Committee, on behalf of the European Community in accordance with Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) of the EC Treaty by adopting the attached decision; the Commission will conclude the Agreement on behalf of the European Atomic Energy Community after the Council has approved it in accordance with the second paragraph of Article 101 of the Euratom Treaty. the Commission will conclude the Agreement on behalf of the ECSC in accordance with the ECSC Treaty, after consulting the Consultative Committee and with the unanimous assent of the Council; The conclusion of the Agreement will have to be ratified by all the Member States given the mixed nature of the Agreement. 6. In view of the above, the Commission proposes that the Council adopt the annexed decision. lb COUNCIL AND COMMISSION DECISION OF on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Azerbaijan. (. /. /ECSC, EC, EURATOM) THE COUNCIL OF THE EUROPEAN UNION, THE EUROPEAN COMMISSION, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to the Treaty establishing the European Community, and in particular Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, £4(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular the second paragraph of Article 101 thereof, Having regard to the assent of the European Parliament, Having regard to the approval of the Council given in accordance with Article 101 of the Treaty establishing the European Atomic Energy Community, Having consulted the ECSC Consultative Committee and the Economic and Social Committee, and with the unanimous assent of the Council, Whereas the conclusion of the Partnership and Cooperation Agreement between the European on. would contribute to achieving the European Union and Azerbaijan signed in Communities' objectives; Whereas that Agreement seeks to strengthen existing links, notably those established by the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community and the USSR, signed on 18 December 1989; Whereas some of the obligations provided for in the Agreement in fields other than Community trade policy affect the arrangements established by Community acts, particularly acts relating to the right of establishment and to transport; e Whereas the Agreement imposes on the Community certain obligations relating to the movement of capital and payments between the Community and Azerbaijan; Whereas in the case of certain measures provided for in the Agreement and falling within the Community's powers the EC Treaty provides no basis for action other than Article 235, HAVE DECIDED AS FOLLOWS : Article 1 The Partnership and Cooperation Agreement between the European Union and the Republic of Azerbaijan, together with the Protocol, the declarations and the exchange of letters, are hereby approved on behalf of the European Community, the European Coal and Steel Com munity and the European Atomic Energy Community. Article 2 1. The position to be adopted by the Community in the Cooperation Council shall be determined by the Council, on a proposal from the Commission, or, where appropriate, by the Commission, in each case in accordance with the relevant provisions of the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community. 2. In accordance with Article 79 of the Partnership and Cooperation Agreement, the President of the Council shall chair the Cooperation Council and shall present the Community's position. A representative of the Commission shall chair the Cooperation Committee in accordance with its rules of procedure and shall present the Community's position. Article 3 The President of the Council shall give the notification provided for in Article 100 of the Agreement on behalf of the European Community. The President of the Commission shall give such notification on behalf of the European Coal and Steel Community and the European Atomic Energy Community. Done at Brussels, U Final Act The plenipotentiaries of: THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE PORTUGUESE REPUBLIC, THE REPUBLIC OF FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND Contracting Parties to the Treaty establishing the EUROPEAN COMMUNITY, the Treaty establishing the EUROPEAN COAL AND STEEL COMMUNITY, and the Treaty establishing the EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Member States", and of the EUROPEAN COMMUNITY, THE EUROPEAN ATOMIC ENERGY COMMUNITY and the EUROPEAN COAL AND STEEL COMMUNITY, hereinafter referred to as "the Community", of the one part, and the plenipotentiaries of the Republic of Azerbaijan, / e. of the other part, meeting at. on in the year one thousand nine hundred and ninety-six for the signature of the Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Members States, of the one part, and the Republic of Azerbaijan, of the other part, hereinafter referred to as "the Partnership and Cooperation Agreement", have adopted the following text : the Partnership and Cooperation Agreement and the Protocol on mutual assistance in customs matters. The plenipotentiaries of the Member States and of the Community and the plenipotentiaries of the Republic of Azerbaijan have adopted the texts of the Joint Declarations listed below and annexed to this Final Act: Joint Declaration (concerning the twelfth recital in the preamble) Joint Declaration concerning Article 3bis of the Agreement Joint Declaration concerning Article 5 of the Agreement Joint Declaration concerning Article 14 of the Agreement Joint Declaration concerning the notion of "control" in Article 24(b) and Article 36 of the Agreement Joint Declaration concerning Article 35 of the Agreement Joint Declaration concerning Article 42 of the Agreement Joint Declaration concerning Article 54 of the Agreement Joint Declaration concerning Article 94 of the Agreement The plenipotentiaries of the Member States and of the Community and the plenipotentiaries of the Republic of Azerbaijan have adopted the exchange of letters listed below and annexed to this Final Act: Exchange of letters in relation to the establishment of companies The plenipotentiaries of the Member States and the Community and the Republic of Azerbaijan have also taken note of the declaration listed below annexed to this Final Act: Unilateral Declaration by the French Republic on the Overseas Countries and Territories Done at in the year one thousand nine hundred and ninety six. For the Council and the Commission of the European Communities. For the Republic of Azerbaijan. // PARTNERSHIP AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES AND THEIR MEMBER STATES, OF THE ONE PART, AND THE REPUBLIC OF AZERBAIJAN, OF THE OTHER PART 9- J* PARTNERSHIP AND COOPERATION AGREEMENT establishing a partnership between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part. THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS. AUSTRIA, THE PORTUGUESE REPUBLIC, FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, Contracting Parties to the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community, and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as "Member States", and THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY, AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Community", of the one part, AND THE REPUBLIC OF AZERBAIJAN of the other part, CONSIDERING the links between the Community, its Member States and the Republic of Azerbaijan and the common values that they share, V - -* 2 * rf RECOGNIZING that the Community and the Republic of Azerbaijan wish to strengthen these links and to establish partnership and cooperation which would strengthen and widen the relations established in the past in particular by the Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on Trade and Commercial and Economic Cooperation, signed on 18 December 1989, which, since the dissolution of the USSR, applies mutatis mutandis to bilateral relations between the European Communities and each of the Independent States. CONSIDERING the commitment of the Community and its Member States and of the Republic of Azerbaijan to strengthening the political and economic freedoms which constitute the very basis of the partnership, RECOGNIZING in that context that support of the independence, sovereignty and territorial integrity of the Republic of Azerbaijan will contribute to safeguarding of peace and stability in Europe, CONSIDERING the commitment of the Parties to promote international peace and security, as well as the peaceful settlement of disputes and to cooperate to this end in the framework of the United Nations and the Organisation for Security and Cooperation in Europe, DESIROUS of encouraging the process of regional cooperation in the areas covered by this agreement with neighbouring countries in order to promote the prosperity and stability of the region and in particular initiatives aimed at fostering cooperation and mutual confidence among Independent States of the Transcaucasus region and other neighbouring States, CONSIDERING the firm commitment of the Community and its Member States and of the Republic of Azerbaijan to the full implementation of all principles and provisions contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the Concluding Documents of the Madrid and Vienna Follow Up Meetings, the Document of the CSCE Bonn Conference on Economic Cooperation, the Charter of Paris for a New Europe and the CSCE Helsinki Document 1992 "The Challenges of Change", and other fundamental documents of the OSCE, CONVINCED of the paramount importance of the rule of law and respect for human rights, particularly those of persons belonging to minorities,, the establishment of a multiparty system with free and democratic elections and economic liberalization aimed at setting up a market economy, BELIEVING that full implementation of this Partnership and Cooperation Agreement will both depend on and contribute to continuation and accomplishment of the political, economic and legal reforms in the Republic of Azerbaijan, as well as the introduction of the factors necessary for cooperation, notably in the light of the conclusions of the CSCE Bonn Conference, DESIROUS of establishing and developing regular political dialogue on bilateral, regional and international issues of mutual interest, RECOGNIZING AND SUPPORTING the wish of the Republic of Azerbaijan to establish close co-operation with European Institutions, CONSIDERING the necessity of promoting investment in the Republic of Azerbaijan, including in the energy sector, and in this context the importance attached by the Community and its Member States to equitable conditions for access to and transit for export of energy products; confirming the attachment of the Community and its Member States and of the Republic of Azerbaijan to the European Energy Charter, and to the full implementation of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects, TAKING ACCOUNT of the Community's willingness to provide for economic cooperation and technical assistance as appropriate, BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between the Republic of Azerbaijan and a wider area of cooperation in Europe and neighbouring regions and its progressive integration into the open international system, CONSIDERING the commitment of the Parties to liberalise trade, in conformity with World Trade Organisation (WTO) rules, CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements, CONVINCED that this Agreement will create a new climate for economic relations between the Parties and in particular for the development of trade and investment, which are essential to economic restructuring and technological modernization, DESIROUS of establishing close cooperation in the area of environment protection taking into account the interdependence existing between the Parties in this field, RECOGNIZING that co-operation for the prevention and control of illegal immigration constitutes one of the primary objectives of this Agreement, DESIROUS of establishing cultural cooperation and improving the flow of information, HAVE AGREED AS FOLLOWS: jrr ARTICLE 1 A Partnership is hereby established between the Community and its Member States of the one part, and the Republic of Azerbaijan of the other part. The objectives of this partnership are: - - - - to provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations; to support the Republic of Azerbaijan's efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy; to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development; to provide a basis for legislative, economic, social, financial, civil scientific, technological and cultural cooperation. sir TITLE I GENERAL PRINCIPLES ARTICLE 2 Respect for democracy, principles of international law and human rights as defined in particular in the United Nations Charter, the Helsinki Final Act and the Charter of Paris for a New Europe, as well as the principles of market economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal and external policies of the Parties and constitute essential elements of partnership and of this Agreement. ARTICLE 3 The Parties consider that it is essential for their future prosperity and stability that the newly independent states which have emerged from the dissolution of the Union of Soviet Socialist Republics, hereinafter called "Independent States", should maintain and develop cooperation among themselves in compliance with the principles of the Helsinki Final Act and with international law and in the spirit of good neighbourly relations and will make every effort to encourage this process. ARTICLE 3bis The Parties shall as appropriate review changing circumstances in the Republic of Azerbaijan, in particular regarding economic conditions there and implementation of market-oriented economic reforms. The Cooperation Council may make recommendations to the Parties concerning development of any part of this Agreement in the light of these circumstances. st TITLE D POLITICAL DIALOGUE ARTICLE 4 A regular political dialogue shall be established between the Parties which they intend to develop and intensify. It shall accompany and consolidate the rapprochement between the Community and the Republic of Azerbaijan, support the political and economic changes underway in that country and contribute to the establishment of new forms of cooperation. The political dialogue: - will strengthen the links of the Republic of Azerbaijan with the Community and its Member States, and thus with the community of democratic nations as a whole. The economic convergence achieved through this Agreement will lead to more intense political relations; - will bring about an increasing convergence of positions on international issues of mutual concern thus increasing security and stability in the region and promoting the future development of the Independent States of the Transcaucasus, - shall foresee that the Parties endeavour to co-operate on matters pertaining to the strengthening of stability and security in Europe, the observance of the principles of democracy, and the respect and promotion of human rights, particularly those of persons belonging to minorities and shall hold consultations, if necessary, on relevant matters. Such dialogue may take place on a regional basis, with a view to contributing towards the resolution of regional conflicts and tensions. ARTICLE 5 At ministerial level, political dialogue shall take place within the Cooperation Council established in Article 77 and on other occasions by mutual agreement. ARTICLE 6 Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in particular in the following forms: - regular meetings at senior official level between representatives of the Community and its Member States on the one hand, and representatives of the Republic of Azerbaijan on the other hand;. A#f taking full advantage of diplomatic channels between the Parties including appropriate contacts in the bilateral as well as the multilateral field, such as United Nations, OSCE meetings and elsewhere, any other means, including the possibility of expert meetings which would contribute to consolidating and developing this dialogue. ARTICLE 7 Political dialogue at parliamentary level shall take place within the framework of the Parliamentary Cooperation Committee established in Article 82. ^rr TITLE HI TRADE IN GOODS ARTICLE 8 1. The Parties shall accord to one another most-favoured-nation treatment in all areas in respect of: - customs duties and charges applied to imports and exports, including the method of collecting such duties and charges, taxes and other internal charges of any kind applied directly or indirectly to imported goods, - provisions relating to customs clearance, transit, warehouses and transhipment, - - methods of payment and the transfer of such payments, - the rules relating to the sale, purchase, transport, distribution and use of goods on the domestic market. 2. The provisions of paragraph 1 shall not apply to: (a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant to the creation of such a union or area, (b) advantages granted to particular countries in accordance with the GATT and with other international arrangements in favour of developing countries; (c) advantages accorded to adjacent countries in order to facilitate frontier traffic 3. The provisions of paragraph 1 shall not apply, during a transitional period expiring on the date of the Republic of Azerbaijan acceding to the GATT or on 31 December 1998, whichever is earlier, to advantages defined in Annex I granted by the Republic of Azerbaijan to other states which have emerged from the dissolution of the USSR. ARTICLE 9 1. The Parties agree that the principle of free transit is an essential condition of attaining the objectives of this Agreement. In this connection each Party shall secure unrestricted transit via or through its territory of goods originating in the customs territory or destined for the customs territory of the other Party. 2. The rules described in the Article V, paragraphs 2, 3, 4 and 5 of the GATT are applicable between the two Parties. 3. The rules contained in this Article are without prejudice to any special rules relating to specific sectors, in particular such as transport, or products agreed between the Parties, or to the provisions of Article 86. ,4#f ARTICLE 10 Without prejudice to the rights and obligations stemming from international conventions on the temporary admission of goods which bind both Parties, each Party shall furthermore grant the other Party exemption from import charges and duties on goods admitted temporarily, in the instances and according to the procedures stipulated by any other international convention on this matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions under which the obligations stemming from such a convention have been accepted by the Party in question. ARTICLE 11 1. Goods originating in the Republic of Azerbaijan shall be imported into the Community free of quantitative restrictions without prejudice to the provisions of Articles 13, 16 and 17 of this Agreement. 2. Goods originating in the Community shall be imported into the Republic of Azerbaijan free of all quantitative restrictions and measures of equivalent effect without prejudice to Articles 13, 16 and 17 of this Agreement Goods shall be traded between the Parties at market-related prices. ARTICLE 12 ARTICLE 13 1. Where any product is being imported into the territory of one of the Parties in such increased quantities or under such conditions as to cause or threaten to cause injury to domestic producers of like or direct competitive products, the Community or the Republic of Azerbaijan, whichever is concerned, may take appropriate measures in accordance with the following procedures and conditions. 2. Before taking any measures, or in cases to which paragraph 4 applies as soon as possible thereafter, the Community or the Republic of Azerbaijan, as the case may be, shall supply the Cooperation Council with all relevant information with a view to seeking a solution acceptable to both Parties as provided for in Title XI. 3. If, as a result of the consultations, the Parties do not reach agreement within 30 days of referral to the Cooperation Council on actions to avoid the situation, the Party which requested consultations shall be free to restrict imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury, or to adopt other appropriate measures. 4. In critical circumstances where delay would cause damage difficult to repair, the Parties may take the measures before the consultations, on the condition that consultations shall be offered immediately after taking such action. 10 ^f 5. In the selection of measures under this Article, the Contracting Parties shall give priority to those which cause least disturbance to the achievement of the aims of this Agreement. 6 Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI of the GATT, the Agreement on implementation of Article VI of the GATT, the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal legislation. ARTICLE 14 The Parties undertake to consider development of the provisions in this Agreement on trade in goods between them, as circumstances allow, including the situation arising from the accession of the Republic of Azerbaijan to the WTO. The Cooperation Council may make recommendations on such developments to the Parties which could be put into effect, where accepted, by virtue of agreement between the Parties in accordance with their respective procedures. ARTICLE 15 The Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security, the protection of health and life of humans, animals or plants; the protection of natural resources, the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties. ARTICLE 16 This Title shall not apply to trade in textile products falling under Chapters 50 to 63 of the Combined Nomenclature. Trade in these products shall be governed by a separate agreement, initialled on 17 November 1993 and applied provisionally since 1 January 1993, and by any successor agreements. ARTICLE 17 1. Trade in products covered by the Treaty establishing the European Coal and Steel Community shall be governed by the provisions of this Title, with the exception of Article 11 2. A contact group on coal and steel matters is set up, comprising representatives of the Community on the one hand, and representatives of the Republic of Azerbaijan on the other. The contact group shall exchange, on a regular basis, information on all coal and steel matters of interest to the Parties. ARTICLE 18 Trade in nuclear materials will be conducted in accordance with the provisions of the Treaty establishing the European Atomic Energy Community. If necessary, trade in nuclear materials shall be subject to the provisions of a specific Agreement to be concluded between the European Atomic Energy Community and the Republic of Azerbaijan. 11 ïtrT TITLE IV PROVISIONS AFFECTING BUSINESS AND INVESTMENT CHAPTER 1 Labour Conditions ARTICLE 19 1. Subject to the laws, conditions and procedures applicable in each Member State, the Community and the Member States shall endeavour to ensure that the treatment accorded to Azerbaijani nationals legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals 2. Subject to the laws, conditions and procedures applicable in the Republic of Azerbaijan, the Republic of Azerbaijan shall ensure that the treatment accorded to nationals of a Member State legally employed in the territory of the Republic of Azerbaijan shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. ARTICLE 20 The Cooperation Council shall examine which improvements can be made in working conditions for business people consistent with the international commitments of the Parties, including those set out in the document of the CSCE Bonn Conference. ARTICLE 21 The Cooperation Council shall make recommendations for the implementation of Articles 19 and 20. 12 ^rT CHAPTER D Conditions affecting the establishment and operation of companies ARTICLE 22 1. The Community and its Member States shall grant treatment no less favourable than that accorded to any third country for the establishment of Azerbaijani companies as defined in Article 24(d). 2. Without prejudice to the reservations listed in Annex IV, the Community and its Member States shall grant to subsidiaries of Azerbaijani companies established in their territories a treatment no less favourable than that granted to any Community companies, in respect of their operation. 3. The Community and its Member States shall grant to branches of Azerbaijani companies established in their territories treatment no less favourable than that accorded to branches of companies of any third country', in respect of their operation. 4. Without prejudice to the reservations listed in Annex V, the Republic of Azerbaijan shall grant for the establishment of Community companies as defined in Article 24(d) treatment no less favourable than that accorded to Azerbaijani companies or to any third country companies, whichever is the better, and shall grant to subsidiaries and branches of Community companies established in its territory treatment no less favourable than that accorded to its own companies or branches or to any third country company or branch, whichever is the better, in respect of their operations. s ^ 13 <7*^f ARTICLE 23 1. Without prejudice to the provisions of Article 96, the provisions of. Article 22 shall not apply to air transport, inland waterways transport and maritime transport 2. However, in respect of activities, as indicated below, undertaken by shipping agencies for the provision of services to international maritime transport, including intermodal transport operations involving a sea-leg, each Party shall permit to the companies of the other Party to have a commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better, and this in conformity with the legislation and regulations applicable in each Party. 3. Such activities include, but are not limited to: a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing, whether these services are operated or offered by the service supplier itself or by service suppliers with which the service seller has established standing business arrangements, b) purchase and use, on their own account or on behalf of their customers (and the resale to their customers) of any transport and related services, including inward transport services by any mode, particularly inland waterways, road and rail, necessary for the supply of an integrated service; c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported; d) provision of business information by any means, including computerised information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications); e) setting up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency; f) acting on behalf of the companies, inter alia in organizing the call of the vessel or taking over cargoes when required For the purpose of this Agreement. ARTICLE 24 (a) A "Community company" or an "Azerbaijani company" respectively shall mean a company set up in accordance with the laws of a Member State or of the Republic of Azerbaijan respectively and having its registered office or central administration, or principal place of business in the territory of the Community or the Republic of Azerbaijan respectively. However, should the company, set up in accordance with the laws of a Member State or the Republic of Azerbaijan respectively, have only its registered office in the territory of the Community or the Republic of Azerbaijan respectively, the company shall be considered a Community or Azerbaijani company respectively if its operations possess a real and continuous link with the economy of one of the Member States or the Republic of Azerbaijan respectively. (b) "Subsidiary" of a company shall mean a company which is effectively controlled by the first company. (c) "Branch" of à company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension. (d) "Establishment" shall mean the right of Community or Azerbaijani companies as referred to in point (a), to take up economic activities by means of the setting up of subsidiaries and branches in the Republic of Azerbaijan or in the Community respectively (e) "Operation" shall mean the pursuit of economic activities. (f) "Economic activities" shall mean activities of an industrial, commercial and professional character. With regard to international maritime transport, including inter modal operations involving a sea leg, nationals of the Member States or of the Republic of Azerbaijan established outside the Community or the Republic of Azerbaijan respectively, and shipping companies established outside the Community or the Republic of Azerbaijan and controlled by nationals of a Member State or Azerbaijani nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III if their vessels are registered in that Member State or in the Republic of Azerbaijan respectively in accordance with their respective legislation. ARTICLE 25 1. Notwithstanding any other provisions of the Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the obligations of a Party under the Agreement. 2. Nothing in the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities 3. For the purpose of this Agreement, "financial services" shall mean those activities described in Annex III. 15. **-9^ ARTICLE 26 The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third country access to its market, through the provisions of this Agreement marL-pt t h r n n oh thp nrnviçinnc nf this Aorf»f»mf»nt ARTICLE 27 1. Notwithstanding the provisions of Chapter I of this Title, a Community company or an Azerbaijani company established in the territory of the Republic of Azerbaijan or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of the Republic of Azerbaijan and the Community respectively, employees who are nationals of Community Member States and the Republic of Azerbaijan respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by companies, or branches The residence and work permits of such employees shall only cover the period of such employment 2. Key personnel of the above mentioned companies herein referred to as "organizations" are "intra-corporate transferees" as defined in (c) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than majority shareholders), for at least the year immediately preceding such movement. (a) Persons working in a senior position with an organization, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including: - directing the establishment or a department or subdivision of the establishment, - supervising and controlling the work of other supervisory, professional or managerial, employees, - having the authority personally to hire and fire or recommend hiring, firing or other personnel actions, (b) Persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession; (c) An "intra-corporate transferee" is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party. 16 ^fff ARTICLE 29 1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement 2. The provisions of this Article are without prejudice to those of Article 37: the situations covered by such Article 37 shall be solely governed by its provisions to the exclusion of any other. 3. Acting in the spirit of partnership and cooperation and in the light of the provisions of Article 43 the Government of the Republic of Azerbaijan shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in the Republic of Azerbaijan of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. The Community may request the Republic of Azerbaijan to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts 4. Where new legislation or regulations introduced in the Republic of Azerbaijan would result in rendering the conditions for operation of subsidiaries and branches of Community companies established in the Republic of Azerbaijan more restrictive than the situation existing on the day of signature of the Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in the Republic of Azerbaijan at the time of entry into force of the relevant act Cross border supply of services between the Community and the Republic of Azerbaijan CHAPTER IQ ARTICLE 30 1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the supply of services by Community or Azerbaijani companies which are established in a Party other than that of the person for whom the services are intended taking into account the development of the service sectors in the Parties 2. The Cooperation Council shall make recommendations for the implementation of paragraph 1. 17 ^r ARTICLE 31 The Parties shall cooperate with the aim of developing a market oriented service sector in the Republic of Azerbaijan ARTICLE 32 1. The Parties undertake to apply effectively the principle of unrestricted access to the international maritime market and traffic on a commercial basis: (a) the above provision does not prejudice the rights and obligations arising from the United Nations Convention on a Code of Conduct for Liner Conferences, as applicable to one or other Contracting Party to this Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis, (b) the Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade 2. In applying the principles of paragraph 1, the Parties shall: (a) not apply, as from entry into force of this agreement, any cargo sharing provisions of bilateral agreements between any Member States of the Community and the former Soviet Union; (b) not introduce cargo sharing clauses into future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to tlpis Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned; (c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade; (d) abolish upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport. 3. Each Party shall grant, inter alia, no less favourable treatment, for the ships operated by nationals or companies of the other Party, than that accorded to a Party's own ships, with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading. 4. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of the Republic of Azerbaijan and vice versa. 18 / ARTICLE 33 With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties after entry into force of this Agreement CHAPTER IV General Provisions ARTICLE 34 1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health. 2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority. ARTICLE 35 For the purpose of this Title, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of the Agreement The above provision does not prejudice the application of Article 34. ARTICLE 36 Companies which are controlled and exclusively owned by Azerbaijani companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV. ARTICLE 37 Treatment granted by either Party to the other thereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, sub-sector and mode of supply. 19 s*T ARTICLE 38 For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or the Republic of Azerbaijan pursuant to commitments entered into in economic integration agreements in accordance with the principles of Article V of the GATS ARTICLE 39 1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements 2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation 3. Nothing in this Title shall be construed to prevent Member States or the Republic of Azerbaijan from distinguishing, in the application of the relevant provisions of their fiscal legislation, between tax payers who are not in identical situations, in particular as regards their place of residence ARTICLE 40 Without prejudice to Article 27, no provision of Chapters II, III and IV shall be interpreted as giving the right to: - nationals of the Member States or of the Republic of Azerbaijan respectively to enter, or stay in, the territory of the Republic of Azerbaijan or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employee thereof or supplier or recipient of services, - Community subsidiaries or branches of Azerbaijani companies to employ or have employed in the territory of the Community nationals of the Republic of Azerbaijan, - Azerbaijani subsidiaries or branches of Community companies to employ or have employed in the territory of the Republic of Azerbaijan nationals of the Member States, - Azerbaijani companies or Community subsidiaries or branches of Azerbaijani companies to supply Azerbaijani persons to act for and under the control of other persons by temporary employment contracts, - Community companies or Azerbaijani subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts. 20 ^rfo CHAPTER V Current payments and capital ARTICLE 41 1. The Parties undertake to authorise in freely convertible currency, any current payments between residents of the Community and of the Republic of Azerbaijan connected with the movement of goods, services or persons made in accordance with the provisions of this Agreement. 2. With regard to transactions on the capital account of balance of payments, from entry into force of the Agreement, the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured 3. The provisions of paragraph 2 shall not prevent the Republic of Azerbaijan from applying restrictions on outward direct investment by Azerbaijani residents. Such restrictions shall not apply to subsidiaries and branches of Community companies. Five years after the entry into force of this Agreement, the Parties agree to consult over the maintenance of these restrictions, taking into account all the relevant monetary, fiscal and financial considerations 4. Without prejudice to paragraph 2 or to paragraph 5, as from entry into force of this Agreement, no new foreign exchange restrictions on the movement of capital and current payments connected therewith between residents of the Community and the Republic of Azerbaijan shall be introduced and the existing arrangements shall not become more restrictive 5. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 above between the Community and the Republic of Azerbaijan in order to promote the objectives of this Agreement 6. With reference to the provisions of this Article, until a full convertibility of the Azerbaijani currency within the meaning of Article VIII of the Articles of Agreement of the International Monetary Fund (IMF) is introduced, the Republic of Azerbaijan may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term financial credits to the extent that such restrictions are imposed on the Republic of Azerbaijan for the granting of such credits and are permitted according to the Republic of Azerbaijan's status under the IMF The Republic of Azerbaijan shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. The Republic of Azerbaijan shall inform the Cooperation Council promptly of the introduction of such measures and of any changes therein 21 ^'t Without prejudice to paragraphs 1 and 2, where, in exceptional circumstances, movement of capital between the Community and the Republic of Azerbaijan cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or the Republic of Azerbaijan, the Community and the Republic of Azerbaijan, respectively, may take safeguard measures with regard to movements of capital between the Community and the Republic of Azerbaijan for a period not exceeding six months if such measures are strictly necessary. CHAPTER VI Intellectual, industrial and commercial property protection ARTICLE 42 1. Pursuant to the provisions of this Article and of Annex II, the Republic of Azerbaijan shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of the Agreement, for a level of protection similar to that existing in the Community, including effective means of enforcing such rights. 2. By the end of the fifth year after entry into force of the Agreement, the Republic of Azerbaijan shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex II to which Member States are parties or which are de facto applied by Member States, according to the relevant provisions contained in these conventions. 22 r TITLE V LEGISLATIVE COOPERATION ARTICLE 43 1. The Parties recognize that an important condition for strengthening the economic links between the Republic of Azerbaijan and the Community is the approximation of the Republic of Azerbaijan's existing and future legislation to that of the Community The Republic of Azerbaijan shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community. 2. The approximation of laws shall extend to the following areas in particular: customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment and legislation regarding the exploitation and utilisation of natural resources, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations and transport. 3. The Community shall provide the Republic of Azerbaijan with technical assistance for the implementation of these measures, which may include, inter alia : the exchange of experts; the provision of early information especially on relevant legislation; - - - organization of seminars; - - aid for translation of Community legislation in the relevant sectors. training activities; 4. The Parties agree to examine ways to apply their respective competition laws on a concerted basis in such cases where trade between them is affected. 23 **«f TITLE VI ECONOMIC COOPERATION ARTICLE 44 1 The Community and the Republic of Azerbaijan shall establish economic cooperation aimed at contributing to the process of economic reform and recovery and sustainable development of the Republic of Azerbaijan. Such cooperation shall strengthen existing economic links, to the benefit of both parties. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic and trading systems in the Republic of Azerbaijan and will be guided by the requirements of sustainability and harmonious social development, they will also fully incorporate environmental considerations. To this end, cooperation will concentrate, in particular, on economic and social development, human resources development, support for enterprises (including privatization, investment and development of financial services), agriculture and food, energy, transport, tourism, environmental protection, regional cooperation and monetary policy Special attention shall be devoted to measures, as in conformity with the legislation in force in the Republic of Azerbaijan capable of fostering cooperation among the Independent States of the Transcaucasus region, and with other neighbouring states, with a view to stimulating a harmonious development of the region. Where appropriate, economic cooperation and other forms of cooperation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to Community technical assistance to the Republic of Azerbaijan and its established coordination and implementation procedures. ARTICLE 45 Cooperation in the field of trade in goods and services The Parties will cooperate with a view to ensuring that the Republic of Azerbaijan's international trade is conducted in conformity with the rules of the WTO. Such cooperation shall include specific issues directly relevant to trade facilitation, including: • formulation of policy on trade and trade-related questions, including payments, and clearing mechanisms, • drafting of relevant legislation, • assistance to prepare for the Republic of Azerbaijan's eventual accession to the WTO 24 jr? ARTICLE 46 Industrial cooperation 1 Cooperation shall aim at promoting the following in particular: the development of business links between economic operators of both sides, - - Community participation in the Republic of Azerbaijan's efforts to restructure its industry, - - the improvement of management, the development of appropriate market-based commercial rules and practices, as well as the transfer of know-how, - environmental protection 2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings. ARTICLE 46 bis Construction The Parties shall cooperate in the field of construction industry. This cooperation shall, inter alia, aim at modernizing and restructuring the construction sector in the Republic of Azerbaijan in line with the principles of a market economy and duly taking into account related health, safety and environmental aspects. ARTICLE 47 Investment promotion and protection 1. Bearing in mind the respective powers and competences of the Community and the Member States, cooperation shall aim to establish a favourable climate for private investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities. 2. The aims of cooperation shall be in particular: - - - - - the conclusion, where appropriate, between the Member States and the Republic of Azerbaijan of agreements for the promotion and protection of investment; the conclusion, where appropriate, between the Member States and the Republic of Azerbaijan of agreements to avoid double taxation; the creation of favourable conditions for attracting foreign investments into the Azerbaijani economy, to establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment, to exchange information on investment opportunities in the form of, inter alia, trade fairs, exhibitions, trade weeks and other events. 25 ARTICLE 48 Public Procurement The Parties shall cooperate to develop conditions for open and competitive award of contracts for goods and services in particular through calls for tenders. ARTICLE 49 Cooperation in the field of standards and conformity assessment 1. Cooperation between the Parties shall promote alignment with internationally agreed criteria, principles and guidelines followed in the field of quality. The required actions will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of the quality of Azerbaijani products. 2 To this end they shall seek to cooperate in technical assistance projects which will: • promote appropriate cooperation with organizations and institutions specialized in these fields; • promote the use of Community technical regulations and the application of European standards and conformity assessment procedures; • permit the sharing of experience and technical information in the field of quality management ARTICLE 50 Mining and raw materials 1. The Parties shall aim at increasing investment and trade in mining and raw materials 2. The cooperation shall focus in particular on the following areas: - exchange of information on the prospects of the mining and non-ferrous metals sectors, - - - - - safety in the mining industry. the establishment of a legal framework for cooperation, trade matters, the adoption and implementation of environmental legislation, training, ARTICLE 51 Cooperation in science and technology 1. The Parties shall promote cooperation in civil scientific research and technological development (RTD) on the basis of mutual benefit and, taking into account the availability of resources, adequate access to their respective programmes and subject to appropriate levels of effective protection of intellectual, industrial and commercial property rights (IPR). 26 ^r 2. Science and technology cooperation shall cover: the exchange of scientific and technical information, - - joint RTD activities, - training activities and mobility programmes for scientists, researchers and technicians engaged in RTD on both sides. Where such cooperation takes the form of activities involving education and/or training, it should be carried out in accordance with the provisions of Article 52 The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in science and technology 3. The Cooperation covered by this Article shall be implemented according to specific arrangements to be negotiated and concluded in accordance with the procedures adopted by each Party, and which shall set out, inter alia, appropriate EPR provisions ARTICLE 52 Education and training 1. The Parties shall cooperate with the aim of raising the level of general education and professional qualifications in the Republic of Azerbaijan, both in the public and private sectors. 2. The cooperation shall focus in particular on the following areas: - updating higher education and training systems in the Republic of Azerbaijan including the - system of certification of higher educational establishments and diplomas of higher education; the training of public and private sector executives and civil servants in priority areas to be determined; - cooperation between educational establishments and between educational establishments and firms; - mobility for teachers, graduates, administrators, young scientists and researchers, and young people; teaching Community languages; - promoting teaching in the field of European Studies within the appropriate institutions; - - post-graduate training of conference interpreters: - - - exchange of teaching methods, encouraging the utilisation of modern educational programmes training of journalists; training of trainers. and technical means of education. 3. The possible participation of one Party in the respective programmes in the field of education and training of the other Party could be considered in accordance with their respective procedures and, where appropriate, institutional frameworks and plans of cooperation will then be established building on participation of the Republic of Azerbaijan in the Community's TEMPUS programme 27 r-^f ARTICLE 53 Agriculture and the agro-industrial sector The purpose of cooperation in this area shall be the pursuance of agrarian reform, the modernization, privatization and restructuring of agriculture, the agro-industrial and service sectors in the Republic of Azerbaijan, development of domestic and foreign markets for Azerbaijani products, in conditions that ensure the protection of the environment, taking into account the necessity to improve security of food supply as well as the development of agri-business, the processing and distribution of agricultural products. The Parties shall also aim at the gradual approximation of Azerbaijani standards to Community technical regulations concerning industrial and agricultural food products including sanitary and phytosanitary standards. ARTICLE 54 Energy 1. Cooperation shall take place within the principles of the market economy and the European Energy Charter, and bearing in mind the Energy Charter Treaty and the Protocol on Energy Efficiency and Related Environmental Aspects, against a background of the progressive integration of the energy markets in Europe. 2. The cooperation shall include among others the following areas: - formulation and development of energy policy, - improvement in management and regulation of the energy sector in line with a market economy, improvement of energy supply, including security of supply, in an economic and environmentally sound manner, - - promotion of energy saving arid energy efficiency and implementation of the Energy Charter Protocol on Energy Efficiency and related environmental aspects, improvement of energy technologies in supply and end use across the range of energy types, - modernisation of energy infrastructures, - - management and technical training in the energy sector, - - The introduction of the range of institutional, legal, fiscal and other conditions necessary to transportation and transit of energy materials and products, encourage increased energy trade and investment. - development of hydro-electric and other renewable energy resources 3 The Parties shall exchange relevant information relating to investment projects in the energy sector, in particular concerning the construction and refurbishing of oil and gas pipelines or other means of transporting energy products. They shall cooperate with a view to implementing as efficaciously as possible the provisions of Title IV and of Article 47, in respect of investments in the energy sector. 28 ,^f ARTICLE 55 Environment 1. Bearing in mind the European Energy Charter and the Declaration of the Lucerne Conference of 1993, and taking into account the Energy Charter Treaty, and especially its article 19, and the Energy Charter Protocol on Energy Efficiency and related environmental aspects, the Parties shall develop and strengthen their cooperation on environment and human health. 2. Cooperation shall aim at combating the deterioration of the environment and in particular: - effective monitoring of pollution levels and assessment of environment; system of information on the state of the environment; - combating local, regional and transboundary air and water pollution, - ecological restoration; - sustainable, efficient and environmentally effective production and use of energy, - ecological safety of industrial facilities; - classification and safe handling of chemicals, - water quality, - waste reduction, recycling and safe disposal, implementation of the Basle Convention, - - - the environmental impact of agriculture, soil erosion, and chemical pollution; the protection and renewal of forests; the conservation of biodiversity, protected areas and sustainable use and management of biological resources; land-use planning, including construction and urban planning; - - use of economic and fiscal instruments; - global climate change, - environmental education and awareness; - technical assistance concerning rehabilitation of zones affected by radioactivity and addressing related health and social problems; implementation of the Espoo Convention on Environmental Impact Assessment in a transboundary context - 3. Cooperation shall take place particularly through: - disaster planning and other emergency situations, - exchange of information and experts, including information and experts dealing with the transfer of clean technologies and the safe and environmentally sound use of biotechnologies, joint research activities, - - improvement of laws towards Community standards; - environmental training and institutional strengthening; - cooperation at regional level, including cooperation within the framework of the European Environment Agency, and at international level, - development of strategies, particularly with regard to global and climatic issues and also in view of achieving sustainable development, - environmental impact studies, - ecological monitoring 29 ^ff ARTICLE 56 Transport The Parties shall develop and strengthen their cooperation in the field of transport This cooperation shall, inter alia, aim at restructuring and modernizing transport systems and networks in the Republic of Azerbaijan, and developing and ensuring, where appropriate, compatibility of transportation systems in the context of achieving a more global transport system. In particular, consideration shall be given to traditional communications links among Independent States in the Transcaucasus region and with other neighbouring states The cooperation shall include, inter alia: the modernizing of management and operations of road transport, railways, ports and airports; - - modernization and development of railways, waterways, roads, ports, airports and air navigation infrastructure including the modernization of major routes of common interest and the trans-European links for the above modes, particularly those related to the TRACECA project; and training in the above-mentioned areas; - promotion and development of multi-modal transport; - - preparation of the legislative and institutional framework for policy development and the promotion of joint research and development programmes; implementation including privatization of the transport sector ARTICLE 57 Postal services and telecommunications Within their respective powers and competences the Parties shall expand and strengthen cooperation in the following areas: - the establishment of policies and guidelines for the development of the telecommunications sector and postal services; - development of principles of a tariff policy and marketing in telecommunications and postal services; - carry out transfer of technology and know how, including on European Technical standards and certification systems; - encouraging the development of projects for telecommunications and postal services and attracting investment; - enhancing efficiency and quality of the provision of telecommunications and postal services, amongst others through liberalization of activities of sub-sectors; - advanced application of telecommunications, notably in the area of electronic funds transfer, - management of telecommunications networks and their "optimization"; - an appropriate regulatory basis for the provision of telecommunication and postal services and - for the use of the radio frequency spectrum; training in the field of telecommunications and postal services for operations in market conditions. 30 ^ ARTICLE 58 Financial Services Cooperation shall in particular aim at facilitating the involvement of the Republic of Azerbaijan in universally accepted systems of mutual settlements. Technical assistance shall focus on: - - - the development of a modern system of private and in particular commercial banking and financial services, the development of a common market of credit resources, the involvement of the Republic of Azerbaijan in a universally accepted system of mutual settlements; the development of fiscal system and its institutions in the Republic of Azerbaijan, exchange of experience and personnel training; the development of insurance services, which would, inter alia, create a favourable framework for Community companies participation in the establishment of joint ventures in the insurance sector in the Republic of Azerbaijan, as well as the development of export credit insurance. This cooperation shall in particular contribute to foster the development of relations between the Republic of Azerbaijan and the Member States in the financial services sector. ARTICLE 58 bis Enterprise restructuring and privatisation Recognizing that privatisation is of fundamental importance to a sustainable economic recovery, the parties agree to cooperate in the development of the necessary institutional, legal and methodological framework. To this end, technical assistance shall be given to implement the privatisation programme adopted by the Parliament of Azerbaijan. Particular attention will be paid to the orderly and transparent nature of the privatisation process Technical assistance shall focus on, inter alia: • the development of an institutional base within the government of Azerbaijan capable of defining and managing the privatisation process; the establishment of a database of enterprises; the corporatisation of enterprises; the development of a system of mass privatisation, which will aim to transfer property to the population, based on a system of vouchers; the development of a system for the registration of share holdings, the development of a system for the sale by tender of particular enterprises deemed not suitable for participation in the mass privatisation programme the restructuring of those enterprise not yet ready for privatisation the development of private enterprise, particularly in the small and medium enterprise sector. The objective of this cooperation is to contribute to the revitalization of the economy of Azerbaijan, the promotion of foreign investment and the development of relations between Azerbaijan and the Member States 31 ^f ARTICLE 59 Regional development 1. The Parties shall strengthen cooperation on regional development and land-use planning 2. To this end, they shall encourage exchange of information by national, regional and local authorities of the Community and its Member States and of the Republic of Azerbaijan on regional and land-use planning policy and on methods of formulation of regional policies with special emphasis on the development of disadvantaged areas They shall also encourage direct contacts between the above mentioned authorities and between regional and public organizations responsible for regional development planning with the aim, inter alia, to exchange methods and ways of fostering regional development. ARTICLE 60 Social cooperation 1. With regard to health and safety, the parties shall develop cooperation between them with the aim of improving the level of protection of the health and safety of workers The cooperation shall include notably: - education and training on health and safety issues with specific attention to high risk sectors of activity; - development and promotion of preventive measures to combat work related diseases and other work related ailments; - prevention of major accident hazards and the management of toxic chemicals, - research to develop the knowledge base in relation to working environment and the health and safety of workers. 2. With regard to employment, the cooperation shall include notably technical assistance to: - optimization of the labour market, - modernization of the job-finding and consulting services; - planning and management of the restructuring programmes, - encouragement of local employment development; - exchange of information on the programmes of flexible employment, including those stimulating self-employment and promoting entrepreneurship. 3. The Parties shall pay special attention to cooperation in the sphere of social protection which, inter alia, shall include cooperation in planning and implementing social protection reforms in the Republic of Azerbaijan. These reforms shall aim to develop in the Republic of Azerbaijan methods of protection intrinsic to market economies and shall comprise all forms of social protection 32 4<( f ARTICLE 61 Tourism The Parties shall increase and develop cooperation between them, which shall include: - facilitating the tourist trade, - increasing the flow of information; - transferring know-how; - studying the opportunities for joint operations; - cooperation between official tourism bodies; - training for tourism development. ARTICLE 62 Small and medium-sized enterprises 1. The Parties shall aim to develop and strengthen small and medium-sized enterprises and their associations and cooperation between SMEs in the Community and the Republic of Azerbaijan. 2. Cooperation shall include technical assistance, in particular in the following areas: - - - - the development of a legislative framework for SMEs; the development of an appropriate infrastructure (an agency to support SMEs, communications, assistance to the creation of a fund for SMEs); the development of technology parks. training in the areas of marketing, accounting and control of the quality of products. ARTICLE 63 Information and communication The Parties shall support the development of modern methods of information handling, including the media, and stimulate the effective mutual exchange of information. Priority shall be given to programmes aimed at providing the general public with basic information about the Community and the Republic of Azerbaijan, including, where possible, access to databases, in full respect of intellectual property rights. 33 '^•r ARTICLE 64 Consumer Protection The Parties will enter into close cooperation aimed at achieving compatibility between their systems of consumer protection. This cooperation may include the exchange of information on legislative work and institutional reform, establishment of permanent systems of mutual information on dangerous products, the improvement of information provided to consumers especially on prices, characteristics of products and services offered, the development of exchanges between the consumer interest representatives, and increasing the compatibility of consumer protection policies, and the organization of seminars and training periods. ARTICLE 65 Customs 1. The aim of cooperation shall be to guarantee compliance with all the provisions scheduled for adoption in connection with trade and fair trade and to achieve the approximation of the Republic of Azerbaijan's customs system to that of the Community. 2. Cooperation shall include the following in particular: - - - - the exchange of information; the improvement of working methods; the introduction of the Combined Nomenclature and the single administrative document; the interconnection between the transit systems of the Community and of the Republic of Azerbaijan; - simplification of inspections and formalities in respect of the carriage of goods; - - the support in the introduction of modern customs information systems; the organization of seminars and training periods. Technical assistance shall be provided where necessary. 3. Without prejudice to further cooperation foreseen in this agreement and in particular Articles in customs matters between administrative authorities of the 69, and 71, mutual assistance Parties shall take place in accordance with the provisions of the Protocol attached to this Agreement. 34 ^r ARTICLE 66 Statistical cooperation Cooperation in this area shall have as its aim the development of an efficient statistical system to provide the reliable statistics needed to support and monitor the process of economic reform and contribute to the development of private enterprise in the Republic of Azerbaijan. It shall also address the protection of confidentially. The Parties, in particular, shall cooperate in the following fields. - adaptation of the Azerbaijani statistical system to international methods, standards and classification, - exchange of statistical information; - provision of necessary statistical macro- and microeconomic information to implement and manage economic reforms. The Community shall contribute to this end by rendering technical assistance to the Republic of Azerbaijan ARTICLE 67 Economics The Parties shall facilitate the process of economic reform and the coordination of economic policies by cooperating to improve understanding of the fundamentals of their respective economies and the design and implementation of economic policy in market economies. To this end, the Parties shall exchange information on macroeconomic performance and prospects. The Community shall provide technical assistance so as to: - assist the Republic of Azerbaijan in the process of economic reform by providing expert advisory and technical assistance, - encourage cooperation among economists in order to expedite the transfer of know-how for the drafting of economic policies, and provide for wide dissemination of policy-relevant research. ARTICLE 67 bis Monetary Policy At the request of the Azerbaijani authorities, the Union shall provide technical assistance designed to support the efforts of the Republic of Azerbaijan towards the strengthening of its monetary system and the introduction of full convertibility of the currency. This will include technical assistance for the design and application of Azerbaijan's monetary and credit policy, in full coordination with the international financial institutions, for the training of personnel, and for the development of financial markets, including the stock exchange, it shall also include informal exchanges of views concerning the principles and the functioning of the European Monetary System and EC regulations on financial markets and capital movements. 35. **f TITLE VII COOPERATION ON MATTERS RELATING TO DEMOCRACY AND HUMAN RIGHTS ARTICLE 68 The Parties shall cooperate on all questions relevant to the establishment or reinforcement of democratic institutions, including those required in order to strengthen the rule of law, and the protection of human rights and fundamental freedoms according to international law and OSCE principles. This cooperation shall take the form of technical assistance programmes intended to assist, inter alia, in the drafting of relevant legislation and regulations, the implementation of such legislation; the functioning of the judiciary, the role of the State in questions of justice; and the operation of the electoral system. They may include training where appropriate. The Parties shall encourage contacts and exchanges between their national, regional and judicial authorities, parliamentarians, and non-governmental organisations. 36 TITLE VTH COOPERATION ON PREVENTION OF ILLEGAL ACTIVITIES AND THE PREVENTION AND CONTROL OF ILLEGAL IMMIGRATION ARTICLE 69 The Parties shall establish cooperation aimed at preventing illegal activities such as: • • • illegal activities in the sphere of economics, including corruption; illegal transactions of various goods, including industrial waste; counterfeiting Cooperation in the abovementioned areas will be based on mutual consultation and close interaction. Technical and administrative assistance may be provided, including in the following areas: drafting of national legislation in the sphere of preventing illegal activities; creation of information centres; increasing the efficiency of institutions engaged in preventing illegal activities, training of personnel and development of research infrastructures, elaboration of mutually acceptable measures impeding illegal activities. ARTICLE 70 Money laundering 1. The Parties agree on the necessity of making efforts and cooperating in order to prevent the use of their financial systems for laundering of proceeds from criminal activities in general and drug offences in particular. 2. Cooperation in this area shall include administrative and technical assistance with the purpose of establishing suitable standards against money laundering equivalent to those adopted by the Community and international fora in this field, including the Financial Action Task Force (FATF) ARTICLE 71 Drugs Within the framework of their respective powers and competencies the Parties shall cooperate in increasing the effectiveness and efficiency of policies and measures to counter the illicit production, supply and traffic of narcotic drugs and psychotropic substances, including the prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention and reduction. The cooperation in this area shall be based on mutual consultation and close coordination between the Parties over the objectives and measures on the various drug-related fields. *r ARTICLE 71 BIS Illegal Immigration 1. The Member States of the European Union and the Republic of Azerbaijan agree to cooperate in order to prevent and control illegal immigration. To this end: - The Republic of Azerbaijan agrees to readmit any of its nationals illegally present on the territory of a Member State, upon request by the latter and without further formalities; - and each Member State agrees to readmit any of its nationals, as defined for community purposes, illegally present on the territory of the Republic of Azerbaijan, upon request by the latter and without further formalities The Member States and the Republic of Azerbaijan will also provide their nationals with appropriate identity documents for such purposes. 2. The Republic of Azerbaijan agrees to conclude bilateral agreements with Member States which so request, regulating specific obligations for readmission including an obligation for the readmission of nationals of other countries and stateless persons who have arrived on the territory of any such Member State from the Republic of Azerbaijan or who have arrived on the territory of the Republic of Azerbaijan from any such Member State. 3. The Cooperation Council shall examine what other joint efforts can be made to prevent and control illegal immigration. 38 ^ -r TITLE IX CULTURAL COOPERATION ARTICLE 72 The Parties undertake to promote, encourage and facilitate cultural cooperation. Where appropriate, the Community's cultural cooperation programmes or those of one or more Member States may be the subject of cooperation and further activities of mutual interest may be developed. The cooperation may include: - exchange of information and experience in the sphere of protection and maintenance of monuments and historic places (architectural legacy), - cultural exchange between institutions, artists, and other people working in the area of art ^^ 39 rft TITLE X FINANCIAL COOPERATION ES THE FIELD OF TECHNICAL ASSISTANCE ARTICLE 73 In order to achieve the objectives of this Agreement and in accordance with Articles 74, 75 and 76, the Republic of Azerbaijan shall benefit from temporary financial assistance from the Community by way of technical assistance in the form of grants. The purpose of this assistance shall be to accelerate the economic transformation of the Republic of Azerbaijan. ARTICLE 74 This financial assistance shall be covered within the framework of TACIS as foreseen in the Community's relevant Council Regulation ARTICLE 75 The objectives and the areas of the Community's financial assistance shall be laid down in an indicative programme reflecting established priorities to be agreed between the two Parties taking into account the Republic of Azerbaijan's needs, sectoral absorption capacities and progress with reform. The Parties shall inform the Cooperation Council thereof ARTICLE 76 In order to permit optimum use of the resources available, the Parties shall ensure that Community technical assistance contributions are made in close coordination with those from other sources such as the Member States, other countries, and international organizations such as the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development. 40 ^t TITLE XI INSTITUTIONAL, GENERAL AND FINAL PROVISIONS ARTICLE 77 A Cooperation Council is hereby established which shall supervise the implementation of this Agreement. It shall meet at ministerial level once a year. It shall examine any major issues arising within the framework of the Agreement and any other bilateral or international issues of mutual interest for the purpose of attaining the objectives of this Agreement. The Cooperation Council may also make appropriate recommendations, by agreement between the two Parties. ARTICLE 78 1 The Cooperation Council shall consist of the members of the Council of the European Union and members of the Commission of the European Communities, on the one hand, and of members of the Government of the Republic of Azerbaijan, on the other. 2. The Cooperation Council shall establish its rules of procedure. 3. The office of President of the Cooperation Council shall be held alternately by a representative of the Community and by a member of the Government of the Republic of Azerbaijan. ARTICLE 79 1. The Cooperation Council shall be assisted in the performance of its duties by a Cooperation Committee composed of representatives of the members of the Council of the European Union and of members of the Commission of the European Communities on the one hand and of representatives of the Government of the Republic of Azerbaijan on the other, normally at senior civil servant level. The office of President of the Cooperation Committee shall be held alternately by the Community and by the Republic of Azerbaijan. In its rules of procedure the Cooperation Council shall determine the duties of the Cooperation Committee, which shall include the preparation of meetings of the Cooperation Council, and how the Committee shall function. 2. The Cooperation Council may delegate any of its powers to the Cooperation Committee, which will ensure continuity between meetings of the Cooperation Council. ARTICLE 80 The Cooperation Council may decide to set up any other special committee or body that can assist it in carrying out its duties and shall determine the composition and duties of such committees or bodies and how they shall function. 41 ^tftf ARTICLE 81 When examining any issue arising within the framework of this Agreement in relation to a provision referring to an article of the GATT/WTO, the Cooperation Council shall take into account to. the greatest extent possible the interpretation that is generally given to the article of the GATTAVTO in question by the Contracting Parties to the GATT/WTO~ ARTICLE 82 A Parliamentary Cooperation Committee is hereby established. It shall be a forum for Members of the Azerbaijani Parliament and the European Parliament to meet and exchange views. It shall meet at intervals which it shall itself determine. ARTICLE 83 1. The Parliamentary Cooperation Committee shall consist of members of the European Parliament, on the one hand, and of members of the Azerbaijani Parliament, on the other. 2. The Parliamentary Cooperation Committee shall establish its rules of procedure. 3. The Parliamentary Cooperation Committee the European Parliament and the Azerbaijani Parliament respectively, in accordance with the provisions to be laid down in its rules of procedure. shall be presided turn by in ARTICLE 84 The Parliamentary Cooperation Committee may request relevant information regarding the implementation of this Agreement from the Cooperation Council, which shall then supply the Committee with the requested information. The Parliamentary Cooperation Committee shall be informed of the recommendations of Cooperation Council the The Parliamentary Cooperation Committee may make recommendations to the Cooperation Council. ARTICLE 85 1. Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights, including those concerning intellectual, industrial and commercial property. 2. Within the limits of their respective powers and competences, the Parties - shall encourage the adoption of arbitration for the settlement of disputes arising out of commercial and cooperation transactions concluded by economic operators of the Community and those of the Republic of Azerbaijan, agree that where a dispute is submitted to arbitration, each party to the dispute may, except where the rules of the arbitration centre chosen by the parties provide otherwise, choose its own arbitrator, irrespective of his nationality, and that the presiding third arbitrator or the sole arbitrator may be a citizen of a third State; will recommend their economic operators to choose by mutual consent the law applicable to their contracts, shall encourage recourse to the arbitration rules elaborated by the United Nations Commission on International Trade Law (Uncitral) and to arbitration by any centre of a State signatory to the Convention on Recognition and Enforcement of Foreign Arbitral Awards done at New York on 10 June 1958 Nothing in the Agreement shall prevent a Party from taking any measures: ARTICLE 86 (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests, (b) which relate to the production of, or trade in arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes, (c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security; (d) which it considers necessary to respect its international obligations and commitments in the control of dual use industrial goods and technology. ARTICLE 87 1. In the fields covered by this Agreement and without prejudice to any special provisions contained therein. - - the arrangements applied by the Republic of Azerbaijan in respect of the Community shall not give rise to any discrimination between the Member States, their nationals or their companies or firms; the arrangements applied by the Community in respect of the Republic of Azerbaijan shall not give rise to any discrimination between Azerbaijani nationals or its companies or firms. 2. The provisions of paragraph 1 are without prejudice to the right of the Parties to apply the relevant provisions of their fiscal legislation to tax payers who are not in identical situations as regards their place of residence 43 ARTICLE 88 1. Each of the two Parties may refer to the Cooperation Council any dispute relating to the application or interpretation of this Agreement. 2. The Cooperation Council may settle the dispute by means of a recommendation 3. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either Party may notify the other of the appointment of a conciliator; the other Party must then appoint a second conciliator within two months. For the application of this procedure, the Community and the Member States shall be deemed to be one Party to the dispute The Cooperation Council shall appoint a third conciliator The conciliators' recommendations shall be taken by majority vote. Such recommendations shall not be binding upon the Parties 4. The Cooperation Council may establish rules of procedure for dispute settlement. ARTICLE 89 The Parties agree to consult promptly through appropriate channels at the request of either Party to discuss any matter concerning the interpretation or implementation of this Agreement and other relevant aspects of the relations between the Parties. The provisions of this Article shall in no way affect and are without prejudice to Articles 13, 88 and 94. ARTICLE 90 Treatment granted to the Republic of Azerbaijan thereunder shall in no case be more favourable than that granted by the Member States to each other ARTICLE 91 For the purposes of this Agreement, the term "Parties" shall mean the Republic of Azerbaijan on the one part, and the Commumty, or the Member States, or the Community and the Member States, in accordance with their respective powers, on the other part. ARTICLE 92 Insofar as matters covered by this Agreement are covered by the Energy Charter Treaty and Protocols thereto, such Treaty and Protocols shall upon entry into force apply to such matters but only to the extent that such application is provided for therein. 44 > - /* ARTICLE 93 This Agreement is concluded for an initial period of ten years The Agreement shall be automatically renewed year by year provided that neither Party gives the other Party written notice of denunciation of the Agreement six months before it expires ARTICLE 94 1. The Parties shall take any general or specific measures required to fulfil their obligations under the Agreement They shall see to it that the objectives set out in the Agreement are attained. 2. If either Party considers that the other Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Cooperation Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In the selection of these measures, priority must be given to those which least disturb the These measures shall be notified immediately to the functioning of the Agreement Cooperation Council if the other Party so requests. ARTICLE 95 Annexes I, II, III, IV and V together with the Protocol shall form an integral part of this Agreement. ARTICLE 96 This Agreement shall not, until equivalent rights for individuals and economic operators have been achieved thereunder, affect rights assured to them through existing Agreements binding one or more Member States, on the one hand, and the Republic of Azerbaijan, on the other, except in areas falling within Community competence and without prejudice to the obligations of Member States resulting from this Agreement in areas falling within their competence ARTICLE 97 This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of the Republic of Azerbaijan. ARTICLE 98 The Secretary-General of the Council of the European Union shall be the depository of this Agreement. 45 ^ :^ ARTICLE 99 The original of this Agreement of which the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese. Spanish, Swedish and Azerbaijani languages are equally authentic, shall be deposited with the Secretary-General of the Council of the European Union. ARTICLE 100 This Agreement will be approved by the Parties in accordance with their own procedures This Agreement shall enter into force on the first day of the second month following the date on which the Parties notify the Secretary-General of the Council of the European Union that the procedures referred to in the first paragraph have been completed. Upon its entry into force, and as far as relations between the Republic of Azerbaijan and the Community are concerned, this Agreement shall replace the Agreement between the European Economic Community, the European Atomic Energy Community and the Union of Soviet Socialist Republics on trade and economic and commercial cooperation signed in Brussels on 18 December 1989 ARTICLE 101 In the event that, pending the completion of the procedures necessary for the entry into force of this Agreement, the provisions of certain parts of this Agreement are put into effect by means of an Interim Agreement between the Community and the Republic of Azerbaijan, the Contracting Parties agree that, in such circumstances, the term "date of entry into force of the Agreement" shall mean the date of entry into force of the Interim Agreement. 46 LIST OF DOCUMENTS ATTACHED Annex I Indicative list of advantages granted by the Republic of Azerbaijan to the Independent States in accordance with Article 8(3). Annex D Intellectual, industrial and commercial property conventions referred to in Article 42. Annex in Financial services definitions, referred to in Article 25. Annex IV Community reservations in accordance with Article 22 (2). Annex V Reservations of the Republic of Azerbaijan in accordance with Article 22 (4). Protocol on mutual assistance between administrative authorities in customs matters 47 , S'~fy ANNEX I Advantages granted by the Republic of Azerbaijan accordance with Article 8(3) to the Independent States in 1. No import duties are applied 2. No export duties are applied with respect to goods delivered under annual bilateral interstate trade and cooperation arrangements, within the nomenclature stipulated therein. 3. No VAT is applied on import 4. No excise duties are applied on import ^ 48 ^f INTELLECTUAL, I N D U S T R UL AND COMMERCIAL P R O P E R TY CONVENTIONS REFERRED TO IN A R T I C LE 42 ANNEX II 1 Paragraph 2 of Article 42 concerns the following multilateral conventions: - Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971), - International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome, 1961); - Protocol relating to the Madrid Agreement concerning the International Registration of Marks (Madrid, 1989); - Nice Agreement concerning the International Classification of Goods and Services for the purposes of the Registration of Mcirks (Geneva 1977 and amended in 1979), - Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the purposes of Patent Procedures (1977, modified in 1980); - International Convention for the Protection of New Varieties of Plants (UPOV) (Geneva Act. 1991). 2. The Cooperation Council may recommend that paragraph 2 of Article 42 shall apply to other multilateral conventions. If problems; in the area of intellectual, industrial and commercial property affecting trading conditions were to occur, urgent consultations will be undertaken, at the request of either party, with a view to reaching mutually satisfactory solutions 3. The Parties confirm the importance they attach to the obligations arising from the following multilateral conventions: - Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967 and amended in 1979); - Madrid Agreement concerning the International Registration of Marks (Stockholm Act, 1967 and amended in 1979), - Patent Cooperation Treaty (Washington, 1970, amended in 1979 and modified in 1984) 4. From the entry into force of this Agreement, the Republic of Azerbaijan shall grant to Community companies and nationals, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by it to any third country under bilateral agreements. 5. The provisions of paragraph 4 shall not apply to advantages granted by the Republic of Azerbaijan to any third country on an effective reciprocal basis and to advantages granted by the Republic of Azerbaijan to another country of the former USSR 49 ^^7* CONCERNING ARTICLE 25 FINANCIAL SERVICES: DEFINITIONS ANNEX HI A financial service is any service of a financial nature offered by a financial service provider of a party. Financial services include the following activities: A. B. All insurance and insurance-related services; 1. life non-life Direct insurance (including co-insurance), (i) (ii) Reinsurance and retrocession. Insurance intermediation, such as brokerage and agency. Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services. Banking and other financial services (excluding insurance). 1. 2. Acceptance of deposits and other repayable funds from the public. Lending of all types, including, inter-alia, consumer credit, mortgage credit, factoring and financing of commercial transaction. Financial leasing. All payment and money transmission services, including credit charge and debit cards, travellers cheques and bankers drafts. Guarantees and commitments. Trading for own account or for the account of customers, whether on an exchange, in an over the counter market or otherwise, the following: (a) (b) (c) (d) money market instruments (cheques, bills, certificates of deposits, etc. ) foreign exchange derivative products including, but not limited to, futures and options exchange rates and interest rate instruments, including products such as swaps, forward rate agreements, etc. (e) transferable securities other negotiable instruments and financial assets, including bullion. (f) Participation in issues of all kinds of securities, including under-writing and placement as agent (whether publicly or privately) and provision of services related to such issues. Money brokering. Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial depository and trust services. Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments. Advisory intermediation and other auxiliary financial services on all the activities listed in points 1 to 10 above, including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy. 2. 3. 4. 3. 4. 5. 6. 7. 8. 9. 10. 11. 50 12. Provision and transfer of financial information, and financial data processing and related software by providers of other financial services. The following activities are excluded from the definition of financial services (a) (b) (c) Activities carried out by central banks or by any other public institution in pursuit of monetary and exchange rate policies. Activities conducted by central banks, government agencies or departments, or public institutions, for the account or with the guarantee of the government, except when those activities may be carried out by financial service providers in competition with such public entities. Activities forming part of a statutory system of social security or public retirement plans, except when those activities may be carried out by financial service providers in competition with public entities or private institutions. 51 ,^n ANNEX IV COMMUNITY RESERVATIONS IN ACCORDANCE WITH ARTICLE 22 (2) Mining In some Member States, a concession may be required for mining and mineral rights for non-EC controlled companies Fishing Access to and use of the biological resources and fishing grounds situated in the maritime waters coming under the sovereignty or within the jurisdicrion of Member States of the Community is restricted to fishing vessels flying the flag of a Community Member State and registered in Community territory unless otherwise provided for. Real estate purchase In some Member States, the purchase of real estate by non-EC companies is subject ot restrictions Audiovisual services including radio National treatment concerning production and distribution, including broadcasting and other forms of transmission to the public, may be reserved to audiovisual works meeting certain origin criteria. Telecommunications services including mobile and satellite services Reserved services In some Member States market access concerning complementary services and infrastructure is restricted. Professional services Services reserved to natural persons nationals of Member States. Under certain conditions those persons may create companies Agriculture In some Member States national treatment is not applicable to non-EC controlled companies which wish to undertake an agricultural enterprise. The acquisition of vineyards by non-EC controlled companies is subject to notification, or, as necessary, authorization News agency services In some Member States limitations of foreign participation in publishing companies and broadcasting companies 52 ,~*~ Reservations of the Republic of Azerbaijan in accordance with Article 22 (4). ANNEX V Utilisation of subsoil and natural resources, including exploration and production, and mining. A concession may be required for foreign companies for exploration and production of hydrocarbon resources as well as for mining some ores and metals. Fishing Authorisation from the competent governmental body is necessary for fishing Hunting Authorisation from the competent governmental body is necessary for hunting Real estate (immovable property) purchase Foreign companies are not allowed to acquire plots of land. Those companies can, however, lease plots of land on a long term basis. Banking services Total capital of foreign-owned banks may not exceed a given percentage of the total capital in the domestic banking system. Azerbaijan undertakes not to reduce for Azerbaijani subsidiaries and branches of Community companies, the ceiling limiting the overall share of foreign capital in the Azerbaijani banking system which applies on the date of initialling of this Agreement unless so required in the framework of IMF programmes in Azerbaijan. At the latest within five years from the date of signature of the Agreement, Azerbaijan will consider the possibility to increase this ceiling, taking into consideration all relevant monetary, fiscal, financial and balance of payments considerations and thé state of the banking system of Azerbaijan. Telecommunications and mass media services Some limitations may be applied to foreign participation. Professional activities Some activities are closed, limited, or subject to special requirements for natural persons who are not Azerbaijani nationals. Historical buildings and Monuments Activities in this area are subject to restrictions. The application of the reservations in this annex can in no case result in treatment less favorable than that accorded to companies of any third country. 53 ^ -f DRAFT PROTOCOL ON MUTUAL ASSISTANCE BETWEEN ADMINISTRATIVT AUTHORITIES IN CUSTOMS MATTERS 54. **? ARTICLE 1 Definitions For the purposes of this Protocol : a) "customs legislation" shall mean any legal or regulatory provisions applicable in the territory of the Contracting Parties governing the import, export, transit of goods and their placing under any customs procedure, including measures of prohibition, restriction and control, b) "applicant authority", shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which makes a request for assistance in customs matters; c) "requested authority", shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which receives a request for assistance in customs matters; d) "personal data", shall mean all information relating to an identified or identifiable individual ARTICLE 2 Scope 1 The Contracting Parties shall assist each other, in the areas within their jurisdiction, in the manner and under the conditions laid down in this Protocol, in preventing, detecting and investigating operations in breach of customs legislation. 2. Assistance in customs matters, as provided for in this Protocol, shall apply to any administrative authority of the Contracting Parties which is competent for the application of this Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover information obtained under powers exercised at the request of the judicial authorities, unless those authorities so agree. ARTICLE 3 Assistance on request At the request of the applicant authority, the requested authority shall furnish it with all relevant information which may enable it to ensure that customs legislation is correctly applied, including information regarding operations noted or planned which are or could be in breach of such legislation. At the request of the applicant authority, the requested authority shall inform it whether goods exported from the territory of one of the Contracting Parties have been properly imported into the territory of the other Party, specifying, where appropriate, the customs procedure applied to the goods. 55 «flF At the request of the applicant authority, the requested authority shall, within the framework of its laws, take the necessary steps to ensure that a special watch is kept on (a) (b) natural or legal persons of whom there are reasonable grounds for believing that they are breaching or have breached customs legislation, places where goods are stored in a way that gives grounds for suspecting that they are intended to supply operations in breach of customs legislation, (c) movements of goods notified as possibly giving rise to breaches of customs legislation, (d) means of transport for which there are reasonable grounds for believing that they have been, are or might be used in operations in breach of customs legislation ARTICLE 4 Spontaneous assistance The Contracting Parties shall provide each other, in accordance with their laws, rules and other legal instruments, with assistance without prior request if they consider that to be necessary for information the correct application of customs pertaining to : legislation, particularly when they obtain - operations which are or appear to be in breach of such legislation and which may be of interest to another Contracting Party; - new means or methods employed in carrying out such operations. - goods known to be subject to breaches of customs legislation - natural or legal persons of whom there are reasonable grounds for believing that they are or have been in breach of customs legislation - means of transport for which there are reasonable grounds for believing that they have been, are or might be used in operations in breach of customs legislation ARTICLE 5 Delivery/Notification At the request of the applicant authority, the requested authority shall, in accordance with its legislation, take all necessary measures in order : - to deliver all documents, - to notify all decisions, falling within the scope of this Protocol to an addressee, residing or established in its territory. In such cases, Article 6(3) shall apply as far as the request itself is concerned 56 ^ Jr. ">'" ARTICLE 6 Form and substance of requests for assistance 1 Requests pursuant to this Protocol shall be made in writing. They shall be accompanied by the documents necessary to enable compliance with the request When required because of the urgency of the situation, oral requests may be accepted, but must be confirmed in writing immediately 2. Requests pursuant to paragraph 1 shall include the following information : (a) (b) (c) (d) (e) the applicant authority making the request; the measure requested, the object of and the reason for the request, the laws, rules and other legal elements involved, indications as exact and comprehensive as possible on the natural or legal persons who are the target of the investigations; (f) a summary of the relevant facts and of the enquiries already carried out. except in cases provided for in Article 5. 3. Requests shall be submitted in an official language of the requested authority or in a language acceptable to that authority. 4. If a request does not meet the formal requirements, its correction or completion may be requested, precautionary measures may, however, be ordered ARTICLE 7 Execution of requests In order to comply with a request for assistance, the requested authority shall proceed, within the limits of its competence and available resources, as though it were acting on its own account or at the request of other authorities of that same Contracting Party, by supplying information already possessed, by carrying out appropriate enquiries or by arranging for them to be carried out. This provision shall also apply to the administrative department to which the request has been addressed by the requested authority when the latter cannot act on its own Requests for assistance shall be executed in accordance with the laws, rules and other legal instruments of the requested Contracting Party. Duly authorized officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, obtain from the offices of the requested authority or other authority for which the requested authority is responsible, information relating to operations which are or may be in breach of customs legislation which the applicant authority needs for the purposes of this Protocol Officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, be present at enquiries carried out in the latter's territory 57 </"f ARTICLE 8 Form in which information is to be communicated 1. The requested authority shall communicate results of enquiries to the applicant authority in the form of documents, certified copies of documents, reports and the like 2. The documents provided for in paragraph 1 may be replaced by computerized information produced in any form for the same purpose ARTICLE 9 Exceptions to the obligation to provide assistance 1. The Contracting Parties may refuse to give assistance as provided for in this Protocol, where to do would: (a) be likely to prejudice the sovereignty of the Republic of. Azerbaijan or that of a Member State of the European Union which has been asked for assistance under this Protocol; or (b) be likely to prejudice public policy, security or other essential interests, in particular in the cases referred to under Article 10 (2); or involve currency or tax regulations other than customs legislation, or (c) (d) violate an industrial, commercial or professional secret 2. Where the applicant authority requests assistance which it would itself be unable to provide if so asked, it shall draw attention to that fact in its request It shall then be left to the requested authority to decide how to respond to such a request 3. If assistance is refused, the decision and the reasons therefor must be notified to the applicant authority without delay. ARTICLE 10 Information exchange and confidentiality 1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a confidential or restricted nature, depending on the rules applicable in each of the Contracting Parties. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to like information under the relevant laws of the Contracting Party which received it and the corresponding provisions applying to the Community institutions 2. Personal data may be exchanged only where the receiving Contracting Party undertakes to protect such data in at least an equivalent way to the one applicable to that particular case in the supplying Contracting Party 3 Information obtained shall be used solely for the purposes of this Protocol Where one of the Contracting Parties requests the use of such information for other purposes, it shall ask for the prior written consent of the authority which furnished the information Moreover, it shall be subject to any restrictions laid down by that authority Paragraph 3 shall not impede the use of information in any judicial or administrative proceedings subsequently instituted for failure to comply with customs legislation The competent authority which supplied that information shall be notified of such use. The Contracting Parties may, in their records of evidence, reports and testimonies and in proceedings and charges brought before the courts, use as evidence information obtained and documents consulted in accordance with the provisions of this Protocol ARTICLE 11 Experts and witnesses 1. An official of a requested authority may be authorized to appear, within the limitations of the authorization granted, as an expert or witness in judicial or administrative proceedings regarding the matters covered by this Protocol in the jurisdiction of the other Contracting Party, and produce such objects, documents or authenticated copies thereof, as may be needed for the proceedings. The request for an appearance must indicate specifically on what matters and by virtue of what title or qualification the official will be questioned 2. The authorized official shall enjoy the protection guaranteed by existing legislation to officials of the applicant authority on its territory. ARTICLE 12 Assistance expenses The Contracting Parties shall waive all claims on each other for the reimbursement of expenses incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to interpreters and translators who are not public service employees. ARTICLE 13 Application 1. The application of this Protocol shall be entrusted to the central customs authorities of the Republic of Azerbaijan on the one hand and the competent services of the European Commission and, where appropriate, the customs authorities of the Member States of the European Union on the other. They shall decide on all practical measures and arrangements necessary for its application, taking into consideration the rules in force in the field of data protection. They may recommend to the competent bodies amendments which they consider should be made to this Protocol. 2. The Contracting Parties shall consult each other and subsequently keep each other informed of the detailed rules of implementation which are adopted in accordance with the provisions of this Protocol. 59 ^4-r ARTICLE 14 Complementarity Without prejudice to Article 10, any agreements on mutual assistance which have been concluded between one or more Member States of the European Union and the Republic of Azerbaijan shall not prejudice Community provisions governing the communication between the competent services of the Commission and the customs authorities of the Member States of any information obtained in customs matters which could be of Community interest. 60 tfiff JOINT DECLARATION The Parties confirm that the twelfth recital in the preamble to this Agreement does not imply any judgement as to which countries, other than Azerbaijan, energy products should transit. 61 *"? JOLNT DECLARATION CONCERNING ARTICLE 3 BIS In reviewing changing circumstances in the Republic of Azerbaijan, as foreseen in Art. 3 bis, the Parties shall discuss important changes which may have a significant bearing on Azerbaijan's future development. This could include accession by Azerbaijan to the WTO, the Council of Europe or other international bodies or accession to any regional customs union or any form of regional integration agreement. 62 ^T JOINT DECLARATION EST RELATION TO ARTICLE 5 Should the Parties agree that circumstances warrant meetings at the highest level, such meetings may be arranged on an ad hoc basis 63 **? JOINT DECLARATION CONCERNING ARTICLE 14 Until the Republic of Azerbaijan accedes to the WTO, the Parties shall hold consultations in the Cooperation Committee on their import tariff policies, including changes in tariff protection. In particular, such consultations shall be offered prior to the increase of tariff protection. 64 r^f^ JOINT DECLARATION CONCERNING THE NOTION OF "CONTROL" IN ARTICLE 24(b) AND ARTICLE 36 1 The Parties confirm their mutual understanding that the question of control shall depend on the factual circumstances of the particular case. 2. A company shall, for example, be considered as being "controlled" by another company, and thus a subsidiary of such other company if: - the other company holds directly or indirectly a majority of the voting rights, or - the other company has the right to appoint or dismiss a majority of the administrative organ, of the management organ or of the supervisory organ and is at the same time a shareholder or member of the subsidiary. 3. Both Parties consider the criteria in paragraph 2 to be non-exhaustive. 65 JOINT DECLARATION CONCERNING ARTICLE 35 The sole fact of requiring a visa for natural persons of certain Parties and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment. 66. A*"*^ JOINT DECLARATION CONCERNING ARTICLE 42 The Parties agree that for the purpose of the Agreement, intellectual, industrial and commercial property includes in particular copyright, including the copyright in computer programs, and neighbouring rights, the rights relating to patents, industrial designs, geographical indications, including appellations of origin, trademarks and service marks, topographies of integrated circuits as well as protection against unfair competition as referred to in Article 10 bis of the Paris Convention for the protection of Industrial Property and protection of undisclosed information on know-how. 67 ,-/<?* JOINT DECLARATION CONCERNING ARTICLE 54 The provisions of Article 54 (3) shall not require either of the Parties to provide information of a confidential nature. 68 ^r JOLNT DECLARATION CONCERNING ARTICLE 94 The Parties agree, for the purpose of its correct interpretation and its practical application, that the term "cases of special urgency" included in Article 94 of the Agreement means cases of material breach of the Agreement by one of the Parties A material breach of the Agreement consists in (a) repudiation of the Agreement not sanctioned by the general rules of international law or (b) violation of the essential elements of the Agreement set out in Article 2 The parties agree that the "appropriate measures" referred to in Article 94 are measures taken in accordance with international law If a party takes a measure in a case of special urgency as provided for under Article 94. the other party may avail itself of the procedure relating to settlement of disputes 69 **? EXCHANGE OF LETTERS BETWEEN THE COMMUNITY AND THE REPUBLIC OF AZERBAIJAN IN RELATION TO THE ESTABLISHMENT OF COMPANIES 70 ^ff A. Letter from the Government of the Republic of Azerbaijan Dear Sir, I refer to the Partnership and Cooperation Agreement initialled on As I underlined during the negotiations, the Republic of Azerbaijan grants to Community companies establishing and operating in the Republic of Azerbaijan in certain respects a privileged treatment. I explained that this reflects the Azerbaijani policy to promote by all means the establishment of Community companies in the Republic of Azerbaijan With this in mind, it is my understanding that during the period between the date of initialling of this Agreement and the entry into force of the relevant articles on establishment of companies, the Republic of Azerbaijan shall not adopt measures or regulations which would introduce or worsen discrimination of Community companies vis-à-vis Azerbaijani companies or companies from any third country as compared to the situation existing on the date of initialling of this agreement. I would be obliged if you could acknowledge receipt of this letter Please accept, Sir, the assurance of my highest consideration. For the Government of the Republic of Azerbaijan 71 ^^ B. Letter from the European Community Dear Sir, Thank you for your letter of today's date, which reads as follows: "I refer to the Partnership and Cooperation Agreement initialled on. As I underlined during the negotiations, the Republic of Azerbaijan grants to Community companies establishing and operating in the Republic of Azerbaijan in certain respects a privileged treatment. I explained that this reflects the Azerbaijani policy to promote by all means the establishment of Community companies in the Republic of Azerbaijan With this in mind, it is my understanding that during the period between the date of initialling of this agreement and the entry into force of the relevant articles on establishment of companies, the Republic of Azerbaijan shall not adopt measures or regulations which would introduce or worsen discrimination of Community companies vis-à-vis Azerbaijani companies or companies from any third country as compared to the situation existing on the date of initialling of this agreement. I would be obliged if you could acknowledge receipt of this letter. " I can acknowledge receipt of this letter Please accept, Sir, the assurance of my highest consideration On behalf of the European Community 72 DECLARATION BY THE FRENCH GOVERNMENT The French Republic notes that the Partnership and Cooperation Agreement with the Republic of Azerbaijan does not apply to the overseas countries and territories associated with the European Community pursuant to the Treaty establishing the European Community. 73 ^ff Outside the Agreement Declaration by the Community The Community undertakes to provide technical assistance in the form of seminars or other appropriate means in order to help Azerbaijani authorities and economic operators to benefit in full from the advantages granted unter the Community GSP as currently applied to Azerbaijan. 74 ISSN 0254-1475 COM(96) 137 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-158-EN-C ISBN 92-78-02524-0 Office for Official Publications of the European Communities L-2985 Luxembourg

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the interpretation of the judgment of the Court of Justice on 17 October 1995 in Case C-450/93, Kalanke v Freie Hansestadt Bremen

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 88 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the interpretation of the judgment of the Court of Justice on 17 October 1995 in Case C-450/93, Kalanke v Freie Hansestadt Bremen COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the interpretation of the judgment of the Court of Justice on 17 October 1995 in Case C-450/93, Kalanke v Freie Hansestadt Bremen 1. Introduction On 17 October 1995, the Court of Justice of the European Communities delivered its judgment in Case C-450/93, (Eckhard Kalanke v Freie Hansestadt BremenV1*. which has given rise to a great deal of controversy throughout Europe. This controversy was caused by the uncertainty created by the judgment with regard to the legitimacy of quotas and other forms of positive action aimed at increasing the numbers of women in certain sectors or levels of employment. The Kalanke judgment is of great significance because it comes at a time when it is increasingly recognized that the anti-discrimination laws which were adopted twenty years ago are not now sufficient to achieve equality for women as regards their access to employment and promotion. Despite some real progress made during the past decade in this field, the rate of unemployment amongst women is higher than amongst men in most parts of the Community. Women still account for the majority of the long-term unemployed, they often have low-skilled, poorly paid and insecure jobs and there are still gaps in pay between men and women. There are also still not enough women to whom decision-making posts and a full share in political and economic life are open Equal treatment between men and women at work constitutes a fundamental right, as has been acknowledged by the Court of Justice in its judgment of 15 June 1978 in Case 149/77, Def renne III(2). In particular, as regards the existence of a general principle prohibiting discrimination based on sex in respect of employment and working conditions, the Court stated the case that the elimination of such discrimination formed part of the fundamental rights which constitute one of the principles of Community law and that the Court had a duty to ensure its observance The principle that fundamental rights should be respected has since been enshrined in the Treaty on European Union (Article F(2)). The Commission considers that, at a time when equality of opportunity for women has been recognized at the highest level (Essen, Cannes and Madrid European Councils) to be a task of paramount importance - together with the fight against unemployment - it is crucial to reaffirm the need to use, where appropriate, "positive action" measures to promote equal opportunities for women and men, in particular by removing existing factors of inequality which affect women's opportunities in the employment area. (1) (2) [1995] ECR 1-3051 [1978] ECR 1365. There is no official definition of "positive action" at Community level. There is, however, widespread agreement across the Community that the concept of positive action embraces all measures which aim to counter the effects of past discrimination, to eliminate existing discrimination and to promote equality of opportunity between women and men, particularly in relation to types or levels of jobs where members of one sex are significant!} under-represented. It is increasingly recognized to be not only a question of equity but also of efficiency in the management of human resources. Positive action can take different forms: a first model consists of measures intended to remedy the disadvantageous situations which are characteristic of women's presence in the labour market. The objective is to eliminate the causes underlying the lesser employment or career opportunities still affecting women's work by intervening, in particular, at the level of professional orientation and vocational training A second model of positive action can be traced in actions favouring the attainment of a certain balance between family and work responsibilities and a more efficient distribution of these responsibilities between the two sexes. In this case, priority is given to measures concerning the organization of working time, the development of childcare infrastructure, and the reintegration of workers in the labour market after a career-break. A third model is based on the idea that positive action should aim to make up for past discrimination. As a consequence, preferential treatment is prescribed in favour of certain categories of persons. This may take the form of quota systems or targets. Quotas may be more or less rigid. Rigid quotas are deemed to be those determining a certain threshold to be reached without taking into account the qualifications and merits of persons concerned, or those fixing minimum requirements to be fulfilled without any possibility of having regard to the particular circumstances of a case. Less rigid or flexible quotas are, on the contrary, those establishing preferential treatment in favour of a certain category provided that qualifications are of equal value in relation to the job to be done and that exceptional circumstances may be taken into account 2. The Community's approach to "positive action" The Commission has always adopted a very favourable attitude towards positive action. In 1984, it put forward a proposal for a recommendation on the promotion of positive action(3), which was adopted by the Council The recommendation invites Member States to adopt a positive action policy designed to eliminate existing inequalities affecting women in working life and to promote a better balance between the sexes in employment in order to eliminate or counteract the prejudicial effects on women in employment or seeking employment which arise from existing attitudes, behaviour and structures based on the idea of a traditional division of roles in society between men and women. Member States are also invited to encourage the participation of women in various occupations they are at present levels of under-represented, particularly responsibility in order to achieve better use of all human resources. The recommendation also advises that Member States should take steps to ensure that positive action includes, inter alia. in the sectors of the future, and at higher those sectors of working life where in (,) Council Recommendation 84/635/EEC of 13 December 1984 on the promotion of positive action for women (OJ No L 331, 19. 12. 1984, p. 34). as far as possible, actions encouraging women candidates as well as the recruitment and promotion of women in sectors and professions and at levels where they are under- represented, particularly as regards positions of responsibility. It is also important to recall that in the Third Medium-Term Action Programme on Equal Opportunities (1991-1995), which has been approved by the Council Resolution of 21 May 1991<4), the Commission underlined the need for positive action and organized a number of programmes specifically aimed at promoting women's integration into the labour market and the improvement in the quality of their work. In the Fourth Action Programme (1996-2000) approved by Council Decision 95/593/EC(5), sex desegregation of the labour market is one of the objectives to be pursued, inter alia, through positive action. Within the Commission itself, a second positive action programme for female staff (1992-1996), has been adopted, in order to redress the balance as regards the number of women in the categories and positions where they are under-represented and to promote their career development and to provide flanking measures making it possible for civil servants to reconcile professional and family commitments. Several operations are envisaged as part of a coherent strategy to eliminate de facto inequalities. In particular, services are encouraged to give priority to women candidates in the event of equal qualifications and merits for recruitment, promotion and appointment to managerial posts, as long as women are under-represented in a given grade or category. To this end, targets are set and implementation plans are established covering a qualitative and quantitative analysis of the evolving situation, a set of consistent measures designed to achieve a better balance between male and female staff and periodical evaluations. 3. The facts of Kalanke In the Kalanke case, the issue was whether a German law on positive action was compatible with Directive 76/207/EEC(6) or whether it exceeded the exception for positive action laid down in Article 2(4) thereof*7'. The law of the Land of Bremen on equal opportunities in the public sector provides that, as regards both recruitment and promotion in sectors where women are under-represented, namely if they do not represent 50% of the personnel in the different grades of the category concerned, a woman having the same qualifications as a male applicant must be given preference over him. Mr Kalanke, having failed to gain a particular promotion as a result of this rule, challenged its validity before the German courts. The national court found that the promotion was legal under German law including constitutional law, but the question of its conformity with Directive 76/207/EEC was referred to the Court of Justice. (4) (5) (6) (?) OJ NoC 142, 31. 5. 1991, p. 1. OJ No L 335, 30. 12. 1995, p. 37. Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ No L 39, 14. 2. 1976, p. 40). Article 2(4) reads as follows: "This Directive shall be without prejudice to measures to promote equal opportunity for men and women, in particular by removing existing inequalities which affect women's opportunities in the areas referred to in Article 1(1). " The relevant provisions of the Bremen Law on Equal Treatment for Men and Women in the Public Service read as follows: "Appointment, assignment to an official post and promotion. In the case of an appointment (including establishment as a civil servant or judge) which is not made for training purposes, women who have the same qualifications as men applying for the same post are to be given priority in sectors where they are under-represented There is under-representation if women do not make up at least half of the staff in the individual pay, remuneration and salary brackets in the relevant personnel group within a department This also applies to the function levels provided for in the organization chart" 4. The judgment In its judgment, the Court of Justice points out that: the purpose of the Directive is, as stated in Article 1(1) to put into effect in the Member States the principle of equal treatment for men and women as regards, inter alia. access to employment including promotion. This principle of equal treatment implies, according to Article 2(1), that "there shall be no discrimination whatsoever on grounds of sex either directly or indirectly"; a national rule whereby, when women and men who are candidates for the same promotion are equally qualified, women are automatically to be given priority in sectors where they are under-represented, involves discrimination on grounds of sex. However, the Court considers that it is important to examine whether such a national rule is allowed by Article 2(4) of the Directive In this respect, the Court states that this provision. is designed to allow measures which, although discriminatory in appearance, are in fact intended to eliminate or reduce actual instances of inequality which may exist in the reality of social life; permits national measures relating to access to employment, including promotion, which give a specific advantage to women with a view to improving their ability to compete in the labour market and to pursue a career on an equal footing with men; as a derogation from an individual right laid down in the Directive, must be interpreted strictly. Finally, the Court makes it clear that: national rules which guarantee women absolute, and ujiconujjiona! priority for appointment or promotion go beyond promoting equal opportunities and overstep the limits of the exception in Article 2(4) of the Directive. The Court concludes that the answer to be given to the national court's question is that Article 2(1) and (4) of Directive 76/207/EEC precludes national rules such as those in the case discussed which, where candidates of different sexes shortlisted for promotion are equally qualified, automatically give priority they are under-represented, under representation being deemed to exist when women do not make up at least half of the staff in the individual pay brackets in the relevant personnel group or in the function levels provided for in the organization chart. in sectors where to women 5. Questions raised by the judgment the should be given interpretation which It appears that the Court's negative attitude towards the legality of the Bremen law is based exclusively on to Article 2(4) of Directive 76/207/EEC. It is clear from the judgment that this provision does not cover the type of quota system under which women are given automatic preference over men in the assignment of posts or promotion However, a number of questions may still be asked concerning Article 2(4) Is this a provision limited to safeguarding positive actions in favour of women at work only as regards measures such as special assistance for vocational training, leave for family reasons, etc, or does it also allow positive discrimination in the field of recruitment/promotion by giving preference to women under certain conditions? In the latter case, should a distinction be made between positive actions which take account of considerations of necessity/proportionality and those which do not? 5a. The US Supreme Court approach to "affirmative action" In this context, it is interesting to recall the case-law of the Supreme Court of the United States on "affirmative action" which demonstrates that the issues involved are extremely complex The term "affirmative action" is used either to refer to action to identify and replace discrimination in employment or to measures aimed at increasing the participation in the workforce of protected groups, i. e. minorities and women. There is a difference between the public standard (under the Equal Protection Clause of the US Constitution) and the private standard (under title VII of the Civil Rights Act 1964). Affirmative action imposed by law or administrative action must be assessed according to a "strict scrutiny" standard, which requires the existence of a "compelling government interest" and action "narrowly tailored" to serve that interest, i. e. a requirement of proportionality. In the private sector, the Supreme Court approach to voluntary affirmative action by employers is more flexible than the strict scrutiny standard since it concentrates only on the basic elements of the "narrow! y-tailored" test. The only gender case, Johnson(X), concerns voluntary affirmative action by private employers. In this case, an affirmative action plan was applied in order to increase the representation of women in a job category historically occupied by men. A woman applicant was selected for the position over a male colleague, despite the fact that her test score was marginally lower than the man's. H> Johnson v Transportation Agency, 480 US 616 (1987). 6 This action was found to be consistent with the prohibition of discrimination in employment imposed under title VII of the Civil Rights Act 1964 on the grounds, inter alia, that consideration of the sex of the applicant was justified by the existence of a manifest imbalance which reflected under-representation of women in "traditionally segregated job categories". The Supreme Court has not decided any gender case concerning the public sector. However, it is interesting to recall the recent Adarand(9) case which concerned positive measures aimed at improving racial balance in the domain of public procurement. In this case, the Supreme Court for the first time applied strict judicial scrutiny to affirmative action programmes adopted by the federal government. Although the particular measure under examination was deemed not to be sufficiently "narrowly tailored" to meet the required aim, it is important to note that seven out of the nine members of the Supreme Court specifically reaffirmed, as a matter of principle, the legitimacy of results-oriented preferential treatment of disadvantaged groups, subject always of course to the strict scrutiny requirements. 5b. International Human Rights Law Discrimination based on sex is also prohibited by international law. However, the international instruments of the United Nations and of the Council of Europe tend to recognize the legitimacy of certain "special measures" designed to establish de facto equality in favour of certain disadvantaged groups. The United Nations Convention of 18 December 1979 on the elimination of all forms of discrimination against women recognizes in Article 4 that, even if women are given de jure equality, this does not automatically guarantee that they will in reality be treated equally. To accelerate women's de facto equality in society and in the workplace, States are permitted to use special remedial measures for as long as inequalities continue to exist. In 1988, the United Nations Committee on the Elimination of Discrimination against women adopted its general recommendation No 5 whereby the Committee recommended that States make more use of temporary special measures such as positive action, preferential treatment or quota systems to advance women's integration into education, the economy, politics and employment. These special measures should be used simply to speed up the achievement of de facto equality for women and should not create separate standards for women and men. The appropriateness of such measures should be evaluated with regard to the actual existence of discriminatory practices. Consequently, once the objectives of equality of opportunity and treatment are reached, those measures are no longer needed and should be discontinued ILO Convention No 111 of 4 June 1958 concerning discrimination in respect of employment and occupation refers to both equality of opportunity and treatment by stating in Article 2 that each member for which this Convention is in force undertakes to declare and pursue a national policy designed to promote, by methods appropriate to national conditions and practice, equality of opportunity and treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect thereof. (K>) •\darand Constructors Inc v Pena, Secretary of Transportation. o3 USLW -l^'lj {I9--5) Article 5 of the ILO Convention is of particular importance in the present case as it states the following: "1 Special measures of protection or assistance provided for in other Conventions or Recommendations adopted by the International Labour Conference shall not be deemed to be discrimination. 2 Any Member may, after consultation with representative employers' and workers' organizations, where such exist, determine that other special measures designed to meet the particular requirements of persons who, for reasons such as sex, age, disablement, family responsibilities or social or cultural status, are generally recognized to require special protection or assistance shall not be deemed to be discrimination. " The principle of equality of opportunity and treatment for all workers is also enshrined in the declaration on equality of opportunity and treatment for women workers adopted by the ILO on 25 June 1975 Article 1 precludes all forms of discrimination on grounds of sex which deny or restrict such equality and also provides that positive special treatment during a transitional period which aims at effective equality between the sexes shall not be regarded as discriminatory Part II of the additional protocol to the European Social Charter of 5 May 1988 provides, in Article 1, that the contracting parties undertake to recognize the right to equal opportunity and treatment in the field of employment without any discrimination based on sex, and to take the appropriate measures in order to ensure or encourage its implementation in various sectors, including those of professional career and promotion. This provision is specifically stated not to impede the adoption of specific measures intended to remedy de facto inequalities. The discussion is still going on in the international human rights law context as to whether, and to what extent, rules giving women automatic priority as regards appointment or promotion are permitted or not. At the same time it is clear that international human rights law does not rule out - and may in some instances even require - distinctions between men and women with the objective oï accelerating women's de facto equality in society Such distinctions, on the other hand, should be based on objective and reasonable criteria and should not be aimed at maintaining on a permanent basis unequal or separate standards. 6. How to interpret Kalanke As fias already been mentioned above, there are various types of positive action. One of then may take the form of quota systems or targets, as in the case examined by the Court of Justice. The Court had to decide whether it was lawful, by applying such a system, to give women preference over male candidates in the event of a promotion in sectors where they were under-represented, provided that their qualifications were the same The Court's answer to that question could be interpreted in two ways: either the Court dismissed the possibility of justifying any quota system, even one containing a safeguard clause which allows the particular circumstances of a case to be taken into account, or I he Court restricted itself to the "rigid" quotas provided for in the Bremen law and applied to Mr Kalanke, that is in an automatic manner. The Commission considers that the Court has only condemned the automatic quota system of the Land of Bremen This interpretation is based upon the wording of the judgment itself whereby the Court makes it clear that national rules which guarantee women absolute and unconditional priority for appointment or promotion overstep the limits of the positive action exception laid down in Article 2(4) of Directive 76/207/EEC (see paragraph 22 of the judgment). It is true that, in paragraph 23, the Court refers to the problem of "substituting for equality of opportunity the result which is only to be arrived at by providing such equality of opportunity" However, this paragraph is clearly added as a rider to the main idea of the Court, contained in paragraph 22, that it is the "absolute and unconditional" nature of the preference given to women which makes the Bremen system unlawful. The Court's remarks in paragraph 23 are clearly based on the assumption that it is discussing a rigid, unconditional quota system. Moreover, this paragraph appears to be aimed mainly at criticising the over-ambitious elements of the particular scheme which was at issue in Kalanke. i. e. the aim of achieving a 50/50 distribution of men and women "in all grades and levels". Finally, it is clear that the Court was only called upon to pronounce upon systems having the characteristics of the Bremen system, and the operative part of the judgment is naturally limited to pronouncing upon the legality of such systems. It is also to be noted that the Court clearly recognized the need for measures going beyond the classic rules against discrimination if equality was to be achieved in practice (paragraph 20). The Commission therefore takes the view that quota systems which fall short of the degree of rigidity and automaticity provided for by the Bremen law have not been touched by the Court's judgment and are, in consequence, to be regarded as lawful. In this context, the Commission considers that the following positive action measures are examples of the types of action which remain untouched by the Kalanke judgment subject of course, to the choice which Member States may make as to the measures to be adopted by them: quotas linked to the qualifications required for the job, as long as they allow account to be taken of particular circumstances which might, in a given case, justify an exception to the principle of giving preference to the under-represented sex; plans for promoting women, prescribing the proportions and the time-limits within which the number of women should be increased but without imposing an automatic preference rule when individual decisions on recruitment and promotion are taken; an obligation oJlprinciple for an employer to recruit or promote by preference a person belonging to the under-represented sex, in such a case, no individual right to be preferred is conferred on any person, reductions of social security contributions which are granted to firms when they recruit women who return to the labour market, to perform tasks in sectors where women are under-represented; State subventions gianted to employers who recruit women in sectors where ihey are under-represented; other positive action measures focusing on training, professional orientation, the reorganization of working time, child-care and so on. In respect of the positive action programme implemented by the Commission in favour of its female staff, it should be noted that this is not prejudiced by the Kalanke judgment as it does not provide for women to be given automatic preference (this is rather a principle to be observed in the case of equal qualifications). Conclusions The Commission considers that the Court has only condemned the special feature of the Bremen law which consists in the automaticity of the measure, giving women an absolute and unconditional right to appointment or promotion. Therefore, the Commission takes the position that the only type of quota system which is unlawful is one which is completely rigid and does not leave any possibility of taking account of individual circumstances. Member States and employers are thus free to have recourse to all other forms of positive action, including flexible quotas The Commission is anxious that the controversy to which the Kalanke case has given rise should be ended definitively. Therefore, notwithstanding the limited nature of the impact of this judgment as properly construed, the Commission believes that it would be helpful if the wording of Article 2(4) of Directive 76/207/EEC were amended so that the text of the provision would specifically permit the kinds of positive action which remain untouched by Kalanke. Such an interpretative amendment would make it clear that positive action measures short of rigid quotas are permitted by Community law and would ensure that the text of the Directive more clearly reflects the true legal position as it results from the judgment of the Court. The Commission is therefore putting forward a proposal for the amendment of Article 2(4) of Directive 76/207/EEC which would specify that the measures envisaged by this provision include actions favouring the recruitment or promotion of one sex in circumstances where the latter is under-represented, on condition that the employer always has the possibility of taking account of the particular circumstances of a given case. If^fHUIfS^f * -*£. "m? ISSN 0254-1475 COM(96) 88 final DOCUMENTS EN 04 06 Catalogue number : CB-CO-96-159-EN-C ISBN 92-78-02535-6 Office for Official Publications of the European Communities L-2985 Luxembourg 11

PROGRESS REPORT 1995 on the approximation of the laws of the member states concerning telecommunications terminal equipment, including the mutual recognition of their conformity supplemented in respect of satellite earth station equipment

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 114 final PROGRESS REPORT 1995 ON THE APPROXIMATION OF THE LAWS OF THE MEMBER STATES CONCERNING TELECOMMUNICATIONS TERMINAL EQUIPMENT, INCLUDING THE MUTUAL RECOGNITION OF THEIR CONFORMITY SUPPLEMENTED IN RESPECT OF SATELLITE EARTH STATION EQUIPMENT (Presented by the Commission) TABLE OF CONTENTS 0. EXECUTIVE SUMMARY 1. INTRODUCTION 1. 1 Outline of the Report Structure 3 „5 6 2. THE MECHANISM OF THE DIRECTIVES 91/263/EEC AND 93/97/EEC Tr 7 2. 1. The adoption of CTRs. 2. 2 Progress Made to Date 2. 3 New Candidate CTRs 2. 4 Market Coverage 2. 5 Conformity Assessment Procedures 2. 6 Specifics for the Satellite Earth Station Directive, 93/97/EEC 2. 7 Mutual Recognition Arrangements (MRAs) 2. 8 Relations with EFTA Countries 3. PROBLEMS ENCOUNTERED DURING THE IMPLEMENTATION OF THE DIRECTIVE 3. 1 Experience on the Scope of Directive 91/263/EEC 3. 2 The coverage of radio equipment. 3. 3 Marking Regime. :. : 3. 4 The slowness of the standardisation process. 3. 5 Experiences in the Elaboration of TBRs 3. 6 Harmonised standards and. CTRs. : 3. 7 Competition amongst Designated Laboratories 3. 8 Responsiveness of Processes Supporting the Directives 3. 9 Assessment of Conformity:. 4. PERSPECTIVES FOR THE FUTURE. 4. 1 Essential Requirements 1 1. 8 9 17 17 18 19 20 21 23 23 25. 26. 27 '. '. 29 30 31 31 32. 33 33 4. 2 Conformity assessment procedures: The time for simplification 4. 3 Modifications of the scope of the Directive 4. 4 The Rationale for a Radio Equipment Directive 4. 5 Relations with ETSI 4. 6 Liberalisation of Infrastructure 5. CONCLUSIONS AND RECOMMENDATIONS RECOMMENDATIONS ANNEX 1 PROCESS FOR THE ADOPTION OF CTRS ANNEX 2 NUMBERS OF PEOPLE WITH SPECIAL NEEDS IN EUROPE ANNEX 3 LIST OF NOTIFIED BODIES. !. ANNEX 4 OFFICIAL JOURNAL REFERENCES TO ADOPTED CTRS 34 35 35. ' 35 36 38 38 41 43 44 48 \ \ 0. EXECUTIVE SUMMARY This is the first Progress Report which has been prepared for submission to the Council and the European Parliament in accordance with Article 15 of the Council Directive 91/263/EEC of 29 April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the mutual recognition of their conformity and in accordance with Article 17. 1 of the Council Directive 93/97/EEC of 29 October 1993 supplementing Directive 91/263/EEC in order to include satellite earth station equipment. These Directives aim to provide the regulatory framework appropriate to a single market for all types of telecommunications terminal equipment ranging from simple telephones to the most sophisticated multimedia terminals required by the information society. This single market requires free circulation of these terminals throughout the union, ability to connect to any network and a single, streamlined Approval procedure. The Directives specify a harmonised system for conformance testing and provide a framework for the application of harmonised European standards as Common Technical Regulations(CTRs) which specify the requirements that are essential to ensure compatibility between terminals and networks. This harmonisation of terminal equipment must be achieved within the context of telecommunications networks which, themselves, are far from harmonised. The report highlights the specific nature of these two New Approach Directives which implement a dual approach utilising reference to harmonised standards for safety and electromagnetic compatibility requirements and mandatory requirements for certain specific telecommunications requirements. These Directives combine in a simplified regime the placing on the internal market of telecommunications terminal equipment and satellite earth stations and the right of connection/usage of such goods without further administrative procedures. The key objective is to have a one-stop regime in this area. So far 9 Common Technical Requirements (CTRs), which specify the mandatory essential requirements, have been adopted covering the key areas of GSM, DECT, ERMES, EURO ISDN and ONP leased lines. A further batch of 29 CTRs, covering Data Networks, Analogue PSTN, TFTS, etc. , are in the process of being adopted. While these CTRs provide for the harmonisation of some significant markets such as GSM handsets, large market segments such as PABXs, key telephone systems and simple telephones are yet to be significantly addressed. The report identifies the problems encountered in particular regarding the long delays in the preparation of the technical specifications and test suites required for type approvals. Industry, in particular, has expressed the view that the current regime is a too heavy and bureaucratic instrument to harmonise the. telecommunications equipment market. Based on experience gained so far and an analysis of the scope of the Directives, the following actions are seen to be necessary : i. ii. Relaxation of the procedures applied by the notified bodies for conformity assessment, Extension of the scope of the Directives to cover all • types of telecommunication equipment using the radio frequency spectrum, iii. Fundamental review of the regulatory framework and, in particular of the two Directives, in order to adapt to the new dynamics of the market place and the future needs of the European Information Society, Improvement to guidance of a regulatory nature given to ETSI, iv. v. , Improvement to ETSI TC and STC working practices in the area of mandated work of a regulatory nature, vi. Reduction of the period between the approval of a proposed measure by ACTE and the publication of the CTR in the Official Journal. These recommendations have been included in Section 5 of the Report. IrrrRobucnoN One of the objectives set out by the Green Paper for the development of a Common Market for telecommunications services and products in Europe (1987) was the liberalisation of terminal equipment. Up to that day, the supply of terminal equipment in most Member States was monopolised by the state owned telecom operator who argued that this was justified by the need for a co ordinated function between the network and the equipment. Following the issuing of the Green Paper and the major recent developments in communications technology the liberalisation of the terminal equipment market became feasible. The need for a co-ordinated function between the network and the equipment could be fully satisfied through type approval procedures which would check compliance of the terminal with technical specifications. Council Directive 86/361/EEC on the initial stage of the mutual recognition of type approval for telecommunications terminal equipment constituted a first step towards the establishment of a single market in this sector. Under the regime laid down by this Directive, a manufacturer or distributor could have their product tested against the relevant NET (Norme Européenne de Télécommunication) at any laboratory recognised by the national body and notified to the Commission. A certificate of Conformity and a Test Report were provided by the laboratory which could be submitted to other national bodies in place of further testing in each country. This arrangement is referred to as mutual recognition of test results. To obtain type approval applications had nevertheless to be submitted to authorities in each country. In this way, Council Directive 86/361/EEC incorporated the principle of the "mutual recognition of the results of tests of conformity with common conformity specifications" and contributed to the establishment of a common market in this sector. This First Phase Directive was repealed in November 1992 with the entering into force of the Telecommunications Terminal Directive 91/263/EEC. This Directive established a one stop type approval procedure including the right of connection so that equipment approved in one Member State can be immediately placed on the market and put into service in all other Member States without the need for additional administrative procedures. Furthermore, the Directive lays down a number of definitions of the essential requirements necessary to provide safeguards due to the technical characteristics of the public networks. With the adoption of Directive 93/97/EEC the scope was further enhanced to cover satellite earth stations. These Directives aimed to make the establishment of internal market in the telecommunications terminal equipment sector a reality. Furthermore, the Directives provided for the possibility for the Community to negotiate Mutual Recognition Agreements with third countries, and thereby extending the one stop approval and connection system beyond the physical boundaries of the EEA This would give EU manufacturers the opportunity to reap the benefits of economies of scale and compete on an equal basis in the world markets. The principal objective of the progress report is to give a first assessment of the regime established by the two Directives on the basis of the experience gained during the first year of implementation. This includes the progress made on drawing up the relevant harmonised standards and transforming these into technical regulations as well as the problems encountered by the relevant authorities within the Member States during the course of implementation of the Directives. 1. 1 Outline of the Report Structure The report is produced in accordance with Article 15 of Council Directive 91/263/EEC and Article 17. 1 of Directive 93/97/EEC. The report is structured as follows: Chapter 2: outlines the principles and the conformity assessment procedures applied and includes the progress achieved. Chapter 3: analyses the functioning of the Directive and puts forward an assessment of the problems encountered. • Chapter 4: makes a number of proposals regarding the scope of the Directives, possible relaxation of procedures and a call for preparation of a Radio Equipment Directive. Chapter 5: contains the conclusions and four recommendations. ANNEX 1. Process for the adoption of CTRs ANNEX 2. Numbers of People with Special Needs in Europe ANNEX 3. List of Notified Bodies ANNEX 4 Official Journal references to Adopted CTRs ••VÎT 2. THE MECHANISM OF THE DIRECTIVES 91/263/EEC AND 93/97/EEC The technical divergence between the various telecom networks in the EU meant that the simple mutual recognition of the national type approval of terminal equipment was not possible. The "free circulation of terminal equipment" could only be achieved by a common type approval regime based on harmonised standards and/or specifications. To this end, the Directive 91/263/EEC was issued. for Regulations The Directive follows the model of the New Approach1 Directives. It lays down a list of essential requirements and it entrusts to standardisation bodies the task of drawing up the technical specifications under mandates issued by the Commission These technical specifications which are elaborated, usually by ETSI (European Telecommunications Standards Institute), are in the form of Technical Basis European Telecommunications Standards to become harmonised standards under Directives 91/263/EEC and 93/97/EEC can be used to specify the essential requirements. At the same time, it requires national authorities to recognise that products manufactured in conformity with harmonised standards are presumed to comply with the "essential requirements" established by the Directive. Further to a conformity assessment procedure, products which comply with the requirements of the Directive can carry the CE marking and circulate freely in the EU. (TBRs). Alternatively, (ETS), mandated However the provisions of Directive 91/263/EEC diverge in some respects from the model of the New Approach. According to Article 6 of the Directive, harmonised standards which implement the essential requirements2 (c), (d), (e), 1 The fundamental principles of this New Approach were set out in Council Resolution 85/C 136/01 of the 7th May 1985 (OJ Reference C 136 of 4th June 1985) and they can be summarised as follows: legislative harmonisation is limited to the adoption of the essential safety requirements (or other requirements in the general interest). the task of drawing up the technical specifications is entrusted to organisation competent in the standardisation area. at the same time national authorities are obliged to recognise that products manufactured in conformity with harmonised standards are presumed to comply with the "essential requirements" established by the Directive. 2 Article 4 of Directive 91/263 states that "Terminal equipment shall satisfy the following essential requirements:. * ' ' • a) user safety, in so far as this requirement is not covered by Directive 73/23/EEC; b) safety of employees of public telecommunications network operators, in so far as this requirement is not covered by Directive 73/23/EEC; c) electromagnetic compatibility requirements in so far as they are specific to terminal equipment; d) protection of the public telecommunications network from harm; 7 ' (f), and (g) shall be transformed into Common Technical Regulations (CTRs), compliance with which shall be mandatory. This divergence is due to the fact that it is not in general possible to comply with the interworking requirements for access and/or for end-to-end communications other than by the application of unique technical solutions. 2. 1. The adoption of CTRs In order for a CTR to be adopted the Commission submits a scope statement for the development of a CTR for an identified type of terminal equipment to the Approvals Committee for Terminal Equipment (ACTE). This scope statement will the Telecommunications Regulations Application Committee (TRAC). The opinion of ACTE regarding this draft scope statement is asked for according to the rules described in Article 148 (2) of the Treaty. consultation with elaborated with have been additional The Commission, formally, issues a mandate to the recognised standardisation bodies ETSI/CEN/CENELEC and in most cases it will be ETSI which is entrusted to develop the corresponding harmonised standard, the so called Technical Basis for Regulation (TBR). In practice, mandates may be given before the consultation process on the scope statement has been completed, in order to speed-up the process. When complete, the TBR is delivered to the Commission. TRAC will advice the Commission on the technical suitability of the TBR. The Commission then prepares a draft measure for a CTR comprising of regulatory aspects and the TBR. In this process additional consultations are made. The opinion of ACTE is then sought. If the opinion of ACTE is favourable, the Commission renders the TBR mandatory by transforming it into the CTR to be published in the Official Journal (OJ). The CTR then becomes EU law. If the opinion of ACTE is not favourable, or if no opinion is delivered, the e) effective use of the radio frequency spectrum, where appropriate; f) interworking of terminal equipment with the public telecommunications network equipment for the purpose of establishing, modifying, charging for, holding and clearing real or virtual connection; g) interworking of terminal equipment via the public telecommunication network, in justified cases. The cases where terminal equipment supports: (i) reserved service according to Community law, (ii) a service which the Council has decided that there should be Community-wide availability, are considered as justified cases and the requirements concerned are determined in accordance with the procedure provided for in Article 14 (reference to ACTE). In addition, after consultation of representatives of the bodies referred to in Article 13 (3) and taking due account of these consultations, the Commission may propose that this essential requirement is recognized as being justified for other terminal equipment in accordance with the procedure provided for in Article 14. 8 ,. , ,;w. r > 7». Commission shall submit to the Council a proposal relating to the measure to be taken3. On no occasion, since the establishment of the committee, has it been necessary to refer a decision to the Council 4. The overall process including consultations is described in more detail in Annex 1. 2. 2 Progress Made to Date Adopted CTRs This section describes the status of all CTRs that have been adopted by the Commission on the advice of ACTE. The current status of all CTRs and proposed CTRs is summarised in Table 1. Pan-European Cellular Digital Mobile Communications The TBRs for GSM Phase 1 5Access and Telephony Application Requirements were adopted by the Commission on the advice given by ACTE in September 1993. These were published in the Official Journal6 and came into force on 1 January 1994. This ended the interim type approval regime and type approval against CTRs 5 and 9 can now be achieved at a number of Notified Bodies. The testing and subsequent approval allows GSM equipment to be placed on the market and put into service in any Member State or EFTA country. Integrated Services Digital Network (ISDN) Access and Telephony -CTR3. 4&8 in required equipment Directive As (91/263/EEC), CTRs 3 ,4 and 8 are currently being drafted to replace NETs 3, 5, and 33 respectively. NET 3, 5 and 33 were European standards for ISDN Basic telecommunications terminal the 3 Article 14. 4 of Directive 91/263/EEC Since the inaugural meeting in July 1991, in total 27 meetings have been held: September 1991, October 1991, December 1991, January 1992, February 1992, April 1992, May 1992, June 1992, September 1992, October 1992, November 1992, December 1992, January 1993, March 1993, April 1993, May 1993, June 1993, September 1993, October 1993, December 1993, February 1994, April 1994, May 1994, June 1994, September 1994, and November 1994. 1 Phase 1 GSM covers full type approval to the original specification whereas Phase 2 GSM covers new features such as 12. 5kHz voice codecs and enhanced supplementary services. 6 Commission Decision 94/11/EEC, OJ No. L8, 12. 1. 94, p. 20 and Commission Decision 94/12/EEC, OJN0. L8, 12. 1. 94, p. 23. * X Access, Primary Rate7 Access and 3. 1 kHz Telephony Requirements. These NETs have been published by ETSI in the form of ETSs and have been referred to in the Official Journal in accordance with the provisions laid down in the First Phase Terminal Equipment Directive (86/361/EEC). It became clear to the Commission Services that the forecast dates for development of the CTR 3 and CTR 4 were slipping significantly. Despite additional funding to ETSI little improvements in dates was envisaged. The following approach was therefore adopted due to the urgent need to have EURO ISDN placed on the market and thereby ensuring that EURO ISDN would take off. The approach was to reassess NET3 and NET5, to reduce the requirements to the exact match with the essential requirements of Council Directive 91/263/EEC and to produce cross references to the test suites which had been recently developed. The objective of the cross reference lists is to establish a presumption of conformity with the appropriate essential requirements. The Commission was therefore capable of presenting draft measures to ACTE on EURO ISDN basic access and primary rate access. A favourable opinion was reached in April 1994. The two Commission Decisions, commonly referred to as the bridging measures, were published in the Official Journal in December 1994. It should be noted that France and Germany have additional requirements beyond the bridging measures. A simplified administrative procedure, including mutual to accommodate such "deltaH recognition provisions has been agreed requirements. A draft measure relating to ISDN telephony has been presented to ACTE and a favourable opinion was obtained in September 1994. Digital European Cordless Telephony (DECT), CTRs 6,10 & 11 The draft measures for DECT Access Requirements and DECT Telephony Application Requirements were presented to ACTE in December 1993. A positive opinion was given and these two CTRs were published in the Official Journal in July 1994. The DECT Public Access Profile was ready for submission to ACTE in the final form of a draft measure in September 1994. The ACTE opinion was positive. At the June ACTE meeting it was agreed to extend the scope of CTR 6 and 10 to include DECT repeaters. Public Land-Based European Radio Message System (ERMES), CTR 7 The ERMES TBRs delivered by ETSI have been ready for some time. However from a regulatory point of view, the essential requirements to be tested were felt to go beyond what was required for a receive-only terminal type. Following consultation with the ACTE Head of Delegations, the Commission was capable ISDN Basic access provides two 64kb/s communication channels and one 16kb/s control channel. Primary rate access provides thirty 64kb/s communication channels and one 64kb/s control channel. 10 of proposing a draft measure covering ERMES which was adopted in August 1995. ONP leased lines 2048 Kbit/s unstructured and 64 Kbit/s, CTRs 12 and 14 The draft measure for ONP leased liens 2048 Kbit/sec received a favourable opinion by ACTE in December 1993. The corresponding CTR, i. e. CTR 12 was published in July 1994. The draft measure for ONP leased lines 64 Kbit/sec received a favourable opinion from ACTE in April 1994 and was adopted in December 1994. Proposed CTRs In addition, twelve draft CTRs are under preparation. These draft CTRs for which scope statements ACTE has given a favourable opinion and mandates given to ETSI are as follows: Pan-European Cellular Digital Mobile Communications i In order to expedite type approvals for GSM Phase 2 terminals, the Commission Services have already prepared draft Measures for CTRs 19 and 20 and have consulted ACTE thereon. As soon as the relevant harmonised standards, TBRs 19 and 20, are available the formal opinion will be requested from ACTE. X. 21 Network Access, CTR 1 The technical basis for regulation completed ETSI vote in July 1995. ACTE expressed a favourable opinion on the draft measure in September 1995. It has been agreed that only layer 1 should be included in the CTR. Layers 2 and 3 are considered to be harmonised standards. X. 2S Network Access, CTR 2 As in the case of X. 21 above, it has been agreed that only layer 1 should be included in the CTR. Layers 2 and 3 are considered to be harmonised standards. The public enquiry phase has been passed. The draft Measure is therefore to be presented to ACTE during 1995. EURO ISDN Basic Access and Primary Rate Access, CTR 3&4 As mentioned earlier, these CTRs will replace the current CTR 3 and CTR 4 (bridging measures). Expected date of coming into force is 1996 before the expiry of the bridging measures (November 1996). A scope statement has been agreed for Packet Mode Bearer Service access for both primary and basic rate. ONP 2 Mbit/sec structured leased lines, CTR 13 The technical basis for regulation is currently in thé Public Enquiry phase and the ETSI vote result is expected before the end of 1995. The draft measure will be very close to the text of already adopted ONP CTRs. 11 PSTN non-voice attachments, CTR 21 -•*% ^Xh for non-speech A CTR for non-voice PSTN Attachments is intended to regulate the essential requirements the public analogue telecommunications network. This would include, in particular, modems. This, is an important problem for the European telecommunications terminal industry. At present there axe a number of national approval regimes in place to test modems and other non-voice PSTN attachments in each of the Member States individually. This is a lengthy and expensive process for manufacturers and distributors. attachments to ' However modems from markets other than the European market are being connected to all analogue networks currently existing in the Member States. Many of these modems are US sourced. This has created a 'grey1 market in these non-voice attachments which can be connected to the network without being approved for marketing or connection in the Member States. A draft scope statement has been elaborated, on which ACTE has delivered a favourable opinion and a mandate has been given to ETSI. The standardisation work is in progress and the draft TBR should complete Public Enquiry by November 1995. Terrestrial Flight Telephone Systems (TFTS) in commercial A CTR on for TFTS would harmonise airborne terminal equipment capable of allowing passengers the public telecommunications networks. The European Radiocommunications Committee (ERC) has allocated the 1670-1675 MHz and 1800-1805 MHz bands for this service. Additional approval or certification procedures would probably be needed to supplement the proposed CTR to ensure compliance of the equipment with the general safety aspects of the aircraft. These would be under the jurisdiction of the Civil Aviation Authorities. aircraft access to The scope statement for TFTS has been elaborated. A mandate has been placed with ETSI. Standardisation work is in progress and the draft TBR is expected to go for Public Enquiry by February 1996. ONP Analogue Leased Lines 2 and 4 wires, CTRs 15 & 17 These two ONP leased line CTRs both have-scope statements, mandates have been placed with ETSI, the vote result is expected in December 1995. DECT Generic Access Profile, CTR 22 To further enhance the connectivity of DECT to different networks, the current Public Access Profile needs to be broadened. Therefore a scope statement has been elaborated defining the requirements for a Generic Access Profile. A mandate has been given to ETSI, standardisation work is in progress and the completion of the ETSI voting procedure is expected in March 1996. 12 • «TS-YT v - f '. - v" ^ p* —'f < ':•*;-• !•>. *>;. •"». •• —» —|-••. •••V:--''- *:: ::?*;'\. r * • '•• «'. '. •' Trans-European Trunked Radio (TETRA) This is a technology for Private Mobile Radio (PMR) communications. It allows speech and data communication within a closed user group and could be used to connect to the public telecommunications network. In particular it can form the basis of a trans-European network including safety international roaming agreements between organisations. The police forces are, for example, considering basing their communications systems on the principles laid down in the relevant TETRA standards the national public Problems have also been encountered in the harmonisation of the frequency bands to be used in this system. This is because the bands most suitable for TETRA are currently reserved for military and police applications in the EU Member States. Discussions are being carried out with the relevant authorities to attempt to free these bands for civilian applications. A scope statement has been agreed which asks ETSI to elaborate the requirements for emergency services use of TETRA, taking into account the issues identified above and without, prejudice to the applicability of Directive 91/263/EEC for this class of equipment. Digital Cellular System (DCS 1800) The Digital Cellular System is essentially a modification to the GSM specification to support operation in the 1800 MHz band. The lower power used and the use of frequencies in the higher band imply small coverage but support higher traffic densities. ETSI has already developed standards for DCS 1800 systems and terminals. DCS 1800 systems are also commonly referred to as the Personal Communications Network (PCN). Scope statements for DCS 1800 Access and DCS 1800 Telephony have been agreed. Problems have been encountered in the harmonisation of the frequency bands to be used by DCS 1800 due to the current usage of the allocated bands by non-public services. Two draft measures are currently under preparation which duly take this issue into account. DECT/GSMAccess At the June ACTE meeting a scope statement was agreed for equipment that uses DECT frequencies and protocols for access to the GSM network. Satellite Earth Stations Scope statements were agreed at the June ACTE meeting for the following classes of satellite earth stations :- L-Band low data rate land mobile satellite earth stations. Ku-Band TVRO satellite earth stations. Ku-Band VSAT satellite earth stations. 13 Ku-Band land mobile satellite earth stations. Ku-Band satellite news gathering transportable earth stations. PSTN Voice Access and Analogue Handset Telephony The market for analogue PSTN terminal equipment is still the major portion of the total telecommunications terminal equipment sales. Despite the rapid introduction of newer technologies, this situation is likely to remain unchanged for several years. The domestic user market for analogue equipment continues to expand with the use of second and third fixed phones or with cordless technologies. The business market also continues to expand. In addition the life span of analogue equipment has reduced dramatically with the development of new features necessitating new models. All these factors imply a continuing requirement for analogue terminal approvals. In addition to the immediate market needs, the liberalisation of voice telephony service and the liberalisation of telecommunications infrastructure are foreseen for 1998 onwards. The regulatory framework for the post 1998 environment is currently being developed, but it is already clear that the concept of Universal Service is crucially important and that the definition of Universal Service will include, as a minimum, a Universal Voice Telephony Service. At the same time as encouraging competition for services and for infrastructure, we must carefully safeguard the harmonisation objectives in the terminal equipment market. Scope statements for PSTN Voice Access and Analogue Handset Telephony were given a favourable opinion at the September ACTE meeting. ETSI have not yet given estimates for the completion dates. For the purpose of giving an overview of the CTRs adopted or under development, please refer to Table 1. The relevant Official Journal references are given in Annex 4 14. * • • • " * " ' > * « ' •? >>#-£ TABLE 1: STATUS OF C T RS ADOPTED OR UNDER DEVELOPMENT CTR Number NET Equivalent (if applicable) Area of Harmonisation CTR1 NET1 X. 21 Network Access CTR 2 NET 2. X. 25 Network Access Adoption Date of CTR measures expected 12/95 expected 08/96 CTR 3 NET 3 ISDN Basic Access (Bridging Measure) "adopted 20/12/94 CTR 4 NET 5 ISDN Primary Rate Access (Bridging Measure) adopted 20/12/94 CTR 5 - NET 10 GSM (Phase 1) Access Requirements adopted 21/01/94-. CTR 6 CTR 7 - - DECT Access Requirements adopted 29/07/94 ERMES Receive Only Access adopted 2/8/95 CTR 8 NET 33 Digital Telephony over ISDN expected 11/95 CTR 9 CTR 10 CTR 11 CTR 12 CTR 13 CTR 14 - - -. - - GSM (Phase 1) Telephony Attachment Requirements adopted 12/01/94 DECT Telephony Terminal Requirements adopted 29/07/94 DECT Public Access Profile (PAP) expected 11/95 ONP Leased Lines: 2048 Kbit/s Unstructured adopted 29/07/94- ONP Leased Lines: 2048 Kbit/s Structured expected 03/96 ONP Leased Lines: 64 Kbit/s adopted 29/12/94 CTR 15 - - ONP Leased Lines: Ordinary and special quality voice - 2 wire expected 04/96 CTR 17 CTR 19 CTR 20 CTR 21 CTR 22 CTR 23 - - - ONP Leased Lines: Ordinary and special quality voice - 4 wire expected 04/96 GSM (Phase 2) Access Requirements expected 06/96 GSM (Phase 2) Telephony Attachment Requirements expected 06/96. v - • ' • ' •" Analogue PSTN Non-Voice Access expected 8/96 - - DECT Generic Access Profile expected 07/96 TFTS expected 03/97 15 ••'AT. ). - —- CTR Number NET Equivalent (if applicable) CTR 24 CTR 25 CTR 26 CTR 27 CTR 28 CTR 29 CTR 30 CTR 35 CTR 36 - - - - - - - - - Area of Harmonisation Leased lines D34U/D34S Leased lines D140U/S Adoption Date of CTR measures expected 09/96 expected 09/96 L-band low data rate mobile earth stations expected 10/97 Ku-band earth stations Ku-band VSATs Ku-band TVROs Ku-band SNG TETRA "Emergency accessH DECT/GSM Radio expected 10/97 ' expected 10/97 expected 10/97 - expected 10/97 expected 3/98 expected 10/97 16 •:•"- -'«••«^p'rv^'^T- V T. -. v„- 2. 3 New Candidate CTRs ACTE is considering the treatment of the following classes of terminal but is yet to take a position : Personal Satellite Communications Network (PSCN) A CTR for PSCN would cover terminal equipment capable of being connected to the public telecommunications network via low earth orbit satellites. This is considered to be a large market for future mobile telephony and falls within the scope of the Satellite Earth Station Equipment Directive and thus within the CTR regime. ETSI have been given a mandate. This standardisation mandate (M/057) calls for harmonised standards to be adopted by end 1995. Terminals for People with Special Needs There is a growing awareness, recognised by regulators, that elderly arid disabled people have the right to expect the same standard of service and access as every other member of the public. The numbers of people involved is indicated in Annex 2. The Commission has consequently tabled a number of contributions at the most recent ACTE meetings and it has been decided to make an in-depth analysis on the needs of this group and the extent to which these needs can be met within current legislative framework on type approvals. It is remains to be seen whether a scope statement for a CTR will be possible. DECT Consideration is being given" to the need for scope statements on DECT/GSM Dual Mode and DECT/ISDN profile CTRs. 2. 4 Market Coverage For The following high value segments of the terminal equipment market no single market exists yet: - Simple telephones -Key Systems -PABXs - Private Networks (apart from leased lines) 17 ' y y ' j ' yt «••r--*-^--;:^~ '• 2,5 Conformity Assessment Procedures According to Article 3 of the Directive 91/263/EEC, terminal equipment can only be placed on the market and put into service if it complies with the requirements laid down in the Directive. The verification of equipment's conformity to these requirements is tested during the Conformity Assessment Procedures. The Conformity Assessment Procedures are used to test equipment's conformity to the essential requirements of the Directive. The onus is placed on the manufacturer to gain certification and approval prior to the affixingof the CE marking and the subsequent placing of the product on the market. Under the 91/263/EEC Directive, a manufacturer can choose between a number of Conformity Assessment Procedures any of which is sufficient to result in approval of the equipment for European market entry, and to allow the manufacturer to affix the CE marking: • • the full quality assurance procedure (module H), where the manufacturer who operates an approved quality system, subject to surveillance by a notified body, is enabled to certify that the products concerned satisfy the requirements of the Directive that apply to them. the type examination procedure (module B), where the manufacturer requests a Notified Body to ascertain that a specimen meets the provision of the Directive that apply to it and issue the relevant EC type-examination certificate. Subsequent to this certificate, the manufacturer has two options: L to issue a Declaration of Conformity to Type (module C), subject to - control by a notified body using random product checks, or ii. to implement a production quality assurance programme (module D) subject to surveillance by a notified body and ensure in a written declaration of conformity to type that the products concerned are in conformity with the type as described in the EC type-examination. Once the procedures-described above are completed, the notified bodies shall issue an administrative approval for the connection of the concerned terminal equipment to the public telecommunications network. Under the Council Decision 93/465/EEC, the CE marking must be affixed during the production control phase. This can only take place after the administrative approval has been issued. It follows that the administrative approval must be issued from the notified body chosen for the production control phase. It is this notified body, responsible for issuing the administrative approval and the last body to intervene in the process, whose identification number is used for the CE marking. The complexity of the mechanism of the conformity assessment procedures has been criticised as non proportional to the objective aimed at. While these procedures were appropriate when they were formulated, the change in circumstances since then could mean that review is now required. 18 • '. • •. ' *" *v ^ * -. * 2. 6 Specifics for the Satellite Earth Station Directive, 93/97/EEC The satellite earth station Directive extends the Terminal Equipment Directive to include Satellite Earth Stations. The purpose of this Directive is to lay down a mechanism which will permit the effective use of orbital resources in conjunction with the radio frequency spectrum and avoidance of harmful interference between space-based and terrestrial communications systems and other systems. Therefore this Directive focuses on the space interface of the satellite earth station equipment. The satellite earth station Directive lays down the type approval procedures for equipment which is capable of being used either for transmission only, or for transmission and reception, or for reception only of radio-communication signals by means of satellites or other space-based systems. These type approval procedures aim at safeguarding the following main objectives: - the public telecommunications network - the effective use of the frequency spectrum - the effective use of orbital resources and the avoidance of harmful interference between space-based and terrestrial communications systems and other systems. In view of these main objectives the Directive makes the following distinctions with respect to the conformity assessment procedures to which satellite earth station equipment are subject to: i. Transmit or transmit-receive satellite earth station equipments this equipment may affect the use of the frequency spectrum and the orbital resources and therefore should always be type approved according to the conformity assessment procedures, laid down by the Directive 91/263/EEC, regardless of its intended use. However, if the equipment is not intended to be connected to the public telecommunications network, the conformity assessment procedure need not be applied to its terrestrial interface provided that the manufacturer or the. supplier fills in the appropriate declaration of intended use, mentioned in Article 2 of the Directive 91/263/EEC and Article 11 of the Directive 93/97/EEC ii. Receive only satellite earth station equipment: this equipment, although it also makes use of the frequency spectrum and orbital resources, does not have the capability to affect the use or provoke harmful interferences between space-based and terrestrial communications systems and other systems. Therefore the principle of proportionality imposes that with respect to the space interface of this equipment, it is upon the manufacturer to choose either the classical conformity assessment procedures or the Community internal production control procedures set out in the Annex of the Directive 93/97/EEC, the latest being a simple self declaration. Nevertheless, the interface to the terrestrial network of the receive only equipment is subject to the same rules as terminal equipment and it therefore has to be duly type approved whenever it is intended to be connected to the 19 public network or accompanied by the manufacturer's declaration whenever it is capable to be connected but not intended for such a purpose. 2. 7 Mutual Recognition Arrangements (MRAs) The seventh recital of the Directive 91/263/EEC states: M. real, comparable access to third country markets for European manufacturers should preferably be achieved through multilateral negotiations within GATT, although bilateral talks between the Community and third countries may also contribute to this process. "* This statement gives the foundation for third country negotiations both within the scope of GATT and on an individual country by country basis. In the course of such negotiations the Commission must ensure that the opening up of the Community market in terminal equipment is not unilateral or without full reciprocity. The Council adopted a negotiating mandate for the mutual recognition of conformity assessment procedures between the EU and certain third countries on 21 September 1992. The MRAs are expected to include fields such as pharmaceuticals, medical devices, chemicals and telecommunications. The main areas of interest in the includes the telecommunications sector prior to and during negotiations following: • • • • agreement on sectors for inclusion in the MRA and precise definition of these sectors; legal framework regarding market access manufacturers, including any tariff origin or technical barriers; for third country conformity assessment procedures including mechanisms, bodies and standards within the negotiating countries and the criteria used for evaluation of test files from third country testing agencies; the essential requirements governing equipment eligible for conformity assessment; and • v. the bodies responsible for the formulation of standards for conformity assessment. In addition there are several horizontal issues that must be addressed in an MRA. These include intellectual property rights, product liability laws (as applied to the manufacturer, the certification body, the accreditation authority, the importer, and the distributor) and origin rules. * Council Directive 91/263/EEC, OJ No L 128, 23. 5. 1991, p. 2. ,- - 20 w:^<r;^ The Commission began negotiations with the US. , Canada, Australia and New Zealand in 1994, these being the priority countries for the conclusion of Mutual Recognition Agreements with the European Union. For each of these countries, telecommunications terminal equipment is regarded as a a priority sector. In the case of Australia and New Zealand, encouraging progress has been made in drafting the telecommunications part of the agreement. Both of these countries are willing to base an agreement on full mutual recognition including the function of certification. Progress has been slower with USA and Canada because both countries would prefer to use an approach which first would conclude an agreement on mutual recognition of test results. The European approach is to pursue an agreement based on full mutual recognition of testing and certification. In addition to continuing discussions with the first four priority countries, negotiations will begin in 1995 with Japan and Switzerland. A difficulty which needs to be overcome is that a substantial proportion of the European telecommunications terminals market is not yet harmonised. Particular examples are PSTN voice terminals and certain classes of radio equipment. These areas continue to be subject to national regulation. In many of the national legal systems it is not currently possible to transfer national rights to a third country to work as a notified body. 2. 8 Relations with EFTA Countries The European Union enjoys close co-operation with the EFTA countries in telecommunications. As a result it is the Commission's policy to extend the 'one stop approval' market to include the EFTA nations, within the framework of the European Economic Area (EEA). EFTA Member State delegations currently attend the ACTE meetings, but they have only observer status and are therefore not entitled to express their opinion on draft measures. The EFTA Secretariat and the EFTA Surveillance Authority are also. represented with observer delegations. This participation by EFTA is in accordance with the procedure adopted by the Commission on 1 June 19949. The EFTA countries and the EU Member States have, through the Agreement establishing the European Economic Area (EEA), extended the principle of the four freedoms (free movement of goods, persons, services and capital) of the single market to cover all 17 countries. The EEA Agreement entered into force on 1 January 1994. The EEA, which is based on EC legislation existing on that date, provides for the legislative framework in terms of trade market access and competition rules throughout the region. The EFTA countries have accepted the Community acquis in the field of technical harmonisation and the principle of a single mutually recognised testing and certification regime and a single CE marking regime within the EEA The general principles on the free movement of goods as expressed in Articles 30 and 36 (Articles 11 and, 13 of the EEA 9 Procedure d'information et de consultation pendant la période de pre-adhesion, SEC (94) 909 et /2. 21 Agreement) and the relevant rulings of the EC Court of Justice are also applicable in the EFTA countries (Article 6 of the EEA Agreement). Switzerland, although a member of EFTA, has not joined the EEA but will nevertheless implement the technical part of the CTRs. The operation of this unique arrangement has not yet been finalised. Liechtenstein has formally ratified the EEA Agreement in May 1995 following modification of their customs union with Switzerland. The EFTA countries have taken the necessary institutiorial measures to ensure the good functioning of the EEA by setting up the Standing Commitfee of the EFTA State, the EFTA Surveillance Authority and the EFTA Court. Joint EFTA-EU institutions have also been created such as the EEA Joint Committee, which is responsible for taking decisions regarding the development of the EEA to new EU legislation and its homogeneous application throughout the EEA. The modus operandi of the CTR regime within the EEA has not yet been finalised. Under the EEA, any new EU legislation must be ratified by the EU/EFTA Joint Committee. Following this ratification, each of the EFTA-EEA Member States transposes this new legislation into national law. In the EU Member States, power can be transferred from the Member States and the Council of Ministers to a Committee (in the case of the CTR regime, this is ACTE) in order to be adopted. This difference in procedure, brought about because CTRs are considered as new legislation and not as acquis communitaire to the 91/263 or the 93/97 Directives, could result in the EFTA-EEA Member States erecting barriers to trade by delaying the adoption of the CTR into their national law, while having full access to the markets in other EEA Member States. Following the accession to the European Union of Austria, Finland and Sweden, the relationship between the EU and EFTA under the EEA framework will have to adapt to the new situation. 22 3. PROBLEMS ENCOUNTERED DURING THE IMPLEMENTATION OF THE DIRECTIVE The following sections examine a number of issues that have arisen during the application of the Directive. 3,1 Experience on the Scope of Directive 91/263/EEC The following issues relating to the scope, of the Directive have been identified. Equipment not intended to be connected to the network: Can a grey market develop?. The Directive 91/263/EEC concerns telecommunications equipment capable of being connected to the public telecommunication network in order to send, process or receive information. A critical principle of the Directive is that all equipment with the physical characteristics of telecommunications equipment must have affixed a marking which will indicate whether or not it can be connected to a public network. The marking thus, serves two purposes: it enables a surveillance authority to easily identify the approval status of the equipment while at the same time informing the user of the intended purpose of the equipment. The Directive distinguishes between equipment intended to be connected to the public telecommunications network and equipment not intended for such a purpose and provides that it is only the first one which should be type approved. In 1991, when the Directive was adopted, it was quite clear that the main prerequisites of the type approval procedures were the protection of the public network and the interoperability of the terminal equipment with the public network or via the public network. Accordingly, to the extent that these objectives were met, there was no need for further regulation. Consequently, equipment having the physical characteristics of terminal equipment but not intended to be connected to the public network did not need any further regulation. Given the construction of the present Directive this approach undoubtedly has a solid logical basis. The Directive imposes mandatory CTRs to terminal equipment intended to be connected to the public network. The extension of these mandatory standards to all equipment with the physical characteristics of terminal equipment, disregarding its use, could not be justified by the aims of the Directive. It has however been argued that the distinction between equipment intended to be connected to the network and equipment not intended to be connected may permit the creation of a "grey" market. Manufacturers could declare that then- product is not intended to be connected to the public network and thus avoid the cumbersome procedures of type approval. In this way providers would be able to place their equipment in the market at a considerably lower cost than if the equipment was type approved. If the user connected this unapproved equipment to the network, he would assume all risks and responsibilities thereof. The possible solutions are the following: 23 i. Amend the Directive in such way that all equipment capable for being connected directly or indirectly to the network will have to be type approved: This solution would prevent the creation of a "grey" market but at the same time it would not be in line with the principle of proportionality. The theory of New Approach Directives is that legislative harmonisation should be limited to the adoption of those essential requirements with which products put on the market must conform10. The essential requirements which one should safeguard in the area of terminal equipment are the safety of the network and interoperability (safety of user and of employees are adequately regulated by Directive 73/23/EEC, EMC by Directive 89/336/EEC). However if a terminal is not connected to the public network, none of these essential requirements are in issue any more and therefore there is no justification for a type approval procedure. ii. Provide for national measures which will deter the fraud in an efficient way. The Directive requires Member States to lay down efficient mechanisms for this purpose. This could be achieved by drawing the attention of the users to their responsibilities in case of misuse of the terminal equipment. Manufacturers, in particular, have expressed the view that there must be a balance between regulation and surveillance in order to deter grey importers while not overly penalising legitimate manufacturers. This implies some harmonisation of surveillance between Member States. The user should be adequately informed about the significance of the markings as well as the possible penalties and other consequences in case of a misuse of the equipment. iii. Simplify the requirements to reduce costs of approval and minimise time to market. This would reduce the relative advantage that the grey market has compared to manufacturers who follow the correct regulatory route. It should also reduce the cost of products and improve the responsiveness to the market place. The risk is that problems may arise with compatibility between the terminal equipment and the networks to which they are connected. Equipment indirectly connected to the public network: do personal computers and other IT equipment fall within the scope of this definition ? As mentioned above, the Directive only regulates the placing on the market and connection to the network of equipment intended to be connected to the public network. This can only be equipment directly connected to the termination of the public network or equipment which interworks with a public telecom network 10 Council Resolution of 7 May 1985 on a new approach to technical harmonisation and standards (85/C136/01). 24. • • M » « >. - , > |,^ « »i •vrv. ' being connected directly or indirectly to the network in order to send, process or receive information. It follows from this definition that only equipment capable of interworking with the network can fall within the scope of the Directive. The term interworking contains a clear element of interaction with the network which limits the scope of the Directive only to equipment which has this capability. Therefore in the case of IT equipment, it is the network interface circuitry , integrated or not in the IT equipment, which ensures the interworking of the IT with the network and which therefore has to be type approved together with the software drivers responsible for initiating, terminating or modifying the call. An in-depth analysis of the objectives of the Directive will lead to the same conclusion. The Directive mainly aims at ensuring the protection of the network and the interoperability of the terminal with the network or via the network. It would not therefore be reasonable to impose type approval procedures on IT equipment on the basis of this Directive as far as this equipment functions independently from the network. There is considerable variation across Member States on the approach on indirectly connected terminals. These approaches vary from having no requirements for such equipment beyond that required for directly connected equipment to having a range of requirements for the indirectly connected terminals themselves as well as the switching equipment such as PABX or key systems. These requirements include such aspects as the protection of privacy and the provision of facilities for users with special needs e. g. Visually Handicapped Operators Consoles. There is an urgent need to resolve this issues since private switching equipment represents one of the largest markets for telecommunications terminal equipment in Europe. There is considerable support for the view that Article 2, referring -to equipment which is capable but not intended for connection to the public network is confusing and of little practical benefit. It would also remove the requirement for negative marking which is not found to be helpful by many parties (see Para 3*3). Classes of equipment wtiich could fall under this article are modems used only for private network links but it is difficult for a manufacturer to confirm the "intention of a user of such a portable item. Another example is radio equipment not intended for connection but the considerations in Para 3. 2 below should cover concerns in this area. 3. 2 The coverage of radio equipment There is ambiguity on which radio equipment is covered by the Directive 91/263. The ambiguity relates to whether or not the radio frequency spectrum is part of the "public telecommunications network" due to the fact that it is a limited natural resource accessible to all, including the fixed public telecommunications network. If the spectrum is regarded as part of the public network, any terminal equipment which makes use of a system of communication employing the radio frequency spectrum would be presumed to be intended for connection to the public telecommunications network. 25 On the other hand, if the spectrum is not regarded as part of the network infrastructure, only radio terminal equipment which is intended to interwork with the fixed telecommunications network would be covered by the Directive. The Commission believes that the intention of the Council was to include the radio frequency spectrum which is allocated to public telecommunications within the definition of public network infrastructure and that terminal equipment capable of making use of this spectrum would fall under the TTE Directive. This intention would be made unambiguous by introducing the following alternative text in Article 1. 3 of the Directive : "However, equipment which is capable of connection to the public telecommunications network and which uses the radio frequency spectrum for connection and/or communication is equipment for which the procedures of article 2 may not be applied. " 3. 3 Marking Regime A series of Directives, designed to remove technical barriers to trade, provided for the affixing of the CE marking. Each one of these Directives sets forth its own rules for the use and the design of the CE marking. In the interest of simplifying Community legislation and making it more consistent, the Council adopted Directive 93/68/EEC which aims to replace the various provisions of all these Directives with uniform prescriptions. However, the Directive remains optional until 1st January 1997 so that manufacturers will be able to adjust gradually to the new situations and to sell their stocks of products manufactured in line with the rules that were previously in force, bearing the non-harmonised markings. When the manufacturer follows the harmonised regime and affixes the EC marking on the terminal equipment as described in Directive 93/68/EEC, this marking indicates that the equipment is also presumed to conform to the provisions of all other Directives that may be applicable to it. With respect to terminal equipment, the Directives that may be applicable are the 91/263/EEC TTE Directive, the 73/23/EEC Low Voltage Directive and the 89/336/EEC Electromagnetic Compatibility Directive. The aspect of dual marking appears in some cases where the manufacturer may have an interest in placing on the market terminal equipment which complies at the same time with national requirements and to a CTR. This could be the case, for instance, with EURO ISDN terminal equipment which also is designed to conform to additional national sets of requirements. In this case, two different markings need to be affixed to the equipment. This is acceptable if the documentation accompanying the equipment explicitly indicates the meaning of each of the markings affixed. The practical application of the marking regime has necessitated many discussions with industry representatives. This, in turn, has led to clarifications being given concerning the marking of the equipment for which neither CTRs nor harmonised standards exist; for indirectly connected equipment and for equipment consisting of sub assemblies need only have marks placed on the telecommunications related elements. For example, communications software 26 which can be loaded into a personal computer can only convey marking information in the literature supplied with the product. Industry and some regulators have expressed concerns regarding the effectiveness of negative marking according to Annex VII of Directive 91/263, as a mechanism to control the grey market and they have proposed that negative marking should be abandoned. It should be noted, however, that the intention of the negative marking was more to open up markets for off-network equipment rather than to specifically control the grey market. 3. 4 The slowness of the standardisation process The implementation of Directive 91/263/EEC and its amending Directives has been hampered, among other things, by the delays in standardisation of the technical areas within ETSI where deliverables have often been over a year late. This has resulted in late availability of TBRs to be adopted as CTRs and therefore of harmonised technical regulations governing particular equipment types. Some of the problems encountered have stemmed from inaccurate forecasting of the work involved at the outset, with subsequent pressure to maintain the optimistic deadlines. The choice of approval procedure to be followed within ETSI needs to be clearly agreed at an early stage. The normal practice is to avoid the use of accelerated procedures for regulatory documents. In principle, the accelerated procedures exist to speed up the approval of 'non-contentious' issues. However because of the need to generate and adopt the TBRs quickly, the accelerated procedures have been used in an attempt to speed up the elaboration of TBRs which may contain contentious issues. This can result in failed votes which require reference back and consequently result in no saving of time. The lack of TBRs and CTRs for particular equipment types has meant that, in practice, some of these areas have been governed by the NET regime. This has caused confusion for manufacturers and suppliers, particularly those new to the European market, in that under the NET regime, approval must be applied for in each of the Member States, but under the CTR regime, now governing equipment types for which CTRs exist, approval need only be granted in one Member State for the product to be placed on the market throughout the EU. The delays during the production of European Telecommunications Standards have been particularly noticeable in the ISDN and DECT cases. The delays to the DECT standards were partly caused by the lack of personnel wjthin ETSI and the manufacturers to develop these standards because a greater emphasis was placed on the development of standards for GSM. This point is specifically mentioned in the recent Green Paper on Mobile Communications: "DECT has [. ] faced a number of issues during development [including] competition from investment in the development of GSM, the development of the resulting in a shortage of manpower for 27 >••"> v~- • f -• standard [and] as with GSM, there have been delays in getting CTRs approved in good time. "l l The delays in development of the TBRs within ETSI stem partly from the way in which ETSI itself operates. It has to be noted that the right level of resources, is not always put at the disposal of the recognised standardisation organisations, in particular in the case of ETSI, by the ETSI members themselves. It is essential to have the timely availability of experts whereby work on the identified technical basis for regulations can be effected speedily and within the time schedule envisaged. It may be that the non-availability of experts is due to the relative priority of the class of terminals being addressed with respect to market needs. Where this is the cause, this should be made clear. In addition, experience has shown that when ETSI needs help on interpretation of the essential requirements laid down by both Directives, this guidance is not communicated in an effective way to ETSI. The current procedures of requesting help and receiving a response via a chain involving the ETSI TBR manager, an ETSI rapporteur, a TRAC correspondent and thence reporting back to the Commission Services have great scope for improvement. A direct route of communication between the Commission services and ETSI TCs and STCs is available by the use of Commission Counsellors but a lack of resources on the part of the Commission Services has reduced the effectiveness of this mechanism. Delays have also been introduced by the lack of clear guidance from the regulators. In some cases it has taken a number of ACTE meetings to resolve certain issues e. g. the X. 25 layer issue, the ERMES CTR issue/the coverage of TETRA by 91/263, indirectly connected terminals. Having regard to the timely development of TBRs experience has also shown that the ETSI TC/STC working practices, in particular regarding the consensus making process and the resolution procedures following a Public Enquiry, are too slow and cumbersome. It is believed that considerable time could be saved if, from the beginning of the TBR work, the working practices would take into account for agreement at the final voting stage. The need for a review of the working procedures of European standards organisations in the development of harmonised standards is urgent as indicated by the recent Bangemann Group Report: "The Group recommends a review of the European standardisation process in order to increase its speed and responsiveness to markets. "n T^his report highlights three levels at which action should be taken to rectify the present situation: operators, investors and public procurement offices should establish an MoU to set specification requirements which would provide input to 11 COM (94) 145. 27. 04. 1994, Towards a Personal Communications Environment: Green Paper on a Common Approach in the field of mobile and personal communications within the European Union, Annex A Section 2. 2. 12 "Europe and the global information society: Recommendations to the European Council", The Bangemann High-Lcvel Group on the Information Society, 26 May 1994, p. 14. 28 'J. "> - * * ». •'. " '• ' • •. - -. the recognised standardisation bodies as a way of responsiveness; establish their work programmes on the basis of market priorities. increasing market the European standards institutes should be encouraged to 3. 5 Experiences in the Elaboration of TBRs There have been a number of problems encountered within ETSI during the course of elaboration of the CTRs requested by the Commission. These problems have slowed down the production of the TBRs or have stifled debate on technical issues. Frequently, the standards upon which the TBRs are based prove not to be fit for the purpose and result in much more work being required than was originally predicted. The resulting delays are not highlighted early enough and therefore not reflected in the workplan. The Commission also believes that work on regulatory standards should concentrate on what is 'essential' in some technical areas. For example, no firm position has been reached concerning the inclusion of all three layers in TBR2 (X. 25 Network Access) despite several attempts at reaching agreement. This has resulted in ETSI developing full three layer13 documents when only Layer 1 could be required14. A similar problem occurred with the TBR 9 (GSM Phase 1 Telephony Attachment Requirements) and its 'bis', 'ter* and 'quad* extensions. Subsequently, the *bis', 'ter" and 'quad' extensions have not been adopted as CTRs, but considered as voluntary standards. These types of problems result in significant delays due to the extra work involved. There are problems in developing the TBRs as ETSI is frequently lacking a well defined interpretation of the applicability of the Directives. To take a recent example, it is still unclear how satellite networks will be regulated. The question arises as to whether or not the satellite network is part of the infrastructure as defined under 91/263/EEC and as to which side of the satellite is considered as the Network Termination Point for the purposes of developing a TBR. Clear and consistent guidance by the Commission must be given to ETSI in this area. After à slow start, in some areas, ETSI has learnt that better structuring of the test parts is a key factor in speeding-up the production and improving the quality of the TBRs. As a consequence, the new TBRs 19 & 20 (GSM Phase 2) should provide a significant improvement to the testing regime for GSM The Commission believes that there should be more involvement of technical experts during the planning phases of TBR production, so that more realistic and accurate time scales and resource predictions are indicated from the beginning of the work. A particular problem has been the delays resulting from the requirement to translate the TBRs into all Union languages. This problem has been made worse by the enlargement of the Union. The use of harmonised standards may alleviate this problem. i. e. including only the three lowest layers of the ISO Open Systems Interconnect 7 Layer Model. 13 14 ACTE has issued an informal opinion that only level 1 should be regulated. 29 There have been difficulties with the maintenance of CTRs following adoption. Formally amendments cannot be made without following a process which is equivalent to adopting anew CTR. A pragmatic solution has been adopted by the issuing of Advisory Notes which clarify the ISDN and GSM CTRs. However, there is no legal status for these notes. Consideration should be given to an efficient process whereby CTRs can be maintained in a controlled manner in the light of experience. A possible solution could be based upon the official corrigendum procedure. 3. 6 Harmonised standards and CTRs Directive 91/263/EEC has been based on the principles laid down by the Council resolution of 7 May 1985 on the New Approach to technical harmonisation and standards. According to these principles, the legislative harmonisation should be limited to the adoption of the essential requirements in the general interest. The elaboration of these essential requirements into harmonised standards is entrusted to the standardisation bodies. Compliance with these harmonised standards gives presumption of conformity to the relevant essential requirements. The Directive 91/263/EEC diverges from the classical New Approach model by imposing mandatory standards CTRs for reasons explained the recitals of the Directive: the essential requirements related to "whereas in respect of interworking with public telecommunications networks and in cases where it is justified, through such networks, it is generally not possible to comply with such requirements other than by the application of unique technical solutions; whereas such solutions shall therefore be mandatory. " While this recital suggests that interworking of the equipment with the network can be achieved only through a unique technical solution, the qualification Min generaT implies that exceptions of this general rule are possible. This position is reinforced by Article 6 par. 2 of the Directive where it is provided that: " the Commission shall. adopt. the measure identifying the type of terminal equipment for which a common technical regulation is required. " It follows that terminal equipment is the subject of CTR only if this is considered necessary. It is for the Commission to identify in which cases the interworking of terminal equipment with the network can only be achieved through a unique technical solution and propose the corresponding CTRs to the ACTE committee. In all other cases, the principles of the New Approach apply in their entirety. Where delay in the production of a CTR is prejudicing the development of the European Type Approval regime the Commission can propose the use of harmonised standards. 30 «»-i>«t-r-*T>**-f«e ,?»i-^'"> • 'r' w. rç~-:r" \- ** -. -* Consequently it is the Commission Services position that :- In the absence of a CTR but in the presence of a relevant harmonised standard whose reference has been published in the EU Official Journal, compliance of terminal equipment to the essential requirements laid down in Article 4 of Directive 91/263/EEC will be presumed. Terminal equipment compliant with these essential requirements can be affixed the EC marking and circulate freely in the EU. The absence of the CTR may either be due to delay in its production or to the fact that a CTR is not required. Notwithstanding the clear Commission Services position on this matter, certain Member States believe that, due to the nature of the transposition of the Directive into national law and their interpretation of European law. harmonised standards may not be used as described above. Furthermore, doubts have been expressed as to the practicality of using harmonised standards in a consistent manner. The Member States who have reservations of the use of harmonised standards believe it is most important to ensure that there is no ambiguity in any new legislation. 3. 7 Competition amongst Designated Laboratories Member States are in the process of notifying to the Commission not only the national notified bodies but also the designated laboratories. It would be useful for Member States to also notify organisations which are accredited to make audits for the approval of quality assurance systems according to Annex III and IV of Directive 91/263/EEC. Regarding Notified Bodies, a list has been published in the Official Journal15. This list contains 18 entries covering 10 of the then Member States plus Austria, Finland, Norway and Sweden. Laboratories may be designated either with respect to CTRs or TBRs once they have passed the adoption procedure. Given that manufacturers also can choose Notified Bodies, competition has therefore started between both laboratories and Notified Bodies. It is most important that laboratories are truly independent, including lack of subsidy as part of a larger organisation and cross subsidy from other work. In order to give confidence to the market, the need for full independence and transparency is particularly important where an designated test house has in the past been within a network operator's overall organisation. The Commission will also ensure that in practice mutual recognition of approvals and results will operate fairly and with full reciprocity between all Member States. 3. 8 Responsiveness of Processes Supporting the Directives The speed of resolution of issues relating to the implementation of the directives has been criticised. This is, in part, due to the complexity of the subject and the many different interest groups both within and between Member States. An 15 OJNo. C203, 23. 07. 1994 31 example of this complexity is the process whereby the specification of what is truly an "essential" requirement as defined under article. 4 of the Directive involves technical, regulatory, marketing, legal and testing considerations as well as a full understanding of the intentions of the Directives. All this has to be resolved in an environment where technology, markets and regulatory policy are all changing rapidly. Issues such as the above example are resolved by the various bodies described in Annex 1 and co-ordinated by Commission Services having consulted ACTE. Since most of the bodies involved are representative for all the regulatory and economic players, the process can become cumbersome resulting in slowness and, in some cases, loss of focus. Further delays can be introduced following the resolution of issues due to the nature and performance of the instruments used to implement decisions such as Commission Decisions. Often legal opinion is sought which can introduce further delays. While many of the delays experienced in the resolution of problems may be inevitable, it is suggested that in any review of the current Directives the following issues should be considered:- The task being tackled seems too complex and should be simplified. The right balance between the extent of the requirements, the heaviness of the regulation and the extent of the surveillance should be established. The processes should be improved, perhaps by applying techniques such as Business Process Re-engineering. 3. 9 Assessment of Conformity Concerns have been expressed on the difficulties experienced in ensuring consistency in the application of the procedures of the Directive between Member States. In order to ensure that there is a consistent interpretation of the Directive the European Organisation of Testing and Certification has been mandated to produce the "Handbook on Implementation of Conformity Assessment Procedures relating to Directive 91/263/EEC". This handbook has been prepared by the ADLNB members. In general the Handbook is seen as a useful clarification of the Directive. There was a general belief that the interpretation included in Annex 2 of the Handbook was too onerous. Consequently this part of the handbook has been redrafted to meet these concerns. 32 4. P E R S P E C T I V ES F OR T HE F U T U RE customers, terminal manufacturers, network The regime has been criticised as extremely rigid and it has been argued that in practice the Directives have not always equally met the requirements of all parties i. e. residential customers, business equipment manufacturers, new operators, established operators, regulators. Manufacturers have been arguing that the telecommunications industry has changed to such an extent that there is no longer a need for such a stringent type approval regime. This may be true. It has also been noted that large sectors of the market are not yét addressed e. £ analogue telephones and PABX. The experience gained by the implementation of the present Directive and the comments that the Commission has received from the various interested parties lead the Commission to the conclusion that the following points may require reconsideration: 4. 1 Essential Requirements According to one of the fundamental principles of the new approach, the legislative harmonisation shall be limited to the adoption of the essential safety requirements (or other requirements in the general interest). One of the essential requirements laid down by Directive 91/263/EEC is the interoperability of the terminal with the network and in justified cases the interoperability of the terminals via the network. There is however a concern whether interoperability ought to be retained as an essential requirement in the present Directive. On the one hand the TransEuropean Network provision of Articles 129 b), 129 c), and J 29 i), calls for deriving the full benefits of TENs and by "promoting interconnection and interoperability of national networks as well as access to such networks". These objectives would be enhanced if they were complemented by a single European market for compatible terminals. The changes in the regulatory environment and markets for new network providers means that the old definition of the term "public network" is becoming more and more impractical for this purpose. Interconnection and inter-operability requirements may have an effect-on any re-definition of the currently defined essential requirements. '. - In addition, due account should be taken of the Civil Protection Code. For example, the European Emergency number "112" can only be used if a 112 call can be made, if the Emergency Centre can be reached, if the type of distress/emergency situation can be communicated and repeated and if instructions can be received by the caller. Other references could be given to tracing or erroneous call, to interception, and to the public security exemption clause of Article 36 of the Treaty. On the other hand, other Approval regimes such as the US appear to function well with a much more limited definition of what is "essential" and there is a general desire to reduce the complexity and cost of type approvals. These issues along with others like the potential regulation of aspects such as the regulation of terminals for people with special needs suggest that a fundamental 33 the definition of what is truly "essential" and of the review is required of mechanisms that ensure compliance to those requirements, in particular, the CTRs and the use of harmonised standards. The Commission has started work on this review. 4. 2 Conformity assessment procedures: The time for simplification. The conformity assessment procedures of the Directive have been criticised as complex, lengthy and costly. Furthermore it can be argued that the complexity of these procedures may favour the development of the grey market. These concerns could be addressed in two different ways: Firstly, the principle of using the models of the Global Approach already referred to in the Directives should be maintained. However, each of the procedures could be revisited for the purpose of relaxing the requirements as contained in the current annexes. It would, in addition, be highly desirable to scrutinise the rationale for the test cases themselves. Furthermore, a number of identified test suites could be entrusted to a manufacturers declaration according to Module A. In this process the Notified Bodies would still maintain the principle of safe guarding appearing in an a priori assessment. Such a three step relaxation is in fully line with the spirit of the Directives. Secondly, a procedure totally relying on full confidence in a manufacturers declaration is theoretically possible. This wouM imply that: - self declaration of the manufacturer or the importer: according to Module A the EC declaration of conformity certifies that the product concerned complies with the relevant CTRs or harmonised standards. A notified body should subsequently issue the administrative approval on the basis of this self declaration. The notified body should keep a register with these self declarations, available to all other notified bodies or national authorities. Further to this procedure, the manufacturer will be able to affix the CE marking of conformity on the terminal and place it on the market. - such an a posteriori philosophy would require intensive market surveillance and strict penalties should be provided for the manufacturer who has made a false declaration. Under most national laws, a false declaration to an authority may generate penal, administrative and civil responsibilities. There is however very different and strong views regarding a priori versus a posteriori assessments. In particular regarding radio communications it seems rather impossible to rely on a posteriori assessments. It should therefore be considered to further investigate the first route outlined above. It may well be necessary to improve the effectiveness of market surveillance carried out by the Member States in order to complement a possible simplification in conformity assessment procedures 34 v>sy *£*<«» 4. 3 Modifications of the scope of the Directive The current scope of the Directive distinguished' between terminal equipment intended to be connected to a public network versus equipment not intended to be connected to a public network. With the appearance of private telecommunications networks in particular in the business sector as described in a recent report presented to the ETSI Business Telecommunications Technical Committee (TC-BTC), due consideration needs to be taken of the existence of this large and quickly growing market. with respect to the objectives of the directives. 4. 4 The Rationale for a Radio Equipment Directive As already discussed certain types of radio equipment does not fall within the scope of the Directive. However the free circulation of this equipment can be lawfully impeded by national authorities on the grounds of possible harmful interferences. The radio spectrum is a limited natural resource and accordingly the effective use of radio frequency spectrum is an essential requirement which can justify the adoption of harmonisation measures at a Community level. Mobile telecommunications are currently the most flourishing sector in the whole telecommunication area. Private business gain every day efficiency by the introduction of radio closed user groups which permit the employees to move around while keeping permanently in touch with their offices. Consequently, manufacturers urgently need a harmonised and stable legal framework which will permit them to create strong economies of scale in this new strategic market. There is a clear preference for there not to be a separate Radio Directive but to include any radio terminal specific requirements within a single terminals directive. To this end, the Commission envisages the amendment of the Directives which would lay down a harmonised type approval scheme for communications terminal equipment making use of telecommunications allocated spectrum. Care will be necessary in defining the borderline between spectrum management and EMC. It is presumed that spectrum allocation aspects will continue to fall outside the scope of any terminals directive. 4. 5 Relations with ETSI is to the entrusted recognised standardisation The harmonised standards drawn up in respect of the essential requirements applicable bodies ETSI/CEN/CENELEC. Up until now most CTRs were based in their entirety upon TBRs produced and agreed by ETSI although CENELEC has been involved in some aspects of EMC. The relation with ETSI is therefore of particular interest. As the Commission has the special status of Councillor at ETSI the co-operation in the administrative level is recognised by both parties as being efficient, professional and satisfactory. At the technical level, and for a number of reasons covered in previous sections, ETSI has not been capable of finalising a number of deliverables at the point in time originally forecast. 35 The Commission believes that ETSI TC/STC working practices can be made more effective within the current ETSI Rules of Procedure. This proposal forms the basis of Recommendation Number 3. Furthermore, experience is proving that the maintenance of adopted TBRs needs to be addressed with high priority The Resolution recently adopted at the ETSI General Assembly upon a proposal from the High Level Task Force provides for an important restructuring within ETSI whereby the concerns above could be lifted. • • „ • 4. 6 Liberalisation of Infrastructure As already indicated the current type approval legislation has been built upon the concept of public telecommunications network. The security of this network as well as its harmonious function with connected equipment were considered a public concern justifying regulation, for it represented a huge investment serving special national interest. However, the definition given to this public infrastructure by the Directive clearly refers to the old telecommunications environment where the network was a state owned infrastructure. Although this has changed in some member states where the telecom infrastructure is liberalised or privatised, the definition has been accepted as still valid, the reasoning being that the term "public" does not refer to ownership but indicates the openness of the infrastructure to the public. infrastructure which is open to all Consequently, any telecommunication members of the public on the same basis (and on which ONP obligations are imposed) is considered as public telecommunications infrastructure deserving regulatoTy protection. However in view of the imminent liberalisation of the infrastructure, these definitions will need revision. The liberalisation regime will give rise to the emergence of a multitude of network operators not necessarily of the same size or with the same functions and subsequent obligations. The current regulatory environment will require substantial modification to handle this situation. V The present definition of terminal equipment relies on the existence of harmonised public networks. If this notion disappears, it would be very difficult to make the distinction between a switch and a terminal since at the termination point of one network, may be the switching equipment of another network or service provider. The distinction between terminal equipment and infrastructure equipment is becoming increasingly difficult. The interconnection of all infrastructures and the interoperability of services and applications will become an increasingly important issue, since as already stressed in the Bangemann report, these two features are essential to the deployment of the information infrastructure. It is noteworthy that the ONP Directives, which under the present regime regulate the relation between the network operator and a service provider refer to a situation, where the network operator is a monopoly or holds a dominant position and therefore it is susceptible to impede competition by refusing access 36 to its network or by adopting technical specifications which do not permit interconnection of the networks or interoperability of services. In this liberalised environment, where many more players will provide an ever- wider range of network services, the challenges presented to the establishment of a single harmonised telecommunications terminal market will be considerable. Harmonised standards will offer to all economic operators affected by telecommunications necessary safeguards that will enable them to benefit from the information society. However, under certain circumstances, conformity assessment can be equally well based upon compliance with the essential requirements in the absence of TBRs. Thus, the Notified Bodies nominated by the Member States should be encouraged to make use of this option where there is market demand and TBRs have not yet been developed. The future situation will multiple and competing network providers is believed to lead to the offering of new innovative services and intelligent use of the subscriber interfaces. In order to preserve a multi-vendor Community-wide equipment market "lock-in" or "bundling" of services and equipment has to be avoided. A balance will therefore have to be stuck between regulation and competition. The implementation thereof may be best assured through the future license regime. 37 •«• • f ? » ^ * i ' * * ^1" j f » - " ' ^ v ** T, r? ' • • ' •• l*~*"N*»*pr''". ''»'''-. * • -»• •. -. -. ,. tr. ,. - __. -, •% • • -% *^"». »- ,^»-'"«;- 5. CONCLUSIONS AND RECOMMENDATIONS Directive 91/263/EEC established an internal market in the terminal equipment sector. Equipment duly commercialised and connected to the network in the rest of the Community. in one Member State can be freely type approved The adoption of 11 CTRs by the Commission enabled the achievement of a considerable harmonisation in the sector and that a further batch of 12 CTRs is under way is noted with satisfaction. In view of the recent developments in the sector, some aspects of the mechanisms of the Directive have been criticised as cumbersome and non proportionate to the objective aimed at. The regime would correspond better to the actual needs of the markets if: • essential requirements were reduced to the absolute minimum; - guidance regarding regulatory aspects were improved. - the consultation process were to become more effective. • the production of harmonised standards was accelerated; - leading to timely availability of relevant standards. • conformity assessment procedures were relaxed; - true cost-based type approval was a reality. - accreditation criteria were fully harmonised. • regulatory a telecommunications allocated spectrum established: framework radio for terminal equipment using - effective use of frequency spectrum became horizontal. - possibility to create strong economies of scales in this new strategic market was achieved. The first recommendation is that, given the extent of the issues identified above, it is recommended that the two Directives" are fundamentally reviewed and changed to adapt to the new dynamics of the market place and the future needs of the European Information Society. The other three recommendations aim to provide for an immediate improvement regarding the points addressed above, pending the fundamental review. 38 ' •««•?•. ;. - v t. - -: •-•- • * RECOMMENDATIONS - •••••••V- < * , v. : The extent of the issues identified in this progress report and the changes to the environment since the Directives were originally drafted, suggests the following recommendation: Recommendation N° 1: It is recommended that the two Directives are fundamentally reviewed and amended as necessary in order to adapt to the new dynamics of the market place and the needs of the European Information Society over the next ten years. Full account should be taken of current arid planned horizontal legislation as well as developments in the liberalisation of the'infrastructure. In the meantime, some of the more pressing issues can be addressed by the following shorter term actions. The following recommendations try to maximise the synergy between the directly involved players for the purpose of shortening the backlog which unfortunately exists today. These recommendations aim to achieve improvements which would have immediate effect. In the area of standardisation experience has shown that the regulatory requirements, which have a~Dne-to-one correlation with the essential requirements laid down by both in an effective way to the standardisation directives, are not communicated organisations, in particular to ETSI. The current procedures of entrusting the communication to a chain via the ETSI TBR manager, via an ETSI rapporteur, via a TRAC correspondent and then reporting back to ETSI Technical Assembly and to the Commission Services have a great scope for improvement. The considerable delay and scope for different if a single management information point in the Commission was informed as soon as any relevant issue is identified. This observation leads to the following recommendation : interpretations would be reduced Recommendation N° 2: For the purpose of improving the guidance to standardisation organisations, in particular to ETSI, in the area-of regulatory constraints, objectives and1 requirements, the current communication chain shall be replaced by a focal management information point within the Commission Services. ; The Commission Services would, of course, continue to take into account the interests of all parties, industry, regulators and operators. • Having regard to the timely development of the Technical Basis for Regulations, experience has shown that the ETSI procedures, in particular regarding the consensus making process and the resolution procedures following a public enquiry, cause 39 '•••fjB* • • 1 I H' • ' » • * » •< > VV. fV^ •••. '• - ; • * *. >. ' ; •• r: ;- > •-• unnecessary delays. It is believed that much time could be saved if, from the beginning of the TBR mandate assignment, every decision at all levels with ETSI were to be made taking due account of the final voting. The whole process should be reviewed, from drafting of scope statements to publication in National Regulations. These aspects are covered by the following recommendation : Recommendation N° 3: Having regard to the considerable delays imposed by the current working methods applied in the elaboration of CTRs, a review should be carried out of the processes anï decision making at all levels in the development of the Common Technical Regulations should be carried out taking into account the need for agreement at the final voting stage and always limiting the scope strictly to the essential requirements applicable. • Observing that considerable time elapses between the adoption of the draft measures by the ACTE Committee and the publication of the measures in the Official Journal, it is understood that this delay is partly caused by the practice of having the Commission translation services technical specifications referred to in the Decisions. The overall process would be significantly speeded up if only the Decision itself were translated. into all Community languages, translate, the To improve this situation reference is given to recommendation N° 3, which has a direct parallel in the attached draft Council Resolution, (ref. draft Council Resolution, section "Invites the Commission", paragraph c): Recommendation N° 4: In order to accelerate the timely availability of Commission Decisions, the Commission Services should minimise the translation requirements to the Annexes of those decisions, while duly taking into account the legal obligations of the CTRs. 40 ANNEX 1 PROCESS FOR THE ADOPTION OF C T RS The overall process including consultations is shown in the following diagram: The Players & the System OFFICIAL JOURNAU EP& COUNCIL rzn REPORT TO EQUIPMENT SUPPLIERS ETSI COMMISSION ACTE TECHNICAL COMMITTEES NETWORK OPERATORS] TRAC MEMBER STATE OR EFTA MEMBER NOTIFIED BODY DESIGNATED LABORATORY ACTE: The Approvals Committee for Terminal Equipment was set up under the / Terminal Equipment Directive to advise the CEC in its drive towards harmonisation of technical standards for terminal equipment. ACTE is chaired by a representative of the Commission and comprises of delegations from each of the Member States. The Committee is of an advisory nature. The opinion of the Committee can be requested following two different approaches. Either an opinion of a general nature can be sought, if necessary by taking a vote. The opinion is recorded by simply reflecting the majority of a vote. Alternatively, in the particular case of identifying the type of terminals for which a CTR should be developed, and for the later opinion on the draft measures proposed by the representatives of the Commission, the opinion v shall be delivered by the majority as laid down in Article 148 (2) of the Treaty. TRAC, ETSI and the EFTA countries are invited to send observer delegations to ACTE. These delegations participate in all parts of ACTE's work except. the regulatory aspects. The Committee operates under the commitology rules that apply to all Commission chaired committees. These rules cover such aspects as voting procedures, representation, quora etc. ETSI: The European Telecommunications Standards Institute has over 300 members from all fields of the telecommunications sector and is open for membership to 41 all countries within the CEPT geographical area (continental Europe). Among other activities, ETSI produces TBRs according to mandates provided by the CEC and based on one or more European Telecommunication Standards (ETSs). ETSI has the responsibility of maintaining the standards referred to in the CTRs. TRAC: The Telecommunications Regulations Application Committee provides advice on request from the Commission to establish a technically consistent framework for CTRs and to assist with the elaboration of the scope statements for TBRs. The TRAC representatives generally are delegations from each of the Member States and from the EFTA and some other regulators and operators. Other European responsibilities of TRAC outside the scope of the CTR regime include advising ETSI on the work plan. representing countries ADLNB: The Association of Designated Laboratories and Notified Bodies is open for membership to all Designated Laboratories (DLs) and Notified Bodies (NBs). The DLs are responsible for testing and the NBs for type approval of telecommunications equipment under the relevant national legislation. The ADLNB provides the forum for the DLs and NBs to exchange information freely and to discuss issues relating to the implementation of the Conformity Assessment Procedures (see Section 3. 1). MSs: for implementing the appropriate national The governments of the Member States are responsible for designating the Notified Bodies and Designated Laboratories, for the proper accreditations legislation to ensure and harmonisation of the Telecommunication Terminal Equipment market. They must ensure that national testing regimes as implemented by the NBs and DLs are limited to the essential requirements laid down in the CTRs. They are also responsible for market surveillance and ensuring that equipment is only placed on the market if it is appropriately marked. In order to comply with the international obligations stipulated by GATT, the Commission undertakes that they will carry out the notifications for every CTR ahead of its publication in the Official Journal. Notifications are addressed to the GATT Committee on Technical Barriers to Trade. Notifications are done under the GATT-TBT-Code Article 2. 5. 2 as the CTRs constitute a technical regulation "which may have a significant effect on trade of the other Parties". It should be noted that CTRs do not fall under the GATT-TBT-Article 4 on preparation, adoption and applications of standards. 42 ANNEX 2 NUMBERS OF PEOPLE WITH SPECIAL NEEDS IN EUROPE In Europe there are about 100 million elderly people and 50 million who are disabled, according to "The forgotten Millions : Access to telecommunications for people with disabilities" (1994, Office for Official Publications of the European Communities, Luxembourg), where the following impairments are ' listed: Mobility impaired Wheelchair user Cannot walk without aid Hearing impaired Profoundly deaf Hard of Hearing Visually impaired Blind Low vision Speech and language impaired Speech Language Dyslexia Intellectually impaired Dexterity impaired fingers Cannot use Cannot use one arm Reduced strength Reduced co-ordination 2,800,000 45,000,000 1,100,000 80,000,000 1,100,000 11,500,000 2,300,000 5,600,000 25,000,000 30,000,000 1,100,000 1,100,000 22,500,000 11,500,000 All the above impairments impact on the use of telecommunications services - clearly, disabled people are a significant part of the telecommunications market. 43 •"f-Si*". a»""*' ANNEX 3 LIST OF NOTIFIED BODIES This list refers to the situation as reported up to 31 October 1995. Updated lists will be published from time to time in the Official Journal. The up to date situation with respect to both Notified Bodies and Designated Laboratories can be confirmed by reference to the appropriate Notified Body. LIST OF NOTIFIED BODIES Name and address NATIONAL STANDARDS AUTHORITY OF IRELAND Nsai, Gasnevin IRL - Dublin 9 ISTITUTOITALIANO DEL MARCHIO DI QUALITA - IMQ Slsfema CSQ V. Quintiliano 43 I-20138Milano DIRECTION GENERALE DES POSTES ET TELECOMMUNICATIONS 20 Avenue de Ségur F - 75700 Paris ISPETTORATO GENERALE DELLE TELECOMUNICAZIONI IGT Viale America 201 I-00144 Roma HOOFDDIRECTIE TELECONJMUNICATIE EN POST - DIRECTE OPERATIONELE ZAKEN Postbus450 NL - 9700 Al Groningen Identif- cation number Responsible for the following products Responsible for the following procedures/modules Annexes ' of the Directives 0050 All telecommunications terminal equipment 0051 All telecommunications terminal equipment Type-examination Conformity to type Production quality assurance Full quality assurance Production quality assurance Full quality assurance Annex I Annex II Annex in Annex IV Annex HI Annex IV 0165 All telecommunications terminal equipment 0166 All telecommunications terminal equipment Type-examination Conformity to type Production quality assurance Full quality assurance Type-examination Conformity to type Annex I Annex H Annex HI Annex IV Annex I Annex II Type-examination Conformity to type Annex I Annex H 0167 All telecommunications terminal equipment and satellite earth station equipment 44 Name and address BRITISH APPROVALS BOARD FOR TELECOMMUNICATIONS BABT Claremont House, 34 Molesey Road, Hersham, Walton-on-Thames Surrey UK - KT12 4RQ TELESTYRELSEN Holsteinsgade 63 DK-2100Kobenhavn BUNDESAMT FUR ZULASSUNGEN IN DER TELEKOMMUNIKATION BZT Postfach 10 04 43 D - 66004 Saarbrûcken DELTA DANSK ELEKTRONIK, LYS & AKUSTIK Venlighedsvej 4 DK - 2970 Horsholm DIRECCION GENERAL DE TELECOMUNICACIONES Plaza de la Cibeles S/N Palacio de Comunicaciones E-28014 Madrid KEMA NV Kwaliteitssystemen Postbus 9035 Ultrechseweg310 NL - 6800 Et Arnhem SWEDISH NATIONAL TESTING AND RESEARCH INSTITUTE SP Box 857 S-501 15 Boras 0402 * Identif- cation number Responsible for the following products Responsible for the following procedures/modules Annexes of the Directives 0168 All telecommunications terminal equipment Type-examination Conformity to type Production quality assurance Full quality assurance Annex I Annex II Annex HI Annex IV 0170 0188 All telecommunications terminal equipment All telecommunications terminal equipment Type-examination Conformity to type Annex I Annex II Type-examination Conformity to type Production quality assurance Full quality assurance Annex I Annex II Annex III Annex IV 0199 All telecommunications terminal equipment Production quality assurance Full quality assurance Annex EH Annex IV 0341 0344 All telecommunications terminal equipment and satellite earth station equipment Type-examination Conformity to type Production quality assurance Full quality assurance Annex I Annex II Annex IH Annex IV Production quality assurance Full quality assurance Annex III Annex IV Type-examination Conformity to type Annex I Annex II All telecommunications terminal equipment and satellite earth station equipment Tele Terminal Equipment for connection to public analogue network except PABX 45 V4**'' t*l*f'<\:+. 7rf. Name and address Idcntif- cation number Responsible for the following products Responsible for the following procedures/modules Annexes of the Directives SIS CERTEFIERING AB Box 3295 S - 103 66 Stockholm SEMKOAB Box 1103 S-164 22Kista 0412 0413 All telecommunications terminal equipment Telefax machines and telefax modems Modems incl. stand alone, printed circuit cards in PC and lap top, Computer equipments with tele connections Alarm equipments with tele connections Remote-control-and control equipments with tele connections, Telefax switches, Terminals for the disabled, Number transmitters All telecommunications terminal equipment Production quality assurance Full quality assurance Conformity to type Annex HI Annex IV Annex II Type-examination Conformity to type Production quality assurance Full quality assurance Annex I Annex II Annex HI Annex IV 0416 All telecommunications terminal equipment Production quality assurance Full quality assurance Annex HI Annex IV 0436 All ; telecommunications terminal equipment Type-examination Conformity to type Annex I Annex H 46 0415 INSTITUTODAS COMUNICACOES DE PORTUGAL ICP Avenida José Malhoa, Lote 16832 P- lOOOLisboa SUOMEN STAND ARDISOIMISLHTTO SFS SERTIFIOINTIOSASTO (FINNISH STANDARDS ASSOCIATION SFS - CERTIFICATION DEPARTMENT Maistraatinportti 2 FIN - 00240 Helsinki COMLAB Comlab P. O. Box 96 NL - 2007 Kjeller rtrr^r. '»}çr ^. T^ff^T :«'::*$- :•£'•'%• Name and address ÔSTERREICHISCHER VERBANDFUR ELEKTROTECHNIK (ÔVE) Eschenbachgasse 9 A-1010Wien INSTITUT BELGE DES SERVICES POSTAUX ET DES TELECOMMUNICATIONS IBPT Avenue de l'Astronomie 14 Boîte 21 B- 1030 Bruxelles SERVICE DE L'ENERGIE DE L'ETAT SEE B. P. 10 L - 2010 Luxembourg TELECOMMUNICATIONS ADMINISTRATION CENTRE TAC P. O. Box 53 FIN-00211 Helsinki DANSK STANDARD Baunegardsvej 73 DK - 2900 Hilierup NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) 60, Kiffisias Avenue GR- 15125 Maroussi ' Identif- cation number Responsible for the following products Responsible for the following procedures/modules Annexes of the Directives 0462 All telecommunications terminal equipment Type-examination Conformity to type Production quality assurance Full quality assurance Annex I Annex H Annex HI Annex IV 0468 All telecommunications terminal equipment Type-examination Conformity to type Production quality assurance Annex I Annex H* Annex in 0499 " " 0523 All telecommunications terminal equipment and satellite earth station equipment AU telecommunications terminal equipment Type-examination Conformity to type Production quality assurance Full quality assurance Type-examination Conformity to type Annex I Annex n Annex HI Annex IV Annex I Annex n 0527 0544 J All- telecommunications terminal equipment All telecommunications terminal equipment Production quality assurance Full quality assurance Type-examination Conformity to type Annex in Annex IV Annex I Annexn 47 ANNEX 4 OFFICIAL JOURNAL REFERENCES TO ADOPTED C T RS GSM Access GSM Telephony DECT Access DECT Telephony TBR Official Journal Reference TBR5 (OJL8 94/11/EC) TBR9 (OJL8 94/12/EC) ' TBR6 (OJL194 94/471/EC) TBR10 (OJL194 94/472;EC) ONP 2 Mbit/s Leased Line unstructured TBR12 (OJL194 94/470/EC) ONP 64 Kbit/s Leased Line TBR14 (OJL339 94/821/EC) ISDN Basic Access, Bridging Measure (OJL329 94/797/EC) ISDN Primary Rate Access, Bridging Measure (OJ L329 94/796/EC) ERMES TBR7 (OJL182 95/290/EC) 48 ISSN 0254-1475 COM(96) 114 final DOCUMENTS EN 15 06 Catalogue number : CB-CO-96-127-EN-C ISBN 92-78-01787-6 Office for Official Publications of the European Communities L-2985 Luxembourg ^°1

Proposal for a COUNCIL DECISION setting up an Employment and Labour Market Policy Committee

http://publications.europa.eu/resource/cellar/6f3b9eb6-9372-497d-9856-0832fcae1749

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 19% COM(96) 134 final 96/0097 (CNS) Proposal for a COUNCIL DECISION setting up an Employment and Labour Market Policy Committee (presented by the Commission) EXPLANATORY MEMORANDUM Implementing a European employment strategy At the Essen summit, in December 1994, the European Council gave a decisive impetus to the European employment strategy. It declared that the fight against unemployment and for equal opportunities was the most important task of the European Union and its Member States and it identified priority areas for structural action in favour of employment. To back up these political recommendations, the European Council set out a number of procedures and responsibilities. It asked the Member States to adopt multiannual national programmes reflecting the common priorities It invited the Council of Ministers responsible for social affairs and employment and the "Economic and Financial Affairs" Council as well as the Commission to keep close track of employment trends, monitor the relevant policies in Member States and submit an annual report to the European Council on further progress in the labour market. This approach was confirmed by the European Council both in Cannes in June 1995 as well as in Madrid in December 1995. In Madrid, the European Council welcomed the substantial progress made in putting the Essen strategy into practice. In particular, all Member States have adopted their multiannual programmes and the "Social Affairs" and Ecofin Councils and the Commission presented, as requested, a single, joint report on employment to the Madrid Council which approved its recommendations To ensure the continuing success of this strategy the Madrid European Council asked the Council (Ecofin and Labour and Social Affairs) to monitor the application of the multiannual programmes continuously and to present a further joint annual report for its meeting in December 1996. This meeting would examine the degree of application of the programmes and recommendations adopted in Madrid "with the aim of reinforcing the employment strategy and adopting further recommendations". This confirms that European-level monitoring of national employment measures, exchanges of information and experience between Member States and with the Commission on these measures, updating multiannual employment programmes to meet common priorities and adopting further recommendations are essential elements of a European strategy for employment which is now well established and which will henceforth be progressively strengthened. Need for a new structure In order to put the Essen mandate into effect, the Social Affairs Council established, at its meeting on 27 March 1995, an Ad Hoc Group of personal representatives of the Ministers of Labour "Follow-up to the Essen European Council". This Group, comprising Directors-General of Employment, met five times in 1995 under the French and It permitted the exchange of information and experience between Spanish Presidencies. Member States on their employment policies, particularly in terms of the five priority areas for action on the labour market identified at Essen. At the request of the Social Affairs Council, it presented an interim report on employment to the Cannes European Council in The Group prepared the June 1995. Social Affairs Council on 5 December 1995 for submission to the Madrid European Council. Finally, the Group gave its opinion on the single report on employment presented by the Ecofin Council, the Social Affairs Council and the Commission at Madrid. the report on employment adopted by Taking into account both the importance of the work which the Ad Hoc Group was given as well as the inadequacy of the means at its disposal, a large majority of Member States expressed the wish to see the formal establishment of a stable structure which would the have more effective Economic Policy Committee in the latter's relationship with the Ecofin Council. tools, and which would have an equivalent role to The need was felt in particular to have a secretariat with adequate human resources, ensuring continuity of the work and offering sufficient analysis and drafting capacity Effectively, the Commission largely fulfilled this role for the Ad Hoc Group. At the informal Council of Social Affairs Ministers on 27-29 October at Cordoba, the Commission was asked to submit an appropriate proposal. The need to set up a structure of this kind was also highlighted in the report on employment by the Social Affairs Council adopted on 5 December as well as in the joint Commission and Council report for Madrid. The Madrid European Council welcomed the way in which the procedure for monitoring employment provided for at Essen had been established and put into practice for the first time. However, it felt that "so as to facilitate practical application of the employment monitoring procedure decided on at Essen, it is necessary to establish as soon as possible the mechanisms envisaged in the joint report (structure and common indicators)". Relationship with the Standing Employment Committee and with the social partners The Standing Employment Committee was created in 1970(1). It is a tripartite consultative body comprising the Council, the Commission and representatives of employers' and workers' organizations. Its role is to "enable, in compliance with the Treaties and with due regard for the powers of the institutions and organs of the Community, that there shall be continuous dialogue, joint action and consultation between the Council - or, where appropriate, the Representatives of the Governments of the Member States - the Commission and the two sides of industry in order to facilitate coordination by Member States of their employment policies in harmony with the objectives of the Community". The Council has requested a reform - currently in preparation - of the Standing Employment Committee to reinforce its capacity for analysis. its effectiveness and, particularly, Appropriate links between the Standing Committee and the Employment/Labour Market Committee should therefore be provided for The two bodies are of different levels, one meeting at ministerial level and the other at that of national administrations. Their composition is also different, as the Standing Committee is a tripartite body. (1) OJ No L 273, 17. 12 1970 and OJ No L 21, 28. 1. 1975. 3 Although the two committees have very similar fields of interest, they will therefore each have their own role to play whilst reinforcing each other mutually. The Employment/Labour Market Committee could, in particular, play the role of interface with the social partners in preparing the meetings of the Standing Employment Committee. A joint meeting between the Employment/Labour Market Committee and representatives of the social partners could be held, for example, on a twice-yearly basis. In this way, the Employment/Labour Market Committee will help meet the need to strengthen the capacity of the Standing Employment Committee in terms of the analysis and preparation of its work. In February 1996, the Commission called for a European Confidence Pact for Employment, to involve all economic actors in the promotion of employment in the European Union. The proposal to create the Employment /Labour Market Committee is entirely consistent with the Pact since both are part of the process of cooperation and coordination in the field of employment. Relationship with the Economic Policy Committee Aside from improving the structure and operation of the labour market, the European employment strategy is also characterized by close interaction between macroeconomic and structural policies. This approach requires full collaboration between the parties involved in defining policies which can have an impact on employment. With this in mind the European Council requested the two Councils with responsibility, respectively, for Economic and Financial Affairs and for Social Affairs to present, together with the Commission, a report and recommendations on employment. Collaboration between the Economic Policy Committee and the aforementioned Ad Hoc Social Affairs Council Group made this possible. The Economic Policy Committee was established by a Council Decision in 1974(2) with the objective of promoting the coordination of Member States' short and medium-term economic policies. It consists of four representatives of the Commission and four representatives of each Member State. The Commission provides the secretariat. A working group has specific responsibility for employment policies. The Committee regularly submits opinions and reports to the Ecofin Council. The establishment of an Employment Labour Market Committee to assist, in particular, the Social Affairs Council will enable more structured collaboration between the two Councils and promote in a more effective way close interaction between macroeconomic and structural policies. In order to strengthen the coordination between the two Committees, and in order to fully analyse and take into account these mutual benefits of better coordination of macroeconomic and structural policies, the Chairmen of the two Committees will coordinate their work programmes with each other. (2) Decision 74/122/EEC of 18 February 1974, OJ No L 63, 5. 3. 1974, p. 21 4 Proposal for a Decision setting up the Employment and Labour Market Policy Committee The Decision is based on Article 145 of the Treaty, which is also the basis adopted for the Economic Policy Committee and the Standing Employment Committee. The role given to the Committee and the tasks set out for it in a non-exhaustive way are appropriate for a body assisting the Social Affairs Council in the implementation and the development of the European Employment Strategy. The provisions concerning the composition and the functioning of the Committee are broadly based on those applying to the Economic Policy Committee. The provision for the Commission to provide the Committee's secretariat responds to the need to guarantee a permanent and sufficient capacity - in terms of human resources - to fulfil the needs of the presidency and members of the Committee. Proposal for a COUNCIL DECISION setting up an Employment and Labour Market Policy Committee THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 145 thereof, Having regard to the opinion of the European Parliament, Whereas the European Council, in its recent meetings, confirmed that the fight against unemployment and the effort to achieve equality for men and women were the paramount tasks of the European Union and of its Member States; Whereas, at its meeting of December 1994 at Essen, the European Council identified priority areas for action to overcome structural employment problems; whereas it requested each Member State to incorporate these recommendations into a multiannual programme; whereas it invited the Council of Ministers with responsibility for Social Affairs and Employment, the "Economic and Financial Affairs" Council and the Commission, to monitor employment trends attentively, to examine the relevant policies of the Member States and to report annually to the European Council on further progress on the employment market; Whereas the Committee is established in the light of the monitoring and reporting process defined in the White Paper on Growth, Competitiveness and Employment; Whereas the "Economic and Financial Affairs" Council is assisted in its work on employment by the Economic Policy Committee set up by Council Decision 74/122/EEC(1); whereas the Social Affairs Council set up, for the same purpose, on 27 March 1995, an "Ad Hoc Group of personal representatives of the Ministers of Labour"; Whereas, in order to ensure the continued success of the Community's strategy for employment, and to facilitate the practical implementation of the employment monitoring procedure decided on in Essen, the European Council at its meeting in Madrid in December 1995 felt that it was necessary to establish, as soon as possible, a stable structure to assist the "Social Affairs" Council in the field of employment, HAS DECIDED AS FOLLOWS: Article 1 1. An Employment and Labour Market Policy Committee (hereinafter referred to as "the Committee") is hereby set up to assist the Council in carrying out its responsibilities in the field of employment and labour market policy, in full compliance with the Treaty and with due regard for the powers of the Community's institutions and organs. (i) O J N o L 6 3, 5. 3. 1974, p. 21 2. The Committee shall, in particular, be responsible for: monitoring trends in employment in the Community, examining the Member States' employment and labour market policies, exchanges of information and experience between Member States and with the Commission in these fields, preparing reports and recommendations on these questions. 3. The opinion of the Committee on a specific subject may be requested by the Council or the Commission. Moreover, the Committee may, on its own initiative, undertake work within its area of competence. 4. The Chairman of the Committee shall coordinate with the Chairmen of other Committees the on Standing Employment Committee, to take account of their respective responsibilities. the Economic Policy Committee and related work, in particular Article 2 1. The Committee shall consist of two representatives of each Member State and two representatives of the Commission. These representatives may be assisted by two alternates. The members of the Committee appointed by the Member States shall be selected from among persons who in their countries participate in the formulation of employment and labour market policy. 2. The Committee may call on external experts where appropriate to its agenda. Article 3 1. The Committee shall elect its Chair from among its members for a non-renewable term of two years. 2. The Secretariat of the Committee shall be provided by the Commission. 3. The Committee shall establish its own rules of procedure. 4. Meetings of the Committee shall be convened by the Chair, either on his or her own initiative or at the request of the Commission or of at least eight Committee members. Done at Brussels, For the Council The President FINANCIAL STATEMENT FINANCIAL STATEMENT 1. TITLE OF OPERATION Creation of an employment and labour market policy committee 2. BUDGET HEADINGS INVOLVED AO 2510 3. LEGAL BASIS Application of Article 145 of the Treaty. Council Decision expected during 1996 4. DESCRIPTION OF OPERATION 4. 1 Objectives The European Council of Madrid requested the Social Affairs Council, the EcoFin Council and the Commission to continue to monitor the application of the multiannual programmes and to prepare an annual single report "with the aim of reinforcing the employment strategy and adopting further recommendations" It also noted that in order to facilitate the practical application of the monitoring procedure, the necessary mechanisms, of which one is a "stable structure", should be established as soon as possible. 4. 2 Period covered Indefinite 5. CLASSIFICATION OF EXPENDITURE 5. 1 Non-compulsory expenditure 5. 2 Non-differentiated appropriations 5. 3 Type of revenue involved: none 6. TYPE OF EXPENDITURE 6. 1 100% for the necessary personnel and costs of meetings 6. 2 6. 3 Interest subsidy: none 6. 4 Other: none 6. 5 Reimbursement: none The proposed operation will not cause any change in the level of revenue 7. FINANCIAL IMPACT No impact on operational expenditure; for administrative expenditure, see point 10. 8. FRAUD PREVENTION MEASURES Expenditure will be carried out in accordance with the normal administrative rules governing the payment of expenses of experts invited to meetings. 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 9. 1 Specific objectives To set up an Employment and Labour Market Policy Committee to assist the Social Affairs Council in carrying out its responsibilities in the field of employment and labour market policy, in full compliance with the Treaties and with due regard for the powers of the Community's institutions and organs. The Committee shall, in particular, be responsible for: monitoring trends in employment in the Community, examining the Member States' employment and labour market policies, exchanges of information and experience between Member States and with the Commission in the aforementioned fields, preparing reports and recommendations on these questions. The work Economic Policy Committee and the Standing Employment Committee. the Committee coordinated with shall be of the 9. 2 Grounds for the operation In order to ensure the continued success of the Community's strategy for employment, and to facilitate the practical implementation of the employment monitoring procedure decided on in Essen, the European Council in its meeting in Madrid in December 1995 felt that it was necessary to establish, as soon as possible, a stable structure to assist the "Social Affairs" Council in the field of employment, 9. 3 Monitoring and evaluation of the operation The Committee shall be responsible for preparing opinions and reports for the Social Affairs Council and the European Council. 9. 4 Coherence with financial programming The measures provided for are included in the financial programming of DG V. 10. Administrative expenditure (Part A of the budget) The effective use of the required adminsitrative resources will depend on the annual decision of the Commission on the allocation of resources, taking into account the additional posts and resources which are granted by the budgetary authority. 10 10. 1 Impact on the number of posts Types of posts Personnel to be attributed to the activity of which duration permanent posts temporary use of existing resources use of additional resources officials or temporary agents A B C other resources TOTAL 2 1 3 2 1 3 indefinite 10. 2 Overall financial impact of additional human resources Amount Calculation Officials Temporary agents Other The Secretariat of the Committee will be provided by the staff of the Employment Directorate of DG V. Travel costs for national government officials in accordance with the rules currently in force will be provided. Meetings of the Committee will be organized by the Commission in Commission meeting rooms. Interpretation will be provided by the Commission. It is estimated that the Committee will meet between six to eight times a year. To a certain extent, these meetings may replace meetings of the Group of Directors-General for Employment and the Directors of Employment Agencies. 11 10. 3 Budget line Amount Calculation AO 2510 125 000 Six meetings per year at an average cost of ECU 20 850 per meeting (30 participants) 12 ISSN 0254-1475 COM(96) 134 final DOCUMENTS EN 04 Catalogue number : CB-CO-96-154-EN-C ISBN 92-78-02480-5 Office for Official Publications of the European Communities L-2985 Luxembourg 13

Proposal for a COUNCIL DECISION concerning the conclusion of the Framework Agreement for Trade and Cooperation between the European Community and its Member States, of the one part, and the Republic of Korea, of the other part

http://publications.europa.eu/resource/cellar/840dc7fe-30a8-4bfe-ae76-d15059f0ea97

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 141 final 96/ 0098 (CNS) Proposal for a COUNCIL DECISION concerning the conclusion of the Framework Agreement for Trade and Cooperation between the European Community and its Member States, of the one part, and the Republic of Korea, of the other part (presented by the Commission) EXPLANATORY MEMORANDUM 1. By means of a decision of 8 March 1995, the Council authorized the Commission to open negotiations for a framework agreement for trade and cooperation with the Republic of Korea and adopted negotiating directives to that end. 2. Two negotiating sessions took place in Brussels, the first on 11 May 1995 and the second on 12-13 October 1995. Further to consultations between the Commission and the Korean Government held at the end of November 1995 and contacts through diplomatic channels, the agreement was initialled in Brussels on 29 February 1996. 3. When the negotiating directives were adopted, the Council stipulated that it reserved the right to give its decision on the legal status of the Agreement once the negotiations would be completed. In line with the outcome of the discussion that took place in Council in December 1995 and January 1996 the agreement will be an agreement to which both the Community and Member States will be parties (a so- called mixed agreement). The Agreement is now being submitted to the Council to be signed and concluded. 4. 5. 6. The Commission considers that the Agreement initialed is in line with the negotiating directives adopted by the Council. The Commission will examine whether the provisional application of certain provisions of this agreement is acceptable to the Korean side. If this were to be the case, the Commission will in due course seek the approval of an exchange of letters to that end. In order to enable the framework agreement for trade and cooperation between the European Community and its Member States and the Republic of Korea to be signed and concluded, the Commission is proposing to the Council that it approve the attached draft decision. "* THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Articles 73 c (2), 75, 84(2), 113, and 235 thereof; in conjunction with the second sentence of Article 228 (2) and the first subparagraph of paragraph 3 of thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, Having consulted the Economic and Social Committee, Whereas the European Community should approve the Framework Agreement for Trade and Cooperation between the European Community and its Member States, of the one part, and the Republic of Korea, of the other part, HAS DECIDED AS FOLLOWS: Article 1 The Framework Agreement for Trade and Cooperation between the European Community and its Member States, of the one part, and the Republic of Korea, of the other part, is hereby approved on behalf of the European Community. The text of the Agreement is attached to this Decision. Article 2 The Commission, assisted by representatives of the Member States, shall represent the European Community in the Joint Committee provided for in Article 19 (3) of the Framework Agreement for Trade and Cooperation. Article 3 The President of the Council shall give the notification provided for in Article 21 of the Agreement on behalf of the European Community. This Decision shall be published in the Official Journal of the European Communities. Article 4 Done at Brussels, For the Council The President M (title) Framework Agreement for Trade and Cooperation between the European Community and its Member States, on the one hand, and the Republic of Korea on the other (text) THE EUROPEAN COMMUNITY, and THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE PORTUGUESE REPUBLIC, THE REPUBLIC OF FINLAND, THE KINGDOM OF SWEDEN,- THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, Parties to the Treaty establishing the European Community and the Treaty on European Union, hereinafter referred to as Member States', on the one hand, and THE REPUBLIC OF KOREA, on the other hand, CONSIDERING the traditional links of friendship between the Republic of Korea, the European Community and its Member States; EC/Korea Framework Agreement - 1/18 AC REAFFIRMING the attachment of the Parties to democratic principles and fundamental human rights as laid down in the Universal Declaration on Human Rights, CONFIRMING their desire to establish a regular political dialogue between the European Union and the Republic ofKorea, based on shared values and aspirations, RECOGNISING that the General Agreement on Tariffs and Trade has played a significant role to promote international trade in general and bilateral trade in particular, and that both the Republic ofKorea and the European Community are equally committed to the principles of free trade and market economy on which that agreement is based, Rf£AFFIRMING that both the Republic of Korea, the European Community and its Member States have pledged to implement fully their commitments made by the ratification of the Agreement establishing the World Trade Organisation, HAVING IN MIND the need to contribute to the full implementation of the results of the GATT Uruguay Round and the need to apply all rules governing international trade in a transparent and non-discriminatory manner; RECOGNISING the importance of strengthening the existing relationship between the Parties with a view to enhancing co-operation between them, and their common will to consolidate, deepen and diversify their relations in areas of mutual interest on the basis of equality, non-discrimination, respect for the natural environment and mutual benefit, DESIROUS of creating favourable conditions for sustainable growth and diversification of trade and for economic cooperation in various areas of mutual interest, BELIEVING that it will be advantageous to the Parties to institutionalise relations and to establish economic cooperation between them, as such cooperation would encourage further development of trade and investment, MINDFUL of the importance of facilitating the involvement in cooperation of the individuals and entities directly concerned, in particular economic operators and the bodies representing them, HAVE DECIDED TO CONCLUDE THIS AGREEMENT AND TO THIS END HAVE DESIGNATED AS THEIR PLENIPOTENTIARIES 3_ EC/Korea Framework Agreement - 2/18 THE EUROPEAN COMMUNFIY: THE KINGDOM OF BELGIUM: THE KINGDOM OF DENMARK: THE FEDERAL RICPUBLIC OF GERMANY: THE HELLENIC REPUBLIC: THE KINGDOM OF SPAIN: THE FRENCH REPUBLIC: IRELAND: THE ITALIAN REPUBLIC: THE GRAND DUCHY OF LUXEMBOURG: THE KINGDOM OF THE NETHERLANDS: THE REPUBLIC OF AUSTRIA: THE PORTUGUESE REPUBLIC: THE REPUBLIC OF FINLAND: THE KINGDOM OF SWEDEN: THE UNITED KINGDOM OF GREA T BRITAIN AND NORTHERN IRELAND: THE REPUBLIC OF KOREA : WHO, having exchanged their full powers, found in good and due form, HAVE AGREED AS FOLLOWS: EC/Korea Framework Agreement - 3/18 Article I. Basis for Cooperation Respect for democratic principles and human rights as defined in the Universal Declaration on Human Rights inspires the domestic and international policies of the Parties and constitutes an essential element of this Agreement. Article 2. Aims of Cooperation stepping up, establishing cooperation in and diversifying trade to their mutual With a view to enhancing co-operation between them, the Parties undertake to promote further development of economic relations between them. Their efforts will in particular be aimed at: a. advantage; b. technological cooperation and industrial cooperation; c. and by promoting better mutual understanding. facilitating cooperation between businesses by facilitating investment on both sides establishing economic cooperation in fields of mutual interest, including scientific and Article 3. Political Dialogue A regular political dialogue, based on shared values and aspirations, shall be established between the European Union and the Republic ofKorea. This dialogue shall take place in accordance with the procedures agreed in the Joint Declaration between the European Union and the Republic ofKorea on this subject. Article 4. Most-fa\>oured-nation Treatment In accordance with their rights and obligations under the World Trade Organization, the Parties undertake to accord each other most-favoured-nation treatment Article 5. Trade Cooperation 1. The Parties undertake to promote the development and diversification of their reciprocal commercial exchanges to the highest possible level and to their mutual benefit. The Parties undertake to achieve improved market access conditions. They will ensure that applied, most favoured nation customs duties are set, taking into account various elements, including the domestic market situation of one Party and the export interests of the other Party. They undertake to work towards the elimination of barriers to trade, in particular through the timely removal of non-tariff barriers and by taking measures to improve transparency, having regard to the work carried out by international organisations in this field. EC/Korea Framework Agreement - 4/18 2. The Parties shall take steps to conduct a policy aimed at c. b. a. multilateral and bilateral cooperation to address issues relating to the development of trade which are of interest to both sides, including the future proceedings of the WTO. To that end they shall cooperate at the international level and bilaterally in the solution of commercial problems of common interest, promoting exchanges of information between economic operators and industrial cooperation between enterprises in order to diversify and increase existing flows of trade; studying and recommending trade-promotion measures suitable for fostering the development of trade, facilitating cooperation between the competent customs authorities of the European Community, its Member States and Korea; improving market access for industrial, agricultural and fisheries products; improving market access telecommunications services; strengthening cooperation in the fields of standards and technical regulations, effectively protecting intellectual, industrial and commercial property, organising trade and investment visits, organising general and single industry trade fairs. services and g. h. i. j. financial services, e. f such for as d. 3. 4. The Parties shall foster fair competition of economic activities through fully enforcing their relevant laws and regulations. In accordance with their obligations under the WTO Government Procurement Agreement, the Parties shall ensure participation in procurement contracts on a non discriminatory and reciprocal basis. They will continue their discussions aimed at further mutual opening of their respective ' procurement markets in other sectors such as telecommunications procurement. Article 6. Agriculture and Fisheries 1. a. b. c. d. 2. The Parties agree to encourage cooperation in the fields of agriculture and fisheries, including horticulture and mariculture On the basis of discussions about their respective agricultural and fisheries policies the Parties will study: the possibilities for increased trade in agricultural products and fish products, the effect on trade of sanitary and phytosanitary measures, and measures relating to the environment; the links between agriculture and the rural environment; research mariculture. in the fields of agriculture and fisheries, including horticulture and As appropriate, the provisions of paragraph 1 of this Article apply to products and services in the related agricultural processing industry EC/Korea Framework Agreement - 5/18 The Parties undertake to comply with the terms of the Agreement on Sanitary and Phytosanitary Measures of the WTO and are willing to enter into consultations, upon request of either of them, to discuss the proposals from the other Party on the application and the harmonisation of sanitary and phytosanitary measures, taking into consideration the standards agreed upon in other international organizations such as OIE, IPPC, and Codex Alimentarius Article 7. Maritime Transport 1 The Parties undertake to move towards the goal of unrestricted access to the international maritime market and traffic based on fair competition on a commercial basis, in accordance with the provisions of this Article. (a) The above provision does not prejudice the rights and obligations arising from the United Nations Convention Code of Conduct for Liner Conferences as applicable to one or other Party to the present Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis. (b) The Parties affirm their commitment to build a fair and competitive environment for the dry and liquid bulk trade. In view of this commitment, the Republic of Korea will take necessary steps to phase out the existing cargo reservation of designated bulk commodities for Korean flag carriers over a transitional period, which will end on 31 December 1998. 2. In pursuit of the goal of paragraph 1, the Parties shall: (a) (b) (c) abstain from introducing cargo sharing clauses into future bilateral agreements with third countries concerning dry and liquid bulk and liner trade, except where, in exceptional circumstances, with regard to liner trade, shipping companies from one or other Party to the present agreement would not otherwise have an effective opportunity to engage in trade to and from the third country concerned abstain from implementing, upon entry into force of this Agreement, administrative and technical and legislative measures which could have the effect of discriminating between their own nationals or companies and those of the other Party in the supply of services in international maritime transport grant no less favourable treatment for the ships operated by nationals or companies of the other Party, than that accorded to its own ships, with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related, fees and charges, customs facilities and assignment of berths and facilities for loading and unloading 3 For the purpose of this Article, access to the international maritime market shall include, inter alia, the right for international maritime transport providers of each Party to arrange door-to-door transport services involving a sea leg, and to this effect to EC/Korea Framework Agreement - 6/18 directly contract with local providers of transport modes other than maritime transport on the territory of the other Party without prejudice to applicable nationality restrictions concerning the carriage of goods and passengers by those other transport modes 4 The provisions of this Article shall apply to European Community companies and Korean companies Beneficiaries of the provisions of this Article shall be also shipping companies established outside the European Community or the Republic ofKorea and controlled by nationals of a Member State or the Republic ofKorea, if their vessels are registered in that Member State or in the Republic ofKorea in accordance with their respective legislations. 5. The issue of the operations in the European Community and in the Republic ofKorea of shipping agency activities shall be dealt with by specific agreements, where appropriate Article S. Shipbuilding The Parties agree to co-operate in the field of shipbuilding with a view to promoting fair and competitive market conditions and note the severe structural disequilibrium between supply and demand and the market trend which depress the world shipbuilding industry. For these reasons, the Parties shall not adopt any measure or take any action to support their shipbuilding industry which would distort competition or allow their shipbuilding industry to escape from any future difficult situation, in accordance with the OECD Agreement on Shipbuilding. The Parties agree to enter into consultations upon a request from either Party regarding the implementation of the OECD Agreement on Shipbuilding, exchange of information on the development of the world market for ships and shipbuilding and on any other problem arising in this sector. The representatives of the shipbuilding industry may be invited as observers to such consultations, upon agreement by the Parties. Article 9. Intellectual, Industrial and Commercial Property Protection The Parties undertake to ensure that adequate and effective protection is provided for intellectual, industrial and commercial property rights, including effective means of enforcing such rights. The Parties agree to implement the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights not later than 1 July 1996 ' For the Republic of Korea with the exception of the Agrochemical Management Law which will enter into force as from 1 January 1997 and the Seedlings Industry Law (and Law on Protection of Geographical Indications) by 1 July 1998. subject to its legislative procedure EC/Korea Framework Agreement - 7/18 3. The Parties confirm the importance they attach to the obligations contained in multilateral conventions for the protection of intellectual property rights The Parties shall make efforts to accede as soon as practicable to the conventions in Annex to which they have not acceded Article 10. Technical Regulations, Standards and Conformity Assessment 1 Without prejudice to their international obligations, within the scope of their responsibilities and in accordance with their laws, the Parties will promote the use of internationally recognised standards and conformity assessment systems To that end, particular attention will be paid to: a. b. c d. e f. 2. exchange of information and technical experts in the fields of standardisation, accreditation, metrology and certification, as well as joint research where appropriate; promotion of interchange and contact between relevant bodies and institutions, sectoral consultations; cooperation in quality management activities; strengthening cooperation in the fields of technical regulations, particularly by concluding an agreement for the mutual recognition of conformity assessment results, as a means of facilitating trade and avoiding any disruption prejudicial to its development, participation and cooperation agreements with a view to promoting the adoption of harmonised standards in the framework of the relevant international The Parties shall ensure that standards and conformity assessment activities do not constitute unnecessary barriers to trade. Article II. Consultations The Parties agree to promote the exchange of information concerning trade measures Each Party undertakes to inform the other in a timely manner of the application of measures which alter most-favoured-nation applied import duties which affect the exports of the other Party Either Party may request consultations on trade measures Where such a request is made, the consultations shall take place at the earliest opportunity with a view to reaching a mutually acceptable, constructive solution as early as possible. Each Party agrees to inform the other Party of the initiation of anti-dumping procedures against products of the other Party. In full respect of the WTO Agreements on anti-dumping and anti-subsidy measures, the Parties shall afford sympathetic consideration to, and shall afford adequate EC/Korea Framework Agreement - 8/18 1 opportunity for consultation regarding, representations made by either Paay with respect to anti-dumping procedures and anti-subsidy procedures The Parties agree to consult each other on any disputes which may arise from the implementation of this Agreement If either Party requests such consultation, it shall take place at the earliest opportunity The Party making its request shall provide the other Party with all information necessary for a detailed examination of the situation. Attempts shall be made through such consultations to resolve trade disputes as rapidly as possible The provisions of this Article shall in no way prejudice the internal procedures of each Party for the adoption and modification of trade measures, or the notification, consultation and dispute settlement mechanisms foreseen under the WTO Agreements. Article 12. Economic and Industrial Cooperation 1. The Parties, taking into account their mutual interest and their respective economic policies and objectives, shall foster economic and industrial cooperation in all fields deemed suitable by them. 2. The objectives of such cooperation shall be in particular: to promote exchanges of information between economic operators, and develop and improve existing networks, while ensuring that personal data are suitably protected; to bring about exchanges of information on the terms and conditions for cooperation in the field of all services as well as information infrastructures; to promote mutually beneficial investment and establish a climate which favours investment, to improve the economic environment and business climate As means to such ends, the Parties shall endeavour, inter alia: to diversify and strengthen economic links between them, to establish industry specific channels of cooperation, to promote industrial cooperation between enterprises, in particular between small and medium sized enterprises, to promote sustainable development of their economies, to encourage ways of production which are not prejudicial to the environment; to encourage the flow of investment and technology; to increase mutual understanding and awareness of their respective business environments 3. a. b. c d. e. f g. 1 EC/Korea Framework Agreement - 9/18 Article 13. Drugs and Money Laundering The Parties shall cooperate in increasing the effectiveness and efficiency of policies and measures to counter the illicit production, supply and traffic of narcotic drugs and psychotropic substances, including the prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention and reduction The cooperation in this area shall be based on mutual consultation and close coordination between the Parties over the objectives and measures on the various drug-related fields The Parties agree on the necessity of making serious efforts and cooperating in order to prevent the use of their financial systems for laundering of proceeds from criminal activities in general and drug offenses in particular. Co-operation in this area shall aim at establishing suitable standards against money laundering taking into consideration those adopted by international fora in this field, in particular the Financial Action Task Force (FATF). Article 14. Cooperation in Science and Technology 1. In accordance with their mutual interest and the aims of their policies on science, the Parties undertake to promote cooperation in science and technology. To this end the Parties shall endeavour to encourage in particular: the exchange of information and know-how in the field of science and technology, dialogue about the elaboration and implementation of the respective research and technological development policies; cooperation in the field of information technology, as well as in the technologies and industry affecting interoperability towards the global information society, cooperation in the fields of energy and the protection of the environment, cooperation in science and technology sectors of common interest. 2. With a view to attaining the aims of their respective policies, the Parties shall, inter alia, endeavour to: information telecommunications and exchange information on research projects in the fields of energy, protection of the environment, information technology industry; advance the training of scientists by appropriate means, encourage technology transfer on the basis of mutual benefit; jointly organise seminars bringing together senior scientists of both sides, and encourage researchers from both Parties to conduct joint research in fields of mutual interest. technology, and 3 The Parties agree that all cooperation and joint actions in the field of science and technology take place on the basis of reciprocity. EC/Korea Framework Agreement - 10/18 The Parties agree to protect effectively the information and the intellectual property resulting from cooperation against any abuse or unauthorised use by others than the legitimate owners thereof. In case of participation by institutions, bodies and undertakings of one of the Parties in specific research and technological development programmes of the other Party, such as those set up under the European Community's general framework programme, this participation and the dissemination and exploitation of knowledge obtained as a result thereof shall take place in accordance with the general rules laid down by that other Party. The priorities for cooperation shall be decided through consultation between the Parties. Subject to the preceding paragraph, the participation of private sector institutions, bodies and undertakings in cooperation activities and specific research projects of common interest shall be encouraged Article 15. Cooperation in Environmental Matters The Parties will establish cooperative relations seeking to protect and preserve the environment. This will take place through. exchanges of information on environmental policies and their implementation between relevant officials in the European Commission and the relevant authorities in the Republic ofKorea; exchanges of information on environmentally sound technologies; exchanges of personnel; the promotion of co-operation on environmental matters being discussed in the international fora where the European Community and the Republic of Korea participate, particularly the UN Commission on Sustainable Development and other fora where international Conventions on the environment are debated, discussion on the pursuit of sustainable development practices and in particular, co operation in the implementation of Agenda 21 and other follow-up activities from the UN Conference on Environment and Development (UNCED); cooperation on joint environmental projects. Article 16. Energy The Parties recognise the importance of the energy sector to economic and social development and are willing, within the scope of their respective competences, to enhance cooperation in this field. The objectives of such cooperation shall be: to promote the market-economy principle in setting consumer prices in accordance with market principles; to diversify energy supplies, to develop new and renewable forms of energy, to achieve rational use of energy, notably by promoting demand-side management, and to foster the best possible conditions for the transfer of technology in the interests of efficient energy use /11 EC/Korea Framework Agreement - 11/18 To these ends, the Parties agree to promote the conduct of joint studies and research, as well as contacts between those responsible for energy planning. Article 17. Cooperation in Culture, Information and Communication The Parties undertake information and communication in order to promote better mutual understanding, taking account of the cultural dimension of relations between them to establish cooperation the fields of in These measures shall take the form of, in particular exchange of information on issues of common interest concerning culture and information, organisation of cultural events; cultural exchanges, and academic exchanges Article 18: Cooperation in the Development of Third Countries The Parties agree to exchange information on their development assistance policies with a view to establishing a regular dialogue on the objectives of these policies and on their respective development aid programmes in third countries. They will study to what extent more substantial cooperation is feasible, in accordance with their respective legislations and the conditions applicable to the implementation of these programmes. Article 19. Joint Committee 1. The Parties shall establish under this Agreement a Joint Committee consisting of representatives of the members of the Council of the European Union and representatives of the Commission of the European Communities, on the one hand, and representatives of the Republic ofKorea, on the other. Consultations shall be held in the Committee in order to facilitate the implementation and to further the general aims of the present Agreement. 2. The Joint Committee shall ensure that the agreement operates properly, study the development of trade and cooperation between the two Parties, seek appropriate methods of forestalling problems which might arise in areas covered by the Agreement; seek ways of developing and diversifying trade, exchange opinions and make suggestions on any issue of common interest relating to trade and cooperation, including future action and the resources available to carry it out; make recommendations suitable for promoting the expansion of trade and cooperation, taking into account the need to coordinate the measures proposed EC/Korea Framework Agreement - 12/18 ^ 2_ The Joint Committee will normally meet once a year in Brussels and Seoul alternately Special meetings of the Committee shall be held at the request of either Party. The Joint Committee shall be chaired alternately by each of the Parties The Joint Committee may set up specialised subcommittees in order to assist it in the performance of its tasks These subcommittees shall make detailed reports of their activities to the Joint Committee at each of its meetings Article 20. Definition For the purposes of the present Agreement, the term "the Parties" means the European Community or its Member States, or the European Community and its Member States, in accordance with their respective competences, on the one hand, and the Republic of Korea, on the other. Article 21. Entry into Force and Duration 1. 2. This Agreement shall enter into force on the first day of the month following the date on which the Parties have notified each other of the completion of the legal procedures necessary for this purpose. This Agreement is concluded for a period of five years. It shall be tacitly renewed on a yearly basis unless one of the Parties denounces it in writing six months before the date of expiry Article 22. Notifications The notifications made in accordance with Article 21 shall be made to the Secretariat- General of the Council of the European Union and the Ministry of Foreign Affairs of the Republic ofKorea, respectively. Article 23. Non-execution of this Agreement If either Party considers that the other Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures. Before doing so, except in circumstances of special urgency, it shall supply the other Party with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement. These measures shall be notified immediately to the other Party and shall be the subject of consultations if the other Party so requests /l\ EC/Korea Framework Aqreement - 13/18 Article 24. Future Developments The Parties may by mutual consent expand this Agreement with a view to enhancing the level of cooperation and add to it by means of agreements on specific sectors or activities With regard to the implementation of this Agreement, either of the Parties may put forward suggestions for widening the scope of cooperation, taking into account the experience gained in its application. Article 25. Declarations and Annex The Joint Declarations and Annex to this Agreement shall form an integral part of this Agreement. Article 26. Territorial Application This Agreement shall apply, on the one hand, to the territory of the Republic ofKorea and, on the other, to the territories in which the Treaty establishing the European Community is applied and under the conditions laid down in that Treaty. Article 27. Authentic Texts This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Korean languages, each text being equally authentic. In witness whereof the undersigned Plenipotentiaries have signed this Framework Agreement. Done at. on the. th day of. in the year one thousand nine hundred and ninety-six FOR THE EUROPEAN COMMUNITY: FOR THE KINGDOM OF BELGIUM: FOR THE KINGDOM OF DENMARK: FOR THE FEDERAL REPUBLIC OF GERMANY: FOR THE HELLENIC REPUBLIC: /7 4 EC/Korea Framework Agreement - 14/18 FOR THE KINGDOM OF SPAIN: FOR THE FRENCH REPUBLIC: FOR IRELAND: FOR THE ITALIAN REPUBLIC: FOR THE GRAND DUCHY OF LUXEMBOURG: FOR THE KINGDOM OF THE NETHERLANDS: FOR THE REPUBLIC OF AUSTRIA: FOR THE PORTUGUESE REPUBLIC: FOR THE REPUBLIC OF FINLAND: FOR THE KINGDOM OF SWEDEN: FOR THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND: FOR THE REPUBLIC OFKOREA: rf <C^ EC/Korea Framework Agreement -15/18 Intellectual, Industrial and Commercial Property Conventions ANNEX Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971) International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome, 1961) Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967, as amended in 1979) Patent Cooperation Treaty (Washington, 1970, as amended and modified in 1984) Madrid Agreement concerning the International Registration of Marks (Stockholm Act, 1967 and amended in 1979) Protocol relating to the Madrid Agreement concerning the International Registration of Marks (Madrid, 1989) Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (Geneva, 1977, and amended in 1979) Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (1977, modified in 1980) International Convention for the Protection of New Varieties of Plants (UPOV) (Geneva Act, 1991) A& EC/Korea Framework Agreement -16718 JOINT DECLARATIONS Joint Declaration concerning Article 7 Each Party shall allow the shipping companies of the other Party to have their commercial presence in its territory for the purpose of carrying out shipping agency activities under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever is the better. Joint Declaration concerning Article 9 The Parties agree that for the purpose of the Agreement, intellectual, industrial and commercial property includes in particular copyright, including the copyright in computer programmes, and neighbouring rights, the rights relating to patents, industrial designs, geographical indications, including designations of origin, trademarks and service marks, topographies of integrated circuits as well as protection against unfair competition as referred to in Article 10 bis of the Paris Convention for the Protection of Industrial Property and protection of undisclosed information on know-how. Joint Interpretative Declaration concerning Article 23 (a) The Parties agree, by common consent, for the purpose of its correct interpretation and its practical application that the terms 'circumstances of special urgency' included in Article 23 of the Agreement mean cases of material breach of the Agreement by one of the Parties. A material breach of the Agreement consists in repudiation of the Agreement not sanctioned by the general rules of international law or violation of the essential element of the Agreement set out in Article 1 b. a. (b) The Parties agree that 'appropriate measures' referred to in Article 23 are measures taken in accordance with international law. /7 7- ' EC/Korea Framework Agreement -17/18 UNILATERAL DECLARATIONS 2 Declaration by the European Community concerning Article 8 The European Community expresses its concern with and attaches great importance to the problems which were created and are likely to be created by the current trend of expansion of shipbuilding capacity in the world market. In this regard it wishes to recall the terms of the declaration it made in Paris on the occasion of the conclusion of the negotiations for the OECD Agreement on Shipbuilding on 21 December 1994, which remains entirely valid on this point. The European Community invites the Republic of Korea to cooperate with the European Community and other signatories of the OECD Agreement on Shipbuilding in order to reduce the severe structural disequilibrium between supply and demand in the world shipbuilding market by appropriate means. Declaration by the Republic ofKorea concerning Article 7 (2) The Republic ofKorea declares that, regarding the provisions of paragraph 2 (a) of Article 7 (Maritime Transport), it will allow the introduction of cargo sharing clauses into future bilateral agreements with a certain third country concerning dry and liquid bulk trade, only in exceptional circumstances where Korea shipping companies could not otherwise engage in such trade to and from such third country. 2 These declarations will be made on the occasion of the signature of the agreement. • (\ EC/Korea Framework Agreement - 18/18 FINANCIAL STATEMENT 1997 Financial year 1. TITLE OF OPERATION Implementation of the Framework Agreement for Trade and Cooperation between the EC and its Member States, on the one hand, and the Republic ofKorea on the other. - Specific actions in the field of economic cooperation and cooperation activities of a general nature. These actions will take place in accordance with the EU Asia Strategy (COM (94) 314 final; in particular section 2. 2). 2. BUDGET HEADING INVOLVED Under the present structure of the budget, the expenditure could be charged against item B7-800 "Economic and commercial cooperation agreements with third countries'*. This is subject to the outcome of the annual budget procedure. 3. LEGAL BASIS Articles 113 and 235 of the EC Treaty 4. DESCRIPTION OF OPERATION 4. 1. General objective To promote the further development of economic relations with Korea under the Framework Agreement with Korea. This will in particular cover fields within the remit of DGI (trade cooperation, trade visits, promotion of contacts between economic operators, specific cooperation activities of a general nature). 4. 2. Period covered and arrangements for renewal or extension The Framework Agreement will enter into force for a period of five years, after which it will be tacitly renewable on an annual basis. 5. (XASSmC^TON OF E X P E ^ n^ 5. 1. Compulsory/Non-compulsory expenditure Non-compulsory expenditure 5. 2. DifTerentiated/Non-differentiated appropriations Differentiated appropriation ÂH 5. 3. Type of revenue involved Not applicable 6. TYPE OF EXPENDITURE OR REVENUE 100% grant (on an exceptional basis) Grant for cofinancing with other public- or private-sector sources (in particular the Korean Government). 7. FINANCIAL IMPACT 7. 1. Method of calculating total cost of operation (definition of unit costs) The Framework Agreement will be signed in 1996, and should therefore be implemented in 1997 and beyond The Framework Agreement is the first-ever general agreement with the Republic of Korea. Specific actions will therefore have to be financed from a new operational budget- allocation. Ihe Framework Agreement provides for economic cooperation in a number of fields, e. g. science and technology, industry, standards, environment, energy, culture. Whereas some of these activities may be covered by existing budget allocations (e. g. cooperation funds earmarked for the Fourth Framework Programme for Research and Technical Development, information budget allocated to DG X7 Delegation in Seoul), an additional allocation estimated at ECU 250 000 a year is likely to be necessary for these new cooperation initiatives. The 1997 programme for cooperation with Korea should cover some or all of the following activities: a. b. c. d. e. f meetings of an EU/Korea Forum, the creation of which was proposed by the EU/Korea Wisemen's Club in its November 1995 report, a conference aimed at promoting dialogue between Korean consumer groups and their European counterparts (in an effort to influence consumer perceptions of European products), a forum aimed at providing information on the possibilities for cooperation in the field of research and development (explanation of functioning of programmes on both sides etc. ), the organisation of sectoral business forums in sectors of common interest with a view to encouraging cooperation between businesses on both sides (Korea has already proposed semiconductors and consumers electronics for 1996), a grant for the creation of a federation of associations of European companies exporting to Korea (to pave the way for the creation of an EU/Korea Chamber of Commerce), the creation of an 'EU-Korea Relationship Prize' the aim of which would be to encourage European media to give more and better information on Korea and Korean media to give more and better information on the EU and its Member States (proposed by the EU/Korea Wisemen's Club in its November 1995 report), a participation in the costs of the organisation of specific trade and investment visits (in line with the principle of subsidiarity). g- 7. 2. Itemised breakdown of cost (to the Community in ECU million) Breakdown 1997 n +1 n •+ 5 and subs, yrs TOTAL EU/Korea Forum Consumer conference 0. 100 0. 100 Subsidies 0. 050 Total 0. 250 - 7. 3. Indicative schedule of appropriations (ECU million) 1997 1998 n + 5 and subs, yrs TOTAL Commitment appropriations Payment appropriations 1997 1998 0. 250 0. 200 0. 050 ' n + 5 and subs, yrs TOTAL 0. 200 0. 050 0. 250 0. 200 0. 050 0. 250 8. FRAUD HŒVENTION MEASURES; RESULTS OF MEASURES TAKEN If 9. ELEMENTS OF CXJST-EFFECIIVENESS ANALYSIS 9. 1. Specific and quantified objectives; taiget population EU/Korea Forum The EU/Korea Forum would be a conference aimed at promoting cooperation between the business, media and academic communities on both sides under the aegis of the Korean Government and the European Commission. Representatives of these sectors should therefore participate. Specific meetings for one or more of the sectors could be an appropriate follow-up. Participants should be selected with the help of Member States' authorities with a view to ensuring that the possibilities afforded by both EC and national cooperation are taken into account. Conference on consumer protection The conference on consumer protection would promote dialogue between Korean consumer groups and their European counterparts and would provide the former with reliable information on EC legislation in this field. The Koreans' perception of foreign products is derived from the austerity campaigns of the past. With a more liberal policy in place, it is essential that this false image of European products as being too expensive, dangerous and of poor quality be corrected. 9. 2. Grounds for the operation Implementation of development of economic cooperation with Korea. the first Framework Agreement with Korea: 9. 3. Monitoring and evaluation of the operation The Commission will carefully assess the effectiveness and impact of actions it organises with the Korean Government, prior to deciding on follow-up action. 10. ADMINISTRATIVE EXPENDITURE (PART A OF THE BUDGET) Hie mobilization of tlie administrative resources needed will depend on the Commission's annual decision on the allocation of resources in the light of the additional staffing and funding accorded by the Budgetary Authority. <LSL 10. 1 Impact on the number of staff Category Staff assigned to manage the operation Permanent posts Temporary posts A B C Officials or temporary staff Other resources Total 1 1 2 Drawn from Period Additional resources < indefinite indefinite Existing resources of theDGor service concerned 1 1 2 10. 2 Overall financial impact of additional human resources None. 10. 3 Increase in other operating costs resulting from the operation Budget item (No and title) A-2510. 11. 01 A-1300. 11. 01 Amounts Method of calculation (ECU) ' p. m. ' Annual meetings of the Joint Committee, meeting alternately in Brussels and Korea, involving only mission expenses for officials 17 000 Brussels-Seoul return tickets for five officials plus daily allowances for five three-day stays in Seoul Total 17000 NB: The sums represent annual expenditure for an indefinite period. 1-3 ISSN 0254-1475 COM(96) 141 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-155-EN-C ISBN 92-78-02491-0 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and Georgia, of the other part

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 135 final 96/092 (AVC) Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and Georgia, of the other part (presented by the Commission) Explanatory memorandum 1. The attached proposal for a Council and Commission Decision constitutes the legal instrument for the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States, on the one hand, and Georgia, on the other. 2. Following the Council's adoption of the negotiating directives on 5 October 1992, negotiations with Georgia were held in the course of 1995. After two rounds of negotiations, the Agreement was initialled on 15/12/95. 3. The Agreement is a mixed agreement covering areas for which both the Communities and the Member States are competent, and is concluded for an initial period often years. It establishes a political dialogue. The Agreement also covers trade in goods, labour conditions, establishment and operation of companies, cross-border supply of services, payments and capital, competition, industrial and commercial property intellectual, protection, legislative cooperation, economic cooperation, cooperation on human rights and democracy, cooperation in combatting illegal activities and illegal immigration, cultural cooperation and financial cooperation. The Agreement contains a clause which allows it to be suspended, even unilaterally, if it is considered that there has been a breach of the essential elements underlying the Agreement i. e. respect for democracy, human rights and the principles of the market economy. The Agreement sets out an institutional framework for its implementation with a Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation Committee. Customs cooperation is covered by a separate protocol. M *\ 4. The Agreement will, as far as trade relations between the Community and Georgia are concerned, replace the Agreement on Trade and Commercial and Economic Cooperation the European Atomic Energy between Community, and the USSR, signed on 18 December 1989. the European Economic Community and 5. The procedures of thev three Communities (EC, EAEC and ECSC) for signing and concluding the Agreement differ. In the case of the EC, account will have to be taken of Opinion 1/94 delivered by the Court of Justice on 15 November 1994 on the competence of the European Community to conclude the agreements reached during the Uruguay Round. For the purpose of concluding the Agreement:. the Council will conclude the Agreement, with the assent of the European Parliament and having consulted the Economic and Social Committee, on behalf of the European Community in accordance with Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) of the EC Treaty by adopting the attached decision; the Commission will conclude the Agreement on behalf of the European Atomic Energy Community after the Council has approved it in accordance with the second paragraph of Article 101 of the Euratom Treaty. the Commission will conclude the Agreement on behalf of the ECSC in accordance with the ECSC Treaty, after consulting the Consultative Committee and with the unanimous assent of the Council; The conclusion of the Agreement will have to be ratified by all the Member States given the mixed nature of the Agreement. 6. In view of the above, the Commission proposes that the Council adopt the annexed decision. tk> COUNCIL AND COMMISSION DECISION OF on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States and Georgia (. /. /ECSC, EC, EURATOM) THE COUNCIL OF THE EUROPEAN UNION, THE EUROPEAN COMMISSION, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to the Treaty establishing the European Community, and in particular Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular the second paragraph of Article 101 thereof, Having regard to the assent of the European Parliament, Having regard to the approval of the Council given in accordance with Article 101 of the Treaty establishing the European Atomic Energy Community, Having consulted Committee, and with the unanimous assent of the Council, the ECSC Consultative Committee and the Economic and Social Whereas the conclusion of the Partnership and Cooperation Agreement between the European Union and Georgia signed in would contribute to achieving the European Communities' objectives; on Whereas that Agreement seeks to strengthen existing links, notably those established by the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community and the USSR, signed on 18 December 1989; Whereas some of the obligations provided for in the Agreement in fields other than Community trade policy affect the arrangements established by Community acts, particularly acts relating to the right of establishment and to transport; ^ Whereas the Agreement imposes on the Community certain obligations relating to the movement of capital and payments between the Community and Georgia; Whereas in the case of certain measures provided for in the Agreement and falling within the Community's powers the EC Treaty provides no basis for action other than Article 235, FIAVE DECIDED AS FOLLOWS : Article 1 The Partnership and Cooperation Agreement between the European Union and Georgia, together with the Protocol, the declarations and the exchange of letters, are hereby approved on behalf of the European Community, the European Coal and Steel Community, and the European Atomic Energy Community. Article 2 1. The position to be adopted by the Community in the Cooperation Council shall be determined by the Council, on a proposal from the Commission, or, where appropriate, by the Commission, in each case in accordance with the relevant provisions of the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community. 2. In accordance with Article 79 of the Partnership and Cooperation Agreement, the President of the Council shall chair the Cooperation Council and shall present the Community's position. A representative of the Commission shall chair the Cooperation Committee in accordance with its rules of procedure and shall present the Community's position. Article 3 The President of the Council shall give the notification provided for in Article 100 of the Agreement on behalf of the European Community. The President of the Commission shall give such notification on behalf of the European Coal and Steel Community and the European Atomic Energy Community. Done at Brussels, le*- Final Act The plenipotentiaries of: THE KINGDOM OF BELGIUM, TFIE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE PORTUGUESE REPUBLIC, THE REPUBLIC OF FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND Contracting Parties to the Treaty establishing the EUROPEAN COMMUNITY, the Treaty establishing the Treaty the EUROPEAN COAL AND STEEL COMMUNITY, and establishing the EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Member States", and of the EUROPEAN COMMUNITY, THE EUROPEAN ATOMIC ENERGY COMMUNITY and the EUROPEAN COAL AND STEEL COMMUNITY, hereinafter referred to as "the Community", of the one part, and the plenipotentiaries of Georgia, I c of the other part, on in the year one thousand nine hundred and ninety-six for the signature meeting at of the Partnership* and Cooperation Agreement establishing a partnership between the European Communities and their Members States, of the one part, and Georgia, of the other part, hereinafter referred to as "the Partnership and Cooperation Agreement", have adopted the following text : the Partnership and Cooperation Agreement and the Protocol on mutual assistance in customs matters. The plenipotentiaries of the Member States and of the Community and the plenipotentiaries of Georgia have adopted the texts of the Joint Declarations listed below and annexed to this Final Act: Joint Declaration concerning Article 5 of the Agreement Joint Declaration concerning Article 14 of the Agreement Joint Declaration concerning the notion of "control" in Article 24 (b) and Article 36 of the Agreement Joint Declaration concerning Article 35 of the Agreement Joint Declaration concerning Article 42 of the Agreement Joint Declaration concerning Article 94 of the Agreement The plenipotentiaries of the Member States and of the Community and the Plenipotentiaries of Georgia have also taken note of the exchange of letters listed below annexed to this Final Act: Establishment of companies The plenipotentiaries of the Member States and of the Community and the Plenipotentiaries of Georgia have also taken note of the declaration listed below annexed to this Final Act: Unilateral Declaration by the French Republic on the Overseas Countries Territories Done at in the year one thousand nine hundred and ninety six. For the Council and the Commission of the European Communities. For Georgia. '/ PARTNERSHIP AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES AND THEIR MEMBER STATES, OF THE ONE PART, AND GEORGIA, OF THE OTHER PART '». • •) PARTNERSHIP AND COOPERATION AGREEMENT establishing a partnership between the European Communities and their Member States, of the one part, and Georgia, of the other part, THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, AUSTRIA, THE PORTUGUESE REPUBLIC, FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, Contraaing Parties to the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community, and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as "Member States", and THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY, AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Community", of the one part, AND GEORGIA of the other part, CONSIDERING the links between the Community, its Member States and Georgia and the common values that they share, RECOGNIZING that the Community and Georgia wish to strengthen these links and to establish partnership and cooperation which would strengthen and widen the relations established in the past in particular by the Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on Trade and Commercial and Economic Cooperation, signed on 18 December 1989, CONSIDERING the commitment of the Community and its Member States and of Georgia to strengthening the political and economic freedoms which constitute the very basis of the partnership, CONSIDERING the commitment of the Parties to promote international peace and security as well as the peaceful settlement of disputes and to cooperate to this end in the framework of the United Nations and the Organisation for Security and Cooperation in Europe, CONSIDERING the firm commitment of the Community and its Member States and of Georgia to the full implementation of all principles and provisions contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the Concluding Documents of the Madrid and Vienna Follow Up Meetings, the Document of the CSCE Bonn Conference on the CSCE Helsinki Economic Cooperation, the Charter of Paris for a New Europe and Document 1992 "The Challenges of Change", and other fundamental documents of the OSCE, RECOGNIZING in that context that support of the independence, sovereignty and territorial integrity of Georgia will contribute to safeguarding of peace and stability in Europe, CONVINCED of the paramount importance of the rule of law and respect for human rights, particularly those of persons belonging to minorities, the establishment of a multiparty system with free and democratic elections and economic liberalization aimed at setting up a market economy, and recognising the efforts of Georgia to create political and economic systems based on these principles, BELIEVING that full implementation of this Partnership and Cooperation Agreement will both depend on and contribute to continuation and accomplishment of the political, economic and legal reforms in Georgia, as well as the introduction of the factors necessary for cooperation, notably in the light of the conclusions of the CSCE Bonn Conference, DESIROUS of encouraging the process of regional cooperation in the areas covered by this agreement with the neighbouring countries in order to promote the prosperity and stability of the region and in particular initiatives aimed at fostering cooperation and mutual confidence among Independent States of the Transcaucasus region and other neighbouring States, DESIROUS of establishing and developing regular political dialogue on bilateral, regional and international issues of mutual interest. RECOGNIZING AND SUPPORTING the wish of Georgia to establish close co-operation with European Institutions, CONSIDERING the necessity of promoting investment in Georgia, including in the energy sector, and in this context the importance attached by the Community and its Member States to equitable conditions for transit for export of energy products; confirming the attachment of the Community and its Member States and of Georgia to the European Energy Charter, and to the full implementation of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects, TAKING ACCOUNT of the Community's willingness to provide for economic cooperation and technical assistance as appropriate, BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between Georgia and a wider area of cooperation in Europe and neighbouring regions and its progressive integration into the open international system, CONSIDERING the commitment of the Parties to liberalise trade, in conformity with World Trade Organisation (WTO) rules, CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements, CONVINCED that this Agreement will create a new climate for economic relations between the Parties and in particular for the development of trade and investment, which are essential to economic restructuring and technological modernization, DESIROUS of establishing close cooperation in the area of environment protection taking into account the interdependence existing between the Parties in this field, RECOGNIZING that co-operation for the prevention and control of illegal immigration constitutes one of the primary objectives of this Agreement DESIROUS of establishing cultural cooperation and improving the flow of information, HAVE AGREED AS FOLLOWS: ^ / ARTICLE 1 A Partnership is hereby established between the Community and its Member States of the one part, and Georgia of the other part. The objectives of this partnership are: - - - - to provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations; to support Georgia's efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy; to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development; to provide a basis for legislative, economic, social, financial, civil scientific, technological and cultural cooperation. • • ^/ TITLE I GENERAL PRINCIPLES ARTICLE 2 Respect for democracy, principles of international law and human rights as defined in particular in the United Nations Charter, the Helsinki Final Act and the Charter of Paris for a New Europe, as well as the principles of market economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal and external policies of the Parties and constitute essential elements of partnership and of this Agreement. ARTICLE 3 The Parties consider that it is essential for their future prosperity and stability that the independent states which have emerged or reestablished their independence following the dissolution of the Union of Soviet Socialist Republics, hereinafter called "Independent States", should maintain and develop cooperation among themselves in compliance with the principles of the Helsinki Final Act and with international law and in the spirit of good neighbourly relations and will make every effort to encourage this process. ARTICLE 3 bis The Parties shall as appropriate review changing circumstances in Georgia, in particular regarding economic conditions there and implementation of market-oriented economic reforms. The Cooperation Council may make recommendations to the Parties concerning development of any part of this Agreement in the light of these circumstances. "'71 •i TITLE II POLITICAL DIALOGUE ARTICLE 4 A regular political dialogue shall be established between the Parties which they intend to develop It shall accompany and consolidate the rapprochement between the Community and intensify. and Georgia, support the political and economic changes underway in that country and contribute to the establishment of new forms of cooperation. The political dialogue: - will strengthen the links of Georgia with the Community and its Member States, and thus with the community of democratic nations as a whole. The economic convergence achieved through this Agreement will lead to more intense political relations; - will bring about an increasing convergence of positions on international issues of mutual concern thus increasing security and stability in the region and promoting the future development of the Independent States of the Transcaucasus; _ shall foresee that the Parties endeavour to co-operate on matters pertaining to the strengthening of stability and security in Europe, the observance of the principles of democracy, and the respect and promotion of human rights, particularly those of persons belonging to minorities and shall hold consultations, if necessary, on relevant matters. Such dialogue may take place on a regional basis, with a view to contributing towards the resolution of regional conflicts and tensions. ARTICLE 5 At ministerial level, political dialogue shall take place within the Cooperation Council established in Article 77 and on other occasions by mutual agreement. ARTICLE 6 Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in particular in the following forms: - regular meetings at senior official level between representatives of the Community and its - Member States on the one hand, and representatives of Georgia on the other hand; taking full advantage of diplomatic channels between the Parties including appropriate contacts in the bilateral as well as the multilateral field, such as United Nations, OSCE meetings and elsewhere; - any other means, including the possibility of expert meetings which would contribute to consolidating and developing this dialogue. ARTICLE 7 Political dialogue at parliamentary Parliamentary Cooperation Committee established in Article 82. level shall take place within the framework of the / TITLE III TRADE IN GOODS ARTICLE 8 1. The Parties shall accord to one another most-favoured-nation treatment in all areas in respect of: - customs duties and charges applied to imports and exports, including the method of collecting such duties and charges, taxes and other internal charges of any kind applied directly or indirectly to imported goods, - provisions relating to customs clearance, transit, warehouses and transhipment, - - methods of payment and the transfer of such payments, - the rules relating to the sale, purchase, transport, distribution and use of goods on the domestic market. 2. The provisions of paragraph 1 shall not apply to: (a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant to the creation of such a union or area; (b) advantages granted to particular countries in accordance with the GATT and with other international arrangements in favour of developing countries; (c) advantages accorded to adjacent countries in order to facilitate frontier traffic. 3. The provisions of paragraph 1 shall not apply, during a transitional period expiring on the date of Georgia acceding to the GATT or on 31 December 1998, whichever is earlier, to advantages defined in Annex I granted by Georgia to other states which have emerged from the dissolution of the USSR. ARTICLE 9 1. The Parties agree that the principle of free transit is an essential condition of attaining the objectives of this Agreement. In this connection each Party shall secure unrestricted transit via or through its territory of goods originating in the customs territory or destined for the customs territory of the other Party. 2. The rules described in the Article V, paragraphs 2, 3, 4 and 5 of the GATT are applicable between the two Parties. 3. The rules contained in this Article are without prejudice, to any special rules relating to specific sectors, in particular such as transport, or products agreed between the Parties. 7 '< >7 -?;-. ARTICLE 10 Without prejudice to the rights and obligations stemming from international conventions on the temporary admission of goods which bind both Parties, each Party shall furthermore grant the other Party exemption from import charges and duties on goods admitted temporarily, in the instances and according to the procedures stipulated by any other international convention on this matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions under which the obligations stemming from such a convention have been accepted by the Party in question. ARTICLE 11 1. Goods originating in Georgia shall be imported into the Community free of quantitative restrictions without prejudice to the provisions of Articles 13, 16 and 17 of this Agreement. 2. Goods originating in the Community shall be imported into Georgia free of all quantitative restrictions and measures of equivalent effect, without prejudice to the provisions of Article 13 of this Agreement. Goods shall be traded between the Parties at market-related prices ARTICLE 12 ARTICLE 13 1. Where any product is being imported into the territory of one of the Parties in such increased quantities or under such conditions as to cause or threaten to cause injury to domestic producers of like or direct competitive products, the Community or Georgia, whichever is concerned, may take appropriate measures in accordance with the following procedures and conditions. 2. Before taking any measures, or in cases to which paragraph 4 applies as soon as possible thereafter, the Community or Georgia, as the case may be, shall supply the Cooperation Council with all relevant information with a view to seeking a solution acceptable to both Parties as provided for in Title XI. 3. If, as a result of the consultations, the Parties do not reach agreement within 30 days of referral to the Cooperation Council on actions to avoid the situation, the Party which requested consultations shall be free to restrict imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury, or to adopt other appropriate measures. 4. In critical circumstances where delay would cause damage difficult to repair, the Parties may take the measures before the consultations, on the condition that consultations shall be offered immediately after taking such action. 5. In the selection of measures under this Article, the Contracting Parties shall give priority to those which cause least disturbance to the achievement of the aims of this Agreement. 6. Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI of the GATT, the ~ 9 J-y 7>~ Agreement on implementation of Article VI of the GATT, the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal lecislation. ARTICLE 14 The Parties undertake to consider development of the provisions in this Agreement on trade in goods between them, as circumstances allow, including the situation arising from the accession of Georgia to the WTO. The Cooperation Council may make recommendations on such developments to the Parties which could be put into effect, where accepted, by virtue of agreement between the Parties in accordance with their respective procedures. ARTICLE 15 The Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of natural resources, the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties. ARTICLE 16 This Title shall not apply to trade in textile products falling under Chapters 50 to 63 of the Combined Nomenclature. Trade in these products shall be governed by a separate agreement, initialled on 17 November 1993 and applied provisionally since 1 January 1993, and by any successor agreements. ARTICLE 17 1. Trade in products covered by the Treaty establishing the European Coal and Steel Community shall be governed by the provisions of this Title, with the exception of Article 11. 2. A contact group on coal and steel matters is set up, comprising representatives of the Community on the one hand, and representatives of Georgia on the other. The contact group shall exchange, on a regular basis, information on all coal and steel matters of interest to the Parties. ARTICLE 18 Trade in nuclear materials will be conducted in accordance with the provisions of the Treaty establishing the European Atomic Energy Community. If necessary, trade in nuclear materials shall be subject to the provisions of a specific Agreement to be concluded between the European Atomic Energy Community and Georgia. 10 TITLE IV PROVISIONS AFFECTING BUSINESS AND INVESTMENT CHAPTER I Labour Conditions ARTICLE 19 1. Subject to the laws, conditions and procedures applicable in each Member State, the Community and the Member States shall endeavour to ensure that the treatment accorded to Georgian nationals, legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. 2. Subject to the laws, conditions and procedures applicable in Georgia, Georgia shall ensure that the treatment accorded to nationals of a Member State, legally employed in the territory of Georgia shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. ARTICLE 20 The Cooperation Council shall examine which improvements can be made in working conditions for business people consistent with the international commitments of the Parties, including those set out in the document of the CSCE Bonn Conference. ARTICLE 21 The Cooperation Council shall make recommendations for the implementation of Articles 19 and 20. CHAPTER H Conditions affecting the establishment and operation of companies ARTICLE 22 1. The Community and its Member States shall grant treatment no less favourable than that accorded to any third country for the establishment of Georgian companies as defined in Article 24 (d). 2. Without prejudice to the reservations listed in Annex IV, the Community and its Member States shall grant to subsidiaries of Georgian companies established in their territories a treatment no less favourable than that granted to any Community companies, in respect of their operation. > (• 3. The Community and its Member States shall grant to branches of Georgian companies established in their territories treatment no less favourable than that accorded to branches of companies of any third country, in respect of their operation. 4. Without prejudice to the reservations listed in Annex V, and subject to the conditions set but therein, Georgia shall grant for the establishment of Community companies as defined in Article 24(d) treatment no less favourable than that accorded to Georgian companies or to any third country companies, whichever is the better, and shall grant to subsidiaries and branches of Community companies established in its territory treatment no less favourable than that accorded to its own companies or branches or to any third country company or branch, whichever is the better, in respect of their operations. ARTICLE 23 1. Without prejudice to the provisions of Article 96, the provisions of Article 22 shall not apply to air transport, inland waterways transport and maritime transport. 2. However, in respect of activities, as indicated below, undertaken by shipping agencies for the provision of services to international maritime transport, including intermodal transport operations involving a sea-leg, each Party shall permit to the companies of the other Party to have a commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better, and this in conformity with the legislation and regulations applicable in each Party. 3. Such activities include, but are not limited to: a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing, whether these services are operated or offered by the service supplier itself or by service suppliers with which the service seller has established standing business arrangements; b) purchase and use, on their own account or on behalf of their customers (and the resale to their customers) of any transport and related services, including inward transport services by any mode, particularly inland waterways, road and rail, necessary for the supply of an integrated service; c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported; d) provision of business information by any means, including computerised information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications); e) setting up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency, f) acting on bei ;If of the companies, inter alia in organizing the call of the vessel or taking over cargoes when required. 12 y/J/? For the purpose of this Agreement: ARTICLE 24 (a) A "Community company" or a "Georgian company" respectively shall mean a company set up in accordance with the laws of a Member State or of Georgia respectively and having its registered office or central administration, or principal place of business in the territory of the Community or Georgia respectively. However, should the company, set up in accordance with the laws of a Member State or Georgia respectively, have only its registered office in the territory of the Community or Georgia respectively^ the company shall be considered a Community or Georgian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or Georgia respectively. (b) "Subsidiary" of a company shall mean a company which is effectively controlled by the first company. (c) "Branch" of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension. (d) "Establishment" shall mean the right of Community or Georgian companies as referred to in point (a), to take up economic activities by means of the setting up of subsidiaries and branches in Georgia or in the Community respectively. (e) "Operation" shall mean the pursuit of economic activities. (f) "Economic activities" shall mean activities of an industrial, commercial and professional character. With regard to international maritime transport, including inter modal operations involving a sea leg, nationals of the Member States or of Georgia established outside the Community or Georgia respectively, and shipping companies established outside the Community or Georgia and controlled by nationals of a Member State or Georgian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III if their vessels are registered in that Member State or in Georgia respectively in accordance with their respective legislation. ARTICLE 25 Notwithstanding any other provisions of the Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the obligations of a Party under the Agreement. 13 / 7 /J. 2. Nothing in the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities. 3. For the purpose of this Agreement, "financial services" shall mean those activities described in Annex III. ARTICLE 26 The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third country access to its market, through the provisions of this Agreement. ARTICLE 27 1. Notwithstanding the provisions of Chapter I of this Title, a Community company or a Georgian company established in the territory of Georgia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of Georgia and the Community respectively, employees who are nationals of Community Member States and Georgia respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by companies, or branches. The residence and work permits of such employees shall only cover the period of such employment. 2. Key personnel of the above mentioned companies herein referred to as "organizations" are "intra-corporate transferees" as defined in (c) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than majority shareholders), for at least the year immediately preceding such movement: (a) Persons working in a senior position with an organization, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including: - directing the establishment or a department or subdivision of the establishment, - supervising and controlling the work of other supervisory, professional or managerial employees, - having the authority personally to hire and fire or recommend hiring, firing or other personnel actions; (b) Persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession; 14 (c) An "intra-corporate transferee" is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party. ARTICLE 29 1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. 2. The provisions of this Article are without prejudice to those of Article 37: the situations covered by such Article 37 shall be solely governed by its provisions to the exclusion of any other. 3. Acting in the spirit of partnership and cooperation and in the light of the provisions of Article 43 the Government of Georgia shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in Georgia of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. The Community may request Georgia to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts. 4. Where new legislation or regulations introduced in Georgia would result in rendering the conditions for operation of subsidiaries and branches of Community companies established in Georgia more restrictive than the situation existing on the day of signature of the Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in Georgia at the time of entry into force of the relevant act. 15 CHAPTER III Cross border supply of services between the Community and Georgia ARTICLE 30 1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the supply of services by Community or Georgian companies which are established in a Party other than that of the person for whom the services are intended taking into account the development of the service sectors in the Parties. 2. The Cooperation Council shall make recommendations for the implementation of paragraph 1. ARTICLE 31 The Parties shall cooperate with the aim of developing a market oriented service sector in Georgia. ARTICLE 32 1. The Parties undertake to apply effectively the principle of unrestricted access to the international maritime market and traffic on a commercial basis: (a) the above provision does not prejudice the rights and obligations arising from the United Nations Convention on a Code of Conduct for Liner Conferences, as applicable to one or other Contracting Party to this Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis; (b) the Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade. 2. In applying the principles of paragraph 1, the Parties shall: (a) not apply, as from entry into force of this agreement, any cargo sharing provisions of bilateral agreements between any Member States of the Community and the former Soviet Union, (b) not introduce cargo sharing clauses into future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned; (c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade; 16 (d) abolish upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport. 3. Each Party shall grant, inter alia, no less favourable treatment, for the ships operated by nationals or companies of the other Party, than that accorded to a Party's own ships, with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading. 4. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of Georgia and vice versa. ARTICLE 33 With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties after entry into force of this Agreement. CHAPTER IV General Provisions ARTICLE 34 1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health. 2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority. ARTICLE 35 For the purpose of this Title, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of the Agreement. The above provision does not prejudice the application of Article 34. ARTICLE 36 Companies which are controlled and exclusively owned by Georgian companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV. 17. s-*. --,•;, ARTICLE 37 Treatment granted by either Party to the other thereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, sub-sector and mode of supply. ARTICLE 38 For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or Georgia pursuant to commitments entered into in economic integration agreements in accordance with the principles of Article V of the GATS. ARTICLE 39 1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements. 2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation. 3. Nothing in this Title shall be construed to prevent Member States or Georgia from distinguishing, in the application of the relevant provisions of their fiscal legislation, between tax payers who are not in identical situations, in particular as regards their place of residence. ARTICLE 40 Without prejudice to Article 27, no provision of Chapters II, III and IV shall be interpreted as giving the right to: - nationals of the Member States or of Georgia respectively to enter, or stay in, the territory of Georgia or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employee thereof or supplier or recipient of services; - Community subsidiaries or branches of Georgian companies to employ or have employed in the territory of the Community nationals of Georgia; - Georgian subsidiaries or branches of Community companies to employ or have employed in the territory of Georgia nationals of the Member States; - Georgian companies or Community subsidiaries or branches of Georgian companies to supply Georgian persons to act for and under the control of other persons by temporary employment contracts; - Community companies or Georgian subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts. 1R • /' CHAPTER V Current payments and capital ARTICLE 41 1. The Parties undertake to authorise in freely convertible currency, any current payments between residents of the Community and of Georgia connected with the movement of goods, services or persons made in accordance with the provisions of this Agreement. 2. With regard to transactions on the capital account of balance of payments, from entry into force of the Agreement, the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured. 3. Without prejudice to paragraph 2 or to paragraph 5, as from entry into force of this Agreement, no new foreign exchange restrictions on the movement of capital and cuirent payments connected therewith between residents of the Community and Georgia shall be introduced and the existing arrangements shall not become more restrictive. 4. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 above between the Community and Georgia in order to promote the objectives of this Agreement. 5. With reference to the provisions of this Article, until a full convertibility of the Georgian currency within the meaning of Article VIII of the Articles of Agreement of the International Monetary Fund (IMF) is introduced, Georgia may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term financial credits to the extent that such restrictions are imposed on Georgia for the granting of such credits and are permitted according to Georgia's status under the IMF. Georgia shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. Georgia shall inform the Cooperation Council promptly of the introduction of such measures and of any changes therein. 6. Without prejudice to paragraph 1 and 2, where, in exceptional circumstances, movement of capital between the Community and Georgia cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Georgia, the Community and Georgia, respectively, may take safeguard measures with regard to movements of capital between the Community and Georgia for a period not exceeding six months if such measures are strictly necessary. 19 / CHAPTER VI Intellectual, industrial and commercial property protection ARTICLE 42 1. Pursuant to the provisions of this Article and of Annex II, Georgia shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of the Agreement, for a level of protection similar to that existing in the Community, including effective means of enforcing such rights. 2. By the end of the fifth year after entry into force of the Agreement, Georgia shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex II to which Member States are parties or which are de facto applied by Member States, according to the relevant provisions contained in these conventions. 20 j _. _ /- x ' TITLE V LEGISLATIVE COOPERATION ARTICLE 43 1. The Parties recognize that an important condition for strengthening the economic links between Georgia and the Community is the approximation of Georgia's existing and future legislation to that of the Community. Georgia shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community. 2. The approximation of laws shall extend to the following areas in particular: laws and regulations governing investments by companies, customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations and transport. 3. The Community shall provide Georgia with technical assistance for the implementation of these measures, which may include, inter alia : the exchange of experts; the provision of early information especially on relevant legislation; - - - organization of seminars; - - aid for translation of Community legislation in the relevant sectors. training activities; ARTICLE 43 bis 1. Further to Article 43, the Commmunity shall provide Georgia with technical assistance regarding the formulation and implementation of legislation in the field of competition, in particular as concerns: • agreements and associations between undertakings and concerted practices which may have the effect of preventing, restricting or distorting competition, abuse by understandings of a dominant position in the market, state aids which have the effect of distorting competition, state monopolies of a commercial character, public undertakings and undertakings with special or exclusive rights, review and supervision of the application of competition laws and means of ensuring compliance with them. The Parties agree to examine ways to apply their respective competition laws on a concerted basis in such cases where trade between them is affected. 21 7: TITLE VI ECONOMIC COOPERATION ARTICLE 44 1. The Community and Georgia shall establish economic cooperation aimed at contributing to the process of economic reform and recovery and sustainable development of Georgia. Such cooperation shall strengthen existing economic links, to the benefit of both parties. 2. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic and trading systems in Georgia and will be guided by the requirements of sustainability and harmonious social development; they will also fully incorporate environmental considerations. 3. To this end the cooperation will concentrate, in particular, on economic and social development, human resources development, support for enterprises (including privatization, investment and development of financial services), agriculture and food, energy, transport, tourism, environmental protection and regional cooperation. 4. Special attention shall be devoted to measures capable of fostering cooperation among the Independent States of the Transcaucasian region, and with other neighbouring states, with a view to stimulating a harmonious development of the region. 5. Where appropriate, economic cooperation and other forms of cooperation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to its established coordination and to Georgia and Community implementation procedures. technical assistance ARTICLE 45 Cooperation in the field of trade in goods and services The Parties will cooperate with a view to ensuring that Georgia's international trade is conducted in conformity with the rules of the WTO. Such cooperation shall include specific issues directly relevant to trade facilitation, including: • formulation of policy on trade and trade-related questions, including payments and clearing mechanisms, • drafting of relevant legislation, • assistance to prepare for Georgia's eventual accession to the WTO. 22 ARTICLE 46 Industrial cooperation 1. Cooperation shall aim at promoting the following in particular: the development of business links between economic operators of both sides; - - Community participation in Georgia's efforts to restructure its industry, - - - environmental protection. _ conversion of the military - industrial complex. the improvement of management; the development of appropriate commercial rules and practices; 2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings. ARTICLE 46 bis Construction The Parties shall cooperate in the field of construction industry. This cooperation shall, inter alia, aim at modernizing and restructuring the construction sector in Georgia in line with the principles of a market economy and duly taking into account related health, safety and environmental aspects. ARTICLE 47 Investment promotion and protection 1. Bearing in mind the respective powers and competences of the Community and the Member States, cooperation shall aim to establish a favourable climate for private investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities. 2. The aims of cooperation shall be in particular: - - - - - the* conclusion, where appropriate, between the Member States and Georgia of agreements for the promotion and protection of investment; the conclusion, where appropriate, between the Member States and Georgia of agreements to avoid double taxation; the creation of favourable conditions for attracting foreign investments into the Georgian economy; to establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment; to exchange information on investment opportunities in the form of, inter alia, trade fairs, exhibitions, trade weeks and other events. 23 / •• ARTICLE 48 Public Procurement The Parties shall cooperate to develop conditions for open and competitive award of contracts for goods and services in particular through calls for tenders. ARTICLE 49 Cooperation in the field of standards and conformity assessment 1. Cooperation between the Parties shall promote alignment with internationally agreed criteria, principles and guidelines followed in the field of quality. The required actions will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of the quality of Georgian products. 2. To this end they shall seek to cooperate in technical assistance projects which will: • promote appropriate cooperation with organizations and institutions specialized in these fields, • promote the use of Community technical regulations and the application of European standards and conformity assessment procedures, • permit the sharing of experience and technical information in the field of quality management. ARTICLE 50 Mining and raw materials 1. The Parties shall aim at increasing investment and trade in mining and raw materials. 2. The cooperation shall focus in particular on the following areas: - exchange of information on the prospects of the mining and non-ferrous metals sectors, - - - - - safety in the mining industry. the establishment of a legal framework for cooperation, trade matters, the adoption and implementation of environmental legislation, training, ARTICLE 51 Cooperation in science and technology 1. The Parties shall promote cooperation in civil scientific research and technological development (RTD) on the basis of mutual benefit and, taking into account the availability of resources, adequate access to their respective programmes and subject to appropriate levels of effective protection of intellectual, industrial and commercial property rights (IPR). 24 _ A 2. Science and technology cooperation shall cover: the exchange of scientific and technical information, - - joint RTD activities; - training activities and mobility programmes for scientists, researchers and technicians engaged in RTD on both sides. Where such cooperation takes the form of activities involving education and'or training, it should be carried out in accordance with the provisions of Article 52. The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in science and technology. In carrying out such cooperation activities, special attention shall be devoted to the redeployment of scientists, engineers, researchers and technicians which are or have been engaged in research and/or production of weapons of mass destruction. 3. The Cooperation covered by this Article shall be implemented according to specific arrangements to be negotiated and concluded in accordance with the procedures adopted by each Party, and which shall set out, inter alia, appropriate IPR provisions. ARTICLE 52 Education and training 1. The Parties shall cooperate with the aim of raising the level of general education and professional qualifications in Georgia, both in the public and private sectors. 2. The cooperation shall focus in particular on the following areas: - updating higher education and training systems in Georgia including the - system of certification of higher educational establishments and diplomas of higher education; the training of public and private sector executives and civil servants in priority areas to be determined, - cooperation between educational establishments and between educational establishments and firms; - mobility for teachers, graduates, administrators, young scientists and researchers, and young people; teaching Community languages; - promoting teaching in the field of European Studies within the appropriate institutions; - - post-graduate training of conference interpreters; - - training of journalists; training of trainers. 3. The possible participation of one Party in the respective programmes in the field of education and training of the other Party could be considered in accordance with their respective procedures and, where appropriate, institutional frameworks and plans of cooperation will then be established building on participation of Georgia in the Community's TEMPUS programme. / — —• 25 ^ ~'-, ARTICLE 53 Agriculture and the agro-industrial sector The purpose of cooperation in this area shall be the pursuance of agrarian reform, the modernization, privatization and restructuring of agriculture, the agro-industrial and service sectors in Georgia, development of domestic and foreign markets for the Georgian products, in conditions that ensure the protection of the environment, taking into account the necessity to improve security of food supply as well as the development of agri-business, the processing and distribution of agricultural products. The Parties shall also aim at the gradual approximation of Georgian standards to Community technical regulations concerning industrial and agricultural food products including sanitary and phytosanitary standards. ARTICLE 54 Energy 1. Cooperation shall take place within the principles of the market economy and the European Energy Charter, and bearing in mind the Energy Charter Treaty and the Protocol on Energy Efficiency and Related Environmental Aspects, against a background of the progressive integration of the energy markets in Europe. 2. The cooperation shall include among others the following areas: - formulation and development of energy policy, - improvement in management and regulation of the energy sector in line with a market economy, improvement of energy supply, including security of supply, in an economic and environmentally sound manner, - - promotion of energy saving and energy efficiency and implementation of the Energy Charter Protocol on Energy Efficiency and related environmental aspects, improvement of energy technologies in supply and end use across the range of energy types, - modernisation of energy infrastructures, - - management and technical training in the energy sector, - - The introduction of the range of institutional, legal, fiscal and other conditions necessary to transportation and transit of energy materials and products, encourage increased energy trade and investment. _ development of hydro-electric and other renewable energy resources. 3. The Parties shall exchange relevant information relating to investment projects in the energy sector, in particular concerning the construction and refurbishing of oil and gas pipelines or other means of transporting energy products. They shall cooperate with a view to implementing as efficaciously as possible the provisions of Title IV and of Article 47, in respect of investments in the energy sector. 26 y//"* ARTICLE 55 Environment 1. Bearing in mind the European Energy Charter and the Declaration of the Lucerne Conference of 1993, and taking into account the Energy Charter Treaty, and especially its article 19, and the Energy Charter Protocol on Energy Efficiency and related environmental aspects, the Parties shall develop and strengthen their cooperation on environment and human health. 2. Cooperation shall aim at combating the deterioration of the environment and in particular: - effective monitoring of pollution levels and assessment of environment; system of information on the state of the environment; - combating local, regional and transboundary air and water pollution, - ecological restoration; - sustainable, efficient and environmentally effective production and use of energy; - safety of industrial plants; - classification and safe handling of chemicals; - water quality; - waste reduction, recycling and safe disposal, implementation of the Basle Convention; - - - the environmental impact of agriculture, soil erosion, and chemical pollution; the protection of forests; the conservation of biodiversity, protected areas and sustainable use and management of biological resources; land-use planning, including construction and urban planning; - - use of economic and fiscal instruments; - global climate change; - environmental education and awareness; - technical assistance concerning rehabilitation of zones affected by radioactivity and addressing related health and social problems; implementation of the Espoo Convention on Environmental Impact Assessment in a transboundary context. - 3. Cooperation shall take place particularly through: - disaster planning and other emergency situations; - exchange of information and experts, including information and experts dealing with the transfer of clean technologies and the safe and environmentally sound use of biotechnologies, joint research activities; - - improvement of laws towards Community standards; - environmental training and institutional strengthening; - cooperation at regional level, including cooperation within the framework of the European Environment Agency, and at international level; - development of strategies, particularly with regard to global and climatic issues and also in view of achieving sustainable development; - environmental impact studies. 27 ARTICLE 56 Transport The Parties shall develop and strengthen their cooperation in the field of transport. This cooperation shall, inter alia, aim at restructuring and modernizing transport systems and networks in Georgia, and developing and ensuring, where appropriate, compatibility of transportation systems in the context of achieving a more global transport system. Particular consideration shall be given to traditional communications links among Independent States in the Transcaucasus region and with other neighbouring states. The cooperation shall include, inter alia: the modernizing of management and operations of road transport, railways, ports and airports; - - modernization and development of railways, waterways, roads, ports, airports and air navigation infrastructure including the modernization of major routes of common interest and the trans-European links for the above modes, particularly those related to the TRACECA project; - promotion and development of multi-modal transport; - - preparation of the legislative and institutional framework for policy development and the promotion of joint research and development programmes; implementation including privatization of the transport sector. ARTICLE 57 Postal services and telecommunications Within their respective powers and competences the Parties shall expand and strengthen cooperation in the following areas: - the establishment of policies and guidelines for the development of the telecommunications sector and postal services; - development of principles of a tariff policy and marketing in telecommunications and postal services; - carry out transfer of technology and know how, including on European Technical standards and certification systems; - encouraging the development of projects for telecommunications and postal services and attracting investment; - enhancing efficiency and quality of the provision of telecommunications and postal services, amongst others through liberalization of activities of sub-sectors, - advanced application of telecommunications, notably in the area of electronic funds transfer, - management of telecommunications networks and their "optimization"; - an appropriate regulatory basis for the provision of telecommunication and postal services and - for the use of the radio frequency spectrum; training in the field of telecommunications and postal services for operations in market conditions. 28 ARTICLE 58 Financial Services Cooperation shall in particular aim at facilitating the involvement of Georgia in universally accepted systems of mutual settlements. Technical assistance shall focus on: - - - the development of banking and financial services, the development of a common market of credit resources, the involvement of Georgia in a universally accepted system of mutual settlements; the development of fiscal system and its institutions in Georgia, exchange of experience and personnel training; the development of insurance services, which would, inter alia, create a favourable framework for Community companies participation in the establishment of joint ventures in the insurance sector in Georgia, as well as the development of export credit insurance. This cooperation shall in particular contribute to foster the development of relations between Georgia and the Member States in the financial services sector. ARTICLE 59 Regional development 1. The Parties shall strengthen cooperation on regional development and land-use planning 2. To this end, they shall encourage exchange of information by national, regional and local authorities on regional and land-use planning policy and on methods of formulation of regional policies with special emphasis on the development of disadvantaged areas. They shall also encourage direct contacts between the respective regions and public organizations responsible for regional development planning with the aim, inter alia, to exchange methods and ways of fostering regional development. ARTICLE 60 Social cooperation 1. With regard to health and safety, the parties shall develop cooperation between them with the aim of improving the level of protection of the health and safety of workers. The cooperation shall include notably. - education and training on health and safety issues with specific attention to high risk sectors of activity; - development and promotion of preventive measures to combat work related diseases and other work related ailments; - prevention of major accident hazards and the management of toxic chemicals; - research to develop the knowledge base in relation to working environment and the health and safety of workers. ' - ~" 29 7 A ^7/7V 2. With regard to employment, the cooperation shall include notably technical assistance to: - optimization of the labour market, - modernization of the job-finding and consulting services; - planning and management of the restructuring programmes, - encouragement of local employment development; - exchange of information on the programmes of flexible employment, including those stimulating self-employment and promoting entrepreneurship. 3. The Parties shall pay special attention to cooperation in the sphere of social protection which, inter alia, shall include cooperation in planning and implementing social protection reforms in Georgia. These reforms shall aim to develop in Georgia methods of protection intrinsic to market economies and shall comprise all forms of social protection. ARTICLE 61 Tourism The Parties shall increase and develop cooperation between them, which shall include: - facilitating the tourist trade, - increasing the flow of information; - transferring know-how, - studying the opportunities for joint operations; - cooperation between official tourism bodies; - training for tourism development. ARTICLE 62 Small and medium-sized enterprises 1. The Parties shall aim to develop and strengthen small and medium-sized enterprises and their associations and cooperation between SMEs in the Community and Georgia. 2. Cooperation shall include technical assistance, in particular in the following areas: - - - the development of a legislative framework for SMEs; the development of an appropriate infrastructure (an agency to support SMEs, communications, assistance to the creation of a fund for SMEs); the development of technology parks. ARTICLE 63 Information and communication The Parties shall support the development of modern methods of information handling, including the media, and stimulate the effective mutual exchange of information. Priority shall be given to -- r— 30. - , - • /- / programmes aimed at providing the general public with basic information about the Community and Georgia, including, where possible, access to databases, in full respect of intellectual property rights ARTICLE 64 Consumer Protection The Parties will enter into close cooperation aimed at achieving compatibility between their systems of consumer protection. This cooperation may include the exchange of information on legislative work and institutional reform, establishment of permanent systems of mutual information on dangerous products, the improvement of information provided to consumers especially on prices, characteristics of products and services offered, the development of exchanges between the consumer interest representatives, and increasing the compatibihty of consumer protection policies, and the organization of seminars and training periods. ARTICLE 65 Customs 1. The aim of cooperation shall be to guarantee compliance with all the provisions scheduled for adoption in connection with trade and fair trade and to achieve the approximation of Georgia's customs system to that of the Community. 2. Cooperation shall include the following in particular: the exchange of information; the improvement of working methods; the introduction of the Combined Nomenclature and the single administrative document; the interconnection between the transit systems of the Community and of Georgia; - - - - - simplification of inspections and formalities in respect of the carriage of goods; - - the support in the introduction of modern customs information systems; the organization of seminars and training periods. Technical assistance shall be provided where necessary. 3. Without prejudice to further cooperation foreseen in this agreement and in particular Articles 69, and 71, mutual assistance in customs matters between administrative authorities of the Parties shall take place in accordance with the provisions of the Protocol attached to this Agreement. ARTICLE 66 Statistical cooperation Cooperation in this area shall have as its aim the development of an efficient statistical system to provide the reliable statistics needed to support and monitor the process of economic reform and contribute to the development of private enterprise in Georgia. -— 0 / - 7f7^7 31 The Parties, in particular, shall cooperate in the following fields: - adaptation of the Georgian statistical system to international methods, standards and classification; - exchange of statistical information; - provision of necessary statistical macro- and microeconomic information to implement and manage economic reforms. The Community shall contribute to this end by rendering technical assistance to Georgia. ARTICLE 67 Economics The Parties shall facilitate the process of economic reform and the coordination of economic policies by cooperating to improve understanding of the fundamentals of their respective economies and the design and implementation of economic policy in market economies. To this end, the Parties shall exchange information on macroeconomic performance and prospects. The Community shall provide technical assistance so as to: - assist Georgia in the process of economic reform by providing expert advisory and technical assistance; - encourage cooperation among economists in order to expedite the transfer of know-how for the drafting of economic policies, and provide for wide dissemination of policy-relevant research. ARTICLE 67 bis Monetary Policy At the request of the Georgian authorities, the Union shall provide technical assistance designed to support the efforts of Georgia towards the strengthening of its monetary system and the introduction of full convertibility of the currency. This will include technical assistance for the design and application of Georgia's monetary and credit policy, in full coordination with the international financial institutions; for the training of personnel:; and for the development of financial markets, including the stock exchange. It shall also include informal exchanges of views concerning the principles and the functioning of the European Monetary System and EC regulations on financial markets and capital movements. 32 *-7r*y TITLE VII. COOPERATION ON MATTERS RELATING TO DEMOCRACY AND HUMAN RIGHTS ARTICLE 68 The Parties shall cooperate on all questions relevant to the establishment or reinforcement of democratic institutions, including those required in order to strengthen the rule of law, and the protection of human rights and fundamental freedoms according to international law and OSCE principles. This cooperation shall take the form of technical assistance programmes intended to assist, inter alia, in the drafting of relevant legislation and regulations, the implementation of such legislation; the functioning of the judiciary; the role of the State in questions of justice; and the operation of the electoral system. They may include training where appropriate. The Parties shall encourage contacts and exchanges between their national, regional and judicial authorities, parliamentarians, and non-governmental organisations. 33 ' TITLE VIII COOPERATION ON PREVENTION OF ILLEGAL ACTIVITIES AND THE PREVENTION AND CONTROL OF ILLEGAL IMMIGRATION ARTICLE 69 The Parties shall establish cooperation aimed at preventing illegal activities such as: • • • illegal activities in the sphere of economics, including corruption; illegal transactions of various goods, including industrial waste; counterfeiting Cooperation in the abovementioned areas will be based on mutual consultation and close interaction. Technical and administrative assistance may be provided, including in the following areas: drafting of national legislation in the sphere of preventing illegal activities; creation of information centres, increasing the efficiency of institutions engaged in preventing illegal activities; training of personnel and development of research infrastructures; elaboration of mutually acceptable measures impeding illegal activities. ARTICLE 70 Money laundering 1. The Parties agree on the necessity of making efforts and cooperating in order to prevent the use of their financial systems for laundering of proceeds from criminal activities in general and drug offences in particular, 2. Cooperation in this area shall include administrative and technical assistance with the purpose of establishing suitable standards against money laundering equivalent to those adopted by the Community and international fora in this field, including the Financial Action Task Force (FATF). ARTICLE 71 Drugs Within the framework of their respective powers and competencies the Parties shall cooperate in increasing the effectiveness and efficiency of policies and measures to counter the illicit production, supply and traffic of narcotic drugs and psychotropic substances, including the prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention and reduction. The cooperation in this area shall be based on mutual consultation and close coordination between the Parties over the objectives and measures on the various drug-related fields. 34 ARTICLE 71 BIS Illegal Immigration 1. The Member States of the European Union and Georgia agree to cooperate in order to prevent and control illegal immigration. To this end: - Georgia, agrees to readmit any of its nationals illegally present on the territory of a Member State, upon request by the latter and without further formalities, - and each Member State agrees to readmit any of its nationals, as defined for community purposes, illegally present on the territory of Georgia. , upon request by. the latter and without further formalities. The Member States and Georgia. will also provide their nationals with appropriate identity documents for such purposes. Georgia, agrees to conclude bilateral agreements with Member States which so request, regulating specific obligations for readmission including an obligation for the readmission of nationals of other countries and stateless persons who have arrived on the territory of any such Member State from Georgia or who have arrived on the territory of Georgia from any such Member State. 3. The Cooperation Council shall examine what other joint efforts can be made to prevent and control illegal immigration. 35 *y TITLE L\ CULTURAL COOPERATION ARTICLE 72 1. The Parties undertake to promote, encourage and facilitate cultural cooperation. Where appropriate, the Community's cultural cooperation programmes or those of one or more Member States may be the subject of cooperation and further activities of mutual interest may be developed. 2. Cooperation may cover, inter alia, the following areas: - exchange of information and experience in the field of conservation and protection of monuments, sites (architectural heritage), and museum values; - cultural exchanges between institutions, artists and other persons working in the area of culture. - translation of literary works. 36 y / TITLE X FINANCIAL COOPERATION IN THE FIELD OF TECHNICAL ASSISTANCE ARTICLE 73 In order to achieve the objectives of this Agreement and in accordance with Articles 74, 75 and 76 Georgia shall benefit from temporary financial assistance from the Community by way of technical assistance in the form of grants. The purpose of this assistance shall be to accelerate the economic transformation of Georgia. ARTICLE 74 This financial assistance shall be covered within the framework of TACIS as foreseen in the Community's relevant Council Regulation. ARTICLE 75 The objectives and the areas of the Community's financial assistance shall be laid down in an indicative programme reflecting established priorities to be agreed between the two Parties taking into account Georgia's needs, sectoral absorption capacities and progress with reform. The Parties shall inform the Cooperation Council thereof. ARTICLE 76 In order to permit optimum use of the resources available, the Parties shall ensure that Community technical assistance contributions are made in close coordination with those from other sources such as the Member States, other countries, and international organizations such as the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development. 37 / /, / \ S-7 TITLE XI INSTITUTIONAL, GENERAL AND FINAL PROVISIONS ARTICLE 77 A Cooperation Council is hereby established which shall supervise the implementation of this Agreement. It shall meet at ministerial level once a year. It shall examine any major issues arising within the framework of the Agreement and any other bilateral or international issues of mutual interest for the purpose of attaining the objectives of this Agreement. The Cooperation Council may also make appropriate recommendations, by agreement between the two Parties. ARTICLE 78 1. The Cooperation Council shall consist of the members of the Council of the European Union and members of the Commission of the European Communities, on the one hand, and of members of the Government of Georgia, on the other. 2. The Cooperation Council shall establish its rules of procedure. 3. The office of President of the Cooperation Council shall be held alternately by a representative of the Community and by a member of the Government of Georgia ARTICLE 79 1. The Cooperation Council shall be assisted in the performance of its duties by a Cooperation Committee composed of representatives of the members of the Council of the European Union and of members of the Commission of the European Communities on the one hand and of representatives of the Government of Georgia on the other, normally at senior civil servant level. The office of President of the Cooperation Committee shall be held alternately by the Community and by Georgia. In its rules of procedure the Cooperation Council shall determine the duties of the Cooperation Committee, which shall include the preparation of meetings of the Cooperation Council, and how the Committee shall function. 2. The Cooperation Council may delegate any of its powers to the Cooperation Committee, which will ensure continuity between meetings of the Cooperation Council. ARTICLE 80 The Cooperation Council may decide to set up any other special committee or body that can assist it in carrying out its duties and shall determine the composition and duties of such committees or bodies and how they shall function. 38 ARTICLE 81 When examining any issue arising within the framework of this Agreement in relation to a provision referring to an article of the GATT/WTO, the Cooperation Council shall take into account to the greatest extent possible the interpretation that is generally given to the article of the GATT in question by the Contracting Parties to the GATT/WTO. ARTICLE 82 A Parliamentary Cooperation Committee is hereby established. It shall be a forum for Members of the Georgian Parliament and the European Parliament to meet and exchange views. It shall meet at intervals which it shall itself determine. ARTICLE 83 1. The Parliamentary Cooperation Committee shall consist of members of the European Parliament, on the one hand, and of members of the Georgian Parliament, on the other. 2. The Parliamentary Cooperation Committee shall establish its rules of procedure. 3. The Parliamentary Cooperation Committee shall be presided in turn by the European Parliament and the Georgian Parliament respectively, in accordance with the provisions to be laid down in its rules of procedure. ARTICLE 84 The Parliamentary Cooperation Committee may request relevant information regarding the implementation of this Agreement from the Cooperation Council, which shall then supply the Committee with the requested information. The Parliamentary Cooperation Committee shall be informed of the recommendations of Cooperation Council. the The Parliamentary Cooperation Committee may make recommendations to the Cooperation Council. ARTICLE 85 Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights, including those concerning intellectual, industrial and commercial property. 39 2. Within the limits of their respective powers and competences, the Parties: - shall encourage the adoption of arbitration for the settlement of disputes arising out of commercial and cooperation transactions concluded by economic operators of the Community and those of Georgia; - agree that where a dispute is submitted to arbitration, each party to the dispute may, except where the rules of the arbitration centre chosen by the parties provide otherwise, choose its own arbitrator, irrespective of his nationality, and that the presiding third arbitrator or the sole arbitrator may be a citizen of a third State; - will recommend their economic operators to choose by mutual consent the law applicable to their contracts; - shall encourage recourse to the arbitration rules elaborated by the United Nations Commission on International Trade Law (Uncitral) and to arbitration by any centre of a State signatory to the Convention on Recognition and Enforcement of Foreign Arbitral Awards. done at New York on 10 June 1958. Nothing in the Agreement shall prevent a Party from taking any measures: ARTICLE 86 (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests; (b) which relate to the production of, or trade in arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes; (c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security; (d) which it considers necessary to respect its international obligations and commitments in the control of dual use industrial goods and technology. ARTICLE 87 1. In the fields covered by this Agreement and without prejudice to any special provisions contained therein: - - the arrangements applied by Georgia in respect of the Community shall not give rise to any discrimination between the Member States, their nationals or their companies or firms; the arrangements applied by the Community in respect of Georgia shall not give rise to any discrimination between Georgian nationals, or its companies or firms. 2. The provisions of paragraph 1 are without prejudice to the right of the Parties to apply the relevant provisions of their fiscal legislation to tax payers who are not in identical situations as regards their place of residence. n / 40 ? y ARTICLE 88 , 1. Each of the two Parties may refer to the Cooperation Council any dispute relating to the application or interpretation of this Agreement. 2. -The Cooperation Council may settle the dispute by means of a recommendation. 3. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either Party may notify the other of the appointment of a conciliator; the other Party must then appoint a second arbitrator within two months. For the application of this procedure, the Community and the Member States shall be deemed to be one Party to the dispute. The Cooperation Council shall appoint a third conciliator. The conciliators' recommendations shall be taken by majority vote. Such recommendations shall not be binding upon the Parties. 4. The Cooperation Council may establish rules of procedure for dispute settlement. ARTICLE 89 The Parties agree to consult promptly through appropriate channels at the request of either Party to discuss any matter concerning the interpretation or implementation of this Agreement and other relevant aspects of the relations between the Parties. The provisions of this Article shall in no way affect and are without prejudice to Articles 13, 88 and 94. ARTICLE 90 Treatment granted to Georgia thereunder shall in no case be more favourable than that granted by the Member States to each other. ARTICLE 91 For the purposes of this Agreement, the term "Parties" shall mean Georgia on the one part, and the Community, or the Member States, or the Community and the Member States, in accordance with their respective powers, on the other part. ARTICLE 92 Insofar as matters covered by this Agreement are covered by the Energy Charter Treaty and Protocols thereto, such Treaty and Protocols shall upon entry into force apply to such matters but only to the extent that such application is provided for therein. 41 •i ARTICLE 93 This Agreement is concluded for an initial period of ten years. The Agreement shall be automatically renewed year by year provided that neither Party gives the other Party written notice of denunciation of the Agreement six months before it expires. ARTICLE 94 1. The Parties shall take any general or specific measures required to fulfil their obligations under the Agreement. They shall see to it that the objectives set out in the Agreement are attained. 2. If either Party considers that the other Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Cooperation Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In the selection of these measures, priority must be given to those which least disturb the functioning of the Agreement. These measures shall be notified immediately to the Cooperation Council if the other Party so requests. ARTICLE 95 Annexes I, II, III, IV and V together with the Protocol shall form an integral part of this Agreement. ARTICLE 96 This Agreement shall not, until equivalent rights for individuals and economic operators have been achieved thereunder, affect rights assured to them through existing Agreements binding one or more Member States, on the one hand, and Georgia, on the other, except in areas falling within Community competence and without prejudice to the obligations of Member States resulting from this Agreement in areas falling within their competence. ARTICLE 97 This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of Georgia. ARTICLE 98 The Secretary-General of the Council of the European Union shall be the depository of this Agreement. 42 / ? / ARTICLE 99 The original of this Agreement of which the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Georgian languages are equally authentic, shall be deposited with the Secretary-General of the Council of the European Union. ARTICLE 100 This Agreement will be approved by the Parties in accordance with their own procedures. This Agreement shall enter into force on the first day of the second month following the date on which the Parties notify the Secretary-General of the Council of the European Union that the procedures referred to in the first paragraph have been completed. Upon its entry into force, and as far as relations between Georgia and the Community are concerned, this Agreement shall replace the Agreement between the European Economic Community, the European Atomic Energy Community and the Union of Soviet Socialist Republics on trade and economic and commercial cooperation signed in Brussels on 18 December 1989. ARTICLE 101 In the event that, pending the completion of the procedures necessary for the entry into force of this Agreement, the provisions of certain parts of this Agreement are put into effect by means of an Interim Agreement between the Community and Georgia, the Contracting Parties agree that, in such circumstances, the term "date of entry into force of the Agreement" shall mean the date of entry into force of the Interim Agreement. 43 /V LIST OF DOCUMENTS ATTACHED Annex I Indicative list of advantages granted by Georgia to the Independent States in accordance with Article 8(3). Annex D Intellectual, industrial and commercial property conventions referred to in Article 42. Annex IH Financial services definitions, referred to in Article 25. Annex IV Community reservations in accordance with Article 22 (2) Annex V Reservations of Georgia in accordance with Article 22 (4). Protocol on mutual assistance between administrative authorities in customs matters. 44 =- 7j 7'7 Indicative list of advantages granted by Georgia to the Independent States in accordance with Article 8 (3) ANNEX I 1. All Independent States: No import duties are implemented. No VAT on excise duties are applied to imports 2. All Independent States: Special system of non-commercial operations, including payments resulting from these operations. 45 C ••- -Y INTELLECTUAL, INDUSTRIAL AND COMMERCIAL PROPERTY CONVENTIONS REFERRED TO IN ARTICLE 42 ANNEX II 1. Paragraph 2 of Article 42 concerns the following multilateral conventions: - International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome, 1961); - Protocol relating to the Madrid Agreement concerning the International Registration of Marks (Madrid, 1989); - Nice Agreement concerning the International Classification of Goods and Services for the purposes of the Registration of Marks (Geneva 1977 and amended in 1979), - Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the purposes of Patent Procedures (1977, modified in 1980); - International Convention for the Protection of New Varieties of Plants (UPOV) (Geneva Act, 1991). 2. The Cooperation Council may recommend that paragraph 2 of Article 42 shall apply to other multilateral conventions. If problems in the area of intellectual, industrial and commercial property affecting trading conditions were to occur, urgent consultations will be undertaken, at the request of either party, with a view, to reaching mutually satisfactory solutions. 3. The Parties confirm the importance they attach to the obligations arising from the following multilateral conventions: - Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971); - Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967 and amended in 1979); - Madrid Agreement concerning the International Registration of Marks (Stockholm Act, 1967 and amended in 1979); - Patent Cooperation Treaty (Washington, 1970, amended in 1979 and modified in 1984). 4. From the entry into force of this Agreement, Georgia shall grant to Community companies and nationals, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by it to any third country under bilateral agreements. 5. The provisions of paragraph 4 shall not apply to advantages granted by Georgia to any third country on an effective reciprocal basis and to advantages granted by Georgia to another country of the former USSR. 46 i CONCERNING ARTICLE 25 FINANCIAL SERVICES: DEFINITIONS ANNEX m A financial service is any service of a financial nature offered by a financial service provider of a Party. Financial services include the following activities: A. B. All insurance and insurance-related services; 1. life non-life Direct insurance (including co-insurance), (i) (ii) Reinsurance and retrocession. Insurance intermediation, such as brokerage and agency. Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services. Banking and other financial services (excluding insurance). 1. 2. Acceptance of deposits and other repayable funds from the public. Lending of all types, including, inter-alia, consumer credit, mortgage credit, factoring and financing of commercial transaction. Financial leasing. All payment and money transmission services, including credit charge and debit cards, travellers cheques and bankers drafts. Guarantees and commitments. Trading for own account or for the account of customers, whether on an exchange, in an over the counter market or otherwise, the following: (a) (b) (c) (d) money market instruments (cheques, bills, certificates of deposits, etc. ) foreign exchange derivative products including, but not limited to, futures and options exchange rates and interest rate instruments, including products such as swaps, forward rate agreements, etc. transferable securities (e) (f) other negotiable instruments and financial assets, including bullion. Participation in issues of all kinds of securities, including under-writing and placement as agent (whether publicly or privately) and provision of services related to such issues. Money brokering. Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial depository and trust services. Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments. Advisory intermediation and other auxiliary financial services on all the activities listed in points 1 to 10 above, including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy. 2. 3. 4. 3. 4. 5. 6. 7. 8. 9. 10. 11. 47 12. Provision and transfer of financial information, and financial data processing and related software by providers of other financial services. The following activities are excluded from the definition of financial services: (a) (b) (c) Activities carried out by central banks or by any other public institution in pursuit of monetary and exchange rate policies. Activities conducted by central banks, government agencies or departments, or public institutions, for the account or with the guarantee of the government, except when those activities may be carried out by financial service providers in competition with such public entities. Activities forming part of a statutory system of social security or public retirement plans, except when those activities may be carried out by financial service providers in competition with public entities or private institutions. 48 ;7r~A 7/ COMMUNITY RESERVATIONS IN ACCORDANCE WITH ARTICLE 22 (2) ANNEX IV Mining In some Member States, a concession may be required for mining and mineral rights for non-EC controlled companies. Fishing Access to and use of the biological resources and fishing grounds situated in the maritime waters coming under the sovereignty or within the jurisdicrion of Member States of the Community is restricted to fishing vessels flying the flag of a Community Member State and registered in Community territory unless otherwise provided for. Real estate purchase In some Member States, the purchase of real estate by non-EC companies is subject ot restrictions. Audiovisual services including radio National treatment concerning production and distribution, including broadcasting and other forms of transmission to the public, may be reserved to audiovisual works meeting certain origin criteria. Telecommunications services including mobile and satellite services Reserved services In some Member States market access concerning complementary services and infrastructure is restricted. Professional services Services reserved to natural persons nationals of Mepiber States. Under certain conditions those persons may create companies. Agriculture In some Member States national treatment is not applicable to non-EC controlled companies which wish to undertake an agricultural enterprise. The acquisition of vineyards by non-EC controlled companies is subject to notification, or, as necessary, authorization. News agency services In some Member States limitations of foreign participation in publishing companies and broadcasting companies. 49 / 7" ANNEX V GEORGIAN RESERVATIONS IN ACCORDANCE WITH ARTICLE 22 (4) 1. Current Georgian investment legislation requires investments by foreign companies and investments by Georgian companies in which the state does not hold a controlling interest1 to be licensed by the competent Georgian authorities. The conditions for the issue of such licenses shall not result in discrimination between private Georgian and foreign companies, as set out in Georgian law. Such licensing may not be used in order to nullify the benefits accorded to Community companies pursuant to Article 22 (4) of this Agreement, nor to circumvent any other provisions of this Agreement. In particular it may not be used to impede the establishment of Community Companies in any area of economic activity, except as provided for below. No license may be revoked without due justification and any such revocation may be subject to appeal and, if necessary, dispute settlement. At the latest by 31 December 1998, Georgia shall bring its legislation on licensing into conformity with standard international practice and in particular with Community legislation. The EU shall provide technical assistance in this area. During this transitional period, Georgia shall not take any measures or actions which render the conditions for establishment and operations of Community companies more restrictive than the situation on the day preceding the date of initialling of this Agreement. 2. Foreign investment is prohibited in the following areas: defence and security of Georgia; preparation and sale of narcotics and psychotropic substances; cultivation and sale of plants containing narcotic or poisonous substances. A foreign company requires special permission from the competent authorities in Georgia if it wishes to carry out activities within 20 km. of Georgia's borders or in other zones designated as vital to national security or for the protection of Georgia's environment. 4. In the following areas of economic activity, Georgian legislation requires the State to hold at least 51 % of the shares of enterprises with foreign participation. This percentage may be reduced if the Parliament of Georgia so determines: 1 as defined in the Joint Declaration to this Agreement concerning the notion of "control" 50 Operation of gas and oil pipelines , communication and power transmission lines, thermal lines of national importance and the buildings and other facilities essential for their operation, Operation of motor highways and railways, airports and maritime ports of national importance in Georgia, Issue of securities, bank notes, coins and stamps; Treatment of patients suffering from highly dangerous infectious diseases, including contagious skin and venereal diseases and mental disorders; Veterinary treatment of animals suffering from dangerous diseases; Production of raw spirit. 5. 6. Whereas Georgian legislation does not discriminate between foreign investors and Georgian non-state enterprises regarding the long-term leasing of land, it does not currently allow them to purchase land or natural resources. Foreign companies willing to prospect for or to exploit mineral deposits, as to extract and exploit natural resources in Georgia or on Georgia's continental shelf, require a concession from the Government of Georgia. The application of the reservations in this annex can in no case result in treatment less favourable than that accorded to companies of any third country. Any relaxation of these restrictions will be extended to Community companies on the basis of national treatment or most- favoured-nation treatment, whichever is the better. The future development of investment legislation in Georgia will take place in conformity with the provisions and the spirit of this Agreement including in particular its General Principles, the conditions affecting the establishment and operation of companies, and the provisions regarding legislative cooperation (Titles I, IV and V) as well as the Exchange of Letters between the Community and Georgia in Relation to the Establishment of Companies. 57 1 DRAFT PROTOCOL ON MUTUAL ASSISTANCE BETWEEN ADMINISTRATIVE AUTHORITIES IN CUSTOMS MATTERS 52 ARTICLE 1 Definitions For the purposes of this Protocol : a) b) c) ''customs legislation" shall mean any legal or regulatory provisions applicable in the territory of the Contracting Parties governing the import, export, transit of goods and their placing under any customs procedure, including measures of prohibition, restriction and control; "applicant authority", shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which makes a request for assistance in customs matters; "requested authority", shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which receives a request for assistance in customs matters; d) "personal data", shall mean all information relating to an identified or identifiable individual. ARTICLE 2 Scope The Contracting Parties shall assist each other, in the areas within their jurisdiction, in the manner and under the conditions laid down in this Protocol, in preventing, detecting and investigating operations in breach of customs legislation. Assistance in customs matters, as provided for in this Protocol, shall apply to any administrative authority of the Contracting Parties which is competent for the application of this Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover information obtained under powers exercised at the request of the judicial authorities, unless those authorities so agree. ARTICLE 3 Assistance on request 1. At the request of the applicant authority, the requested authority shall furnish it with all relevant information which may enable it to ensure that customs legislation is correctly applied, including information regarding operations noted or planned which are or could be in breach of such legislation. 2. At the request of the applicant authority, the requested authority shall inform it whether goods exported from the territory of one of the Contracting Parties have been properly imported into the territory of the other Party, specifying, where appropriate, the customs procedure applied to the goods. 5r 53 •^7'i- At the request of the applicant authority, the requested authority shall, within the framework of its laws, take the necessary steps to ensure that a special watch is kept on : (a) (b) natural or legal persons of whom there are reasonable grounds for believing that they are breaching or have breached customs legislation: places where goods are stored in a way that gives grounds for suspecting that they are intended to supply operations in breach of customs legislation; (c) movements of goods notified as possibly giving rise to breaches of customs legislation; (d) means of transport for which there are reasonable grounds for believing that they have been, are or might be used in operations in breach of customs legislation. ARTICLE 4 Spontaneous assistance The Contracting Parties shall provide each other, in accordance with their laws, rules and other legal instruments, with assistance without prior request if they consider that to be necessary for the correct application of customs legislation, particularly when they obtain information pertaining to : - operations which are or appear to be in breach of such legislation and which may be of interest to another Contracting Party, - new means or methods employed in carrying out such operations, - goods known to be subject to breaches of customs legislation. - natural or legal persons of whom there are reasonable grounds for believing that they are or have been in breach of customs legislation - means of transport for which there are reasonable grounds for believing that they have been, are or might be used in operations in breach of customs legislation ARTICLE 5 Delivery/Notification At the request of the applicant authority, the requested authority shall, in accordance with its legislation, take all necessary measures in order : - to deliver all documents, - to notify all decisions, falling within the scope of this Protocol to an addressee, residing or established in its territory. In such cases, Article 6(3) shall apply as far as the request itself is concerned. ARTICLE 6 Form and substance of requests for assistance Requests pursuant to this Protocol shall be made in writing. They shall be accompanied by the documents necessary to enable compliance with the request. When required because of the urgency of the situation, oral requests may be accepted, but must be confirmed in writing immediately. / 54 " ' 2. Requests pursuant to paragraph 1 shall include the following information : (a) (b) (c) (d) (e) the applicant authority making the request, the measure requested; the object of and the reason for the request; the laws, rules and other legal elements involved; indications as exact and comprehensive as possible on the natural or legal persons who are the target of the investigations; (f) a summary of the relevant facts and of the enquiries already carried out, except in cases provided for in Article 5. 3. Requests shall be submitted in an official language of the requested authority or in a language acceptable to that authority. 4. If a request does not meet the formal requirements, its correction or completion may be requested, precautionary measures may, however, be ordered. ARTICLE 7 Execution of requests 1. In order to comply with a request for assistance, the requested authority shall proceed, within the limits of its competence and available resources, as though it were acting on its own account or at the request of other authorities of that same Contracting Party, by supplying information already possessed, by carrying out appropriate enquiries or by arranging for them to be carried out. This provision shall also apply to the administrative department to which the request has been addressed by the requested authority when the latter cannot act on its own. 2. Requests for assistance shall be executed in accordance with the laws, rules and other legal instruments of the requested Contracting Party. 3. Duly authorized officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, obtain from the offices of the requested authority or other authority for which the requested authority is responsible, information relating to operations which are or may be in breach of customs legislation which the applicant authority needs for the purposes of this Protocol. 4. Officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, be present at enquiries carried out in the latter's territory. ARTICLE 8 Form in which information is to be communicated 1. The requested authority shall communicate results of enquiries to the applicant authority in the form of documents, certified copies of documents, reports and the like. ; ^ 55 /•-?<• The documents provided for in paragraph 1 may be replaced by computerized information produced in any form for the same purpose. ARTICLE 9 Exceptions to the obligation to provide assistance 1. The Contracting Parties may refuse to give assistance as provided for in this Protocol, where to do would: (a) (b) (c) (d) be likely to prejudice the sovereignty of Georgia or that of a Member State of the European Union which has been asked for assistance under this Protocol, or be likely to prejudice public policy, security or other essential interests, in particular in the cases referred to under Article 10 (2); or involve currency or tax regulations other than customs legislation, or violate an industrial, commercial or professional secret. 2. Where the applicant authority requests assistance which it would itself be unable to provide if so asked, it shall draw attention to that fact in its request. It shall then be left to the requested authority to decide how to respond to such a request. 3. If assistance is refused, the decision and the reasons therefor must be notified to the applicant authority without delay. ARTICLE 10 Information exchange and confidentiality 1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a confidential or restricted nature, depending on the rules applicable in each of the Contracting Parties. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to like information under the relevant laws of the Contracting Party which received it and the corresponding provisions applying to the Community institutions. 2. Personal data may be exchanged only where the receiving Contracting Party undertakes to protect such data in at least an equivalent way to the one applicable to that particular case in the supplying Contracting Party. 3. Information obtained shall be used solely for the purposes of this Protocol. WTiere one of the Contracting Parties requests the use of such information for other purposes, it shall ask for the prior written consent of the authority which furnished the information. Moreover, it shall be subject to any restrictions laid down by that authority. 4. Paragraph 3 shall not impede the use of information in any judicial or administrative proceedings subsequently instituted for failure to comply with customs legislation. The competent authority which supplied that information shall be notified of such use. 5. The Contracting Parties may, in their records of evidence, reports and testimonies and in proceedings and charges brought before the courts, use as evidence information obtained and documents consulted in accordance with the provisions of this Protocol. 56 / ^ ARTICLE 11. Experts and witnesses 1. An official of a requested authority may be authorized to appear, within the limitations of the authorization granted, as an expert or witness in judicial or administrative proceedings regarding the matters covered by this Protocol in the jurisdiction of the other Contracting Party, and produce such objects, documents or authenticated copies thereof, as may be needed for the proceedings. The request for an appearance must indicate specifically on what matters and by virtue of what title or qualification the official will be questioned. 2. The authorized official shall enjoy the protection guaranteed by existing legislation to officials of the applicant authority on its territory. ARTICLE 12 Assistance expenses The Contracting Parties shall waive all claims on each other for the reimbursement of expenses incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to interpreters and translators who are not public service employees. ARTICLE 13 Application 1. The application of this Protocol shall be entrusted to the central customs authorities of Georgia on the one hand and the competent services of the European Commission and, where appropriate, the customs authorities of the Member States of the European Union on the other. They shall decide on all practical measures and arrangements necessary for its application, taking into consideration the rules in force in the field of data protection. They may recommend to the competent bodies amendments which they consider should be made to this Protocol. 2. The Contracting Parties shall consult each other and subsequently keep each other informed of the detailed rules of implementation which are adopted in accordance with the provisions of this Protocol. ARTICLE 14 Complementarity Without prejudice to Article 10, any agreements on mutual assistance which have been concluded between one or more Member States of the European Union and Georgia shall not prejudice Community provisions governing the communication between the competent services of the Commission and the customs authorities of the Member States of any information obtained in customs matters which could be of Community interest. 7 - ,< JOINT DECLARATION IN RELATION TO ARTICLE 5 Should the Parties agree that circumstances warrant meetings at the highest level, such meetings may be arranged on an ad hoc basis. 58 JOINT DECLARATION CONCERNING ARTICLE 14 Until Georgia accedes to the WTO, the Parties shall hold consultations in the Cooperation Committee on their import tariff policies, including changes in tariff protection. In particular, such consultations shall be offered prior to the increase of tariff protection. 59 JOENT DECLARATION CONCERNING THE NOTION OF "CONTROL" IN ARTICLE 24(b) AND ARTICLE 36 1. The Parties confirm their mutual understanding that the question of control shall depend on the factual circumstances of the particular case. 2. A company shall, for example, be considered as being "controlled" by another company, and thus a subsidiary of such other company if: - the other company holds directly or indirectly a majority of the voting rights, or - the other company has the right to appoint or dismiss a majority of the administrative organ, of the management organ or of the supervisory organ and is at the same time a shareholder or member of the subsidiary. 3. Both Parties consider the criteria in paragraph 2 to be non-exhaustive. 60 / • / JOINT DECLARATION CONCERNING ARTICLE 35 The sole fact of requiring a visa for natural persons of certain Parties and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment. 61 7^ / : JOINT DECLARATION CONCERNING ARTICLE 42 The Parties agree that for the purpose of the Agreement, intellectual, industrial and commercial property includes in particular copyright, including the copyright in computer programs, and neighbouring rights, the rights relating to patents, industrial designs, geographical indications, including appellations of origin, trademarks and service marks, topographies of integrated circuits as well as protection against unfair competition as referred to in Article 10 bis of the Paris Convention for the protection of Industrial Property and protection of undisclosed information on know-how. / 62 JOINT DECLARATION CONCERNING ARTICLE 94 1. The Parties agree, for the purpose of its correct interpretation and its practical application, that the term "cases of special urgency" included in Article 94 of the Agreement means cases of material breach of the Agreement by one of the Parties. A material breach of the Agreement consists in (a) repudiation of the Agreement not sanctioned by the general rules of international law or (b) violation of the essential elements of the Agreement set out in Article 2. - 2. The parties agree that the "appropriate measures" referred to in Article 94 are measures taken in accordance with international law. If a party takes a measure in a case of special urgency as provided for under Article 94, the other party may avail itself of the procedure relating to settlement of disputes. 63 DECLARATION BY THE FRENCH GOVERNMENT The French Republic notes that the Partnership and Cooperation Agreement with Georgia does not apply to the overseas countries and territories associated with the European Community pursuant to the Treaty establishing the European Community. A •75'"7 '/ • y/ 64 EXCHANGE OF LETTERS BETWEEN THE COMMUNITY AND GEORGIA IN RELATION TO THE ESTABLISHMENT OF COMPANIES A. Letter from the Government of Georgia Dear Sir, I refer to the Partnership and Cooperation Agreement initialled on As I underlined during the negotiations, Georgia grants to Community companies establishing and operating in Georgia in certain respects a privileged treatment. I explained that this reflects the Georgian policy to promote by all means the establishment of Community companies in Georgia. With this in mind, it is my understanding that during the period between the date of initialling of this Agreement and the entry into force of the relevant articles on establishment of companies, Georgia shall hot adopt measures or regulations which would introduce or worsen discrimination of Community companies vis-à-vis Georgian companies or companies from any third country as compared to the situation existing on the date of initialling of this agreement. I would be obliged if you could acknowledge receipt of this letter. Please accept, Sir, the assurance of my highest consideration. For the Government of Georgia •/ -y, -y^ 66 B. Letter from the European Community Dear Sir, Thank you for your letter of today's date, which reads as follows: "I refer to the Partnership and Cooperation Agreement initialled on. As I underlined during the negotiations, Georgia grants to Community companies establishing and operating in Georgia in certain respects à privileged treatment. I explained that this reflects the Georgian policy to promote by all means the establishment of Community companies in Georgia. With this in mind, it is my understanding that during the period between the date of initialling of this agreement and the entry into force of the relevant articles on establishment of companies, Georgia shall not adopt measures or regulations which would introduce or worsen discrimination of Community companies vis-à-vis Georgian companies or companies from any third country as compared to the situation existing on the date of initialling of this agreement. I would be obliged if you could acknowledge receipt of this letter. " I can acknowledge receipt of this letter. Please accept, Sir, the assurance of my highest consideration. On behalf of the European Community 67 Outside the Agreement: Declaration by the Community The Community undertakes to provide technical assistance in the form of seminars or other appropriate means in order to help Georgian authorities and economic operators to benefit in full from the advantages granted under the Community GSP as currently applied to Georgia. / ISSN 0254-1475 COM(96) 135 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-156-EN-C ISBN 92-78-02502-X Office for Official Publications of the European Communities L-2985 Luxembourg (A

PROPOSAL FOR A COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee

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COMMISSION OF THE EUROPEAN COMMUNITIES -à- it Brussels, 27 03 1996 COM(%) IV) final PROPOSAL FOR A COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee (presented by the Commission) EXPLANATORY MEMORANDUM Subject: Replacement of members and alternate members of the European Social Fund Committee for the period up to 22 October 1998 1. 2. 3. 4. 5. Article 17 of Council Regulation (EEC) No 2052/88 of 24 June 1988, as most recently amended by Council Regulation (EEC) No 3193/94 of 19 December 1994, on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments, states that the Commission shall be assisted in respect of Objectives 3 and 4 by a Committee pursuant to Article 124 of the Treaty. The provisions relating to the organisation and tasks of this Committee are laid down in the implementing regulations, principally in Article 28 of Council Regulation (EEC) No 4253/88, as amended by Council Regulation (EEC) No 3193/94 of 19 December 1994, concerning coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments. The said Article provides that the Committee shall be composed of two government representatives, two representatives of the workers' organisations and two representatives of the employers' organisations from each Member State. The members and alternates are appointed by the Council, acting on a proposal from the Commission, for a period of three years. The Council decided, on 23 October 1995, to appoint the members and alternate members of the European Social Fund Committee, on a proposal from the Commission, for the period from 23 October 1995 to 22 October 1998. Following the resignation of a member and an alternate member, the Commission is presenting to the Council this proposal for a Decision replacing those members for the period up to 22 October 1998. PROPOSAL FOR A COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee THE COUNCIL OF THE EUROPEAN UNION, Having regard to the proposal from the Commission, Whereas the Council, on 23 October 1995, acting on a proposal from the Commission, decided to appoint the members and alternate members of the European Social Fund Committee1 for the period up to 22 October 1998; Whereas two members' seats (government representatives) have become vacant following the resignations of Mrs Maria Teresa Bengala and Mr Raul Carlos (Portugal); Whereas one alternate member's seat (government representative) has become vacant following the resignation of Mr Mario Ferras de Oliveira (Portugal); Whereas, therefore, it is necessary to amend the said Decision, HAS DECIDED AS FOLLOWS: The Decision of 23 October 1995 is amended as follows: Article 1 1. - - 2. In Article 1, I a) the member representing the Portuguese government, Mrs Maria Teresa Bengala, is replaced by Mrs Maria Candida Soares; the member representing the Portuguese government, Mr Raul Carlos, is replaced by Mr Rafael Prata. In Article 1,1 b), the alternate member representing the Portuguese government, Mr Mario Ferras de Oliveira, is replaced by Mr Mario Caldeira Diaz. Article 2 The appointments referred to in Article 1 shall be published, for information, in the Official Journal of the European Communities. Done at Brussels For the Council The President 1 OJ No C 296, 10. 11. 1995. ISSN 0254-1475 COM(96) 139 final DOCUMENTS EN 01 Catalogue number : CB-CO-96-144-EN-C ISBN 92-78-01974-7 Office for Official Publications of the European Communities L-2985 Luxembourg H

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT the application of the Council Directive on the compilation of gross national product at market prices

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96)124 final REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT THE APPLICATION OF THE COUNCIL DIRECTIVE ON THE COMPILATION OF GROSS NATIONAL PRODUCT AT MARKET PRICES 1. Introduction The GNP Directive (Council Directive 89/130/EEC, Euratom of 13 February 1989) established the procedures to facilitate the verification, and where necessary the improvement, of the comparability, reliability and exhaustiveness of Member States' estimates of GNP. The adoption of the GNP Directive followed the creation of the fourth own resource of the European Communities (the GNP Resource). This report summarises the progress made by the Commission and the GNP Committee since the adoption of the GNP Directive. This document has been produced in response to the Council's Declaration made with respect to Article 8, paragraph 2 of the Council Decision on the system of own resources 94/728/EC, Euratom of 31 October 1994. The GNP Directive itself noted in Article 7 that special attention needed be paid to verifying and improving the exhaustiveness of the GNP estimates. That is to say, in particular, the coverage of the hidden economy. Exhaustiveness has thus been a top priority for the GNP Committee. The milestone in the work done so far was the publication of the Commission Decision on exhaustiveness (94/168/EC, Euratom of 22 February 1994). Reflecting this priority, this report has been organised as follows: Section 2 summarises the most important work done on exhaustiveness. Progress on the so-called transversal themes and on country-specific matters is described in section 3. Conclusions are drawn in section 4. This report focuses on the verification and improvement of the national accounts of the twelve Member States as of the end of 1994. The GNP estimates of the new Member States from 1 January 1995 (Austria, Finland and Sweden) will be assessed for the first lime during 1996, as will those of Norway and Iceland as signatories to the European Economic Area Treaty. The Commission has identified a number of points on which it has formally noted its reservations with the Member States. These reservations identify parts of the process of compilation of GNP where further efforts are needed to verify and if necessary improve the statistics. Foremost amongst the reservations is one concerning the exhaustiveness of each country' GNP estimates. In addition a range of transversal reservations exists (themes which need further verification or improvement in all Member States) and a variety of country-specific reservations. A 2. Exhaustiveness The Commission Decision on exhaustiveness of February 1994 was adopted after a great deal of effort to identify the best approaches to this very difficult matter. The Decision required Member States to submit reports on four aspects of exhaustiveness by the end of June 1994, and in some cases to carry-out substantial research in support of those reports. The four reports were as follows: A detailed description of all of the explicit and implicit adjustments already made by the Member State to produce exhaustive GNP estimates. A report describing the results of a specified piece of research into the use of employment data to validate the GNP estimates. A report detailing the coverage of income in kind and tips or gratuities in the accounts, with proposals for improvements where necessary. A report on the feasibility of using the fiscal authorities' audit information for improving the exhaustiveness of the national accounts. The main conclusions from these exercises were as follows: Concerning the existing calculations and adjustments made to ensure the exhaustiveness of each Member State's GNP estimates, it was clear that the need for and adequacy of any adjustments and calculations made for exhaustiveness could only be assessed in the light of the quality of the basic statistics and general methods used. The Member States' estimates are not all based on good quality data sources for all parts of the economy. For example, several Member States do not have good statistics for all services, and some do not have good quality business registers or do not maximise the use of the cross-checks inherent in the system of national accounts. Most of the Member States in this position already have concrete plans for improving the situation in the near future. Various Community initiatives support the Member States' efforts in respect of business registers and service statistics, in particular the Council Regulation on Business Registers (93/2186/EC, Euratom of 22 July 1993). Furthermore, not all Member States make explicit adjustments for evasion (that is purposeful mis- reporting to the authorities) outside the construction industry, and the methods that are used vary widely. Further work needs to be done by nearly all Member States. Concerning the use of employment data to validate GNP. the current situation on this work can only be fully assessed on a country by country basis. For some countries the exercise gave re-assurance to the existing GNP estimates. For others, the message was less clear. One general conclusion however was that the results from this exercise could and should be integrated in the GNP estimates as part oi each country's next general revision of their national accounts. The general revisions are linked to the introduction of the new edition of the ESA ("ESA-95", the ESA being the set of national accounting guidelines in use for all of this work), which will take place during the next few years in each country. The deadline for the integration of the results is October 1998. Concerning the coverage of incomes in kind and tips or gratuities, the main conclusion was that the extent to which adjustments are made differs substantially between Member States. These differences reflect differences in the tax rules and regulations, in the importance of such income in the Member States, and in the interpretation of the accounting guidelines (the ESA). However there are also some unwarranted differences between the Member States. Thus further work in some Member States will be necessary. Concerning the feasibility of using information from fiscal audits to improve the exhaustiveness of the GNP estimates, it was clear that the need to use such information depends on the availability of other possibilities to allow for evasion; and this differs for each Member State and for each industry. It was also clear that while some countries can and do use fiscal audit information, to varying extents, other countries are unable to do so, either for reasons of data confidentiality or because the non-random nature of the data makes its use in a statistical situation impossible. To complete the work on exhaustiveness the Commission is using two approaches. It is working bilaterally with the Member States on the issues specific to each of them in turn arising from the reports noted above. In 1996 missions to the Member States are planned in order to discuss detailed plans for the work still to be done to help to ensure that this work is completed. The Commission has also established four task forces in support of the GNP Committee targeted on those subjects for further investigation concerning all countries which have arisen from the reports in respect of the Decision. These task forces will advise the Commission, and hence in due course the GNP Committee, on the best methodologies to be used for construction, for distribution, on the use of households budget surveys and on estimating imports and exports under the Intrastat system. All four task forces will report by June 1996. All the work on exhaustiveness currently under way should be complete and all the Commission reservations on the Member States' GNP estimates lifted by October 1998. A more complete description of the work done following the Decision on exhaustiveness, and of the conclusions so far, is given in Annex A to this report. 3. The transversal and country-specific themes The Commission has also been putting much effort into the verification of the comparability, reliability and completeness of Member States' GNP estimates with respect to a series of transversal themes (issues which concern all of the countries) and a large number of country-specific issues. The transversal themes identified as being the most important for the Member States' GNP estimates are as follows: the definition of the economic territory the recording of taxes and subsidies the comparability and reliability of the estimates for dwelling services the comparability of estimates at the borderline between intermediate and final consumption. the completeness and recording of the activity of financial institutions the quality of the estimates for government and non-profit institutions the completeness of the estimates for agriculture the quality of the estimates for the transition from GDP to GNP the completeness of the estimates oi' VAT as a component of GNP Progress has been made on all of these transversal themes. For some, the basis for reliable and complete estimates is now in place and some corrections to GNP have already been made. For others, the Commission is currently at the stage of collecting the very detailed information required before the need for any corrective action can be fully specified. The current situation on each of the transversal themes, in outline, is noted below. More detailed information on each theme may be found in Annex A. The economic territories for which GNP is to be reported for the GNP Resource were delimited in a Commission Decision in 1991. The conceptual work needed to ensure the comparability of the Member States recording of taxes and subsidies was completed by the publication of three Commission Decisions in 1993. Work to ensure compliance in practice with the new provisions by some Member States is still necessary. To ensure the comparability and reliability of the estimates for dwelling services, «a Commission Decision was adopted in 1995. Member States arc to provide GNP estimates compiled using a common and objective methodology by October 1996. In practice some countries may need a derogation to allow them to complete the work by October 1997. The comparability and reliability of the estimates at the borderline between intermediate and final uses and for financial institutions have been pursued using extensive questionnaires seeking very detailed information. Reports setting-out any necessary improvements in the Member States will follow in 1996. Concerning both government and non-profit institutions and agriculture, documents identifying the most important issues were discussed by the GNP Committee in 1994. More recently other more important work, for example on exhaustiveness, has taken priority, but these subjects will be taken up again in 1996. The comparability and reliability of data for the transition from GDP to GNP has been discussed in a series of reports for the GNP Committee. Bilateral discussions have been held with each Member State and a list of points for improvement is being followcd-up. An important difficulty in the recording of the activities of mutual investment funds has been identified. A Commission proposal setting-out a recommended common treatment of these funds, based on the work of a special Task Force, will be presented to the GNP Committee in March 1996. The estimates of the VAT component of GNP , in particular with respect to the differences between the amounts of VAT collected by the fiscal authorities and the amounts theoretically payable according to the national accounts, has been discussed thoroughly by the GNP Committee. The potential impact on GNP of the different approaches being used by the countries to account for VAT within their national accounts will be assessed in bilateral discussions in 1996. The work on all of the transversal subjects is scheduled to be completed by October 1997, though for dwellings results are expected in September 1996. Derogations may be necessary for some countries to allow some of the work to be completed by October 1998. It should also be noted that the introduction of the new edition of ESA ("ESA-95") will change Member States' GNP estimates. Article 8. 3 of the draft Council Regulation on the ESA-95, recently approved by the Council and expected to be adopted shortly, requires the GNP Committee to establish by the end of 1996 methods for converting GNP estimates compiled according to ESA-95 into ones consistent with the current edition of the ESA, which will still be needed for own resource purposes. A first paper detailing how and where ESA-95 affects estimates of GNP was presented to the October 1995 meeting of the GNP Committee. Concerning the country-specific issues which are important for GNP, a great deal of progress may also be noted. The most important improvements made can be summarised as follows: Great efforts have been made to fundamentally redevelop the national accounts of those Member States which were seen as having the weaker based GNP estimates. These redevelopments have already seen large changes to the GNP estimates for Greece, Luxembourg and Portugal (changes of the order of +20%, +15% and +10%, respectively). Similarly important developments arc underway in Belgium and Ireland, though that is not to say that equally large changes to the GNP estimates ©f those two countries can be expected. All of the Member States have done important work in response to the Commission's country-specific reservations on aspects of their GNP compilation methods. In many cases this work has enabled the Commission to lift its reservations on them. In the other cases the work in hand is expected to enable the Commission to lift the reservations by the target date of October 1997 (though, again, in some individual cases a derogation to allow a deadline of October 1998 may be necessary). All of the Member States also have their own important national accounts development projects. These projects are not directly the consequence of work programmes emanating from the Commission and the GNP Committee but they are nevertheless very important and they complement them. More detailed information on the county-specific improvements already completed by Member States or currently being implemented by them is given at Annex A. The impact of all of the improvements made so far by the Member States' on their estimates of GNP where they are subject to reservation is given in a summary table at Annex B. Concerning the new Member States, and Iceland and Norway, the Commission carried out a first visit to each of these countries during the second half of 1994, and duly reported to the GNP Committee on the main sources and methods used to calculate GNP. 4. Conclusions From the above summary it can be seen that much progress has been made (for example in Greece, Luxembourg and Portugal) and that further important improvements are underway (for example in Belgium and Ireland). For most Member States, improvements have been made in many parts of the compilation process, although the net. effects on GNP estimates have sometimes been small because adjustments have cancelled out. As a consequence of the work carried-out the most important deficiencies in the Member States' GNP estimates have either already been addressed or will soon be subject to improvements. The Member States' GNP estimates are therefore substantially more exhaustive, reliable and comparable than they have ever been. However the work remaining on exhaustiveness, on some transversal themes and on some country- specific issues is considerable and important. A large part of that work is scheduled to be completed by October 1997, with all work including that on exhaustiveness due to be completed by October 1998. It is impossible, at this stage, to estimate the likely impact on the GNP estimates of the work which remains to be completed. During the next few years it will be necessary to ensure that the newest Member States (Austria, Finland and Sweden) and the European Economic Area countries (Norway and Iceland) also have reliable and exhaustive GNP estimates. Introduction ANNEX A This annex to the report explains in more detail the extent of the work already completed or currently in progress to assure the comparability, reliability and exhaustiveness of the Member States' GNP estimates. The work is by its nature highly technical. This annex describes only the main themes and achievements. A discussion of the more technical matters is considered to be outside its scope. Reflecting the importance of the work on exhaustiveness, this annex has been organised as follows: Section 1 of this report summarises very briefly the most important work done by the Commission with the assistance of the GNP Committee in the years leading up to the publication of the Commission Decision on exhaustiveness. The work done since the publication of the Decision, and the work that is planned up to 1997/1998, is described in more detail in section 2. - «. 1. Tasks undertaken between 1989 and 1993 1. 1 Preparatory work The GNP Committee met for the first time in June 1989. The most important first steps were some essential preparatory work: Member States had to submit inventories describing the data sources and compilation methods they use to. calculate GNP. These inventories had to be examined by Eurostat, with the assistance of the other Member States via the GNP Committee. Eurostat's reports on these inventories were discussed during 1992. These reports were also the basis the Commission's country-specific reservations on parts of the compilation process. A work programme had to be set up. A number of issues were selected for transversal investigation: taxes and subsidies, dwelling services, financial institutions, government and non-profit institutions, the distinction between intermediate and final uses, the transition from GDP to GNP and, of course, exhaustiveness. For all Member States a reservation was put on all of these aspects of their GNP estimates. In addition to the transversal reservation issues listed above, also several other issues were chosen for further transversal investigation by the GNP Committee, in particular: the definition of economic territories, agriculture, VAT, balancing procedures and the use of fiscal data. Progress could be made quickly on one of the transversal issues. A Commission Decision defining the economic territories of the Member States for GNP fourth resource purposes was adopted (91/450/EEC, Euratom of 26 July 1991), completing the work needed from the Committee on this subject. For example, it was agreed that the Canary Islands, Ceuta and Melilla are part of the Spanish economic territory, that Madeira and the Azores are part of the Portuguese economic territory and that the overseas départements not included in Annex IV to the EC Treaty are part of the economic territory of France. It should also be noted that the economic territory of Germany changed in 1990 to include the new Lander. 1. 2 Direction of GNP work At the meeting of the GNP Committee in October 1990, the Commission presented a paper on the future direction of GNP work. This paper proposed the dual approach consisting of a transversal approach for a number of selected issues accompanied by a country-specific approach to some other issues. The paper also contained an overview of general approaches to improving exhaustiveness, setting out a range of approaches that might be follow-up by the Commission and the GNP Committee. At the GNP Committee Meeting in October 1991, the Commission presented an overview of the explicit adjustments already made by Member States to give exhaustiveness, based on a first assessment of the inventories submitted by the Member States. The descriptions of the adjustments made by each Member State varied in detail; reflecting the heterogeneity of the inventories. The Member States expressed their opinions about the various statistical tools and data sources used to ensure exhaustiveness (e. g. business registers, commodity-flow methods, Labour Force Surveys) and about the possibilities for both transversal and country-specific approaches to this-work. 1. 3 First assessments of the Member States' estimates A major part of 1992 was devoted to the discussion of the Commission's reports on the compilation methods of each of the Member States. During the GNP Committee meetings of July and September 1992, reports on the general sources and methods used in all Member States with the exception of Luxembourg were discussed. These reports included some description and assessment of the exhaustiveness of the GNP figures for the individual Member States. 1. 4 Direction of the work on exhaustiveness Also at the GNP meeting of July 1992, the Commission presented a short document noting the following criteria for the assessment of exhaustiveness: the existence of a well-defined reference universe of production units; the ability to ascertain absence; the ability to correct for absence; the existence of general and systematic adjustments for evasion; the existence of general and systematic adjustments for hidden labour. At the GNP meeting of September 1992, the Commission presented a detailed proposal for a uniform work programme on exhaustiveness in the form of a draft Commission Decision. This proposal already distinguished the four main titles of the Commission Decision that would be published in February 1994. During most of the GNP Committee meetings from September 1992 to September 1993, this work programme on exhaustiveness was the subject of long, detailed and intensive discussions before the Commission Decision was duly published in February 1994. At the December 1993 meeting of the GNP Committee, the Commission presented a paper complementing Title IV of the Commission Decision. It described how the comparison of employment figures required by Title IV might influence the Member States' GNP estimates. It demonstrated that this influence is not mechanical, nor is it the same for all countries, but rather that the effect of the employment comparison on GNP estimates depends on national circumstances and the particular data sources and estimation methods used to compile GNP. 1. 5 Progress on the transversal themes The work programme on exhaustiveness took a major part of the time of the GNP Committee in 1993. Nevertheless, progress was also be made on many other issues. The conceptual work on the transversal issue taxes and subsidies was completed by the publication of three Commission Decisions concerning the guidance given in the ESA: one on production and imports subsidies (93/475/EEC, Euratom of 22 July 1993), another on taxes linked to production and imports (93/454/EEC, Euratom of 22 July 1993) and the third on the distinction between intermediate consumption and other taxes linked to production (93/570/EEC, Euratom of 4 October 1993). Work to ensure compliance with this guidance in practice was of course still necessary. The work on dwelling services was taken forward by discussion of a Eurostat paper containing the results of a special questionnaire to Member States. It was agreed that the so-called stratification method should be used to estimate imputed dwelling services (that is to impute for the production and consumption of services which is implicit in the owner-occupation of dwellings) and that this method had to be used progressively in all Member States. A task force consisting of both national accountants and housing statisticians was established to work out solutions to various conceptual and statistical difficulties (e. g. the treatment of garages and rent-free dwellings and the absence of rented dwellings that are comparable to some types of owner-occupied dwellings). The most important issues concerning the transition from GDP to GNP were identified in a document for the GNP Committee's meeting of October 1991. Consultants undertook bilateral visits to each of the Member States during 1993 (and in one case 1994) to study these problems. 1. 6 Progress on country-specific issues Reports of GNP control missions to five Member States were presented at the meeting of October 1993. Many other such reports have been presented since. Furthermore, a Eurostat report on the estimates for the French overseas provinces was also discussed. Individual Member States also made sizeable efforts to improve their GNP estimates during this period, in particular with respect to their exhaustiveness. For some Member States (Portugal, Greece and Luxembourg), special support programmes were set up by Eurostat in order to revise and upgrade their national accounts. Other Member States had already planned a revision of their national accounts (United Kingdom and the Netherlands). Ireland made substantial efforts to improve the reliability of its estimates from the income approach for both wages and the operating surplus. Germany was in a special situation, since from 1990 it had also to provide figures on the new Lander. Setting up a totally new statistical system for the new Lander required a massive extra effort from the Statistisches Bundesamt. For some other Member States, estimates had to be produced or included for specific areas, e. g. France had to include estimates for its overseas départements. Furthermore, many Member States have introduced other improvements which may have been less visible but which have nevertheless contributed substantially to the quality of their GNP estimates. 2. Tasks undertaken since the publication of the Commission Decision on exhaustiveness in February 1994 2. 1 The scope of the decision on exhaustiveness According to the Commission Decision of February 1994, Member States were to submit reports on four titles of the Decision by the end of June 1994. In practice several of the reports were submitted some months late, as some countries found it impossible to complete the large amount of work required while continuing to meet the other demands put on them. At the December 1994 meeting of the GNP Committee, Eurostat presented two overview papers on the reports submitted by the Member States. These overview papers covered the work done under Title IV, on the validation of employment underlying GNP, and Title VI on the feasibility of the use of fiscal audit information for improving exhaustiveness. At the April 1995 meeting of the GNP Committee, Eurostat presented a paper summarising for each Member State the work still to be done on Title IV, the validation of employment underlying GNP estimates. This paper was based on the results of special missions to most Member States judged to be necessary following the December 1994 meeting. At the June 1995 meeting of the GNP Committee, Eurostat presented overview papers on the two remaining titles of the Decision, that is on Title III, concerning the existing calculations and adjustments made to ensure exhaustiveness of the GNP estimates, and on Title V, income in kind and tips The former paper was backed by a whole set of detailed reports on each of the Member States. 2. 2 Title III: Descriptions of the existing calculations and adjustments made to ensure the exhaustiveness of Member States' GNP estimates The purpose of this part of the Decision was to gather additional information from the Member States to clarify where and how they make calculations or adjustments which either make explicit allowance for units registered with the public authorities but not covered in statistical surveys and units exempted from registration or otherwise not registered, or which otherwise mis-report or do not report part of their activities. or, make implicit allowance for such omissions Eurostat's summary of Member States' replies was presented to the June 1995 meeting of the GNP Committee. That document emphasises one very important point: the need for and adequacy of any adjustments and calculations made for exhaustiveness can only be assessed in the light of the quality of the basic statistics of that country. 10 The main conclusions of the document were as follows: The Member States' estimates are not all based on good quality data sources for all parts of the economy. For example, several Member States do not have good statistics for parts of market services. However most of the Member States in this position already have concrete plans for setting-up such statistics in the near future. Member States make many efforts to adjust for units not covered by the basic data sources. In order to make systematic adjustments for such units, a good business register with a wide coverage is indispensable. Such a business register is also crucial for the good linkage of various types of data sources. Such a business register is missing in several Member States, but most countries in that position already have concrete plans for setting-up such a business register in the near future or are working to improve or extend their existing business registers. Some Member States do not exploit all the possibilities that exist for cross-checking their data, by comparing it with alternative data sources and by reconciling it in a systematic framework such as a supply and use table. However several of the Member States which are most deficient in this respect are already working on improving the situation or have plans to do so. Only some Member States make explicit adjustments for evasion (that is purposeful mis-reporting to fiscal or other public authorities) in industries other than construction. Furthermore, for construction the methodologies, data sources and assumptions vary widely. Further work needs to be done by nearly all Member States. Two Task Forces, on construction and distribution, where evasion is most common in most Member States, would be set-up up to look into all aspects of the estimation methods used for v these industries, including evasion allowances. Part 3. 6 of this report explains the role of these Task Forces in more detail. These conclusions summarise in general terms the strengths and the limitations of the Member States' current estimates with respect to exhaustiveness. However in order to see the wider picture the following examples of explicit and implicit adjustments for exhaustiveness already made by the Member States should also be noted. The examples which follow are not a complete listing of all of the adjustments made during the processes oi' compilation, nor are the figures for each country comparable for the reasons noted above, but they do give a flavour of the efforts made. Belgium makes a large number of detailed implicit and explicit adjustments for exhaustiveness. However, despite these adjustments, the lack of good quality and up-to-date basic statistics for many parts of the Belgian economy means that the estimates of GNP even alter adjustment cannot yet be confirmed as necessarily exhaustive. Denmark makes a range of implicit adjustments (and some explicit adjustments) to its estimates from the production approach, for example by using functionally derived estimates for a large part of construction activity and expenditure estimates for some service activities. 11 France makes systematic adjustments to what is in general already high quality basic data to make allowances for the absence of units, fiscal fraud and evasion including VAT fraud and hidden labour. Altogether these adjustments result in an addition to GNP of some 12%. Germany estimates GDP from both the output and expenditure approaches, with various adjustments made during the compilation process adding some 6% to GNP, and then chooses the higher of the resulting output and expenditure estimates as the definitive figure. A further positive adjustment is then made to allow for any incompleteness which might remain. Together these two last procedures add over 0. 5% to GNP. Greece has undertaken a major development of its national accounts with the aim of making them more complete. The more reliable methods now used, and more complete coverage of economic activity, resulted in an increase of some 20% to the previous estimate of GNP for 1988, with similarly large increases for other years. Ireland uses data from the Census of Population to adjust and supplement other data received on numbers in employment and self-employment and hence the income of these groups. * A separate substantial adjustment to allow for the possible under-reporting of income by the self-employed is also made. Italy uses employment statistics to make systematic adjustments to its data from enterprises to allow for unreported and hidden employment and for the likely under-reporting of activity. Use is also made of indirect methods for ensuring exhaustivity such as functional estimation methods. The adjustments for irregular labour add some 8% to GDP, and those for under-reported income add around another 3%. Luxembourg completed a major revision of its national accounts in 1994, making them more reliable and complete in several respects and adding some 10% to GNP. Luxembourg makes allowances for activity not captured in its basic statistics. However, with the exception of domestic services, adjustments are not made for hidden labour or purposefully under-reported activity. The Netherlands has a strong set of basic statistics underlying its national accounts, notably incorporating data from the VAT system and its system of labour accounts to help to ensure the exhaustiveness of its estimates. In addition explicit adjustments are made for the under-reporting of activity in a range of branches. The explicit adjustments are based mainly on data from the fiscal authorities and add about 1% to GNP. Portugal completed a major revision of its national accounts system in 1993 with the aim of making them more complete and reliable. In the new system data on the demand for products is used to add some 5% to the basic data on production, and comparisons with the Labour Force Survey add about 2% more. The revision itself added some 15% to GDP. Spain makes valuable cross-checks between its data to ensure that they are as complete as possible, for example using employment data, and makes an explicit adjustment for unreported construction activity. \ '?. The United Kingdom has introduced a supply and use framework to improve the cross-checks between its data, and has undertaken a major redevelopment of its business register. Explicit adjustments are made for construction activity and a further general adjustment is made for exhaustiveness based on the historic under-estimation of the income approach when compared with the expenditure approach. 2. 3 Title IV: Validation of the estimates of employment underlying the present GNP estimates Title IV of the Decision required comparisons of the employment data according to demographic involved data sources with the employment estimates underlying the GNP estimates. This standardising the definition of employment for the comparison on that of the domestic occupied population. The demographic data sources to be used were the Labour Force Survey and the Population Census or its national equivalent if no Population Census existed. The Decision sought the comparison at a specified level of detail by branch (NACE-CLIO R44 for services and NACE- CLIO R25 for the other branches). The format for the tables to be provided was set out in an annex to the Decision. « This part of the Decision was inspired by the Italian approach to using employment as a key variable for ensuring the exhaustiveness of the national accounts. If the same statistical sources used to estimate production and/or value added for the national accounts can also be used to yield an estimate of employment, then that employment estimate can also be assessed for completeness against the estimates of employment available from demographic sources. If the comparison should show a deficiency in the employment estimates underlying the national accounts, then there may well be grounds for believing that production and value added are also understated in the national accounts. If the comparison shows no such deficiency then one likely conclusion is that the national accounts cover at least employment exhaustively. The first results of the exercise were set out in a Eurostat paper for the December 1994 meeting of the GNP Committee. This paper focused on: Clarifying the concept of employment underlying GNP. There had been some confusion in some Member States where various employment estimates were linked to the national accounts. Describing what had thus far been achieved by the Member States. Some had completed the work as required while others had not. Presenting the first results. It was clear from the paper that two steps were required immediately: Bilateral discussions were required with most Member States in the very short-term. These discussions were required to clear up any remaining difficulties concerning the identification of the work still required according to the Commission Decision and to agree how and when this work should be completed. i. i Task Forces should need to be set-up to look at all aspects of the quality of the different estimation methods for certain branches, for example construction and distribution, including the subject of employment comparisons for these industries. The further discussions with Member States on employment comparisons took place during the first quarter of 1995. In eight cases special missions to Member States were undertaken. At the meeting of the GNP Committee in April 1995 a second paper on this subject was presented, giving an overview of the work still to be done. The current situation on this work can only be fully summed-up on a country by country basis. One general conclusion however was that the Member States agreed that the results from this validation exercise could only be integrated in their GNP estimates as part of each country's next general revision of the national accounts. This was thought to be the only feasible option because: A revision is already necessary to introduce the new concepts and classifications from the new ESA, the NACE(') and the CPA("). • « A revision is already necessary for taking account of new data sources and compilation methods such as the new services statistics and improved business registers. Employment statistics can best be reconciled and integrated by using all the other information available, including the new data sources and classifications to be introduced as part of the next general revisions. One general revision instead of several successive ones limits the disruption to the national accounts. This is an advantage to both data compilers and most data users. 2. 4 Title V: Description of the regulations and statistical adjustments pertaining to income in kind and tips or gratuities Under Title V of the Decision Member States were asked to: draw-up a survey of the tax rules on a list oï incomes in kind and describe for each type of income in kind the procedures used to ensure that they are correctly recorded in the national accounts; describe the calculations made in respect of tips or gratuities. (*) NACE: Classification of activities (**) CPA: Classification of products by activity 14 The point of interest for Eurostat and the GNP Committee is to ensure that these types of income are not omitted from value added and hence from GNP, either by being omitted from the statistical data system altogether or by being recorded incorrectly as the intermediate consumption of enterprises. Some types of income in kind and tipping are thought to be important components of total incomes in some Member States Eurostat presented a report on the studies made by the Member States to the meeting of the GNP Committee held in June 1995. The main conclusions were as follows: Firstly, the reports themselves were rather heterogeneous in length, detail, clarity and completeness. Eurostat would hold bilateral discussions with each of the Member States to ensure that clarifications or additional information were provided as necessary. Secondly, the extent to which adjustments are made for income in kind and tips differs substantially between Member States. These differences reflect differences in the tax rules and regulations, differences in the importance of the various types of income in kind in the Member States and differences in the interpretation of the ESA. However they also seem to reflect differences between the Member States which are unwarranted. Thus further work in some Member States will be necessary. 2. 5 Title VI: Investigation into the feasibility of the use of information from fiscal audits for improving the exhaustiveness of the GNP estimates At Title VI of the Decision Member States were asked to report on the feasibility of using audit information from the fiscal authorities to improve the exhaustiveness of GNP estimates. Personal and corporate income tax and value added tax systems, together with the corresponding audit mechanisms, exist in all Member States. In some Member States, notably France, information from fiscal audits is already used to improve the exhaustiveness of GNP estimates. Eurostat presented a paper summarising the Member States' reports to the December 1994 meeting of the GNP Committee. The main conclusions from these reports were as follows: The need to use fiscal audit information depends on whether there are other possibilities to make adjustments for evasion; this differs for each Member State and each industry. Similarly the likely size of evasion will differ between Member States and between industries. The results of fiscal audits are taken into the national accounts in some countries by the use of statistics inclusive of the results of fraud control exercises. This is the case for example with the use of VAT statistics by Denmark, Germany and the United Kingdom. The results of fiscal audits are used by some other Member States to make separate adjustments for evasion. This is the case in France, where the adjustments made cover the whole economy, and in the Netherlands for certain service industries. In the near future the use of fiscal data inclusive of fiscal audit information will be extended in the Netherlands and Italy and, perhaps, Belgium. Several Member States intend to use fiscal audit results to make separate adjustments or to verify adjustments already made on the basis of other data sources. This is the case in the Netherlands, the United Kingdom and Portugal. The use of fiscal audit information to make separate adjustments does not seem feasible for various reasons in Belgium, Germany, Ireland, Italy, Luxembourg and Spain (and perhaps Greece, but the position in Greece needs to be clarified). Two main stumbling blocks were cited: data confidentiality and the difficulty of applying the results for the non-random selection of enterprises subject to audit to the universe of all enterprises. It is usually the case that fiscal audits are targeted on enterprises thought. most likely to fraud. Thus it cannot simply be assumed that enterprises which are not audited have the same characteristics as those that are. 2. 6 The follow-up to the Commission Decision on exhaustiveness In order to take forward the work on exhaustiveness the Commission established task forces in support of the GNP Committee targeted on some specific topics. These task forces will advise the Commission, and hence in due course the GNP Committee, on the best methodologies to be used for construction, distribution, on the use of households budget surveys and on estimating imports and exports under the Intrastat system. The Task Force on Construction will give an overview of the most important data and estimation problems for that industry (e. g. the problems of subcontracting, seasonal work, evasion of output and income) and suggest ways in which they can be best overcome (which types of data are most useful, how to combine the figures from various data sources, etc. ). The Task Force on Distribution will do the same for the wholesale and retail industries (e. g. the determination of trade margins, the separation of sales into those to final users and those to business) and for cafes, hotels and restaurants. The Task Force on The Use of Household Budget Surveys will investigate how the figures from the household budget surveys can be used when compiling GDP estimates in general and to what extent they can be a tool for capturing under-reported sales (e. g. in retail establishments, hotels, cafes and restaurants). The Task Force on the Use of Intrastat data will investigate how the GDP estimates can be safeguarded and improved using this data. Since the abolishment of the intra-EU customs formalities and the introduction oï Intrastat for recording intra-HU trade in merchandise, the accuracy of the statistical information on this type of trade seems to have declined substantially, in particular at the product-group level. Such a decline of the quality oi'information on foreign trade reduces the reliability of the expenditure and commodity How methods for estimating GDP. It is also likely to reduce the quality of the balancing process. ImprovcmcMt of the statistical information lb on intra-EU trade in merchandise is therefore very important for maintaining and improving the quality of the Member States' GDP estimates. The first meetings of each of these Task Forces took place between September and November 1995 and more meetings are planned for the end of 1995 and the beginning of 1996. All of the Task Forces will report back to the GNP Committee by the end of June 1996. The work on exhaustiveness should be complete and the Commission reservations lifted by October 1998. It should be noted however that some difficulties in achieving this date in some Member States are likely. The precise scope of the work required from each Member State will vary, and it is not yet fully specified. For example, the recommendations of the four GNP Committee Task Forces will not be known until June 1996. Those recommendations will need to be considered by the Commission and then discussed and agreed by the GNP Committee, before being implemented by October 1998. In 1996 missions to the Member States are planned in order to discuss detailed plans for the work still to be done to ensure exhaustiveness before October 1998, e. g. on employment comparisons, which should be incorporated as part of the forthcoming revisions of national accounts, or on estimating income in kind, in particular on the treatment of the private use of business cars. 2. 7 Progress on the transversal issues since 1994 Alongside the major efforts made on exhaustivity, much progress was made on the other transversal subjects of reservation and investigation facing the Commission and the GNP Committee. The following points of progress are notable: The Task Force on dwelling services, which began its work in mid 1993, completed its work by mid 1994 by specifying the manner of application of the stratification method. Based on its work, Eurostat presented a draft Commission Decision specifying the methodology to be used in all Member states to the meeting of the GNP Committee in December 1994. After some modifications on points of detail, the proposal gained the unanimous support of the GNP Committee, and the Commission Decision was duly adopted (95/309/EC, Euratom of 18 July 1995). Member States are required to provide GNP estimates compiled using the new common methodology for dwelling services for the years 1988 onwards in the data transmission for GNP own resource purposes due in September 1996. In practice some countries may need a derogation to allow the work to be completed by the end of September 1997. The comparability of estimates at the borderline between intermediate and final uses was discussed in a document for the GNP Committee in July 1994. Issues of particular concern include, for example, the recording of expenditures on infrastructure repairs, improvements and renewals, on small value capital goods and on software. Detailed information on the practical steps Member States take to conform with the ESA regarding such expenditures will be required before comparability can be verified and where necessary improved. An extensive questionnaire seeking this information was sent to Member Slates in October 1994 for answer by the end of 1995. Eurostat presented a first document on financial institutions to the GNP Committee in January 1994. The document identified a number of technical questions concerning the measurement of the output o!" some types of financial services (such as insurance and foreign exchange dealing) and some other questions concerning the coverage of certain types of financial institutions (such as those institutions which are not supervised by the government or central bank) in the statistical reporting framework. It was followed by a questionnaire to each Member State seeking detailed explanations of these points and posing some further questions for each country following a detailed institutions. Most of the replies to the study of their inventories as they concern financial questionnaire have now been received and a follow-up report will be prepared for the GNP Committee during the next few months. Concerning government and non-profit institutions, a first document the most important issues was presented to the GNP Committee in December 1994. The Committee's view was that while at least some of the issues are undoubtedly of some importance for GNP, particularly the subject of the imputation of the consumption of fixed capital for government capital assets, they are of lesser priority than many of the other subjects also being studied at the same time by the Committee (e. g. exhaustiveness). It was agreed therefore that further work on government and non profit institutions should be deferred for a year or so, in order that more important work could be progressed. This subject is therefore due to be taken up again shortly with the GNP Committee. identifying The earlier work on the transition from GDP to GNP noted in section 2 of this document was followed-up by a report to the GNP Committee meeting of December 1994. This report followed the bilateral discussions on the subject held with each Member State and identified a list of points needing improvement in some Member States and an important difficulty in the recording of the activity of mutual investment funds common to all Member States which was in need of further investigation. The Committee decided to set-up a Task Force to propose what should be done on mutual investment funds. The Task Force met three times in the first half of 1995. A document setting-out a recommended treatment of these funds based on the work of the Task Force was presented to the GNP Committee at its meeting in October 1995. Discussions were continued at the December 1995 meeting of the Committee and are expected to be concluded in March 1996. The other points of weakness concerning the transition from GDP to GNP which need improvement in some Member States are being pursued on a bilateral basis. The subject of agriculture was discussed in a document for the GNP Committee in July 1994. A large number of detailed and technical difficulties in measuring the agricultural contribution to GNP were identified. Weaknesses, usually of minor consequence, were found in the estimates for many Member States, but a reservation was thought necessary and so introduced on the Portuguese estimates for agriculture. Often the general points of weakness found were connected to the use of the concept of the "national farm" for agricultural economic accounts, and incomplete compatibility with the concepts needed for national accounts. The Committee decided to consult the specialists in agricultural economic accounts ol' a working party attached to the Committee on Agricultural Statistics on the technical and detailed points raised in the document. The GNP Committee will return to the subject during 1996, once this advice has been received. its The subject of the use of VAT data for estimating GNP has long been a subject of interest for the GNP Committee. Two aspects of this subject have been of particular interest, both hinging on the calculation and interpretation of the theoretical amount of VAT: that is the amount of VAT that can be expected if the VAT rules and regulations are applied to the estimates of economic activity contained in the national accounts. The first aspect of interest concerns the interpretation of the difference between this theoretical amount of VAT and the amount of VAT actually received by the state. The second aspect of interest concerns which VAT concept is actually used as the VAT element which is a component of GNP. At the January 1994 meeting of the Committee Eurostat presented a paper identifying differences between the concepts used for the estimate of VAT as a component of GNP in some of the Member States and setting out the main themes for further investigation. This was followed by a short questionnaire to collect the additional information needed to take this work forward, and then by a second document for the GNP Committee's meeting in June 1995. Discussion to agree a feasible common method for estimating VAT as a component of GNP for all Member States were taken up again at the December 1995 meeting of the Committee and will be further pursued bilateraly. The work on all of the transversal subjects is scheduled to be complete and the Commission reservations lifted by October 1997 (for dwellings results are due in September 1996). Derogations may be necessary for some countries to allow some of the work to be completed by October 1998. 19 2. 8 Progress on the country specific issues since 1994 Much progress has also been made in individual Member States to improve the comparability and reliability of their GNP estimates in country-specific ways. The improvements made can be summarised as follows: Great efforts have been made to fundamentally redevelop the national accounts of those Member States which were seen as having the weaker based GNP estimates. These redevelopments have already seen large changes to the GNP estimates for Greece, Luxembourg and Portugal. Similarly, important developments are underway in Belgium and Ireland, though that is not to say that equally large changes to the GNP estimates of those two countries can be expected. All of the Member States have done important work in response to the Commission's country-specific reservations on aspects of their GNP compilation methods. In many cases this work has enabled the Commission to lift the reservations concerned. In the other cases the work in hand is expected to enable the Commission to lift the reservations between the time of writing and the target deadline of October 1997 (though again in some cases a derogation to allow a deadline of October 1998 may be necessary). All of the Member States also have their own important national accounts development projects. These projects are not directly the consequence of work programmes emanating from the Commission and the GNP Committee but they are nevertheless very important and they complement them. A complete list of the individual improvements made by each Member State would be very long indeed. Major improvements made already by Member States or currently being implemented by them include the following: In Belgium, a series of institutional changes have been made with the intention of giving a new impetus to the development of the national accounts. The existing system, noted as having considerable shortcomings by Eurostat in a detailed report of 1992, will be subject to a major overhaul. Important new features of the national accounts system will include a new range of basic statistics from enterprises and the replacement of the 1958 OECD framework of national accounts with that of the ESA. In Denmark, work already completed has enabled the Commission to lift one reservation specific to Denmark, and another is expected to be lifted shortly. The Commission has also been able to lift its reservation on taxes and subsidies, after some changes were made by Statistics Denmark. Work on a wide-ranging revision of the national accounts, involving the incorporation of several important new data sources, is due to be completed in mid-1997. The revision includes a number of projects which address themselves at the Commission's remaining points of reservation specific to Denmark and others which take forward the work done so far on exhaustiveness. In France, improvements made to some of the component national accounts estimates have allowed the Commission to lift one of its reservations specific to France and the reservation on the 2 0 transversal reservation on taxes and subsidies. Work is also in progress on the longer-term developments needed to lift the remaining reservation specific to France. In Germany, estimates GNP inclusive o( the new Lander of Germany were presented to the GNP Committee. A Commission report to the GNP Committee in July 1994 gave a critical appraisal of them, noting the great efforts that had been made and some areas where they can be improved in the future. The Commission reservations specific to Germany (both the old and new Lander) are being addressed, with the different pieces of work required due to be completed at various dates between now and October 1997. The transversal reservation on taxes and subsidies has been lifted for Germany. In Greece, the national statistical office has, with assistance from some technical experts funded by the Commission, made great improvements to its national accounts. The major revision, largely completed in 1994, featured improved methods for, for example, construction, distribution and business and personal services, and led to the previous GNP estimates increasing by over 20%. Although some further improvements are still necessary, it is clear that a very substantial increase in the comparability and reliability of the Greek national accounts has already been-achieved. The information still needed by the Commission before the specific reservations for Greece can be assessed and then in due course lifted is expected to be provided by February 1996. In Ireland, a number of projects to give important improvements to the reliability of the estimates of GDP from the income approach are continuing. In addition the development of the expenditure approach and of a supply and use framework will lead to more dependable national accounts. These developments are due to be completed in 1997, when, if the work is successful, it should be possible to lift all of the Commission's reservations specific to Ireland. In Italy, the existing use of employment data to give exhaustive national accounts is recognised to be a good foundation for them. Work to make the maximum use possible of family budget surveys and to build a good quality business register is underway. Once these major tasks are completed it is expected that the Commission's reservations specific to Italy should be lifted. In Luxembourg, a major revision was completed during 1994, featuring improvements to many of the basic statistics particularly for services and some of the estimation methods used. The previous estimate of GNP was increased by some 10% as a result. Once full documentation is received on the revised system of national accounts, the Commission expect to be able to lift most or all of the reservations specific to Luxembourg For The Netherlands, an important revision of the national accounts, eliminating some of the relative weaknesses, was completed in 1992. A further revision, incorporating notably further improvements to exhaustiveness is underway and is due to be completed in 1999. A study has been completed in response to the only Commission reservation specific to the Netherlands and a small revision to GNP will allow the reservation to be lifted. In Portugal, the main weaknesses of the national accounts system were addressed in a major revision completed in 1994. The revision saw much improved estimates of the contribution of. for example, large parts of the services industries, and led to the previous estimates of GNP being increased by some 15%). Although some further improvements to the Portuguese national accounts will still be necessary, the important work completed already should shortly allow many of the Commission reservations specific to Portugal to be lifted. 1 he remaining reservations specific to :>. i Portugal are expected to lead to further improvements to GNP in 1996, and it is hoped that those reservations can also be lifted then. In Spain, improvements have been made to the treatment of the national lottery and of taxes and subsidies. The Commission's reservation on the Spanish national lottery estimates is being lifted. Work is underway to enable the remaining specific reservations for Spain, and the transversal reservation on taxes and subsidies, to be lifted by 1997. In The United Kingdom, work already completed has enabled the Commission to lift all four of its reservations specific to the United Kingdom estimates of GNP. Concerning the new Member States, Iceland and Norway, Eurostat carried out a first visit to each of the countries during the second half of 1994. Those visits were used to collect some basic information on the sources and methods used in each country, and to guide them in their provision of more detailed information to the Commission. A report on each visit was discussed by the GNP Committee at its meetings in December 1994 or March 1995. 2 2 Annex B to the report to Council and Parliament on GNP Directive Summary of the improvements made to GNP estimates for the years under reservation Year 1988 1989 1990 1991 1988- 1988R95 total reservation 1989-1 1989R95 total reservation 1990- 1990R95 total reservation 1991-1 1991-IV total reservation change improvements change improvements change improvements change improvements Country Unit Belgium Md BFR 5445 5513 1. 25% 0,06% 5952 5991 0,66% N/A 6352 6345 - 0 , 1 1% N/A 6680 6699 0,28% Denmark Md DKR Germany Md DM G-eece Md DR 695 2122 7290 694 -0. 14% 0,11% 733 725 -1,09% 0,11% 111 753 -3,09% 0,11% 784 782 -0,26% 2108 -0. 66% N/A 2261 2249 -0,53% N/A 2410 2494 0,97% N/A 2826 2882 1,98% 8997 21. 75% 20,70% 8768 10691 21,93% 20,60% 10409 12867 23,61% 20,90% 12813 15726 22,73% MdPTA 39190 40018 2. 1 1 : : 0,69% 44597 44945 0,78% 0,64% 49627 49971 0,69% 0,56% 54223 54736 0,95% Soam France Ireland Md FF Md IR£ itaiy (L'T) 1000 Md Ljxemoourg Md LFR Netherlands Md HFL Portugal Md ESC UK MdUK£ 5645 18. 8 1072 326 449 5880 463 5726 1. 43% 0,07% 6101 6154 0,87% 0,08% 6467 6479 0,19% 0,03% 6722 6735 0,19% 20 6. 38% 1084 1. 12% 360 10. 43% 454 1,11% 3,67% -0,04% 9,20% 1,56% 20. 9 1177 373 473 22,18 6,12% 1183 0 , 5 1% 404 485 8 , 3 1% 2,54% 3,30% N/A 8,85% 1,69% 22,9 1291 397 509 24,06 5,07% 3,93% 24,25 25,4 4,74% 1296 0,39% N/A 1407 1409 0,14% 442 11,34% 516 1,38% 9,32% 1,37% 433 543 482 11,32% 542 -0,18% 6780 15. 31% 15,53% 6994 8004 14,44% 14,71% 8460 9490 12,17% 14,21% 10206 10915 6,95% 459 -0. 86% -0,10% 511 502 -1,76% -0,16% 548 540 -1,46% •0,24% 568 566 -0,35% ——————— N/A 0,11% 0,85% 20,70% 0,67% •0,06% 3,51% N/A 8,78% •0,18% 10,74% -0,25% 19XX-I = first estimate for 19XX N/A = not available 19XXR95 = revised estimate in 1995 for 19XX Foreword The above table shows the changes to the Member States' GNP estimates for the period 1988 to 1991. Some of these changes are the result of ongoing adjustments of GNP. This is not dealt with here. The purpose here is to highlight those changes which reflect improvements as a result of applying Commission decisions or after notification of reservations. The notes which follow clarify the particular type of improvement in each country. In order to measure the progress achieved by the Member States, Eurostat and the GNP Committee were also keen to assess improvements to the statistical methods and sources used after reservations had been notified, especially when changes in figures are not indicated in sufficient detail. The period from 1988 to 1991 was selected because it corresponds to the years for which the GNP estimates are supposed to be final and for which reservations have been expressed. Belgium For 1988 the overall extent of GNP adjustments directly relating to reservations (0. 06%) matches the average rate of correction for the three different ways of calculating GNP. Where output is concerned, these changes (0. 13% of total GNP) affect mainly compensation received from the rest of the world (0. 19%) and the value added of market services (-0. 08%). With regard to income, the improvements (0. 16%) concern mainly taxes paid to Belgian enterprises (-0,33%), company profits (0. 25%), compensation of employees (0. 13%) and dividends received by Belgian firms (0. 09%). On the expenditure side, the adjustments (-0. 12%) relate wholly to estimates of final consumption. The other changes for 1988 and those for the years 1989 to 1991 stem primarily from changes in the statistical bases and procedures used, as well as retropolation to these years of new and more detailed data obtained since 1994. Exhaustiveness has been enhanced. However, it is not possible at present to attribute these adjustments to any particular reservation. Denmark Denmark has changed ils GNP estimates from 11>XS to 1991 to take account of the reservations which were notified to the Danish authorities on the subject of water supplies and commercial activities. The impact of the changes for these four years is approximately 0. 02% of GNP in the case of water supplies and 0. 09% for commercial activities. It should also be pointed out that, in order to comply with the decision on taxes and subsidies, Denmark withdrew the adjustments for taxes and subsidies which it had introduced in 1991. Germany Since 1990 the GNP estimates in Germany have taken into account the country's unification on 3 October of that year. The figures for 1988 and 1989 thus apply to the old Federal Republic, while those for 1990 and 1991 include the new Lander. Germany has adjusted the 1991 estimate for the new Lander by some 0. 85 %, in response to the reservations which have been notified for these new Lander. Greece Greece has changed its GNP figures for 1988-1991 as part of the thorough overhaul of its national accounts, which is still ongoing. The impact of the changes over the period amounts to approximately 20. 7% of GNP. Spain Spain has made changes to its GNP estimates for 1988-1991 in response to the reservations which were notified. These adjustments concern the national lottery (0. 36% bf GNP), insurance services (- 0. 21%) and subsidies for educational activities (0. 48%). The estimates for the national lottery are final for the 1988-1991 period. The procedure for lifting the reservation concerning the national lottery is under way. On the other hand, the figures for insurance services and education subsidies are still provisional. France France has supplied GNP estimates for 1988-1991 which have been revised in the light of the reservations which were notified, with reference to the economic territory, leasing operations, insurance, depreciation of highways and networks, theft of stocks, treatment of inspection and supervision fees paid to the State and payments to the SNCF and the RATP in respect of the carte orange season ticket. The adjustments made for all these reservations for 1988-1991 are final and come to 0. 07%, 0. 08%, 0. 03% and -0. 06% of GNP respectively. Also, since 1992 France has been transmitting data incorporating the adjustments required for these items. The specific reservations have been lifted. Ireland Ireland has adjusted its GNP estimates for 1988-1991 in response to certain reservations which were notified. The adjustments amount to 3. 67%, 3. 30%, 3. 93% and 3. 51% of GNP for the four years in In the case of 1988, more than two-thirds of the changes concern the gross operating question. surplus. As for 1989-1991, it is not possible, on the basis of the data which have been supplied, to break down the changes in accordance with the various reservations which were notified. The new estimates are provisional. Italy The only change which Italy has made to its national accounts for 1988-1991, as a result of reservations which were notified, is an adjustment of -0. 04% of GNP for compensation to employees received from the rest of the world. This adjustment stems from the reservation on the transition from GDP to GNP which the GNP Committee has not yet considered. As the revision of Italy's national accounts is not yet complete, it is currently impossible to ascertain the adjustments to be made. Luxembourg As a result of the major revision of its national accounts which was completed in 1994, Luxembourg has adjusted its estimates for the national accounts for 1988 to 1991, with the aim of complying with the reservations which were notified. The adjustments for the period amount to approximately +9% of GNP. They relate mainly to better coverage of services and financial and insurance activities (about 90%) of the increase) and, to a lesser extent, to the reappraisal of the market and non-market services of general government. Netherlands The Netherlands has adjusted its GNP estimates for 1988-1990 as part of the major revision of the national accounts which was completed in 1992. The changes amount to approximately 1. 5% of GNP. The figures for 1991 were estimated using the new base and have not been greatly altered subsequently. Minor adjustments were made to the figures for 1988 to 1991 after the revision of fixed capital consumption which was made possible in 1995 thanks to the availability of new data on investment. This revision may be attributed to the reservation concerning general government and private non-profit institutions. Portugal As part of the major overhaul of its national accounts, Portugal has corrected its GNP estimates for 1988-1991. The changes amount to 15. 53%, 14. 71%, 14. 21% and 10. 74% of GNP respectively. The figures for 1991 required less adjustment, the reason being that, unlike the previous three years, the initial estimate for that year already included the Azores and Madeira, which together account for about 5% of GNP. Moreover, for the period 1988-1991, the ligures for the changes relating to reservation improvements are higher than those for the total change. This is due to the fact that other corrections have led to a decrease in the GNP estimates between 1993 (the year in which the reservation improvements were made) and 1995. It is not possible, with the data which arc currently available, to break down the effect of revision (excluding the Azores and Madeira), i. e. approximately 10%, in accordance with the various reservations which were notified. 'Ah United Kingdom In response to the reservations which were notified, the United Kingdom adjusted its GNP estimates for 1988-1991. The improvements in connection with the reservations (-0. 10%, -0. 16%, -0. 24% and -0. 25% of GNP respectively for the four years in question) match the adjustments to property income received from the rest of the world. They relate to the "transversal reservation" on the transition from GDP to GNP. The heading "total change" nevertheless includes some adjustments made on the basis of other reservations. Some of these reservations had a negligible impact on GNP, an example being insurance, for which only 1991 was adjusted (0. 08%). In other cases (register of import-export firms, register of leasing companies), it has not been possible to calculate the overall effect on GNP, since the adjustments were made to the input-output tables. For these ables, however, the changes made to the statistical methods after the notification of reservations have proved satisfactory. The new estimates supplied by the United Kingdom for 1998-1991 are final and the specific reservations have been lifted. 2 7 ISSN 0254-1475 COM(96) 124 final DOCUMENTS EN 17 Catalogue number : CB-CO-96-133-EN-C ISBN 92-78-01853-8 Office for Official Publications of the European Communities L-2985 Luxembourg z%

Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and the Republic of Armenia, of the other part

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ït&Ssfc^WWr** £ •à- tr -it COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 27. 03. 1996 COM(96) 136 final 96/093 (AVC) Proposai for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and the Republic of Armenia, of the other part (presented by the Commission) Explanatory memorandum 1. The attached proposal for a Council and Commission Decision constitutes the legal instrument for the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States, on the one hand, and the Republic of Armenia, on the other. 2. Following the Council's adoption of the negotiating directives on 5 October 1992, negotiations with the Republic of Armenia were held in the course of 1995. After two rounds of negotiations, the Agreement was initialled on 15/12/95. 3. The Agreement is a mixed agreement covering areas for which both the Communities and the Member States are competent, and is concluded for an initial period often years. It establishes a political dialogue. The Agreement also covers trade in goods, labour conditions, establishment and operation of companies, cross-border supply of services, payments and capital, competition, industrial and commercial property intellectual, protection, legislative cooperation, economic cooperation, cooperation on human rights and democracy, cooperation in combatting illegal activities and illegal immigration, cultural cooperation and financial cooperation. The Agreement contains a clause which allows it to be suspended, even unilaterally, if it is considered that there has been a breach of the essential elements underlying the Agreement i. e. respect for democracy, human rights and the principles of the market economy. The Agreement sets out an institutional framework for its implementation with a Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation Committee. Customs cooperation is covered by a separate protocol. '\ 4. The Agreement will, as far as trade relations between the Community and the Republic of Armenia are concerned, replace the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community, and the USSR, signed on 18 December 1989. 5. The procedures of the three Communities (EC, EAEC and ECSC) for signing and concluding the Agreement differ. In the case of the EC, account will have to be taken of Opinion 1/94 delivered by the Court of Justice on 15 November 1994 on the competence of the European Community to conclude the agreements reached during the Uruguay Round. For the purpose of concluding the Agreement:. the Council will conclude the Agreement, with the assent of the European Parliament and having consulted the Economic and Social Committee, on behalf of the European Community in accordance with Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) of the EC Treaty by adopting the attached decision; the Commission will conclude the Agreement on behalf of the European Atomic Energy Community after the Council has approved it in accordance with the second paragraph of Article 101 of the Euratom Treaty. the Commission will conclude the Agreement on behalf of the ECSC in accordance with the ECSC Treaty, after consulting the Consultative Committee and with the unanimous assent of the Council; The conclusion of the Agreement will have to be ratified by all the Member States given the mixed nature of the Agreement. 6. In view of the above, the Commission proposes that the Council adopt the annexed decision. 6 COUNCIL AND COMMISSION DECISION OF on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Armenia (. /. /ECSC, EC, EURATOM) THE COUNCIL OF THE EUROPEAN UNION, THE EUROPEAN COMMISSION, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to the Treaty establishing the European Community, and in particular Article 54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article 228(2) and the second subparagraph of Article 228(3) thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular the second paragraph of Article 101 thereof, Having regard to the assent of the European Parliament, Having regard to the approval of the Council given in accordance with Article 101 of the Treaty establishing the European Atomic Energy Community, Having consulted Committee, and with the unanimous assent of the Council, the ECSC Consultative Committee and the Economic and Social Whereas the conclusion of the Partnership and Cooperation Agreement between the European Union and Armenia signed in would contribute to achieving the European Communities' objectives; on Whereas that Agreement seeks to strengthen existing links, notably those established by the Agreement on Trade and Commercial and Economic Cooperation between the European Economic Community and the European Atomic Energy Community and the USSR, signed on 18 December 1989; Whereas some of the obligations provided for in the Agreement in fields other than Community trade policy affect the arrangements established by Community acts, particularly acts relating to the right of establishment and to transport; a Whereas the Agreement imposes on the Community certain obligations relating to the movement of capital and payments between the Community and Armenia; Whereas in the case of certain measures provided for in the Agreement and falling within the Community's powers the EC Treaty provides no basis for action other than Article 235, HAVE DECIDED AS FOLLOWS : Article 1 The Partnership and Cooperation Agreement between the European Union and the Republic of Armenia, together with the Protocol, the declarations and the exchange of letters, are hereby approved on behalf of the European Community, the European Coal and Steel Com munity and the European Atomic Energy Community. Article 2 1. The position to be adopted by the Community in the Cooperation Council shall be determined by the Council, on a proposal from the Commission, or, where appropriate, by the Commission, in each case in accordance with the relevant provisions of the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community. 2. In accordance with Article 79 of the Partnership and Cooperation Agreement, the President of the Council shall chair the Cooperation Council and shall present the Community's position. A representative of the Commission shall chair the Cooperation Committee in accordance with its rules of procedure and shall present the Community's position. Article 3 The President of the Council shall give the notification provided for in Article 100 of the Agreement on behalf of the European Community. The President of the Commission shall give such notification on behalf of the European Coal and Steel Community and the European Atomic Energy Community. Done at Brussels, Id Final Act The plenipotentiaries of: THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE PORTUGUESE REPUBLIC, THE REPUBLIC OF FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND Contracting Parties to the Treaty establishing the EUROPEAN COMMUNITY, the Treaty establishing the Treaty the EUROPEAN COAL AND STEEL COMMUNITY, and establishing the EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Member States", and of the EUROPEAN COMMUNITY, THE EUROPEAN ATOMIC ENERGY COMMUNITY and the EUROPEAN COAL AND STEEL COMMUNITY, hereinafter referred to as "the Community", of the one part, and the plenipotentiaries of the Republic of Armenia, f e of the other part, on in the year one thousand nine hundred and ninety-six for the signature meeting at of the Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Members States, of the one part, and the Republic of Armenia, of the other part, hereinafter referred to as "the Partnership and Cooperation Agreement", have adopted the following text : the Partnership and Cooperation Agreement and the Protocol on mutual assistance in customs matters. The plenipotentiaries of the Member States and of the Community and the plenipotentiaries of the Republic of Armenia have adopted the texts of the Joint Declarations listed below and annexed to this Final Act: Joint Declaration concerning Article 3bis of the Agreement Joint Declaration concerning Article 5 of the Agreement Joint Declaration concerning Article 14 of the Agreement Joint Declaration concerning the notion of "control" in Article 24 (b) and Article 36 of the Agreement Joint Declaration concerning Article 35 of the Agreement Joint Declaration concerning Article 42 of the Agreement Joint Declaration concerning Article 94 of the Agreement The plenipotentiaries of the Member States and of the Community and the Plenipotentiaries of the Republic of Armenia have also taken note of the exchange of letters listed below annexed to this Final Act: Establishment of companies The plenipotentiaries of the Member States and of the Community and the Plenipotentiaries of the Republic of Armenia have also taken note of the declaration listed below annexed to this Final Act: Unilateral Declaration by the French Republic on the Overseas Countries Territories Done at in the year one thousand nine hundred and ninety six. For the Council and the Commission of the European Communities. For the Republic of Armenia. u PARTNERSHIP AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES AND THEIR MEMBER STATES, OF THE ONE PART, AND THE REPUBLIC OF ARMENIA, OF THE OTHER PART f PARTNERSHIP AND COOPERATION AGREEMENT establishing a partnership between the European Communities and their Member States, of the one part, and the Republic of Armenia, of the other part, THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, TFIE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, AUSTRIA, THE PORTUGUESE REPUBLIC, FINLAND, THE KINGDOM OF SWEDEN, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, Contracting Parties to the Treaty establishing the European Community, the Treaty estabhshing the European Coal and Steel Community, and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as "Member States", and THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY, AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Community", of the one part, AND THE REPUBLIC OF ARMENIA of the other part, CONSIDERING the links between the Community, its Member States and the Republic of Armenia and the common values that they share, RECOGNIZING that the Community and the Republic of Armenia wish to strengthen these links and to establish partnership and cooperation which would strengthen and widen the relations established in the past in particular by the Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on Trade and Commercial and Economic Cooperation, signed on 18 December 1989, CONSIDERING the commitment of the Community and its Member States and of the Republic of Armenia to strengthening the political and economic freedoms which constitute the very basis of the partnership, CONSIDERING the commitment of the Parties to promote international peace and security as well as the peaceful settlement of disputes and to cooperate to this end in the framework of the United Nations and the Organisation for Security and Cooperation in Europe, CONSIDERING the firm commitment of the Community and its Member States and of the Republic of Armenia to the full implementation of all principles and provisions contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the Concluding Documents of the Madrid and Vienna Follow Up Meetings, the Document of the CSCE Bonn Conference on Economic Cooperation, the Charter of Paris for a New Europe and the CSCE Helsinki Document 1992 "The Challenges of Change", and other fundamental documents of the OSCE, RECOGNIZING in that context that support of the independence, sovereignty and territorial integrity of the Republic of Armenia will contribute to safeguarding of peace and stability in Europe, CONVINCED of the paramount importance of the rule of law and respect for human rights, particularly those of persons belonging to minorities, the establishment of a multiparty system with free and democratic elections and economic liberalization aimed at setting up a market economy, BELIEVING that full implementation of this Partnership and Cooperation Agreement will both depend on and contribute to continuation and accomplishment of the political, economic and legal reforms in the Republic of Armenia, as well as the introduction of the factors necessary for cooperation, notably in the light of the conclusions of the CSCE Bonn Conference, DESIROUS of encouraging the process of regional cooperation in the areas covered by this agreement with the neighbouring countries in order to promote the prosperity and stability of the region and in particular initiatives aimed at fostering cooperation and mutual confidence among Independent States of the Transcaucasus region and other neighbouring States, DESIROUS of estabhshing and developing regular political dialogue on bilateral, regional and international issues of mutual interest, RECOGNIZING AND SUPPORTING the wish of the Republic of Armenia to establish close co-operation with European institutions; CONSIDERING the necessity of promoting investment in the Republic of Armenia, including in the energy sector, and in this context the importance attached by the Community and its Member States to equitable conditions for transit for export of energy products, confirming the attachment of the Community and its Member States and of the Republic of Armenia to the European Energy Charter, and to the full implementation of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects, TAKING ACCOUNT of the Community's willingness to provide for economic cooperation and technical assistance as appropriate, BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between the Republic of Armenia and a wider area of cooperation in Europe and neighbouring regions and its progressive integration into the open international system, CONSIDERING the commitment of the Parties to liberalise trade, in conformity with World Trade Organisation (WTO) rules, CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements, WELCOMING AND RECOGNIZING the importance of the Republic of Armenia's efforts, aimed at transition of its economy away from a state trading country with a centrally planned economy into a market economy; CONVINCED that this Agreement will create a new climate for economic relations between the Parties and in particular for the development of trade and investment, which are essential to economic restructuring and technological modernization, DESIROUS of establishing close cooperation in the area of environment protection taking into account the interdependence existing between the Parties in this field, RECOGNIZING that co-operation for the prevention and control of illegal immigration constitutes one of the primary objectives of the Agreement, DESIROUS of establishing cultural cooperation and improving the flow of information, HAVE AGREED AS FOLLOWS: ARTICLE 1 A Partnership is hereby established between the Community and its Member States of the one part, and the Republic of Armenia of the other part. The objectives of this partnership are: - - - - to provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations; to support the Republic of Armenia's efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy; to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development; to provide a basis for legislative, economic, social, financial, civil scientific, technological and cultural cooperation. TITLE I GENERAL PRINCIPLES ARTICLE 2 Respect for democracy, principles of international law and human rights as defined in particular in the United Nations Charter, the Helsinki Final Act and the Charter of Paris for a New Europe, as well as the principles of market economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal and external policies of the Parties and constitute essential elements of partnership and of this Agreement. ARTICLE 3 The Parties consider that it is essential for their future prosperity and stability that the newly independent states which have emerged from the dissolution of the Union of Soviet Socialist Republics, hereinafter called "Independent States", should maintain and develop cooperation among themselves in compliance with the principles of the Helsinki Final Act and with international law and in the spirit of good neighbourly relations and will make every effort to encourage this process. ARTICLE 3bis The Parties shall as appropriate review changing circumstances in the Republic of Armenia, in particular regarding economic conditions there and implementation of market-oriented economic reforms. The Cooperation Council may make recommendations to the Parties concerning development of any part of this Agreement in the light of these circumstances. TITLE II POLITICAL DIALOGUE ARTICLE 4 A regular political dialogue shall be established between the Parties which they intend to develop It shall accompany and consolidate the rapprochement between the Community and intensify. and the Republic of Armenia, support the political and economic changes underway in that country and contribute to the establishment of new forms of cooperation. The political dialogue: - will strengthen the links of the Republic of Armenia with the Community and its Member States, and thus with the community of democratic nations as a whole. The economic convergence achieved through this Agreement will lead to more intense political relations, - will bring about an increasing convergence of positions on international issues of mutual concern thus increasing security and stability in the region and promoting the future development of the Independent States of the Transcaucasus; - shall foresee that the Parties endeavour to co-operate on matters pertaining to the strengthening of stability and security in Europe, the observance of the principles of democracy, and the respect and promotion of human rights, particularly those of persons belonging to minorities and shall hold consultations, if necessary, on relevant matters. Such dialogue may take place on a regional basis, with a view to contributing towards the resolution of regional conflicts and tensions. ARTICLE 5 At ministerial level, political dialogue shall take place within the Cooperation Council established in Article 77 and on other occasions by mutual agreement. ARTICLE 6 Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in particular in the following forms: - - regular meetings at senior official level between representatives of the Community and its Member States on the one hand, and representatives of the Republic of Armenia on the other hand; taking full advantage of diplomatic channels between the Parties including appropriate contacts in the bilateral as well as the multilateral field, such as United Nations, OSCE meetings and elsewhere; - any other means, including the possibility of expert meetings which would contribute to consolidating and developing this dialogue. ARTICLE 7 Political dialogue at parliamentary Parliamentary Cooperation Committee established in Article 82. level shall take place within the framework of the TITLE III TRADE IN GOODS ARTICLE 8 1. The Parties shall accord to one another most-favoured-nation treatment in all areas in respect of: - customs duties and charges applied to imports and exports, including the method of collecting such duties and charges. - provisions relating to customs clearance, transit, warehouses and transhipment, - taxes and other internal charges of any kind applied directly or indirectly to imported goods, - methods of payment and the transfer of such payments, - the rules relating to the sale, purchase, transport, distribution and use of goods on the domestic market. 2. The provisions of paragraph 1 shall not apply to: (a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant to the creation of such a union or area; (b) advantages granted to particular countries in accordance with the GATT and with other international arrangements in favour of developing countries; (c) advantages accorded to adjacent countries in order to facilitate frontier traffic. 3. The provisions of paragraph 1 shall not apply, during a transitional period expiring on the date of the Republic of Armenia acceding to the WTO or on 31 December 1998a whichever is earlier, to advantages defined in Annex I granted by the Republic of Armenia to other states which have emerged from the dissolution of the USSR. ARTICLE 9 1. The Parties agree that the principle of free transit is an essential condition of attaining the objectives of this Agreement In this connection each Party shall secure unrestricted transit via or through its territory of goods originating in the customs territory or destined for the customs territory of the other Party. 2. The rules described in the Article V, paragraphs 2, 3, 4 and 5 of the GATT are applicable between the two Parties. 3. The rules contained in this Article are without prejudice to any special rules relating to specific sectors, in particular such as transport, or products agreed between the Parties. T~^~' 8. / ARTICLE 10 Without prejudice to the rights and obligations stemming from international conventions on the temporary admission of goods which bind both Parties, each Party shall furthermore grant the other Party exemption from import charges and duties on goods admitted temporarily, in the instances and according to the procedures stipulated by any other international convention on this matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions under which the obligations stemming from such a convention have been accepted by the Party in question ARTICLE 11 1. Goods originating in the Republic of Armenia shall be imported into the Commumty free of quantitative restrictions without prejudice to the provisions of Articles 13, 16 and 17 of this Agreement. 2. Goods originating in the Community shall be imported into the Republic of Armenia free of all quantitative restrictions and measures of equivalent effect. Goods shall be traded between the Parties at market-related prices. ARTICLE 12 ARTICLE 13 1. Where any product is being imported into the territory of one of the Parties in such increased quantities or under such conditions as to cause or threaten to cause injury to domestic producers of like or direct competitive products, the Community or the Republic of Armenia, whichever is concerned, may take appropriate measures in accordance with the following procedures and conditions. 2. Before taking any measures, or in cases to which paragraph 4 applies as soon as possible thereafter, the Community or the Republic of Armenia, as the case may be, shall supply the Cooperation Council with all relevant information with a view to seeking a solution acceptable to both Parties as provided for in Title XI. 3. If, as a result of the consultations, the Parties do not reach agreement within 30 days of referral to the Cooperation Council on actions to avoid the situation, the Party which requested consultations shall be free to restrict imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury, or to adopt other appropriate measures. 4. In critical circumstances where delay would cause damage difficult to repair, the Parties may take the measures before the consultations, on the condition that consultations shall be offered immediately after taking such action. 5. In the selection of measures under this Article, the Contracting Parties shall give priority to those which cause least disturbance to the achievement of the aims of this Agreement. 6. Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI of the GATT the Agreement on implementation of Article VI of the GATT, the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal legislation. ARTICLE 14 The Parties undertake to consider development of the provisions in this Agreement on trade in goods between them, as circumstances allow, including the situation arising from the accession of the Republic of Armenia to the WTO. The Cooperation Council may make recommendations on such developments to the Parties which could be put into effect, where accepted, by virtue of agreement between the Parties in accordance with their respective procedures. ARTICLE 15 The Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of natural resources, the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties. ARTICLE 16 This Title shall not apply to trade in textile products falling under Chapters 50 to 63 of the Combined Nomenclature. Trade in these products shall be governed by a separate agreement, initialled on 17 November 1993 and applied provisionally since 1 January 1993, and by any successor agreements ARTICLE 17 1. Trade in products covered by the Treaty establishing the European Coal and Steel Community shall be governed by the provisions of this Title, with the exception of Article 11. 2. A contact group on coal and steel matters is set up, comprising representatives of the Community on the one hand, and representatives of the Republic of Armenia on the other. The contact group shall exchange, on a regular basis, information on all coal and steel matters of interest to the Parties. ARTICLE 18 Trade in nuclear materials will be conducted in accordance with the provisions of the Treaty establishing the European Atomic Energy Community. If necessary, trade in nuclear materials shall be subject to the provisions of a specific Agreement to be concluded between the European Atomic Energy Community and the Republic of Armenia. 10 TITLE IV PROVISIONS AFFECTING BUSINESS AND INVESTMENT CHAPTER I Labour Conditions ARTICLE 19 Subject to the laws, conditions and procedures applicable in each Member State, the Community and the Member States shall endeavour to ensure that the treatment accorded to Armenian nationals legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. Subject to the laws, conditions and procedures applicable in the Republic of Armenia, the Republic of Armenia shall ensure that the treatment accorded to nationals of a Member State legally employed in the territory of the Republic of Armenia shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. 11 ARTICLE 20 The Cooperation Council shall examine which improvements can be made in working conditions for business people consistent with the international commitments of the Parties, including those set out in the document of the CSCE Bonn Conference. ARTICLE 21 The Cooperation Council shall make recommendations for the implementation of Articles 19 and 20. CHAPTER H Conditions affecting the establishment and operation of companies ARTICLE 22 1. The Community and its Member States shall grant treatment no less favourable than that accorded to any third country for the establishment of Armenian companies as defined in Article 24(d). 2. Without prejudice to the reservations listed in Annex IV, the Community and its Member States shall grant to subsidiaries of Armenian companies established in their territories a treatment no less favourable than that granted to any Community companies, in respect of their operation. 3. The Community and its Member States shall grant to branches of Armenian companies established in their territories treatment no less favourable than that accorded to branches of companies of any third country, in respect of their operation 4. The Republic of Armenia shall grant for the establishment of Community companies as defined in Article 24(d) treatment no less favourable than that accorded to Armenian companies or to any third country companies, whichever is the better, and shall grant to subsidiaries and branches of Community companies established in its territory treatment no less favourable than that accorded to its own companies or branches or to any third country company or branch, whichever is the better, in respect of their operations. 12 ARTICLE 23 1. Without prejudice to the provisions of Article 96, the provisions of Article 22 shall not apply to air transport, inland waterways transport and maritime transport. 2 However, in respect of activities, as indicated below, undertaken by shipping agencies for the provision of services to international maritime transport, including transport operations involving a sea-leg, each Party shall permit to the companies of the other Party to have a commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country-, whichever are the better, and this in conformity with the legislation and regulations applicable in each Party. intermodal 3. Such activities include; but are not limited to: a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing, whether these services are operated or offered by the service supplier itself or by service suppliers with which the service seller has established standing business arrangements; b) purchase and use, on their own account or on behalf of their customers (and the resale to their customers) of any transport and related services, including inward transport services by any mode, particularly inland waterways, road and rail, necessary for the supply of an integrated service; c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported. d) provision of business information by any means, including computerised information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications); e) setting up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency, f) acting on behalf of the companies, inter alia in organizing the call of the vessel or taking over cargoes when required. For the purpose of this Agreement: ARTICLE 24 (a) A "Community company" or an "Armenian company" respectively shall mean a company set up in accordance with the laws of a Member State or of the Republic of Armenia respectively and having its registered office or central administration, or principal place of business in the territory of the Community or the Republic of Armenia respectively. However, should the company, set up in accordance with the laws of a Member State or the Republic of Armenia respectively, _have only its registered office in the territory of the Community or the Republic of Armenia respectively, the company shall be considered a Community or Armenian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or the Republic of Armenia respectively. ~^~~ 13 / jl (b) "Subsidiary" of a company shall mean a company which is effectively controlled by the first company (c) "Branch" of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension. (d) "Establishment" shall mean the right of Community or Armenian companies as referred to in point (a), to take up economic activities by means of the setting up of subsidiaries and branches in the Republic of Armenia or in the Community respectively. (e) "Operation" shall mean the pursuit of economic activities. (f) "Economic activities" shall mean activities of an industrial, commercial and professional character With regard to international maritime transport, including inter modal operations involving a sea leg, nationals of the Member States or of the Republic of Armenia established outside the Community or the Republic of Armenia respectively, and shipping companies established outside the Community or the Republic of Armenia and controlled by nationals of a Member State or Armenian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III if their vessels are registered in that Member State or in the Republic of Armenia respectively in accordance with their respective legislation. ARTICLE 25 1. Notwithstanding any other provisions of the Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the obligations of a Party under the Agreement. 2. Nothing in the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities. 3. For the purpose of this Agreement, "financial services" shall mean those activities described in Annex III. ARTICLE 26 The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third country access to its market, through the provisions of this Agreement. 14 ARTICLE 27 1. Notwithstanding the provisions of Chapter I of this Title, a Community company or an Armenian company established in the territory of the Republic of Armenia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of the Republic of Armenia and the Community respectively, employees who are nationals of Community Member States and the Republic of Armenia respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by companies, or branches. The residence and work permits of such employees shall only cover the period of such employment. 2. Key personnel of the above mentioned companies herein referred to as "organizations" are "intra-corporate transferees" as defined in (c) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than majority shareholders), for at least the year immediately preceding such movement: (a) Persons working the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including: in a senior position with an organization, who pnmarily direct - directing the establishment or a department or subdivision of the establishment, - supervising and controlling the work of other supervisory, professional or managerial employees, - having the authority personally to hire and fire or recommend hiring, firing or other personnel actions: (b) Persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession, (c) An "intra-corporate transferee" is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party. 15 ARTICLE 29 1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. 2. The provisions of this Article are without prejudice to those of Article 37: the situations covered by such Article 37 shall be solely governed by its provisions to the exclusion of any other. 3. Acting in the spirit of partnership and cooperation and in the light of the provisions of Article 43 the Government of the Republic of Armenia shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in the Republic of Armenia of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. The Community may request the Republic of Armenia to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts. 4. Where new legislation or regulations introduced in the Republic of Armenia would result in rendering the conditions for operation of subsidiaries and branches of Community companies established in the Republic of Armenia more restrictive than the situation existing on the day of signature of the Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in the Republic of Armenia at the time of entry into force of the relevant act. Cross border supply of services between the Community and the Republic of Armenia CHAPTER m ARTICLE 30 1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the supply of services by Community or Armenian companies which are established in a Party other than that of the person for whom the services are intended taking into account the development of the service sectors in the Parties. 2. The Cooperation Council shall make recommendations for the implementation of paragraph 1. ARTICLE 31 The Parties shall cooperate with the aim of developing a market oriented service sector in the Republic of Armenia 16 ARTICLE 32 1. The Parties undertake to apply effectively the principle of unrestricted access to the international maritime market and traffic on a commercial basis: (a) the above provision does not prejudice the rights and obligations arising from the United Nations Convention on a Code of Conduct for Liner Conferences, as applicable to one or other Contracting Party to this Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis; (b) the Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade. 2. In applying the principles of paragraph 1, the Parties shall: (a) not apply, as from entry into force of this agreement, any cargo sharing provisions of bilateral agreements between any Member States of the Community and the former Soviet Union, (b) not introduce cargo sharing clauses into future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned; (c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade; (d) abolish upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport. 3. Each Party shall grant, inter alia, no less favourable treatment, for the ships operated by nationals or companies of the other Party, than that accorded to a Party's own ships, with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading. 4. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of the Republic of Armenia and vice versa. ARTICLE 33 With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties after entry into force of this Agreement. 17 CHAPTER IV General Provisions ARTICLE 34 1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health. 2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority. ARTICLE 35 For the purpose of this Title, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify' or impair the benefits accruing to any Party under the terms of a specific provision of the Agreement. The above provision does not prejudice the application of Article 34. ARTICLE 36 Companies which are controlled and exclusively owned by Armenian companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV. ARTICLE 37 Treatment granted by either Party to the other thereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, sub-sector and mode of supply. ARTICLE 38 For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or the Republic of Armenia pursuant to commitments entered into in economic integration agreements in accordance with the principles of Article V of the GATS. 18 ARTICLE 39 1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements 2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation. 3. Nothing in this Title shall be construed to prevent Member States or the Republic of Armenia from distinguishing, in the application of the relevant provisions of their fiscal legislation, between tax payers who are not in identical situations, in particular as regards their place of residence. ARTICLE 40 Without prejudice to Article 27, no provision of Chapters II, III and IV shall be interpreted as giving the right to: - nationals of the Member States or of the P^epublic of Armenia respectively to enter, or stay in, the territory of the Republic of Armenia or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employee thereof or supplier or recipient of services; - Community subsidiaries or branches of Armenian companies to employ or have employed in the territory of the Community nationals of the Republic of Armenia; - Armenian subsidiaries or branches of Community companies to employ or have employed in the territory of the Republic of Armenia nationals of the Member States; - Armenian companies or Community subsidiaries or branches of Armenian companies to supply Armenian persons to act for and under the control of other persons by temporary employment contracts; - Community companies or Armenian subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts. CHAPTER V Current payments and capital ARTICLE 41 The Parties undertake to authorise in freely convertible currency, any current payments between residents of the Community and of the Republic of Armenia connected with the movement of goods, services or persons made in accordance with the provisions of this Agreement. With regard to transactions on the capital account of balance of payments, from entry into force of the Agreement, the free movement cf capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured. 3. Without prejudice to paragraph 2 or to paragraph 5, as from entry into force of this Agreement, no new foreign exchange restrictions on the movement of capital and current payments connected therewith between residents of the Community and the Republic of Armenia shall be introduced and the existing arrangements shall not become more restrictive. 4. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 above between the Community and the Republic of Armenia in order to promote the objectives of this Agreement. is (IMF) introduced, the Republic of Armenia may 5. With reference to the provisions of this Article, until a full convertibility of the Armenian currency within the meaning of Article VIII of the Articles of Agreement of the International in exceptional Monetary Fund circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term financial credits to the extent that such restrictions are imposed on the Republic of Armenia for the granting of such credits and are permitted according to the Republic of Armenia's status under the IMF. The Republic of Armenia shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. The Republic of Armenia shall inform the Cooperation Council promptly of the introduction of such measures and of any changes therein. 6. Without prejudice to paragraph 1 and 2, where, in exceptional circumstances, movement of capital between the Community "and the Republic of Armenia cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or the Republic of Armenia, the Community and the Republic of Armenia, respectively, may take safeguard measures with regard to movements of capital between the Community and the Republic of Armenia for a period not exceeding six months if such measures are strictly necessary. CHAPTER VI Intellectual, industrial and commercial property protection ARTICLE 42 1. Pursuant to the provisions of this Article and of Annex II, the Republic of Armenia shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of the Agreement, for a level of protection similar to that existing in the Community, including effective means of enforcing such rights. 2. By the end o i t he fifth year after entry into force of the Agreement, the Republic of Armenia shall accede u die multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex II to which Member States are parties or which are de facto applied by Member States, according to the relevant provisions contained in these conventions. - 20 TITLE V LEGISLATIVE COOPERATION ARTICLE 43 1. The Parties recognize that an important condition for strengthening the economic links between the Republic of Armenia and the Community is the approximation of the Republic of Armenia's existing and future legislation to that of the Community. The Republic of Armenia shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community. 2. The approximation of laws shall extend to the following areas in particular: customs lawy company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations and transport. 3. The Community shall provide the Republic of Armenia with technical assistance for the implementation of these measures, which may include, inter alia : the exchange of experts: the provision of early information especially on relevant legislation; - - - organization of seminars; - - aid for translation of Community legislation in the relevant sectors training activities; 4. The Parties agree to examine ways to apply their respective competition laws on a concerted basis in such cases where trade between them is affected. ^ 21 TITLE VI ECONOMIC COOPERATION ARTICLE 44 1. The Community and the Republic of Armenia shall establish economic cooperation aimed at contributing to the process of economic reform and recovery and sustainable development of the Republic of Armenia Such cooperation shall strengthen existing economic links, to the benefit of both parties. 2. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic and trading systems in the Republic of Armenia and will be guided by the requirements of sustainability and harmonious social development, they will also fully incorporate environmental considerations. 3. To this end cooperation will concentrate in particular, on economic and social development, human resources, development, support for enterprises (including privatization, investment promotion and protection, small and medium-sized enterprises), mining and raw materials, science and technology, agriculture and food, energy, transport, tourism, telecommunications, financial services, combatting of money laundering, trade, customs, statistical cooperation, information and communication, environmental protection and regional cooperation. 4. Special attention shall be devoted to measures capable of fostering cooperation among the Independent States of the Transcaucasian region, and with other neighbouring states, with a view to stimulating a harmonious development of the region. 5. Where appropriate, economic cooperation and other forms of cooperation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to Community technical assistance to the Republic of Armenia and its established coordination and implementation procedures. ARTICLE 45 Cooperation in the field of trade in goods and services The Parties will cooperate with a view to ensuring that the Republic of Armenia's international trade is conducted in conformity with the rules of the WTO. Such cooperation shall include specific issues directly relevant to trade facilitation, including: formulation of policy on trade and trade-related questions, including payments, • • drafting of relevant legislation, • continuing assistance for the Republic of Armenia's eventual accession to the WTO. 22 ARTICLE 46 Industrial cooperation 1. Cooperation shall aim at promoting the following in particular: the development of business links between economic operators of both sides; - - Community participation in the Republic of Armenia's efforts to restructure, and attract follow-up investment to, its industry; the improvement of management; the development of appropriate commercial rules and practices; - - - environmental protection. 2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings. ARTICLE 47 Investment promotion and protection 1. Bearing in mind the respective powers and competences of the Community and the Member States, cooperation shall aim to establish a favourable climate for private investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities. 2. The aims of cooperation shall be in particular: - - - - - the conclusion, where appropriate, between the Member States and the Republic of Armenia of agreements for the promotion and protection of investment; the conclusion, where appropriate, between the Member States and the Republic of Armenia of agreements to avoid double taxation; the creation of favourable conditions for attracting foreign investments into the Armenian economy; to establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment; to exchange information on investment opportunities in the form of, inter alia, trade fairs, exhibitions, trade weeks and other events. ARTICLE 48 Public Procurement The Parties shall cooperate to develop conditions for open and competitive award of contracts for goods and services in particular through calls for tenders. 23 ARTICLE 49 Cooperation in the field of standards and conformity assessment 1. Cooperation between the Parties shall promote alignment with internationally agreed criteria principles and guidelines followed in the field of quality. The required actions will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of the quality of Armenian products. 2. To this end they shall seek to cooperate in technical assistance projects which will: • promote appropriate cooperation with organizations and institutions specialized in these fields; • promote the use of Community technical regulations and the application of European standards and conformity assessment procedures; • permit the sharing of experience and technical information in the field of quality management. ARTICLE 50 Mining and raw materials 1. The Parties shall aim at increasing investment and trade in mining and raw materials. 2. The cooperation shall focus in particular on the following areas: - exchange of information on the prospects of the mining and non-ferrous metals sectors, - - - - - safety in the mining industry. the establishment of a legal framework for cooperation, trade matters, the adoption and implementation of environmental legislation, training, ARTICLE 51 Cooperation in science and technology 1. The Parties shall promote cooperation in civil scientific research and technological development (RTD) on the basis of mutual benefit and, taking into account the availability of resources, adequate access to their respective programmes and subject to appropriate levels of effective protection of intellectual, industrial and commercial property rights (IPR). 2. Science and technology cooperation shall cover: - - - the exchange of scientific and technical information; joint RTD activities; training activities and mobility programmes for scientists, researchers and technicians engaged in RTD on both sides 24 Where such cooperation takes the form of activities involving education and/or training, it should be carried out in accordance with the provisions of Article 52 The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in science and technology. In carrying out such cooperation activities, special attention shall be devoted to the redeployment of scientists, engineers, researchers and technicians which are or have been engaged in research and/or production of weapons of mass destruction. 3. The Cooperation covered by this Article shall be implemented according to specific arrangements to be negotiated and concluded in accordance with the procedures adopted by each Party, and which shall set out, inter alia, appropriate IPR provisions. ARTICLE 52 Education and training 1. The Parties shall cooperate with the aim of raising the level of general education and professional qualifications in the Republic of Armenia, both in the public and private sectors. 2. The cooperation shall focus in particular on the following areas: - updating higher education and training systems in the Republic of Armenia including the - system of certification of higher educational establishments and diplomas of higher education; the training of public and private sector executives and civil servants in priority areas to be determined; - cooperation between educational establishments and between educational establishments and firms; - mobility for teachers, graduates, administrators, young scientists and researchers, and young people; teaching Community languages; - promoting teaching in the field of European Studies within the appropriate institutions; - - post-graduate training of conference interpreters; - - training of journalists; training of trainers. 3. The possible participation of one Party in the respective programmes in the field of education and training of the other Party could be considered in accordance with their respective procedures and, where appropriate, institutional frameworks and plans of cooperation will then be established building on participation of the Republic of Armenia in the Community's TEMPUS programme. 25 ARTICLE 53 Agriculture and the agro-industrial sector in this area shall be the pursuance of agrarian reform, The purpose of cooperation the modernization, privatization and restructuring of agriculture, the agro-industrial and service sectors in the Republic of Armenia, development of domestic and foreign markets for Armenian products, in conditions that ensure the protection of the environment, taking into account the necessity to improve security of food supply as well as the development of agri-business, the processing and distribution of agricultural products. The Parties shall also aim at the gradual approximation of Armenian standards to Community technical regulations concerning industrial and agricultural food products including sanitary and phytosanitary standards. ARTICLE 54 Energy 1. Cooperation shall take place within the principles of the market economy and the European Energy Charter, and bearing in mind the Energy Charter Treaty and the Protocol on Energy Efficiency and Belated Environmental Aspects, against a background of the progressive integration of the energy markets in Europe. 2. The cooperation shall include among others the following areas: - - - formulation and development of energy policy, improvement in management and regulation of the energy sector in Hne with a market economy, improvement of energy supply, including security of supply, in an economic and environmentally sound manner, - promotion of energy saving and energy efficiency and implementation of the Energy Charter Protocol on Energy Efficiency and related environmental aspects, improvement of energy technologies in supply and end use across the range of energy types, - modernisation of energy infrastructures, - - management and technical training in the energy sector, - - The introduction of the range of institutional, legal, fiscal and other conditions necessary to transportation and transit of energy materials and products, encourage increased energy trade and investment. _ development of hydro-electric and other renewable energy resources. 3 The Parties shall exchange relevant information relating to investment projects in the energy sector, in particular concerning the construction and refurbishing of oil and gas pipelines or other means of transporting energy products. They shall cooperate with a view to implementing as efficaciously as possible the provisions of Title IV and of Article 47, in respect of investments in the energy sector. 26 ARTICLE 55 Environment 1. Bearing in mind the European Energy Charter and the Declaration of the Lucerne Conference of 1993, and taking into account the Energy Charter Treaty, and especially its article 19, and the Energy Charter Protocol on Energy Efficiency and related environmental aspects, the Parties shall develop and strengthen their cooperation on environment and human health. 2. Cooperation shall aim at combating the deterioration of the environment and in particular: - effective monitoring of pollution levels and assessment of environment, svstem of information on the state of the environment; - combating local, regional and transboundary air and water pollution; - ecological restoration; - sustainable, efficient and environmentally effective production and use of energy; - safety of industrial plants, - classification and safe handling of chemicals; - water quality, - waste reduction, recycling and safe disposal, implementation of the Basle Convention: - - - the environmental impact of agriculture, soil erosion, and chemical pollution: the protection of forests; the conservation of biodiversity, protected areas and sustainable use and management of biological resources; land-use planning, including construction and urban planning; - - use of economic and fiscal instruments; - global climate change; - environmental education and awareness; - technical assistance concerning rehabilitation of zones affected by radioactivity and addressing related health and social problems; implementation of the Espoo Convention on Environmental Impact Assessment in a transboundary context. - 3. Cooperation shall take place particularly through: - disaster planning and other emergency situations; - exchange of information and experts, including information and experts dealing with the transfer of clean technologies and the safe and environmentally sound use of biotechnologies, - joint research activities; - improvement of laws towards Community standards; - environmental training and institutional strengthening, - cooperation at regional level, including cooperation within the framework of the European Environment Agency, and at international level, - development of strategies, particularly with regard to global and climatic issues and also in view of achieving sustainable development, - environmental impact studies. 27 ARTICLE 56 Transport The Parties shall develop and strengthen their cooperation in the field of transport. This cooperation shall, inter alia, aim at restructuring and modernizing transport systems and networks in the Republic of Armenia, and developing and ensuring, where appropriate, compatibility of transportation systems in the context of achieving a more global transport traditional system. Particular consideration shall be given communications links among Independent States in the Transcaucasus region and with other neighbouring states. the functioning of all to The cooperation shall include, inter alia: the modernizing of management and operations of road transport, railways, ports and airports, - - modernization and development of railways, waterways, roads, ports, airports and air navigation infrastructure including the modernization of major routes of common interest and the trans-European links for the above modes, particularly those related to the TRACECA project, - promotion and development of multi-modal transport, - - preparation of the legislative and institutional framework for policy development and the promotion of joint research and development programmes; implementation including privatization of the transport sector. ARTICLE 57 Postal services and telecommunications Within their respective powers and competences the Parties shall expand and strengthen cooperation in the following areas: - the establishment of policies and guidelines for the development of the telecommunications sector and postal services; - development of principles of a tariff policy and marketing in telecommunications and postal services; - carry out transfer of technology and know how, including on European Technical standards and certification systems; - encouraging the development of projects for telecommunications and postal services and attracting investment; - enhancing efficiency and quality of the provision of telecommunications and postal services, amongst others through liberalization of activities of sub-sectors; 28 /' '/' advanced application of telecommunications, notably in the area of electronic funds transfer- management of telecommunications networks and their "optimization": an appropriate regulatory basis for the provision of telecommunication and postal services and for the use of the radio frequency spectrum, training in the field of telecommunications and postal services for operations in market conditions. ARTICLE 58 Financial Services Cooperation shall in particular aim at facilitating the involvement of the Republic of Armenia in universally accepted systems of mutual settlements. Technical assistance shall focus on: - - - the development of banking and financial services, the development of a common market of credit resources, the involvement of the Republic of Armenia in a universally accepted svstem of mutual settlements, the development of fiscal system and its institutions in the Republic of Armenia, exchange of experience and personnel training; the development of insurance services, which would, inter alia, create a favourable framework for Community companies participation in the establishment of joint ventures in the insurance sector in the Republic of Armenia, as well as the development of export credit insurance. This cooperation shall in particular contribute to foster the development of relations between the Republic of Armenia and the Member States in the financial services sector. ARTICLE 59 Regional development 1. The Parties shall strengthen cooperation on regional development and land-use planning. 2. To this end, they shall encourage exchange of information by national, regional and local authorities on regional and land-use planning policy and on methods of formulation of regional policies with special emphasis on the development of disadvantaged areas. They shall also encourage direct contacts between the respective regions and public organizations responsible for regional development planning with the aim, inter alia, to exchange methods and ways of fostering regional development. ARTICLE 60 Social cooperation 1. With regard to health and safety, the parties shall develop cooperation between them with the aim of improving the level of protection of the health and safety of workers. 29 The cooperation shall include notably: - education and training on health and safety issues with specific attention to high risk sectors of activity, - development and promotion of preventive measures to combat work related diseases and other work related ailments, - prevention of major accident hazards and the management of toxic chemicals; - research to develop the knowledge base in relation to working environment and the health and safety of workers 2. With regard to employment, the cooperation shall include notably technical assistance to: - optimization of the labour market, - modernization of the job-finding and consulting services; - planning and management of the restructuring programmes; - encouragement of local employment development; - exchange of information on the programmes of flexible employment, including those stimulating self-employment and promoting entrepreneurship. 3. The Parties shall pay special attention to cooperation in the sphere of social protection which. inter alia, shall include cooperation in planning and implementing social protection reforms in the Republic of Armenia. These refonns shall aim to develop in the Republic of Armenia methods of protection intrinsic to market economies and shall comprise all forms of social protection. ARTICLE 61 Tourism The Parties shall increase and develop cooperation between them, which shall include: - facilitating the tourist trade; - increasing the flow of information, - transferring know-how; - studying the opportunities for joint operations, - cooperation between official tourism bodies, - training for tourism development. ARTICLE 62 Small and medium-sized enterprises 1. The Parties sh. 11 aim to develop and strengthen small and medium-sized enterprises and their associations and cooperation between SMEs in the Community and the Republic of Armenia. 30 2 Cooperation shall include technical assistance, in particular in the following area; - the development of a legislative framework for SMEs. - the development of an appropriate infrastructure (an agency to support SMEs, communications, assistance to the creation of a fund for SMEs), - the development of technology parks ARTICLE 63 Information and communication The Parties shall support the development of modern methods of information handling, including the media, and stimulate the effective mutual exchange of information. Prioritv shall be given to programmes aimed at providing the general public with basic information about the Community and the Republic of Armenia, including, where possible, access to databases, in full respect of intellectual property rights. ARTICLE 64 Consumer Protection The Parties will enter into close cooperation aimed at achieving compatibility between their systems of consumer protection. This cooperation may include the exchange of information on legislative work and reform, establishment of permanent systems of mutual information on dangerous products, the improvement of information provided to consumers especially on prices, characteristics of products and services offered, the development of exchanges between the consumer interest representatives, and increasing the compatibility of consumer protection policies, and the organization of seminars and training periods. institutional ARTICLE 65 Customs 1. The aim of cooperation shall be to guarantee compliance with all the provisions scheduled for adoption in connection with trade and fair trade and to achieve the approximation of the Republic of Armenia's customs system to that of the Community. 2. Cooperation shall include the following in particular: - - - - - - - the exchange of information; the improvement of working methods, the introduction of the Combined Nomenclature and the single administrative document; the interconnection between the transit systems of the Community and of the Republic of Armenia; simplification of inspections and formalities in respect of the carriage of goods; the support in the introduction of modern customs information systems; the organization of seminars and training periods 31 / / J Technical assistance shall be provided where necessary. 3. Without prejudice to further cooperation foreseen in this agreement and in particular Articles in customs matters between administrative authorities of the 69, and 71, mutual assistance Parties shall take place in accordance with the provisions of the Protocol attached to this Agreement. ARTICLE 66 Statistical cooperation Cooperation in this area shall have as its aim the development of an efficient statistical system to provide the reliable statistics needed to support and monitor the process of economic reform and contribute to the development of private enterprise in the Republic of Armenia. The Parties, in particular, shall cooperate in the following fields: - adaptation of the Armenian statistical system to international methods, standards and classification; - exchange of statistical information, - provision of necessary statistical macro- and microeconomic information to implement and manage economic reforms. The Community shall contribute to this end by rendering technical assistance to the Republic of Armenia. ARTICLE 67 Economics The Parties shall facilitate the process of economic reform and the coordination of economic policies by cooperating to improve understanding of the fundamentals of their respective economies and the design and implementation of economic policy in market economies. To this end, the Parties shall exchange information on macroeconomic performance and prospects. The Community shall provide technical assistance so as to: - assist the Republic of Armenia in the process of economic reform by providing expert advisory and technical assistance, - encourage cooperation among economists in order to expedite the transfer of know-how for the drafting of economic policies, and provide for wide dissemination of policy-relevant research. 32 TITLE VII COOPERATION ON MATTERS RELATING TO DEMOCRACY AND HUMAN RIGHTS ARTICLE 68 The Parties shall cooperate on all questions relevant to the establishment or reinforcement of democratic institutions, including those required in order to strengthen the rule of law, and the protection of human rights and fundamental freedoms according to international law and OSCE principles. This cooperation shall take the form of technical assistance programmes intended to assist, inter alia, in the drafting of relevant legislation and regulations; the implementation of such legislation; the functioning of the judiciary; the role of the State in questions of justice, and the operation of the electoral system. They may include training where appropriate. The Parties shall encourage contacts and exchanges between their national, regional and judicial authorities, parliamentarians. and non-governmental organisations. 33 TITLE VIII COOPERATION ON PREVENTION OF ILLEGAL ACTIVITIES AND THE PREVENTION AND CONTROL OF ILLEGAL IMMIGRATION ARTICLE 69 The Parties shall establish cooperation aimed at preventing illegal activities such as: • • • illegal activities in the sphere of economics, including corruption; illegal transactions of various goods, including industrial waste; counterfeiting Cooperation in the abovementioned areas will be based on mutual consultation and close interaction. Technical and administrative assistance may be provided, including in the following areas: drafting of national legislation in the sphere of preventing illegal activities; creation of information centres; increasing the efficiency of institutions engaged in preventing illegal activities; training of personnel and development of research infrastructures; elaboration of mutually acceptable measures impeding illegal activities. ARTICLE 70 Money laundering 1. The Parties agree on the necessity of making efforts and cooperating in order to prevent the use of their financial systems for laundering of proceeds from criminal activities in general and drug offences in particular. 2. Cooperation in this area shall include administrative and technical assistance with the purpose of establishing suitable standards against money laundering equivalent to those adopted by the Community and international fora in this field, including the Financial Action Task Force (FATF). ARTICLE 71 Drugs Within the framework of their respective powers and competencies the Parties shall cooperate in increasing the effectiveness and efficiency of policies and measures to counter the illicit production, supply and traffic of narcotic drugs and psychotropic substances, including the prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention and reduction. The cooperation in this area shall be based on mutual consultation and close coordination between the Parties over the objectives and measures on the various drug-related fields. 34 ARTICLE 71 BIS Illegal Immigration The Member States of the European Union and the Republic of Armenia agree to cooperate in order to prevent and control illegal immigration. To this end: - The Republic of Armenia, agrees to readmit any of its nationals illegally present on the territory of a Member State, upon request by the latter and without further formalities; - and each Member State agrees to readmit any of its nationals, as defined for community purposes, illegally present on the territory of the Republic of Armenia , upon request by the latter and without further formalities. The Member States and the Republic of Armenia, will also provide their nationals with appropriate identity documents for such purposes. The Republic of Armenia, agrees to conclude bilateral agreements with Member States which so request, regulating specific obligations for readmission including an obligation for the readmission of nationals of other countries and stateless persons who have arrived on the territory of any such Member State from the Republic of Aimenia or who have arrived on the territory of the Republic of Armenia from any such Member State. 3. The Cooperation Council shall examine what other joint efforts can be made to prevent and control illegal immigration. 35 TITLE IX CULTURAL COOPERATION ARTICLE 72 The Parties undertake to promote, encourage and facilitate cultural cooperation. Where appropriate, the Community's cultural cooperation programmes or those of one or more Member States may be the subject of cooperation and further activities of mutual interest may be developed. 36 TITLE X FINANCIAL COOPERATION IN THE FIELD OF TECHNICAL ASSISTANCE ARTICLE 73 In order to achieve the objectives of this Agreement and in accordance with Articles 74, 75 and 76, the Republic of Armenia shall benefit from temporary financial assistance from the Community by way of technical assistance in the form of grants. The purpose of this assistance shall be to accelerate the economic transformation of the Republic of Armenia. ARTICLE 74 This financial assistance shall be covered within the framework of TACIS as foreseen in the Community's relevant Council Regulation ARTICLE 75 The objectives and the areas of the Community's financial assistance shall be laid down in an indicative programme reflecting established priorities to be agreed between the two Parties taking into account the Republic of Armenia's needs, sectoral absorption capacities and progress with reform. The Parties shall inform the Cooperation Council thereof. ARTICLE 76 In order to permit optimum use of the resources available, the Parties shall ensure that Community technical assistance contributions are made in close coordination with those from other sources such as the Member States, other countries, and international organizations such as the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development. 37 TITLE XI INSTITUTIONAL, GENERAL AND FINAL PROVISIONS ARTICLE 77 It shall meet at ministerial level once a year. A Cooperation Council is hereby established which shall supervise the implementation of this Agreement. It shall examine any major issues arising within the framework of the Agreement and any other bilateral or international issues of mutual interest for the purpose of attaining the objectives of this Agreement. The Cooperation Council may also make appropriate recommendations, by agreement between the two Parties. ARTICLE 78 1. The Cooperation Council shall consist of the members of the Council of the European Union and members of the Commission of the European Communities, on the one hand, and of members of the Government of the Republic of Armenia, on the other. 2. The Cooperation Council shall establish its rules of procedure. 3. The office of President of the Cooperation Council shall be held alternately by a representative of the Community and by a member of the Government of the Republic of Armenia. ARTICLE 79 1. The Cooperation Council shall be assisted in the performance of its duties by a Cooperation Committee composed of representatives of the members of the Council of the European Union and of members of the Commission of the European Communities on the one hand and of representatives of the Government of the Republic of Armenia on the other, normally at senior civil servant level. The office of President of the Cooperation Committee shall be held alternately by the Community and by the Republic of Armenia. In its rules of procedure the Cooperation Council shall determine the duties of the Cooperation Committee, which shall include the preparation of meetings of the Cooperation Council, and how the Committee shall function. 2. The Cooperation Council may delegate any of its powers to the Cooperation Committee, which will ensure continuity between meetings of the Cooperation Council. ARTICLE 80 The Cooperation Council may decide to set up any other special committee or body that can assist it in carrying out its duties and shall determine the composition and duties of such committees or bodies and how they shall function. 38 ARTICLE 81 When examining any issue arising within the framework of this Agreement in relation to a provision referring to an article of the GATTAVTO, the Cooperation Council shall take into account to the greatest extent possible the interpretation that is generally given to the article of the GATTAVTO in question by the Contracting Parties to the WTO. ARTICLE 82 A Parliamentary Cooperation Committee is hereby established. It shall be a forum for Members of the Armenian Parliament and the European Parliament to meet and exchange views. It shall meet at intervals which it shall itself determine. ARTICLE 83 1. The Parliamentary Cooperation Committee shall consist of members of the European Parliament, on the one hand, and of members of the Armenian Parliament, on the other. 2. The Parliamentary Cooperation Committee shall establish its rules of procedure. 3. The Parliamentary Cooperation Committee European Parliament and the Armenian Parliament respectively, provisions to be laid down in its rules of procedure. shall be presided in the in accordance with the turn by ARTICLE 84 The Parliamentary Cooperation Committee may request relevant information regarding the implementation of this Agreement from the Cooperation Council, which shall then supply the Committee with the requested information. The Parliamentary Cooperation Committee shall be informed of the recommendations of Cooperation Council. the The Parhamentary Cooperation Committee may make recommendations to the Cooperation Council. ARTICLE 85 1. Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights, including those concerning intellectual, industrial and commercial property. 2. Within the limits of their respective powers and competences, the Parties: - shall encourage the adoption of arbitration for the settlement of disputes arising out of / / 39 commercial and cooperation transactions concluded by economic operators of the Community and those of the Republic of Armenia; agree that where a dispute is submitted to arbitration, each party to the dispute may, except where the rules of the arbitration centre chosen by the parties provide otherwise, choose its own arbitrator, irrespective of his nationality, and that the presiding third arbitrator or the sole arbitrator may be a citizen of a third State; will recommend their economic operators to choose by mutual consent the law applicable to their contracts; shall encourage recourse to the arbitration rules elaborated by the United Nations Commission on International Trade Law (Uncitral) and to arbitration by any centre of a State signatory to the Convention on Recognition and Enforcement of Foreign Arbitral Awards done at New York on 10 June 1958. ARTICLE 86 Nothing in the Agreement shall prevent a Party from taking any measures. (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests; (b) which relate to the production of, or trade in arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes; (c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security; (d) which it considers necessary to respect its international obligations and commitments in the control of dual use industrial goods and technology. ARTICLE 87 1. In the fields covered by this Agreement and without prejudice to any special provisions contained therein: - - the arrangements applied by the Republic of Armenia in respect of the Community shall not give rise to any discrimination between the Member States, their nationals or their companies or firms; the arrangements applied by the Community in respect of the Republic of Armenia shall not give rise to any discrimination between Armenian nationals or its companies or firms. 2. The provisions of paragraph 1 are without prejudice to the right of the Parties to apply the relevant provisions of their fiscal legislation to tax payers who are not in identical situations as regards their place of residence. 40 ARTICLE 88 1. Each of the two Parties may refer to the Cooperation Council any dispute relating to the application or interpretation of this Agreement. 2. The Cooperation Council may settle the dispute by means of a recommendation. 3. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either Party may notify the other of the appointment of a conciliator; the other Party must then appoint a second arbitrator within two months. For the application of this procedure, the Community and the Member States shall be deemed to be one Party to the dispute. The Cooperation Council shall appoint a third conciliator. The conciliators' recommendations shall be taken by majority vote. Such recommendations shall not be binding upon the Parties. 4. The Cooperation Council may establish rules of procedure for dispute settlement. ARTICLE 89 The Parties agree to consult promptly through appropriate channels at the request of either Party to discuss any matter concerning the interpretation or implementation of this Agreement and other relevant aspects of the relations between the Parties. The provisions of this Article shall in no way affect and are without prejudice to Articles 13, 88 and 94. ARTICLE 90 Treatment granted to the Republic of Armenia thereunder shall in no case be more favourable than that granted by the Member States to each other. ARTICLE 91 For the purposes of this Agreement, the term "Parties" shall mean the Repubhc of Armenia on the one part, and the Community, or the Member States, or the Community and the Member States, in accordance with their respective powers, on the other part. ARTICLE 92 Insofar as matters covered by this Agreement are covered by the Energy Charter Treaty and Protocols thereto, such Treaty and Protocols shall upon entry into force apply to such matters but only to the extent that such application is provided for therein. 41 ARTICLE 93 This Agreement is concluded for an initial period of ten years. The Agreement shall be automatically renewed year by year provided that neither Party gives the other Party written notice of denunciation of the Agreement six months before it expires. ARTICLE 94 1. The Parties shall take any general or specific measures required to fulfil their obligations under the Agreement. They shall see to it that the objectives set out in the Agreement are attained. 2. If either Party considers that the other Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Cooperation Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In the selection of these measures, priority must be given to those which least disturb the functioning of the Agreement. These measures shall be notified immediately to the Cooperation Council if the other Party so requests. ARTICLE 95 Annexes I, II, and III and IV together with the Protocol shall form an integral part of this Agreement. ARTICLE 96 This Agreement shall not, until equivalent rights for individuals and economic operators have been achieved thereunder, affect rights assured to them through existing Agreements binding one or more Member States, on the one hand, and the Republic of Armenia, on the other, except in areas falling within Community competence and without prejudice to the obligations of Member States resulting from this Agreement in areas falling within their competence. ARTICLE 97 This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of the Republic of Armenia. ARTICLE 98 The Secretary-General of the Council of the European Union shall be the depository of this Agreement. 42 ARTICLE 99. The original of this Agreement of which the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Armenian languages are equally authentic, shall be deposited with the Secretary-General of the Council of the European Union. ARTICLE 100 This Agreement will be approved by the Parties in accordance with their own procedures. This Agreement shall enter into force on the first day of the second month following the date on which the Parties notify the Secretary-General of the Council of the European Union that the procedures referred to in the first paragraph have been completed. Upon its entry into force, and as far as relations between the Republic of Armenia and the Community are concerned, this Agreement shall replace the Agreement between the European Economic Community, the European Atomic Energy Community and the Union of Soviet Socialist Republics on trade and economic and commercial cooperation signed in Brussels on 18 December 1989. ARTICLE 101 In the event that, pending the completion of the procedures necessary for the entry into force of this Agreement, the provisions of certain parts of this Agreement are put into effect by means of an Interim Agreement between the Community and the Republic of Armenia, the Contracting Parties agree that, in such circumstances, the term "date of entry into force of the Agreement" shall mean the date of entry into force of the Interim Agreement. 43 LIST OF DOCUMENTS ATTACHED Annex I Indicative list of advantages granted by the Republic of Armenia to the Independent States in accordance with Article 8(3). Annex II Intellectual, industrial and commercial property conventions referred to in Article 42. Annex HI Financial services definitions, referred to in Article 25. Annex IV Community reservations in accordance with Article 22 (2). Protocol on mutual assistance between administrative authorities in customs matters. 44 / / Advantages granted by the Republic of Armenia to the Independent States in accordance with Article 8(3) ANNEX 1 All Independent States: No import duties are implemented. 45 / ••J» - r > l. l -. -l -i M- • , ANNEX II INTELLECTUAL, INDUSTRIAL AND COMMERCIAL PROPERTY CONVENTIONS REFERRED TO IN ARTICLE 42 1. Paragraph 2 of Article 42 concerns the following multilateral conventions: - Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971); - International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome, 1961); - Protocol relating to the Madrid Agreement concerning the International Registration of Marks (Madrid, 1989); - Nice Agreement concerning the International Classification of Goods and Services for the purposes of the Registration of Marks (Geneva 1977 and amended in 1979); - Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the purposes of Patent Procedures (1977, modified in 1980); - International Convention for the Protection of New Varieties of Plants (UPOV) (Geneva Act, 1991). 2. The Cooperation Council may recommend that paragraph 2 of Article 42 shall apply to other multilateral conventions. If problems in the area of intellectual, industrial and commercial property affecting trading conditions were to occur, urgent consultations will be undertaken, at the request of either party, with a view to reaching mutually satisfactory solutions. 3. The Parties confirm the importance they attach to the obligations arising from the following multilateral conventions: - Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967 and amended in 1979); - Madrid Agreement concerning the International Registration of Marks (Stockholm Act, 1967 and amended in 1979); - Patent Cooperation Treaty (Washington, 1970, amended in 1979 and modified in 1984). 4. From the entry into force of this Agreement, the Republic of Armenia shall grant to Community companies and nationals, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by it to any third country under bilateral agreements. 5. The provisions of paragraph 4 shall not apply to advantages granted by the Republic of Armenia to any third country on an effective reciprocal basis and to advantages granted by the Republic of Armenia to another country of the former USSR. 46 CONCERNING ARTICLE 25 FINANCIAL SERVICES: DEFINITIONS ANNEX m A financial service is any service of a financial nature offered by a financial service provider of a party. Financial services include the following activities: A. B. All insurance and insurance-related services; 1. life non-life Direct insurance (including co-insurance), (i) (ii) Reinsurance and retrocession. Insurance intermediation, such as brokerage and agency. Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services. Banking and other financial services (excluding insurance). 1. 2. Acceptance of deposits and other repayable funds from the public. Lending of all types, including, inter-alia, consumer credit, mortgage credit, factoring and financing of commercial transaction. Financial leasing. All payment and money transmission services, including credit charge and debit cards, travellers cheques and bankers drafts. Guarantees and commitments. Trading for own account or for the account of customers, whether on an exchange, in an over the counter market or otherwise, the following: (a) (b) (c) (d) money market instruments (cheques, bills, certificates of deposits, etc. ) foreign exchange derivative products including, but not limited to, futures and options exchange rates and interest rate instruments, including products such as swaps, forward rate agreements, etc. transferable securities (e) (f) other negotiable instruments and financial assets, including bullion. Participation in issues of all kinds of securities, including under-writing and placement as agent (whether publicly or privately) and provision of services related to such issues. Money brokering. Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial depository and trust services. Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments. Advisory intermediation and other auxiliary financial services on all the activities listed in points 1 to 10 above, including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy. 2. 3. 4. 3. 4. 5. 6. 7. 8. 9. 10. 11. 47 12. Provision and transfer of financial information, and financial data processing and related software by providers of other financial services. The following activities are excluded from the definition of financial services: (a) (b) (c) Activities carried out by central banks or by any other public institution in pursuit of monetary and exchange rate policies. Activities conducted by central banks, government agencies or departments, or public institutions, for the account or with the guarantee of the government, except when those activities may be carried out by financial service providers in competition with such public entities Activities forming part of a statutory system of social security or pubhc retirement plans, except when those activities may be carried out by financial service providers in competition with public entities or private institutions. 48 / 7' ANNEX IV COMMUNITY RESERVATIONS IN ACCORDANCE WITH ARTICLE 22 (2) Mining In some Member States, a concession may be required for mining and mineral rights for non-EC controlled companies. Fishing Access to and use of the biological resources and fishing grounds situated in the maritime waters coming under the sovereignty or within the jurisdicrion of Member States of the Community is restricted to fishing vessels flying the flag of a Community Member State and registered in Community territory unless otherwise provided for. Real estate purchase In some Member States, the purchase of real estate by non-EC companies is subject ot restrictions. Audiovisual services including radio National treatment concerning production and distribution, including broadcasting and other forms of transmission to the public, may be reserved to audiovisual works meeting certain origin criteria. Telecommunications services including mobile and satellite services Reserved services In some Member States market access concerning complementary services and infrastructure is restricted. Professional services s Services reserved to natural persons nationals of Member States. Under certain conditions those persons may create companies. Agriculture In some Member States national treatment is not applicable to non-EC controlled companies which wish to undertake an agricultural enterprise. The acquisition of vineyards by non-EC controlled companies is subject to notification, or, as necessary,. authorization. News agency services In some Member States limitations of foreign participation in publishing companies and broadcasting companies] / ^ ' ^ 49 DRAFT PROTOCOL ON MUTUAL ASSISTANCE BETWEEN ADMINISTRATIVE AUTHORITIES IN CUSTOMS MATTERS ,/ ARTICLE 1 Definitions For the purposes of this Protocol : a) b) c) "customs legislation" shall mean any legal or regulatory provisions applicable in the territory of the Contracting Parties governing the import, export, transit of goods and their placing under any customs procedure, including measures of prohibition, restriction and control; "applicant authority", shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which makes a request for assistance in customs matters; "requested authority", shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which receives a request for assistance in customs matters; d) "personal data", shall mean all information relating to an identified or identifiable individual. ARTICLE 2 Scope 1. The Contracting Parties shall assist each other, in the areas within their jurisdiction, in the manner and under the conditions laid down in this Protocol, in preventing, detecting and investigating operations in breach of customs legislation. 2. Assistance in customs matters, as provided for in this Protocol, shall apply to any administrative authority of the Contracting Parties which is competent for the application of this Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover information obtained under powers exercised at the request of the judicial authorities, unless those authorities so agree. ARTICLE 3 Assistance on request 1. At the request of the applicant authority, the requested authority shall furnish it with all relevant information which may enable it to ensure that customs legislation is correctly applied, including information regarding operations noted or planned which are or could be in breach of such legislation. 2. At the request of the applicant authority, the requested authority shall inform it whether goods exported from the territory of one of the Contracting Parties have been properly imported into the territory of the other Party, specifying, where appropriate, the customs procedure applied to the goods. 51 • / • ' ';. / '' 3. At the request of the applicant authority, the requested authority shall, within the framework of its laws, take the necessary steps to ensure that a special watch is kept on : (a) (b) natural or legal persons of whom there are reasonable grounds for believing that they are breaching or have breached customs legislation; places where goods are stored in a way that gives grounds for suspecting that they are intended to supply operations in breach of customs legislation; (c) movements of goods notified as possibly giving rise to breaches of customs legislation; (d) means of transport for which there are reasonable grounds for believing that they have been, are or might be used in operations in breach of customs legislation. ARTICLE 4 Spontaneous assistance The Contracting Parties shall provide each other, in accordance with their laws, rules and other legal instruments, with assistance without prior request if they consider that to be necessary for the correct application of customs legislation, particularly when they obtain information pertaining to : - operations which are or. appear to be in breach of such legislation and which may be of interest to another Contracting Party, - new means or methods employed in carrying out such operations; - goods known to be subject to breaches of customs legislation. - natural or legal persons of whom there are reasonable grounds for believing that they are or have been in breach of customs legislation - means of transport for which there are reasonable grounds for believing that they have been, are or might be used in operations in breach of customs legislation ARTICLE 5 Delivery/Notification At the request of the applicant authority, the requested authority shall, in accordance with its legislation, take all necessary measures in order : - to deliver all documents, - to notify all decisions, falling within the scope of this Protocol to an addressee, residing or established in its territory. In such cases, Article 6(3) shall apply as far as the request itself is concerned. ARTICLE 6 Form and substance of requests for assistance Requests pursuant to this Protocol shall be made in writing. They shall be accompanied by the documents necessary to enable compliance with the request. When required because of the urgency of the situation, oral requests may be accepted, but must be confirmed in writing ; immediately. -^ 52 ' ' / // 2. Requests pursuant to paragraph 1 shall include the following information : (a) (b) (c) (d) (e) the applicant authority making the request; the measure requested; the object of and the reason for the request; the laws, rules and other legal elements involved; indications as exact and comprehensive as possible on the natural or legal persons who are the target of the investigations; (f) a summary of the relevant facts and of the enquiries already carried out, except in cases provided for in Article 5. 3. Requests shall be submitted in an official language of the requested authority or in a language acceptable to that authority. 4. If a request does not meet the formal requirements, its correction or completion may be requested; precautionary measures may, however, be ordered. ARTICLE 7 Execution of requests 1. In order to comply with a request for assistance, the requested authority shall proceed, within the limits of its competence and available resources, as though it were acting on its own account or at the request of other authorities of that same Contracting Party, by supplying information already possessed, by carrying out appropriate enquiries or by arranging for them to be carried out. This provision shall also apply to the administrative department to which the request has been addressed by the requested authority when the latter cannot act on its own. 2. Requests for assistance shall be executed in accordance with the laws, rules and other legal instruments of the requested Contracting Party. 3. Duly authorized officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, obtain from the offices of the requested authority or other authority for which the requested authority is responsible, information relating to operations which are or may be in breach of customs legislation which the applicant authority needs for the purposes of this Protocol. 4. Officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, be present at enquiries carried out in the latter's territory. ARTICLE 8 Form in which information is to be communicated 1. The requested authority shall communicate results of enquiries to the applicant authority in the form of documents, certified copies of documents, reports and the like. ^ ^ 53 The documents provided for in paragraph 1 may be replaced by computerized information produced in any form for the same purpose. ARTICLE 9 Exceptions to the obligation to provide assistance 1. The Contracting Parties may refuse to give assistance as provided for in this Protocol, where to do would: (a) (b) (c) (d) be likely to prejudice the sovereignty of the Republic of Armenia or that of a Member State of the European Union which has been asked for assistance under this Protocol; or be likely to prejudice public policy, security or other essential interests, in particular in the cases referred to under Article 10 (2); or involve currency or tax regulations other than customs legislation; or violate an industrial, commercial or professional secret. 2. Where the applicant authority requests assistance which it would itself be unable to provide if so asked, it shall draw attention to that fact in its request. It shall then be left to the requested authority to decide how to respond to such a request. 3. If assistance is refused, the decision and the reasons therefor must be notified to the applicant authority without delay. ARTICLE 10 Information exchange and confidentiality 1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a confidential or restricted nature, depending on the rules applicable in each of the Contracting Parties. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to like information under the relevant laws of the Contracting Party which received it and the corresponding provisions applying to the Community institutions. 2. Personal data may be exchanged only where the receiving Contracting Party undertakes to protect such data in at least an equivalent way to the one applicable to that particular case in the supplying Contracting Party. 3. Information obtained shall be used solely for the purposes of this Protocol. Where one of the Contracting Parties requests the use of such information for other purposes, it shall ask for the prior written consent of the authority which furnished the information. Moreover, it shall be subject to any restrictions laid down by that authority. 4. Paragraph 3 shall not impede the use of information in any judicial or administrative proceedings subsequently instituted for failure to comply with customs legislation. The competent authority which supplied that information shall be notified of such use. 5. The Contracting Parties may, in their records of evidence, reports and testimonies and in proceedings and charges brought before the courts, use as evidence information obtained and documents consulted in accordance with the provisions of this Protocol. ----- —- 54 "/"''' ARTICLE 11 Experts and witnesses 1. An official of a requested authority may be authorized to appear, within the limitations of the authorization granted, as an expert or witness in judicial or administrative proceedings regarding the matters covered by this Protocol in the jurisdiction of the other Contracting Party, and produce such objects, documents or authenticated copies thereof, as may be needed for the proceedings. The request for an appearance must indicate specifically on what matters and by virtue of what title or qualification the official will be questioned. 2. The authorized official shall enjoy the protection guaranteed by existing legislation to officials of the applicant authority on its territory. ARTICLE 12 Assistance expenses The Contracting Parties shall waive all claims on each other for the reimbursement of expenses incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to interpreters and translators who are not public service employees. ARTICLE 13 Application 1. The application of this Protocol shall be entrusted to the central customs authorities of the Republic of Armenia on the one hand and the competent services of the European Commission and, where appropriate, the customs authorities of the Member States of the European Union on the other. They shall decide on all practical measures and arrangements necessary for its application, taking into consideration the rules in force in the field of data protection. They may recommend to the competent bodies amendments which they consider should be made to this Protocol. 2. The Contracting Parties shall consult each other and subsequently keep each other informed of the detailed rules of implementation which are adopted in accordance with the provisions of this Protocol. ARTICLE 14 Complementarity Without prejudice to Article 10, any agreements on mutual assistance which have been concluded between one or more Member States of the European Union and the Republic of Armenia shall not prejudice Community provisions governing the communication between the competent services of the Commission and the customs authorities of the Member States of any information obtained in customs matters which could be of Community interest. 55 •/ > JOINT DECLARATION CONCERNING ARTICLE 3 BIS In reviewing changing circumstances in the Republic of Armenia, as foreseen in Art. 3 bis, the Parties shall discuss important changes which may have a significant bearing on Armenia's future development. This could include accession by Armenia to the WTO, the Council of Europe or other international bodies or accession to any regional customs union or any form of regional integration agreement. > ft bh JOINT DECLARATION IN RELATION TO ARTICLE 5 Should the parties agree that circumstances warrant meetings at the highest level, such meetings may be arranged on an ad hoc basis. 56 JOINT DECLARATION CONCERNING ARTICLE 14 Until the Republic of Armenia accedes to the WTO, the Parties shall hold consultations in the Cooperation Committee on their import tariff policies, including changes in tariff protection. In particular, such consultations shall be offered prior to the increase of tariff protection. R7 /? JOINT DECLARATION CONCERNING THE NOTION OF "CONTROL" IN ARTICLE 24(b) AND ARTICLE 36 1. The Parties confirm their mutual understanding that the question of control shall depend on the factual circumstances of the particular case. 2. A company shall, for example, be considered as being "controlled" by another company, and thus a subsidiary of such other company if: - the other company holds directly or indirectly a majority of the voting rights, or - the other company has the right to appoint or dismiss a majority of the administrative organ, of the management organ or of the supervisory organ and is at the same time a shareholder or member of the subsidiary. 3. Both Parties consider the criteria in paragraph 2 to be non-exhaustive. 58 JOINT DECLARATION CONCERNING ARTICLE 35 The sole fact of requiring a visa for natural persons of certain Parties and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment. 59 JOINT DECLARATION CONCERNING ARTICLE 42 The Parties agree that for the purpose of the Agreement, intellectual, industrial and commercial property includes in particular copyright, including the copyright in computer programs, and neighbouring rights, the rights relating to patents, industrial designs, geographical indications, including appellations of origin, trademarks and service marks, topographies of integrated circuits as well as protection against unfair competition as referred to in Article 10 bis of the Paris Convention for the protection of Industrial Property and protection of undisclosed information on know-how. 60 / / JOINT DECLARATION CONCERNING ARTICLE 94 The Parties agree, for the purpose of its correct interpretation and its practical application, that the term "cases of special urgency" included in Article 94 of the Agreement means cases of material breach of the Agreement by one of the Parties. A material breach of the Agreement consists in (a) repudiation of the Agreement not sanctioned by the general rules of international law or (b) violation of the essential elements of the Agreement set out in Article 2. The parties agree that the "appropriate measures" referred to in Article 94 are measures taken in accordance with international law. If a party takes a measure in a case of special urgency as provided for under Article 94, the other party may avail itself of the procedure relating to settlement of disputes. 61 EXCHANGE OF LETTERS BETWEEN THE COMMUNITY AND THE REPUBLIC OF ARMENIA IN RELATION TO THE ESTABLISHMENT OF COMPANIES 62 ' / •' / A. Letter from the Government of the Republic of Armenia Dear Sir, I refer to the Partnership and Cooperation Agreement initialled on As I underlined during the negotiations, the Republic of Armenia grants to Community companies establishing and operating in the Republic of Armenia in certain respects a privileged treatment. I explained that this reflects the Armenian policy to promote by all means the establishment of Community companies in the Republic of Armenia. With this in mind, it is my understanding that during the period between the date of initialling of this Agreement and the entry into force of the relevant articles on establishment of companies, the Republic of Armenia shall not adopt measures or regulations which would introduce or worsen discrimination of Community companies vis-à-vis Armenian companies or companies from any third country as compared to the situation existing on the date of initialling of this agreement. I would be obliged if you could acknowledge receipt of this letter. Please accept, Sir, the assurance of my highest consideration. For the Government of the Republic of Armenia 63 B. Letter from the European Community Dear Sir, Thank you for your letter of today's date, which reads as follows: "I refer to the Partnership and Cooperation Agreement initialled on. As I underlined during the negotiations, the Republic of Armenia grants to Community companies establishing and operating in the Republic of Armenia in certain respects a privileged treatment. I explained that this reflects the Armenian policy to promote by all means the establishment of Community companies in the Republic of Armenia. With this in mind, it is my understanding that during the period between the date of initialling of this agreement and the entry into force of the relevant articles on establishment of companies, the Republic of Armenia shall not adopt measures or regulations which would introduce or worsen discrimination of Community companies vis-à-vis Armenian companies or companies from any third country as compared to the situation existing on the date of initialling of this agreement. I would be obliged if you could acknowledge receipt of this letter," I can acknowledge receipt of this letter. Please accept, Sir, the assurance of my highest consideration. On behalf of the European Community 64 / >. '• / ' /' DECLARATION BY THE FRENCH GOVERNMENT The French Republic notes that the Partnership and Cooperation Agreement with the Republic of Armenia does not apply to the overseas countries and territories associated with the European Community pursuant to the Treaty establishing the European Community. 65 SIDE LETTER FROM THE EUROPEAN COMMUNITIES AND. THEIR MEMBER STATES TO THE GOVERNMENT OF THE REPUBLIC OF ARMENIA (OUTSIDE THE AGREEMENT) Subsequent to the request by the Armenian authorities to include provisions for assistance in the nuclear safety area in the PCA, the European Communities and their Member States make the following statement: The European Communities and their Member States regret the decision of the Armenian authorities to reopen Unit 2 of the Medzamor Nuclear Power Plant in November 1995, which they consider not to be in line with the overall objective pursued by the European Communities and their Member States to increase nuclear safety worldwide, and in particular in the countries of Central and Eastern Europe and of the former Soviet Union where nuclear installations exist for which significant design deficiencies have been identified, On the basis of the fact that the Medzamor Nuclear Power Plant cannot be upgraded to a level corresponding to internationally recognized safety standards, the European Communities and their Member States consider that it is not suitable for long-term operation and that its shutdown in the shortest practically achievable time should be pursued. It is therefore most important that alternative energy sources be identified and used. The EC is willing to support Armenia in the definition and implementation of a comprehensive long term energy strategy, in line with Article 54 of the Partnership and Cooperation Agreement, through its TACIS program (in cooperation with the International Financial Institutions), Without prejudice to the above-mentioned objective of the shutdown of the Nuclear Power Plant and taking into account the current situation, the EC could consider, upon request of Armenia, the possibility of limited support, compatible with the existing framework of Tacis resources and priorities, for short term safety measures under its Tacis technical assistance programme. These measures could include: support to the Safety Authorities operational safety assistance to the operator and when this is needed for fulfilling these tasks, limited supply of urgently needed equipment. U -«* // ISSN 0254-1475 COM(96) 136 final DOCUMENTS EN ii Catalogue number : CB-CO-96-157-EN-C ISBN 92-78-02513-5 Office for Official Publications of the European Communities L-2985 Luxembourg k?

Draft COUNCIL RESOLUTION relating to educational multimedia software in the fields of education and training

http://publications.europa.eu/resource/cellar/0eaff72a-3ed8-4a08-8441-bf92bdb516ab

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COMMISSION OF THE EUROPEAN COMMUNITIES à •it •h it -tr it Brussels, 26 03 1096 COM(96) 120 final Draft COUNCIL RESOLUTION relating to educational multimedia software in the fields of education and training (presented by the Commission) £XPUANATQRY,,MO^BAN&UM Preparing the people of Europe for the information society has become a priority, particularly in education. Accordingly, a research/industry Task Force "Multimedia educational software" was set up in March 1995 by the Commission and provided an opportunity to take stock of the current situation as regards educational multimedia and to draft a tentative plan of action to strengthen the research effort in this field through the research and technological development actions of the fourth framework programme (1994-1998), to allow the users concerned to derive the best possible advantages from the new technologies in the context of education and training, to improve the effectiveness of European research, and to give a boost to the European educational multimedia industry. A number of observations on the current situation emerged from this exercise. Firstly, multimedia educational software offers vast potential for teaching and people in the education sector are key figures for the multimedia industry. Teachers and trainers are responsible for a whole range of tasks which cannot be taken over by machines. Teachers discuss and exchange ideas with their pupils. They stimulate, assess and adapt teaching routes. They analyse and select from among the resources available. The great advantage of multimedia is its interactivity whether for local or distance learning, and experiments in progress show that it offers additional dimensions. Multimedia permits an original presentation of knowledge and the creation of a virtual environment which gives students an idea of the effects of their actions. interpersonal In combination with communication, a collective tool which is essential to the learning process. Furthermore, multimedia offers fresh prospects for providing a growing percentage of the population with access lo a good level of general education and to solid vocational training, and for renewing knowledge and skills in a context of increasing specialisation and complexity. it provides a capacity telematics networks, for A second Task Force observation is that the European Union has to make the best possible use of expertise in this area and foster co-operation between all those in the Member States who are involved in these developments. A research and incentive drive is needed to turn the potential of multimedia educational software into tangible teaching benefits and achievement. This drive should focus in particular on better co-ordination of Community programmes, be they R &D programmes, programmes dealing with the production of multimedia contents or education and training programmes, in complementarity with national action. The Structural Funds and the resources allocated to the trans-European networks could also make a useful contribution to this drive. The Task Force's stocktaking exercise also reveals a patchy and generally unsatisfactory situation at present as regards the provision oi' multimedia educational equipment and software in education and training establishments. There is even a serious risk that home equipment will overtake the level of equipment in educational establishments, meaning that the children from low-income families will be left on the fringes of developments. Wider access to the new information and training media in schools and in all places of learning is a challenge which has to be met if we are to avoid a two-tier society divided by unequal access to technologies. These three broad observations prompt recommendations concerning: research and the choice of priorities in collaboration with consumers and industry the design of multimedia educational software the training of teachers and trainers the infrastructure of equipment and services for users, teachers or trainers, and the dissemination of best practice Co-ordinated and targeted research on the teaching environment offered by multimedia technology should make it possible to better understand the teaching issues inherent in these developments and to tailor supply to demand. User requirements should be taken into account in the design of multimedia tools, services and applications at the outset, so that software can be customised to the teaching process. Pupil and teacher must be at the heart of this process of designing multimedia applications and services. The training of teachers and users in the broad sense is essential and due account has to be taken of the specific roles of the teacher, the trainer, the pupil and the student in the use of multimedia educational software, also paying attention to the fundamental contribution of initial and continuing teacher training structures. Multimedia technology could make dissemination of teaching and organisational innovation easier e. g. new patterns of organisation for school or outside school learning or teaching methods at all levels. Infrastructures are essential. A good level of appropriate multimedia equipment is a precondition for the successful introduction of multimedia: at school, university and all places of education and training. This equipment should be defined as a function of its suitability to the teaching environment and the funding context. New ways of access to resources and funding should be devised. The establishment of multimedia and distance support centres, the development of co-operation networks, the development of forums of evaluation and demonstration would be a useful way to disseminate good practice. The effectiveness of these measures presupposes synergy between all the players concerned: teachers, families, local authorities, heads of establishments, of associations and companies, pupils, students and employees, in arriving at a general consensus on the objectives to be attained at these different levels. Solid school-enterprise partnerships should be negotiated in the interests of mutually advantageous relationships under flexible and adaptable contracts. In particular, telecommunications operators and service providers should be encouraged to try out innovatory technological solutions and pricing structures, in conjunction with the education authorities, teachers, parents and students. Specific measures are needed for children and students from disadvantaged environments, underachievers, disabled people, pupils or students in rural areas, the unemployed and the employees of small firms. Specific actions could be envisaged, as part of international co-operation, under existing programmes and in relation with specific aid programmes for the countries of Central and Eastern Europe, and the countries of the Mediterranean basin, as well as third countries, in the light of the experience gained during the PHARE programme in the field of Open and Distance learning. Article 126 of the Treaty creating the European Community, which allows for encouragement of distance learning under the heading of the general objectives of co-operation in education, and respecting the principle of subsidiarity as regards the content and organisation of educational systems, does not allow the proposal of a legally binding text. This is why the Commission proposes the adoption of a resolution seeking to lay the foundations of profitable and lasting co-operation on questions are which are essential to the future of education systems in Europe. It also purports to encourage and support the education authorities in the Member States in any action they take in this area. Lastly, it seeks to achieve better co-ordination on these issues following the recommendations of the Task Force "Multimedia educational software". Council resolution of relating to educational multimedia software in the fields of education and training THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to the draft resolution submitted by the European Commission, Having regard to action to support the development of high quality education through co operation between the Member States, while respecting their responsibilities in this area, Having regard to Decision No 819/95/EC of the European Parliament and of the Council of 14 March 1995 establishing the Community action programme SOCRATES (1) Having regard to Council Decision 94/819/EC of 6 December 1994 establishing an action programme for the implementation of a European Community vocational training policy (LEONARDO DA VINCI) (2); Having regard to Decision 818/95/CE of the European Parliament and the Council of 14 March 1995 regarding the adoption of the third phase of the "YOUTH FOR EUROPE" programme (3). Whereas Decision No 1110/94/EC of the European Parliament and of the Council of 26 April 1994 concerning the fourth framework programme of the European Community activities in the field of research and technological development and demonstration (1994-1998), also makes provision for research in the area of the application of information and communication technologies in responding to common social needs (4) Whereas Commission communication COM (96) 12 final concerning the draft decision of the European Parliament and the Council regarding the second amendment to decision 1 i 10/94/CE relating to the fourth framework programme for research, technological development and demonstration (1994-1998), makes provision for an increase in the global amount of the Community's financial contribution to the fourth framework programme, and the allocution of financial resources to activities relating to educational multimedia software. OJNoL87of2G. 04. 1995, p. 10 OJ No L 340 of 29. 12 1994, p. 8 OJ No L 87 of 20. 04. 1995, p. 1 OJNoL 126 of 18. 05. 1994, p. 1 Having regard to Council Decision 94/802/EC of 23 November 1994 adopting a specific programme for research and technological development, including demonstration, in the field of information technologies (1994-1998) (5) Having regard to Council Decision 94/801/EC of 23 November 1994 adopting a specific programme for research and technological development, including demonstration, in the field of telematics applications of common interest (1994-1998) (6) Having regard to Council Decision 94/915/EEC of 15 December 1994 adopting a specific programme of research and technological development, including demonstration, in the field of targeted socio-economic research (1994-1998) (7) Having regard to the Commission proposal of 30 June 1995 for a Council Decision adopting a multi-annual Community programme to stimulate the development of a European multimedia content industry and to encourage the use of multimedia content in the emerging information society (INFO 2000) (8) Having regard to Council Decision 95/563/EC of 10 July 1995 on the adoption of the (MEDIA the II -development and distribution) programme dissemination of European audio-visual works (9), and the Council decision 95/564/CE of 22 December 1995 on the adoption of a training programme for professionals in the European audio-visual industry (MEDIA II - training) (10) the development and to encourage Having regard to Council resolution of 4 April 1995 on "culture and multimedia", which recognised the urgency of taking action to support the establishment and development of a market in cultural multimedia whilst respecting Europe's linguistic and cultural diversity (11 ), Having regard to the Commission's White Paper Growth, competitiveness and employment: the challenges and ways forward into the 21st century, which stresses the importance of education and training as catalysts in a changing society (12) Having regard to the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions "Towards the information society in Europe: a plan of action" (13) 5 6 7 8 9 10 II 12 13 OJ No L 334 of 22. 12. 1994, p. 24 OJ No L 334 of 22. 12. 1994, p. 1 OJ No L 361 of 31. 12. 1994, p. 77 OJ No C 250 of 26. 09. 1995, p. 4 OJ No L 321 of 30. 12. 1995, p. 25 OJ No L 321 of 30. 12. 1995, p. 33 OJ No C 247 of 23. 09. 1995 COM (93) 700 final,05. 12. 1993 COM (94) 347 final, 19. 07. 1994 Taking note of the outcome of the G7 meeting in Brussels on 25-26 February 1995 on the information society and particularly the recommendations on pilot projects in the area of transcultural education and training; Having regard to the potential offered by the use of educational multimedia for third countries in the interest of international co-operation, and in particular the countries of central and eastern Europe, the countries of the Mediterranean basin, and developing countries, Taking note of the two reports of June and December 1995 from the advisory group on competitiveness forwarded to the President of the Commission and to the heads of state and government on the improvement of European competitiveness; Taking note of the report of the Task Force "Multimedia educational software", which takes stock of the situation as regards this software in Europe and proposes a plan of action in this area; Having regard to the White Paper Teaching and learning: towards the learning society (14) which recommends inter alia measures to encourage the development of multimedia instruments conducive to the acquisition of new knowledge by: launching co-ordinated calls for proposals across the Community programmes concerned; establishing a system to exploit to the full and label European educational software and European education and training products in order to boost the dissemination of these products; Having regard to the Communication from the Commission to the Council the European Parliament, the Economic and Social Committee and the Committee of the Regions on a methodology for the use of Community resources in implementing information society applications and on the need for effective co-ordination between research and educational programmes (15) Having regard to the advantages of joint action for the use of educational multimedia software in services in schools and training establishments in order to: improve the quality and effectiveness of education and training systems, inter alia by introducing new patterns of teaching; strengthen social cohesion by giving every person and every company, particularly those of the less-favoured regions and the small and medium size enterprises, the means to be an active part of the information society; COM(95) 590 final, 29. 11. 1995 COM (95) 224, 31. 05. 1995 make teachers and students aware of the use of these new instruments and provide appropriate training; instigate a solid partnership between educational establishments and the suppliers of hardware, software and services with a view to creating a big market in multimedia applications and services truly adapted to teaching needs: Whereas the use of software and multimedia educational services requires the active participation of local authorities, schools and training establishments, teachers, trainers, and the business sector so that the best teaching methods can be tested and used; Having regard to the contribution of multimedia telematics networks in linking up education and training establishments, teachers, pupils, and the outside world in order to provide access to information, exchange and compare ideas and teaching experience; Taking note of the results obtained within Community programmes, and of the richness and diversity of actions in progress, and of experience acquired by the Member States in the development and exchange of methods relating to the use of information and communication technology for educational and training systems, CALLS UPON THE MEMBER STATES TO: develop the use of the new information and communication technologies in education and training systems as part of an enhanced approach to teaching methods which take full account of the teacher's role, give the student a more active and participative role, customise learning, encourage a cross-curricular slant, and secure co-operation between teachers in defining teaching projects and in responding to specific needs, step up the training of teachers and trainers in using multimedia software and on-line services and their use as tools to better prepare their teaching activities; special attention should be paid to the analysis and understanding of the role of teachers and trainers, to providing teachers with the results of research on the introduction of multimedia into teaching, to campaigns to show the benefits of multimedia, to support and promotion of teachers' initiatives, and to co-operation between teachers and the business sector on trial runs using multimedia products and services; encourage research activity, the creation and design of multimedia educational software in Europe, particularly under partnerships between the education world, editors and multimedia companies, for: the development of methods for the design of multimedia teaching material, structures to support the development and adaptation of educational multimedia software, involving teachers and trainers in the design of these products; the definition of appropriate software licensing systems and the development of new ways to share resources; ways of opening up access to multimedia libraries for schools and training establishments while safeguarding intellectual property; the definition of quality criteria and labels or appropriate means of recognition, inter alia in order to secure synergy with multimedia intended for the home market and a satisfactory level of consumer protection; setting up the appropriate infrastructures to guarantee to the greatest possible number of users access to hardware, software and on-line multimedia services of good quality, as well as to the appropriate training and back-up. This should be achieved by installing this equipment at the places concerned, i. e. nursery, primary and secondary schools, universities, public libraries, businesses, resource centres, socio-educational centres for young people and families, associations, etc. Special attention should be paid to developing multimedia support centres and to communication between teachers and education partners; and to training in its broadest sense. take specific steps to: introduce multimedia as a means of testing and encouraging flexible patterns of school or university organisation, in order to increase the effectiveness and dissemination of such instruments, favour the use of, and access to educational multimedia software in particular in catering for the needs of young people, and areas which are disadvantaged, peripheral or suffering from industrial decline; encourage the dissemination of best teaching practice based on the use of multimedia educational software and services, and consider the establishment or consolidation of demonstration and promotion forums on this basis; seek out the most efficient management methods for joint action at European level between cultural, educational and training programmes and research programmes; taking account of the possibilities offered by the Structural Funds, produce regular progress reports on the implementation of multimedia educational software in their education systems. CALLS UPON THE COMMISSION TO undertake a comparative analysis and follow up of the most advanced pilot experiments on the use of multimedia educational products and services in Europe and in the world, and disseminate the results of this analysis to the Member States; take account of the fields of education and training in the context of its overall initiatives on the information society; use all the potential offered by multimedia software and services in implementing Commission-driven actions in the areas of education, training and culture, including international co-operation, particularly with the countries of Central and Eastern Europe and the Mediterranean countries; identify and encourage common services which could be developed at European level, including information on products and their evaluation, the establishment of links between producers, users and managers of education and training systems in order to secure good quality in the products and their use; establish a co-ordinated approach for action in the field of multimedia educational software under the different Community programmes concerned and also under the telecommunications Structural Funds and initiatives to develop trans-European networks, around converging objectives and pooling of budgetary resources, while respecting the procedures applicable; pay special attention to the external visibility and implementation of this co-ordinated approach in order to improve the quality and effectiveness of education and training systems, research and access to the employment market encourage full use and dissemination at European level of best teaching practice based on the use of multimedia software and services; making as much use as possible of existing structures at all levels; submit no later than 31 December 1997 a report on progress achieved, obstacles encountered and additional action needed for the implementation of these actions looking ahead to the year 2000. ISSN 0254-1475 COM(96) 120 final DOCUMENTS EN 16 15 Catalogue number : CB-CO-96-130-EN-C ISBN 92-78-01820-1 Office for Official Publications of the European Communities L-2985 Luxembourg

Decision of the EEA Joint Committee No 9/96 of 26 March 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement

http://publications.europa.eu/resource/cellar/55d5f32a-4caf-4d0f-b7c2-fe67418e27de

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L_1996124EN. 01002301. xml 23. 5. 1996    EN Official Journal of the European Communities L 124/23 DECISION OF THE EEA JOINT COMMITTEE No 9/96 of 26 March 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the Agreement, and in particular Article 98 thereof, Whereas Annex II to the Agreement was amended by Decision of the EEA Joint Committee No 15/96 (1); Whereas European Parliament and Council Directive 95/27/EC of 29 June 1995 amending Council Directive 86/662/EEC on the limitation of noise emitted by hydraulic excavators, rope-operated excavators, dozers, loaders and excavator-loaders (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following indent shall be added in point 10 (Council Directive 86/662/EEC) in Chapter VI of Annex II to the Agreement: ‘— 395 L 0027: European Parliament and Council Directive 95/27/EC of 29 June 1995 (OJ No L 168, 18. 7. 1995, p. 14). ’ Article 2 The texts of Directive 95/27/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 April 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 March 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  See page 17 of this Official Journal. (2)  OJ No L 168, 18. 7. 1995, p. 14

Decision of the EEA Joint Committee No 19/96 of 26 March 1996 amending Annex XIII (Transport) to the EEA Agreement

http://publications.europa.eu/resource/cellar/c4e83f88-a770-4cc2-bc51-8bbb0de5e1dc

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L_1996124EN. 01002701. xml 23. 5. 1996    EN Official Journal of the European Communities L 124/27 DECISION OF THE EEA JOINT COMMITTEE No 19/96 of 26 March 1996 amending Annex XIII (Transport) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the Agreement, and in particular Article 98 thereof, Whereas Annex XIII to the Agreement was amended by Decision of the EEA Joint Committee No 74/95 (1); Whereas Council Directive 95/50/EC of 6 October 1995 on uniform procedures for checks on the transport of dangerous goods by road (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 17. C (Council Decision 93/704/EC) in Annex XIII to the Agreement: ‘17. D. 395 L 0050: Council Directive 95/50/EC of 6 October 1995 on uniform procedures for checks on the transport of dangerous goods by road (OJ No L 249, 17. 10. 1995, p. 35). ’ Article 2 The texts of Directive 95/50/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 April 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 March 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 57, 7. 3. 1996, p. 36. (2)  OJ No L 249, 17. 10. 1995, p. 35

Decision of the EEA Joint Committee No 18/96 of 26 March 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement

http://publications.europa.eu/resource/cellar/7b8fc892-09fd-48fd-bc6c-240c70b6571e

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L_1996124EN. 01002601. xml 23. 5. 1996    EN Official Journal of the European Communities L 124/26 DECISION OF THE EEA JOINT COMMITTEE No 18/96 of 26 March 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the Agreement, and in particular Article 98 thereof, Whereas Annex II to the Agreement was amended by Decision of the EEA Joint Committee No 38/94 (1); Whereas Sixth Commission Directive 95/32/EC of 7 July 1995 relating to methods of analysis necessary for checking the composition of cosmetic products (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 6 (Fifth Commission Directive 93/73/EEC) in Chapter XVI of Annex II to the Agreement: ‘7. 395 L 0032: Sixth Commission Directive 95/32/EC of 7 July relating to methods of analysis necessary for checking the composition of cosmetic products (OJ No L 178, 28. 7. 1995, p. 20). ’ Article 2 The texts of Directive 95/32/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 April 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 March 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 372, 31. 12. 1994, p. 11. (2)  OJ No L 178, 28. 7. 1995, p. 20

Proposal for a COUNCIL REGULATION (EC) extending the suspension of the definitive anti-dumping duty imposed on imports of certain types of electronic micorcircuits known as EPROMS (erasable programmable read only memories) originating in Japan

http://publications.europa.eu/resource/cellar/25a0c2c2-389a-44e6-bbbf-a83c501bb363

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COMMISSION OF THE EUROPEAN COMMUNITIES iV * Vr •ir * -K * Brussels, 26. 03. 1996 COM(96) 125 final Proposal for a COUNCIL REGULATION (EC) EXTENDING THE SUSPENSION OF THE DEFINITIVE ANTI DUMPING DUTY IMPOSED ON IMPORTS OF CERTAIN TYPES OF ELECTRONIC MICROCIRCUITS KNOWN AS EPROMS (erasable programmable read only memories) ORIGINATING IN JAPAN (presented by the Commission) Explanatory Memorandum (1) The Commission, by Decision (95/272/EC) of 15 July 19951 , suspended the definitive anti-dumping duty imposed on EPROMs originating in Japan for a period of nine months, as had been done before in the case of DRAMs originating in Japan and the Republic of Korea2. This decision was adopted on the grounds that the market situation for the product in question had temporarily changed to the extent that injurious dumping no longer prevailed and that therefore, the anti-dumping duty could be suspended. (2) The Commission has examined the data available concerning the conditions on the Community market and found that, towards the end of the initial period of suspension of the anti-dumping duty, the EPROM market in the Community is still stable with demand outstripping supply. Sales prices are high and the financial performance of the Community industry is still favourable. Market forecasts indicate that such market situation would be sustained at least for the next 12 months. It appears reasonable, therefore, to assume that injurious dumping on the Community market would not recur if the suspension of the anti-dumping duty would be extended for a period of one year, i. e. until April 1997. 1 O J N ° L 1 6 5, 15. 7. 1995, p. 26 2O J N ° L 1 2 6, 9. 6. 1995, p. 58 I (3) The Commission has informed the complainant of its intention to propose to the Council the extension of the suspension of the above anti-dumping duty and has provided it with an opportunity to comment. The complainant has raised no objections with regard to such proposal. (4) The attached draft Council Regulation contains more detailed information showing that the requirements contained in Article 14 (4) of Council Regulation (EC) No 384/96 for the extension of the suspension of the anti dumping duty are met. (5) As in the DRAM case, therefore, it is proposed that the Council decides to extend, for a period of one year, the suspension of the anti-dumping duty imposed on imports of EPROMs originating in Japan. 3 COUNCIL REGULATION (EC) N°. of EXTENDING THE SUSPENSION OF THE DEFINITIVE ANTS- DUMPING DUTY IMPOSED ON IMPORTS OF CERTAIN TYPES OF ELECTRONIC MICROCIRCUITS KNOWN AS EPROMS (erasable programmable read only memories) ORIGINATING IN JAPAN THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) N° 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community^1) and in particular Article 14(4) thereof. Having regard to the proposal submitted by the Commission after consulting the Advisory Committee, Whereas: 0) OJN°L56, 6. 3. 96 p. 1. (1) The Council, by Regulation (EEC) 577/91 (2), imposed a definitive anti dumping duty on imports into the Community of certain types of electronic microcircuits known as EPROMs (erasable programmable read only memories) originating in Japan, and falling under CN codes 8542 11 33, 8542 11 34, 8542 11 35 or 8542 11 36 for finished UV erasable EPROMs, ex 8542 11 38 for finished Flash E2PROMs, ex 8542 11 76 for OTPs, ex 8542 11 01 for wafers for all types of EPROMs and ex 8542 11 05 for dice and chips for all types of EPROMs. (2) The Commission, by Decision (95/272/EC) of 15 July 1995(3), suspended the definitive anti-dumping duty imposed on EPROMs originating in Japan for a "period of nine months on the grounds that the market situation for the product in question had temporarily changed to the extent that injurious dumping no longer prevailed and that, therefore, the anti-dumping duty could be suspended for this period. (2) (3) OJ N° L 65, 12. 3. 91, p. 1, as last amended by Regulation (EEC) No 2860/93, OJ L 262 of 21. 10. 93, p. 1 OJ N° L 165, 15. 7. 1995, p. 26 (3) On 8 October 1995 the Commission initiated an interim review'^ of the ,mti- dumping measures concerning EPROMs originating in Japan, pursuant to Article 11 (3) of Regulation (EC) 3283/94. This review is at present pending. (4) As in the case of another type of electronic microcircuits, i. e. DRAMs<5), the Commission has, based on the information available on the market situation, in particular the sales reports of the exporters concerned, examined whether the conditions for extending the suspension of the anti-dumping duty are met. In particular, the available statistical information and the sales data which the Commission has obtained from the Community producers and all known Japanese exporters shows that, as the end of the initial period of suspension of the anti-dumping duty approaches, the EPROM market in the Community is still stable, with demand outstripping supply. Sales prices are high and the financial performance of the Community industry is still favourable. It was found that, in general, the market conditions described in recital (3) of Commission Decision (95/272/EC) have prevailed. Market forecasts indicate that such a market situation will be sustained at least for the next 12 months. (4) (5) OJN°C262, 7. 10. 95, p. 9 By Council Regulation (EC) N°399/96 (OJ N° L 55, p1. ), the suspension of the anti-dumping duties applicable to imports of DRAMs originating in Japan and the Republic of Korea has been extended for one year. (5) However, it is also considered that, in view of the cyclical nature of the EPROM market in the past, the current market situation might be followed by a market down-turn. This could result in a recurrence of injurious dumping and would again necessitate the application of anti-dumping measures. This consideration appears to be supported by the fact that significant additional production capacities have recently been established, in particular in Japan, and that, in addition, further capacities will be established in the near future. It is reasonable to assume that this increase in worldwide production capacity might aggravate a possible future market down-turn. (6) In the light of the foregoing, it is considered appropriate to extend the suspension of the anti-dumping duty in question beyond the initial period of nine months, by a further period of one year, and it is considered unlikely that injurious dumping of EPROMs would recur on the Community market as a result of such extension. (7) Therefore, in accordance with the provisions of Article 14 (4) of the Regulation (EC) 3283/94 the Commission informed the complainant of its intention to propose to the Council to extend the suspension of the above anti-dumping duty for a period of one year and has provided it with an opportunity to comment. The complainant raised no objections in this regard (8) In conclusion, it is considered that the requirements to extend the suspension of the duty concerned, pursuant to Article 14 (4) of Regulation (EC) N° 384/96, are met and that the suspension should therefore be extended for a period of one year. (9) The Commission will continue to monitor closely the development of the EPROM-market and the behaviour of individual market participants, as it has done so during the initial period of suspension. Should a situation arise in which injury to the Community industry would recur, the Commission will propose that the Council reinstate the above anti-dumping duty without delay. (10) To this end, the obligation to submit reports on sales and prices pursuant to the undertakings will continue in order to enable the Commission to monitor the EPROM market. However, as previously stated, during the period of the extended suspension of the anti-dumping duty, the obligation to adhere to the minimum price provisions of these undertakings will be waived. The quarterly calculation and communication of such prices to these companies by the Commission will therefore be discontinued during this period. (11) The Advisory Committee was consulted on the suspension of the anti-dumping duty and raised no objections. HAS ADOPTED THE FOLLOWING REGULATION % Sole Article (1) The suspension of the definitive anti-dumping duty imposed on imports of certain types of electronic microcircuits known as EPROMs (erasable programmable read only memories) originating in Japan by Council Regulations (EEC) N° 577/91 is hereby extended for a period of one year until 15 April 1997. (2) This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. Done at Brussels, _S ISSN 0254-1475 COM(96) 125 final DOCUMENTS EN 02 11 Catalogue number : CB-CO-96-134-EN-C ISBN 92-78-01864-3 Office for Official Publications of the European Communities L-29S5 Luxembourg y{0

Decision of the EEA Joint Committee No 21/96 of 26 March 1996 amending Annex XIII (Transport) to the EEA Agreement

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L_1996124EN. 01002901. xml 23. 5. 1996    EN Official Journal of the European Communities L 124/29 DECISION OF THE EEA JOINT COMMITTEE No 21/96 of 26 March 1996 amending Annex XIII (Transport) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the Agreement, and in particular Article 98 thereof, Whereas Annex XIII to the Agreement was amended by Decision of the EEA Joint Committee No 8/96 (1); Whereas Council Resolution 95/C 264/01 of 28 September 1995 on the deployment of telematics in the road transport sector (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 85 (Council Resolution 95/C 169/03) in Annex XIII to the Agreement: ‘86. 395 Y 1011(01): Council Resolution 95/C 264/01 of 28 September 1995 on the deployment of telematics in the road transport sector (OJ No C 264, 11. 10. 1995, p. 1). ’ Article 2 The texts of Resolution 95/C 264/01 in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 April 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 March 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 102, 25. 4. 1994, p. 51. (2)  OJ No C 264, 11. 10. 1995. p. 1

Decision of the EEA Joint Committee No 17/96 of 26 March 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement

http://publications.europa.eu/resource/cellar/5d842564-ac7b-4562-94ef-6605dde25a46

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L_1996124EN. 01002401. xml 23. 5. 1996    EN Official Journal of the European Communities L 124/24 DECISION OF THE EEA JOINT COMMITTEE No 17/96 of 26 March 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the Agreement, and in particular Article 98 thereof, Whereas Annex II to the Agreement was amended by Decision of the EEA Joint Committee No 14/96 ( (1)); Whereas Commission Directive 95/31/EC of 5 July 1995 laying down specific criteria of purity concerning sweeteners for use in foodstuffs (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 1. The following indent shall be added in point 16 (Council Directive 78/663/EEC) in Chapter XII of Annex II to the Agreement: ‘— 395 L 0031: Commission Directive 95/31/EC of 5 July 1995 (OJ No L 178, 28. 7. 1995, p. 1). ’ 2. The following point shall be inserted after point 46 (Commission Directive 89/107/EEC) of Chapter XII of Annex II to the Agreement: ‘46. A. 395 L 0031: Commission Directive 95/31/EC of 5 July 1995 laying down specific criteria of purity concerning sweeteners for use in foodstuffs (OJ No L 178, 28. 7. 1995, p. 1). ’ Article 2 The texts of Directive 95/31/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 April 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 March 1996. For the EEA Joint Comittee The President P. BENAVIDES (1)  See page 16 of this Official Journal. (2)  OJ No L 178, 28. 7. 1995, p. 1

Decision of the EEA Joint Committee No 20/96 of 26 March 1996 amending Annex XIII (Transport) to the EEA Agreement

http://publications.europa.eu/resource/cellar/43cc3f14-3f95-40c4-b483-8dbf32e2851d

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L_1996124EN. 01002801. xml 23. 5. 1996    EN Official Journal of the European Communities L 124/28 DECISION OF THE EEA JOINT COMMITTEE No 20/96 of 26 March 1996 amending Annex XIII (Transport) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement on the European Economic Area, hereinafter referred to as the Agreement, and in particular Article 98. thereof, Whereas Annex XIII to the Agreement was amended by Decision of the EEA Joint Committee No 8/96 (1); Whereas Council Directive 95/21/EC of 19 June 1995 concerning the enforcement, in respect of shipping using Community ports and sailing in the waters under the jurisdiction of the Member States, of international standards for ship safety, pollution prevention and shipboard living and working conditions (port State control) (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 56. A (Commission Regulation (EEC) No 2158/93) in Annex XIII to the Agreement: ‘56. B. 395 L 0021: Council Directive 95/21/EC of 19 June 1995 concerning the enforcement, in respect of shipping using Community ports and sailing in the waters under the jurisdiction of the Member States, of international standards for ship safety, pollution prevention and shipboard living and working conditions (port State control) (OJ No L 157, 7. 7. 1995, p. 1). ’ Article 2 The texts of Directive 95/21/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into forco on 1 April 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 March 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 102, 25. 4. 1996, p. 51. (2)  OJ No L 157, 7. 7. 1995, p. 1

Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of certain magnetic disks (3.5" microdisks) originating in Malaysia, Mexico and the United States of America, and collecting definitively the provisional duty imposed.

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^^ I COMMISSION Oh THE EUROPEAN COMMUNITIES * ** j Brussels, 25. 03. 1996 COM(96) 122 UnaJ Proposal l'or a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of certain magnetic disks (3. 5" microdisks) originating in Malaysia, Mexico and the United States of America, and collecting definitively the provisional duty imposed. (presented by the Commission) EXPLANATORY MEMORANDUM 1. The Commission, by Regulation (EEC) No 2426/95 of 14 October 19951 imposed a provisional duty on imports of certain magnetic disks (3. 5" microdisks) originating in the United States, Mexico and Malaysia. 2. Following the adoption of the provisional measures, the interested parties, who so requested, were heard by the Commission and made written submissions. Upon request, parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of definitive duties and the definitive collection of imports secured by way of a provisional duty. They were also granted a period within which to make representations subsequent to the disclosure. 3. The oral and written comments submitted by the parties were considered and, where appropriate, the Commission's findings were modified to take account of them. 4. The facts as finally established confirm dumping for exporters in Malaysia and non- cooperating exporters in the United States and Mexico as well as injury to the Community industry caused thereby, especially demonstrated by price depression and resulting lack of profitability. OJNOL249, 17,10. 95, P. 3 5. In these circumstances, the Commission considers that it is in the Community interest to adopt definitive measures intended to eliminate the injurious effect of the dumped imports concerned. Consequently, in accordance with Article 9 of Council Regulation (EEC) No 3283/942, the Commission, after consultation within the Advisory Committee, proposes the imposition of definitive anti-dumping duties on imports of certain magnetic disks (3. 5" microdisks) originating in the United States, Mexico and Malaysia. 6. In view of the dumping margins established, and the seriousness of the injury caused to the Community industry, it is also proposed that the amounts secured by way of provisional anti-dumping duty be definitively collected to the extent of the amount of the duty definitively imposed. OJNOL349, 31. 12. 1994, P. 1 Council Regulation (EC) N° of imposing a definitive anti-dumping duty on imports of certain magnetic disks (3. 5" microdisks) originating in Malaysia, Mexico and the United States of America, and collecting definitively the provisional duty imposed. The Council of the European Union, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 3283/94 of 22 December 1994 on protection against dumped imports from countries not members of the European Community3, as last amended by Regulation (EC) No 1251/954, and in particular Article 9 thereof, Having regard to the proposal from the Commission submitted after consulting the Advisory Committee, Whereas, 3 OJ NO L 349, 31. 12. 1994, P. 1. 4 OJ NOL 122,02. 06. 1995, P. 1. (1) (2) (3) A. Provisional measures The Commission, by Regulation(EC) No 2426/955, hereinafter referred to as "the provisional duty Regulation", imposed a provisional anti-dumping duty on imports into the Community of certain magnetic disks (hereafter referred to as 3. 5" microdisks) originating in Malaysia, Mexico and the United States of America, and falling within CN code ex 8523 20 90. B. Subsequent procedure Subsequent to the imposition of the provisional anti-dumping duty, one cooperating Malaysian producer and one company producing in both the United States and Mexico, which had explicitly informed the Commission of its intention not to participate in the proceeding, were heard by the Commission. Both parties also presented written submissions making known their views on the findings. On request, parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of definitive duties and the definitive collection of amounts secured by way of the provisional duty. They were also granted a reasonable period within which to make representations subsequent to disclosure. (4) Because of the volume and the complexity of the data examined, the investigation could not be concluded within the time limit provided for in Article 6(9) of Regulation (EC) No 3283/94, (hereinafter referred to as "the basic Regulation"). OJ NO L 249, 17. 10. 1995, P. 3. C. Product under consideration and like product (5) As no further arguments have been presented regarding the product under consideration and the like product, the findings set out in recitals (8) to (12) of the provisional duty Regulation are confirmed. D. Dumping (6) For the purpose of the definitive findings, dumping was established on the basis of the same methods used in the provisional determination of dumping. The dumping margin calculations were only modified to take account of clerical errors or technical amendments as no new facts and arguments on the methods were presented by the parties. (7) In the light of the foregoing, the findings set out in recitals (14) to (20) of the provisional duty Regulation, with the appropriate modifications, are confirmed. Dumping margins (a) Cooperating producers (8) As far as the cooperating producers in the United States of America and Mexico are concerned, the findings in recital (21) of the provisional duty Regulation are confirmed. (9) On the basis of technical modifications made to the calculations of normal value and export price for one cooperating producer in Malaysia, the definitive dumping margins calculated by the Commission, expressed as a percentage of the free-at- Community-frontier price for each of the companies concerned are as follows: - Mega High Tech - Diskcomp 31. 8% 46. 4% (b) Non-cooperating producers (10) In the absence of comment, the findings in recitals (23) and (24) of the provisional Regulation are confirmed. E. Community Industry (11) No new arguments were presented with regard to the definition of the Community industry. The findings set out in recitals (25) to (28) of the provisional duty Regulation are, therefore, confirmed. F. Injury 1. Prices of the dumped imports (12) The producer in the United States and Mexico referred to at recital (2) above objected to the use of Eurostat data as positive evidence of price undercutting for non-cooperating companies, on two grounds. First, as its distribution system on the Community market is similar to those American and Mexican producers which cooperated, any undercutting on its part would also have been de minimis. Secondly, as the CN code under which Eurostat data is collected for 3. 5" microdisks is a "basket" category covering more than the product concerned, judgements on the basis of these figures are likely to be inaccurate. These contentions cannot be accepted. In the light of this producer's explicit decision not to participate in the proceeding, its claim that price undercutting on its part would also have been de minimis is unsupported by any evidence, and, consequently, amounts to no more than assertion. As to the second objection, it is the standard practice of the Community institutions to use Eurostat data as the best positive evidence available of import volumes and prices in the absence of more reliable indications from other sources. Further, the methodology employed by the Commission in this and the two prior proceedings (see recital (7) of the provisional duty Regulation) to address the "basket" nature of the CN code in question has been found to be reasonable and has not been criticised by the parties involved. In any event, the producer concerned has provided no evidence of whether, or to what extent, Eurostat figures may be misleading, as far as the product in question is concerned. 2. Other Injury findings (13) No new facts and arguments were received in connection with cumulation, causality and the other injury findings. The findings in recitals (30) to (45) of the provisional duty Regulation are therefore confirmed. H. Community interest (14) No representations have been received in respect of the Community interest in this proceeding and no comments have been made by any interested parties on the provisional findings regarding Community interest. The findings in recitals (46) to (50) of the provisional duty Regulation are, therefore, confirmed. I. Duty (15) No comments were received on the methodology adopted by the Commission for the establishment of the duty rates to be applied, as set out in recitals (51) to (55) of the provisional duty Regulation. These are, therefore, confirmed, and, as the dumping margins definitively determined exceed the injury thresholds established for the cooperating producers in Malaysia, measures should be imposed at the level of these injury thresholds. As the injury thresholds established for the cooperating producers in Mexico and the United States are de minimis, no definitive anti-dumping measures should be imposed on imports of the like product manufactured by these producers. J. Collection of the provisional duties (16) In view of the dumping margins established, the injury caused to the Community industry, and of the latter's precarious financial situation, it is considered necessary that amounts secured by way of the provisional anti-dumping duty for all companies should be collected definitively at the duty rate definitively imposed, HAS ADOPTED THIS REGULATION : Article 1 1. A definitive anti-dumping duty is hereby imposed on imports of 3. 5" microdisks used to record and store encoded digital computer information, falling within CN code ex 8523 20 90 (Taric code 8523 20 90 10), and originating in Malaysia, Mexico and the United States of America. 2. The rate of duty applicable to the net, free-at-Community-frontier price, not cleared through customs, shall be as follows : Country Malaysia Mexico United States Rate of duty (%) 46. 4 44. 0 44. 0 Taric additional code 8858 8882 8857 with the exception of imports which are manufactured and sold for export to the Community by the following companies which shall be subject to the rates of duty mentioned below: Country and producer a) Malaysia - Mega High Tech - Diskcomp Rate of duty (%) Taric additional code 12. 8% 26. 4% 8855 8856 10 3. The duty shall not apply to imports of the product defined in paragraph 1 manufactured and sold for export to the country by the following companies : Country and producer b) Mexico -Verbatim c) United States - 3M - TDK - Verbatim Taric additional code 8854 8853 8853 8853 4. Unless otherwise specified, the provisions in force concerning customs duty shall apply. Article 2 The amounts secured by way of the provisional anti-dumping duty pursuant to Regulation (EC) No 2426/95 shall be definitively collected up to the duty rate definitvely imposed. Article 3 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council 11 ISSN 0254-1475 COM(96) 122 final DOCUMENTS EN 02 11 Catalogue number : CB-CO-96-132-EN-C ISBN 92-78-01842-2 Office for Official Publications of the European Communities L-2985 Luxembourg 42

Amended proposal for a COUNCIL REGULATION (EC) on financial and technical measures to support the reform of economic and social structures in Mediterranean non- member countries and territories

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 25. 03. 1996 COM(96) 113 final 95/0127 (CNS) Amended proposal for a COUNCIL REGULATION (EC) on financial and technical measures to support the reform of economic and social structures in Mediterranean non-member countries and territories (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) EXPLANATORY MEMORANDUM 1. On 14 December 1995 Parliament adopted 22 amendments under the consultation procedure concerning the proposal for a Council Regulation on financial and technical measures to support the reform of economic and social structures in Mediterranean non-member countries and territories. The Commission 1. Parliament's amendments as follows: therefore presents an amended proposal incorporating Amendments adopted by the European Parliament Amendment 33 ( 1 ° whereas, preamble) Amendment 1 (third whereas) Amendment 2 ( new third bis whereas) Amendment 4 (14° whereas) Amendment 7 (15° whereas bis new) Amendment 8 (Article 1 para 2) Amendment 9 (Article 1 bis) Amendment 34 (Art 2, para 1) I Commission position Modify: should be added after the 5° preamble Reject: the reference to human rights also covers ethnic and religious minorities Reject: there should be no link with accession negotiations and implementation of cooperation measures Reject: the pluriannual nature of MEDA cannot be reduced to budgetary aspects Modify: replace with "Whereas relations with third countries should pursue the principles referred to in the Commission's Communication on "The inclusion of Respect for Democratic Principles and Human Rights in Agreements between the Community and Third Countries". This preserves the spirit of the amendment but avoids a reference to other articles in the TEU which may contradict the legal basis of the Regulation Accept Reject: The Regulation provides the necessary mechanisms to suspend measures in the case of breaches of human rights and rights of ethnic and religious minorities and not too much visibility should be given to this delicate issue Accept I 1 ; : : : —— ~——"--—~——— Amendment 12 (Article 2 para 2) Amendment 13 (Art 2, para 3) Amendment 14 (Article 2, para 4, third indent) Amendment 15 (Article 2, para 5) Amendment 16 (Art 2, para 8) Amendment 26 (Article 2, para 8) Amendment 17 ( Art 3, para 2 bis) Amendment 18 ( Art 9) Amendment 19 (Art 10, para 3) Accept 2° indent Accept 4° indent Reject 6° indent because this refers to a trade measure which concerns the Association Agreements, not the Regulation Reject 2° indent because self-sufficiency in food is not an appropriate objective given scarce water resources and growing trade in agriculture Accept indents 3° to 11° Reject 12° indent because trade in human beings is not widely recognised to be a problem specific to the Mediterranean Modify: replace with "other regional activities including the Euro-Arab Dialogue" because this gives more flexibility Accept Reject: The existing text provides an effective mechanism for suspension of cooperation in case of abuses of human rights, as appropriate for an internal Regulation Reject: The institutional equilibrium should be maintained; the Commission may already transmit the requests of Parliament by using Art 138b of the TEU Reject: Such an evaluation is appropriate in the context of the annual evaluation. The Commission is committed to regularly informing the relevant Committee of the Parliament on the implementation of the Regulation. Reject: no fixed country financial allocation is to be determined because the MEDA programme foresees more flexibility than the old financial protocol system. Indicative country allocations will be used for internal programming purposes and will be based on population, absorption capacity and progress in negotiations concerning the establishment of an Association Agreement. Reject: the comitology proposed by the Commission provides the necessary flexibility V\ 11 I Amendment 20 (Art 10, para 6) Amendment 21 (Art 14, para 1) Amendment 22 (Art 14, para 2 bis new) Amendment 27 (Art 14a (new)) 1 1 Reject: The MED Committee is the appropriate forum for discussion of technical matters concerning routine project implementation. The Commission is committed to regularly informing the relevant Committee of the Parliament on the implementation of the Regulation Reject: implementation of measures to strengthen democracy will be evaluated. The Regulation is not the appropriate basis for judging the necessity of excluding certain Mediterranean partners; this should be decided in the framework of the bilateral agreements Reject: the annual evaluation will be conducted after the termination of the calendar year whereas the budget proposal is submitted the year before; thus the proposal is not feasible. Modify: Highly detailed information on contracts is very costly to produce in terms of human resources and is only interesting to the operators concerned with implementation and para 1 should read, "The results of invitations to tender shall be published in the Official Journal of the European Communities. Twice a year the Commission shall submit to the Committee referred to in Article 10 detailed and specific information on the contracts concluded in furtherance of MEDA programmes and projects. " Amendment 24 (Art 16, 2° line new) 1999, the Council will proceed to re Accept paragraphs 2, 3, 4 and 5. Modify: replace with "Before the 30 June examine the Regulation. To this end, the Commission will submit before 31 December 1998, an evaluation report containing proposals concerning the future of the Regulation and, as necessary, modifications to the Regulation. " The amended proposal is attached. it Amended proposal for a COUNCIL REGULATION (EC) on financial and technical measures to support the reform of economic and social structures in Mediterranean non-member countries and territories The Council of the European Union, Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, Whereas the stability and prosperity of the Mediterranean region require a new phase of relations to be established which foresee the establishment of a free trade area between the European Community and Mediterranean non-member countries and territories as well as the associated applicant countries Cyprus and Malta and a customs union with Turkey; Whereas the Essen European Council of 9-10 December 1994 affirmed that the Mediterranean constitutes a priority area of strategic importance to the European Union and adopted the aim of establishing a Euro-Mediterranean partnership; Whereas it is necessary to pursue efforts to ensure that the Mediterranean becomes an area of political stability and security founded on respect for democracy, good governance and respect for human rights; Whereas for the Mediterranean non-member countries and territories the establishment of a free trade area will involve profound structural reform; Whereas it is therefore necessary to support the efforts that Mediterranean non-member countries and territories will undertake to reform their economic and social structures; Whereas there is a need to devise an integration strategy in which the regions of the Union can participate, and whereas it is therefore essential to encourage interregional and cross-border cooperation between the two shores of the Mediterranean; Whereas intensified regional cooperation and in particular the development of economic links and trade flows between Mediterranean non-member countries and territories which are conducive to economic reform and restructuring should be encouraged; Whereas the bilateral protocols on financial and technical cooperation concluded by the Community with Mediterranean non-member countries provided a useful initial basis for cooperation and now it is necessary to build on the experience which has been acquired and to enter into a new partnership within a unified framework; Whereas rules for the administration of such partnership have to be determined; Whereas to this end the present Regulation will apply to the range of measures contained 1c in Council Regulation (EEC) No 1762/92 on the implementation of the protocols on financial and technical cooperation concluded by the Community with Mediterranean non-member countries, in Council Regulation (EEC) No 1763/92 concerning financial cooperation in respect of all Mediterranean non-member countries for measures whose scope extends beyond the scope of a single country, in Council Regulation (E C) No 1734/94 on financial and technical cooperation with the Occupied Territories and in proposal COM (94) 289 final for a Council Regulation in the field of employment creation and support to small and micro-enterprises in the Maghreb countries; Whereas therefore, the present Regulation replaces the abovementioned Regulations as from 1 January 1997, while it is necessary to maintain Council Regulation (EEC) No 1762/92 in force for the management of financial protocols still applicable at this date and for the commitment of funds remaining under the expired financial protocols; Whereas in respect of environmental projects the loans granted by the European Investment Bank, hereinafter referred to as "the Bank", from its own resources under conditions laid down by it, in accordance with its Statute, may receive an interest-rate subsidy; Whereas in loan operations involving interest-rate subsidies, the granting of a loan by the Bank from its own resources and the granting of an interest-rate subsidy financed by the budgetary resources of the Community must be linked and are conditional upon each other; whereas the Bank may, in accordance with its Statute, and in particular by a unanimous decision of its Board of Directors in the presence of an unfavourable opinion by the Commission, decide to grant a loan from its own resources, subject to granting of the interest-rate subsidy; whereas, on account of this aspect, it is necessary to ensure that the procedure adopted for granting interest-rate subsidies results in every case in an express decision, whether to grant the subsidy or to refuse it, where appropriate; Whereas it is necessary to make provision for a Committee consisting of representatives of the Member States to assist the Bank in the tasks attributed to it to implement this Regulation; Whereas to allow for effective management of the measures foreseen in this Regulation and to facilitate policy dialogue with the beneficiary countries a multiannual approach is required; Whereas relations with third countries should follow the principles referred to in the Commission's communication on "the inclusion of respect for democratic principles and human rights in agreements between the Community and third countries"; Whereas the measures foreseen by the present Regulation go beyond the framework of development cooperation and are destined to apply to countries which cannot be classified as developing countries; whereas therefore this Regulation cannot be adopted other than on the basis of the competences foreseen by Article 235 of the EC Treaty, HAS ADOPTED THIS REGULATION: Article 1 The Community shall implement measures to support the efforts that the Î. Mediterranean non-member countries and territories listed in Annex 1 (hereinafter 2. to as "Mediterranean partners") will undertake to reform their economic and social structures. The beneficiaries of support measures may include not only states and regions but 2. also local authorities, regional organizations, public agencies, education and training structures, local or traditional communities, organizations supporting business, trade unions, private operators, cooperatives, mutual societies, associations, foundations and non-governmental organizations. Article 2 1. Support measures shall be undertaken in coherence with the objective of achieving long-term stability and prosperity and in particular in the fields of economic transition, achieving socioeconomic equilibrium, sustainable management of natural and cultural resources and regional and cross-border cooperation, including cooperation with the regions of the European Union. 2. Support to economic transition and the establishment of a Euro-Mediterranean free trade area shall include notably: - private sector development and employment creation, including improvement of the business environment and support to SME; - development of the financial system; - promotion of European private investment, including industrial cooperation; - upgrading of economic infrastructure; - restructuring and privatization of industrial sectors and infrastructure; - operations in support of structural adjustment programmes. 3. Support to achieving a better socioeconomic balance shall include notably: - the improvement of social services; - harmonious and integrated rural development; - development of water resources; - development of basic infrastructure, particularly in the energy, transport and telecommunications sectors; - reinforced cooperation concerning fisheries; - environmental cooperation; - participation of civil society in development; - modernization of public administration; 3 - integrated development of human resources, notably in education and vocational training, as well as improving the potential for scientific and technological research; - strengthening democracy and respect for human rights and the rights of ethnic and religious minorities; - cultural cooperation, including the strengthening of audiovisual media; - through the above measures, cooperation and technical assistance in order to reduce illegal immigration, drug trafficking and international crime. 4. Regional and cross-border cooperation shall be supported notably by: - establishing structures and improving infrastructure for regional cooperation between Mediterranean partners; - establishing the infrastructure necessary for regional trade, including transport, communications and energy, improvement of the regulatory framework and small-scale infrastructure projects in the context of border-crossing facilities: particular attention will be paid to border-crossing facilities on borders between the Mediterranean partners and the Union, to cooperation on the level of large geographic regions as well as to measures complementary to those undertaken in this field within the Union; - other regional activities including the Euro-Arab Dialogue Good governance shall be promoted by supporting key institutions, including 5. local government, trade unions, media and organizations supporting business and by assisting in the improvement of the capacity of the public administration to develop policies and manage implementation. Good governance shall also be promoted through support for projects aimed at encouraging cooperation between local and regional bodies. 6. Measures taken under this Regulation shall pay due regard to the promotion of the participation of women. Special importance shall be attached to the creation of jobs for women and young people. 7. The activities financed under this Regulation shall mainly take the form of technical assistance, training, institution building, policy dialogue, information, seminars, studies, investment projects in companies, micro-enterprises, SME and infrastructure and actions to ensure the visibility of Community projects and programmes. Recourse should be made to decentralized cooperation where this may prove effective. Risk capital operations and interest-rate subsidies may be financed notably in collaboration with the European Investment Bank. Costs incurred by the beneficiaries as a result of the preparation, implementation, monitoring, audit and execution of support measures may also be covered. When an essential element for the continuation of support measures is missing, in 8. particular in cases of violation of democratic principles and human rights, the Council may, on a proposal from the Commission, acting by a qualified majority, decide upon appropriate measures concerning the assistance to a Mediterranean partner. Article 3 Measures to be financed under this Regulation shall be selected taking account, 1. inter alia, of the beneficiaries' priorities, evolving needs and progress towards structural reform as well as on the basis of an assessment of the effectiveness of those measures in achieving the objectives aimed at by Community support, in line with the provisions of association or cooperation agreements where applicable. 2. Indicative programmes covering three-year periods shall be established at national and regional level, taking into account the priorities identified with the Mediterranean partners, including the conclusions of economic dialogue, and shall be updated annually, as necessary. These programmes shall define the principal objectives of and guidelines for Community support in the indicative areas referred to in Article 2 and may include a financial estimate. These programmes may be amended during the period of their application taking into account the experience accumulated in the implementation of this Regulation as well as progress in structural reform, macroeconomic stabilization and social progress achieved by the Mediterranean partners. Financing decisions based notably on these indicative programmes shall be 3. adopted in accordance with the procedure provided for in Article 10. Article 4 1. The Commission shall, together with the Member States and on the basis of the information supplied by them, ensure the effective coordination of the assistance efforts undertaken by the Community and individual Member States. In addition, coordination and cooperation with international financial institutions and other donors shall be encouraged. 2. The measures referred to in this Regulation may be granted by the Community, either independently or in the form of co-financing with the Mediterranean partners themselves or with, on the one hand, public or private bodies of the Member States and the European Investment Bank or, on the other hand, third countries or multilateral bodies. Article 5 Community financing shall notably be in the form of grants or risk capital. 1. Concerning cooperation measures in the field of the environment, it may equally take the form of interest-rate subsidies for loans granted by the Bank from its own resources. Grants may be used to finance or co-finance activities, projects or programmes 2. which contribute to the realization of the objectives defined in Article 2. The extent to which activities, projects or programmes will be financed by grants shall also depend on their capacity to yield financial return. 3. Financing decisions and any financing agreements and contracts resulting therefrom shall expressly provide, inter alia, for supervision and financial control by the Commission and audits by the Court of Auditors to be carried out on the spot. Article 6 - Measures under this Regulation may cover expenditure on imports of goods and 1. services and local expenditure needed to carry out the projects and programmes. Taxes, duties and charges shall be excluded from Community financing. Contracts for the implementation of Community-funded measures under this Regulation shall enjoy, in the Mediterranean partners concerned, fiscal and customs arrangements no less favourable than those applied by such partners in respect of the most favoured state or most favoured international development organization. 2. Maintenance and operating costs may be covered for training, communications and research programmes and for other projects; however, for the latter, such costs may be covered only in the start-up stage on a declining scale. 3. For investment projects, Community financing shall be combined with own resources of the promoter or with financing at market conditions, taking into account the nature of the project. However, Community financing may not exceed 80% of total investment cost. Article 7 Invitations to tender and contracts shall be open on equal terms to all natural and 1. legal persons of the Member States and of Mediterranean partners. 2. In the case of co-financing, participation in invitations to tender and contracts by nationals of countries other than the Mediterranean partners concerned may be authorized by the Commission on a case-by-case basis. In these cases, participation of undertakings from third countries shall be acceptable only if reciprocity is granted. Article 8 Financing decisions exceeding ECU 2 000 000 other than those relating to 1. interest-rate subsidies on European Investment Bank loans and risk capital shall be adopted in accordance with the procedure laid down in Article 10. 2. Financing decisions on overall allocations shall be adopted in accordance with the procedure laid down in Article 10. The Commission shall inform the Committee referred to in Article 10 of the use made of these overall allocations. 3. Decisions amending decisions adopted in accordance with the procedure provided for in Article 10 shall be taken by the Commission where they do not entail any substantial amendments or additional commitments in excess of 20% of the original commitment. Financing decisions relating to interest-rate subsidies on Bank loans shall be 4. adopted in accordance with the procedure laid down in Article 11. Financing decisions relating to risk capital shall be adopted in accordance with the procedure laid down in Article 12. Article 9 Measures referred to in this Regulation which are financed from the general budget of the European Community shall be appraised, decided upon and administered by the Commission, without prejudice to the management by the Bank of interest-rate subsidies and risk capital operations under authority conferred on it by the Commission on behalf of the Community pursuant to Article 105(3) of the Financial Regulation of 21 December 1977 applicable to the general budget of the Community. Article 10 1. The Commission shall be assisted by a Committee composed of the representatives of the Member States and chaired by the representative of the Commission (hereinafter referred to as the 'Committee') to be known as the "MED Committee". A representative of the Bank shall take part in the proceedings. 2. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit the chair may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148(2) of the EC Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States within the Committee shall be weighted in the manner set out in that Article. The chair shall not vote. The Commission shall adopt measures which shall apply immediately. However, 3. if these measures are not in accordance with the opinion of the Committee, they shall be communicated by the Commission to the Council forthwith. In that event, the Commission shall defer application of the measures which it has decided for a period of six weeks. The Council, acting by a qualified majority, may take a different decision within the period laid down in the first subparagraph. 4. The Committee may examine any other question relating to the implementation of this Regulation which may be put to it by its chair, possibly at the request of the representative of a Member State and, in particular, any question relating to general implementation, the administration of the programme, co-financing and the coordination referred to in Article 4. 5. The Committee shall adopt its rules of procedure by qualified majority. The Commission shall keep the Committee regularly informed and will supply 6. information on the implementation of measures under this Regulation. The European Parliament shall be kept regularly informed of the implementation 7. of this Regulation. Article 11 1. As regards the projects to be financed by subsidized loans in the field of the environment, the Bank shall draw up the financing proposal in accordance with its Statute. The Bank shall seek the opinion of the Commission, in accordance with Article 21 of the Statute, and of the Committee referred to in Article 13. That Committee shall issue an opinion on the Bank's proposal. The Commission 2. representative shall convey to the Committee the Commission's position on the project concerned, and in particular on its conformity with the objectives of this Regulation and with the general guidelines adopted by the Council. In addition, the Committee shall be informed by the Bank of the non-subsidized loans which the Bank envisages granting from its own resources. On the basis of that consultation, the Bank shall ask the Commission to take a 3. financing decision to grant the interest-rate subsidy for the project concerned. The Commission shall submit to the MED Committee a draft decision authorizing 4. or, if appropriate, refusing the financing of the interest-rate subsidy. The Commission shall forward the decision referred to in paragraph 4 to the 5. Bank, which, where the decision grants the subsidy, may grant the loan. Article 12 l. The Bank shall submit to the Committee referred to in Article 13, for its opinion, projects concerning risk capital operations. The Commission representative shall convey to the Committee the Commission's position on the project concerned and in particular on its conformity with the objectives of this Regulation and with the general guidelines adopted by the Council. 2. On the basis of this consultation, the Bank shall forward the project to the Commission. 3. The Commission shall take the financing decision within a period appropriate to the characteristics of the project. 4. The Commission shall forward the decision referred to in paragraph 3 to the Bank, which shall take the appropriate measures. ArtideJi 1. A Committee consisting of the representatives of the Member States, hereinafter referred to as the 'Article 13 Committee', shall be set up at the Bank. The Committee shall be chaired by the representative of the Member State currently holding the presidency of the Board of Governors of the Bank; its secretariat shall be provided by the Bank. A representative of the Commission shall take part in its proceedings. The rules of procedure of the Committee shall be adopted unanimously by the 2. Council. The Committee shall act by a qualified majority in accordance with Article 148(2) 3. of the Treaty. 4. Within the Committee, the votes of the representatives of the Member States shall be weighted in accordance with Article 148(2) of the Treaty. Article 14 1. The results of invitations to tender shall be published in the Official Journal of the European Communities. Twice a year the Commission shall submit to the Committee referred to in Article 10 detailed and specific information on the contracts concluded in furtherance of MEDA programmes and projects. _ 2. By 1 September of each year, a comprehensive report evaluating the progress of projects and their impact on the progress of development in each of the Mediterranean partners shall be prepared by the Commission together with the European Investment Bank and addressed to the Member States, the European Parliament, the Council and the Economic and Social Committee. 3. In 1997, this report shall be replaced by an interim report on the implementation of the programme during the whole period until that date, which shall be submitted by the Commission by 30 June 1997. Both the annual and the interim reports shall be the basis for decisions concerning 4. the continuation of the programmes within the annual budgetary procedure. The Commission and the Bank shall evaluate the projects that concern each of 5. them, in order to determine whether the objectives have been achieved and to establish guidelines for stepping up the effectiveness of future activities. The evaluation reports shall be forwarded to the Council and Parliament. 6. Before 30 June 1999, the Council will proceed to re-examine the Regulation. To this end, the Commission shall submit before 31 December 1998 an evaluation report containing proposals concerning the future of the Regulation and, as necessary, amendments to the Regulation. Article 15 Council Regulation (EEC) No 1763/92 and Council Regulation (EC) No 1734/94 1. are repealed as from 31 December 1996. 2. As from 31 December 1996 Council Regulation (EEC) No 1762/92 shall apply to the management of the protocols still in force at that date and to the commitment of funds remaining under the expired protocols. Article 16 This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. 10 ANNEX I Partner countries and territories referred to in Article 1 The People's Democratic Republic of Algeria The Republic of Cyprus The Arab Republic of Egypt The State of Israel The Kingdom of Jordan The Republic of Lebanon The Republic of Malta The Kingdom of Morocco The Syrian Arab Republic The Republic of Tunisia The Republic of Turkey The Occupied Territories of Gaza and the West Bank of the River Jordan 11 ISSN 0254-1475 COM(96) 113 final DOCUMENTS EN 11 Catalogue number : CB-C0-96-126-EN-C ISBN 92-78-01776-0 Office for Official Publications of the European Communities L-2985 Luxembourg 12

Council Regulation (EC) No 540/96 of 25 March 1996 amending Regulation (EC) No 3010/95 totally or partially suspending the customs duties applicable to certain products falling within Chapters 1 to 24 and Chapter 27 of the Combined Nomenclature originating in Malta and Turkey (1995)

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L_1996079EN. 01000801. xml 29. 3. 1996    EN Official Journal of the European Communities L 79/8 COUNCIL REGULATION (EC) No 540/96 of 25 March 1996 amending Regulation (EC) No 3010/95 totally or partially suspending the customs duties applicable to certain products falling within Chapters 1 to 24 and Chapter 27 of the Combined Nomenclature originating in Malta and Turkey (1995) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof, Having regard to the proposal from the Commission, Whereas Regulation (EC) No 3010/95 (1) totally or partially suspended the customs duties applicable to certain agricultural goods and to certain petroleum products originating in Turkey and Malta; whereas the validity of that Regulation ended on 31 December 1995; Whereas existing trade relations should not be interrupted; whereas accordingly it appears appropriate to continue applying the said Regulation; Whereas the tariff advantages granted in this context should at least be equivalent to those accorded by the Community to developing countries under the Generalized System of Preferences; Whereas the Customs Union between the European Community and Turkey took effect as from 31 December 1995; whereas, as a result, it is appropriate to amend the Annexes to the aforementioned Regulation, HAS ADOPTED THIS REGULATION: Article 1 Regulation (EC) No 3010/95 shall be amended as follows: 1. in the title, ‘(1995)’ shall be deleted. 2. Article 1 shall be replaced by the following: ‘Article 1 The following are allowed for importation into the Community at the customs rate indicated for each: — starting from 1 January 1995, the products of Chapters 1 to 24 of the Combined Nomenclature, originating in Malta and Turkey, as listed in Annexes I and II, — from 1 January 1995 to 30 December 1995, the petroleum products of Chapter 27 of the Combined Nomenclature, refined in Turkey, as listed in Annex III. ’ 3. the Annexes shall be amended as follows: (a) in the heading in the last column of Annex I, ‘Period 1. 7 to 31. 12. 1995’ shall be replaced by ‘Starting from 1. 7. 1995’; (b) in Annex I, as regards order numbers 16. 0500, 15. 0510, 16. 0520, 16. 1070 and 16. 2900, the table shall be replaced by the table in Annex I to this Regulation; (c) Annex II shall be replaced by the Annex in Annex II to this Regulation; (d) Annex III shall be deleted with effect from 31 December 1995. Article 2 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. It shall apply from 1 January 1995, except for Annex II, which shall apply from 31 December 1995. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 25 March 1996. For the Council The President S. AGNELLI (1)  OJ No L 314, 28. 12. 1995, p. 1. ANNEX I Amendments to Annex I to Regulation (EC) No 3010/95 Order No CN code Description of goods Rate of duty Period (1. 1 to 30. 6. 1995) Starting from 1. 7. 1995 16. 0500 16. 0510 0307 39 90 0307 41 0307 49 01 0307 49 11 Mussels (Perna spp. ) Cuttlefish and squid 4 % 4 % 16. 0520 0307 49 18 Cuttlefish 4 % 4 % 16. 1070 ex 0807 11 00 (1) Watermelons, from 1 November to 30 April 6,5 % 6,5 % 16. 2900   Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included:     2008 11 92 (1) 2008 11 94 (1) 2008 11 96 (1) 2008 11 98 (1) Ground-nuts 6 % 6 % 2008 19 11 ex 2008 19 13 ex 2008 19 19 Other, including mixtures in immediate packings of a net content exceeding 1 kg, excluding almonds, walnuts and hazelnuts     Taric codes Order Number CN code Taric code 16. 1070 ex 0807 11 00 0807 11 00*10 0807 11 00*20 0807 11 00*50 (1)  CN code starting from 1. 1. 1996. ANNEX II ‘ANNEX II LIST OF PRODUCTS OF CHAPTERS 1 TO 24, ORIGINATING IN TURKEY Order number CN code Taric subdivision Description of goods Rate of duty as from 31. 12. 1995 15. 0001 ex 0709 30 00 *10 Other vegetables, in a fresh or refrigerated state:         — aubergines, from 1 to 14 January 9 % 15. 0003     Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin contents, fresh, chilled, frozen or dried, whether or not sliced or in the form of pellets; sago pith: exemption   0714 20 10   — sweet potatoes, intended for human consumption (1)   15. 0005 ex 0807 11 00 *10 *50 Melon, (including watermelons), fresh:         — watermelons, from 1 November to 31 March 6,5 % (1)  Entry under this subheading is subject to conditions laid down in the relevant Community provisions. ’

Proposal for a COUNCIL REGULATION (EC) opening and providing for the administration of autonomous Community tariff quotas for certain fishery products (1996)

http://publications.europa.eu/resource/cellar/271f5835-6368-441a-8b76-e2c925d63cb2

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COMMISSION OF THE EUROPEAN COMMUNITIES Vy * ,V •it' -k •& "A Brussels, 25. 03. 1996 COM(%) 119 final Proposal tor a COUNCIL REGULATION (EC) opening and providing for the administration of autonomous Community tariff quotas for certain fishery products (1996) (presented by the Commission) EXPLANATORY MEMORANDUM As part of the annual overall review within the Council concerning the granting of autonomous preferences for fishery products, the Commission has drawn up a report on the markets and supply needs of user industries for 1996. Having regard to the requirements of the internal and external policies of the Community, the Commission is proposing a certain number of tariff measures, notably tariff quotas, to ensure continuation of Community production in accordance with the rules and obligations of the common organisation of the markets, and to ensure supply of the processing industries while also taking into account the current and foreseeable situation on the international market. In these conditions, the tariff quotas for the products specified arc for products which meet the conditions laid down as regards the reference prices fixed, or to be fixed, and which are intended for processing. Furthermore, according to this proposal, these tariff measures should be opened from 1 April 1996 for a period extending to 31 December 1996 in order to allow planning of supply to the industry without destabilizing the revenue of Community producers. This is the purpose of the attached proposal. Proposal for COUNCIL REGULATION (EC) No /96 of opening and providing for the administration of autonomous Community tariff quotas for certain fishery products (1996) THE COUNCIL OF THE EUROPEAN UNION Having regard to the Treaty establishing the European Community, and in particular Article 28, thereof, Having regard to the proposal from the Commission, Whereas Community supplies of certain species offish or fish fillets currently depend on imports from third countries; whereas it is in the Community's interest to suspend in part or in whole the customs duties for the products in question, within Community tariff quotas of an appropriate volume; whereas, in order not to jeopardize the development prospects of this production in the Community and to ensure an adequate supply to satisfy user industries, it is advisable to open those quotas for the period from 1 April 1996 until 31 December 1996, applying customs duties varied accordingly to sensitivity of the different products on the Community market; Whereas it is necessary, in particular, to ensure for all Community importers equal and uninterrupted access to the said quotas and to ensure the uninterrupted application of the rates laid down for the quotas to all imports of the products concerned into all Member States until the quotas have been used up; Whereas the decision for the opening of autonomous tariff quotas should be taken by the Community; whereas, to ensure the efficiency of a common administration of these quotas, there is no reasonable obstacle to authorising the Member States to draw from the quota-volumes the necessary quantities corresponding to actual imports; whereas, however, this method of administration requires close cooperation between the Member States and the Commission and the latter must in particular be able to monitor the rate at which the quotas are used up and inform the Member States accordingly; HAS ADOPTED THIS REGULATION: Article 1 1. 2. From 1 April 1996 until 31 December 1996, the customs duties applicable on importation to products listed in the Annex shall be suspended at the levels and within the limits of the Community tariff quota indicated for each product. Imports of the products in question shall not be covered by the quotas referred to in paragraph 1 unless the free-at-frontier price, which is determined by the Member States in accordance with Article 22 of Regulation (EEC) No 3759/92 of 17 December 1972 on the common organisation of the market in fishery and aquaculture products1, as last amended by Council Regulation (EC) No 3318/942, is at least equal to the reference price fixed; or to be fixed, by the Community for the products under consideration of the categories of the products concerned. 1 OJNoL 388, 31. 12. 1992, p. 1. 2 OJNoL350, 31. 12. 94, p. 15. 3» The tariff quotas referred to in Article 1 shall be managed by the Commission, which may take all appropriate administrative measures in order to ensure effective administration thereof. Article 2 Article 3 If an importer presents in a Member State an entry for release for free circulation, including a request for preferential benefit for a product covered by this Regulation and if this entry for release is accepted by the customs authorities, the Member States concerned shall inform the Commission and draw an amount corresponding to its requirements from the corresponding quota amount. The drawing request, with indication of the date of acceptance of the said entries, must be transmitted to the Commission without delay. The drawings are granted by the Commission by reference to the date of acceptance of the entries for release for free circulation by the customs authorities of the Member States concerned to the extent that the available balance so permits. If a Member State does not use the quantities drawn it shall return them as soon as possible to the corresponding quota amount. If the quantities requested are greater than the available balance of the quota amount, allocation shall be made on a. pro rata basis with respect to the requests. Member States shall be informed by the Commission of the drawings made. Article 4 Each Member State shall ensure that importers of the products concerned have equal and uninterrupted access to the quotas for such time as the residual balance of the quota volumes so permits. The Member States and the Commission shall cooperate closely to ensure that this Regulation is complied with. Articles 5 This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities. Article 6 This Regulation shall beJjinding in its entirety and directly applicable in all Member States. Done at Brussels For the Council The President Scries Number CN code TARIC Sub division 09. 2753 ex 0302 50 10 ex0302 50 90 ex 0302 69 35 ex 0303 60 11 ex 0303 60 19 ex 0303 60 90 ex 0303 79 41 0305 62 00 0305 69 10 09. 2765 09. 2773 ex 0306 13 10 ex 0306 23 10 09. 2758 ex 0302 70 00 20 11 91 10 10 10 10 10 10 11 91 20 09. 2779 ex 0304 90 05 10 ANNEX Description of goods Cod (Gadus morhua, Gadus ogac, Gadus macrocephalus), and fish of the genus Boreogadus saida, excluding, livers, roes, presented fresh, chilled or frozen, for processing (a)(b) Cod (Gadus morhua, Gadus ogac, Gadus macrocephalus), and fish of the species Boreogadus saida, salted or in brine, but not dried or smoked Shrimps and prawns of the species Pandalus borealis, in shell, fresh, chilled or frozen, for processing (a)(b) Cod livers (Gadus morhua, Gadus ogac, Gadus macrocephalus), and fish liver of the genus Boreogadus saida, for processing (a)(b) Surimi, frozen, for processing (a)(b) 09. 2780 ex 0304 20 91 ex 0304 90 97 09. 2757 ex 0302 62 00 ex 0303 72 00 09. 2785 ex 0307 49 59 09. 2786 ex 0307 99 11 ex 0307 49 59 09. 2787 ex 0307 99 11 ex 0302 22 00 ex 0303 32 00 10 60 10 10 10 10 20 20 20 20 Blue grenadier fillets (Macrouronus novaezelandiae), and other frozen meat of blue grenadier for processing (a)(b) Haddock (Melanogrammus aeglefinus) fresh, chilled or frozen for processing (a)(b) Tubes of squid (Omnastrephes spp. -Nototodarus spp. , Sepioteuthis spp. ), and lllex spp. , frozen , for processing (a)(b) Squid (Omnastrephes spp. -Nototodarus spp. , Sepioteuthis spp. ) and lllex spp. , frozen whole, tentacles and fins, for processing (aXb) Plaice (Pleuronectes platessa), fresh, chilled or frozen, for processing (a)(b) Amount of quota (in tons) Quota duty (%) 50 000 3 9 000 6 000 400 3 500 2 500 500 3 500 500 3 000 3 0 0 6 6 3 4 4 3 (a) Control of the use for this special purpose shall be carried out pursuant to the relevant Community provisions. (b) This quota is available for products intended to undergo any operation, unless it is solely for one or more of the following operations: cleaning, gutting tailing, heading, cutting (excluding filleting or cutting of frozen blocks), sampling, sorting, labelling, packing; chilling, freezing, deep freezing thawing, separation. However the quota is not available for products intended, in addition to undergo treatment (or operations) which giver quota entirlement, where such treatment (or operations) is (are) carried out at retail or catering level. The reduction of customs duties shall apply only to fish intended for human consumption. FINANCIAL RECORD Budget line concerned : Chap. 12 Art. 120 Legal basis : Art. 28 of the Treaty Title of the tariff measure concerned : Proposal for Council Regulation opening and providing for the administration of Community tariff quotas, for certain fishery products (1996) 4. Objective : To ensure an adequate supply for Community user industries 5. Method of calculation: Order number 09. 2753 09. 2757 09. 2758 09. 2765 09. 2773 09. 2779 09. 2780 09. 2785 09. 2786 09. 2787 CN rate of duty (%) 12 10. 5 12 13 12 15 14,25 8 8 10. 5 Rate of duty (%) 3 3 0 3 0 6 6 4 4 3 Estimated price ECU/T 1270 1310 1588 3 048 3 099 1829 2 074 1475 1475 1480 Volume of quota (ECU/T) 50 000 500 400 9 000 6 000 3 500 2 500 3 500 500 3 000 Foreseen revenue Loss of revenue (ECU) 1 905 000 19 650 822 960 392 490 311 100 5 715 000 49 125 76 224 2 743 200 2 231280 576 135 427 763 206 500 29 500 333 000 Total foreseen revenue: 3 820 400 Total loss: 12 387 727 On the basis of the available Community statistics for 1994, the cost of this tariff- measure available for 1993 is estimated at 12 387 727 ECU. Fight against fraud: Provisions on the management of these tariff quotas include the measures necessary for preventing frauds and irregularities and protecting against them. 6 ISSN 0254-1475 COM(96) 119 final DOCUMENTS EN 02 03 Catalogue number : CB-CO-96-129-EN-C ISBN 92-78-01809-0 Office for Offici&l Publications of the European Communities L-2985 Luxembourg ?

Amended proposal for a COUNCIL DIRECTIVE on the use of vehicles hired without drivers for the carriage of goods by road

http://publications.europa.eu/resource/cellar/05604a20-593d-4d68-8625-c70e487a8715

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COMMISSION OF THE EUROPEAN COMMUNITIES •it "ii *** Brussels,25. 03. 1996 CUM(*K>) 115 linal 95/0012 (SYN) Amended proposal tor a COUNCIL DIRECTIVE on the use of vehicles hired without drivers for the carriage of goods by road (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) Amendment to the proposal for a COUNCIL DIRECTIVE on the use of vehicles hired without drivers for the carriage of goods by road EXPLANATORY MEMORANDUM 1. 2. 3. 4. On 13 February 1995 the Commission presented to the Council a proposal for a Council Directive on the use of vehicles hired without drivers for the carriage of goods by road1. As the proposal presents further amendments to Council Directive 84/647/EEC of 19 December 1984 on the use of vehicles hired without drivers for the carriage of goods by road2, it has been recast for reasons of clarity and rationality. The Economic and Social Committee gave its positive opinion on 31 May 1995. During its plenary session on 13 July 1995, the European Parliament approved, subject to five amendments, the proposal for a Council Directive presented by the Commission. The Commission has not accepted amendment 1 (citation 3) which refers to Article 189c of the Treaty, as it is legally superfluous. However, it has accepted amendment 5 (recital 11a) requesting the Commission to submit a similar proposal to allow the use of vehicles hired without drivers for the transport of passengers between Member States, but without fixing a delay for the submission of such a proposal. Amendments 2 (recital 5) and 3 (recital 8a) have been accepted as proposed by the European Parliament. The text of amendment 7 (new), which the Commission has accepted, has been substituted to become a new Article 7 in line with Commission Communication (95) 162 def. The Commission has therefore amended its position as follows : Initital proposal Amended proposal Whereas the carriage of goods in the single market should be facilitated; Whereas the European Union's single market is an area in which (Amendment 2) Recital 5 Doc. COM(95) 2 final O. J. n" L 335, 22. 12. 1984, p. 72. Directive amended by Directive 90/398/EEC (O. J. n' L 202, 31. 7. 1990, p. 46). £ goods, persons, services and capital rmy the move freely; whereas, therefore, carriage of goods in particular should also be liberalized in conjunction with a gradual harmonization of transport conditions; (Amendment 3) Recital 8a (new) Whereas it is necessary to ensure that hiring vehicles without drivers does not lead to an increase in casual undeclared employment; (Amendment 5) Recital 11a (new) policy, Whereas, in line with the priorities laid down in the White Paper on the common the Commission transport for envisages submitting a proposal liberalizing the use of vehicles hired without drivers for the transport of passengers in other Member States; Article 7 (new) to Member States shall lay down the system of penalties for breaching the national this provisions adopted pursuant Directive and shall take all the measures necessary to ensure that those penalties are applied. The penalties thus provided for shall be effective, proportionate and dissuasive. Member States shall notify the relevant positions to the Commission in not later than the date specified Article any subsequent changes as soon as possible. shall notify 10 and Article 7 becomes Article 8 Article 8 becomes Article 9 Article 9 becomes Article 10 Article 10 becomes Article 11 Article 11 becomes Article 12. j ISSN 0254-1475 COM(96) 115 final DOCUMENTS EN 07 Catalogue number : CB-CO-96-124-EN-C ISBN 92-78-01754-X Office for Official Publications of the European Communities L-2985 Luxembourg H

Proposal for a COUNCIL REGULATION (EC) extending the provisional anti-dumping duty on imports of unwrought magnesium originating in Russia and Ukraine

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| C U M M I b S I ON Oh I Hb b U K O P b AN C O M M U N II I bb A yWr 'it it ' * A* Brussels, 22. U3. iwo lUM(Vô) 138 final Proposal tor a COUNCIL RhUULAl ION (hi ) extending the provisional anti-dumping duty on imports ofunwrought magnesium originating in Russia and Ukraine. (presented by the Commission) EXPLANATORY MEMORANDUM. (1) Commission Regulation N° 2997/95 imposed a provisional anti-dumping duty on imports ofunwrought magnesium originating in Russia and Ukraine. (2) Examination of the facts has not yet been completed. (3) (4) The Commission has informed the exporters known to be concerned of its intention to extend the validity of the provisional duty for another two months. The exporters have raised no objections. Accordingly, pursuant to Article 11(5) of Council Regulation (EEC) N° 2423/88, the Commission is putting before the Council a draft Regulation extending the validity of the provisional anti-dumping duty on imports ofunwrought magnesium originating in Russia and Ukraine. ;. COUNCIL REGULATION (EC) N° 796 of 1996 extending the provisional anti-dumping duty on imports ofunwrought magnesium originating in Russia and Ukraine. HE COUNCIL OF THE EUROPEAN UNION, Having regard to the treaty establishing the European Community, Having regard to Council Regulation (EC) N° 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community1 and in particular Article 23 thereof, Having regard to Council Regulation (EEC) N° 2423/88 11 of July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community2, and in particular Article 11 thereof, Having regard to the proposal submitted by the Commission, Whereas Commission Regulation (EC) N° 2997/953 imposed a provisional anti-dumping duty on imports ofunwrought magnesium originating in Russia and Ukraine, Whereas examination of the facts has not yet been completed and the Commission has informed the exporters known to be concerned of its intention to propose an extension of the validity of the provisional duty for an additional period of two months; Whereas the exporters have raised no objections. lOJN°L56, 6. 3. 1996, p. 1. 2OJ N° L 209, 2. 8. 1988, p. 1. Regulation as last amended by Regulation (EC) N° 522/94 (OJ N° L 66. 10. 3. 1994, p. 10). 3OJN°L312, 23. 12. 1995. p. 37 HAS ADOPTED THIS REGULATION: Article The validity of the provisional anti-dumping duly on imports ofunwrought magnesium originating in Russia and Ukraine imposed by Regulation (EC) N" 2997/95 shall be extended for a period of two months and shall expire on 24 June 1996. It shall cease to apply if, before that date, the Council adopts definitive measures or if the proceeding is terminated pursuant to Article 9 of Regulation (EEC) N° 2423/88. Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels 1996 <\ ISSN 0254 1475 COM(96) 138 final DOCUMENTS EN 02 11 Catalogue number : CB-CO-96-143-EN-C ISBN 92-78-01963-1 Office for Official Publications of the European Communities L-2985 Luxembourg v •>

Commission report to the Council on Member States' experience in applying the provisions listed in Article 50 of Council Directive 83/349/EEC on consolidated accounts

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 03. 1996 COM(96) 94 final Commission report to the Council on Member States' experience in applying the provisions listed in Article 50 of Council Directive 83/349/EEC on consolidated accounts 1. Introduction and background Article 50 of the Seventh Council Directive of 13 June 1993 on consolidated accounts (83/349/EEC, OJNoL 193 of 18 July 1983) requires the Commission to report to the Council on Member States' experience of applying the provisions referred to in that Article. The Council is to examine those provisions in the light of the experience acquired, the aims of the Directive and the economic and monetary situation at the time and is to amend them if necessary. Austria, Finland and Sweden are not covered by this report because they have either not yet transposed the provisions in question into domestic law or have not yet acquired experience in applying them). Article 50 of the Seventh Directive " 1. Five years after the date referred to in Article 49(2), the Council, acting on a proposal from the Commission, shall examine and if need be revise Articles l(l)(d) (second subparagraph), 4(2), 5, 6, 7(1), 12, 43 and 44 in the light of the experience acquired in applying this Directive, the aims of this Directive and the economic and monetary situation at the time. 2. Paragraph 1 above shall not affect Article 53(2) of Directive 78/660/EEC. " The provisions in question are as follows: Article 1(1 )(d), second subparagraph: agreement between shareholders regarding the transfer of voting rights, which can lead to a consolidation requirement; Article 4(2): exemption from the consolidation requirement where the parent undertaking does not have certain legal forms; Article 5: exemption of financial holding companies from the consolidation requirement; Article 6: exemption of small and medium-sized enterprises from the consolidation requirement; Article 7(1): exemption of intermediate groups from the consolidation requirement; Article 12: exemption of horizontal groups from the consolidation requirement; Article 43: exemption of subsidiary undertakings from requirements arising from the Fourth Directive; Article 44: exemption of parent undertakings from requirements arising from the Fourth Directive. Article 50 provides for the Council to carry out the examination five years after companies first apply the provisions. According to Article 49(2), the provisions of 2. n I If l f I J financial the Seventh Directive are to be applied for the first time to consolidated accounts for years beginning on 1 January 1990 or during the calendar year 1990. In fact, the provisions of the Seventh Directive were first applied in the various Member States as follows: - - Belgium: for the financial year beginning after 31 December 1990; Denmark: for the financial year beginning on or after 1 April 1991 ; Germany: for thé financial year beginning after 31 December 1989; Greece: for the financial year beginning on or after 1 July 1990; Spain: for the financial year beginning on or after 31 December 1991; France: for the financial year beginning after 31 December 1985 (companies eligible for stock-exchange listing) or after 31 December 1989 (companies not eligible for stock-exchange listing); Ireland: for the financial year beginning on or after 1 September 1992; Italy: for the financial year beginning on or after 1 January 1994; Luxembourg: for the financial year beginning on or after 1 January 1990; Netherlands: for the financial year beginning on or after 1 January 1990; Portugal: for the financial year beginning on or after 1 January 1991 ; United Kingdom: for the financial year beginning on or after 23 December 1989. The Commission wrote to the Member States on 4 August 1994 asking them to report to it on their experience in applying the provisions in question. At its meeting on 6 and for Accounting Directives discussed 7 December 1994, Member States' experience in applying those provisions. the Contact Committee II. Detailed description of the provisions of the Seventh Directive in question and the outcome of the discussions Article l(l)(d), second subparagraph According to this provision, a parent undertaking must draw up consolidated accounts where, on the basis of an agreement with other shareholders, it alone controls a majority of the voting rights in a given subsidiary. Member States are permitted to adopt more detailed provisions governing the form and content of such agreements (Member States' option). 3 Comments France is the only Member State to have made use of this option. Such agreements concluded in France may not be directed against the company's interests. None of the Member States abovementioned provision. Articled) is experiencing problems in connection with the A consolidation requirement exists in principle where at least one undertaking in a group has the legal form of a company limited by shares. According to the abovementioned provision, however, Member States have the option of waiving the consolidation requirement where the parent undertaking does not have the legal form of a company limited by shares. Comments This option has been used without qualification by Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and the United Kingdom. In France the list of undertakings not exempt from the consolidation requirement comprises, in addition to companies limited by shares, those with the form of a "société commerciale". In Germany very large enterprises (turnover of at least DM 250 million, balance-sheet total of at least DM 125 million and workforce of at least 5 000) are subject to the consolidation requirement irrespective of their legal form. Belgium, Denmark and Spain have not made use of this option. None of the Member States abovementioned provision. Article 5 is experiencing problems in connection with the This (extensive) Article gives Member States the option of exempting financial holding companies from the consolidation requirement where they satisfy certain conditions (e. g. they do not intervene in the management of subsidiary undertakings, they do not exercise certain voting rights attaching to participating interests). Comments This option has been used only by Luxembourg and Greece. None of the Mehiber States abovementioned Article. Article 6 is experiencing problems in connection with the This Article gives Member States the option of exempting groups of undertakings from the consolidation requirement where they do not exceed two of the three size criteria referred to in Article 27 of Directive 78/660/EEC (medium-sized enterprises). For a limited period, furthermore, the size criteria laid down in Article 27 may be exceeded (Article 6(5)). Comments All the Member States have made use of this option. With the exception of Denmark, Ireland, the Netherlands, Portugal and the United Kingdom, all the Member States are permitting the size criteria to be exceeded temporarily under Article 6(5). In the Netherlands only those groups of undertakings are exempt from the consolidation requirement that do not exceed two of the three size criteria referred to in Article 11 of Directive 78/660/EEC (small enterprises). None of the Member States abovementioned Article. Article 7(1) is experiencing problems in connection with the Subject to certain conditions, this paragraph exempts parent undertakings which are also subsidiary undertakings (intermediate groups) from the consolidation requirement where the parent undertaking: holds all of the shares in the exempted undertaking, or holds 90% or more of the shares in the exempted undertaking and the remaining shareholders have approved the exemption. In so far as the laws of a Member State prescribe consolidation in this case at the time of the adoption of the Directive, that Member State need not apply this provision for ten years as from 1990. Comments None of the Member States has experienced problems in transposing the abovementioned exemption provision. No Member State has used the option of deferring the exemption for ten years. ArtkkH This Article permits Member States to impose a consolidation requirement on an undertaking where (a) that undertaking and one or more other undertakings with which it is not connected are managed on a unified basis pursuant to a contract concluded with that undertaking or provisions in the memorandum or articles of association of those undertakings, or x (b) the administrative, management or supervisory bodies of that undertaking and of one or more other undertakings with which it is not connected consist for the major part of the same persons. The circumstances referred to here are those of a horizontal group. Comments Only Belgium, Greece and the Netherlands have made use of this option. In Italy a consolidation requirement is imposed in such a case where banks are involved. Consolidation is required in France in such cases in the insurance sphere. In the view of the Belgian delegation, problems may arise where, in addition to horizontal consolidation, vertical consolidation comes into consideration. None of the Member States has so far experienced problems in connection with the abovementioned Article. Article 43 This Article gives Member States the option of not applying to subsidiary undertakings governed by its laws the provisions of Directive 78/660/EEC (balance-sheet Directive) concerning the content, auditing and publication of annual accounts where the parent undertaking is subject to the law of a Member State and various conditions set out in the Article are met. In particular, the subsidiary undertaking must be included in the consolidated accounts and the parent undertaking must have declared that it guarantees the commitments entered into by the subsidiary undertaking. Comments Only Ireland, Luxembourg and the Netherlands have made use of this option. None of the Member States is experiencing problems in connection with the abovementioned Article. Article 44 This Article gives Member States the option of not applying to parent undertakings governed by their laws the provisions of Directive 78/660/EEC concerning the auditing and publication of the profit-and-loss account where certain conditions set out in the Article are met. In particular, the parent undertaking's individual accounts must have been included in the consolidated accounts to be drawn up by it. Comment? Use may be made of this exemption in Ireland, Luxembourg, the Netherlands and the United Kingdom. None of abovementioned Article. the Member States is experiencing problems in connection with the m. Conclusions The negotiations leading to the adoption of Directive 83/349/EEC could not have been successful if the Council had not undertaken to review the Member State options referred to in Article 50 after five years and to amend them if necessary. It was feared that those options might materially undermine some of the Directive's objectives, notably regarding the equivalence and comparability of consolidated accounts, and so give rise to practical problems. In the Commission's view, those fears have not been realized. The Commission has examined the application or non-application of the options in individual countries in close cooperation with the Member States. It has concluded that these options have not given rise to problems in any Member State. In particular, there are no indications that they are impairing the equivalence and comparability of consolidated accounts. The Commission therefore proposes that the Council should not amend the provisions in question on the basis of Article 50 of Directive 83/349/EEC. } ISSN 0254-1475 COM(96) 94 final DOCUMENTS EN 09 Catalogue number : CB-CO-96-098-EN-C ISBN 92-78-01291-2 Office for Official Publications of the European Communities L-29S5 Luxembourg

Proposal for a COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee

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COMMISSION OF THE EUROPEAN COMMUNITIES •it & Brussels, 20. 03. 1996 COM(96) 80 final Proposal tor a COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee (presented by (he Commission) EXPLANATORY MEMORANDUM Subject: Replacement of members and alternate members of the European Social Fund Committee for the period up to 22 October 1998 1. 2. 3. 4. 5. Article 17 of Council Regulation (EEC) No 2052/88 of 24 June 1988, as most recently amended by Council Regulation (EEC) No 3193/94 of 19 December 1994, on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments, states that the Commission shall be assisted in respect of Objectives 3 and 4 by a Committee pursuant to Article 124 of the Treaty. The provisions relating to the organisation and tasks of this Committee are laid down in the implementing regulations, principally in Article 28 of Council Regulation (EEC) No 4253/88, as amended by Council Regulation (EEC) No 3193/94 of 19 December 1994, concerning coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments. The said Article provides that the Committee shall be composed of two government representatives, two representatives of the workers' organisations and two representatives of the employers' organisations from each Member State. The members and alternates are appointed by the Council, acting on a proposal from the Commission, for a period of three years. The Council decided, on 23 October 1995, to appoint the members and alternate members of the European Social Fund Committee, on a proposal from the Commission, for the period from 23 October 1995 to 22 October 1998. Following the resignation of a member and an alternate member, the Commission is presenting to the Council this proposal for a Decision replacing those members for the period up to 22 October 1998. PROPOSAL FOR A COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee THE COUNCIL OF THE EUROPEAN UNION, Having regard to the proposal from the Commission, Whereas the Council, on 23 October 1995, acting on a proposal from the Commission, decided to appoint the members and alternate members of the European Social Fund Committee' for the period up to 22 October 1998; Whereas one member's seat (government representative) has become vacant following the resignation of Mr P. Hayden (Ireland); Whereas one alternate member's seat (government representative) has become vacant following the resignation of Mr D. Kerr (Ireland); Whereas, therefore, it is necessary to amend the said Decision, HAS DECIDED AS FOLLOWS: The Decision of 23 October 1995 is amended as follows: Article I 1. 2. In Article 1, I a), the member representing the Irish government, Mr P. Hayden, is replaced by Mr Michael English. In Article 1, I b), the alternate member representing the Irish government, Mr David Itsrr, is replaced by Mr William Parnell. Article 2 The appointments referred to in Article 1 shall be published, for information, in the Official Journal ©f the European Communities. Done at Brussels for the Council The President O J N o C 2 $ 6, 10. 11. 1995. ISSN 0254-1475 COM(96) 80 final DOCUMENTS EN 01 Catalogue number : CB-CO-96-089-EN-C ISBN 92-78-00965-2 Office for Official Publications of the European Communities L-2985 Luxembourg k

COMMUNICATION FROM THE COMMISSION Community structural assistance and employment

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 03. 1996 COM(96) 109 final COMMUNICATION FROM THE COMMISSION COMMUNITY STRUCTURAL ASSISTANCE AND EMPLOYMENT COMMUNITY STRUCTURAL ASSISTANCE AND EMPLOYMENT Contents Page I. II. Analysis and assessment of the impact of structural assistance on employment A. The structuring work of the Funds is essential for the creation of lasting jobs An impact on employment which varies depending on Objective Quantifying the impact B. C. Possible adjustments: doing more for employment within existing programming and doing it better A. B. C. Providing the conditions for long-term economic growth Increasing the job-intensity of economic growth Promoting a more active approach to economic and social solidarity, including equal opportunities Developing and enriching the partnership in the context of structural assistance D. Conclusions Annexes 3 3 8 12 15 15 18 24 26 29 COMMUNITY STRUCTURAL ASSISTANCE AND EMPLOYMENT BACKGROUND The serious employment situation is a central concern of the European Union, where the unemployed now number around 18 million. This makes the fight against unemployment and the creation of new jobs a first priority for the European the White Paper on "Growth, Community and Competitiveness and Employment", the Essen European Council decided to take medium-term measures in this field through multi-annual programmes to be defined by the Member States. its Member States. Following In its communication to the Council on action to be taken as a result of the Essen summit,1 the Commission stressed the need to ensure consistency between the policy decided there and the use to be made of the Structural Funds. Similarly, in its recent communication on trends and developments in employment systems in the European Union - the European employment strategy,2 the Commission set out its priorities on how the Structural Funds could take account of recent developments and prospects in employment policy. This report was favourably received at the Madrid European Council, which drew particular attention to "the mutually beneficial effects of greater coordination of the Union's economic and structural policies. " With a budget (including the Cohesion Fund) of ECU 170 000 million at 1995 prices for 1994-99, the Structural Funds, acting in the context of economic and social cohesion, have an important role to play in promoting employment, principally in the Member States and regions where they are concentrated, through programming, the main responsibility for which lies with the Member States. They provide support for medium- and long-term job-creation by improving the match between physical and human resources and the operation of the labour market. They also have a short-term impact through extra demand for goods and services. To offset persistent regional disparities within the Union, the structural policies promote the balanced territorial development of the priority regions. The regional disparities relating to employment, create too considerable tensions within the Union with regional unemployment rates varying from 3. 4% to 34. 7%, a ratio of 1 to 10 (see Annex I). In any case, unemployment statistics should be read in the light of employment rates which the economically active population between 15 and 64 which is in employment), in order to reveal under-employment. Here too, there are wide variations, with participation rates ranging from 51% to 86. 5% (see Annex II), the lowest rates being mainly in the south of the Union (Northern Greece, Spain and the Mezzogiorno). take account of participation (the percentage of COM(95) 74 final of 8 March 1995. COM(95) 465 final of 11 October 1995. 2 Elsewhere, structural policies are contributing to the implementation of active labour market policies promoting the integration of young people, the long-term unemployed and those threatened with exclusion and the adjustment of the labour force to industrial change. Through their contribution to promoting employment, structural policies can also help foster equal opportunities which, as several European Councils have stressed, are a priority for the Union and its Member States. I. A. ANALYSIS AND ASSESSMENT OF THE IMPACT OF STRUCTURAL ASSISTANCE ON EMPLOYMENT The structuring work of the Funds is essential for the creation of lasting jobs 1. In general terms, structural assistance operates in two ways: (a) (b) the main thrust, on the supply side: investment part-financed by the Structural Funds helps improve the economic performance of the productive apparatus by increasing and adjusting supplies of physical and human resources which in due course leads to higher employment; secondarily, on the demand side: where they have a direct impact on income and employment and substantial indirect and induced effects arising from higher final demand. These also have leakage effects outside the regions assisted which benefit mainly the more developed areas. More generally, the structural policies may be regarded as one element of the national economic policies which they help to part-finance. A typical example is the "Gemeinschaftsaufgabe" (joint scheme) in Germany, which is a national scheme of aid for regional purposes. Macro-economic impact Proportion of investment undertaken by the regions concerned In terms of gross fixed-capital formation, the proportion of Community assistance devoted to investment (principally under the ER0F) accounts for almost Vl% of alt public and private investment in Greece, between 8% and 9% in Ireland and Portugal and 7% in the relevant regions Of Spain. These proportions, which do not at present include the Cohesion Fund, give a glimpse of the economic impact of the Funds. These figures are calculated as a proportion of total investment,- both private and public. AS proportions of public investment alone, they become substantial, rising to as much as 50%. Impact on growth in the beneficiary Member States Initial estimates concerning the CSFs adopted suggest that they have a matted effect'on growth and hence on employment. In Portugal and Greece» the additional growth in G0P dae to Community assistance is estimated at 0. 5% per year (plus an additional 1% generated by the national contribution). This means that by 1999 GDP in Portugal and Greece will be 3% higher man if there had been no Community transfers. The first results of estimates for Spain and Ireland suggest additional growth in GDP in the regions concerned amounting to 0. 4% per year (0*7% if the national contribution is included), which means that in 1999 GDP will be 2% higher than it would have bee» without assistance, Naturally, the actual impact on growth will depend to a large extent on the general economic context, comprising both the success of macro-economic policies and developments in the world economy. Structural assistance employs a range of tools based on measures of three types: support for infrastructure, support for the productive sector and the development of human resources. (a) Infrastructure stimulates growth andjience employment: (i) a better standard of infrastructure creates positive externalities for private capital (increased productivity and lower production costs). This is particularly marked in the least well-equipped Objective 1 regions; (ii) the impact on employment is generally positive and may be broken down into: direct effects linked mainly to construction. Such jobs are, however, by their nature, temporary and, to some extent, filled from outside the région; indirect effects related to externalities generated by the completion of infrastructure and the amount of use made of it. Density of employment is variable. Infrastructure The major rail infrastructure programmes supported by the ERDF in Italy and Greece will directly create or safeguard 37 000 and 11 600 jobs respectively. The indirect impact may be estimated at 57 000 jobs in Italy and 7 100 in Greece. The programme for the construction and equipment of 15 hospital centres in the Spanish region of Castile-Leon will help create 445 jobs directly. An initial estimate, probably on the conservative side, of the impact of infrastructure financed by the Cohesion Fund in 1993 gives a figure of 40 000 person/years plus 7 500 person/years for the operation of the infrastructure. (b) Support for the productive sector Aid schemes for firms should be distinguished from indirect assistance affecting demand for services: (i) The impact of direct aid on employment varies depending on the nature of the investment (productivity, capacity, cleaning up pollution, diversification), the type of sector (capital-labour coefficient) and how firm the commitment to employment is. Its main limitation should also be noted: the fact that such aid is often automatic means that the employment variable cannot always be taken into account in financing decisions. In any case, the Structural Funds regulations require these aid schemes to seek to create or safeguard permanent jobs and the Commission and the Member States are required to check regularly that this is being done. Furthermore, a number of direct aids appear to be inadequately targeted on growth sectors and benefit large firms rather than the small businesses which are often involved in technological innovation and job creation while at the same time they are often more concerned with physical investment than non-material investment. Investment aid There are legal provisions covering this point in Spain while in Germany and the United Kingdom a positive impact on employment is a prime condition of investment aid. On the contrary, investment aid schemes in Portugal, and, to a lesser extent in Italy, are more targeted on firms competitiveness and their impact on employment is therefore medium term oriented. (ii) Business services: these non-material measures provide essential support for the productive sector. They have a wide-ranging effect on employment by increasing the supply of non-material capital and increasing the effectiveness and external competitiveness of local firms. They may be divided into: • advisory and support services, including financial engineering mechanisms; • services to support innovation, quality and RTD, which are particularly vital in the most outlying areas and those with low population densities. Even though their direct effect on employment remains relatively limited in terms of individual economic activity, these are often highly skilled jobs offering high added value and with substantial general potential, particularly as regards the establishment of businesses, the promotion of new technologies and closer contacts between research centres and businesses. Business services The goals of the Industry sub-programme in the CSF for Portugal lay particular stress on the provision of a complete range of new services to businesses. The Objective 2 SPDs in the United Kingdom contain specific measures to support the establishment of strategic groups of small firms in key sectors at regional level with stress on the development of small firms at local level. Objective 6 pays particular attention to the question of support for innovation and RTD. In these areas, Finland will devote about 35% of resources to programming of this type. Similarly, the introduction of telecommunications into rural areas has enabled certain activities to start up in isolated areas and provided them with access to certain services and training offering qualifications (telecottages in the United Kingdom). By way of example, since it began in 1984 the Community BIC programme, which offers integrated support to those establishing small firms, has contributed to the consolidation of some 5 600 firms directly generating 27 000 jobs in the Union. (c) The development of human resources This has a variety of effects on competitiveness, growth and employment. These can be better understood if they are looked at in two groups: (i) trained. Such measures investment in human resources through education and training provided that the productive sector is able to absorb the labour accordingly increase the productive potential of the human element, which is acquiring greater importance in the attempts to achieve economic recovery and establish a process of growth. The availability of a skilled labour force permits physical investment offering greater productivity the dissemination of new knowledge and and techniques, which may in turn increase the effectiveness of firms and make economies as a whole more competitive. facilitates Here, the approach adopted by the Structural Funds involves improving qualifications adapted to employment by modernizing the system of education and initial training and improving the opportunities for training throughout working life. The Structural Funds also operate to improve human resources in the areas of research, science and technology through advanced training and the training of managers and technicians in research establishments. In the medium and long term, this potential helps create new jobs and consolidate those exposed to international competition. (ii) Active labour market measures which operate both on the supply of work, through training measures, and on demand, through measures to promote employment. Measures in this area help offset rigidities in the labour market by providing an appreciable level of support for macro-economic policies to strengthen the process of growth. They also operate directly on the level of employment by making the least skilled section of the population easier to employ. The combination of measures to subsidize low wages with those to improve skills means that the best possible use can be made of the available labour force and the greater social cohesion achieved. Human resources The CSF for Greece devotes substantial financial resources to the development and modernization of systems of education and initial training. The strategy adopted includes the following principal features: at secondary level, attention is concentrated on the adaptation of curricula, the promotion of technical and scientific subjects and the introduction of computer studies; a new role for vocational training and apprenticeship is the priority within the initial training system; in higher education, the main aim is to modernize the management of universities and strengthen their links with the world of work. In the area of training to develop human resources, the "Knowledge bases" and "Vocational training and employment" programmes will enable Portugal to train 31 200 workers, 4 700 of whom will be in the research sector. These measures will also be of particular importance in the Objective 2 areas affected by industrial change. The urban policy being followed in a number of Member States places particular stress on the area of aid to integration. In the Objective 2 areas of France, structural assistance provides support for training and employment establishments which seek to centralize services offering information about employment and training and guidance facilities for those who are already unemployed. In 1989-93 vocational training absorbed about 11 % of the total finance for Objective 5(b) and is expected to absorb about 15% in the new period, so permitting the skills of rural workers to be improved and adapted to employment in areas such as tourism and the environment which are new for certain regions. B. An impact on employment which varies depending on Objective The extent of the impact on employment is a function of the intensity and combination of assistance, which depend on the light of the initial situation, the Fund Objective and the Member State. 1. The Objective 1 regions, which will eventually account for 70% of Structural Fund assistance, seek to give priority to job-creation principally by promoting growth to reduce gaps in per capita GNP. This explains the great stress laid on the general modernization and upgrading of the productive sector in order to improve competitiveness and on the provision of a variety of basic infrastructure. In terms of employment, the key feature underpinning this approach is the establishment of an economic base for sustainable development which will create jobs over the long term using, amongst other means, increased education, training, research and technological innovation. In the short term, the effect of this approach on employment is less clear-cut since it results in the creation of temporary jobs on building sites while also destroying jobs in agriculture and traditional sectors through the modernization and restructuring of the economy. It is important to note too the contribution made by active labour-market policies which seek to make the labour-force more employable. Objective 1 The development strategy of the CSF for Ireland seeks to support the exposed sectors of the economy. In the long run, this will improve their competitiveness and productive capacity and so create employment. Assistance to agriculture and the food industry, the main employer in the country, is designed to safeguard employment and raise productivity at the production stage while increasing the number of jobs in the downstream sectors of processing and marketing. In the case of Portugal, the evolution of the economy will lead to a decrease in the agricultural workforce to probably less than 10% by 1999. The programmes part-financed through the Structural Funds shall, among other objectives, reduce the negative impacts on employment of this structural adaptation. Along the same lines, while, according to the Ministry of Planning, 80 000 jobs were created between 1989 and 1993 as direct result of the CSF, total employment remained unchanged at the end of the period, which suggests that an equivalent number of jobs were lost in the sectors undergoing restructuring. In the Objective 2 areas, which are defined on the basis of criteria mainly concerned with employment, the priority is the diversification and revitalization of a declining industrial fabric by seeking the most immediate possible impact on employment. To the list of such areas should also be added those smaller industrialized areas which are eligible under Objective 1 in the United Kingdom (Merseyside), Belgium (Hainaut) and France (Nord/Pas-de-Calais), which resemble each other closely. This means that the instruments used concentrate on support for the productive sector and the development of human resources while seeking to make the speediest possible impact on employment. In providing support for the productive sector, most of the SPDs give priority to locally-generated development through job-creation and aid to job-creating investment in existing firms. This trend also gives greater scope to the role of indirect aid for improving the business environment, as compared with direct aid to investment. Objective, 2 The trend of redirecting aid to the productive sector is demonstrated particularly clearly in the programmes for the United Kingdom, where the percentage dedicated to support for small firms has increased from 10% of total assistance in the previous programming period to 30% now. This has also been accompanied by increased part-financing from the private sector. A similar, although less marked, trend may also be observed in Germany (SPDs for Saarland and North Rhine-Westphalia) and France (SPD for Lorraine, which stresses support for innovation, and measures to support business incubators in most SPDs). Measures to develop human resources are mainly designed to improve the productive base and business management, particularly in small firms. This approach should assist the diversification of the economy of the region and enable the labour force to adapt to the productive needs stemming from the application of new technologies. More generally, and this point is linked to the previous one, the very considerable reduction in finance for infrastructure (including infrastructure in the productive sector) as compared with the previous programming period should be noted. There can be no doubt that this improves the cost effectiveness of the programmes in employment terms. 3. In the cases of Objectives 5 and 6. the question revolves mainly around the maintenance of activities, employment and population in rural areas, which often includes thinly populated areas in need of economic diversification, and the fisheries sector. It should be noted that the regulations governing Objective 5(a). on the modernization of agricultural structures, apply equally throughout the European Union. Their adjustment in the light of the new rules governing the Structural Funds, which territorial Objectives (particularly as regards integration with Objective 1) and allows better account to be taken of new factors such as the environment and the diversification of activity in agriculture, is of recent date. links between this Objective and the improves Each year, assistance of this type contributes to the establishment of some 15000 young farmers, to whom it provides grants for investments in their holdings. Furthermore, 33000 agricultural holdings are improving and modernizing their production and working environment every year, so enabling family workers to be better employed, creating new jobs and discouraging young people from leaving rural areas. Compensatory allowances are also important because they ensure an adequate income on more than 1 million holdings covering 56% of the area of the Union. This too maintains the population of rural areas. The food industry is an even more important source of jobs than agriculture and, in certain sectors, particularly those concerned with new markets and new consumer products, their number may be increased by investment in the improvement and processing of agricultural and forestry products. In the case of Objectée 5(a) fisheries, the tasks of the FIFG are to reduce the fishing effort in terms of the over-exploitation of natural resources and to support this sector, which is in a state of severe structural crisis. The first category of assistance will inevitably reduce jobs, although this can be offset by the supporting measures now having been adopted by the Union. These include aid for national early retirement schemes and flat-rate individual permanent cessation premiums for younger fishermen. By contrast, the second group will increase employment, although it should be stressed that their main goal is to improve the competitiveness of the Union's fishing industry. Objective 5(a) fisheries In the area of processing fisheries products, for example, the FIFG could help create 750 new jobs in Italy and 1 100 in Germany by 1999 but its main contribution will be to safeguarding existing jobs, which are seriously threatened by the crisis in the sector. Similar considerations apply to aquaculture (1 300 jobs expected to be created in Ireland) and to investment to modernize the fleet and port facilities. In any case, the safeguarding and creation of jobs are linked to support to the productive sector. The Pesca Community Initiative, by contrast, concentrates on employment and human resources in coastal areas because it can help maintain activity levels in such areas, whether in fisheries or elsewhere. It may finance diversification measures for firms and vocational retraining to enable fishermen to pursue other occupations, such as tourism or aquaculture, or it may finance training courses to improve either vocational qualifications or the general training of sea fishermen. Assistance to employment under Objective 5(b) concentrates mainly on the diversification of activities. While in the case of agricultural production in the strict sens of the term, this is designed to safeguard jobs, mainly by enhanced development of local products, the bulk of jobs created have been in other activities and sectors, such as tourism, small businesses, services and, more recently, the environment. Rural tourism is often of the utmost importance since its rapid expansion has resulted in the development of a number of related activities. 10 Objective 5(b) Assistance in the area of the environment is of recent origin and is primarily directed towards reducing pollution from agriculture and the food industry (construction of treatment stations at Trento in Italy), the purification of water for some hundred municipalities in Limousin (France), the development of organic farming in Brittany (France) and the improvement of forested areas in Cantabria (Spain). Alongside this, there is now growing emphasis on turning the protected environment to economic use. An evaluation of about twenty areas found 1 270 environment-related initiatives which had created a substantial number of jobs. The renovation and development of villages also constitutes the first stage of a large number of investments which so far has had remarkable multiplier effects, mainly in the construction sector and principally in the new German Lander. As can also be seen in France, support for tourism forms an essential element in the diversification of Objective 5(b) areas. The achievements in this field part-financed by the Structural Funds include the rapid development of "nature" tourism (crossing the sands around Mont-St-Michel) and hiking and adventure tourism (Stevenson route). Similar comments apply to Objective 6, although its programmes are very recent. Since areas under Objective 6 are even more thinly populated than those under Objective 5(b), expenditure on RTD and the new information and communications technologies is an important factor in economic diversification. Since their main aim is bring demand into line with supply, and so place people in the jobs available, those measures under Objectives 3 and 4 which are most oriented towards the labour market are, by their nature, directly linked to employment. Assistance under these Objectives applies throughout the Union. At present, about 8% of measures under the Funds come under Objective 3. They are concerned with the integration of young people (36%), the long-term unemployed (40%), those threatened with exclusion (16%) and equal opportunities for men and women (5%). Objective 3 Measures under Objective 3 are intended to develop or consolidate national employment policies while taking account of regional and local needs. Hence, in the German Lander, structural assistance complements measures taken under the law to support employment. It is estimated that some 400 000 people benefit from measures receiving part-finance. Because of the very high level of youth unemployment in Spain, structural assistance has concentrated on the social and vocational integration of this category. In accordance with the Youthstart Community Initiative, Community support backs up national efforts to increase the proportion of 16-18-year-olds in full- time education. About 2% of measures under the Funds come under Objective 4 (the adaptation of workers to industrial changes). 11 Objective 4 The main beneficiaries in France of assistance under Objective 4 are the least skilled workers who are the main victims of industrial change. Preventative measures also provide support for prospective studies of branches, support for advisory and diagnostic services to firms and some of the tasks of the regional observatories of employment and training. It was also planned that at least 70% of workers benefitting from measures under Objective 4 should come from firms employing under 500 people, with particular attention being paid to those employing under 250 people. The main aim in Denmark is to improve access to continuing training for employees of small firms in order to promote the rotation of employment. The impact on employment of measures taken under Objectives 3 and 4 can only be assessed on a case-by-case basis and using appropriate methodologies. However, it may be estimated that some 11 million people will benefit from such measures in 1994-99. In general, assistance from the Structural Funds under Objectives 3 and 4 is handicapped by the unfavourable conditions arising from the weight of massive long-term unemployment and the acceleration of economic restructuring, the main victims of which are those least able to compete on the labour market. Structural measures prove particularly useful in these difficult circumstances. The programmes part-financed, which are designed with an eye to both the short and the medium term, help strengthen the links between growth and job- creation and hence reduce the pressure on the most disadvantaged groups. Despite the modest resources available, this assistance also exerts a multiplier effect on national policies. Active policies at the expense are referred to passive income-support policies and good practice enjoys wider circulation through the partnerships and networks set up as a result of this assistance. The summary tables in Annex III illustrate these developments by showing by Member States and for all the Objectives the finance allocated to each of the main categories of structural assistance. C. Quantifying the impact The programming of structural assistance for 1994-99 drawn up through partnership reflects the great importance attached to the promotion of employment throughout the Union. Through its general and rather indirect effects, it also demonstrates the difficulties inherent in a firm commitment to quantified employment objectives. 1. Programmes often include a lot of data on employment which demonstrate, particularly for the assisted regions, the extent of the concerns for this area felt by those responsible at national and regional level. However, the available information tells us more about the difficulties both of maintaining employment as a target and of estimating employment effects than about the total impact that can be expected. This derives from a lack of consensus, either at methodological or operational level, on how to calculate employment effects. Thus, for example, in region A a measure such as 12 'reclaiming and improving industrial sites' might be forecast to create 30 jobs per million ecus invested, while in region B a similar measure might anticipate 300 jobs per million ecus. The difference does not necessarily have anything to do with the efficiency of the respective programmes, but rather with the types of jobs that are being counted. For example, in one case only jobs involved in the actual work of clearing the site might be calculated; in another, those temporary jobs might be excluded but all employment created by companies occupying the newly cleared zone might be estimated. It is therefore necessary to appreciate the different ways in which jobs can be created by the Structural Funds, and also the various ways in which the total might be over- or under-estimated (in this regard it will be necessary to develop for the future a methodology for forecasting job creation). Briefly, jobs may be created by the implementation of measures the workforce directly involved in clearing the site, building the road, delivering the training as a direct outcome of the measure e. g. new staff operate equipment purchased with financial assistance, staffing of a tourist attraction. ; as an indirect or induced outcome (jobs created by the new purchasing power delivered by the Funds, new companies created thanks to the improved business climate or skilled labour resources). The calculation of this indirect effect is a most difficult exercise as it requires an identification of the impact of non-Structural Fund related factors on job creation. For these reasons, and especially because there is no standard methodology, the information provided is fairly disparate and so unsuitable for systematic treatment. The SPDs for Objectives 2 and 5(b) suggests that 650 000 and 518 000 jobs respectively will be created over the period but these figures should be treated with the greatest caution due to the relative importance of the displacement and deadweight effects in those areas. 2. In response to this situation, the Commission has launched a series of studies intended to lead to a rapid improvement in our understanding and calculation of employment effects. The important macro-economic impact of the Union's structural transfers, particularly in those Member States most fully covered by Objective 1 (E, EL, I, IRL, P) has a direct effect on employment. * Where Objective 1 applies to whole countries, or at least to major economic regions, 'top down' analyses, based on the macroeconomic relationships of the economy, are employed. While subject to a number of limitations, based particularly on the 'static' nature of the relationships used as assumptions, these techniques can give broad brush estimates of the employment and income effects of structural assistance. 13 Independent analyses for the period 1994-99 suggest that implementation of the CSFs will create about 1. 2 million jobs (4. 1% of the active population) in all the Objective 1 regions. In the case of Portugal, for example, this figure is 190 000 jobs per year, for Spain 220 000 jobs per year, for Greece 260 000 jobs per year and for the new Lander 160 000 jobs per year. However, only some of these jobs will be new, hence the disparities with the estimates provided by the Member States. These do have the advantage of providing a uniform and comparable assessment of the impact of Community assistance on the labour force deployed in these Member States. This consideration of current programming shows where improvements can be to the Monitoring Committees, along the lines of the proposed, particularly Commission's communication on a European strategy for employment. Such improvements include adjustment of both the content of and procedures for assistance while respecting the guidelines already agreed. To achieve this, all available scope for manoeuvre (the "deflator" effect, adjustments within programmes within the powers of the Monitoring Committees, etc. ) will be used and attention paid to improving links between macro-economic effects and the actual areas they affect. 14 II. POSSIBLE ADJUSTMENTS: DOING MORE FOR EMPLOYMENT WITHIN EXISTING PROGRAMMING AND DOING IT BETTER The task of the Structural Funds is to support economic and social cohesion within the Union. The first consideration is therefore to provide the conditions for strong sustainable growth which takes account of increased international competition and the growing pace of technological change. However, while such growth is essential, it is not of itself sufficient to find a solution to the employment problem: efforts must also be made to increase the employment content of growth. The currently unacceptable practice of work sharing reflected in low activity rates and high unemployment must be replaced by arrangements which ensure full participation in work and mobilize the full potential of our economy. This will promote greater solidarity in the economy and society and a more active approach to employment. The aim is therefore to work within current programming to seek adjustments which can increase the impact on growth and the impact of growth on employment. This means concentrating on using the scope for manoeuvre and flexibility available within current programming in order to pursue the following goals: A. Providing the conditions for long-term economic growth 1. The first priority is to ensure that due importance is given to non-material investment, a form of investment which has become a major source of economic growth. The stress laid by the Structural Funds on promoting research, development and the organization of businesses, particularly small businesses, open to innovation and the constant improvement of human resources through education and training represent a vital contribution to the development and dissemination of new technologies and forms of production. (a) Investment in human resources is a vital component of non-material investment and so should be accorded pride of place3. Current circumstances suggest that stress should be placed on the following priorities: increasing supply in order to guarantee all young people access to education and initial training. The Structural Funds should play an important role here, particularly in the less-favoured areas of the Union; fostering an integrated education and training system throughout working life; This has been a permanent approach in the White Papers on Growth, Competitiveness, Employment, on Social Policy and on the Learning Society. 15 adapting the structures and content of education and training to the needs generated by economic and technical changes. This presupposes the adaptation of curricula, the establishment of links between schools and the world of work (apprenticeships, stimulating the growth of an entrepreneurial spirit,. ) and encouragement for training organized by firms; encouraging public and private investment in education and training and creating appropriate structures to ensure that such investment is profitable. (b) These developments also make improved business support services, particularly for small firms, highly desirable. National and regional aid schemes part-financed by structural assistance could give firmer support to demand for quality services by small firms, a category of business which has a large degree of flexibility in organizing its production. Still more important is the need to seek integration in providing support for the offer of such services. local in the proliferation at While a large number of structures providing services for small businesses have developed in regions, particularly over the last ten years, which has resulted level of comparatively specialized and often competing bodies, heads of firms still have considerable problems in securing general advisory services which could then, in the light of their needs, direct them towards specific services. The Commission has recently launched a number of pilot projects to provide assistance at regional level for preparation of a strategy to support innovation and technology in small firms (Regional Innovation Strategies: RIS). These entail analysis of the supply of support services, comparisons between them and their adaptation to suit the varying needs of small firms while also promoting a single access point (development agencies, chambers of commerce, BICs, technology centres and the like) or contact point (Euro Info Centres - EIC) for these services under one roof and organized in the form of a regional network. Furthermore, the advisory nature of such services is not usually coordinated with the financial aspect, which substantially reduces their effectiveness. The under-capitalization of small firms is a critical point from which stem the bulk of their problems as regards ability to continue, develop and operate internationally. The Commission therefore advocates the systematic integration of financial services, seed capital, risk capital and other forms of financial engineering, into the advisory and support structures for small firms. International marketing also represents an important element for the development of small firms. 16 Measures to support technological innovation must also be given particular attention. A series of Community programmes to this end is already under way and discussions have begun on the basis of the Green Paper on innovation which the Commission adopted on 20 December 1995. We must take energetic measures to meet the challenge of the information society. More should be done in the way of regional and Community development planning to prepare for technological developments and not merely submit to them passively. Telematic services and applications now offer the technical potential for a rapid and high-quality response to individual requirements offering lower prices for private persons (telemedicine, education and training, trade, reservations, etc. ), employees (teleworking), business and industry and local authorities. the These new technologies are certainly not an unmixed blessing for employment situation where they are used to rationalize and automatize tasks previously done by people. Be that as it may, their arrival is inevitable and so supporting measures should be prepared well in advance. If those measures are successful, the new technology can also create opportunities by: opening up and expanding outlets and know-how in the least developed areas (Objectives 1 and 5(b)) and the most remote areas (Objective 6): examples of this are teleworking, and the improvement in quality made possible by medical telediagnosis; customizing and improving access to training, in particular for Objective 2, 3 and 4 areas: constant updating of knowledge and adjustment of programmes to specific needs are major advantages in a rapidly changing world; in general, increasing the amount of free time: the gains in productivity the new technologies bring with them will, ultimately, mean a reduction in working hours, which can only be a good thing for the new sources of employment in the services sector. These are the aims of the Community pilot measures in support of the information society recently launched under the IRIS Initiative and of the pilot projects under Article 10 of the ERDF Regulation and Article 6 of the ESF Regulation. 17 Information technologies It is worth mentioning here some experience and orientations from various programmes: in Limousine and Aquitaine (France), telesecretarial services have been developed and, in on a larger scale, Sweden and Finland new methods of work, training and education are receiving Structural Funds support. The British "knowledge-based industry" programmes and programmes for the integration of tourism, culture and media industries provide examples to be followed, as does the support in France for research, development and technology in SMEs in pursuit of "regional excellence". B. Increasing the job-intensity of economic growth The aim here is to regain a margin of manoeuvre between growth and employment, which is currently being restricted by the imperatives of competitiveness in the medium term. To achieve this, we need to devote particular attention to: 1. The employment question when financing infrastructure and productive investment, giving greater weight to this criterion in the case of the more developed regions. (a) In general: / - implementation, as regards the methodologies and selection criteria for projects are not always satisfactory, since they result in undifferentiated assistance designed to reduce the overall cost of the investment. Although there has been an improvement on the previous period, the criteria should be more selective and give greater priority to measures with the greatest job-creation potential. The procedures for granting the assistance, particularly to small firms, should be simplified and speeded up. Project selection criteria The "scoring system" used in the United Kingdom provides one example of a methodology to help with the qualitative analysis of assistance, it is based on two essential features: firstly, the projects must satisfy a certain number of basic criteria, and secondly there are specific criteria for evaluating the quality of a project in relation to the corresponding measure. Employment is one of the basic criteria, which means that if a project does not create jobs (in net terms), it has little chance of being selected. The criteria specific to the measure involved are based on unit cost indicators corresponding to the type of operation concerned, including the cost per job created. Only the most efficient projects, i. e. those with the best cost/job-created ratio, are financed under the aid scheme. in the same vein, certain Monitoring Committees for Objective 5(b) areas, such as the Committee for the French region of Provence-Alpes-Côte d'Azur, have included job creation in their project selection criteria. more appropriate evaluation methods should be used, better adjusted to the diversity of the regions and so providing a better picture of the quantified objectives in terms of the creation and preservation of jobs. 18 For the monitoring of operations, tools could be developed for the continuous assessment of interim impact, with particular attention to the measures which create the greatest number of jobs. (b) Measures to accompany infrastructure work and investment aid should be stepped up in order to maximise the spill-over effect on local employment. Direct jobs generated by major infrastructures have two limitations: they are temporary and risk being filled by people from outside the area. There should be a pro-active response to this situation, involving close cooperation between promoters and supervisors of major projects with the aim of maximising the local spill-over effects of the works. In order not to influence the award of contracts, this approach will of course be applied at a later stage (cf. box below). It may also be applied to local businesses with a view to sub-contracting parts of the works following Commission guidelines on better access for SMEs to public contracts. Particular attention should also be given to the possibility of making the local jobs and outlets thus generated permanent (cf. box below). The same principles (targeted training of workers and upgrading of local SMEs) could be applied to major productive investments. 19 Measures to support infrastructures The jobs generated by infrastructures are temporary since they are linked to single construction operations and, generally speaking, no steps are taken to make any of them permanent after the works are completed (by way of example, the region of Andalusia and the site of Expo '92 in Seville). An estimate shows that up to 50 to 80% of work on major construction sites under Objective 1 is supplied by firms (and staff) from outside the region, and sometimes from outside the Member State. This estimate obviously varies according to the qualifications required and the population density in the area where the works are carried out. in order to improve the local spill-over effects of these works, the following measures could be initiated after the contracts have been awarded in accordance with the relevant Community Directives: advance forecast of craft labour requirements at each site; comparison of those requirements with supply on the local or regional labour market; adjustment of local supply to those requirements which it is not already equipped to meet, using intensive training programmes (part-financed by the ESF). An operation to create permanent jobs could be carried out: either at local level: maintenance, repairs and operational management of the infrastructure and general services to it (e. g. supply of consumer goods, refreshments), which represent an estimated 100 000 local jobs per year; even more could be created by systematic measures in the context of local services, in particular environmental services; or at external level: creation of pools of qualified or expert staff for one or more of the trades needed for the works, which could be used on similar sites outside the area. With regard to measures accompanying productive investment, the German CSF for the new Lander shows a possible way ahead in concentrating on the recycling of industrial material and promoting a strategy of cooperation between companies to the benefit of the new SMEs. 2. Compensating wherever appropriate for changes required bv the modernization of the productive sector, whether it is a matter of mitigating its sectoral impact (in fisheries, for example) or its impact on the urban environment, or of slowing down the rural exodus, which itself aggravates urban problems. To achieve this, financing assistance should be stepped up and provided as the rule rather than the exception to support integrated approaches to rural development designed to develop products or sectors that are not exposed to international competition, or only exposed to a small extent: (a) Firstly, a strategy for the systematic development of regional strengths should be encouraged. It should be based on industries or niches that make an economic advantage of tradition and quality and give scope for diversification of the local or regional economy's outlets. It could also be based on the offer of services centred on revitalized medium-sized towns, which should play a greater structural role. Whichever approach is emphasized, the necessary conditions for the success of such a strategy are: 20 greater cooperation among SMEs and between SMEs and large companies, designed to establish "innovative economic areas", giving new life to industrial districts; advisory and supporting services of sufficiently high quality, essential for the establishment and development of SMEs (cf. 11/A. 1) having regard to their role as a dynamic source of employment4. (b) Secondly, particular attention should be paid, as the Commission asks in its Communication to the Council5, to developing new sources of employment in certain areas of local initiative seeking to meet new needs not yet found an adequate response and relating principally to the quality of life (personal assistance services, in particular for senior citizens, culture, tourism, local services) and the management of scarce resources (cultural heritage, management and protection of the environment - cf. 11/A/3 -, alternative sources of energy, in particular biomass). New full- time, labour-intensive activities need to be developed on the basis of the new needs arising from demographic and social trends in Europe, of which the most important are: the aging population, (one adult in three in the European Union is over sixty), the increase in free time and the greater stress on the management of scarce resources. The basic premise is that these areas contain potential pent-up demand, which needs to be brought into the open and encouraged by public measures to supporting the unemployed), but which will take its natural place in the commercial sector. (in particular by activating the resources allocated See Commission report to the Madrid European Council (CSE(95)2087) "Small and medium- sized enterprises: a dynamic source of employment, growth and competitiveness in the European Union". COM(95) 273 of 13 June 1995 on a strategy for encouraging local development and job-creation initiatives 21 Sources of employment Strategies for exploiting regional advantages must be designed to activate employment potential based on tradition, which may include: "unique" local products which are in danger of disappearing or have already disappeared but which the public still remembers: know-how and trades, particularly in crafts; typical craft or traditional products which, although not unique to a particular area, have a strong competitive edge calling for appropriate marketing strategies. Examples of this nature can be found in the Irish CSF local development programme which is implemented by a global grant and based on the practice of "Community development". Similarly, the programme for developing regional potential in Portugal was recendy (July 1995) adjusted to give greater weight to this aspect, focusing on the development of small and very small businesses. Finally, examples of good practice abound in the Leader Community Initiative, under which most of the local action groups support projects involving the improvement of production methods and the sale of typical regional products. Under Objective 2, the central issue is the financing of SMEs, in particular start-up capital for those just getting off the ground. This issue cannot be dissociated from that of integrated quality services to support business start-ups, based on partnership between the different service providers in the area. The SPDs of the new Member States, in particular Sweden, attach particular importance to these aspects. Support for new sources of employment needs to be increased. In this context, programmes in Greece could be restructured or could allocate "deflator" resources to supporting the provision by the national authorities of a job-seekers' voucher along the lines of the French system. More specifically, the Merseyside (UK) SPD stresses the opportunities offered by local jobs through the identification of 38 "pathways" based on local initiative strategies. 3. Encouraging dynamic reorganization of work and working time where this is accompanied by an increase in employment. The rapid spread of new techniques and the resultant types of production mean that work needs to be organized in new ways. Delay in this area could slow down growth and productivity and hinder the potential employment advantages resulting from flexible work schedules. Structural Fund assistance, in particular job support, could act as a catalyst by supporting the transitional costs of implementing approaches such as: arrangements allowing workers to interrupt their careers temporarily for training purposes, for example in exchange for the employment of an unemployed person during that training period; 22 restructuring of working time to achieve better distribution of available employment throughout each person's working life. In this context the importance of the role played by appropriate training for the employees of SMEs should be emphasized, as should that of systems promoting training throughout employees' working life and the role of the social and economic partners. Management of work and working time In Denmark, under the legislation which entered into force in 1994, unpaid leave for personal reasons may be granted for a period of thirteen to fifty-two weeks and an allowance on the same scale as unemployment pay is granted. Such leave is intended for further education, parental leave or sabbatical purposes. The resulting vacancies are filled by the unemployed or young job-seekers. This rotation increases the flexibility of the labour market and helps members of the work force to retrain throughout their working lives. 4. Fostering environmentally sound growth Protecting the environment constitutes a major source of new jobs. Apart from those generated by the construction and maintenance of infrastructures, more and more importance is attached to the job potential offered by work relating to the environment, sometimes called the "eco-sector". This branch of activity creates goods and services for measuring, preventing, limiting or correcting damage caused to water, air and soil. It also includes the reduction and management of waste and noise pollution and energy saving at local level. In addition, the services concerned cover environmental audits and advice to all other sectors of industry. The development of environment-related industries, which mostly use very sophisticated technology and develop innovative approaches (production of anti-pollution materials, telematic developments contributing to a more integrated approach to environmental management at local and regional level, the prevention of natural and "man-made" disasters, the management of natural resources, energy-saving techniques and renewable energy sources) all look set to generate long-term jobs. It should also be noted that environment-related services, including the launch and maintenance of the necessary infrastructure, which are particularly important for Objective 1 regions (e. g. waste management, pollution control, water management, the preservation of protected natural areas and activities going beyond the environmental in the narrow sense, but which make a significant contribution to the quality of life, such as preservation of the national heritage and urban renewal), may be labour-intensive and so can make a major contribution to job creation and preservation. As early as 1988, in its Communication on the future of rural world, the Commission emphasized the importance of stepping up environmental protection measures. In rural areas, the growing demand for "natural" agricultural products, "green" tourism, unspoilt areas and well-kept landscapes are opening up new horizons for the regions concerned. Other economic activities linked to a "clean" environment (e. g. research on 23 technology) may also contribute significantly to the diversification of sources of income and so help maintain rural population levels. Environment The Cohesion Fund is providing more than ECU 16 000 million between 1993 and 1999. During the first two years of its operation (1993-94), the ratio of environmental to transport projects was roughly 40:60. The Commission considered this proportion to be too low in view of the target of 50:50. The situation should therefore be improved significantly. Under Objective 2, the SPD for Germany devotes 7% of its resources to "clean" technologies and products. The United Kingdom SPD has a similar orientation: in western Scotland, ECU 47 million has been allocated to improving the region's environment and image, as part of the Business Infrastructure priority. The ERDF will be financing projects such as those allowing an increase in the recycling of land with an emphasis on reducing the damage to which historical sites and monuments are subject, or a limited number of projects for the reconstitution of natural habitats on the outskirts of towns. In Picardy (France), 17% of SPD resources have been set aside for this purpose and a model pilot project has been set up to create local sectoral networks for the recycling of household waste. C. Promoting a more active approach to economic and social solidarity, including equal opportunities Economic and social solidarity should be clearly distinguished from the provision of assistance. The high rate of unemployment has weakened large sections of the population throughout the Community and led to the spread of social màrginalization, particularly affecting those categories most vulnerable on the labour market, such as young people from underprivileged backgrounds, women, the long-term unemployed and part of the immigrant population. In order to combat and prevent long-term unemployment and the risk of social fragmentation, we must work to reform labour market policies. Active policies must be given priority over merely handing out benefits. This would allow available financial resources to be used productively and, above all, permit mobilization of the unemployed and marginalized. To do this, access to unemployment benefits will be connected to a greater extent to training actions and to acquisition of new competences in order to better prevent long-term unemployment and exclusion. The transfer of aid hitherto used for passive measures to active labour market measures, which would hence not entail an increased burden on public finances, would require the range and quality of services to job-seekers to be adapted. Such improvements are necessary to deal effectively with the specific difficulties of the unemployed and the sections of the population weakest on the labour market, in particular women, by giving them better access to economic and social activity. This means introducing arrangements to integrate guidance, training, counselling and employment aid to make it easier for job-seekers to find work. In this context, measures to promote the active participation of all in economic and social life should particularly emphasize equal opportunities for women and men. 24 In its Communication of 21 February 19966 the Commission proposed that the situation of women and men should always be taken into account when the Structural Funds are being used in order to make a more positive contribution to equal opportunities. It also proposed guidelines for the role which the Funds might play in reconciling family and working life and integrating disadvantaged women. This approach, which gives priority to work and employment, can also be combined with developing new sources of employment. Encouragement for local development and employment initiatives could be supported from part of the resources hitherto allocated to passive income support, as well as from increased cooperation with the competitive economy. Economic solidarity In Hainaut (Belgium, Objective 1), "Agences de Développement de Quartier" (urban local development agencies), in association with the appropriate regional authorities, are working on the social integration of underprivileged young people through projects to restore public areas (accommodation, schools, renovation of urban areas). Under the supervision of a social worker and a works manager, the typical group is made up of seven or eight apprentices, under-going pre-training in unskilled techniques which should be followed by training proper, or by employment. In 1994, 2 205 people took part in these measures in Hainaut. The average duration is 453 hours per participant and the average cost per hour for each participant is ECU 6. To integrate extremely marginalized members of Belgian society, public social assistance centres can provide individualized guidance with a view to offering training and giving them access to social security. The average duration of these measures is 1 350 hours per person. In Kolding (Denmark), a group of young people excluded from the labour market transformed an old Russian submarine into a tourist attraction. The project was supported by the municipal authorities with assistance (40%) from the ESF (Objective 3) and combined practical and theoretical lessons. After a basic course (history, languages, working as a tourist guide), the participants could choose among a number of training courses (computer studies, electronics, marketing, metal working) and practical work (publishing, communications, setting up a submarine museum, etc. ). During the first three years, 110 people participated and 69 of them have found work or are attending training courses. The average cost per hour per participant is ECU 18. In Lelystadt (Netherlands) the reconstruction of a seventeenth century boat has enabled around fifty long- term unemployed people to participate each year in renovation work accompanied by vocational training programmes. With time, the project has become a tourist attraction and developed into a socio-cultural organization. Most (224) of the 350 participants have found work in the private sector, while others (70) are still in training. The historical renovation of the English church in Hamburg (Germany) over the years 1991-94 was undertaken by a group of ten long-term unemployed people who attended a course on construction, architecture and renovation techniques leading to qualifications. The ESF contributed around ECU 170 000 to the project. COM(96)67 final of 21 February 1996 "Integrating equal opportunities for women and men in all Community policies and action". 25 D. Developing and enriching the partnership in the context of structural assistance Each of the approaches described above is a potential reserve for fostering job creation, which, if it is to be fully activated, requires the strenghtening and renewal of the partnership while fully respecting the specific competences and the legitimacy of each of the partners having to be involved in the different stages of the process. More significant margins for manoeuvre can be created by the way financial assistance is used than from its content or volume. 1. In this context the participation of the all the parties concerned should be increased in order to achieve triple value-added: economic, financial and political. in different areas require more precisely Economic, to the extent that, if they are to be effective, widely varying employment situations targeted measures that give greater priority to local links. In order to safeguard or create jobs by developing all the resources of an area, it is also necessary to achieve wide-raging involvement in this approach and publicize the fact that projects involving entrepreneurial initiative will be rewarded. Financial, because public resources are subject to budget constraints, which are becoming tighter. If financial partnership with the private sector is developed for the assistance measures that affect it most closely, this will increase their multiplier effect and their impact on employment. But this aspect can work only if private companies play a greater part in the preparation and implementation of assistance measures, as can be seen from the global grants implemented in several Member States. Political, in that Community assistance, in particular structural assistance, must become more visible to the public. This important aspect of the European project, stressing economic and social cohesion, including in the sphere of employment, which affects everyone, should mean greater involvement of public opinion in the Union. 2. The Commission has found that the political, economic and social partnership is not fully exploited, level of national authorities. The mobilization of local authorities, social partners, non-profit-making associations and businesses is still often inadequate and always too formal. It should therefore be stepped up, which implies: including at the (a) enriching territorial partnership: in terms of organization, this means integrating traditional, vertical partnership between national, better regional and local public authorities with horizontal partnership between public and private bodies at the most appropriate territorial level. 26 Above all, the impact of local assistance needs to be improved. Tailor- made training, accompanying measures for infrastructures, support services for SMEs, better targeting of aid schemes for the productive sector, will all mean a certain decentralization at the level of the preparation and implementation of measures. In this context, there seem to be ample grounds for improving vertical partnership between the different administrative levels. The local level is too often under- represented, or left out altogether, by the Monitoring Committees. (b) expanding economic partnership: at the same time we must not lose sight of the need for a horizontal dimension of partnership: support measures for the private sector and assistance for education and support for RDT can be neither planned nor implemented without the active participation of the economic and social partners, and in particular of social and trade organizations in particular, SMEs, craft organizations and the social economy). The same applies to non-profit-making associations the organization of social and economic schemes, combating social and economic marginalization, supporting new sources of employment and equal opportunities. the broader sense where measures involve in In terms of day-to-day practicalities, we should go beyond the confines of the Monitoring Committees and develop less formal forums for discussion and proposals with more balanced participation by both sexes, more appropriate information and discussion of territorial projects affecting employment. This enriched partnership should not, however, become a source of confusion: national authorities will concentrate on arbitration, examining the general coherence of programmes and preparing project assessment instruments. 27 Structural Funds and Partnership Analysis shows that the situation varies widely according to the Objectives in different Member States. 1. In terms of the organization of the Monitoring Committees (a) Under Objective I There are some examples of widening the partnership with subcommittees. In Spain the Andalusian model is an example of this. It involves a special committee below the level of the Monitoring Committee, bringing the regional government and the social partners together in order to have their opinion on economic develop ment and job creation issues. Another model for organizing the socio-economic partnership is to follow closely the territorial organization of programming and implementation. For some countries (I, IRL) this model involves the socio-economic partnership operating at the second level, that of operational programmes. At the third level, the regional authority committees (Ireland) operate in their own areas and the partnership is even wider. The socio-economic partnership plays too weak a role in the UK Monitoring Committees. In Merseyside as well as in the Highlands and Islands there is discussion of the Monitoring Committees' omission of the private sector. In Germany, there has been hesitation over establishing subcommittees with the social and economic partners at Lander level. The Prime Ministers of the Lander want to restrict contact with the Social and economic partners to information only. Another way to strengthen the Monitoring Committee could be through technical support. In Spain a multidisciplinary team has been established to deal with all aspects of operations financed by the ERDF and ESF. The team's report gives feedback to the Monitoring Committee on different aspects. (b) Under Objective 2 The socio-economic partnership in the Objective 2 areas is considerably stronger. Denmark, Belgium and the Netherlands provide examples of socio-economic participation in the Monitoring Committees even if there are variations in decision making procedures. By contrast, lack of participation by the social partners and limited representation of elected members of local authorities are to be noted in the UK. In one instance, the Commission member of the Monitoring Committee is also a member of the project- selecting committee, which gives early opportunities to stress special aspects. In another, the Monitoring Committee decides upon proposals from the technical financial committees (Belgium). The model of establishing subcommittees to the Monitoring Committees is also used in Objective 2 areas (Spain). The model of letting the socio-economic partnership in at a lower level is used by France, for example, where socio-economic representation is guaranteed by the "Economic and Social Council" of every region but completely excluded from the Monitoring Committees themselves. Luxembourg provides an interesting example of representation on the Monitoring Committees going beyond that of the traditional socio-economic partners, including also Chambers of Commerce and other trade bodies. This also applies to Luxembourg's Objective 5(b) programme. 28 Technical management support is used to assist the Monitoring Committees in Spain, Belgium and the Netherlands for example. To coordinate Objective 2 and 5(b) programmes and combine them to the best effect, a steering committee has been established (Netherlands). c) Objectives 3 and 4 In the case of Objectives 3 and 4, the Commission has stressed the importance of involving the economic and social partners in negotiating CSFs and drawing up the internal rules of procedure for the Monitoring Committees. Under Objective 4 a consistent effort has been made to involve both social and economic partners, in particular Chambers of Commerce and SMEs (Germany, France, the Netherlands). 2. The role of the Monitoring Committees There is a development in the direction of more involvement in regional or local programmes. These involve regional or local networks. There is also discussion in some Monitoring Committees of how the Commission's need for impact information is met and how to set up standardized methods and definitions for a report system on employment (Spain and Ireland). Beyond this institutional aspect, the Monitoring Committees could in any case initiate more active partnership practices: in certain Member States a set of practices for opening up the partnership (in particular to the economic and social partners) shows how to achieve greater effectiveness while respecting spheres of administrative competence. Under different names (seminars, technical committees, consultative sectoral committees, sub-committees, panels, working parties, etc. ), less official bodies, which, however, meet on a regular basis, make it possible to exchange information on the prospects, interests and activities of all those concerned. These structures are supplementary to the Monitoring Committees and managed by them, allowing more effective dissemination of information and new guidelines, better ways of dealing with the problems and preoccupations of those involved, the enrichment of analysis and reflection with expert contributions on the different areas and the promotion of concerted activity at the level at which the work is being done. The Italian model of "territorial pacts" based on employment areas is undoubtedly the most innovative and advanced form of this expanded and dynamic partnership. * * * Conclusions7 The active measures derived from the guidelines formulated above calls for a concerted effort by all those involved in the implementation of structural assistance. The Commission, while fully respecting the objectives of the Structural Funds, intends to take the necessary political initiatives to support the various partners in applying the approach adopted in this document. At its meeting on the 13 February 1996 the European Social Fund Committee broadly accepted these analyses and general conclusions. 29 At the present stage of programming, it is not a question of re-opening the the negotiation of CSFs or SPDs. What needs to be done is to exploit programmes' margin of flexibility more fully and to focus monitoring and evaluation systems on the gradual introduction of the priorities adopted in this paper. Thus, while taking account of the specific situations of different regions, the departments responsible for Structural Funds should coordinate their work to ensure that the Monitoring Committees translate the above priorities into concrete measures. In this context, particular attention will be paid to preparations for programming for the second period of Objective 2 (1997-99) and to the mid-term assessment of assistance. Within the current programming arrangements, the resources derived from the annual application of the deflator, or from delays recorded for the 1994 and 1995 financial years, will have to be used. Similarly, the systems and methodologies for evaluation will have to be adapted rapidly to take these recommendations fully into account. 2. To achieve these objectives, in line with previous recommendations, the Commission proposes establishing, in the context of the structural policies, territorial partnerships for employment, involving the public and private sectors whose scope could, moreover, go beyond that of the Structural Funds. Such partnerships, concluded at the most appropriate level, could provide a context in which smaller territorial units could be involved in those aspects of the multiannual employment programmes agreed with the Member States which concern them. the practical arrangements for Their content and implementation will be thoroughly discussed by all parties so that the situations and institutional practices in each Member State can be taken into account. In addition to the discussions currently in progress in the Structural Funds Committees, the subject could be on the agenda for future European Councils and for Parliament. However, the Commission believes that the partnerships for employment will involve all concerned in preparing global territorial diagnoses of the employment situation, from which strategies will be derived which the different parties the administrative bodies - will work more concerned concertedly, in particular by spreading information about successful experiments. innovative approaches, - and especially favouring 30 The aim is to build up an organization and develop political momentum, as has been successfully done within the Union (Employment pact in Andalusia, Charter for employment in the Deux-Sèvres and Poitou-Charentes, Area Development Management in Ireland). This does not mean duplicating the work of the programme Monitoring Committees but providing the facilities for reflection and reference which will enable them to give priority to using all the available flexibility which the current programme affords to support local initiatives for development and employment. 31 Annexe 1 European C o m m i s s i on Regional Policy and Cohesion DG XVI -A4 Austria : unemployment rale lor 1993 Reunion. Guadeloupe. Martinique. Guyane average unemployment 'île "S91-92-32 A n n e xp ? Participation rates, 1993 European Commission Regional Policy and Cohesion DG XVI-A4 Annexe 3a Contribution des Fonds structurels aux dépenses de développement Belgique Allemagne Grèce Espagne France Irlande Italie Pays-Bas Portugal i 138 34 12 1106 ! 92 1106 6408 4002 252 864 624 666 10628 6100 418 624 3034 452 254 21 139 4261 3648 3444 1878 1236 7462 623. 5974 610 262 • «, / 8 323 15 595 86 465 1109 888 37 70 74 39 2470 1007 1094 4420 1142 418 312 1867 81 3184 2209 36 31 5 40 28 4146 1872 276 426 1056 516 4110 1404 2334 Mécu prix 1994 Royaume Uni. 671 314 20 190 146 Autriche* EUR 11 % 33 4 4 25 29304 15244 1435 2495 8328 1770 3. 1,2% 16. 2% 1,5% 2,7% 8,9% 1,9% 895 791 43 4 32 26713 5048 17890 28,4% 5,4% 19,0% 93 613 330 865 43 368 975 11 372 104 7 3775 4,0% Infrastructures Transport f Télécommunications Energie Environnement & Eau Santé Ressources humaines Education Formation Recherche & Développement Environnement productif Industrie et services Agric. & Développement rur Pêche Tourisme 335 252 50 0 32 7973 4748 3141 83 3888 1008 2040 150 690 8023 3019 3422 1033 550 753 215 387 ''•42 99 1845 559 853 78 355 7168 3708 2341 257 862 4. *' 300 ,. 246 187 238 211 88 56 22 22 8 5 18 5006 2226 1908 251 618 713 331 242 37 103 86 35 24 27 35845 16088 14405 1940 3313 38,1% 17,1% 15,3% 2,1% 3,5% 732 82 4 2104 2,2% 730 13640 13986 26300 2195 5634 14860 150 13994 2360 166 94014 100,0%. , 1 Autres TOTAL ' Môcu prix 1 995 u Annexe 3b Contribution des Fonds Structurels aux dépenses de développement de l'Objectif 2 (1994-1996) Allemagne Belgique Danemark Espagne France - Italie Luxem bourg Pays-Bas Royaume- Uni Finland Austria' Sweden' TOTAL Mécu prix 1994 Environnement productif Infrastructures de soutien Industries et services PME Tourisme Sites Industriels, oménagoment et réhabilitation Environnement Zones urbaines, aménagement et réhabilitation Protection de infrastructures l'environnement, Ressources humaines Formation, emploi Centres de formation, Recherche & Développement équipements Assistance tochnlquo TOTAL C) moy. 1995-98 en Mecu 1995 • ' 245 48. 24 162 11 1 19. -65 13 62 293 2)3 79 1 1 76 37 17 '2 10 16 11 3 a 53 27 9 17 4 23 9 8 1 5 692 302 É90 ' 7 10 168 264 160 148 • 335 36 49 191 68 214 174 40 317 268 69 8 32 12 20 1 164 77 262 169 103 614 306 67 242 25 '. , 57 9 48 204 137 5 63 1 1 733 160 56 1130 1785 684 ' / 1 / 2 2 2 2 / 0 7. T 31 31 36 30 34 41 5 1038 262 248 330 207 189 138 6 138 113 90 23 9 755 628 39 188 22 300 2142 48 16 10 17 5 0 7 7 0 13 13 1 69 24 8 10 2 3 0 0 0 0 15 ;/ 2 2 1 40 42 2 13 18 8 3264 901 671 1203 489 % 45,6% 12,6% 9,4% 16,8% 6,8% 0 599 8,4% 0,24 762 10,7% 364 5 , 1% 0,24 398 5,6% 20 14 1 6 2 64 2431 1608 123 699 34,0% 22,6% 1,7% 9,8% 95 1,3% 7151 100,0% Contribution of the Slruclural Funds to Objective 3. end 4 expenditure on Human Resources lor the period 1994-1096/1899 Contribution des Fond» structurels eux dôpensos de Ressources Humaines objectifs 3 el 4 pour la période 1894-1996/1999. Boltrog der Slrukturlonds zo don Auswondunnen (Or Menschtldha Roriouicen nach Zlel 3 und 4 fur die Période 1994-1096/1009. Meeus 1994 BE OK DE ES FR IT LU NL UK Total % Annexe 3C Ob|octlvo3 1. Occupational Integration ol lonrj-torm unemployed 2. Occupationol intégration ol young porsons 3. Integration of personj excluded from the labour market 4. Promollon of equal opportunities 5. Aulro3 Total Objocfjvu 4 133 82 " 124 26 29 H4 55 68 0 6 952 442 77 • 160 50 495 723 ISO 62 0 724 980 705 18 136 423 568 132 105 91 6 3 10 1 1 577 346 0 0 0 562 474 360 90 IS 4 015 3 67( 1. 654 461 327 - 40 36 16 5 3 393 263 1. 681 1. 4GB 2. 562 1. 316 21 923 1. 501 10. 128 100 1. Adaptation of v/orkois to Industrial change 2. Autres 2-1 2 12 :: 1 105 0 369 0 300 0 Total Nolo: Objocilvo 3 In UK is ooroed (or 1994-1996; Objocilvo 4 in BE. OK, DE. FR, LU Is ocjreod for 1094-1996; no ug/oernenl for UK. * ' 13 • 105 369 300 26 321 78 399 1 0 1 156. 0 156 0 0 0 1. 287 - 81 1. 368 94 6 100 tf Conlribulion des Fonds structurels aux dépensés de développement, de l'objectif 5a-péche (hors objectif 1), 1994-99 Ahnexe 3D Mécus 1994 B DK D E F-k''•. '. V. FI •••/ 1 L NL SE UK TOT 24,5 139,8 74,6 119,6 • 189,9 ••-••'•. 23 134,4 1. 1 46,6 40 88,8 882,3. ; •: ' • •. ' ' • : • '• • ' !. •. ';. '. U3 Annexe 3E DOCUP de l'Objectif 5b ( 1 9 9 4 - 1 9 9 9) : A l l o c a t i on c o m m u n a u t a i re par axe prioritaire de développement ( ') • :. ; • , • • • ; ' •• ! • - ; • ' •. MECU prix couruni BE '. - DK ' DE •:. ES FR IT. LU NI UK Axe prioritaire ;. :|!;si-. l. i i Diversification Agricole et sylvicole L','!''. 'il. it. ^. Diversification et développement do? socteurs non-agricoles LirA i. iili', l- KfOleclioh de l'environnement : >i ;•. ; TÔUrisrné 2 0 ,3 22,8 6,9 10,2 14,7 12,9 C *) 14,7 Développement local ei rénovation des villages 3. 9. C). Ressources humaines Assistance technique et évaluation total • Diversification agricole ei sylvicole Axe prioritaire Diversification et développement des socieurs,non-agricoles Protection de l'environnemeni Tourisme * Développement local ot rénovation dos villages Ressources humaines Assistance technique et évaluauon total 12,9 1. 1 78. 1 10,6 1,1 5 4 ,0 BE 2 6 , 0% 2 9 , 2% 8 , 8% 1 3 , 1% 4 , 9% 1 6 , 6% 1,4% 1 0 0. 0% OK" 2 7 , 2% 2 4 , 0% C) 2 7 , 2% fi 1 9 , 6% 2 , 0% 1 0 0 , 0% ! j | ! j : \ ; !'l Proçramn)os approuvés par (' 'I Les actions relevant de cet oxe sont habilitation intégrées dans d'autres axes prioritaires. 2 2 4 ,2 3 2 1 ,7 2 0 7 ;7 8 6 ,7 14 6,1 2 1 9 ,6 2 3 ,0 2 9 7 ,9 9 6. 2 6 7 ,5 4 5. 2 6 8 ,6 8 8 ,6 f) 6 8 3 ,8 5 0 8 ,6 2 4 4 ,8 2 6 6 ,0 2 0 5. 9 2 8 6. 3 4 3. 9 1 2 2 9 ,0 6 6 4 ,0 2 2 3 9. 4 | DE 1 8. 2 %. 2 6 , 2% 1 6 , 9 %. 7. 1 % 1 1 , 9% 1 7 , 9%. 1. 9% ES 4 4 , 9% 1 4 , 5% 1 0 , 2% 6 , 8% 1 0. 3% 1 3 , 4% FR 3 0. 5% 2 2. 7% 1 0 , 9% 1 1 , 9% 9 , 2% 1 2. 8% 2. 0 %: 3 3 1. 5 168,3 9 4. 6 168. 6 7. 2 120. 9 12. 6 9 0 3. 7 IT 3 6. 7% 1 8. 6% 1 0. 5% 1 8. 7% 0. 8% 1 3. 4% 1,4% 0. 7 0. 9 0. 5 1,0 2. 0 0,8 0. 2 6,0 LU 11,2 % 1 4. 2% 8 , 8% 1 6. 4% 3 4 , 1% 1 2 , 8% 2. 5% 15. 2 58. l 35. 7 20. 9 1. 1 17,2 1. 8 1 5 0. 0 NL 1 0. 1% 3 8. 7% 2 3. 8% 1 3. 9% 0. 7% 1 1. 4% 1. 2% 64. 8 305. 7 63,9 1 74. 9 69. 0 132. 1 10. 1 8 2 0. 5 (Otal 1653. 2 1495. 2 721,5 783. 2 503. 8 8 8 9. 1 93,7 6144,7 % tota: UK | total 7. 9% 3 7. 3% 7. 8% 2 1. 3% 8. 4% 1 6. 1% 1. 2% 2 6. 9% 2 4. 3% 11. 7% 12,8% 9. 2%. 1 4. 5% 1. 5% | 1 0 0 , 0% 1 0 0 , 0% 1 0 0. 0% •' 1 0 0. 0% 1 0 0. 0% 1 0 0. 0% 1 0 0. 0% | 1 0 0 , 0 %| Annexe 3 F Contribution des Fonds Structurels à : l'Objectif 6 (1995-1999) ;. : Mecu 1995 Finlande Suède r , Total • % •. ', i • Infrastructures de base Secteur productif Ressources humaines Recherche et développement TOTAL 0. 347 104 114 5 65 13 152 ' 13 • - 4 99 64 1 68 1,6 6 1 ,1 2 0 ,5 23 2 5 2| -137 :8 17 1 6 ,8 , 1 0 0 ,0 a ISSN 0254-1475 C0M(96) 109 final DOCUMENTS EN 13 04 Catalogue number : CB-CO-96-117-EN-C ISBN 92-78-01677-2 Office for Official*Ptfblications of-the European Communities L-2985 Luxembourg

Proposal for a COUNCIL DECISION on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997-2000)

http://publications.europa.eu/resource/cellar/394bd7ae-9044-416a-ae44-62981c4b8345

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COMMISSION OF THE EUROPEAN COMMUNITIES * -tr -it -tr Brussels, 20. 03. 1996 COM(96) 98 final 96/ 0087 (CNS) "MAXIMISING EUROPEAN SMEs' FULL POTENTIAL _ FOR EMPLOYMENT, GROWTH AND COMPETITIVENESS" Proposal for a COUNCIL DECISION on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997 - 2000) (presented by the Commission) "MAXIMISING EUROPEAN SMEs' FULL POTENTIAL FOR EMPLOYMENT, GROWTH AND COMPETITIVENESS" 9 I THE MULTIANNUAL SME PROGRAMME WITHIN THE GLOBAL FRAMEWORK OF THE COMMUNITY ACTIONS IN FAVOUR OF SMEs There is now widespread recognition that small and medium-sized enterprises (SMEs) are the key sector for generating employment opportunities and growth within the European Union. To help unlock SMEs' full potential to meet these objectives the Commission recently presented a report to the Madrid European Council calling for a more ambitious policy in favour of SMEs. 1 The conclusions of this Council endorsed this approach, inviting the Commission to put the objectives of the Madrid SME Policy Paper into practice as swiftly as possible. 2 Accordingly, the Commission announced that a four- year programme (1997-2000) would be launched as part of the European Confidence Pact on Employment Clearly, a stronger and more direct focus on SME policy is necessary both at Member State and European Union level to safeguard existing jobs and to create new employment opportunities. Empirical evidence shows that targeted help to SMEs is a cost-effective way to support job creation. A. THE CONTRIBUTION OF SMEs TO GROWTH AND EMPLOYMENT SMEs are the key sector for generating employment opportunities and growth. SMEs account for 99. 8% of all companies, 66% of total employment and 65% of business turnover in the European Union. 3 The employment growth rate of SMEs is greater than that of large enterprises. 4 Moreover, the SME-dominated services sector has been a major source of jobs in recent years and continues to offer significant employment potential. Because of their flexibility and capacity to swiftly adapt to the evolution and specialisation of market demands, SMEs are a major instrument for promoting the competitiveness of European industry and its capacity to penetrate into third country markets. Especially important is the role SMEs play in less favoured regions and rural areas where they often represent the backbone of the local economy. At the same time, the growing trend towards contracting out of activities and downsizing of operations by large firms represents both a challenge and an opportunity for SMEs. The rapidly changing technological environment and the globalisation of the markets impacts on competitive conditions and creates new opportunities for SMEs. They have therefore a key role to play for increasing economic and social cohesion in the Union. 5 B. WEAKNESSES IN SMEs' JOB CREATION AND GROWTH POTENTIAL While SMEs are potentially a dynamic source of employment growth and wealth creation, it must also be recognised that they are inherently weaker and more vulnerable to failure, particularly in the early years. On average 50% of SMEs in the EU fail within the first five years of start-up. 6 1 "SMEs: a dynamic source of employment, growth and competitiveness in the European Union", Report presented by the Commission to the Madrid European Council, CSE(95) 2087. 2 Conclusions o; !ie Presidency, SI(95) 1000 of 16. 12. 1995, p. 14. 3 Enterprises in Europe, Third Report, 1994, pp. 42-43. 4 See Footnote 1 above, p. 3. 5 6 Enterprises in Europe, Third Report, 1994, p. 230. Ibid. > The relative weakness and vulnerability of SMEs arises primarily from five sources: II • • • • • the increasingly complex legal, fiscal and administrative environment; difficulties in accessing research programmes and exploiting research results; structural weakness of programmes; difficulties in obtaining finance at reasonable cost; barriers to accessing product and services markets. their management capacity and ill-adapted training C. REALISING S M E S' POTENTIAL TO CONTRIBUTE TO EMPLOYMENT AND GROWTH To maximise SMEs' contribution to growth, competitiveness and employment, it is essential that Member States and the European Union reinforce and co-ordinate their policies in favour of SMEs, to take into account the new challenges facing European businesses. 7 Most measures for SMEs need to be taken at Member States level, as close as possible to the business itself. As highlighted in the Commission's SME Policy Paper for the Madrid European Council8, all Member States (in particular Germany, France, United Kingdom, Spain and Belgium) have recently strengthened their policies for SMEs and there is now a considerable degree of convergence between these policies. 9 In this area, the European Union can play a vital and complementary role while fully respecting the principle of subsidiarity. D. THE COMMUNITY'S SME POLICY In line with the objectives of Article 130 of the Treaty, the White Paper on Growth. Competitiveness and Employment and the Integrated Programme in favour of SMEs and the Craft Sector, the Community's SME Policy aims at: • encouraging an environment favourable for the development of SMEs throughout the • EU; improving Europeanisation and internationalisation. the competitiveness of European SMEs and encouraging their To achieve the above objectives the Community's SME Policy is based on two interrelated programmes : the Integrated Programme in favour of SMEs and the Multiannual SME Programme. The synoptic table on the next page sets out the various Community actions in favour of SMEs. Commission White Paper on Growth, Competitiveness and Employment, p. 92. See Footnote 1 above. See Footnote 1 above, section 1, p. 2 and Annex I. h Madrid priorities 1. Administrative simplification 2. Information Concerted actions with M e m b er States (exchange of best practices) - Committee on improving and simplifying the business environment TABLE I : COMMUNITY'S ACTIONS IN FAVOUR OF S M ES Actions under other Community policies of interest to SMEs (*) - Guidelines for regulatory policy - Simple VAT definitive system - Follow-up Single Report on Employment (non wage labour costs, flexible & simpler labour regulations) - Concerted actions on business support measures and stimulating demand Community networks such as EC-BIC, Craft Focal Points, Innovation Relay Centres, Multimedia Information Demonstration and Support Network, EURES, Rural Carrefours, European Crossborder Consumer Information Centres. ESF (Community Support Frameworks) ADAPT (ECU 1. 57 billion)) EMPLOYMENT NOW(460 MECU) LEONARDO (620 MECU) 4th R&TD framework (12,3 billion ECU including 700 MECU specific SME) INFO 2000 ERDF LIFE : 450 MECU (96-99) Environment & Growth Initiative Competition policy (including State Aid) Cross-border public procurement Cross-border economic areas JOP (CEEC+CIS 50 MECU 96-99); ECIP (250 MECU 95-99), MED INVEST (no budget approved for 96); AL INVEST(41 MECU 95-2000); ASIA INVEST (to be defined) - Access to structural funds (ERDF, ESF) - Community Initiative for SMEs (ECU 1 billion) - EIB global loans for SMEs - EIF loan guarantees - Follow-up Communication on SME tax treatment. Complementary actions (Multiannual SME P r o g r a m m e) * Business impact assessment system - Cost/benefit analyses - Transfer of businesses - EICs as first-stop-shops for other Community networks - SME pilots (management training) - actions for promoting business culture - Women & young entrepreneurs - SME pilots (e. g. NTBFs, COMMERCE 2000) - EIC information on environment - impact environmental legislation on SMEs - craft: environmental management - Partner search networks (BC-Net/ BRE) - Direct partnerships (Europartenariat - Interprise) - Subcontracting - SME pilots - internationalisation - Actions for craft & small enterprises - Actions for commerce & distribution - Legal environment (retention of title, dispute settlement, legal structures) - Late payment - Access to loan financing (e. g. Round Table) - EASDAQ - Factoring & Credit insurance. - NTBF pilot - Consultation of businesses - Statistics & SME Observatory - Promotion 1 Training - Follow-up Single Report on employment (training in SMEs) - Follow-up White Paper on education (business culture and entrepreneurship) - Follow-up Green Paper on innovation - Information Society Forum and G7-pilots - R & TD - Innovation -Information Society Environment 3. Europeanisation and Internationalisation - Concerted actions on business support measures and stimulating demand - Concerted actions on business support measures 4. Financial environment 5. Consultation and Policy making (*) For more details see Report on the co-ordination of activities in favour of SMEs and the Craft Sector, COM(95) 362 final of 8. 9. 1995. -h Ill 1. The Integrated Programme in favour of SMEs and the Craft Sector The Integrated Programme, which was adopted by the Commission on 3 June 199410, sets out the overall framework of Community Enterprise Policy. It is not intended to substitute for various actions taken at a national or Community level, nor to interfere in the decision making process of the different actions. Its objective is to pull together various initiatives into an overall framework to ensure their coherence and visibility, and to propose a closer partnership between all parties concerned with the development of SMEs - at Community, national and regional levels - with a view to enhancing the convergence and effectiveness of these measures. The Integrated Programme distinguishes between two types of measures which are set out in the following table: Integrated Programme fn favour of SMEs Concerted actions with Member States11 measures to promote mutual consultation between Member States and joint co ordination, where necessary, concerning actions in favour of SMEs and the Craft Sector in the fields of: • improving and simplifying the SME business environment; stimulating and measures for SMEs. improving support • Contributions from the European Union12 measures for SMEs developed : • either within the framework of the Community's specific SME Policy (i. e. the Multiannual SME Programme); or under the other Community policies, for instance, international co-operation programmes; EIB and EIF instruments; Structural Funds Programmes, e. g. Community initiative for SMEs • In the context of the Integrated Programme the Commission will put forward new proposals in favour of SMEs, in particular a loan guarantee instrument with a high leverage effect on growth and employment. The Integrated Programme predominantly focuses on enterprises within the European Union. However, in view of the Commission's commitment to gradually open most of the Union's activities to SMEs from associated countries, a number of actions outlined in this Third Multiannual Programme (e. g. partnership actions) could be made accessible to SMEs from these countries mainly by using funds from other EU programmes, notably PHARE, TACIS, JOP, MED-INVEST, AL-INVEST and ASIA-INVEST. 2. The Multiannual Programme for SMEs The Multiannual SME Programme fits into the framework of the Integrated Programme as an important part of the EU contribution. It provides the legal and budgetary basis for the Community's specific SME Policy actions. The current Multiannual Programme expires on 31 December 1996. 13 The Third Multiannual Programme will cover the period 1997-2000. This Proposal is unanimously welcomed and supported by the European business organisations representing SMEs,14 which were consulted by the Commission on 20 February 1996. 10 Integrated Programme in favour of SMEs and the Craft Sector, COM(94) 207 final of 3. 6. 1994. 11 See Article 130 § 2 of the Treaty. 12 i. e. contributions through policies and activities the Community pursues in the framework of the in Member States Treaty, as well as through specific measures in support of action taken (Article 130 § 3 of the Treaty). 13 Council Decision 93/379/EEC of 14. 6. 1993, OJN°L 161 of 2. 7. 1993, p. 68. 14 CCACC, CECOP, CEDI, EMSU, EUROCHAMBRES, EUROCOMMERCE, EUROPMI, UEAPME, UNICE and YES for Europe. G IV The added value and complementary nature of the Multiannual Programme are evidenced in particular by the following : Added value of the Multiannual Programme the Multiannual Programme aims at a number of specific objectives which are not covered by other Community policies (e. g. the improvement of the SME business environment and the Europeanisation of business strategies of SMEs through the provision of information and support services providing transnational co-operation opportunities); the Multiannual Programme also plays a useful role by testing innovative methods of support. Such actions will for instance complement the activities undertaken under the Community research, innovation and regional policies. The actions proposed will help to increase the awareness and effectiveness of, the other Community policies of interest to SMEs; it has a horizontal scope (i. e. it applies irrespective of economic sectors) and covers the population of SMEs within the entire European Union; a series of measures and methodologies within the Multiannual Programme (eTg. the networking of intermediaries with an important leverage effect) are developed in close co-operation and co-ordination with other Community policies, in particular Structural Funds, Innovation, Research and international co-operation in order to maximise their effect for enterprises. _ Compared to the Integrated Programme the actions in the Multiannual Programme are complementary to other actions in favour of SMEs, thus avoiding duplication. On the contrary, the Multiannual Programme stresses complementarities and synergies with other Community policies and Member State actions in favour of SMEs. Compared to the Second Multiannual Programme, the Third Multiannual Programme will ensure the continuity of the Community's Enterprise Policy, whilst at the same time strengthening a number of existing actions and introducing a series of new initiatives in the key areas identified in the Commission's recent SME Policy Paper. 15 The new elements are highlighted in the following box: New elements in the Third Multiannual Programme in particular by facilitating access to all Community Programmes of interest to SMEs by developing the Euro-Info-Centres (EICs) as "first-stop-shops"; the efforts on administrative simplification, strengthening introducing the cost-benefit aspect into the business impact assessment system; ensuring better involvement of SME Organisations in the decision-formation process; encouraging and supporting SMEs to trade in international markets, in particular by improved networking facilities and improving access to market information; identifying novel ways to better promote the technological adjustment of SMEs and their access to entrepreneurial training; developing concrete actions for craft and small enterprises taking into account their specific characteristics; improving the financial environment for SMEs (access to loans, secondary markets for SMEs, late payment, factoring and credit insurance); encouraging women and young entrepreneurs and businesses owned by minority groups; encouraging a new spirit of entrepreneurship; integrating the environment and sustainable development into the Community's Enterprise Policy (Art. 130r of the Treaty). 15 See Footnote 1 above. 1- V The Third Multiannual Programme is presented alongside an external evaluation report on the current Multiannual Programme (1993-1996). 16 This independent evaluation report has made a number of suggestions which are being implemented or commented in the Explanatory Memorandum, while a separate Commission Communication completes this analysis. The following table highlights some major recommendations of the report which have been taken into account in this Proposal: Major recommendations from the external evaluation report strengthening co-ordination efforts to ensure the consideration of SMEs into the various Community policies, and reinforcing the effectiveness of the evaluation of the impact of legislative proposals on SMEs; qualitative improvement in the EIC network and promoting a greater co-ordination between Community networks, including alternative ways of organisation; reinforcing the partnership programmes through improved follow-up services and assistance to the participating enterprises; continuing the "laboratory approach1' of working with pilot projects to "test by doing" innovative measures for SMEs in key areas; strengthening the promotional efforts for actions of interest to SMEs; greater use of information technologies in the networks and the dissemination of information. Participation by SME representative bodies in devising policy actions must be sought in order to increase their efficiency. In line with the Madrid Report on SMEs, the Commission will improve "the consultation of SME organisations when preparing policies of relevance to them, and encourage their full involvement" both at national and Community level. 17 E. THE MULTIANNUAL SME PROGRAMME AS PART OF THE EUROPEAN CONFIDENCE PACT FOR EMPLOYMENT This Third Multiannual SME Programme is the cornerstone of the Community's SME Policy. As such it forms an integral part of the Commission's Confidence Pact on Employment. This Programme provides for concrete actions producing rapid effects and which help to exploit SMEs' full potential for job creation, in particular by helping to increase the number of SMEs participating in the Internal Market and promote their internationalisation. When consistently implemented, the entire range of actions of this Third Multiannual SME Programme will produce a significant leverage and mass effect throughout the Union. 16 See the Commission Communication on the External Evaluation Report concerning the implementation of Council Decision 93/379/EEC of 14 June 1993, OJ N° L 161 of 2. 7. 1993, p. 68. 17 See Footnote 1 above, p. 17. ? PROPOSAL FOR A COUNCIL DECISION on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997 - 2000) (presented by the Commission) u:\polnev\program\prea-en 1 +prp-en45 °t 1HBRD MULTIANNUAL PROGRAMME FOR SMEs EXPLANATORY MEMORANDUM TABDE OF ODNTENTS L S œ PE OF Tlffi PROGRAMME IL PRIORTIY OBJECTIVES AND PROPOSED ACTIONS A. SIMPLIFY AND IMPROVE THE ADMMMT^TTVEANDR A. 1. Ensure consideration of the interests of SMEs in the various Community initiatives and policies A. 2. Simplify and improve Community legislation A3. Increase transparency and the spread of best practices on simplifying and improving the administrative and regulatory environment A. 4. Improve framework for transnational operations of SMEs B. IMPROVE THE FINANCIAL ENVIRONMENT FOR ENTERPRISES B. l. Improve access to loan financing B. 2. Intensify efforts to reduce late payment problems B. 3. Facilitate the development of specific financial instruments B. 4. Stimulate the development of capital markets for fast-growing SMEs C. HHJSMBTORJRGFEANSE BETTER INFORMATION SERVICES C. l. Develop information services C. 2. Improve the promotion of SME Policy actions C. 3. Promote co-operation through business search networks C. 4. Promote direct contacts through partnership programmes C. 5. Develop subcontracting partnerships C. 6. Promote access to new markets and internationalisation of SMEs s? ^*? P. FNHANŒSMROM^TTIVFNr^ANDI^ TRAINING D. 1. Increase the innovative potential of SMEs D. 2. Stimulate managerial training D. 3. Adaptation to environmental requirements E. PROMOTE ENTREPRENEURSHIP AND SUPPORT SPEQAL TARGET GROUPS E. l. Business culture and entrepreneurship E. 2. Craft and small enterprises E. 3. Enterprises in commerce and distributive trades E. 4. Women and young entrepreneurs; enterprises owned by minorities m POIICY DEVELOPMENT SECTION L SCOPE This Third Multiannual Programme is the cornerstone of the Community's SME policy. It provides the basis for actions which aim at raising the awareness of significant number of SMEs to the challenges of a business strategy which increases their competitive position towards improving their share of transnational and international trade. A positive effect of this would be to generate employment opportunities. In line with the analysis presented in the Commission's SME Policy Paper for the Madrid European Council1, the five following priority policy objectives are set out together with an outline of the actions which need to be taken at Community level : 1. Simplify and improve the administrative and regulatory business environment; 2. Improve the financial environment for enterprises; 3. Help SMEs to Européanise and internationalise their strategies, in particular through better information services; 4. Enhance SMEs' competitiveness and improve their access to research, innovation and training; 5. Promote entrepreneurship and support special target groups. The Third Programme is focused on SMEs, irrespective of their sector, legal form or location within the European Economic Area. 2 Where proposed measures specifically relate to craft and small businesses, a separate reference to this type of enterprises will be made, as well as for commerce and distribution. While supporting the Community's cohesion policy3, the actions in favour of SMEs set out in the Multiannual Programme are not limited to enterprises established in regions eligible for support under the Community's Regional Policy. In this context the complementarity between the Multiannual Programme and the Community Initiative for SMEs should be highlighted as factor stimulating the economic development of the Union, including job creation at local level. The current Multiannual Programme expires on 31 December 1996. 4 Therefore the new Programme shall enter into force on Ï January 1997 and cover the period up to 31 December 2000. "SMEs: a dynamic source of employment, growth and competitiveness in the European Union", Report presented by the Commission to the Madrid European Council, CSE(95) 2087. Commission Recommendation concerning the definition of SMEs (doc. C 96/261). First Report on Economic and Social Cohesion established under Article 13 TEU, p. 263. Council Decision 93/379/EEC of 14. 6. 1993, OJ N° L 161 of 2. 7. 1993, p. 68. "I SECTION DL PRIORITY OBJECTIVES AND PROPOSED ACTIONS A SIMPUFY AND IMPROVE THE ADMINISTRATIVE AND REGULATORY BUSINESS ENVIRONMENT A l. ENSUREcn^gpER\Tiayqn^ AND POLICIES A key objective of the Community's SME Policy is to ensure that the SME dimension is integrated into the conception and implementation of Community actions and policies. The Commission will step up its efforts in this area While efforts to simplify and improve Community legislation will contribute to achieve this objective, a greater co ordination of Community actions and policies in favour of SMEs should also be promoted to enable SMEs to fully participate in all Community actions and programmes. For instance, in the area of the Structural Funds programmes SMEs are still not benefiting sufficiently relative to their share of economic activity and employment growth potential. This approach should also apply to R&TD, innovation, employment and vocational training, energy efficiency programmes, environment, international co-operation, EIB and EIF instruments. The first results of this co-ordination effort are set out in the Integrated Programme in favour of SMEs and the Craft Sector6 and in a recent co-ordination report. 7 Concrete action under the SME Multiannual Programme will include a Recommendation to Member States on ways to increase the share of SMEs in Community policies and programmes. Recognising the need to accelerate work on the simplification of Single Market legislation particularly affecting SMEs a proposal could be elaborated to set up small "SLIM' teams (Simpler Legislation for the Internal Market). A 2. SlMPUFY AND IMPROVE COMMUNITY LEGISLATION SMEs face an increasingly complex legal, fiscal and administrative environment. While the cost of non-regulation has never been measured, the total annual cost of administrative burdens on all enterprises in Europe has been roughly estimated to be 150 to 250 billion ECU. 8 In particular the costs of the formalities for setting up a business are a cause for concern. 9 These costs are predominantly attributable to requirements of Member States. In line with the Commission report to the Madrid European Council on "Better Law Making"10 the Commission will improve its own contribution towards reducing red tape and improving Community legislation which may affect enterprises, in particular SMEs. This objective requires action to avoid and reduce unnecessary administrative burdens and compliance costs in existing and new legislation which hinder the creation and development of enterprises. :> 6 7 8 9 10 Annual Report of the Court of Auditors (1994), OJ N° C 303 of 14. 11. 1995, p. 140. COM(94) 207 final. COM(95) 362 final of 8. 9. 1995. See Footnote 1 above, p. 4. See comparative table on p. 36 of the Green Paper on innovation, COM(95) 688 final of 20. 12. 1995. "Better law making", COM(95) 580. To achieve this objective, the Commission has recently adopted guidelines on regulatory policy. 11 These guidelines stress the need to ensure the widest possible external consultation and also foresee a new approach aimed at rationalising and modernising the impact analyses of which the Business Impact Assessment System is of particular importance for SMEs. In view of the need for SMEs to be consulted on Commission proposals which are likely to have a significant impact on them, the Commission will improve the quality of the business impact assessments by ensuring a greater involvement of SMEs at the drafting stage of Community legislation or programmes, and by implementing a pragmatic methodology for the evaluation of the impact of legislative proposals including the use of cost/benefit analyses wherever this is deemed appropriate. Depending on the nature and complexity of the proposals, the evaluation will be based on: • desk research where this is sufficient to identify the compliance costs and administrative burdens; • using a representative number of firms selected from a pool of volunteering enterprises, in co-operation with SME organisations, who would provide detailed information about the implications of legislative proposals as above; • œmmissioning comprehensive cost/benefit analyses for the most complex proposals impacting on many business sectors. The tasks of carrying out the desk research or conducting the cost/benefit analyses will be entrusted to the Commission services responsible for the respective proposals. For carrying out enquiries limited to a representative number of volunteering enterprises, DG XXIII will in co-operation with other Commission services and SME organisations, set up an agreement with a network of SME research institutes to ensure the necessary degree of homogeneity and neutrality of the results. A. 3. INO?EASE TRANSPARENCY AND THE SPREAD OFBESTI^CTC^ONSIMPIIFYINGAND IMPROVING THE ADMINISTRATIVE AND REGULATORY ENVIRONMENT a monitoring of administrative simplification In order to raise the quality and scope of administrative simplification efforts both at EU and Member State level, there is a need for a greater transparency and spread of information on new initiatives in this field. Various Member States expressed their interest in this type of information, which should also benefit the Community institutions. The Commission will therefore monitor the progress achieved under the new strategy of aclministrative simplification13 and exchange of best practice between Member States resulting in Recommendations as appropriate. 14 This will include the results of substantial surveys conducted by the Euro-Info-Centres (EICs). Guidelines on regulatory policy, SEC(95) 2255 of 16. 1. 1996. This method was considered as particularly innovative in the external evaluation report (see page 7). A similar approacli has been suggested recently by a 1996 Report from the Committee on business creation set up by the Danish Ministry for Industry (see Betaenkning N° 1304 page 210). See Footnote 1 above, Section V. l. See the Integrated Programme in favour of SMEs and the Craft Sector. 12 14 Ah h. transfer of businesses At least 300,000 jobs a year are lost due to unsuccessful transfers of businesses in the EU. 15 The Commission will encourage and support initiatives aiming at raising the awareness of business organisations and other interested parties on the issue of transfer of businesses. Based on an assessment of the implementation of the Recommendation on transfer of businesses16, the Commission will encourage new initiatives and promote appropriate actions including a specific concerted action on this subject. c retention of tide Retention of title - a legal mechanism to delay the transfer of ownership of goods until the purchase price has been paid in full - is one of the most appropriate measures for facilitating commercial transactions. Such a legal tool should be available to all economic actors. However, there are a number of disparities which hamper the recourse to this type of instrument. The Commission will consider on the basis of a consultation document17 whether or not a Commission Recommendation in this area would be useful. A. 4. IMPROVE FRAMEWORK FOR TRANSNATIONAL OPERATIONS OF SMES a. settlement procedures for transnational disputes between enteiprises Disputes arising from transnational operations are often difficult to solve, in particular in view of the costly, complex and lengthy procedures. The lack of easy access to justice for operations in other Member States thus discourages enterprises, in particular SMEs, from internationalising. Most of the problems lie with Member States to the extent that the organisation of the judiciary is concerned. 18 The Commission will encourage the development of alternative dispute resolution as a means to solve disputes arising from transnational operations of enterprises, in particular SMEs. This will include the promotion of instruments such as mediation, simplified arbitration and conciliation procedures. b. promote appropriate legal structures The existing legal structures for transnational co-operation are still incomplete and insufficiently known by SMEs. Enterprise Policy should therefore promote existing legal structures and support the creation of new instruments which are more adapted to SMEs' needs. The European Economic Interest Grouping (EEIG) is the first legal instrument of Community law for transnational co-operation. However, this instrument is not yet widely used by SMEs and there is a lack of practical information about the experience of this instrument. To promote the use of EEIGs for transnational co-operation, the REGIE Initiative (i. e. Promotion of the EEIG in the European Union) should be fully implemented. This requires developing the REGIE database and raising awareness of See footnote 1 above, Section III. A. 16 Commission Recommendation on the transfer of SMEs, OJ N° L 385/14 and C 400/1 of 31. 12. 94. A similar consultation document was prepared on the transfer of businesses ( OJ N°C 204 of 23. 7. 1994, p. l). 18 Lengthy delays in taking action against Member States in which there are Single Market obstacles mean the difference between survival or failure for some SMEs and so the Commission will speed up and make more effective its own Single Market dispute procedure. /r SMEs in order to provide practical information and to identify possible improvements of existing legislation where appropriate. As highlighted in the Molitor Report19 and the second Ciampi Report20, there is a need to establish other legal instruments suitable for SMEs doing business in different Member States. The adoption by the Council of the Statute for a European Company will help to provide SMEs with an appropriate legal instrument for their transnational operations. In the meantime, the Commission will promote the development of simplified legal statutes for closely held limited liability companies. 21 B. IMPROVE THE FINANOL\L EWmONMEOT PC^ The Commission strongly believes that the move towards Economic and Monetary Union produces positive effects on businesses, in particular in the field of increased monetary stability. The achievement of the Treaty objectives concerning public finance will have both quantitative (reduction of "crowding-out") and price effects (interest "rates). 22 However, European SMEs are still undercapitalised, inter alia due to a fiscal discrimination against risk capital, have problems accessing bank loans at reasonable rates and fast-growing companies are hampered by the absence of European capital markets for SMEs. 23 The Integrated Programme in favour of SMEs provides the framework for an array of measures to improve the financial environment for enterprises, including the exchange of best practice between Member States and the strengthening of Community actions in this field. This Third Multiannual Programme provides for complementary measures which do not involve any direct financial support for SMEs but rather focus on improving the financial environment through the elimination of constraints and better access for SMEs to financial instruments. All measures involving State aid to undertakings in any form whatsoever have to comply or be coherent with the principles set out in Articles 92 to 94 of the Treaty and all relevant secondary legislation. More specifically, the Multiannual Programme proposes measures in the following areas: B. l. IMPROVE ACCESS TO LOAN FINANCING Bank lending constitutes the dominant form of external funding for SMEs, despite the widely acknowledged fact that many of these firms experience substantial difficulties in obtaining loans at reasonable cost for their expansion and investments compared to larger enterprises. This is a problem of particular relevance for small enterprises, as banks consider that the credit risks applying to this category of companies are higher than those applying to larger ones, and as small firms are typically unable to offer adequate collaterals. SMEs typically pay an interest rate two to five percentage points higher than large enterprises. 24 Report of the Group of Independent Experts on Legislative and Administrative Simplification, COM(95) 288 final of 21. 06. 1995, p. 83. "Enhancing European Competitiveness", Second Report from the Competitiveness Advisory Group, December 1995, p. 8. 20 21 Commission Comments on the Report of the Group of Independent Experts on Legislative and Administrative Simplification, COM(95) 596. See also the amended Proposal for a Council Regulation on the Statute for a European Co-operative Society (SYN 388 of 6. 07. 1993, currently under discussion in the Council). 22 For instance, it is estimated that a reduction of 1 % of public deficits within the European Union generates an annual amount of 65 billion ECU for private sector financing. 23 See Footnote 1 above, Section III. D. See Footnote 1 Above, p. 7. U Loan guarantees are extremely helpful in overcoming these obstacles as they reduce credit risks and also provide compensation for lack of collateral. The European Investment Fund (EIF), which issues loan guarantees in favour of SMEs and Trans-European Networks, has considerable potential to help enterprises in overcoming these obstacles. Scope for co-operation exists also between budgetary support instruments and the EIF. The "Growth and Environment" pilot project constitutes a clear and promising example: the Community loan guarantee is extended at no cost to the borrowing enterprise (for investments producing environmental benefits), while the cost of the guarantee premiums is borne by the Community budget. The Commission will submit proposals for an SME loan guarantee instrument with a high leverage effect on growth and employment. The Commission will continue its support for the development of mutual guarantee schemes, in particular through co-operation with the European Association of Mutual Guarantee Schemes. The Commission will further stimulate a wide discussion within the banking community on ways to improve SME financing. Concrete actions will include support for the Round Table of Bankers and SMEs, which examines innovative practices in the field of better access for SMEs to financing. Particular attention will be paid to better access to finance for women entrepreneurs and improving the financial environment of SMEs in the field of commerce and distribution. The Commission will encourage banks and SMEs to implement the Round Table recommendations as widely as possible. B. 2. INTENSIFY EFFORTS TO REDUCE LATE PAYMENT PROBLEMS The Commission recognises the importance to SMEs of reducing late payment. This implies efforts from the public authorities including the Commission itself. It believes that the current economic climate warrants an acceleration of the evaluation process set out in its 1995 Recommendation on late payment. 25 The Commission will bring forward further proposals in 1997 and will support actions organised by business organisations which aim at improving the financial management capabilities through information, training and other measures (e. g. cash-flow management software for SMEs). B. 3. FAOUTATE THE DEVELOPMENT OF SPECIFIC FINANCIAL INSTRUMENTS The Round Table of Bankers and SMEs highlighted the importance of factoring and credit insurance in helping to meet SMEs' need for working capital and reducing their problems linked to late payment. The take-up of these instruments varies considerably between Member States. The Commission will therefore examine the reasons which hamper the development of these instruments in a number of Member States and prepare a consultation paper with proposals, possibly in the form of recommendations, for making these financial instruments in the Single Market function better. B. 4. STIMULATE THE DEVELOPMENT OF CAPrrAL MARKETS FOR FAST-GROVWNG SMES A major weakness in the present European financial system is the lack of liquidity and the absence of European capital markets for high growth SMEs. 26 This particularly hampers high technology companies which in turn discourages innovation and risk-taking. Compared to the US annual figure of 400 companies, in Europe only 10 to 20 % of this 25 OJ N° L 127 of 10. 6. 1995, p. 19 and OJ N° C 144, 10. 6. 1995, p. 3. 26 See Footnote 1 above, p. 8. /> number tap secondary markets and many choose a US NASDAQ listing instead To encourage the creation and the smooth operation of such markets in Europe the Commission has urged Member States to remove all remaining legal, regulatory, fiscal and other barriers by the end of 1996. 27 On the basis of a forthcoming report to the Council the Commission will propose appropriate measures to encourage the growth of these important financial facilities, including EASDAQ. 28 C HF1P SMES TO EUROPEANISE AND INTERNATTOVALLSE TOFIR STRATEGIES. IN PARTICULAR THROUGH BETTER INFORMATION SERVICES The employment and growth potential of SMEs will not be fully exploited without their rapid integration into the Single Market. There are only about 460. 000 enterprises which engage in transnational activities. In view of the relative ease with which US enterprises engage in inter-state trade,29 a considerably higher number of European enterprises, in particular SMEs, should be encouraged to participate in transnational trade. While the achievement of a more ambitious target largely depends on the full co-operation of intermediaries and Member States, the specific and complementary actions provided in this Programme should help to facilitate the access of a much larger of enterprises, in particular SMEs, to the Single Market and to help them to adjust to the new requirements of international competitiveness. The first task is to influence SMEs' strategies in the sense of a rapid integration into the Single Market. To achieve this aim, it is necessary to provide SMEs with the appropriate instruments for the implementation of such strategies. Information and business partnerships constitute main instruments for SMEs to reach out to wider markets within the Single Market and beyond. Given the wide variety of situations faced by SMEs additional measures are however required in particular for specific target groups. The Commission will follow the line set out in its report on the future operation of the information and co-operation netwoiks. 30 This report sets out a number of possible improvements in the management of these networks, but stops short of a fundamental change in the methods chosen by the Commission. It does not recommend in particular merging the different networks into one, nor abandoning the formula whereby the Commission works in co-operation with a large number of decentralised host organisations and limits itself to providing an intermediate service31. The reasons why the external evaluation report of the Second Multiannual Programme proposes such a merger for all enterprise policy networks are shared by the Commission only to the extent that a unique interface with the final customer would have obvious advantages only from the point of view of transparency and simplicity in all promotional activities. It would not bring improvements in terms of efficiency, cost effectiveness and •j'y 27 See Footnote 1 above, Section V, p. 18. ' 28 See Commission Communication on the feasibility of the creation of a European Capital Market for smaller entrepreneurially managed growing companies, COM (95) 498 final of 25. 10. 1995. 29 No figures exist concerning the US firms engaged in inter-state trade. However, the fact that about 400. 000 of the 16 million US enterprises are engaged in international trade, suggests that the number of firms participating in inter-state trade must be considerably higher given the relatively higher concentration of US firms on domestic markets. 30 This Commission report was mandated by Article 5 of Council Decision 93/379/EEC of 14 June 1993. 3 ' See page 20 of the report. 32 This external report was mandated by Article 5 of Council Decision 93/379/EEC of 14 June 1993. i << quality control since the various services rendered - as set out in the evaluation report - will all need to be continued in co-operation with the different specialised intermediaries involved and the various roles even more clearly defined if quality of the service is to be enhanced. The idea of a full operational control of the EIC network by the Commission (as advanced in the external evaluation report) would make the merger into one network even more difficult to achieve. In the view of the Commission it would not only require a considerable investment, but entail considerable additional running costs since the cost of the central unit would remain unaltered, while the size and the human resources of a reduced number of EICs would have to be considerably greater in terms of knowledge and full-time equivalent per EIC. Therefore, the Commission comes to the conclusion that it would be a mistake to discontinue the strong and fruitful partnership with a great number of different organisations, the direct and indirect contribution of which is of immense political value and should rather be developed by integrating more completely the EICs into the. overall structure of the host organisations. This does not preclude the Commission from attempting to choose, in agreement with its various partner organisations, a unique identification under uhich the different networks operate. In this case the EIC network will have to function as "First Stop Shop" in order to simplify and facilitate the access of the final customer to the various services offered by the Community networks. While not advocating full operational and financial control of the EIC network (inter alia in view of the cost involved), the Commission would see an advantage, in order fully to reap the benefits of the stimulation method it has chosen, in offering an additional financial contribution to those EICs which commit themselves to a particularly high quality and targeted information services with an obvious potential for transnational strategies. The rapid development of information technologies and services (e. g. , Internet) also justifies the provision of financial resources, partly in the form of a one shot investment, in order to intensify the links between all different intermediaries co-operating in the framework of the different Community networks, but also in order to enlarge the interface with the final customer. In formulating the specifications for a new VANS,33 the Commission will take into account the need for easy access to and from other existing networks widely used by SMEs; where confidentiality is a decisive element of the services offered (in particular BC-NET), the Commission will upgrade the existing information technology to bring it into line with this state of the art. The Commission will continue its quality policy by means of a sharper definition of the services on offer in the different networks as already mentioned, as well as through a greater assurance of full professionalism, which might result in a reduction of the overlap between the three networks operating under the Cornmunity SME policy. - 31 Value Added Network and Services (VANS), including for instance Erinail and specialised conferences. Cl. DEVELOP INFORMATION SERVICES ŒiJR(>liNnFO-CEivrrRKs AS 'T^ST-STOB-SHOPS^ Over and above the managerial improvements discussed in the Communication on the future operation of the information and co-operation networks, the Commission proposes to adopt the following orientations for the EIC network, which will also apply to Euro- Info-Correspondence Centres (EICCs) where appropriate: a EICs as "Flist Stop Shops" The new orientations outlined above which, correspond to the demands expressed by SMEs and highlighted in the Commission's report for Madrid, will put into play a growing number of operators working in synergy with the EIC network. Moreover, the latter is only one of the various networks of relevance to SMEs operated by the Commission within and outside the framework of its enterprise policy. There is an obvious need for greater transparency of the numerous services on offer. However, rather than artificially reducing the number of such services, the Commission proposes a double approach: a single identification for all Community networks of relevance for SMEs34, and a single interface with the final customer in order to direct each request to the relevant Community network or service provider. The latter role would logically have to be assumed by the EICs given their task of providing comprehensive information to business. Some of them might have to gear up their capabilities in order to fulfil this new task. Inter alia this will require efforts to identify, and develop regular contacts with, the representatives of other Community networks, to build bridges, including through VANS, in order to facilitate dialogue, and to launch joint activities aimed at enhancing the visibility of the Community networks. The chart set out in the following page illustrates how the EICs will function as first- stop-shops. Table II summarises the main Community networks. h composition of the EICs The present composition of the network is the result of an historical development. The evaluator has questioned the rationality of the composition of the network and suggested an attempt to obtain a better representation of SMEs' most trusted business advisors, while keeping in mind the need for a stable financial commitment on their part and the requirement for geographical cohesion. The Commission will therefore publish a new call for candidatures, which will be open to existing and new organisations, in order to identify the ones most able to host a first stop shop. The selection criteria and the evaluation of the outcome of the call for candidatures will be discussed with the Member States. The number of EICs participating in the network should not be increased as a consequence of this consultation. c. enlarged and reinforced information task of the EICs Better infonnation for enterprises is a priority objective for the Community's Enterprise Policy, where the local EIC network plàys a key role. Under this Programme the tasks of the EICs to provide infonnation will be enlarged and reinforced in the following ways: EICs as first-stop-shops. To cover the needs of enterprises for a rapid response to their information requests, the EICs will help to direct them to the appropriate Community In combination with the distinctive logos of each network. ^ EICs as First-Stop-Shops National & Regional Partners Community Networks • Public A u t h o r i t i es • EC R e p r e s e n t a t i o ns in the MS • Representative O r g a n i s a t i o ns • Sectoral O r g a n i s a t i o ns • B u s i n e ss S u p p o rt O r g a n i s a t i o ns ( B u s i n e ss Links) • C h a m b e rs of C o m m e r ce • D e v e l o p m e nt A g e n c i es • S t a n d a r d i s a t i on Bodies E u r o p e an B u s i n e ss I n f o r m a t i on •Ë(ù;tflllMŒ^Œt^S 229 EICs 19 E I C Cs u Business Service Partners • C o n s u l t a n ts • L a w y e rs • T r a i n i ng O r g a n i s a t i o ns B a n ks A c c o u n t a n ts R e s e a r ch C e n t r es General Information Business Cooperation • BC-Nef • BRE* • Europartenarlat & Interprise * Support for Innovative SMEs • s/c R&TD and Innovation • IRC * • OPET* • Craft Information Society • NAP • • AGORA * Training • Leonardo Employment • EURES Rural Development • Carrefours Other Links Environment (DG XI) Public Procurement (DG XV) Third Countries Single Currency (DG II) Health and Safety at Work (DG V) Some EICs act In synergy with these networks r^o. Name Euro-Info-Centres (EIC) DG XXIII Business-Cooperation-Network (BC-Net) DGXXni Bureau de Rapprochement des Entreprises (BRE) DG XXIII KUROPARTKNAR1AT DG XXIII "TNTERTRISE" DG XXIII EC-Business Innovation-Centres (BIC) DGXVI Cratt Network ot Focal Points EX} XII Innovation Relay Centres IRCs DGXIII TABLE U: MAIN COMMUNITY NETWORKS Number ol Membeis & geographical coverage 'm EU + KFlA 20 correspondence centres in CEEC, Med. countries 300 advisers m 38 countries 500 correspondents in 70 countries in the world 60 National counsellors in 60 countries (EU, Med, CEEC, AL, Asia) promote 2 EUROPARTENARIAT events/year 200 partners of EU are involved in the organisation of 40- 50 events per year 110 BIC (98 in assisted*areas, otliers in Central & Eastern Europe) 200 Focal Points (23 National Focal Points), 18 countnes (EU + EFTA) 56 Members EU + Norway + Iceland lntormation Demonstration and Organisations tor Promotion ot Energy technologies (OPET) DGxvn + xni MIDAS (Multimedia Support Network) (will replace NAPs in 1997) DG XEU NAPs (National Awareness Partners) DG XI11 EU RES (European Employment Service) DG V European Crossbordcr Consumer Information Centres DGXX1V Rural Information Carrefours DGX 50 in Europe- New call tor proposal in 1996 22 centres in 17 countries (EU + EEA) 30 Members EEA 450 Euroadvisers in 15 MS + Iceland & Norway 12 cross-border structures 21 Members in EU countries except Greece and UK 70 in EU countries Info-points-Europe; Euro-libraries - DG X all Member States c-1 JMë lntormation and advice to businesses, in particular SMEs on Community regulations & programmes Help businesses develop international partnerships through appropriate advise for, before and after the search of partners Help SMEs to find partners through a very large broadcasting of their cooperation opportunities Encourage cooperation between enterprises trom assisted areas (objectives 1, 2, 5b & 6) and enterprises from other EU and non EU countries. Promote transnational cooperation between SMEs in Europe Creation and development ot innovative SMEs through provision of integrated services Disseminate information to SMEs on KID programmes for RTD and help programmes Promote innovation notably via technology transter, exploitation of research results and promotion of EU-RTD programmes Build relations with the industrial world and SMEs their applications them in Raise awareness and organise information campaigns on new information services Promote the use ot electronic information services Facilitate freedom of movement tor workers and help employers recruit at international level. Information to consumers on crossborder activities linked to consumer issued Community information to rural communities, stimulate exchange of experiences and partnerships between European and rural regions information tor the general public 10 network or service provider. This "first-stop-shop" concept does not affect the specific missions and activities of the other Community networks and does not remove the need to improve the effectiveness of these networks. However, this "first-stop-shop" dimension for the EICs will help businesses to find their way more easily about the various existing networks (see paragraph a above and corresponding chart). Content of information. While in the past the EICs focused on disseminating Community information and cooperation opportunities, the following new areas will be covered or strengthened: - Single Market: Mechanisms will be put into place to allow for a more systematic two- way communication flow between the Commission and the business world. EICs are in a particularly good position to inform the Commission on the problems faced by enterprises in their activity related to the implementation of the Single Market programme and other Community policies. - internationalisation: the completion of the Single Market and the growing globalisation of markets creates important trade and business opportunities abroad for European companies. However, one of the main obstacles that SMEs have to overcome in attempting to participate in a European or global market is the difficulty in accessing global or regional market information35. Such information is generated by a great number of organisations within the Community, some of which are members of the EIC network (Chambers of Commerce, Export promotion agencies, Eurostat, etc. ). Therefore, the Commission will encourage maximum synergy between these organisations; - environment: the EIC network will, in particular through its specialised working group on environmental issues, increase its efforts to provide adequate information on environmental management, regulations, studies and Community Programmes. In terms of sustainable development, the EIC network can play an important role in helping SMEs understand environmental challenges and discovering appropriate solutions. EICs could also facilitate contacts between mainstream businesses wishing or needing to invest in cleaner and energy saving methods and processes and those (eco-) businesses which produce the relevant goods and services; - sectoral information : much effort will be devoted by EICs to satisfy a frequently expressed interest by SMEs to obtain information on European matters, sometimes related to specific business or trade sectors. This will require greater co-operation between the EIC network and the sectoral trade associations established at European or national level. ; - pmactive pjwision of information : the information needs of SMEs are strongly related to the development of the Community's policies and activities which are undergoing considerable change36. The provision of information services by the EIC network will have to adjust to this change whereas the provision of tailor-made replies to specific questions from SMEs will remain unaltered. With a greater emphasis on openness and transparency, and the wider use of Green and White Papers in the consultation process will place greater importance on providing information about issues on which business needs to be kept informed. - awareness of Community priorities : there will also be a greater need for promotional activities in particular in the framework of the Community wide awareness-raising 35 36 Commission SME Report for the Madrid European Council, CSE(95)2087, pages 9 and 16. See Action Programme 1996 of the Commission. 11 11 campaigns launched by the Commission in order to promote major political priorities of the Union (e. g. , the Single Currency). Finally, the Commission will step up its other information efforts either in co-operation with SME representative organisations or through its own publications. The EICs will step up their efforts to improve access to these Community publications. Whenever possible, the Commission will use Internet services to make information readily available to the final customer. High quality service is of paramount importance to the impact the network can have on the business community. This high quality should be as homogeneous as possible on the basis of the stimulation method. The Commission does not share the view of the evaluator that - at the current level of resources employed - the network should be able to achieve a greater qualitative and quantitative impact within the business community (especially with SMEs)37. It stands by its assessment that the stimulation method has now reached its limit38, unless additional resources can be mobilised Such an increase can be modest by comparison with what would be required if the Commission were to follow the suggestion that the EIC network be fully operated and financed by the Community. 39 The additional financial contribution would come on top of the regular quality premium which the Commission suggests should be raised to a level of 25 000 ECU per annum. This amount would cover not only the present amount of 20 000 ECU but also all the other financial support granted to the EICs in order to cover the costs of promotional material, access to data banks etc. It would thereby allow considerable adninistrative economy and also remain conditional on obtaining the minimum quality standard at present under preparation, or the quality objectives defined by the host organisation within the framework of the management by objective methodology. 40 An additional financial contribution of 10 000 ECU would be sufficient to stimulate a sizeable number of EICs to commit themselves to a quality standard which would include a proactive approach and full co-operation œncerning the establishment of a comprehensive performance measurement system which would allow, inter alia, the impact on the business community to be monitored This contribution, while being open to ail EICs, would in practice be limited in the beginning to between one quarter and one third of the network since it is estimated that the number and the qualification of the personnel required for satisfying the enhanced quality criteria will not be available for a greater number of EICs, at least at the beginning of the four year period. In the long run this policy should encourage most of the EICs to obtain a high level of customer satisfaction. C2. IMPROVE THE PROMOTION OF SME POLICY ACTIONS While the scope of the Community's SME policy has grown gradually over time, the same cannot be said about the perception of its impact by the European SMEs. There is an urgent need to increase this impact which partly depends on similar efforts at national level. Reflection in this direction will be favoured by the outcome of a concerted action 37 38 39 40 External evaluation report of the Second Multiannual Programme, p. 12. Report on the future operation of the information and cooperation networks, COM(95) 435 final of 5. 12. 1995, p. 21. External evaluation report of the Second Multiannual Programme, p. 14. Report on the future operation of the information and cooperation networks, COM(95) 435 final of 5. 12. 1995, p. 31. %ln 12 to stimulate the demand for business services. The Community partly shares this problem with Member States. This has led to a proposal for a concerted action in this field41. It has to be recognised that the promotional efforts agreed to by the Community and the individual members of its networks have not been proportional to the need for a wider use of these instruments. One of the difficulties encountered has been that the target population of about 1. 5 million European enterprises cannot be easily identified through direct promotional action. The Commission will continue to seek the right balance between a general awareness raising action and more pinpointed efforts, while widely decentralising the implementation of its yearly campaigns. Continued attempts to increase the cost effectiveness notwithstanding, the Commission firmly believes that the resources available for such campaigns need to be increased. These campaigns will be of two types : • campaigns undertaken in co-ordination with the normal promotional activities carried out by the members of the EIC Network; • the organisation of two European Business Weeks which will aim at increasing the awareness of concrete Community business support services throughout the Union and also cover particular themes of interest to SMEs to be developed with Member States and SME business organisations. C3. PROMOTE CO-OPERATOVTH^ There is an obvious need to facilitate the efforts of SMEs to find business partners in other Member States, or even third countries. Since SMEs express their needs for partnership research in different ways, according to the degree of complexity of the co operation desired, the Community will have to continue to provide different kinds of services. Therefore, a merger of the BRE and BC-networks42 is not contemplated by the Commission. However, there is a need for simplification and clarification arising from the fact that some EICs use a special VANS conference for answering co-operation requests. Those EICs who wish to participate in partnership search activities will be requested to become members of one or the other group of intermediaries, depending on their interest and capability. The co-operation conference, which has operated as a further channel of contacts, will therefore be discontinued in the interest of reaching a higher degree of professionalism. This policy will be facilitated by the Commission's efforts (e. g. VANS) to intensify linkages between its different networks. Another measure in this context will be the creation of a directory listing all the members of the different networks and indicating the various types of services they offer. Such services can embrace company audits prior to the formulation of a strategy involving partnership search as well as downstream assistance in the negotiation of a co-operation agreement. For the rest the Commission will follow the orientations outlined in the report on the future operation of the information co-operation networks. They include: 41 42 Integrated Programme for SMEs and the craft sector, p. 19. BRE: Business Cooperation Centre ("Bureau de rapprochement des entreprises") BC-NET: Business Cooperation Network. 13 • intensifying the network effect through the support giyen to specialised groups within the networks. • developing a new information system to replace the outdated technology still in use • since the initial phase of the BC-NET. setting up of a single database in order to facilitate an integrated access to partnership or business opportunities identified through the various Community initiatives in this field (the two partnership search networks, Europartenariat and Interprise). Despite these various new initiatives, the Commission estimates that the financial support from the Community budget will not have to be increased. This will be rendered possible by ploughing back the revenue generated through the tarification of the BC-NET services, the level of which will be fixed at a flat rate of 1 000 ECU per year under the conditions presented in the report on the future operations of the information and co-operation networks. C 4. FRfJvOE DIRECT OGrnAŒ INTERPRISE) In view of the success of the Europartenariat and Interprise Programmes, the Commission intends to continue the organisation of two Europartenariat events per year and of some 40 to 50 Interprise events per year. In order to increase the quality of the preparation of the meetings, the Commission, in selecting the national organiser, will emphasise those criteria which confirm the capability of the organisation to provide upstream and downstream assistance to the undertakings selected for a participation. The Commission does not believe that a similar effort can be made for visiting companies43 bearing in mind that Europartenariat and Interprise programmes have been developed for enterprises which do not seek the intervention of an intermediary and often manifest their interest rather late in the day. However, in advertising such events, the Commission will draw attention to the availability of the services offered by the various Community networks. G5. DEVELOP SUBOONTTUCITNG PARTIVERSHIPS Community actions for subcontracting aim at improving transparency of the markets and strengthening inter-industrial partnership. Apart from statistical aspects there is a need to increase transparency of the legal environment applicable to subcontracting relations in each Member State. The Commission will provide practical guides to improve the contractual relationship between principals and subcontractors, particularly when there is an element of transnational ity. Support should also be given to the organisation of European forums intended to identify new developments and concerns related to subcontracting in strategic activities, as well as best practices of third countries which could be transferred to the Union. This should allow the Commission to focus its support on priority areas for the Community's subcontracting strategy. To improve the competitiveness of European subcontractors actions will be developed aiming at the promotion of European subcontractor know-how to third country principals wishing either to invest in Europe, or to import European assets and services. In addition, actions will be taken to develop a better understanding of the structures of third country 43 As suggested in the external evaluation report of the Second Multiannual Programme, p. 22. 14 subcontracting markets and the nature of the subcontracting relations of these countries, in order to identify the existing co-operation opportunities. To facilitate subcontractor contact and to optimise the search for partners, the Commission will develop a Sub-Contracting Assistance Network (SCAN) aimed at the identification and promotion of highly qualified businesses, possibly certified throughout the Union. In view of promoting relationships between main contractors and subcontractors and in response to a Council mandate of 22 November 199344 buyer's exhibitions45 were organised at international level with the support of the Community to test their feasibility in a number of sectors in the context of the new inter-industrial relations. The result of the test phase will be evaluated at the beginning of the new programme. Depending on the outcome of this evaluation, the need for further Community action will be examined. C6. PROMOTE ACCESS TO NEW MARKETS AND INTERNATTOvmiSATTaV OF SMES The globalisation of the markets has a strong impact on the competitive situation of European SMEs. European SMEs need to adapt their strategies on the basis of better awareness both of strategic advances made by third country competitors and of the characteristics of third country markets they want to access, including in the newly emerging and fast-growing economies of Asia and the Pacific Rim. The Community recently defined a strategy for achieving improved market access to third countries. 46 The Commission SME Report for the Madrid European Council highlighted the need for measures for business support in this field While much of the effort needs to be made at Member State level, the Community has a role to play. The Commission will in particular step its efforts for the promotion of internationalisation of SMEs and their penetration into third country markets. Community Programmes aimed at fostering international co-operation (JOP, ECEP, MED-INVEST, AL-INVEST, ASIA-INVEST) should be better focused on SMEs, in particular in view of encouraging partnerships and joint ventures with enterprises in third countries. In addition to the measures proposed in the Integrated Programme in favour of SMEs, the Commission will facilitate access to market information47, improve business co-operation networks and partnership programmes48 and develop pilot actions. The latter will in particular focus on the organisation of fact finding missions and the testing of co operation models in accessing third markets. 49 Finally, support will be given for a small number of actions to facilitate the participation of small enterprises in trade shows in third countries, at least with joint stands. Part of these initiatives will help to reinforce the concrete implementation of the actions provided under the Transatlantic Dialogue ("Business Bridge"). Council Resolution of 22 November 1993 on strengthening the competitiveness of enterprises in particular of SMEs and craft enterprises, and developing employment, OJ n° C 326 of 3. 12. 93, p. l. "salons inversés". COM(96)53 final. See § C. l. c. ove. See § C. 3 and C. 4. See for instance the French "compagnonnage" programme and the German "Firmenpool" scheme. 50 Communication from the Commission on the Craft Industry and Small Enterprises, Keys to Growth and Employment in Europe, COM(95) 502 final of 26. 10. 1995, p. l 1. z 15 P. ENHANCE SME œMPETmVENESS AND IMPROVE ACCESS TO RESEARCH INNOVATION AND TRAINING D. l. INCREASE THE INNOVATIVE POTENTIAL OF SMES Innovation is a major factor in growth to which SMEs have traditionally made an important contribution. However, the globalisation of markets has introduced a new dimension to this problem and the Commission, in its Report for the Madrid European Council51, has identified a number of problem areas in this field. In its Green Paper on Innovation52 the Commission stressed the need to intensify and take a more consistent approach to efforts which hitherto have been too fragmented, in order to overcome the obstacle and handicaps which still hinder innovation in the European Union, and identified routes for action to this aim. The main responsibility for correcting action lies with Member States. In addition, specific measures for SMEs have been introduced under the Community research, innovation and regional policies (e. g. the Innovation Programme, Technology Stimulation Measures for SMEs and Regional Innovation Strategies). A large consultation process on new Community actions has recently been launched on the basis of the Green Paper on Innovation. On the basis of this Third Multiannual Programme the Community's Enterprise Policy will continue its "laboratory approach" in particular by testing innovative methods of support through pilot actions which, if successful, can be taken over by Member States or other Community policies. These pilot actions which are not yet covered by other Community programmes can be tested to demonstrate the utility of specific approaches for SMEs. a. support for the development of firms with growth potential The White Paper on Growth, Competitiveness and Employment highlighted the need for supporting the development of firms with growth potential since these are the firms most likely to create permanent jobs over a longer period. 53 A major challenge is to identify these enterprises. In the framework of the Second Multiannual Programme for SMEs and craft industries, the Commission has successfully developed an audit methodology aimed at increasing the access of SMEs to national or European R&TD Programmes (Euromanagement R&TD). Similar actions aiming at facilitating the participation of SMEs to the Community R&TD programmes have been implemented by the specific R&TD programmes and in the future the technology and management audit methodology initiated by Enterprise Policy will be integrated and, if necessary, adjusted under the Innovation Programme. In addition, R&TD is not the only way to growth. In particular in service industries, other factors come into play. Under this Third Multiannual Programme the scope of the Euromanagement methodology will therefore be refocussed to encompass these other critical factors, including strategic management training and internationalisation. 51 52 Commission SME Report for the Madrid European Council, CSE(95)2087, pages 5 and 6. Green Paper on Innovation, COM(95) 688 final. White Paper on Growth, Competitiveness and Employment, p. 87. n 16 In addition to this audit - methodology, the Commission proposes a more bottom-up approach consisting of support for the creation of "business clubs" with entrepreneurs willing to contribute through their own action to the development of a growth strategy for their region. 54 This model has been successfully developed in a number of Member States. 55 The Commission will further encourage the spread of this model in other Member States, in particular through support for the networking of the various initiatives. tx support for New Technology Based Firms (NTBFs) New technology based firms (NTBFs) open entirely new areas for growth and job creation. However, specific problems need to be resolved in order to support the growth of these firms. 56 In this context the Community has successfully developed a methodology to mobilise private capital in the high risk phase of seed finance. But there are similar problems when it comes to finding sufficient second round finance in order to sustain NTBFs in their attempt to realise rapid growth (including the case of existing companies attempting to rejuvenate themselves through a new technology). The high risks involved in such investments have made early stage venture capital unattractive for most European investors. There is a need to ascertain the appropriate incentive for larger quantities of private capital to be invested in the international expansion of new technology based enterprises. Therefore, the Commission proposes to launch a pilot action - to be jointly managed with the Community Innovation Programme - aimed at catalysing the process of channelling private capital towards this kind of high risk investments. D. 2. STIMULATE MANAGERIAL TRAINING Other key factors in safeguarding the competitiveness and long-term employment potential of SMEs are the improvement of training provision and the stimulation of their managerial skills, in particular to increase their capacity to adapt to new challenges. 57 Member States need to put into place easily accessible training programmes and an infrastructure which take into account the special needs of SMEs. 5 The Commission plays a complementary role in this field mainly through a series of actions taken under the Community's Policies for Employment (in particular througji the ADAPT Initiative59), Education and Training. Most of these concentrate on training provision and access for workers in SMEs. 60 Under this Third Multiannual Programme actions will be encouraged and focused on training of SME managers and intermediaries, in particular with the aim of helping to identify and test novel approaches in this field mainly through pilot projects. The latter will in particular seek to: • improve management training prior to business start-up, in particular by supporting the development of a case study methodology adapted to the needs of European e. g. the PLATO project developed in Belgium, e. g. Ireland and Denmark. 56 Commission SME Report for the Madrid European Council, CSE (95)2087, p. 5. 57 White Paper on Growth, Competitiveness and Employment, p. 87. 58 Commission SME Report for tlie Madrid European Council, CSE(95)2087, p. 13. 59 See, Report on tlie co-ordination of activities in favour of SMEs and tlie Craft Sector, COM(95) 362 final of 8. 9. 1995. See Integrated Programme in favour of SMEs and the Craft Sector. 60 1 17 SMEs61, by training intermediaries from SMEs and craft organisations on European issues and by promoting the exchange of experience between leading third countries and the EU in this field; increase training in the fields of standardisation and certification and adapt management training to the needs of women entrepreneurs. 62 • D. 3. ADAPTATION TO ENVIRONMENTAL RFXXJÏÏŒMENTS In the Action plan for the further implementation of the Fifth Environmental Action Programme adopted on 24 January 1996 priority is given to the problems faced by SMEs in adapting to environmental requirements. SMEs are less aware of "environmental" regulations, have less access to information about the availability and costs of clean. technologies, energy saving and other environmental advice services. In this context particular emphasis is put on environmental management and thcspeedy launched a introduction of eco-audit certification. EUROMANAGEMENT pilot action which focuses on small and craft enterprises which will be finalised in 1997. Subsequent extemal evaluation should indicate the further actions needed. In 1996 the Commission R mOMOra ENTREPRENEZ E l. BUSINESS CULTURE AND ENTREFKKNTCURSHu^ In its Report to the Madrid European Council63 the Commission highlighted the need to promote entrepreneurship at all levels. The primary goal must be to stimulate a truly entrepreneurial culture, based on values such as self-reliance, risk-taking and a sense of personal commitment. While most of the actions will have to be taken at Member State level64, the Commission will stimulate the exchange of best practice in this field and by supporting the identification of particularly dynamic entrepreneurs65. E2. CRAFT AND SMALL ENTERPRISES In a separate communication to the Council66, the Commission has highlighted the need for a specific Community initiative taking into account the specific characteristics of craft industries and small enterprises. This communication, mandated by Council Resolution of 10 October 199467 formulates the conclusions to be drawn from the debates held at the second European Conference on the craft industry and Small Enterprises held in Berlin on 26 and 27 September 1994. 62 63 64 Most of the case studies used at present are based on US experience. See Section E. 4. below. See Footnote 1 above. Promotional programmes already exist in various Member States, for instance in Germany, Austria, Ireland, Finland and Luxemburg (See Footnote 1 above, Annex I, section G. 3). In 1995 tlie Commission supported an initiative in this area (Europe's 500). 65 66 COM(95)502 of 26. 10. 1995. 67 Council Resolution of 10 October 1994 on giving full scope to the dynamism and innovatory potential of SMEs, including the craft sector and micro-enterprises, in a competitive economy, OJ n° C 294 of 22. 10. 1994, p. 6. ^ 18 The Commission intends to give a first follow-up to this communication under the Second Multiannual Programme. Given the limited financial resources available, most of the priority objectives identified will have to be covered by actions to be undertaken in the Third Multiannual Programme. These priority objectives include: integration of this particular category of enterprises in the Single Market; support for transnational co operation projects; specific support in the fields of standardisation, certification, environmental and quality management; better access to vocational and management training in particular for co-entrepreneurs; a better access to sources of finance; and support for an initiative of the European Craft industry associations in the field of image building (European Craft Academy). E3. ENTERPRISES IN COMMERCE AND DLsnrRmunvE TRADES Parallel to the ongoing consultation of the interested parties in the framework of the Committee on Commerce and Distribution, the Commission proposes to carry on its action aimed at facilitating the adjustment process of enterprises in commerce. The Commerce 2000 pilot programme should be extended in order to cover the application by such enterprises of all the modern methods of management related to the use of new technologies. Emphasis will continue to be placed on the promotion of co-operation between SMEs, including co-operation between SMEs and large enterprises. Attention will be given to a wide dissemination of the results of the pilot actions carried out after careful evaluation and discussion of their outcome. Depending on the outcome of the discussion of the Green paper on Commerce and Distribution, which the Commission plans to approve in 1996, the Commission proposes to organise an exchange of best practices on topics particularly sensitive for the development of commerce and distribution. E>4. WOMEN AND YOUNG ENTREPRENEURS: ENTERPRISES OWNED BY MINORITIES The Essen and Madrid Summits œnfirmed the important role of women in SME development, the generation of new jobs and the competitiveness of the European economy which depends on making the best use and development of women's skills. Up to one third of new enterprises are at present created by women, and greater attention has to be paid to the importance of women entrepreneurs. As recently highlighted by the Commission,68 women entrepreneurs and assisting spouses are faced with various difficulties and constraints. This Multiannual Programme will develop a number of actions to support Community policy in favour of equal opportunities for women69. The actions will include: - the promotion of information activities throughout the Multiannual Programme, in - particular through the Euro-Info-Centres and the partnership programmes; the development of exploratory actions into possible solutions in the field of equal oprx)rtunity for women entrepreneurs and co-entrepreneurs; - the development of a synergy with the other relevant Community policies; - the support for European networks of women entrepreneurs and co-entrepreneurs. 68 69 COM(96)67 final of 21. 2. 1996. Fourth Community Action Programme on Equality of Opportunities between Women and Men (1996- 2000 ) and Commission's Communication on "Incorporating Equal Opportunities into all Community Policies and Activities" "X 19 The Commission will also support and initiate concrete actions which seek to address the specific problems faced by young entrepreneurs. Concrete actions will include support for initiatives exploring innovative approaches, in particular in view of strengthening management training and advice for young entrepreneurs during their critical start-up and first development phases, for instance by promoting the use of new technologies and networking between enterprises. In addition, the Commission will explore possible actions to address the specific problems faced by minorities in setting up and running small enterprises. Concrete action will include the co-financing of a limited number of studies or support measures to foster and encourage their integration into the society. These initiatives will complement the measures contained in the proposed Employment-Inclusion Initiative within the European Social Fund. m POLICY DEVELOPMENT There is a strong need for a better knowledge of the specific characteristics and needs of European businesses, in particular SMEs and crafts, in order to adapt and complement existing Enterprise Policy actions. The Commission will therefore develop its activities in this field in its effort to improve their effectiveness. a. statistics Having good quality and timely information on the number of enterprises, their size, structure and demography is of great importance in order to monitor and revise the Community's SME Policy. In co-operation with Eurostat several statistical projects and programmes will be continued with the emphasis on improving the coverage and timeliness, and on using all available information rather than burdening businesses with extra requests for information. In this context, the Commission will test the feasibility of creating a pan-European microeconomic database. The availability of this information - which exists in the US - constitutes a very useful tool for stimulating the creation and orientation of new enterprises, in particular in areas where job potential exists. Parallel to this general statistical work, support will continue to be given to the statistical analysis of commerce and distribution as well as of the situation of co-operatives, mutual societies, associations and foundations (CMAFs). In all these fields, consideration will be given to the need for minimising the burden on enterprises resulting from the collection of data, in particular by assessing the cost-effectiveness of the statistics requested and by consulting SME organisations before proposals are made to collect new statistics. b. SME Observatory The Commission proposes to maintain the approach hitherto followed in the field of the SME Observatory. The reliance on an independent network with a strong research component is the best guarantee of an objective interpretation of the available quantitative and qualitative data. Already now this network comprises some institutions close to the business realities of SMEs as suggested in the extemal evaluation report. 70 70 External evaluation report of the Second Multiannual Programme, p. 36. ~\X 20 The Commission will consider the methodology for developing a framework of trend indicators based on inquiries led by various organisations (such as Eurochambers) in co ordination with Eurostat. There could be also an attempt to use in the report non- harmonised national data in the field of monitoring the impact of the Single Market on SMEs in view of the fact that in this field the dynamics of the evolution are of greater interest than a harmonised snapshot of the situation. Finally, the feasibility of incorporating the major qualitative and quantitative conclusions into a data bank with on-line access will be examined as well as the possibility of putting part of the report on Internet. This should give the report a uider audience including the possible access by SMEs. To enhance the impact the Commission proposes to organise a yearly conference in order to allow for a wide discussion with all interested parties. c studies on SMEs In order to increase knowledge about SMEs, a number of research projects will be supported. These will include the study of particular aspects, such as craft industries and small enterprises, women entrepreneurs, commerce and distribution and CMAFs, followed by the dissemination of the research results. d develop and evaluate SME policy actions The adequacy of Community measures depends on an ongoing effort aimed at identifying and evaluating policy initiatives undertaken both at national and Community level in order to develop the potentials of SMEs as "a dynamic source of employment, growth and competitiveness in the European Union". This calls for a stronger effort to increase the quality of the support the Commission can contribute to the exchange of best practices between Member States. This also calls for better accessibility of the available information. In order to achieve this goal, the Commission proposes to develop, in close co-operation with Member States and with the SME Observatory network, an easily accessible and user-friendly data base œnœming SME policy measures. The Commission will also publish on a regular basis a report on the development of the inclusion of the SME dimension in all policies and programmes of the Community. These measures which provide an overview of the progress achieved in the field of SME Policy will help increasing the efficiency of actions aimed at stimulating the competitiveness and growth of European SMEs in the prospect of stimulating their employment capacity. ANNEX I COMMISSION REPORT ON RECENT POLICY INITIATIVES AT MEMBER STATE LEVEL FOR SMALL AND MEDIUM-SIZED ENTERPRISES (*) (*) This Report has been presented by the Commission to the Madrid European Council (CSE (95) 2087) u:\polncv\cannes\annex-en 3 4 4 5 6 6 8 8 9 9 SUMMARY OF SME-RELATED MEASURES TAKEN AT MEMBER STATE LEVEL Contents Page Introduction A. SUPPORT FOR THE DEVELOPMENT OF EMPLOYMENT IN SMEs A. 1. Social Measures A. 2. Fiscal Measures B. FACILITATING THE CREATION AND DEVELOPMENT OF SMEs BY REDUCING ADMINISTRATIVE, FISCAL, SOCIAL AND OTHER CONSTRAINTS B. 1. Reduction of Administrative or Legislative Constraints B. 2. Improvement of the Fiscal Environment for SMEs B. 3. Reduction of Constraints Resulting from Social Legislation C. IMPROVING MANAGEMENT QUALITY IN SMEs C. 1. Facilitating SME access to Training Programmes C. 2. Improving Information for SMEs C. 3. Improving Advice to SMEs D. SUPPORT FOR R+D EFFORTS IN SMEs D. 1. Facilitating the Participation of SMEs in Research Programmes D. 2. Encouraging the Distribution of Results of R+D to SMEs E. IMPROVING SME ACCESS TO FINANCE E. 1. Financing Business Creation E. 2. Financing Business Development E. 3. Financing Business Transfer F. HELPING SMEs TO INTEGRATE BETTER INTO THE INTERNAL MARKET AND TO INTERNATIONALISE F. 1. Integration of SMEs into the Internal Market F. 2. SMEs1 Exports to Third Countries G. OTHER MEASURES G. 1. Promoting. VIE Access to the Information Society G. 2. Facilitating SME Access to Public Markets G. 3. Development of an Enterprise Culture 10 10 11. 11 12 13 13 13 14 15 15 15 17 17 17 18 "IC Introduction This note presents a summary of measures taken at Member State level in the course of the last two years or currently envisaged which aim to promote the creation, development and transfer of SMEs. The note is structured under seven headings as follows: A. Support for the development of employment in SMEs B. Facilitating the creation and development of SMEs by reducing administrative, fiscal, social or other constraints C. Improving management quality in SMEs D. Support for R+D efforts of SMEs E. Improving SME access to finance F. Helping SMEs to integrate better into the Internal Market and to internationalise G. Other measures The note is based on replies to a questionnaire sent to all Member States. For a number of countries, the replies to the questionnaire were very general. Here also, where possible, the information provided has been supplemented by internal Commission analysis. ,£, A. SUPPORT FOR THE DEVELOPMENT OF EMPLOYMENT IN SMEs The majority of initiatives under this heading are not targeted exclusively at SMEs, but, given their predominant role in employment creation in all Member States, SMEs are intended to be prime beneficiaries. A. l. Social Measures The main emphases in Member States1 social policies in this area include on the one hand, increasing demand for labour by improving the flexibility of the labour market, by reducing the costs of recruitment, by incentives to recruit unemployed people and by improving the skills of those seeking work and, on the other hand, improving the supply of labour by facilitating access to qualified people and by making recruitment easier. A number of Member States have improved the flexibility of the labour market. In Germany, the limited contract employment provision has been extended to the year 2000 and a new law permits more flexible working hours. In Belgium, the procedure for modification of working time has been simplified and consecutive fixed-term contracts are now permitted. In Belgium also, instruments are being developed to redistribute available work, particularly by promoting different forms of temporary work and career interruption. In the Netherlands, dismissal procedures have been shortened and made more flexible, particularly as regards the preventive test on dismissal, working time regulations, extension of probation and conditional periods and extension of temporary contracts. In Spain, the maximum duration of temporary employment contracts has been extended from three to four years and enterprises receive a subvention if they make a temporary contract permanent. A number of countries have introduced measures to reduce the costs of creating employment. In Spain, new subsidies have been introduced for permanent part-time recruitment. In France, the new government has indicated its intention to reduce non- salary costs by 10% for low-skilled workers earning up to 1. 2 times the minimum wage (SMIC). In Belgium, under the "Plan Plus Un", an enterprise employing its first worker receives a reduction of 100%, 75% and 50% of employer social charges for the first three years and there is a reduction of employer charges for low-paid workers in both Belgium and France. In the UK, the Netherlands, Spain, Italy and Ireland, employers' social insurance contributions have been reduced in general. In Luxembourg, employer social charges on salaries have been abolished and replaced by a State scheme. In Germany, SMEs have been relieved from the cost related to parental leave. r Austria, the Netherlands and Belgium have introduced measures to increase the attractiveness to enterprises of recruitment of unemployed people. In Austria, where a person has been unemployed for more than a year and is difficult to employ, the public employment agency can pay two-thirds of the wages to an employer. In the Netherlands, 57 pilot projects are to be launched, mainly aimed at SMEs, to provide 20,000 subsidised jobs for unemployed people who keep their unemployment benefits for two years with a view to maintaining these jobs unsubsidised thereafter. In Belgium, an action allows for employer social security charges to be reduced when an employee is engaged through an unemployment support programme. There is also support for the remuneration and social security contributions of unemployed people engaged in the framework of support for SMEs. In Portugal, there is a three-year exemption from social contributions and a subvention equivalent to twelve times the minimum monthly wage for enterprises which recruit first time young workers and the long-term unemployed. In Spain, there is a reduction in social charges for recruitment of unemployed people over 45 and the handicapped. In Finland, subsidies are provided for recruitment of the unemployed. To improve the supply of labour, some countries have focused on the skills of those seeking work. In Austria, the "Arbeitstiftungen" keep people in contact with work who would otherwise be unemployed and offer them continuing education or vocational training while at the same time helping SMEs to find qualified employees. In Belgium, the Employment-Training Convention for unqualified young people under the age of 25 alternates work in a company with professional training in an agreed centre. In Sweden, there are programmes to train and re-educate the unemployed. Germany and Austria have sought to improve access of SMEs to qualified personnel by establishing independent employment placement services. In France and the UK, the emphasis in this regard is on improving information for employers. In France, a "one- stop-shop" is to be established to simplify administrative procedures relating to taking on employees, particularly in SMEs. In the UK, comprehensive guidance on employing staff has been produced to address lack of knowledge of entrepreneurs in this area. A. 2. Fiscal Measures Tax-breaks to encourage recruitment are the main form of fiscal measure used by Member States. In Finland, for family-owned SMEs and small companies, income for consumption is separated from income for investment with the latter taxed at standard company tax rates instead of personal tax rates. In Italy, firms which employ additional workers can claim tax relief and reinvested profits are exempt from taxation. In Ireland, a lower VAT rate has been introduced for labour-intensive service industries. In Germany, VAT thresholds have been raised. In Spain, national and regional incentives include reductions in tax levels and free depreciation related to employment creation. B. FACILITATING THE CREATION AND DEVELOPMENT OF S M ES BY REDUCING ADMINISTRATIVE, FISCAL, SOCIAL AND OTHER CONSTRAINTS B. l. Reduction of Administrative or Legislative Constraints from reporting Simplified and more requirements, one-stop-shops, business impact assessments and deregulation are the main areas of administrative simplification facilitating SME creation and development pursued by Member States in recent years. transparent procedures, derogations With regard to administrative procedures, France, the Netherlands and Finland have reduced substantially the number of documents and regulations applied in setting up an enterprise. While in Finland collection and coordination of company information is concentrated in the National Statistics Office, France uses the "Centres de Formalités des Entreprises" (CFE) for that purpose. In Italy, one fixed tax has replaced six former taxes, and there is automatic approval of an authorisation request if the relevant authority does not react within the specified time period. In Finland, the company approval process has been simplified, a single advance payment procedure has been introduced for all taxes and local tax offices are empowered to issue binding precedents. In Ireland, a single registration form for all tax purposes has been introduced. In Austria, a uniform date for return of all taxes has been introduced. In France, three simplifications are due to be introduced in 1996: the single social and recruitment declarations and the single apprenticeship contract. In Germany, licensing procedures have been simplified. In the UK, introduction of an annual return form with pre-printed details and three line accounts for low turnover companies have cut down on paperwork for SMEs and facilitated prompt delivery of annual accounts. In Spain, more flexible administrative procedures allow greater transparency and more rapid responses, and standard and simplified forms are being planned. In Portugal, enterprise associations have established protocols with the National Companies' Register to facilitate company creation from an administrative point of view. M Changes in legal procedures have widened the scope for formation of SMEs and made the rules governing their operation more flexible. Germany has enlarged the range of trades eligible for certification by the Handelskammer. In Greece, it is now possible to create a limited company consisting of one person. In Spain, the new private limited companies law simplifies and makes more flexible the legal framework for companies and takes special account of SMEs. In France, broadening of the legal definition of a company has created a level playing field in the tax and social treatment of different forms of business entity. In Portugal, notaries have been given a wider role in the legal formation of companies, so simplifying the process. Among derogations applied, in Austria greater flexibility has been introduced so that businesses with lower turnover are not required to keep records by double entry but can use the cost book principle of accounting. In the UK too, Companies' Act disclosure requirements have been simplified. In the UK and Ireland, VAT return thresho-tds are being increased to reduce reporting burdens. One-Stop-Shops to promote start-ups are to be launched in Germany by the chambers of commerce and in Sweden by the regional support organisations, the ALMI. In Belgium and Spain, it is intended to establish a single point of contact for all SMEs' dealings with public services. The deregulation initiative in the UK aims to improve existing legislation, simplify new legislation and improve sensitivity of enforcement. This initiative involves a consultation phase with business on all legislative proposals and application of the principle of "think small first" at all stages from drafting to implementation. Future development of this initiative will include greater use of contracting out. Other countries are at various stages of introduction of similar Business Impact Assessments and deregulation initiatives. In Germany, the emphasis is on reviewing the impact of new consumer protection provisions on SMEs. Sweden is undertaking a systematic overhaul of all business regulations. Greece has created specialised units in each Ministry to examine simplification. In Ireland, a parliamentary committee has been established to scrutinise the impact of new and existing legislation on SMEs. Business Impact Assessments are about to be introduced in the Netherlands and are under consideration in Spain. h* B. 2. Improvement of the Fiscal Environment for SMEs Tax reform, various tax derogations and reductions of corporation tax rates are the main fiscal measures pursued by Member States. Tax reform in Germany has focused on mergers and reorganisations, with the possibility now available of a fiscally neutral change of corporate form from a company to a partnership, a development with particular importance for SMEs. In Sweden, limited companies, partnerships and the self employed are treated equally for tax purposes. Italy has exempted operating income which has been reinvested from corporation or income tax, whichever is applicable. In France, investment in an enterprise less than three years old, or in an unquoted SME with a turnover below FF 140 million, attracts a tax credit equal to 25% of the investment. In Belgium, it is intended to revise the fiscal regime to reinforce the own resources of enterprises. In Ireland, it is planned to streamline. existing legislation on income, corporation and capital gains tax. Among derogations applied, in the Netherlands, Portugal, Spain and development zones of France, there is a reduction in taxes for the early years after start-up. In the Netherlands also, the tax deduction for new start-ups is to be increased, while in Spain there is also a tax deduction for investment in RTD. In Austria, the tax exemption for small enterprises has been increased. In Finland, property tax on SMEs has decreased and in Ireland, the thresholds which qualify a company for quarterly rather than monthly tax returns have been increased. In the new German Lander, the municipal trade capital tax ("Gewerbekapitalsteuer") has been suspended and the municipal trade earnings tax ("Gewerbeertragsteuer") has been lowered to benefit SMEs; tax relief on the sales profits of manufacturing SMEs has also been extended. Corporation tax rates have been reduced in Germany, Spain, France, the Netherlands and Ireland. In Germany also, the top rate of personal taxation of enterprise income has been reduced; the enterprise tax threshold has been enlarged and the base to which it is applied reduced; and the wealth tax threshold has been increased. In the UK, businesses are entitled to claim tax relief for training, and employees can claim tax relief on vocational training they pay for themselves. In Finland, the rate of corporate income tax, the rate of tax on investment income and the rate of withholding tax are being decreased. B. 3. Reduction of Constraints resulting from Social Legislation There are two main areas of action under this heading. First, there is the maintenance of welfare benefit entitlements for unemployed people starting up a new business, which apply in Belgium, the Netherlands, Denmark, Finland and Spain. Secondly, there are simplified health and safety compliance procedures for small firms in the UK and Ireland. h C. I M P R O V I NG M A N A G E M E NT Q U A L I TY IN S M Es C. l. Facilitating SME Access to Training Programmes Provision of finance for training, specific and general training programmes, coordination of training services and wider recognition of qualifications are the key emphases in Member States' policies in this area. Finance for training in Germany takes the form of subsidised, guaranteed loans to the craft, industrial and distribution sectors. In the UK, workforce training is regarded as an important business investment and loans are provided to small firms to support this. In the UK and Ireland, there are special provisions for training programmes involving ten or more SMEs. In Spain, public funds are available for training programmes for groups of SMEs. In Luxembourg, funding is provided for training centres of the Chambers of Commerce. Among specific training programmes, in Austria the emphasis is on management of the quality process, in France key areas include maintenance, the environment and quality, and in Spain the focus is on increasing understanding of industrial design techniques. In the UK, the focus is on World Class Manufacturing and on a programme to update the skills of key workers in SMEs. General training programmes are provided in Finland through post-graduate institutions and in Belgium, through a mix of in-company experience and courses in specialist training centres. In Denmark, training is coordinated through technical schools and the SME federation. In France, a new orientation in training programmes is focused on managers and chief executives. Coordination of training services in the UK is the particular responsibility of the Training and Enterprise Centres. In Sweden, the coordination role is filled by the regional support organisations, the ALMI, which have subsidiaries in each region jointly owned with the County Councils; improving management quality is a major aspect of their work. In Portugal, the Programme for Enterprise Creation provides integrated support to improve the capability and competence of young entrepreneurs. In Ireland, the integrated approach is delivered through the PLATO Network. In Germany, a recent initiative has broadened recognition of qualifications and means that employees in SMEs enjoy increased opportunities to improve qualifications as, for many professions, a university training is no longer required. This initiative could also increase the supply of qualified outside expertise, thus making it less costly to SMEs. U C. 2. Improving Information for SMEs Understanding best practice, information and more comprehensive information services are the key aspects of Member States' policies in this regard. improved access to In the UK, the emphasis on best practice promotion is spearheaded by business links with the emphasis on self-help and learning from others. In Ireland, guides on best practice have been prepared for key management areas. In Belgium, Sweden and Ireland, telephone hotlines are being set up to improve access to information. In the UK, Spain and Portugal, computer databases are being developed for this purpose. More comprehensive information services are being provided by means of Enterprise Houses in the Netherlands, through the Technological Information Centres in Denmark and by a network of regional government offices in Finland. In Austria, a programme to tackle management difficulties with understanding new technologies involves SME managers visiting leading-edge companies. C. 3. Improving Advice to SMEs Provision of advisory services and financial support for advisers are the main aspects of Member States' policies. General advisory services tend to focus on provision of comprehensive advice. The "Supernet" system in the UK introduces small firms to national and international networks of centres of excellence. In Finland, general programmes are provided on the one hand to help entrepreneurs evaluate the feasibility of their ideas and their own suitability to act as entrepreneurs; these programmes also provide external consultancy support to help existing SMEs to analyse their present position and prepare a development programme. In Ireland, retired business managers act as mentors to SMEs. and the PLATO Programme provides SME owner-managers with access to expertise in large companies. In the Netherlands, the key initiative is coordination of networks and consultancy services; a number of pilot projects have also been established to provide advice and support to unemployed people starting up a business. Specific advisory services focus on counterfeiting and strategic management in France, knowledge and quality systems and environmental management in Denmark and technology and exporting in Finland. Financial support for hiring advisers is provided in Germany, Spain, Denmark, Greece, the UK and Ireland. 10 ^ D. SUPPORT FOR R+D EFFORTS IN S M ES D. l. Facilitating the Participation of SMEs in Research Programmes National policies focus on promoting cooperation between SMEs and Research Centres to facilitate innovation in SMEs, and on direct and indirect financial support for R+D. In Germany, the federal research cooperation programme promotes links between enterprises and research establishments, including cooperative research and exchanges of research personnel. Austria has also established a programme for industry-research cooperation. In the UK, the LINK programme supports collaborative R+D between higher education institutions and SMEs. In France, the Technology Diffusion Network links SMEs with specific research needs to the research centre best able to address their need. In Finland, the TEKES national network coordinates contacts between SMEs, universities and research institutes and a world-wide network of technology centres; the network is focused on marketing of programmes and projects to targeted SME groups. In Greece, national policy encourages SME cooperation with specialised R+D organisations. In Ireland, campus-based technology centres have been set up to bring SMEs closer to research programmes. Promotion of innovation by SMEs in Germany is through a programme to encourage market-oriented innovation leading to commercialisation. In the UK, the SMART programme promotes technological feasibility studies for small firms while the SPUR programme offers support to SMEs for development of new products and processes. In Ireland, an inventions service assists entrepreneurs in developing patents. In Sweden, the National Board for Industrial and Technical Development supports SME R+D efforts. Greece also provides support to SMEs for research on applied technologies and innovative products. Austria provides finance for searches for R+D partners. In France, the Technology Services Institute co-finances development work carried out in a joint development project between the institute, a research centre and an SME. In the Netherlands, financial support is more indirect : under the "Techno-starters" programme, technology brokers select high technology seed projects and offer them to financiers for support. 11 hh D. 2. Encouraging the Distribution of Results of R+D to SMEs Technology counsellors, personnel exchanges between research bodies and SMEs and technology transfer initiatives are the main means used to encourage the distribution of the results of R+D to SMEs. In the UK, innovation, design and technology counsellors provide advice to SMEs on how to absorb the results of R+D. In Denmark, the role of the Technology Service Institute has been extended to make it the key link between domestic and foreign research centres and SMEs. The ATOUT initiative in France is focused on advanced materials and informatics. In Sweden, the ALMI network provides counsellors to support the R+D efforts of SMEs by improving the standards of technology and innovation resources and has recently taken the initiative to improve coordination and collaboration between the different bodies working with technology diffusion. In Sweden also, the Innovation Centre has been set up to finance early stage innovation and other related measures, including a network of innovation advisers. Portugal also supports demonstration actions on the use of innovative technologies in certain sectors. Personnel exchanges between research bodies and SMEs in Denmark are promoted under the Icebreaker Programme which gives grants to small companies which employ an academic to bring new knowledge to the company through participation in a development project. In the UK, the Teaching Companies Scheme enables highly qualified graduates to work part-time in SMEs for two years with joint academic/industry supervisors. Technology transfer initiatives in Spain are carried out via the Interministerial Commission on Science and Technology which runs a programme to transfer the results of research to industry. In Finland, TEKES promotes SME involvement in technology transfer activities with national, regional and international programmes. - In Belgium, there is a programme to improve SME access to patents and to commercialise prototypes and new products. 12 E. I M P R O V I NG S ME A C C E SS TO F I N A N CE E. l. Financing Business Creation New business creation is encouraged by state support, either tax-based or subsidy- based. In addition, some countries have measures to encourage business creation by the unemployed. Tax-based state support takes the form in Ireland of refunds of tax paid by an entrepreneur in previous employment to be invested in the business. Subsidies are provided for start-ups in Germany, Spain, Portugal, Greece and Ireland. Loans schemes are provided in Ireland, Sweden, Spain and Greece. Loan guarantees are provided in the UK and France. In addition, in the UK, the Growth Start Programme focuses support on fast growth start-ups. Sweden and Ireland provide seed capital for start-ups. The Netherlands is considering a scheme to improve access of start-up entrepreneurs to "business angels". For the unemployed, in Germany, unemployment benefit may be continued at a daily rate for six months while the unemployed person seeks to become established. The ACCRE Initiative in France is also focused on support for the unemployed. In Sweden, an unemployed person with a business plan can receive 50% of unemployment benefit for a certain period. Luxembourg provides special aid to enterprises started by people who are difficult to employ. E. 2. Financing Business Development Facilitating loan finance and private investment in SMEs are the priorities in Member States' policies. In Germany, state investment funds have been refocused on SMEs. In France, SOFARIS guarantees loans to SMEs during their growth phase. In Sweden, subsidised loans are available for SME development projects, while in Belgium, regional investment companies underwrite SME loans. Private investments in SMEs in the UK are being facilitated by the launch of the Alternative Investment Market for unquoted companies with growth potential, by providing additional tax relief for Venture Capital Trusts and by the Enterprise Investment Scheme which helps unquoted companies raise equity capital. The "Business Angel" system has been introduced, according to which profits from investments in shares of unquoted companies may be rolled over if reinvested in such shares. Italy has recently adopted a new law which provides that operating income which has been reinvested cannot be taxed. This exemption extends beyond the corporation tax system and includes other enterprises (such as partnerships) which are subject to income tax. 13 In France, a scheme has been introduced under which any investment in an enterprise less than three years old, or in a unquoted SME with a turnover below FF 140 million, attracts a tax credit equal to 25 % of the, investment. In Ireland a measure has been introduced whereby new entrepreneurs and other investors in a new business can reclaim income tax paid in their previous three years' employment (up to certain limits). The Belgian and German governments have likewise shown interest in measures designed to terminate the fiscal discrimination of equity. Schemes are also under discussion in the UK and Italy designed to achieve neutral tax treatment of debt and equity financing for enterprises. The key feature of the proposals is that enterprises would be given an "Allowance for Corporate Equity" (ACE), a relief against corporation tax based on the value of the shareholders' funds in the business. In France, approved development companies receive 50% state guarantees of their investments in growth companies, while Sweden offers tax breaks for investment in unquoted companies. In Luxembourg, tax relief is provided on profits reinvested in the business. In Denmark, state support is provided to venture capitalists specialising in SMEs. E. 3. Financing Business Transfer Favourable tax treatment of inheritance and subsidised loans are the main measures used to facilitate the financing of business transfer. Transfers and bequests of unincorporated businesses and share holdings in SMEs are eligible for full exemption from inheritance tax in the UK. Subsidised loans to facilitate the transfer of businesses are provided in Belgium and Spain. In France, SOFARIS provides loan guarantees to facilitate the transfer of businesses. The proposed law for 1996 provides a 50% reduction of gift tax for the transfer of a business, as long as the beneficiaries continue the business for the next five years. In Ireland, a new law allows companies to purchase their own shares out of undistributed profits for the "benefit of the trade" and 50% of all business assets transferred are now exempted from inheritance and gift taxes. In Denmark, there is a substantial reduction in death duty in the case of business transfer and succession taxes are deferred and reduced. In Finland, agricultural entrepreneurs can obtain special financing arrangements for the transfer of assets between generations. In Germany, the transfer of business is facilitated by the extension of the time frame from 7 to 10 years during which the inheritance and the gift tax can be paid, free of interest. Moreover, businesses benefit from a 25 % reduction of the unit value of the working capital before succession tax is levied. This applies also to shares of finance companies. In the Netherlands, the interest-free period for payment of inheritance tax will be extended from 5 to 10 years. 14 A' F. HELPING SMEs TO INTEGRATE BETTER INTO THE INTERNAL MARKET AND TO INTERNATIONALISE It should be noted that a number of Member States cited initiatives aimed at both integration into the Internal Market and at internationalisation. Where these initiatives are of a general nature, they are described under the internationalisation heading. F. l. Integration of SMEs into the Internal Market Programmes to promote Internal Market penetration, advisory services and studies are the main measures employed by Member States in relation to the Internal Market. In the UK, "Opportunity Europe" Programmes are designed to encourage SMEs to broaden their market base in Europe. In France the "Partenaires pour l'Europe" initiative is focused on standards and quality in this regard. Greece offers support for Internal Market cooperation projects while Portugal cofinances European tendering efforts. The UK operates a Single Market Compliance Unit which provides an advisory service to firms experiencing obstacles to Internal Market trading. The UK also carries out detailed sectoral studies of internal market trade opportunities. F. 2. SMEs' Exports to Third Countries Financial support, advisory services, better coordination and delivery of export promotion services and export risk reduction measures are the main features of Member States' recent policies. In Spain, financial support takes the form of investments in companies which are establishing themselves abroad. Finland provides special support for internationalisation of technology-based SMEs. Denmark provides finance for cooperation with East European enterprises. In the UK, advisory services help SMEs to identify export needs and potential and provide support to help ensure successful implementation of export strategies. In Germany, advice is given on development of business cooperation programmes, such as with Asia and Latin America. In Greece, development of export consortiums is facilitated. 15 h"i In the Netherlands, the emphasis is on greater coordination of the services of government, the chambers of commerce, the banks and the SME representative organisations to improve the distribution of information on internationalisation. In Belgium, greater coordination of the federal bodies for export promotion is being undertaken, including greater collaboration of the Foreign Trade Office with other relevant bodies and better utilisation of foreign credit insurance facilities. German embassies now have specific responsibility for assisting SMEs entering foreign markets. To seek to reduce the risks associated with exporting, in Denmark 50% subsidies are available towards establishment costs of doing business in Eastern Europe. In Finland, subsidies have been introduced to promote export diversification. In the UK, experienced exporters are being recruited as Export Development Counsellors to SMEs. In Ireland, formal links are being established with key European market regions. 16 G. OTHER MEASURES G. I. Promoting SME Access to the Information Society Programmes to stimulate use of information technology and access to the INTERNET and other infrastructure are the primary means of promoting SME access to the information society. In Finland, an SME-tele-programme has been started to encourage SMEs to use information technology for networking to present co-operation projects in computer hardware, software and services. In the UK, training courses are run jointly with IT suppliers to train SMEs in the use and benefits of information and IT. In Greece-,* SMEs are supported in the application of information and networks. In the UK, the Advanced IT Service assists clients to access information via the INTERNET. In the Netherlands, and Austria, the Chambers of Commerce are being given the possibility to provide information via the INTERNET. In Ireland, leading-edge telecommunications infrastructure is being provided in less developed areas to. facilitate establishment of remote information industry SMEs. G. 2. Facilitating SME Access to Public Markets Provision of databases and familiarisation campaigns are the main means used to facilitate access of SMEs to public markets. In Austria and Finland (on a regional basis), the TED database is used. In France, calls for tenders are available via Minitel. In the UK, public and specialist databases, video conferencing and national supplier databases are available through regional supply offices. In the UK also, familiarisation is promoted through advice given to public sector purchasing officers on the benefits of using small business suppliers. In Ireland the focus is on information directories, seminars and "meet the buyer" exhibitions. In Ireland also, specialised consultancy support is being provided to improve SMEs' access to public procurement and preparation of public tenders, and it is planned to establish a national procurement and sub-supply database and to develop an advisory service for SMEs and procurement officials. In Belgium, legislation has been amended to guarantee cooperatives better access to public markets. 17 $• G. 3. Development of an Enterprise Culture Promotion of entrepreneurship is the primary means used to develop the enterprise culture. Promotional programmes are run by the Chambers of Commerce in Germany, Austria and Luxembourg. In Finland, the "Decade of the Entrepreneur" project aims to create a favourable attitude to entrepreneurship and self-employment as a voluntary method of creating employment. In Ireland, an Enterprise Preparation Programme has been introduced for senior business managers considering launching their own venture and Enterprise Boards have been established at local level to support start-up of micro- enterprises. 18 SI "MAXIMISING EUROPEAN SMEs' FULL POTENTIAL -' FOR EMPLOYMENT, GROWTH AND COMPETITIVENESS" PROPOSAL FOR A COUNCIL DECISION on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997 - 2000) (presented by the Commission) Ç 1 PROPOSAL FOR A COUNCIL DECISION on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in tlie European Union (1997-2000) (. /. /EC) (Text with EEA relevance) THE COUNCIL OF TOE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 130 thereof, Having regard to the proposal from the Commission,1 Having regard to the opinion of the European Parliament,2 Having regard to the opinion of the Economic and Social Committee,3 Having regard to the opinion of the Committee of the Regions,4 1. Whereas on 14 June 1993 the Council adopted Decision 93/379/EEC on a Multiannual Programme of Community measures to intensify the priority areas and to ensure the continuity and consolidation of policy for enterprises, in particular small and medium-sized enterprises, in the Community;5 2. Whereas in line with its White Paper on growth, competitiveness and employment, the Commission has adopted on 3 June 1994 a Communication on the implementation of an Integrated Programme in favour of SMEs and the Craft Sector;6 3. Whereas on 29 November 1995 the Commission adopted a Report on "SMEs: a dynamic source of employment, growth and competitiveness in the European Union" in which the Commission called for a more ambitious Enterprise Policy to unlock the full potential of European enterprises for employment, growth and competitiveness; 1 OJ n° C of , p. 2 OJ n° C of , p. 3 OJ n° C of , p. 4 OJ n° C of , p. 5 QJn°L 161, 2. 7. 1993, p. 68. 6 7 COM (94)207 final of 3. 6. 1994. CSE(95) 2087. 4. Whereas on 16 December 1995 the Madrid European Council invited the Commission to put the objectives of the Madrid SME Report into practice as swiftly as possible; 5. Whereas the Integrated Programme in favour of SMEs8 aims at presenting the overall Community Enterprise Policy; 6. Whereas this Decision is limited to providing the legal and budgetary basis for specific complementary measures which are not part of other Community policies; 7. Whereas the Commission submitted to the European Parliament, the Council and the Economic and Social Committee and the Committee of the Regions an external evaluation report on the implementation of the current multiannual programme pursuant to Article 5 of Decision 93/379/EEC; 8. Whereas the Commission has submitted to the Council in the past 3 years a series of communications on measures of relevance to this Decision (e. g. Report on the future operation of the information and co-operation networks9 and Report on the Craft industry and small enterprises10); 9. Whereas this Decision is especially directed at SMEs11, regardless of sector, legal structure and geographical location, and provides for specific actions in favour of the Craft Sector and enterprises in commerce and distribution ; 10. Whereas the measures set out in this Decision aim at: • • encouraging an environment favourable for the development of SMEs throughout the EU; improving the competitiveness of European SMEs and encouraging their Europeanisation and internationalisation. 11. Whereas the actions in the area of transnational technological development will be jointly managed with the Community's R&TD Programme, respecting the relevant decision-making procedures; 12. Whereas the Second Programme expires on 31 December 1996, while the reasons for its adoption continue to prevail, at least for the foreseeable future; 13. Whereas it is therefore necessary to adopt a Third Programme for a four-year period and to endow it with sufficient resources to attain its objectives; 14. Whereas account has been taken of the extemal evaluation report on the implementation of the current multiannual programme; 15. Whereas the Treaty does not provide, for the adoption of this Decision, powers other than those of Article 130. COM (94)207 final of 3. 6. 1994. 9 COM (95)435 final of 5. 12. 95. 10 COM(95)502 final of 26. 10. 1995. 1 ' As defined in the Commission Recommendation concerning the definition of SMEs (doc. C 96/261 ). HAS DECIDED AS FOLLOWS: Article J A programme for a Community Policy for Small and Medium-sized Enterprises (SMEs), is hereby adopted for a period of four years from 1 January 1997. Article 2 The programme referred to in Article 1, incorporating the measures specified in Annex I hereto, shall have the following objectives: 1. Simplify and improve the administrative and regulatory business environment • • • •. Ensure consideration of the interests of SMEs in the various Community initiatives and policies Simplify and improve Community legislation Increase transparency and the spread of best practices on simplifying and improving the administrative and regulatory environment Improve the framework for transnational operations of SMEs 2. Improve the financial environment for enterprises • • Improve access to loan financing Intensify efforts to reduce late payment problems • Facilitate the development of specific financial instruments • Stimulate the development of capital markets for fast-growing SMEs 3. Help SMEs to Européanise and internationalise their strategies, in particular through better information services • Develop information services • Improve the promotion of SME Policy actions • Promote co-operation through business search networks • Promote direct contacts through partnership programmes • Develop subcontracting partnerships • Promote access to new markets and internationalisation of SMEs 4. Enhance SME competitiveness and improve access to research, innovation and training • Increase the innovative potential of SMEs • Stimulate managerial training • Adaptation to environmental requirements Ç*> 5. Promote entrepreneurship and support special target groups • Business culture and entrepreneurship • Craft and small enterprises • Enterprises in commerce and distributive trades • Women and young entrepreneurs; enterprises owned by minorities Policy development and improvement of knowledge about SMEs. Article 3 1. In order to achieve the objectives laid down in Article 1 and 2, the Commission shall take the necessary measures in so far as they cannot be better achieved by the Member States, taking account of the findings of any specific evaluation reports. 2. The procedure laid down in Article 4 shall be followed for adopting measures relating to: • the adoption, experimental implementation or extension of the necessary projects devised for the application of this Decision, • the content and timetable of, and financial assistance for, measures and calls for proposals, • periodic evaluation of the results of each project in accordance with the timetables laid down in specific programmes. 3. The Committee referred to in Article 4 may examine any other matters concerning the programme. Article 4 1. The Commission shall be assisted by a committee of an advisory nature composed of the representatives of the Member States and chaired by a representative of the Commission. 2. The representative of the Commission shall submit to the committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote. 3. The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes. 4. The Commission shall take the utmost account of the opinion delivered by the committee. It shall inform the œmmittee of the manner in which its opinion has been taken into account. <r* Article 5 1. The Commission shall submit to the Committee referred to in Article 4 annual reports on the implementation of this Decision. 2. The Commission shall submit to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions a regular report on the development of the inclusion of the SME dimension in all Community policies and programmes. Article 6 The Commission shall submit to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, no later than the end of-March 2000, an external evaluation report on the implementation of this Decision, including a cost-effectiveness evaluation, and any proposals which it deems necessary in the light of the evaluations effected. Article 7 1. This programme shall be opened up to the participation of the associated countries of Central and Eastern Europe (ÇCEE) in accordance with the conditions laid down in the additional protocols to the association agreements on participation in Community programmes to be concluded with those countries. 2. This programme shall be opened up to the participation of Cyprus and Malta on the basis of additional appropriations in accordance with the same rules as those applied to the EFTA countries, in accordance with procedures to be agreed on with those countries. Article 8 1. This Decision shall enter into force on 1 January 1997 and shall cover the period up to 31 December 2000. 2. The budgetary authority shall détermine the appropriations available for each financial year in accordance with the principles of good management referred to in Article 2 of the Financial Regulation applicable to the general budget of the European Communities. Upon entry into force this Decision shall replace Council Decision 93/379/EEC. Article 9 Done at , For the Council The President ç? ANNEX I MEASURES REFERRED TO IN ARTICLE 2 A SlMPUFY AND IMPROVE THE ADMI1MSTRATTVE AND RECIJIATORY BUSINESS EVfyiROVMEXT A. l. Ensure consideration of the interests of SMEs in the various Community initiatives and policies Integration of the SME dimension into the conception of Community policies. Promotion of the co-ordination of Community actions in favour of SMEs which enable SMEs to participate fully in all Community actions and programmes, including the Structural Funds, R&TD, international co-operation and environmental programmes. A. 2. Simplify and improve Community legislation Actions to avoid and reduce unnecessary administrative burdens and compliance costs in Community legislation which hinder the creation and development of enterprises, in particular SMEs, through the implementation of a pragmatic methodology for the evaluation of the impact of legislative proposals (including the use of an unproved Business Impact Assessment System and cost/benefit analyses wherever appropriate). A. 3. Increase transparency and the spread of best practices on simplifying and improving the administrative and regulatory environment Actions to promote the spread of best practices in particular in the field of administrative simplification; promotion of actions on transfer of businesses and retention of title clauses. A. 4. Improve the framework for transnational operations of SMEs Promotion of the development of alternative dispute resolution for settling transnational disputes between enterprises; Stimulation of appropriate legal structures for transnational operations of SMEs, in particular the use of the European Economic Interest Grouping (REGIE project). B. IMPROVE THE nNANOAi, FT^VTRONMENT FOR ENTERPRISES B. l. Improve access to loan financing Promotion of innovative practices in the field of better access of SMEs to loan financing (including mutual guarantee schemes, Round Table of Bankers and SMEs) B. 2. Intensify efforts to reduce late payment problems Acceleration of follow-up to Recommendation on late payment and foresee further proposals; support for actions to improve the financial management capabilities of SMEs, in particular in the field of information, training and the promotion of integrated cash flow management software. B. 3. Facilitate the development of specific financial instruments Promotion of the development of specific financial instruments of interest to SMEs, in particular factoring and credit insurance. B. 4. Stimulate the development of European capital markets for fast-growing SMEs (including EASDAQ). 0 G y HFJPSVESTOEURCPE\NKEAlVDINmi^TlT^^ INFORMATION SERVICES Cl. Development of information services (Euro-Info-Centres as "Fust Stop Shops") Better access to Community information for enterprises : development of the Euro-Info-Centre network as a "First-stop-shop", directing each request to the relevant service provider; improvement of tlie composition and quality of services; enlarge and reinforce the information task of the EICs including proactive information activities, in particular in the areas of accessing Community programmes, the Internal Market, internationalisation, environmental issues and the introduction of the Single Currency; facilitating access of SMEs to market informatiorL C. 2. Improve the promotion of SME Policy actions Promotion campaigns in co-ordination with EIC network; organisation of European Business Weeks. C. 3. Promote co-operation through business search networks; Qualitative improvement and definition of a quality standard for the confidential business-partner- search network (BC-Net) and non-confidential partner-search network (BRE). C4. Promote direct contacts through partnership programmes; Continued development of instruments permitting direct contact between entrepreneurs (Europartenariat and Interprise programmes) C. 5. Develop subcontracting partnerships; Further develop actions aimed at promoting transnational sub-contracting. C. 6. Promote access to new markets and internationalisation of SMEs; Test innovative approaches in particular by facilitating SMEs' access to new markets and encourage their internationalisation. D. ENHANŒSMECP\reiITI\'EN^ D. J. Increase the innovative potential of SMEs Identify best practices and test concrete approaches through pilot actions, in particular in the fields of developing firms with growth potential and New Technology Based Firms (NTBFs). D. 2. Stimulate managerial training ' Helping to identify and test positive approaches in the field of management training (mainly through pilot projects). D. 3. Adaptation to environmental ivquiivments E PROMOTION OF ENTREPRENEURSHIP AND SPECIAL TARGET GROUPS E1. Business cultwe and entivpœneurship Stimulate the exchange of best practice and support the identification of particularly dynamic entrepreneurs. E2. Craft and small enleipiises Launching of pilot-projects, enabling these enterprises in particular to adapt to structural changes, to better integrate in the Single Market and to benefit from the opportunities offered by this market, including in the field of standardisation, certification, environmental and quality management. ^ E3. Enterprises in commeive and distributive trades Facilitating the adjustment process of commercial enterprises to the Single Market and to structural changes, in particular through new technologies (COMMERCE 2000), promotion of co-operation between SMEs, dissemination of results of pilot programmes. Follow-up to Green Paper on Commerce and Distribution E4. Women and young entrepreneurs; enterprises owned by minorities Identification of the specific problems faced by women and young entrepreneurs, as well as small enterprises owned by minorities and support for innovative solutions. POLICY DENHELOPMENT AND IMPROVEMENT OF KNOW! EDGE ABOUT SMES Improved statistics on SMEs without increasing the burden on enterprises; European Observatory for SMEs; studies; database concerning SME Policy measures; evaluation of existingpolicy actions and development of proposals for new Community measures in areas affecting enterprises. ù Proposal for a Council Decision (. /. /EC) on a Third Multiannual Programme for Enterprises, in particular SMEs, in the European Union (1997 - 2000) 1. TITLE OF OPERATION: Maximising European enterprises' full potential for employment, growth and competitiveness 2. BUDGET HEADING INVOLVED: B5-320 3. LEGAL BASIS Article 130 of the Treaty of the European Union. Commission Report to the Madrid European Council and conclusions of the European Council of 15 and 16 December 1995. Follow-up of the "Wliite Paper on growth, competitiveness and employment" as presented by the Commission to the European Council of the 10 and 11 December 1993. 4. D E S C R I P T I ON OF O P E R A T I ON 4. 1 GENERAL OBJECTIVE: The present programme aims at: 1. Simplify and improve the administrative and regulatory environment of SMEs 2. 3. Ensure better information services and help SMEs internationalise, in particular, through their Improve the financial environment of SMEs Europeanisation 4. Promote SME competitiveness, access to research, innovation and training 5. Promote entrepreneurial culture and target groups * Development of SME policy and knowledge of enterprises 4. 2 PERIOD CO VERED 4\ears (1997 -2000) 5. C L A S S I F I C A T I ON OF E X P E N D I T U R E / R E V E N UE 5. 1 NON-COMPULSOR Y EXPENDITURE 5. 2 DIFFERENTIA TED APPROPRIA TIONS 5. 3 TYPE OF REVENUE INVOL VED: Possible revenues from contribution of third parties registered under article 609 on the state of revenues result in the opening of additional credits to be indicated under the present article according to the provisions of the Financial Regulation. 6. TYPE OF EXPENDITURE OR REVENUE Subsidies for co-financing with other sources of the public and/or private sector (over 60% of total credit requested). Studies, training sessions, running costs of instruments, information. Partial reimbursement for certain actions: for example, for the BC-NET: introduction of user cost applicable to advisors of the network as of 1 January 1993, seed capital: reimbursement of loans on management costs in case of success after 10 years. 7. F I N A N C I AL I M P A CT 7. 1 METHOD OF CALCULA TING TOTAL COST OF OPERA TION (RELA TION BETWEEN INDIVIDUAL AND TOTAL COSTS) The total amount required for the action depends on the experience of former exercises. The method of calculation is based on a detailed estimation of each specific action, calculated according to their specific character, intensity, frequency and even range (see point 9. 2. ). CI 7. 2 ITEMISED BREAKDOWN OF COST ITEMISED BREAKDOWN 1997 199H 1999 2000 TOTAL 1. Simplify and improve the administrative and regulatory environment of SMEs i Unique budget line, indicative amounts administrative Simplification of the and regulatory environment of SMEs Consultation and dialogue with representatives organisations 400 000 450 000 450 000 450 000 1 750 000 I 000 000 1 000 000 1 000 000 1 000 000 4 000 000 2. Improve the financial environment of SMEs 400 000 550 000 650 000 650 000 2 250 000 3. Ensure better information services and help SMEs internationalise, in particular through their Europcanisation (EIC), new policy Access to information actions in the field of market information Promotion of enterprise activities Inter-enterprise BC-NET/BRE, INTERPRISE- Subcontracting access to new markets (Internationalisation) co-operation Europartenariat, and 11 050 000 12 850 000 13 900 000 15 400 000 53 200 000 3 000 000 4 000 ono 4 500 000 4 550 000 16 050 000 7 300 000 8 200 000 9 624 500 9 065 500 34 190 000 4. Promote SME competitiveness, access to research, innovation and training innovation, Participation of SMEs to R&D, the Information Promotion of the (raining of entrepreneurs and of entrepreneurial culture Society I 500 000 4 750 000 3 000 000 3 000 000 12 250 000 1 500 000 1 500 000 1 500 000 1 500 000 6 000 000 enterprises 5. Promote entrepreneurial culture and target groups Craft and small Enterprises distribution Women and young 1 750 000 1 750 000 in commerce and entrepreneurs 200 00-0 3 000 000 3 000 000 500 000 1 750 000 * Development of SME policy and knowledge of enterprises 3 831 000 Development and evaluation of the policy Enterprise Other actions (subventions and publications) Knowledge of enterprises, particular SMEs (including co operatives) 1 100 000 1 500 000 1 600 000 I 300 000 in 3 500 000 3 500 000 4 000 000 4 000 000 12 250 000 12 250 000 880 000 880 000 2 460 000 3 255 000 1 164 000 10 000 000 2 275 000 2 275 000 7 450 000 1 600 000 1 700 000 5 900 000 T O T AL 1997-2000 34 000 000 46 731 000 49 634 500 49 634 500 ISO 000 OOOQ (*) Conditional Perspectives to a complement of 40 MECU (1998-1999) resulting from a possible revision of the Financial 3 - <P' 7. 3 SCHEDULE OF COMMITMENT AND PA YMENT APPROPRIA TfONS 1997 34 000 1998 46 731 1999 49 634,5 2000 49 634,5 CE. C. P. 1997 1998 1999 2000 ex. suivants TOTAL Including a complement of 40 MECU in the event of a revision of the Financial Perspectives - - 24 817,5 14 890 9 927 49 634,5 - - - 24817,5 24 817 49 634,5 17 000 10 200 6 800 p m p m 34 000 - 23 366 14 019 9 346 p m 46 731 17 500 33 566 45 636,5 49 053,5 34 744 180 000 (*) EC in M E CU TOTAL 180 000 1. -4 FINANCIAL PERSPECTIVES The financing of this programme under the Community budget having to be made, according to point 18 of the Interinstitutional Agreement of 29 October 1993, in line with the financial perspectives of 1998 and 1999, the granting of a complementary financing is conditional to the authorisation by the budgetary authority of an increase of the maximum amount of the relevant item for motives related to the SME programme. 8. FRAUD PREVENTION MEASURES The checking before payment of subsidies or of the delivery of services and studies ordered and carried out by Commission services, taking into account the contractual obligations and the principles of economy and of sound financial and global management. Anti-fraud mechanisms (controls, deliver}' of reports, etc. ) are mentioned in all the agreements and contracts concluded between the Commission and the beneficiaries of the payments. 9. E L E M E N TS OF C O S T - E F F E C T I V E N E SS A N A L Y S IS 9. 1 SPECIFIC AND QUANTIFIED OBJECTIVES, TA RGET POPULA TION: SPECIFIC OBJECTIVES: A) Simplify and improve the administrative and regulatory environment of SMEs A. l. Ensure consideration of the interests of SMEs in the various Community initiatives and policies SME dimension to be integrated into the conception and implementation of Community actions and policies. Greater co-ordination of Community actions and policies in faveur of SMEs to be promoted in order to enable SMEs to participate fully in all Community actions and programmes, including the Structural Funds, R&TD programmes. OS A. 2. Simplify and improve the administrative and regulatory environment of enterprises Actions to avoid and reduce administrative burdens and compliance costs in Community legislation which hinder the creation and development of enterprises, in particular SMEs, through implementation of a pragmatic methodology for the evaluation of the impact of legislative proposals (in particular, cost/benefit analysis wherever appropriate). Greater transparency and dissemination of information on administrative and regulatory simplification initiatives. A. 3. Increase transparency and the spread of best practices on simplifying and improving the administrative and regulatory environment A. 4. Improve the regulatory framework for transnational operations of SMEs B. Improve the financial environment for enterprises Promote innovative practices in the field of better access of SMEs to financing. B. 1. Improve access to loan financing B. 2. Intensify efforts to reduce late payment problems B. 3. Facilitate the development of specific financial instruments (eg. mutual. guarantee, facturing, credit insurance) B. 4. Improve the access of SMEs to capital markets C. Ensure better information services and help SMEs internationalise, in particulat, through their Europeanisation C. 1. Develop information services (EIC as a "first stop shops" Better access to Community information for enterprises: Development of EICs as "first stop shops" in order to direct each request to the relevant service provider, improvement of the composition and quality of services provided by EICs, reorientation of the information task of the EICs including proactive provision of information; better access of SMEs to information on international or regional markets. C. 2. Improve the promotion of SME Policy actions Information campaigns in co-ordination with the EIC network; organisation of European Business Weeks. * C. 3. Partner search networks (BC-NET and BRE) Qualitative improvement and definition of a quality standard for the confidential partner- search network (BC-NET) and the non-confidential partner-search network (BRE). C. 4. Partnership programmes (Europartenariat and INTERPRISE) Development of instruments allowing a direct contact between entrepreneurs (Europartenariat and INTERPRISE programmes) and aimed at promoting cross-border co-operation. C. 5. Subcontracting C. 6. Access to new markets and internationalisation of SMEs Development of pilot actions to facilitate SMEs' access to information on new markets and to encourage their internationalisation. 6 5" D. Enhance SME competitiveness - access to research, innovation and training D. l. Increase the innovative potential of SMEs and facilitate their access to the Information Society Identify best practice and test concrete approaches through pilot projects,. in particular, in the areas of developing firms with growth potential and supporting New Technology Based Firms (NTBFs). D. 2. Stimulate managerial training D. 3. Adaptation to environmental requirements E. Promote entrepreneurship and support special target groups E. 1. Business culture and entrepreneurship Promote business culture and entrepreneurship. E. 2. Craft and small enterprises Identify the needs of craft and small enterprises and develop projects, on the basis of pilot projects allowing these enterprises to adjust, in particular, to structural changes, to better integrate in the Single Market and to benefit from the opportunities offered by this market, in particular in the field of standardisation, certification and quality management, better access to professional training and management training. E. 3. Enterprises in Commerce and distributive trades Facilitate the adjustment process of commercial enterprises to the Single Market and to structural changes, in particular, new technologies (COMMERCE 2000). Promote co operation between SMEs. Disseminate results of pilot programmes. Follow-up to Green Paper on Commerce and Distribution. E. 4. Women and young entrepreneurs; enterprises owned by minorities Identification of the specific problems faced by women and young entrepreneurs and support for innovative solutions. * SME Policy development and knowldege of enterprises Improvement of statistics on SMEs without burdening businesses; European Observatory for SMEs, studies and seminars on SMEs. Development of statistics, studies and recurrent analysis concerning co-operatives, mutual societies, associations and foundations. TARGET POPULATION In principle, the actions could possibly interest all the SMEs in the European Union (this represents 15 million SMEs, their trade organisations and the wholesale - including intermediaries - retail, catering and accommodation sectors). However, the number of SMEs which benefit from transnational actions will necessary be more reduced according to the typology and the activity of the enterprises and of the nature of the actions developed. For example, among the 15 million SMEs, 1,5 million are most likely to be targeted for an action regarding Community information (compared to the'450 000 enterprises that are currently involved). One million SMEs could be targeted by the partnership actions. Tlie targets of the actions varying according to the nature of these actions. Furthermore, the actions aim at the professional organisations, the Chambers of Commerce and the Trades. -6 ^ 9. 2 GROUNDS FOR THE OPERA TION 9. 2. 1. Introduction It is largely recognised that enterprises, and in particular, small and medium sized enterprises (SMEs) represent a key element in the efforts towards job creation and growth. Indeed, the job creation rate of SMEs is higher than that of the big enterprises. It is, however, necessary to recognise the fact that SMEs are inherently more vulnerable particularly in the first years following their creation. This weakness stems, in particular, from the following five factors: • an increasingly complex legal, fiscal and administrative environment; • difficulty in participating in R&D programmes and in exploiting the results; • structural weakness of SMEs with regard to their management abilities as well as to the inappropriateness of training programmes; • difficulty in obtaining finance at a reasonable cost; • difficulty in accessing markets for products and services. It is necessary to underline - with regard to the subsidiarity approach - that the actions developed at Community level are taken in a context which ensures a significant added- value, resulting in particular from the dimension of the networks and of the actions developed, the objectivity and the neutrality of the decisions taken at central level as well as of the attention paid to regional equilibrium. In particular, if most actions in favour of enterprises are developed by the Member States, it is up to the Community to take measures having a transnational nature, to implement networks that have a Community dimension. To confine such activities to the national level would not only be impossible and less efficient, but it would also distort competition to the extent that the level of support of each Member State would be extremely diverse. The network methodology that is proposed for the main actions is based on an extended partnership with the national and local players (chambers of commerce and industry, development agencies, national authorities, etc. ). It is preferred to the Union itself taking charge of the EIC network which would most probably affect the Community budget more, particularly in terms of human and logistical resources, even with fewer centres, and would considerably deprive the European Institutions of their privileged relations with their partners. 7- ^ 9. 2. 2. Ch nice of ^ va y s an d means (*) The estimations include the complementary budget resulting from a possible revision of the financial perspectives for the SME programme 1. Simplify and improve the administrative and regulatory business environment:. 5,75 MECU a) Administrative and regulatory environment of enterprises: 1,75 MECU Simplify and improve the regulatory environment of SMEs Reports on administrative simplification Recommendations on administrative simplification Transfer of businesses Retention of title Settlement procedures Appropriate legal structures • REGIE data base • awareness actions TOTAL 1997 50 000 1998 100 000 1999 100 000 2000 100 000 - - 100 000 100 000 50 000 50 000 50 000 - - 100 000 100 000 50 000 50 000 50 000 - - 100 000 100 000 50 000 50 000 50 000 - : 100 000 100 000 50 000 50 000 50 000 400 000 450 000 450 000 450 000 b) Consultation and dialogue: 4. 0 MECU Consultation and dialogue with representatives organisations (1) 1997 1,0 1998 1,0 1999 1,0 '2000 1,0 TOTAL 4,0 (1) This consultation and dialogue have become of first importance at the national as well as European level. The strengthening of SME representative organisations should allow to better identify priority actions for enterprises and evaluate the impact of the different legislations. 2. Improve the financial environment for enterprises: 2,25 MECU SMEs - banks Mutual guarantees Late payment Factoring and credit insurance TOTAL 1997 100 000 100 000 100 000 100 000 1998 150 000 150 000 150 000 100 000 1999 150 000 250 000 150 000 100 000 2000 150 000 250 000 150 000 100 000 400 000 550 000 650 000 650 0000 0 Ensure better information services and help SMEs internationalise, in particular, through their Europeanisation: 103,44 MECU a) Development of information services (EICs as First Stop Shops): 53,2 MECU Development of EICs as First Stop Shops in order to direct each request to the relevant service provider, improvement of the composition and quality of services provided by EICs, reorientation of the information task of the EICs including proactive provision of information; better access of SMEs to information on international and regional markets. EIC network estimated budget for 1997, Direct contributions Information/ documentation Network (1) Quality bonus (la) Documentation 1998, 1999 and 2000 1998 5 800 000 1 300 000 750 000 1997 5 800 000 800 000 700 000 Information products (2) Products of the network Consultants 400 000 150 000 2 000 000 475 000 165 000 2 100 000 30 000 110 000 100 000 35 000 120 000 110 000 1999 5 800 000 1 800 000 800 000 500 000 185 000 2 100 000 40 000 135 000 120 000 2000 5 800 000 2 300 000 850 000 525 000 200 000 2 100 000 44 000 148 000 131 000 General training Decentralised training Decentralised training databases Brussels Group Annual Conference Monitoring Consultants: management Consultants: technical issues Training Management/ co-ordination Promotion Audit T O T AL New actions market information G E N E R AL T O T AL 860 000 875 000 875 000 875 000 • 100 000 110 000 300 000 120 000 350 000 135 000 350 000 11050 000 12 140 000 710 000 12 825 000 1 075 000 13 458 000 1 942 000 11050 000 12 850 000 13 900 00 15 400 000 Note: (1) (la) In 1997, 1998 and 1999, an average increase of 10% per year and per item - except for the contribution to the network of 25 000 ECUS per EIC and for the expenses of the consultants - is expected to improve the quality of the Central Unit's contribution. 232 EIC x 25 000 ECUS: this includes documentation, databases, travel expenses per diem (except for meetings). There will be a bonus of 10 000 ECUS in 1997 for a third of the network (80 EICs), for the EICs which have increased their efforts to improve their quality. In 1998, 1999 and 2000, 50 EICs more will receive this bonus. INFORMATION PRODUCTS (2) Supposing a greater demand for DG XXIII support regarding products developed by the network - in particular increased translation and printing costs (it is not reasonable to let an EIC take on all the costs for a product that can benefit the whole network). -9 b) Promotion of SMEs Policy actions: 16,05 MECU Better knowledge of Community instruments and programmes for SMEs is necessary to allow a greater involvement of SMEs in Community actions. Promotion of SME Policy actions 1997 3,0 1998 4,0 1999 4,5 2000 4,55 T O T AL 16,05 The importance of repeated actions in the field of communication must be associated to sufficiently large campaigns so as to reach appropriate results. Future actions will aim to make SMEs aware of specific issues: innovating SMEs, intra-Community trade,. Two European Business Weeks will also be organised with all the networks and European, national, regional and local actors (estimated cost: 1,2 MECUs). The estimated requirements of the other promotion actions, in particular the enterprise policy presentation stands, are included in the above-mentioned financial envelopes. c) Partner-search networks (BC-NET and BRE) - Partnership programmes (Europartenariat and INTERPRISE) - Subcontracting: 34,19 MECU BC-NET/BRE Networks Europartenariat INTERPRISE Internationalisation Pilot actions SUBCONTRACTING TOTAL 1997 1 2,1 2,1 0,3 1,8 7,3 1998 1 2 2,5 0,7 2 8,2 1999 1 2 2,5 1,5 2000 1 2,3 2„5 1,5 T O T AL 4 8,4 9,6 4,0 2,6245 9,6245 1,7655 9,0655 8,19 34,19 (1) BC-NET/BRE Networks: Maintenance over the whole of the period of costs related to the management, co-ordination and technical and informatic instrumentation of the networks. Specific objective, target population and performance indicators: as a highly professional network, the BC-NET will aim at high quality offers of co-operation. It should provide an average of 2 000 contacts a year, that is 8 000 for the whole penod. The number of declared final agreements should be about 1 000. It is necessary to integrate the indirect effects of the network and the elements of confidentiality in the evaluation of factors having a direct influence on the known results. The two networks should increase the awareness of some 100 000 SMEs towards co-operation. (2) Europartenariat: 33 % co-financing of the cost of organising two Europartenariat events a year, that is 1 MECU per event. Specific objective, target population and performance indicators: an average of 350 host enterprises will be targeted per event, in other words 2 800 enterprises for the host regions over 8 Europartenariats. About 15 to 16 000 enterprises will be visiting the events and about 100 000 enterprises will be directly made aware (European meetings, distribution of catalogues, etc. ). The aim is that the host-enterprises obtain 30% success rate in their co operation agreements. (3) INTERPRISE: Co-financing of up to 50 000 ECU (this corresponds in general to a co- financing of up to 25-30% of general expenses) of 40/50 INTERPRISE events annually. Specific objective, target population and performance indicators: 16 000 enterprises over the period of 4 years (80-100 enterprises on average per event). 2 400 enterprises - representing 1 200 co-operation agreements - should be concluded. Some 50 000 enterprises should be made aware of these co-operation opportunities (promotion, catalogues, etc. ). (4) Internationalisation: different new pilot actions, calculated on the basis of experiences developed by other players, in particular, national ones. For example: • Enterprise Pool: to support SMEs first attempts to target selected foreign markets. Selection of groups including 15 enterprises from at least three Member States which wish to penetrate a specific market. • Compagnonnage: to provide collaborative assistance between SMEs in the same sector across national boundaries to develop projects in the pre-feasibility stage. A public tender procedure will be launched. (5) Subcontracting: the three main lines of action in favour of subcontracting are as follows: • Improvement of market transparency, in particular, through statistical surveys and studies on the economic importance of subcontracting with the Statistical Office of the EC, legal guide: 0,4 - 0,5 MECU per year; • Strengthening of inter-industrial partnership (linking subcontractors, improving co operation between main contractors and subcontractors, in particular, development phase of the SCAN (Subcontracting Assistance Network) project, support to subcontracting development poles, updating of multilingual sectoral nomenclatures, buyers' exhibitions and actions in strategic areas in co-ordination with DG III): 1,0 - 1,4 MECU • Promotion of subcontracting among third countries: 0,4 - 0,5 MECU 11 Enhance SME competitiveness - Access to research, innovation and training: 18,25 MECU a) Increase the innovative potential of SMEs: 12 250 MECU high Support to venture capital funds for the growth of young development enterprises - reimbursable advances (1) EUROMANAGEMENT, and internationalisation of SMEs, audit of 1000 SMEs, assistance to innovation, R&TD, risk capital, prêt bancaire (2) TOTAL growth 1997 0,5 1998 3 1999 3 2000 T O T AL 3. 9,5 1 1,75 2,75 1,5 4,750 3 3 12,250 ( 1 ) Support to venture capital funds for the development of young high growth enterprises - reimbursable advances: Support newly created enterprises from start-up to development phase and encourage the setting-up or enlargement of 20 investment funds. The Commission will provide reimbursable advances to cover up to 50% of management costs during the first four years. 50 ECUS could be invested by private investors for one ECU spent on the Community budget. 10 000 jobs could be created in 5 years, many more after ten years. (2) EUROMANAGEMENT, growth and internationalisation of SMEs: Specific objective, target population and performance indicators: Selecting and training at European level of 50 organisations to apply a new auditing methodology on a sample of 800 SMEs. Based on the current EUROMANAGEMENT R&TD II initiative, participating SMEs could access some 40 MECU of funding from national and European R&TD programmes and an estimated 20 MECU of private finance. 2 MECU will be used to pay 2. 500 ECUS per SME (on a 50% co-financing basis for ten days of consultancy), 200 000 ECUS for the seminars plus 500 000 ECUS for the co ordination. b) Stimulate management training: 6MECU Training of intermediaries for Craft and Small Enterprises on European issues (1) Training for Craft and Small Enterprises on standardisation and certification (2) TOTAL 1997 0,7 1998 0,8 1999 0,9 2000 0,8 T O T AL 3,2 0,8 1,5 0,7 1,5 0,6 1,5 0,7 1,5 2,8 6 ( I ) Training of intermediaries for Craft and Small Enterprises on European issues: Specific objective, target population and performance indicators: improve the expertise of the craft and small enterprises on European issues by the selection of representatives of the European organisation(s) of craft and small enterprises and universities to develop the appropriate training schemes for them (training seminars of 3-5 days in the respective countries and a general seminar in Brussels). DG XXIII will cover 50% of the cost for the training courses and finance the travelling expenses for the participants of the Brussels seminar. (2) Training of craft and small enterprises on standardisation and certification: Specific objective, target population and performance indicators: to improve the competitiveness of small enterprises and craft enterprises through an audit to upgrade their performance. This action will concern 850 enterprises from industry, services and craft sectors. 12 >1 Promote entrepreneurship and target groups: 26,960 MECU a) Craft and small enterprises: 12,250 MECU young between competitions Transnational co-operation craft and small enterprises (2) European prize for craft works for European craftsmen Joint participation in fairs in the EU, in assisted countries and in Mediterranean countries (3) Support to NORMAPME European network of organisations for the development of certification Better know hew and improvement of role of collaborating spouse Quality EUROMANAGEMENT (1) 3rd and 4th European Conferences on craft and small enterprises (4) TOTAL 2000 0,5 T O T AL 1,9 1997 0,4 0,250 0,1 1998 0,5 - 0,1 0,6 1999 0,5 0,250 0,1 0,8 - 0,1 1 0,2 0,05 0,4 0,05 0,4 0,05 0,6 0,05 0,05 0,04 0,03 0. 03 - 0,6 1. 010 - 1. 070 - 0,620 0,8 1,750 3 3,5 4 12,250 0,5 0. 4 2,4 1. 6 0,2 1,5 2,7 1,4 (1) Quality EUROMANAGEMENT: Objective, target population and performance indicators: audit of small craft enterprises with regard to applicable nonns and regulations, help them to overcome the difficulties of levelling their performance. (2) Transnational co-operation between craft and small enterprises Objective, target population and performance indicators: create long-lasting partnerships between small and craft enterprises in the EU, the EEA, the PECO and the Mediterranean countries. Co-operation projects could be developed in different areas such as the search for third markets, co-production. A call for tender will be launched and the Commission will cover up to 50% of the total cost of each project up to a maximum of 20 000 ECUS. 2 000 small and craft enterprises will be concerned by this action over the period. (3) Joint participation in fairs in the European Union, in assisted countries and in the Mediterranean countries: Objective, target population and performance indicators: DG XXIII will launch a call for tender inviting the intermediaries to set up joint representation stands for small and craft enterprises. The projects should gather at least 5 enterprises from 3 Member States of the EU or of the EEA in order to be eligible. Intermediaries will have to provide assistance to exhibitors during the fairs. (4) 3rd and 4th European Conferences on craft and small enterprises: Objective, target population and performance indicators: to renew to dialogue - on specific themes - between the craftsmen and their intermediaries through the organisation in 1997 of 5 preparatory symposiums in close co-operation with the representative bodies of the crafts sector, public and private organisations, governments representatives, entrepreneurs and experts. Nine symposiums will be organised in the year 2000 in preparation to the 4th conference. - 13 7^ b) Enterprises in commerce and distributive trades: 12 250 MECU Facilitate the adjustment process of commercial enterprises to the Single Market and to the structural changes, including new technologies (Commerce 2000) Promote co-operation between SMEs Disseminate results of piiot programmes Follow-up to Green Paper on Commerce and Distribution Statistics (1) Pilot actions (2) Dissemination Panels Studies TOTAL 1997 0,5 0,9 0,1 0,05 0,2 1,750 1998 0,6 1,9 0,150 0,1 0,250 2 1999 0,7 2,2 0,2 0,1 0,3 3,5 2000 0,7 2,6 0,225 0,125 0,350 4 T O T AL 2,5 7,6 0,675 0,375 1,1 12,250 ( 1 ) Improve statistics on enterprises involved in Commerce - action mainly carried out with the Statistical Office of the EC (2. 5 MECU). (2) • Extension of the range of the Commerce 2000 pilot actions for the use of information technology for the co-operation between big enterprises and SMEs. • Commerce and services: development of partnerships for specialised shops, commercial centres and implementation of the single currency. • Support to local commerce c) Actions for women and young entrepreneurs, minorities: 2,460 MECU i) Actions for women entrepreneurs and collaborating spouses: (estimated cost: 730 000 ECUS). support the creation of enterprises by women and help them to increase their qualification:; facilitate the professional recognition of collaborating women spouses. Women entrepreneurs represent 25% of the -16 million SMEs, that is 4 million enterprises. The actions will also aim to support the creation of European networks of women entrepreneurs and collaborating spouses, ii) Actions in favour of young entrepreneurs, particularly in the start-up phase of the enterprise as well as to meet specific needs such as the use by young people of new technologies for the management and the development of SMEs. These actions will be developed in close co-operation with the representative organisations which arc currently being reinforced and represented in every Member State (estimated cost: 730 000 ECUS), iii) Studies or specific support for events gathering women entrepreneurs, young representing minorities and organised on a entrepreneurs or entrepreneurs transnational basis within the EU (estimated cost: 1 MECU). 14 H SME Policy development and knowledge of SMEs: 23,35 MECU Knowledge of SMEs (1) Developing and evaluating SME Policy actions (2) Other actions, subventions publications (3) 1997 1,1 1. 750 1998 1,5 3,831 1999 1,6 3,255 2000 1. 7 1,164 T O T AL 5,9 10,000 1,3 1,6 2,275 2,275 7,45 (1) The statistical efforts made with the Statistical Office of the EC should allow to better appreciate the questions relating to the size of SMEs as well as to their creation, development and economic importance (including statistics on co-operatives). (2) Development of the European Observatory for SMEs: the works of this observatory allow for an academic and independent analysis that is based on a highly qualified network. The financial costs arc estimated at 2 MECU per year based on a new call for tender and on former experience. An external and independent evaluation of the 1997-2000 programme (estimated cost: 0,6 MECU) will be carried out as will surveys relating to the legal programme or the elaboration of a database on the main measures developed under the enterprise policy. (3) These are general subsidies that aim to support a large number of initiatives in favour of SMEs and that possess a transnational character (average annual cost of 1 MECU). Publication of documents relating to enterprise policy must also be considered on this credit line (average cost of 3 MECU over the period). 9. ? E VA L UA TION OF THE OPERA TION Performance indicators selected: Evaluation report to ensure that each action described above corresponds to the objectives set out on the basis of quantitative criteria (for example: number of questions and answers, number of co operation profiles, number of co-operation agreements). Details and frequency of planned evaluations: Article 6 of the draft Council Decision foresees that the Commission presents to the European Parliament and the Economic and Social Committee, at the latest by end March 2000, an external evaluation report on the application of this decision, including the evaluation of the cost/efficiency ratio, as well as proposals that it will deem necessary in view of the evaluation carried out. 15 - > <" 10. A D M I N I S T R A T I VE E X P E N D I T U R ES (SECTION III, PART A OF BUDGET) The effective mobilization of required administrative resources will depend on the Commission's annual decision concerning the allocation of resources, taking into account the additional staff and amounts authorised by the Budgetary Authority 10. 1. EFFECT ON THE NUMBER OF POSTS Type of post Officials or temporary staff Other resources TOTAL Staff to be managing t assigned to le operation Permanent posts 65 21 47 A B C Temporary posts 8 5 Source Duration Additional resources Existing resources 73 26 47 4 year programme 133 13 146 10. 2. OVERALL FINANCIAL IMPACT OF ADDITIONAL HUMAN RESOURCES Amounts ECU Method of calculation Officials Temporary staff Other resources TOTAL 11 10. 3. OTHER ADMINISTRATIVE EXPENDITURE RESULTING FROM THE OPERATION Budget line (n° and heading) A-130 Missions A-250 Meetings A-2510 Meetings of Committees A-25 11 Meetings of Committees which have been established through a Commission Act A-260 Studies Amounts 2 200 000 1 320 000 400 000 520 000 ECU Method of calculation 500 000/year+10% x 4 300 000 /year +10% x 4 100 000 /year x 4 130 000 /year x 4 TOTAL 1 4 440 000 [ ->(o OTHER RESOURCES (INDICATIVE AMOUNTS) INI'RA-MUROS EIC/BC-NET/BRE CONTRACTS (A 1178) ANNUAL COST (ECU) 1998 1999 1997 2000 TOTAL A B C TOTAL 4 1 4 9 720 000 720 000 720 000 720 000 2 880 000 -" EXTRA-MUROS EIC/BC-NET/BRE CONTRA CTS (A 1178) ANNUAL COST (ECU) 1998 1999 1997 2000 | T O T AL A B C 6. 5 1 4 TOTAL 11,5 1 150 000 1 150 000 1 150 000 1 150 000 4 600 00 PRESTA TAIRE DE SERVICES CONTRACTS ANNUAL COST (ECU) 1998 1999 1997 2000 T O T AL 6,3 6,3 A B TOTAL TOTAL 442 000 442 000 442 000 442 000 1 768 000 TOTAL 26,8 2 312 000 1997 1998 2 312 000 1999 2 312 000 2000 2 312 000 TOTAL 9 248 000 17- "1 ISSN 0254-1475 COM(96) 98 final DOCUMENTS EN 08 04 Catalogue number : CB-CO-96-138-EN-C ISBN 92-78-01908-9 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL DECISION on the conclusion of the Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast

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* it COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 03. 1996 COM(96) 111 final 96/0084 (CNS) Proposal for a COUNCIL DECISION on the conclusion of the Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast Proposal for a rOTINCTL REGULATION (EC) on the conclusion of the Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast (presented by the Commission) EXPLANATORY MEMORANDUM The Protocol annexed to the fisheries agreement between the European Community and the Republic of Guinea expired on 31 December 1995. A new Protocol was initialled by the two parties on 6 December 1995 establishing the technical and financial conditions under which Community fishing vessels can fish in Guinea waters in the period 1 January 1996 to 31 December 1997. The Commission is accordingly proposing that the Council should adopt: by means of a Decision, the draft Agreement in the form of an exchange of letters concerning the provisional application of the new Protocol pending its final entry into force, by means of a Regulation, the Protocol establishing the fishing opportunities and the associated technical and financial conditions agreed between the Community and Guinea-Bissau for the period 1 January 1996 to 31 January 1997. COUNCIL DECISION of on the conclusion of the Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast, and in particular Article 15 thereof ('), Having regard to the proposal from the Commission, Whereas, in accordance with the second subparagraph of Article 15 of the aforesaid Agreement, the Community and the Republic of Guinea conducted negotiations to determine the amendments or additions to be made to the Agreement at the end of the period of application of the Protocol annexed to the Agreement; Whereas, as a result of the these negotiations, a new Protocol was initialled on 6 December 1995; Whereas, under that Protocol, Community fishermen have fishing rights in the waters under the sovereignty or jurisdiction of the Republic of Guinea for the period from 1 January 1996 to 31 December 1997; Whereas, in order to avoid any interruption in the fishing activities of Community vessels, it is essential that the new Protocol be applied as soon as possible; whereas, for this reason, the two Parties initialled an Agreement in the form of an exchange of letters providing for the provisional application of the initialled Protocol from the day following the date of expiry of the current Protocol; Whereas the Agreement in the form of an exchange of letters should be approved, pending a final decision taken on the basis of Article 43 of the Treaty, HAS DECIDED AS FOLLOWS: Article 1 The Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast is OJ NoL 111, 27. 4. 1983, p. 1. A: ;eby approved on behalf of the Community. The texts of the Agreement in the form of an exchange of letters and of the Protocol are attached to this Decision. Article 2 The President of the Council is hereby authorized to designate the persons empowered to sign the Agreement in the form of an exchange of letters in order to bind the Community. Done at Luxembourg. For the Council ! The President AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS CONCERNING THE PROVISIONAL APPLICATION OF THE PROTOCOL ESTABLISHING, FOR THE PERIOD FROM 1 JANUARY 1996 TO 31 DECEMBER 1997, THE FISHING RIGHTS AND FINANCIAL COMPENSATION PROVIDED FOR IN THE AGREEMENT BETWEEN THE EUROPEAN COMMUNITY AND THE GOVERNMENT OF THE REPUBLIC OF GUINEA ON FISHING OFF THE GUINEAN COAST A. Letter from the Government of the Republic of Guinea Sir, With reference to the Protocol initialled on 6 December 1995, establishing fishing rights and financial compensation for the period from 1 January 1996 to 31 December 1997, I have the honour to inform you that the Government of the Republic of Guinea is ready to apply this Protocol on a provisional basis, with effect from 1 January 1996, pending its entry into force in accordance with Article 9 of the said Protocol, provided that the European Community is disposed to do the same. This is on the understanding that the first instalment of the financial compensation specified in Article 2 of the Protocol is paid by 31 May 1996. I should be obliged if you would confirm the European Community's agreement to such provisional application. Please accept, Sir, the assurance of my highest consideration. For the Government of the Republic of Guinea B. Letter from the Community Sir,. I have the honour to acknowledge receipt of your letter of today's date, which reads as follows: "With reference to the Protocol initialled on 6 December 1995, establishing fishing rights and financial compensation for the period from 1 January 1996 to 31 December 1997, I have the honour to inform you that the Government of the Republic of Guinea is ready to apply this Protocol on a provisional basis, with effect from 1 January 1996, pending its entry into force in accordance with Article 9 of the said Protocol, provided that the European Community is disposed to do the same. This is on the understanding that the first instalment of the financial compensation specified in Article 2 of the Protocol is paid by 31 May 1996. I should be obliged if you would confirm the European Community's agreement to such provisional application. " I have the honour to confirm the European Community's agreement to this provisional application of the Protocol. Please accept, Sir, the assurance of my highest consideration. On bnfenlf of thm Council thm tvrqnnen Onion 5 Proposal for a COUNCIL REGULATION (EC) on the conclusion of the Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off thé Guinean coast THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43, in conjunction with Article 228(2) and (3) first subparagraph thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament,1 Whereas pursuant to the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast,2 the two Parties conducted negotiations to determine the amendments or additions to be made to the Agreement at the end of the period of application of the Protocol annexed to the Agreement; Whereas, as a result of these negotiations, a new Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the abovementioned Agreement was initialled on 6 December 1995; Whereas it is in the Community's interest to approve the new Protocol, HAS ADOPTED THIS REGULATION: Article 1 The Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast is hereby approved on behalf of the Community. The text of the Protocol is attached to this Regulation. i 2 O J No O J N oL 111,27. 4. 1983, p. 1. Article 2 The President of the Council is hereby authorized to designate the persons empowered to sign the Protocol in order to bind the Community. Article 3 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at For the Council The President PROTOCOL establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast Article 1 For a period of two years from 1 January 1996, the fishing rights granted under Article 2 of the Agreement shall be as follows: 1. trawlers (fin-fish, cephalopods and shrimp): 5 000 grt a month, annual average; 2. freezer tuna seiners: 28 vessels; 3. pole-and-line tuna vessels: 7 vessels; 4. surface longliners: 7 vessels. Article 2 1. The financial compensation referred to in Article 8 of the Agreement shall be, for the period referred to in Article 1, ECU 2 450 000, payable in two annual instalments of ECU 1 150 000 and ECU 1 300 000 respectively. 2. The use to which this compensation is put shall be the sole responsibility of the Government of the Republic of Guinea. 3. The compensation shall be paid into an account opened with a financial institution or any other body designated by the Government of the Republic of Guinea. i Article 3 At the request of the Community, the fishing rights referred to in point 1 of Article 1 may be increased by successive instalments of 1 000 grt a month, calculated on an annual average basis. In this case, the financial compensation referred to in Article 2 shall be increased proportionately. Article 4 The Community shall also contribute during the period referred to in Article 1 the sum of ECU 400 000 towards the financing of a Guinean scientific or technical programme to improve information on the fishery resources within the exclusive economic zone of Guinea. This sum shall be made available to the Government of the Republic of Guinea and paid into the account indicated by the Guinean authorities. y Article 5 The two Parties agree that improving the skills and knowledge of those involved in sea-fishing is a vital element in the success of their cooperation. To that end, the Community shall make it easier for nationals of Guinea to find places in establishments in its Member States and shall provide for that purpose awards for study and practical training in the various scientific, technical and economic disciplines relating to fisheries. The awards may also be used in any country linked with the Community by a cooperation agreement. The total cost of the awards may not exceed ECU 250 000. At the request of the Guinean authorities, part of this sum may be used to cover the costs of participation in international meetings or training courses concerning fisheries or for the organization of seminars on fishing in Guinea. The sum shall be payable as and when it is used. A proportion of the funds provided for in this article, which shall not exceed ECU 100 000, may be used to pay Guinea's contributions to international fisheries organizations. Article 6 The Community shall also contribute to the financing of programmes as follows: ECU 350 000 in aid for fisheries surveillance bodies; ECU 300 000 in institutional aid for the Ministry for Fisheries; ECU 250 000 in aid for non-industrial fishing. These funds shall be made available to the bodies concerned. The ministry shall communicate the bank accounts to which payment is to be made. Article 7 Should the Community fail to make the payments provided for in Articles 2 and 4, the application of this Protocol may be suspended. Article 8 The Annex to the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast is hereby repealed and replaced by the Annex to this Protocol Article 9 This Protocol shall enter into force on the date on which it is signed. It shall be applicable from 1 January 1996. ANNEX CONDITIONS FOR THE EXERCISE OF FISHING ACTIVITIES BY COMMUNITY VESSELS IN GUINEA'S FISHING ZONE A. Licence application and issuing formalities The relevant Community authorities shall present to the fisheries ministry via the Delegation of the Commission of the European Communities in Guinea, an application for each vessel that is to be used for fishing under the Agreement, at least 30 days before the date of commencement of the period of validity requested. The applications shall be made on the forms provided for that purpose by the fisheries ministry, a specimen of which is attached hereto (Annex 1). Each licence application shall be accompanied by proof of payment of the fee for the period of the licence's validity. Payment shall be made into the account opened with the Public Treasury of Guinea. The fees shall include all national and local charges except for port taxes and service costs. Licences for all vessels shall be issued by the fisheries ministry within 30 days following receipt of proof of payment as laid down above to the shipowners or their representatives via the Delegation of the Commission of the European Communities in Guinea. Licences shall be issued for a specific vessel and shall not be transferable. However, where force majeure is proven and at the request of the European Community, a vessel's licence shall be replaced by a new licence for another vessel whose features are similar to those of the first vessel. The owner of the first vessel shall return the cancelled licence to the fisheries ministry via the Delegation of the Commission of the European Communities. The new licence shall indicate: - the date of issue, - the validity of the new licence, covering the period from the date of arrival of the replacement vessel to the date of expiry of the licence of the replaced vessel. In this case, no fee as laid down in the second subparagraph of Article 5 of the Agreement shall be due for unexpired periods of validity. The licence must be held on board at all times. 4 I. Provisions applicable to trawlers 1. Each vessel shall be obliged to report to the port of Conakry once a year, prior to the issue of the licence, to undergo the inspection laid down by the rules and regulations currently in force. Inspections shall be carried out exclusively by duly authorized persons and must be effected within 24 working hours of arrival of the vessel in port if arrival has been announced at least 48 hours in advance. If the licence is renewed during the same calendar year the vessel shall be exempt from further inspection. 2. Each vessel must be represented by an agent of Guinean nationality, established in Guinea. 3. (a) Licences shall be issued for periods of three, six and twelve months and be renewable. (b) The fees to be paid by shipowners, expressed in ECU/gross registered tonne, shall be as follows. for annual licences: 126 for fin-fish trawlers, 150 for cephalopod trawlers, 152 for shrimp trawlers. for six-month licences: 65 for fin-fish trawlers, 77 for cephalopod trawlers, 78 for shrimp trawlers. for three-month licences: 33 for fin-fish trawlers, 39 for cephalopod trawlers, 40 for shrimp trawlers. However, vessels failing to land 200 kg of fish per grt per year in accordance with the provisions of part C shall be obliged to pay an additional fee of ECU 10 per grt per year. II. Provisions applicable to tuna vessels and surface longliners (a) The annual fees shall be ECU 20 per tonne caught within Guinea's fishing zone. (b) Licences shall be issued following payment to the fisheries ministry of a lump sum of ECU 1 500 a year for each tuna seiner and ECU 300 a year for each pole-and-Iine tuna vessel and surface longliner, equivalent to the fees for: - 75 tonnes of tuna caught per year in the case of seiners, 41 - 15 tonnes caught per year in the case of pole-and-line tuna vessels and surface longliners. The final statement of the fees due for the fishing period shall be drawn up by the Commission of the European Communities at the end of each calendar year on the basis of the catch statements made for each vessel and confirmed by the scientific institutes competent to verify catch data, such as the French Office of Overseas Scientific and Technical Research (Orstom) and the Spanish Institute of Oceanography (IEO). The statement shall be forwarded to the fisheries ministry and to the shipowners at the same time. Any additional payment due shall be made by the shipowners to the fisheries ministry no later than 30 days after notification of the final statement, to be paid into the account opened with the Public Treasury of Guinea. However, if the amount of the final statement is lower than the abovementioned amount, the resulting balance shall not be reimbursable. B. Statement of catch For all Community vessels authorized to fish in Guinea's waters under the Agreement a statement of their catch must be provided to the fisheries ministry, with a copy to the Delegation of the Commission of the European Communities in Guinea, in accordance with the procedures set out below: - for trawlers a statement shall be made out according to the specimen annexed hereto (Annex 2). The statements shall be drawn up each month and presented at least once each quarter, - for tuna seiners, pole-and-line tuna vessels and surface longliners a fishing log shall be kept, in accordance with Annex 3, for each fishing period spent in Guinea's fishing zone. The form must be sent, within 45 days of the end of the fishing voyage spent in the Guinean fishing zone, to the fisheries ministry via the Delegation of the Commission of the European Communities in Guinea. Forms must be completed legibly and be signed by the master of the vessel. Should this provision not be adhered to, the fisheries ministry reserves the right to suspend the licence of the offending vessel until the formality has been complied with. In this case, the Delegation of the Commission of the European Communities in Guinea shall be informed. C. Landing of catch Trawlers authorized to fish in the Guinea fishing zone shall, in order to make a contribution towards supplying the local population with fish caught in the Guinea fishing zone, be obliged to land 200 kg of fish per grt per year free of charge. Landings may be made individually or collectively, mention being made of the vessels concerned. M D. By-catch 1. Fin-fish trawlers may not hold on board species other than fish representing more than 15% of their total catch in the Guinea fishing zone. Cephalopod trawlers may not hold on board crustaceans representing more than 20% or fish representing more than 30% of their total catch in the Guinea fishing zone. Shrimp trawlers may not hold on board cephalopods representing more than 25% or fish representing more than 50% of their total catch in the Guinea fishing zone. A maximum tolerance of 5% of these percentages shall be authorized. These limits shall be indicated on the licence. 2. Pole-and-line tuna vessels shall, moreover, be authorized to fish for live bait in order to carry out their fishing activities in the Guinea fishing zone. E. Signing-on of seamen Owners who have been issued fishing licences under the Agreement shall contribute to the on-the-job vocational training of Guinea nationals, subject to the conditions and limits set out below: (1) Each trawler owner shall undertake to employ: - three Guinean seamen on vessels of up to 350 grt, - a number of Guinean seamen equivalent to 25% of the number of seamen/fishermen signed on for vessels with a tonnage greater than 350 grt. (2) For the fleet of tuna seiners, three Guinean seamen shall be signed on permanently. (3) For the fleet of pole-and-line tuna vessels, three Guinea seamen shall be signed on for the tuna-fishing season in the Guinean fishing zone, all of them to be assigned to different vessels. (4) For the fleet of surface longliners, the shipowners undertake to employ two Guinean seamen per vessel during the fishing season in Guinean waters. (5) The wages of these Guinean seamen shall be fixed, before licences are issued, by mutual agreement between the shipowners or their representatives and the fisheries ministry; the wages shall be borne by the shipowners and must include the social contributions to which the seaman is subject (including life assurance and accident and sickness insurance). Should the seamen not be signed on, owners of tuna seiners, pole-and-line tuna vessels and surface longliners shall be obliged to pay the fisheries ministry a lump sum equivalent to the wages of seamen not signed on in accordance with the provisions of points 2, 3 and 4. This sum will be used for the training of seamen/fishermen in Guinea and is to be paid into an account specified by the fisheries ministry. 43 F. Observers 1. The observers' task shall be to check on fishing activities in the Guinean fishing zone and collect all statistical data on the fishing activities of the vessel concerned. They shall be offered every facility needed to carry out their duties, including access to premises and documents and weekly radio communication of fishing data. 2. Each trawler shall take on board an observer appointed by the fisheries ministry. In the case of trawlers of less than 200 grt, however, a fisherman designated by the fisheries ministry shall act as observer, in which case the master of the vessel shall facilitate the work of this seaman outside the actual fishing operations. Observers shall not normally remain on board for more than two trips. 3. Tuna vessels and surface longliners shall take an observer on board at the request of fisheries ministry. He must not remain on board any longer than is necessary for the accomplishment of his duties. The master of the vessel shall facilitate the work of the observer, who shall be accorded the conditions enjoyed by officers of the vessel. Should observers be taken on board in foreign ports, their travelling costs shall be borne by the shipowner. 4. The pay and social insurance contributions of observers shall be borne by the fisheries ministry. In the case of trawlers, shipowners shall pay to the "Centre National de Surveillance de Pêches" (CNSP) ECU 10 for each day spent on board by an observer as a contribution to the expenses arising from their presence on board. 5. Should a vessel with an observer on board leave the Guinean fishing zone, all measures must be taken to ensure the observer's return to Conakry as soon as possible at the expense of the shipowner. G Inspection and monitoring Any Community vessel fishing in Guinea's zone shall allow on board any official of Guinea responsible for the accomplishment of his duties. This official must not remain on board any longer than is necessary for the verification of catches by random checks and for any other inspection relating to fishing activities. inspection and monitoring and shall assist him in H. Fishing zones All the vessels referred to in Article 1 of the Protocol shall be authorized to fish in waters beyond 10 nautical miles. I. Minimum meshes authorized St The minimum mesh size authorized for the trawl body (mesh fully extended) shall be: (a) 40 mm for shrimps; (b) 50 mm for cephalopods; (c) 60 mm for fin fish. These minimum sizes may be altered to conform to the standardization of the member states of the Subregional Fisheries Commission. Any such alterations shall be examined in the Joint Committee. Fishing with outriggers shall be authorized. J. Entering and leaving the zone All Community vessels fishing under the Agreement in the Guinean zone shall communicate to the radio station of the CNSP the date and time and their position when entering and leaving the Guinea fishing zone. The call sign and operating frequencies and times of the station shall be communicated to the shipowners by the CNSP at the time the licence is issued. In cases where this radio communication cannot be used, vessels may use alternative means, such as fax (CNSP: 1-212-4794-885, the fisheries ministry: 224-413523). K. Boarding of vessels 1. The Delegation of the Commission of the European Communities in Guinea shall be notified within 48 hours of any boarding within the Guinean exclusive economic zone of a fishing vessel flying the flag of a Member State of the Community and operating under an Agreement concluded between the Community and a third country and shall at the same time receive a brief report of the circumstances and reasons leading to the boarding. 2. In the case of vessels authorized to fish in Guinean waters, before any measures regarding the master or the crew of the vessel or any action regarding the cargo and equipment of the vessel are considered, other than those to safeguard evidence relating to the presumed infringement, a consultation meeting shall be held, within 48 hours of receipt of the abovementioned information, between the Delegation of the Commission of the European Communities, the fisheries ministry and the inspection authorities, possibly attended by a representative of the Member State concerned. At the meeting, the Parties shall exchange any relevant documentation or information, in particular automatically registered data showing the vessel's positions during the trip up to the time of boarding, helping to clarify the circumstances of the established facts. The shipowner or his representative shall be informed of the outcome of the meeting and of any measures resulting from the boarding. •15 3. Before any judicial procedure, an attempt shall be made to resolve the presumed infringement through a compromise procedure. This procedure shall end no later than three working days after the boarding. 4. Should the case not be settled by means of compromise, and therefore be brought before a competent judicial body, a bank security shall be fixed by the relevant authority within 48 hours following the conclusion of the compromise procedure, pending the judical decision. The amount of the security must not exceed the amount of the penalty laid down under national legislation for the presumed infringement in question. The bank security shall be returned to the shipowner by the relevant authority once the case is settled without incrimination of the master of the vessel concerned. 5. The vessel and its crew shall be released either: - at the end of the consultation meeting, if the established facts permit, or - once the obligations arising under the compromise have been fulfilled, or - once a bank security is deposited (judicial procedure). * •\ / > / » / • ' ! < / /» / APPLICATION FORM FORA FISHING LICENCE I. , oil,,,. ! ,,sc or. lv Ki mark\ Nationality licence No: Date of si^mn}; D. IIC <)t («. sue: A I TI I C A NI N a me of ( i n n: T r a de remisier No I usl n. ime. Hid s u r n a me ol applicant I). Hi- Hid pi. ICC i ll b l l t ll O c c u p a t i on Address No ol employees N a me. jnd. u l d r t ss ol co signatory VESSII Typc of vessel: N ew n a m e: Date and place of c o n s t r u c t i on O r i g i n al n a t i o n a l i ty R e g i s t r a t i on N< Former name: I ength Beam H o ld Gross tonnage. Net tonnage I ypc ol b u i l d i ng n i. i t e n. i ls M a ke of m am engine 1 \ pe Rating. Propeller laved LJ V a r i a b le L >IK led I I raiiMi speed1 C a ll Slgll (. ill ll'Ci|UCIH \ 1 ISI ol s o u n d i n g, n a v i g a t i ng and ir. nisiiiissioii instruments. R. ul. n L. J Son. i, 1. 1 Ncisonde L j V I II S Sb N c i s i m dc satellite ll. lvi. -. Hion I I i I O i l, 4 CONSERVATION • Ice ami re Inge ran» »« f~~~\ | I Ircc/. ing in'brine I I Dry I J Kclrigt-i. ticd se. i v\atjei [ ] Total rcfrigcr. itnig power: I rec/ing capacity in tonnes/24 hours Hold capactt y I Y PI Ol IISHIiNK, A Demersal Inshore demersal I I Deep-sea demersal 1 I Type of trawl: Cephalopods | J Shrimps | | hsh I I Length of trawl: Headline: Mesh size in the body: Mesh size in the wings: Speed of trawling: B. Deep-sea pelagic (tuna) Pole and line | | No of poles and lines | 1 Seine I I Length of net: Depth of net No of tanks: Capacitv m tonnes C l. onglincs and pots Surface L. J I cngth of lines. No of lines No id pots:. Bottom I. J No ol hooks fl SHORi: INSTALLA I IONS Address and pennu No Name of firm Activities '. Domestic wholesale fish trade I I I. vport I I Type ami No ol wholesale trader's card:. Description of processing and conscivation plant No of employees N/J: Indicate alfuin. iiive answers by a lick m ihe appropriai»- box. D >l <f<îtmrtiuiTf e<tKt*fc s Aui»u>ruation of the M i n i s t ry f or F i s h e r i es OFFICE OF THE SECRETARY OF STATE FOR FISHERIES Name of vessel: Nationality (flag): Appendix 2 S T A T I S T I CS ON C A T CH A ND A C T I V I TY Engine rating: Gross registered tonnage: Wishing j o nc Longitude Latitude | Number ol fi>hing o p r r j n o ns N u m b er ol fishing hours N'ont Y e ar Fish:ng method: Per: of landing: Species of fish "t" *f 13- 13 FINANCIAL STATEMENT 1. 2. 3. TITLE OF OPERATION: New financial Protocol EC/Guinea BUDGET HEADING INVOLVED: B7-800 LEGAL BASIS:Treaty art. 43, in conjunction with art. 228(2) and (3) first subpar. EC/Guinea Agreement (OJ No L 111, 27. 4. 1983) 4. DESCRIPTION OF OPERATION 4. 1 General objective: Protocol and Annex for a two-year period 4. 2 Period covered and arrangements for renewal or extension: 1 January 1996 to 31 December 1997 Arrangements for renewal by negotiations before the Protocol expires. 5. Classification of expenditure or revenue 5. 1 Compulsory 5. 2 Differentiated 6. Type of expenditure or revenue - Other: Financial compensation to a third country in exchange for fishing opportunities granted by it and laid down in the Protocol. 7. FINANCIAL IMPACT 7. 1 Method of calculating total cost of operation (definition of unit costs) see complement to the Protocol Itemised breakdown of cost 7. 2 Breakdown 1996 1997 1. 150. 000 400. 000 250. 000 900. 000 !. 700. 000 1. 300. 000 1. 300. 000 TOTAL current ECUs TOTAL 2. 450. 000 400. 000 250. 000 900. 000 4. 000. 000 olH 7. 3 Schedule for proposed new operation 1996 1997 2. 700. 000 1. 300. 000 Commitment appropriations Payment appropriations 1996 1997 2. 000. 000 2. 000. 000 , ' current ECUs TOTAL 4. 000. 000 2. 000. 000 2. 000. 000 TOTAL 2. 000. 000 2. 000. 000 4. 000. 000 8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN: Since the financial contributions are made by the Community in direct exchange for the fishing possibilities offered, the third country uses them for whatever end it chooses. The exception to this rule is the case of programmes, such as the scientific programmes, where under the dispositions of the Agreement, Mauritania will furnish reports to the Community. In addition, the Member States whose vessels operate under this Agreement must certify to the Commission the exactitude of the data indicated in the tonnage certificates of the vessels so that the licence fees may be calculated on a guaranteed basis. To for Community vessels. includes catch declarations the Agreement that end, 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS: In terms of the benefits of this agreement, it is clear that the value of the catches of the main commercial species far exceeds the cost of 4. 0 MECU. In addition to the direct commercial value of the catches of the vessels concerned, there are the following evident benefits from this Agreement: guaranteed employment aboard the fishing vessels; multiplier employment effect in the ports, auctions rooms, processing factories, shipyards, service industries, etc. ; these employment opportunities are in regions where no other opportunities are available; contribution to the supply of fish to the Community. Obviously, in addition to those benefits, one must take account of the importance of our relations with Guinea in the fisheries field and our overall political relations. 10. ADMINISTRATIVE EXPENDITURE (part A of the budget): No incidence on administrative expenditure. 05 ISSN 0254-1475 COM(96} 111 final DOCUMENTS EN 03 U Catalogue number : CB-CO-96-121-EN-C ISBN 92-78-01721-3 Office for Official Publications of the European Communities L-2985 Luxembourg I

Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP)

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels,20. 03. 1996 COM(%) 121 final 95/0207 (COD) Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP) (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) EXPLANATORY MEMORANDUM The Commission hereby presents a modified proposal for a European Parliament and Council Directive on Interconnection in Telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP). The modified proposal incorporates those amendments proposed by the European Parliament at First Reading which were accepted by the Commission. 1. Introduction a) Background The Commission adopted its proposal on 19. 07. 95, and it was formally transmitted to the EP and the Council on 12. 09. 951. The Economic and Social Committee gave a favourable Opinion on 28. 02. 962. The European Parliament adopted a favourable Resolution at its First Reading on 14. 02. 96, and proposed 69 amendments to the Commission proposal3. b) Purpose of the Directive This Directive is an essential component of the regulatory framework for the future liberalised telecommunications sector, to be in place by 1. 1. 98. It will enable new market entrants to access existing business and residential customers, on a basis which will encourage increased investment and market growth in the telecommunications services sector, within a predictable and stable regulatory environment. At the same time, it will put in place safeguards to ensure interconnection and interoperability of networks and services so that users may of universal from increasingly benefit telecommunications services. the European wide provision The Directive to be implemented at a national level, under supervision of the national regulatory authorities, in accordance with the principle of subsidiarity. lays down harmonized principles for interconnection 1 2 3 OJ C 313, 24. 11. 1995, p. 7 TRA/301 ,28. 02. 1996 A4-0017/96, PV 14-02-96 - 2- 2. EP amendments accepted by the Commission Of the 69 amendments adopted by the European Parliament at First Reading, the Commission accepted 28 in full, 13 in part, and 4 in principle (ie with some reformulation of the text), making a total of 45. Amendments accepted in full Amendments accepted in part Amendments accepted in principle : : : 1, 2, 5, 8, 11, 14, 20, 22, 24, 28, 29, 33, 39, 40, 42, 43, 44, 46, 47, 48, 52, 56, 58, 63, 64, 65, 66, 67 3, 4, 6, 9, 12, 15, 26, 32, 36, 37, 45, 49, 57, 23, 51, 53, 68 The Commission accepted those amendments which: - re-inforce the importance of ensuring universal service, and a single European telecommunications market; - concern number portability; - emphasise the need for protection of the environment; - increase transparency and ensure reasonable confidentiality; - call for increased coordination between national regulatory authorities and between national regulatory authorities and the Commission; - clarity the text in a manner consistent with the aims of the Directive; - call for an examination of the possibility of a European regulator)' authority for telecommunications, as part of the review of the Directive during 1999; - are consistent with other EU legislation. 3. Amendments not accepted by the Commission The Commission has not accepted 24 of the 69 amendments proposed by the European Parliament. The reasons are given below, where the amendments are grouped into 11 broad categories. Scope of the Directive (Amendments 13, 15 (part), 55) The Directive concerns interconnection to public telecommunications networks and services. Amendment 13 would restrict the scope of the Directive to interconnection between public networks of the same type, and is inconsistent with part of amendment 1 On the other hand, amendment 15 (first part) would expand the scope of the Directive too far by extending the requirement for confidentiality to al] telecommunications networks (public and private). The Directive concerns interconnection within the Community, as set out in Article 1. Amendment 55 is therefore outside the scope of the Directive. - 3- World Trade Organisation (WTO) negotiations on basic telecommunications services (Amendments 10, 54) Negotiations on multilateral agreements for comparable and effective access to third country markets are currently underway in the context of the World Trade Organisation negotiations in Geneva. Amendment 10 is inappropriate as the Directive is due to be adopted after the conclusion of the WTO negotiations scheduled for April 1996. Amendment 54 would place inappropriate constraints on the action to be taken in the case of a lack of agreement at a multilateral level. Accounting separation (Amendments 6(part), 34, 35, 37, 38, 60) Amendments 6 (second part), 34, 35, 37 (second part) would replace the requirement for full accounting separation in Article 8 by a weaker requirement for transparent cost accounting systems. The Commission proposal represents a careful balance between the differing needs of the existing operators, the new entrants and the national regulatory authorities; this amendment would tip that balance in favour of the existing operators, while also adding to the supervisory load of the national regulatory authorities. Amendments 38 and 60 could lead to inconsistency with Commission Directive 95/51/EC4 on the use of cable television networks for the provision of already liberalised telecommunications services, by proposing an additional threshold for accounting separation National regulatory authorities (Amendments 16, 41) The need for independence of the national regulatory authorities as expressed in amendment 41 is being dealt with elsewhere, in the proposed adaptation of the ONP framework Directive (see COM(95) 543). The possibility for the national regulatory authority to extend obligations for interconnection, as referred to in Amendment 16, is already foreseen in Article 9. 6. Universal service (Amendments 3(parts), 17, 18, 19, 26(part), 31, 32(part), 57(parts), 59, 62, 69) Services which cannot at present be made available to all users everywhere cannot be accepted as part of a universal service obligation, at least for the time being. Hence amendments 3 (second part) and 57 (first and second parts) are not accepted. Amendments 17 (first part) and 18 are not accepted because they would reduce the flexibility in the financing of universal service, by requiring Member States to set up a universal service fund. OJ L 256, 26. 10. 1995, p. 49 4- Amendments 3 (last part) and 17 (second part) would provide for contributions to the cost of the universal service obligations to be shared between all operators of telecommunications networks (instead of only public networks). This would be unfair on those networks which already contribute to the cost of the universal service through payment of standard tariffs. Amendment 19 would suppress the reference to market benefit for organisations with universal service obligations. This is an important factor to be taken into account when assessing the net burden*of universal service obligations. Amendments 26 (third part), 31, 32 (second part) and 59 could increase the cost of market entry to new players and decrease incentives to remove tariff imbalances between local and long distance calls. They would have the effect of reducing the clear distinction between interconnection charges and contributions to universal service obligations. Amendment 62 would reduce the role of the national regulatory authority in overseeing contributions to universal service costs. The Commission's forthcoming Communication on Universal Service For Telecommunications means that amendment 69 is notappropriate. Dispute resolution (Amendments 25, 49(part), 50) Amendment 25 was not accepted because amendment 51, accepted in principle, already covers the question of damages in the context of dispute resolution, and retrospective adjustments in charges are already foreseen in 9(2) of the Directive. Amendment 49 (second part) cannot be accepted as the principles in Article 9(1) are an important reference for dispute resolution. Amendment 50 would allow a dispute to be pursued simultaneously in national courts and at EU level, and could result in two different outcomes. This does not provide legal certainty. Review of the Directive (Amendment 12 (part)) There are provisions in the Directive which will need to remain even after achievement of full competition, in particular those concerning universal service and dispute resolution. The second part of Amendment 12 is therefore not accepted. Commission guidelines (Amendments 7(part), 21, 30, 36(part), 61) Guidelines are considered the most appropriate tool for addressing complex financial issues, in that they are flexible and more easily updated than Directives. The committee procedure proposed will ensure that the guidelines have the backing of Member States. Amendments 7 (first part), 21, 30, 36 (second part), 61 would change the nature of the guidelines and/or extend their scope. 5- Definition of significant market power (Amendment 4 (parts)) The deletions proposed in Amendment 4 cannot be accepted as they are important factors for assessing if an organisation has significant market power. The existence of alternative means of access to the market does not justify immediate removal of obligations on those with significant market power. Collocation and facility sharing (Amendments 9 (parts) and 45 (parts)) Amendments 9 and 45 would result in too rigid a framework for collocation and facility sharing, in particular in the area of costing. These are issues which demand a certain flexibility of approach in order to decide where the public interest lies. Amendment 45 would remove the requirement for public consultation. Other amendments (Amendment 7(part), 26(part), 27) Amendments 26 (first part) and 27 would result in inconsistent terminology with other ONP Directives. Amendment 7 (second part) cannot be accepted as the interconnection point is not always the choice of the organisation providing interconnection. 4. Conclusion The Commission has accepted 45 of the 69 amendments proposed by the European Parliament at First Reading either in whole, in part or in principle. In accordance with Article 189a paragraph 2 of the EC Treaty, the Commission amends its initial proposal, incorporating these amendments. Amended Proposal for a European Parliament and Council Directive on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP) Original text Amended text Recital 1 in to that service different principles recognizes Whereas from 1 January 1998 (with transition periods for certain Member States) the provision of telecommunications services and infrastructure in the Community will be liberalized; whereas the Council's Resolution of 7 February 1994 on the universal telecommunications sector^ in order Community-wide promote telecommunications services there is a need to ensure interconnection of public networks and, in the future competitive environment, interconnection between and Community national operators; whereas Council Directive 90/387/EEC of 28 June 1990 on the establishment of the internal market for telecommunications services through the implementation of open network provision (ONP)(4) lays down harmonized principles for open and public efficient of, and, telecommunications where applicable, the Council's Resolution of 22 July 1993 on the review of the situation in the telecommunications sector and the in that markct(5) need for further development recognizes that open network provision measures provide an appropriate framework for harmonizing interconnection conditions; and networks services; whereas access use to, promote interconnection of networks Whereas from 1 January 1998 (with, subject to certain conditions, the possibility of transition periods in some Member States) the provision of telecommunications services and infrastructure in liberalized; whereas in the Community will be Community-wide to order telecommunications services there is a need to ensure between different national and Community operators; whereas Council Directive 90/387/EEC of 28 June 1990 on the establishment of the internal market for telecommunications the implementation of open network provision (ONP)(4) lays down harmonized principles for open and public efficient of, and, telecommunications where applicable, the Council's Resolution of 22 July 1993 on the review of the situation in the telecommunications sector and the in that market(5) need for further development recognizes that open network provision measures provide an appropriate framework for harmonizing interconnection conditions; and networks services; whereas services through access use to, 7- Recital 4 Whereas, following the removal of special and exclusive rights for telecommunications services and infrastructure in the Community, the provision of telecommunications networks or services may require some form of authorization by Member States; whereas all organizations authorized to provide public telecommunications networks or public telecommunications services in all or part of the Community should be to negotiate interconnection agreements on a commercial basis in accordance with Community law, subject to supervision and intervention by national regulatory authorities; whereas to ensure adequate interconnection within the Community of certain networks and services essential for the social and economic well-being of Community users, notably public telephone networks and services, and leased lines; is necessary free it Whereas, following the removal of special and exclusive rights for telecommunications services and infrastructure in the Community, the provision of telecommunications networks or services may require some form of authorization by the relevant public authority, in accordance with the subsidiarity principle; whereas all organizations authorized to provide public telecommunications networks or public telecommunications services in all or part of the Community should be to negotiate interconnection agreements on a commercial basis in accordance with Community law, subject to relevant supervision and authorities; whereas to ensure adequate interconnection within the Community of certain networks and services essential for the social and economic well-being of Community users, notably public telephone networks and services, and leased lines; intervention by it is necessary free the Recital 6 service obligations; whereas Whereas the Resolution of 7 February 1994 sets voice out conditions for financing a universal telephony service; whereas obligations for the provision of universal service contribute to the Community objective of socio-economical cohesion and territorial equity; whereas there may be more than one organization in a Member State with the universal calculation of the net cost of universal service should take due account of costs and revenues, as well as economic externalities and the intangible benefits resulting from providing universal service but, in order not to hinder the on-going process of tariff rebalancing, should not include elements which are due to historic tariff imbalances; whereas costs of universal service obligations should be calculated on the basis of transparent procedures; whereas the sharing of universal service obligations should be unbundled from charges for interconnection; financial contributions related to Whereas obligations for the provision of universal service contribute to the Community objective of socio-economical cohesion and territorial equity; introduce new whereas the aim should be to technologies like the integrated services digital network (ISDN) as soon as possible and on as broad a basis as possible in the Member States; whereas the current level of deployment of ISDN in Member States means that it cannot be made available to all users everywhere and therefore it cannot at present be subject to a universal service obligation; whereas there may be more than one organization in a Member State with obligations of providing universal service; whereas the calculation of the net cost of universal service should take due account of costs and revenues, as well as economic externalities and the intangible benefits resulting from providing universal service but, in order not to hinder the on-going process of tariff rebalancing, should not include elements which arc due to historic tariff imbalances, given that the fixed costs associated with the existing network are at present partly taken into account in the tariff shared by all users of that network; whereas costs of universal service obligations should be calculated on the basis of financial contributions related to the sharing of the cost of universal service obligations should be unbundled from charges for interconnection; transparent procedures; whereas Recital 7 to end-users, Whereas it is important to lay down principles to guarantee transparency, access to information, non discrimination and equality of access, in particular for organizations with significant market power; the market power of an organization whereas depends on a number of factors including its share of the relevant product or service market in the relevant geographical market, its turnover relative to the size of the market, its ability to influence its control of the means of market conditions, access financial resources, its experience providing products and services in the market; whereas, for the purpose of this Directive, an organization with a share of more than 2 5% of a particular telecommunications market in the geographical area in a Member State within which it is authorized to operate would be presumed to enjoy significant market power, unless its national regulatory authority determined that this was not the case; whereas, for an organization foiling below the national regulator^' authority may nevertheless determine that the organization enjoyed significant market power; threshold market share, its access this to Whereas it is important to lay down principles to guarantee transparency, access to information, non discrimination and equality of access, in particular for organizations with significant market power; whereas the market power of an organization depends on a number of factors including its share of the relevant product or service market in the relevant geographical market, its turnover relative to the size of the market, its ability to influence its control of the means of market conditions, links, its international access to end-users, its experience its resources, financial to access providing products and services in the market; whereas, for the purpose of this Directive, an organization with a share of more than 2 5% of a the telecommunications market particular geographical area in a Member State within which it is authorized to operate would be presumed to enjoy significant market power, unless the relevant regulatory authority determined that this was not the case; whereas, for an organization falling below this threshold market share, the relevant regulatory authority may nevertheless determine the that organization enjoyed significant market power; in Recital 8 be the able power must the structure and Whereas pricing for interconnection is a key factor to determine intensity of competition in the transformation process towards a liberalized market; whereas organizations with significant market to demonstrate that their interconnection charges are set on the basis of objective criteria and follow the principles of transparency and cost orientation, and arc sufficiently unbundled in ternis of network and service elements offered; whereas publication of a list of charges and services transparency and non enhances discrimination; whereas flexibility in the methods of should be charging charging; possible, whereas level of charges should promote productivity and encourage efficient and sustainable market entry, and should not be below a limit calculated by the use of long-run incremental cost and cost allocation and attribution methods based on actual cost causation, nor above a limit set by the the interconnection m question; interconnection the necessary traffic capacity-based interconnection stand-alone providing including cost the for of be the able power must the stmcture and Whereas pricing for interconnection is a key factor to determine intensity of competition in the transformation process towards a liberalized market; whereas organizations with significant market to demonstrate that their interconnection charges are set on the basis of objective criteria and follow the principles of transparency and cost orientation, and arc sufficiently unbundled in terms of network and service elements offered; whereas publication of a list of interconnection services, charges, terms and conditions enhances the necessary transparency and the non-discrimination; whereas methods of charging traffic should capacity-based be possible, charging; whereas the level of charges should promote productivity and encourage efficient and sustainable market entry, and should not be below a limit calculated by the use of long-run incremental cost and cost allocation and attribution methods based on actual cost causation, nor above a limit set by the interconnection m question; the stand-alone cost of providing flexibility interconnection including for in Recital 9 accounting activities appropriate interconnection separation Whereas between and other activities ensures transparency of internal cost- transfers; whereas, where an organization with a special non- telecommunications provides field telecommunications services, accounting separation is an appropriate means to discourage unfair cross- subsidies; exclusive rights also or in activities interconnection Whereas where an organization enjoys significant market power, appropriate accounting separation between and other activities ensures transparency of internal cost- transfers; whereas, where an organization with a special non- telecommunications provides field telecommunications services, accounting separation is an appropriate means to discourage unfair cross- subsidies; exclusive rights also or in Recital 11 in accordance with Whereas, Directive 90/387/EEC, the essential requirements upon which restrictions on access to and usage of public telecommunications networks or services are to security of network justified are limited integrity, operations, maintenance of network interoperability of services in justified cases, and protection of data as appropriate; in accordance with Whereas, Directive 90/387/EEC, the essential requirements upon which restrictions on access to and usage of public telecommunications networks or services are to security of network justified are limited integrity, operations, maintenance of network interoperability of services in justified cases, and protection of data as appropriate; whereas the reasons for these restrictions must be made public; Recital 12 Whereas facility-sharing can be of benefit for town planning, environmental, economic or other reasons, and should be encouraged by national regulatory authorities on the basis of voluntary agreements; whereas compulsory facility-sharing may be appropriate in some circumstances, but should be imposed on organizations only after full public consultation; whereas virtual collocation may to physical provide a satisfactory alternative collocation of telecommunications equipment; Whereas facility-sharing can be of benefit for town planning, environmental, economic or other reasons, and should be encouraged by national regulatory authorities on the basis of voluntary agreements; whereas compulsory facility-sharing may be appropriate in some circumstances, but should be imposed on organizations only after full public consultation; whereas virtual collocation may in satisfactory normal circumstances provide a of to alternative telecommunications equipment; collocation physical Recital 22 Whereas the essential goal of interconnection of networks and services throughout the Community and the provision of trans-European networks and services cannot be realized satisfactorily at Member State level, and is better achieved at Community level by this Directive; Whereas the essential goal of interconnection of networks and services throughout the Community and the provision of trans-European networks and services cannot be realized satisfactorily at Member State level, and is better achieved at Community level by this Directive; whereas it may appear io desirable, when this Directive envisage the possibility of establishing a European Regulatory Authority to ensure those tasks carried out by the Commission or the National Regulatory Authority according to this Directive, which would be more efficiently through such a fulfilled European Regulatory Authority; is reviewed, 10 Article 1 par. 1 This Directive establishes a regulatory framework for securing the interconnection and interoperability of telecommunications networks and services in the Community, in an environment of open and competitive markets. This Directive establishes a regulatory framework for securing the interconnection and interoperability of telecommunications networks and services in the Community and ensuring universal service, in an environment of open and competitive markets. Article 2 par. 1(h) (new) "universal service" means a defined minimum service or set of services of specified quality which is accessible to all users everywhere and, in the light of an national affordable price. conditions, specific at Article 3 par. 1 to by Member States networks from Member States shall take all necessary measures to remove any restrictions which prevent organizations provide authorized and telecommunications telecommunications negotiating services interconnection agreements between themselves in The accordance with Community organizations concerned may be the same in different Member States. Member State or for Technical interconnection shall be a matter for agreement between the provisions of this Directive and the competition rules of the Treaty. arrangements the parties commercial law. in involved, subject and to to in Member States networks from Member States shall take all necessary measures to remove any restrictions which prevent organizations provide authorized and telecommunications telecommunications negotiating services interconnection agreements between themselves in The accordance with organizations concerned may be same in different Member States. Member State or for Technical interconnection shall be a matter for agreement between the provisions of this Directive and the competition rules of the Treaty. arrangements the parties Community commercial law. in involved, subject and the to Article 3 par. 3 their Member States shall ensure that organizations who public interconnect telecommunications public telecommunications services respect at all times the confidentiality of information transmitted or stored. to and/or networks facilities their facilities Member States shall ensure that organizations who public interconnect telecommunications public telecommunications services respect at all times the confidentiality of information transmitted or storedi except when required by their national law for the protection of public order. to and/or networks Article 5 par. 5 Where the mechanisms referred to in paragraph 4 are established, national regulator}' authorities shall ensure that the principles for cost sharing, and details of the mechanism used, are open to public inspection in accordance with Article 14(2). 11 - is established, national Where a mechanism for sharing the net cost of in to universal service obligations as paragraph 4 regulatory authorities shall ensure that the principles for cost sharing, and details of the mechanism used, are open to public inspection in accordance with Article 14(2). referred Article 6 par. 1 to networks the and interconnection public For telecommunications public telecommunications services identified in Annex I provided by organizations which have been notified by national regulatory authorities as having significant market power, Member States shall ensure that: to interconnection public For telecommunications public telecommunications services identified in Annex I provided by organizations which have significant market power, Member States shall ensure that: the and networks Article 6(d) interconnection agreements are open to public inspection, in accordance with Article 14(2), with the exception of those parts which deal with the commercial strategy of the parties. In every case, details of and any contributions to universal service obligations shall be published. interconnection charges interconnection agreements and changes to them are communicated to the relevant national regulatory authorities and the Commission, and made available on request to interested parties, in accordance with Article 14(2), with the exception of those parts which deal with the commercial strategy of the parties. The national regulatory authority shall decide which parts deal with the commercial strategy of the parties. In every case, details of interconnection charges, terms and conditions and any contributions to universal service obligations shall be made available on request to interested parties. Article 6(e) (new) Information received from an organization seeking interconnection shall be used only for the purpose for which it was supplied. It shall not be passed on to other departments, subsidiaries or partners for whom such information could provide a competitive advantage. Article 7 par. 3 Charges for interconnection shall be based on the costs of providing the interconnection services requested, and shall normally contain the following elements, each of which should be itemized separately: Charges for interconnection shall be based on the costs of providing the interconnection services requested, and shall normally contain the following itemized elements, each of which should be separately: - a charge to cover re-imbursement of the one time costs incurred in providing the specific elements of the interconnection requested; (i. e. the initial cost of any engineering work needed to provide the interconnection facilities requested); - a charge to cover re-imbursement of the one time costs incurred in providing the specific elements of the interconnection requested; (i. e. cost of any the the engineering work needed interconnection facilities requested); to provide initial and subsequent usage charges related to the utilisation of the requested. resources network elements and These may include capacity-based charges and/or traffic related charges; - usage charges related to the utilisation of the requested. resources include capacity-based charges network elements and These may and/or traffic related charges; 12 Annex IV indicates, for information only, the types of costs that may be included in each of these tariff elements. Where other tariff elements are applied, these must be transparent and based on objective criteria, and approved by the national regulatory authority. Annex IV indicates the types of costs that may be included in each of these tariff elements. Where other tariff elements are applied, these must be transparent and based on objective criteria, and approved by the national regulatory authority. interconnection may include bulk Charges for In some cases, these may be discount schemes. available only to organizations identified in Annex II. Such schemes shall be based on objective criteria and applied in a non-discriminatory manner. interconnection may include bulk Charges for In some cases, these may be discount schemes. available only to organizations identified in Annex II. Such schemes shall be based on objective criteria and applied in a non-discriminatory manner. Article 7 par. 5 National regulatory authorities shall ensure the publication, in accordance with Article 14(1), of a list of interconnection services and associated tariffs broken down into components, according to market needs. National regulatory authorities shall ensure the publication, in accordance with Article 14(1), of terms and conditions for interconnection. This shall include a interconnection services and relevant tariffs broken down into components, according to market needs. list of Article 7 par. 5a (new) of In order to provide a common basis for the derivation the interconnection Commission shall draw up. acting in accordance with the procedure in Article 15, guidelines on cost accounting systems in relation to interconnection. charges. Article 7 par. 8 Member States that published shall ensure interconnection charges and charges related to the sharing of the cost of universal service obligations arc made available to the ONP Committee at the request of the Commission. Member States that published shall ensure interconnection charges, terms and conditions, and charges related to the sharing of the cost of universal service obligations are made available to the ONP Committee at the Commission. request of the Article 7 par. 9 In order to provide a common basis for the the interconnection derivation of Commission shall, if necessary, draw up, acting in accordance with the procedure laid dowTi in Article 15, recommendations on cost accounting systems in relation to interconnection. charges, (deleted) 13 Article 8 par. 3a (new) The Commission shall, acting in accordance with the procedure laid down in Article 15. draw up guidelines on accounting separation in relation to interconnection. Article 8 par. 4 The financial accounts of organizations providing public telecommunications networks or public telecommunications services shall be drawn upa published and submitted to independent audit. The audit shall be carried out in accordance with the relevant rules of national legislation. The first subparagraph shall also apply to the separate accounts required in paragraphs 1 and 2. The financial accounts of organizations providing public telecommunications networks or public telecommunications services shall be drawn up, submitted to independent audit and published. The audit shall be carried out in accordance with the relevant rules of national legislation, and its results shall be made public. The first subparagraph shall also apply to the separate accounts established as in paragraphs 1 and 2. required Article 8 par. 6 Where appropriate, the Commission shall, acting in accordance with the procedure laid down in Article 15. draw up guidelines on accounting separation in relation to interconnection. (deleted) Article 9 par. 1 National regulatory' authorities shall encourage and secure adequate interconnection in the interests of all users, exercising their responsibility in a way that provides maximum economic efficiency and gives the maximum benefit to end-users. National regulatory authorities shall encourage and secure adequate interconnection in the interests of all users, exercising their responsibility in a way that provides maximum economic efficiency and gives the maximum benefit to end-users. In particular, national regulatory authorities shall take into account: In particular, national regulatory authorities shall take into account: the need communications for users; to ensure satisfactory end-to-end the need communications for users; to ensure satisfactory end-to-end the need to stimulate a competitive market; the need to stimulate a competitive market; the seamless to ensure a of fair and proper _the need development harmonious European telecommunication home market, thus coordinate their policies, guidelines and actions with their counterparts in other Member States and. with the Commission; 14 the need to promote the establishment and development of trans-European networks and and interconnection the services, interoperability of national networks and services, as well as access to such networks and services; and the need to promote the establishment" and development of trans-European networks and and interconnection the services, interoperability of national networks and services, as well as access to such networks and services; and the principles of non-discrimination (including equal access) and proportionality; the principles of non-discrimination (including equal access) and proportionality; the need to maintain the universal service. the need to maintain the universal service. Article 9 par. 5 operating In the event of an interconnection dispute between organizations authorizations granted by the same Member State, the national regulatory authority of that Member State shall, on request of either party, take steps with a view to resolving the dispute. under operating In the event of an interconnection dispute between organizations authorizations granted by the same Member State, the national regulatory authority of that Member State shall, on request of either party, take steps with a view to resolving the dispute. under In so doing, the national regulatory authority shall take into account, inter alia: In so doing, the national regulatory authority shall take into account, inter alia: the user interest, - the user interest, - the need to maintain a universal service, regulatory obligations or constraints imposed on any of the parties, the desirability of stimulating innovative market offerings, and of providing users with a wide range of telecommunications services at a national and at a Community level, the availability of technically and commercially viable interconnection to requested, alternatives the the desirability of ensuring equal access arrangements, the need to maintain the integrity of the public telecommunications the interoperability of services, network and the nature of the request in relation to the resources available to meet the request, - - - - - - regulatory obligations or constraints imposed on any of the parties, the desirability of stimulating innovative market offerings, and of providing users with a wide range of telecommunications services at a national and at a Community level, the availability of technically and commercially viable interconnection to requested, alternatives the the desirability of ensuring equal access arrangements, the need to maintain the integrity of the public telecommunications the interoperability of services, network and the nature of the request in relation to the resources available to. meet the request, the relative market positions of the parties, - the relative market positions of the parties, the public interest (e. g. the protection of the environment). - the public interest (e. g. the protection of the environment). - 1 5- Article 9 par. 6a (new) their counterparts National regulatory authorities shall provide help in other and assistance to in order to Member States whenever required implement this Directive. The Commission may at any time request a National regulatory authority to intervene on specific issues. National Regulatory the Authorities Commission's request and inform the Commission in detail and without undue delay of the steps taken. take due account of shall Article 10(e) (new) Protection of the environment : Member States may impose conditions in interconnection agreements in order to ensure the protection of environment or comply with objectives of town planning, and in particular to impose physical collocation of lines and ducts. The need to protect the environment does not constitute a valid reason for refusal_to negotiate terms of interconnection. Article 11 par. 1 Where an organization is granted a general right under national legislation to install facilities for telecommunications purposes on, over or under public or private land, or may take advantage of a procedure for the expropriation or use of property national for regulatory authorities shall encourage the sharing of such facilities and property with other organizations providing public telecommunications services. telecommunications purposes, Where an organization is granted a general right under national legislation to install facilities for télécommunications purposes on, over or under public or private land, or may take advantage of a procedure for the expropriation or use of property national for regulatory authorities shall encourage the sharing of such facilities and property with other organizations providing public telecommunications networks and services. telecommunications puq^oses, Article 12 par. 2 In order to ensure full interoperability of European- wide networks and services, Member States shall ensure the coordination of their national positions in fora where international numbering decisions are taken, taking into account possible future developments in numbering at a European level. organizations and In order to ensure full interoperability of European- wide networks and services, Member States shall take all necessary steps to ensure the coordination international of organizations and fora where numbering decisions are taken, taking future developments in numbering at a European level. their national positions into account possible in 16 Article 12 par. 3 shall from ensure independence that national Member States telecommunications numbering plans are controlled by the national regulatory authority, in order to organizations guarantee providing public telecommunications networks or public telecommunications services. In order to ensure effective competition, national regulatory authorities shall ensure that the procedures for allocating individual numbers and/or numbering ranges are transparent, equitable and timely and the allocation is carried out in an objective, transparent National and regulatory authorities may lay down conditions for the use of certain prefixes or certain short codes, in particular where these are used for services of general public interest (e. g. freephone services, kiosk billed services, directory services, emergency services), or to ensure equal access. non-discriminatory manner. that shall from ensure independence national Member States telecommunications numbering plans are controlled by the national regulatory authority, in order to organizations guarantee providing public telecommunications networks or public telecommunications services and facilitate number portability. In order to ensure effective competition, national regulatory authorities shall ensure that the procedures for allocating individual numbers and/or numbering ranges are transparent, equitable and timely and the allocation is carried and non in an objective, out discriminatory manner. regulatory authorities may lay down conditions for the use of certain prefixes or certain short codes, in particular where these are used for services of general public interest services, kiosk billed services, directory services, emergency services), or to ensure equal access. transparent National freephone (e. g. Article 12 par. 5 National regulatory authorities shall encourage the earliest possible introduction of the facility whereby end-users who so request can retain their national number at a specific location independent of the organization providing service, and shall ensure that this facility is available at least in all major centers of population before 1 January 2003. National regulatory authorities shall encourage the earliest possible introduction of the facility whereby end-users who so request can retain, against a reasonable contribution, their national number at a specific location independent of the organization providing service, and shall ensure that this facility is available at in all major centers of population before 1 January 2003. If this facility is not yet in use, national regulatory authorities shall ensure that, once a user has changed supplier, a telephone call to his old number is rerouted to the user, or that during a reasonable period callers are given an indication of the new number. least Article 16 par. 2 Any party may refer the dispute to the national regulatory authorities concerned. The national regulatory authorities shall coordinate their efforts in order to bring about a resolution of the dispute, in accordance with the principles set out in Article 9(1). Any party may refer the dispute to the national regulatory authorities concerned. The national regulatory authorities shall coordinate their efforts and shall inform the Commission in order to bring about a resolution of the dispute, in accordance with the principles set out in Article 9(1). -17 Article 16 par. 5 in accordance with The position agreed the procedure referred to in paragraph 4 shall form the basis of a solution to be implemented at a national If an agreed position is not level without delay. reached, or if an agreed position is not implemented within a reasonable time which shall not, except in justified cases, exceed two months, the appropriate solution shall be adopted by the Commission in accordance with the procedure laid down in Article 15. in accordance with The position agreed the procedure referred to in paragraph 4 shall form the basis of a solution to be implemented at a national If an agreed position is not level without delay. reached, or if an agreed position is not implemented within a reasonable time which shall not, except in justified cases, exceed two months, the appropriate solution shall be adopted by the Commission in accordance with the procedure laid down in Article 15. the This solution does not prejudice possibilities which exist in national legislation for one party to claim in the relevant courts for the granting of damages if it appears that the behaviour of another party has led to financial losses due to distortion of competition. However, issues which level cannot be have been settled at EU questioned under these claims. Article 17 par. 2 National regulatory authorities shall notify to the Commission by 31 January 1997, and immediately thereafter in the event of any change, the names of those organizations which: National regulatory authorities shall notify to the Commission by 31 January 1997, and immediately thereafter in the event of any change, the names of those organizations which: have universal service obligations the telecommunications provision of networks and services identified in Annex I, Part the public for have universal service obligations the telecommunications provision of networks and services identified in Annex I, Part the public for are subject to the provisions of this Directive concerning organizations with significant market power; are subject to the provisions of this Directive concerning organizations with significant market power; are covered by Annex II. are covered by Annex II. The Commission may request national regulatory authorities to provide their reasons for classifying an organization as having significant market power. The Commission may request national regulatory authorities to provide their reasons for classifying an organization as having significant market power or for not classifying an organization as such. Article 19 par. I Deferment from the obligations under Articles 3(1) and 9(3) may be requested by those Member States identified in the Council's Resolution of 22 July 1993 who benefit from an additional transition period for the liberalization of telecommunications services. Deferments granted on these grounds shall not exceed the transition periods set out in the said Resolution. Member States with less developed networks which are granted an additional period of up to five years in which to implement all or some of the obligations a under Directive request corresponding deferment of some or all the requirements of Articles 3(1) and 9(3). to the extent justified by any special or exclusive rights for telecommunications infrastructure allowed under Community law. 96/. /EC may services and Article 19 par. 2 requested where Deferment from the obligations under Article 12(5) may be the Member State concerned can prove that they would impose an excessive burden on certain organizations or classes of organization. Deferment from the obligations under Article 12(5) may be requested where the Member State concerned can prove that they would impose an excessive burden on certain organizations or classes of organization. the requirements can be met, and The Member State shall inform the Commission of the reasons for requesting a deferment, the date by which the measures envisaged in order to meet this deadline. The Commission shall consider the request taking into account the particular situation in that Member State and the need to ensure a coherent regulatory environment at a Community level, and shall info mi the the Member State whether particular situation in that Member State justifies a deferment and, if so, until which date such deferment is justified. it deems that The Member State shall inform the Commission of the reasons for requesting a deferment, the date by which the requirements can be met, and the measures envisaged in order to meet this deadline. The Commission shall consider the request taking into account the particular situation in that Member State and the existing possibilities of otherwise meeting the requirements, and shall inform the Member State whether it deems that the particular situation in that Member State justifies a deferment and, if so, until which date such deferment is justified. Article 21 par. 2 The Commission shall examine and report to the European Parliament and to the Council on the functioning of this Directive, on the first occasion not later than 31 December 2000. For this purpose, the Commission may request information from the Member States. Where necessary, further measures can be proposed full in implementation of the aims of this Directive. the report the for The Commission shall examine and report to the European Parliament and to the Council on the functioning of this Directive, on the first occasion not later than 31 December 1999. For this purpose, the Commission may request information from the Member States. Where necessary, the report shall examine what provisions of this Directive should be adapted in the light of the developments in the market. Further measures can be proposed in the report for the full implementation of the aims of this Directive; in particular, the report shall examine the possibility of establishing a European regulatory authority to ensure those tasks carried out by the Commission or the national regulatory authorities according to this Directive, which would be more efficiently through such a European Regulatory Authority. fulfilled 19 The fixed public telephone service The fixed public telephone service Annex I, Part 1 The fixed public telephone service means the provision to end-users at fixed locations of a service for the originating and receiving of national and international calls, and may include access to emergency (112) services, the provision of operator assistance, directory information services, provision of public pay phones, provision of service under special terms and/or provision of special facilities for customers with disabilities. calls, The fixed public telephone service means the provision to end-users at fixed locations of a service for the originating and receiving of national and international to and emergency (112) services, the provision of operator assistance, directory information services, provision of public pay phones, provision of service under special terms and/or provision of special facilities for customers with disabilities. includes access Annex II par. 4 Organizations included in this category at their own licensing or relevant national request, under authorization schemes. providing Organizations telecommunication services which are included in this category at their own request, under relevant national licensing or authorization schemes. Annex VII, Part 2. (n) (new) Provision of facility sharing. Annex VII, Part 2. (o) (new) Maintenance services. and quality of interconnection Annex VII, Part 2. (p) (new) Protection of confidential information. Annex VII, Part 3. (b) Provision of facility sharing. (deleted) Annex VII, Part 3. (e) Maintenance services. and quality of interconnection (deleted) 20- ISSN 0254-1475 COM(96) 121 final DOCUMENTS EN 15 Catalogue number : CB-CO-96-131-EN-C ISBN 92-78-01831-7 Office for Official Publications of the European Communities L-2985 Luxembourg IX

Proposal for a COUNCIL REGULATION (EC) on the conclusion of the Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast

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* it COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 03. 1996 COM(96) 111 final 96/0084 (CNS) Proposal for a COUNCIL DECISION on the conclusion of the Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast Proposal for a rOTINCTL REGULATION (EC) on the conclusion of the Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast (presented by the Commission) EXPLANATORY MEMORANDUM The Protocol annexed to the fisheries agreement between the European Community and the Republic of Guinea expired on 31 December 1995. A new Protocol was initialled by the two parties on 6 December 1995 establishing the technical and financial conditions under which Community fishing vessels can fish in Guinea waters in the period 1 January 1996 to 31 December 1997. The Commission is accordingly proposing that the Council should adopt: by means of a Decision, the draft Agreement in the form of an exchange of letters concerning the provisional application of the new Protocol pending its final entry into force, by means of a Regulation, the Protocol establishing the fishing opportunities and the associated technical and financial conditions agreed between the Community and Guinea-Bissau for the period 1 January 1996 to 31 January 1997. COUNCIL DECISION of on the conclusion of the Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast, and in particular Article 15 thereof ('), Having regard to the proposal from the Commission, Whereas, in accordance with the second subparagraph of Article 15 of the aforesaid Agreement, the Community and the Republic of Guinea conducted negotiations to determine the amendments or additions to be made to the Agreement at the end of the period of application of the Protocol annexed to the Agreement; Whereas, as a result of the these negotiations, a new Protocol was initialled on 6 December 1995; Whereas, under that Protocol, Community fishermen have fishing rights in the waters under the sovereignty or jurisdiction of the Republic of Guinea for the period from 1 January 1996 to 31 December 1997; Whereas, in order to avoid any interruption in the fishing activities of Community vessels, it is essential that the new Protocol be applied as soon as possible; whereas, for this reason, the two Parties initialled an Agreement in the form of an exchange of letters providing for the provisional application of the initialled Protocol from the day following the date of expiry of the current Protocol; Whereas the Agreement in the form of an exchange of letters should be approved, pending a final decision taken on the basis of Article 43 of the Treaty, HAS DECIDED AS FOLLOWS: Article 1 The Agreement in the form of an exchange of letters concerning the provisional application of the Protocol establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast is OJ NoL 111, 27. 4. 1983, p. 1. A: ;eby approved on behalf of the Community. The texts of the Agreement in the form of an exchange of letters and of the Protocol are attached to this Decision. Article 2 The President of the Council is hereby authorized to designate the persons empowered to sign the Agreement in the form of an exchange of letters in order to bind the Community. Done at Luxembourg. For the Council ! The President AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS CONCERNING THE PROVISIONAL APPLICATION OF THE PROTOCOL ESTABLISHING, FOR THE PERIOD FROM 1 JANUARY 1996 TO 31 DECEMBER 1997, THE FISHING RIGHTS AND FINANCIAL COMPENSATION PROVIDED FOR IN THE AGREEMENT BETWEEN THE EUROPEAN COMMUNITY AND THE GOVERNMENT OF THE REPUBLIC OF GUINEA ON FISHING OFF THE GUINEAN COAST A. Letter from the Government of the Republic of Guinea Sir, With reference to the Protocol initialled on 6 December 1995, establishing fishing rights and financial compensation for the period from 1 January 1996 to 31 December 1997, I have the honour to inform you that the Government of the Republic of Guinea is ready to apply this Protocol on a provisional basis, with effect from 1 January 1996, pending its entry into force in accordance with Article 9 of the said Protocol, provided that the European Community is disposed to do the same. This is on the understanding that the first instalment of the financial compensation specified in Article 2 of the Protocol is paid by 31 May 1996. I should be obliged if you would confirm the European Community's agreement to such provisional application. Please accept, Sir, the assurance of my highest consideration. For the Government of the Republic of Guinea B. Letter from the Community Sir,. I have the honour to acknowledge receipt of your letter of today's date, which reads as follows: "With reference to the Protocol initialled on 6 December 1995, establishing fishing rights and financial compensation for the period from 1 January 1996 to 31 December 1997, I have the honour to inform you that the Government of the Republic of Guinea is ready to apply this Protocol on a provisional basis, with effect from 1 January 1996, pending its entry into force in accordance with Article 9 of the said Protocol, provided that the European Community is disposed to do the same. This is on the understanding that the first instalment of the financial compensation specified in Article 2 of the Protocol is paid by 31 May 1996. I should be obliged if you would confirm the European Community's agreement to such provisional application. " I have the honour to confirm the European Community's agreement to this provisional application of the Protocol. Please accept, Sir, the assurance of my highest consideration. On bnfenlf of thm Council thm tvrqnnen Onion 5 Proposal for a COUNCIL REGULATION (EC) on the conclusion of the Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off thé Guinean coast THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43, in conjunction with Article 228(2) and (3) first subparagraph thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament,1 Whereas pursuant to the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast,2 the two Parties conducted negotiations to determine the amendments or additions to be made to the Agreement at the end of the period of application of the Protocol annexed to the Agreement; Whereas, as a result of these negotiations, a new Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the abovementioned Agreement was initialled on 6 December 1995; Whereas it is in the Community's interest to approve the new Protocol, HAS ADOPTED THIS REGULATION: Article 1 The Protocol establishing, for the period 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast is hereby approved on behalf of the Community. The text of the Protocol is attached to this Regulation. i 2 O J No O J N oL 111,27. 4. 1983, p. 1. Article 2 The President of the Council is hereby authorized to designate the persons empowered to sign the Protocol in order to bind the Community. Article 3 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at For the Council The President PROTOCOL establishing, for the period from 1 January 1996 to 31 December 1997, the fishing rights and financial compensation provided for in the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast Article 1 For a period of two years from 1 January 1996, the fishing rights granted under Article 2 of the Agreement shall be as follows: 1. trawlers (fin-fish, cephalopods and shrimp): 5 000 grt a month, annual average; 2. freezer tuna seiners: 28 vessels; 3. pole-and-line tuna vessels: 7 vessels; 4. surface longliners: 7 vessels. Article 2 1. The financial compensation referred to in Article 8 of the Agreement shall be, for the period referred to in Article 1, ECU 2 450 000, payable in two annual instalments of ECU 1 150 000 and ECU 1 300 000 respectively. 2. The use to which this compensation is put shall be the sole responsibility of the Government of the Republic of Guinea. 3. The compensation shall be paid into an account opened with a financial institution or any other body designated by the Government of the Republic of Guinea. i Article 3 At the request of the Community, the fishing rights referred to in point 1 of Article 1 may be increased by successive instalments of 1 000 grt a month, calculated on an annual average basis. In this case, the financial compensation referred to in Article 2 shall be increased proportionately. Article 4 The Community shall also contribute during the period referred to in Article 1 the sum of ECU 400 000 towards the financing of a Guinean scientific or technical programme to improve information on the fishery resources within the exclusive economic zone of Guinea. This sum shall be made available to the Government of the Republic of Guinea and paid into the account indicated by the Guinean authorities. y Article 5 The two Parties agree that improving the skills and knowledge of those involved in sea-fishing is a vital element in the success of their cooperation. To that end, the Community shall make it easier for nationals of Guinea to find places in establishments in its Member States and shall provide for that purpose awards for study and practical training in the various scientific, technical and economic disciplines relating to fisheries. The awards may also be used in any country linked with the Community by a cooperation agreement. The total cost of the awards may not exceed ECU 250 000. At the request of the Guinean authorities, part of this sum may be used to cover the costs of participation in international meetings or training courses concerning fisheries or for the organization of seminars on fishing in Guinea. The sum shall be payable as and when it is used. A proportion of the funds provided for in this article, which shall not exceed ECU 100 000, may be used to pay Guinea's contributions to international fisheries organizations. Article 6 The Community shall also contribute to the financing of programmes as follows: ECU 350 000 in aid for fisheries surveillance bodies; ECU 300 000 in institutional aid for the Ministry for Fisheries; ECU 250 000 in aid for non-industrial fishing. These funds shall be made available to the bodies concerned. The ministry shall communicate the bank accounts to which payment is to be made. Article 7 Should the Community fail to make the payments provided for in Articles 2 and 4, the application of this Protocol may be suspended. Article 8 The Annex to the Agreement between the European Community and the Government of the Republic of Guinea on fishing off the Guinean coast is hereby repealed and replaced by the Annex to this Protocol Article 9 This Protocol shall enter into force on the date on which it is signed. It shall be applicable from 1 January 1996. ANNEX CONDITIONS FOR THE EXERCISE OF FISHING ACTIVITIES BY COMMUNITY VESSELS IN GUINEA'S FISHING ZONE A. Licence application and issuing formalities The relevant Community authorities shall present to the fisheries ministry via the Delegation of the Commission of the European Communities in Guinea, an application for each vessel that is to be used for fishing under the Agreement, at least 30 days before the date of commencement of the period of validity requested. The applications shall be made on the forms provided for that purpose by the fisheries ministry, a specimen of which is attached hereto (Annex 1). Each licence application shall be accompanied by proof of payment of the fee for the period of the licence's validity. Payment shall be made into the account opened with the Public Treasury of Guinea. The fees shall include all national and local charges except for port taxes and service costs. Licences for all vessels shall be issued by the fisheries ministry within 30 days following receipt of proof of payment as laid down above to the shipowners or their representatives via the Delegation of the Commission of the European Communities in Guinea. Licences shall be issued for a specific vessel and shall not be transferable. However, where force majeure is proven and at the request of the European Community, a vessel's licence shall be replaced by a new licence for another vessel whose features are similar to those of the first vessel. The owner of the first vessel shall return the cancelled licence to the fisheries ministry via the Delegation of the Commission of the European Communities. The new licence shall indicate: - the date of issue, - the validity of the new licence, covering the period from the date of arrival of the replacement vessel to the date of expiry of the licence of the replaced vessel. In this case, no fee as laid down in the second subparagraph of Article 5 of the Agreement shall be due for unexpired periods of validity. The licence must be held on board at all times. 4 I. Provisions applicable to trawlers 1. Each vessel shall be obliged to report to the port of Conakry once a year, prior to the issue of the licence, to undergo the inspection laid down by the rules and regulations currently in force. Inspections shall be carried out exclusively by duly authorized persons and must be effected within 24 working hours of arrival of the vessel in port if arrival has been announced at least 48 hours in advance. If the licence is renewed during the same calendar year the vessel shall be exempt from further inspection. 2. Each vessel must be represented by an agent of Guinean nationality, established in Guinea. 3. (a) Licences shall be issued for periods of three, six and twelve months and be renewable. (b) The fees to be paid by shipowners, expressed in ECU/gross registered tonne, shall be as follows. for annual licences: 126 for fin-fish trawlers, 150 for cephalopod trawlers, 152 for shrimp trawlers. for six-month licences: 65 for fin-fish trawlers, 77 for cephalopod trawlers, 78 for shrimp trawlers. for three-month licences: 33 for fin-fish trawlers, 39 for cephalopod trawlers, 40 for shrimp trawlers. However, vessels failing to land 200 kg of fish per grt per year in accordance with the provisions of part C shall be obliged to pay an additional fee of ECU 10 per grt per year. II. Provisions applicable to tuna vessels and surface longliners (a) The annual fees shall be ECU 20 per tonne caught within Guinea's fishing zone. (b) Licences shall be issued following payment to the fisheries ministry of a lump sum of ECU 1 500 a year for each tuna seiner and ECU 300 a year for each pole-and-Iine tuna vessel and surface longliner, equivalent to the fees for: - 75 tonnes of tuna caught per year in the case of seiners, 41 - 15 tonnes caught per year in the case of pole-and-line tuna vessels and surface longliners. The final statement of the fees due for the fishing period shall be drawn up by the Commission of the European Communities at the end of each calendar year on the basis of the catch statements made for each vessel and confirmed by the scientific institutes competent to verify catch data, such as the French Office of Overseas Scientific and Technical Research (Orstom) and the Spanish Institute of Oceanography (IEO). The statement shall be forwarded to the fisheries ministry and to the shipowners at the same time. Any additional payment due shall be made by the shipowners to the fisheries ministry no later than 30 days after notification of the final statement, to be paid into the account opened with the Public Treasury of Guinea. However, if the amount of the final statement is lower than the abovementioned amount, the resulting balance shall not be reimbursable. B. Statement of catch For all Community vessels authorized to fish in Guinea's waters under the Agreement a statement of their catch must be provided to the fisheries ministry, with a copy to the Delegation of the Commission of the European Communities in Guinea, in accordance with the procedures set out below: - for trawlers a statement shall be made out according to the specimen annexed hereto (Annex 2). The statements shall be drawn up each month and presented at least once each quarter, - for tuna seiners, pole-and-line tuna vessels and surface longliners a fishing log shall be kept, in accordance with Annex 3, for each fishing period spent in Guinea's fishing zone. The form must be sent, within 45 days of the end of the fishing voyage spent in the Guinean fishing zone, to the fisheries ministry via the Delegation of the Commission of the European Communities in Guinea. Forms must be completed legibly and be signed by the master of the vessel. Should this provision not be adhered to, the fisheries ministry reserves the right to suspend the licence of the offending vessel until the formality has been complied with. In this case, the Delegation of the Commission of the European Communities in Guinea shall be informed. C. Landing of catch Trawlers authorized to fish in the Guinea fishing zone shall, in order to make a contribution towards supplying the local population with fish caught in the Guinea fishing zone, be obliged to land 200 kg of fish per grt per year free of charge. Landings may be made individually or collectively, mention being made of the vessels concerned. M D. By-catch 1. Fin-fish trawlers may not hold on board species other than fish representing more than 15% of their total catch in the Guinea fishing zone. Cephalopod trawlers may not hold on board crustaceans representing more than 20% or fish representing more than 30% of their total catch in the Guinea fishing zone. Shrimp trawlers may not hold on board cephalopods representing more than 25% or fish representing more than 50% of their total catch in the Guinea fishing zone. A maximum tolerance of 5% of these percentages shall be authorized. These limits shall be indicated on the licence. 2. Pole-and-line tuna vessels shall, moreover, be authorized to fish for live bait in order to carry out their fishing activities in the Guinea fishing zone. E. Signing-on of seamen Owners who have been issued fishing licences under the Agreement shall contribute to the on-the-job vocational training of Guinea nationals, subject to the conditions and limits set out below: (1) Each trawler owner shall undertake to employ: - three Guinean seamen on vessels of up to 350 grt, - a number of Guinean seamen equivalent to 25% of the number of seamen/fishermen signed on for vessels with a tonnage greater than 350 grt. (2) For the fleet of tuna seiners, three Guinean seamen shall be signed on permanently. (3) For the fleet of pole-and-line tuna vessels, three Guinea seamen shall be signed on for the tuna-fishing season in the Guinean fishing zone, all of them to be assigned to different vessels. (4) For the fleet of surface longliners, the shipowners undertake to employ two Guinean seamen per vessel during the fishing season in Guinean waters. (5) The wages of these Guinean seamen shall be fixed, before licences are issued, by mutual agreement between the shipowners or their representatives and the fisheries ministry; the wages shall be borne by the shipowners and must include the social contributions to which the seaman is subject (including life assurance and accident and sickness insurance). Should the seamen not be signed on, owners of tuna seiners, pole-and-line tuna vessels and surface longliners shall be obliged to pay the fisheries ministry a lump sum equivalent to the wages of seamen not signed on in accordance with the provisions of points 2, 3 and 4. This sum will be used for the training of seamen/fishermen in Guinea and is to be paid into an account specified by the fisheries ministry. 43 F. Observers 1. The observers' task shall be to check on fishing activities in the Guinean fishing zone and collect all statistical data on the fishing activities of the vessel concerned. They shall be offered every facility needed to carry out their duties, including access to premises and documents and weekly radio communication of fishing data. 2. Each trawler shall take on board an observer appointed by the fisheries ministry. In the case of trawlers of less than 200 grt, however, a fisherman designated by the fisheries ministry shall act as observer, in which case the master of the vessel shall facilitate the work of this seaman outside the actual fishing operations. Observers shall not normally remain on board for more than two trips. 3. Tuna vessels and surface longliners shall take an observer on board at the request of fisheries ministry. He must not remain on board any longer than is necessary for the accomplishment of his duties. The master of the vessel shall facilitate the work of the observer, who shall be accorded the conditions enjoyed by officers of the vessel. Should observers be taken on board in foreign ports, their travelling costs shall be borne by the shipowner. 4. The pay and social insurance contributions of observers shall be borne by the fisheries ministry. In the case of trawlers, shipowners shall pay to the "Centre National de Surveillance de Pêches" (CNSP) ECU 10 for each day spent on board by an observer as a contribution to the expenses arising from their presence on board. 5. Should a vessel with an observer on board leave the Guinean fishing zone, all measures must be taken to ensure the observer's return to Conakry as soon as possible at the expense of the shipowner. G Inspection and monitoring Any Community vessel fishing in Guinea's zone shall allow on board any official of Guinea responsible for the accomplishment of his duties. This official must not remain on board any longer than is necessary for the verification of catches by random checks and for any other inspection relating to fishing activities. inspection and monitoring and shall assist him in H. Fishing zones All the vessels referred to in Article 1 of the Protocol shall be authorized to fish in waters beyond 10 nautical miles. I. Minimum meshes authorized St The minimum mesh size authorized for the trawl body (mesh fully extended) shall be: (a) 40 mm for shrimps; (b) 50 mm for cephalopods; (c) 60 mm for fin fish. These minimum sizes may be altered to conform to the standardization of the member states of the Subregional Fisheries Commission. Any such alterations shall be examined in the Joint Committee. Fishing with outriggers shall be authorized. J. Entering and leaving the zone All Community vessels fishing under the Agreement in the Guinean zone shall communicate to the radio station of the CNSP the date and time and their position when entering and leaving the Guinea fishing zone. The call sign and operating frequencies and times of the station shall be communicated to the shipowners by the CNSP at the time the licence is issued. In cases where this radio communication cannot be used, vessels may use alternative means, such as fax (CNSP: 1-212-4794-885, the fisheries ministry: 224-413523). K. Boarding of vessels 1. The Delegation of the Commission of the European Communities in Guinea shall be notified within 48 hours of any boarding within the Guinean exclusive economic zone of a fishing vessel flying the flag of a Member State of the Community and operating under an Agreement concluded between the Community and a third country and shall at the same time receive a brief report of the circumstances and reasons leading to the boarding. 2. In the case of vessels authorized to fish in Guinean waters, before any measures regarding the master or the crew of the vessel or any action regarding the cargo and equipment of the vessel are considered, other than those to safeguard evidence relating to the presumed infringement, a consultation meeting shall be held, within 48 hours of receipt of the abovementioned information, between the Delegation of the Commission of the European Communities, the fisheries ministry and the inspection authorities, possibly attended by a representative of the Member State concerned. At the meeting, the Parties shall exchange any relevant documentation or information, in particular automatically registered data showing the vessel's positions during the trip up to the time of boarding, helping to clarify the circumstances of the established facts. The shipowner or his representative shall be informed of the outcome of the meeting and of any measures resulting from the boarding. •15 3. Before any judicial procedure, an attempt shall be made to resolve the presumed infringement through a compromise procedure. This procedure shall end no later than three working days after the boarding. 4. Should the case not be settled by means of compromise, and therefore be brought before a competent judicial body, a bank security shall be fixed by the relevant authority within 48 hours following the conclusion of the compromise procedure, pending the judical decision. The amount of the security must not exceed the amount of the penalty laid down under national legislation for the presumed infringement in question. The bank security shall be returned to the shipowner by the relevant authority once the case is settled without incrimination of the master of the vessel concerned. 5. The vessel and its crew shall be released either: - at the end of the consultation meeting, if the established facts permit, or - once the obligations arising under the compromise have been fulfilled, or - once a bank security is deposited (judicial procedure). * •\ / > / » / • ' ! < / /» / APPLICATION FORM FORA FISHING LICENCE I. , oil,,,. ! ,,sc or. lv Ki mark\ Nationality licence No: Date of si^mn}; D. IIC <)t («. sue: A I TI I C A NI N a me of ( i n n: T r a de remisier No I usl n. ime. Hid s u r n a me ol applicant I). Hi- Hid pi. ICC i ll b l l t ll O c c u p a t i on Address No ol employees N a me. jnd. u l d r t ss ol co signatory VESSII Typc of vessel: N ew n a m e: Date and place of c o n s t r u c t i on O r i g i n al n a t i o n a l i ty R e g i s t r a t i on N< Former name: I ength Beam H o ld Gross tonnage. Net tonnage I ypc ol b u i l d i ng n i. i t e n. i ls M a ke of m am engine 1 \ pe Rating. Propeller laved LJ V a r i a b le L >IK led I I raiiMi speed1 C a ll Slgll (. ill ll'Ci|UCIH \ 1 ISI ol s o u n d i n g, n a v i g a t i ng and ir. nisiiiissioii instruments. R. ul. n L. J Son. i, 1. 1 Ncisonde L j V I II S Sb N c i s i m dc satellite ll. lvi. -. Hion I I i I O i l, 4 CONSERVATION • Ice ami re Inge ran» »« f~~~\ | I Ircc/. ing in'brine I I Dry I J Kclrigt-i. ticd se. i v\atjei [ ] Total rcfrigcr. itnig power: I rec/ing capacity in tonnes/24 hours Hold capactt y I Y PI Ol IISHIiNK, A Demersal Inshore demersal I I Deep-sea demersal 1 I Type of trawl: Cephalopods | J Shrimps | | hsh I I Length of trawl: Headline: Mesh size in the body: Mesh size in the wings: Speed of trawling: B. Deep-sea pelagic (tuna) Pole and line | | No of poles and lines | 1 Seine I I Length of net: Depth of net No of tanks: Capacitv m tonnes C l. onglincs and pots Surface L. J I cngth of lines. No of lines No id pots:. Bottom I. J No ol hooks fl SHORi: INSTALLA I IONS Address and pennu No Name of firm Activities '. Domestic wholesale fish trade I I I. vport I I Type ami No ol wholesale trader's card:. Description of processing and conscivation plant No of employees N/J: Indicate alfuin. iiive answers by a lick m ihe appropriai»- box. D >l <f<îtmrtiuiTf e<tKt*fc s Aui»u>ruation of the M i n i s t ry f or F i s h e r i es OFFICE OF THE SECRETARY OF STATE FOR FISHERIES Name of vessel: Nationality (flag): Appendix 2 S T A T I S T I CS ON C A T CH A ND A C T I V I TY Engine rating: Gross registered tonnage: Wishing j o nc Longitude Latitude | Number ol fi>hing o p r r j n o ns N u m b er ol fishing hours N'ont Y e ar Fish:ng method: Per: of landing: Species of fish "t" *f 13- 13 FINANCIAL STATEMENT 1. 2. 3. TITLE OF OPERATION: New financial Protocol EC/Guinea BUDGET HEADING INVOLVED: B7-800 LEGAL BASIS:Treaty art. 43, in conjunction with art. 228(2) and (3) first subpar. EC/Guinea Agreement (OJ No L 111, 27. 4. 1983) 4. DESCRIPTION OF OPERATION 4. 1 General objective: Protocol and Annex for a two-year period 4. 2 Period covered and arrangements for renewal or extension: 1 January 1996 to 31 December 1997 Arrangements for renewal by negotiations before the Protocol expires. 5. Classification of expenditure or revenue 5. 1 Compulsory 5. 2 Differentiated 6. Type of expenditure or revenue - Other: Financial compensation to a third country in exchange for fishing opportunities granted by it and laid down in the Protocol. 7. FINANCIAL IMPACT 7. 1 Method of calculating total cost of operation (definition of unit costs) see complement to the Protocol Itemised breakdown of cost 7. 2 Breakdown 1996 1997 1. 150. 000 400. 000 250. 000 900. 000 !. 700. 000 1. 300. 000 1. 300. 000 TOTAL current ECUs TOTAL 2. 450. 000 400. 000 250. 000 900. 000 4. 000. 000 olH 7. 3 Schedule for proposed new operation 1996 1997 2. 700. 000 1. 300. 000 Commitment appropriations Payment appropriations 1996 1997 2. 000. 000 2. 000. 000 , ' current ECUs TOTAL 4. 000. 000 2. 000. 000 2. 000. 000 TOTAL 2. 000. 000 2. 000. 000 4. 000. 000 8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN: Since the financial contributions are made by the Community in direct exchange for the fishing possibilities offered, the third country uses them for whatever end it chooses. The exception to this rule is the case of programmes, such as the scientific programmes, where under the dispositions of the Agreement, Mauritania will furnish reports to the Community. In addition, the Member States whose vessels operate under this Agreement must certify to the Commission the exactitude of the data indicated in the tonnage certificates of the vessels so that the licence fees may be calculated on a guaranteed basis. To for Community vessels. includes catch declarations the Agreement that end, 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS: In terms of the benefits of this agreement, it is clear that the value of the catches of the main commercial species far exceeds the cost of 4. 0 MECU. In addition to the direct commercial value of the catches of the vessels concerned, there are the following evident benefits from this Agreement: guaranteed employment aboard the fishing vessels; multiplier employment effect in the ports, auctions rooms, processing factories, shipyards, service industries, etc. ; these employment opportunities are in regions where no other opportunities are available; contribution to the supply of fish to the Community. Obviously, in addition to those benefits, one must take account of the importance of our relations with Guinea in the fisheries field and our overall political relations. 10. ADMINISTRATIVE EXPENDITURE (part A of the budget): No incidence on administrative expenditure. 05 ISSN 0254-1475 COM(96} 111 final DOCUMENTS EN 03 U Catalogue number : CB-CO-96-121-EN-C ISBN 92-78-01721-3 Office for Official Publications of the European Communities L-2985 Luxembourg I

COMMUNICATION FROM THE COMMISSION - Evaluation of the second multiannual programme for entreprise and SMEs (1993-1996) - Observations from the Commission on the report submitted by Arthur Andersen & Co-Business Consulting Services

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 03. 1996 COM(96) 99 final COMMUNICATION FROM THE COMMISSION EVALUATION OF THE SECOND MULTIANNUAL PROGRAMME FOR ENTERPRISE AND SMEs (1993-1996) OBSERVATIONS FROM THE COMMISSION ON THE REPORT SUBMITTED BY ARTHUR ANDERSEN & co - BUSINESS CONSULTING SERVICES INTRODUCTION Article 5 of the Council Decision of 14 June 1993 on the Second Multiannual Programme for Enterprise and SMEs (1993-1996) stipulates that an evaluation of the implementation of the Decision is to be conducted by an external evaluator. 1 This evaluation has been carried out by Arthur Andersen & Co - Business Consulting Services, and an executive summary of this evaluation (hereafter called "AA report") was submitted to the Commission on 31 January 1996. 2 This Communication, which contains a summary of the Commission's observations on the AA Report, will be forwarded to the Council, European Parliament and Economic and Social Committee alongside a proposal for a Council decision on a Third Multiannual Programme for Enterprise and SMEs in the European Union. (1997 - 2000). 3 I. GENERAL COMMENTS | The Commission welcomes the AA report, particularly in view of the positive assessment of the overall implementation of the current Multiannual Programme and the helpful suggestions made in the report for future Community action in this field. The overall achievement of the objectives of the current Multiannual Programme is rated positively by the evaluator4 for the following reasons: • The different measures have been well conceived by the Commission as they respond to the objectives of the Council Decision; • The implementation and achievement of the objectives are adequate. From a dynamic perspective, major progress has been achieved over the last two years in the implementation of some measures and for most measures considerable improvement has been identified in terms of quantitative and qualitative impact. In this context the AA report highlights the existing imbalance between the broad and ambitious objectives on the one hand and the limited resources on the other hand; • The cost-effectiveness ratio varies from "adequate" to "good" and "exceed", which demonstrates the "value for money" provided by the Community's Enterprise Policy actions. Council Decision 93/379/EEC of 14. 6. 1993 on a Multiannual Programme of Community measures to intensify the priority areas and to ensure the continuity and consolidation of policy for enterprise, in particular small and medium-sized enterprises in the Community, OJ N°L 161 of 2. 7. 1993, p. 68. See Annex 1. In this proposal, a number of key conclusions of the evaluator are cross-referenced, especially where modifications proposed reflect suggestions of the evaluator or, as in some cases, where the Commission disagrees with the comments made by the evaluator. See AA report, Conclusion. The Commission agrees that, while progress is being made in the right direction, there is still room for improvement. Therefore the Commission has carefully considered the various recommendations made in the AA report for increasing the impact of the individual measures. Some of the proposed changes have already been introduced by the Commission,5 while others will be implemented in the framework of its Proposal for a Third Multiannual Programme for Enterprise and SMEs. II. OBSERVATIONS ON THE ASSESSMENT OF SPECIFIC MEASURES Chapter I: Improvement of the administrative and enterprises including the area of indirect taxation legal environment of The AA report evaluates the different measures in this field6 as well conceived and adequately implemented, with an adequate rate of achievement and an excellent cost- effectiveness ratio. The Commission shares the evaluator's positive assessment of the individual measures. In particular, the measures in relation to legal and administrative simplification (including the business impact assessment system) present an enormous leverage potential, combining very broad impact (the entire enterprise population) with limited cost. The AA report states correctly that there remains room for improvement in the evaluation of the impact of legislative proposals on SMEs. Extensive work has been carried out under the Community's Enterprise Policy to this effect, and the result makes up part of the proposal for a Third Multiannual Programme. 7 The AA report also cites a considerable number of high profile bench mark success cases where the business impact assessment system was well exploited. 8 The evaluator's recommendations are in line with the Commission's thinking and have been taken up in the proposal for a Third Multiannual Programme. 9 Report on the future operation of the information and cooperation networks, COM(95) 435 final of 5. 12. 1995. The AA report focuses on the work of the Community's Enterprise Policy in the field of administrative simplification and legal environment. It does not cover all the work carried out by the Commission in this field (e. g. the recent Commission Guidelines on regulatory policy and the Commission's actions in the area of consolidation of Community legislation) and to a certain extent goes beyond the remit of the Second Multiannual Programme (e. g. cross-border access to Courts and arbitration has been taken up in the proposal for a Third Multiannual Programme). See AA report, Footnote 10. See AA report, Chapter I. See AA report, Chapter I, recommendations. The Commission notes that both representatives of SME organisations and Member States support the view that the objective of improving the administrative and legal environment for enterprise should remain a priority objective of the Community's Enterprise Policy. 10 The critical importance of legal and administrative simplification has also been highlighted in the Commission's SME Report presented to the Madrid European Council. 11 The conclusions of this European Council should give further impetus to the work which needs to be made in this area both by Member States and the Commission. Chapter II : Better access to Community information for enterprises A. The Euro-Info-Centres CEICs^ The evaluator states that the different measures in the field of information for enterprises are well conceived. In particular, the AA report points out that the Commission's approach of integrating the Euro-Info-Centres (EICs) into national, regional or local "host structures" should allow deep penetration of the SME business environment and allow the Commission to run a network at minimal cost by sharing part of the financial and administrative burden with these host organisations. 12 As regards the implementation of the EIC network, which is rated adequate by the evaluator, the Commission only partially agrees with a number of remarks made in the AA report:13 • Location of EICs: It is true that the EIC network has grown historically from an initial pilot action covering 39 host structures to a first enlargement covering 189 host structures. In the third stage of development the total number reached 228 mainly arising from the accession of new Member States. However, it should be borne in mind that the selection of EICs in the second phase was the outcome of a call for proposals, with careful consultations being held with Member States before taking a decision. A compromise had to be reached between the need to service areas of high concentration of SMEs and more remote areas where the population of SMEs is limited. A major factor in the choice which was made, the importance of which should not be underestimated, was the role of the EIC network as an instrument for achieving economic and social cohesion of the Union. 10 Ibidem. 11 "SMEs: a dynamic source of employment, growth and competitiveness in the European Union", Report presented by the Commission to the Madrid European Council, CSE(95) 2087. 12 See AA report, Chapter II. 13 Ibidem. • Host structures: The number of banks and other private institutions in the network is quite considerable (approximately 30%,14 while many EICs established close contacts with this type of entities), but it must be taken into account that provision of information to enterprises is generally considered a public service, and that the number of volunteering banks is therefore limited on account of the considerable cost the host structures have to bear for setting up and running an EIC. • Central structure: The AA report states that the EICs are generally satisfied with most support services provided by the EIC Central structure. However, the evaluator suggests that the existing quarterly evaluation reports of the EIC network do not allow the central structure to monitor effectively the quantitative and qualitative development of the network. This is a weakness which stems from the methodology chosen right at the outset of the EIC network, whereby the Commission works with volunteering host organisations on the basis of a co-operative effort largely-funded by host structures, whose relationships with their customers are not monitored by the Commission. The quarterly reports requested by the Commission have always been a key element in the relationship between the central structure and the EICs. Their information content is the most important basis for the evaluation of the EIC activities carried out for the whole structure by an independent evaluator. There have been constant efforts by the Commission to improve this aspect. This has led to major improvements, although it has to be conceded that the system of sanctions and incentives existing under the Second Multiannual Programme has not been fully efficient. This is why the proposal for the Third Multiannual Programme suggests a strengthening of both, with the aim of achieving a higher and more homogeneous level of services rendered by the EICs. • An alternative approach ? The evaluator proposes to consider the merits of a radical shift to a network consisting of a significantly reduced number of EICs which would be operated and funded totally by the Commission. While this may theoretically offer an even greater potential of reaching a homogeneous level of quality throughout the network, the Commission does not consider it wise to follow this line of action for the reasons set out in the proposal for a Third Multiannual Programme. 15 As to the cost effectiveness of the EIC network, which is also rated adequate, the AA report suggests that, at the current level of resources employed, the network should be able to achieve a greater qualitative and quantitative impact within the business community. 16 While the Commission shares this objective with the evaluator, it has come to the conclusion that the stimulation method employed by the Commission has now reached its limits, unless additional resources can be mobilised. 17 In reality, the 14 An additional 25% are both of a private and public nature. 15 See Explanatory Memorandum of the Commission Proposal for a Council Decision on a Third Multiannual Programme for Enterprise and SMEs, Section IV. B. l. 16 See A A report, Chapter II. 17 Report on the future operation of the information and cooperation networks, COM(95) 435 final of 5. 12. 1995. Commission only bears 25% of the total cost of the EIC network, and the evaluation report notes that the current financial structure of the network adds considerable leverage to DG XXIII's resources. 18 The proposal for a Third Multiannual Programme presents a number of improvements which from the Commission's perspective, would improve the overall result and increase the impact of the EIC network. It also sets out reasons why more far-reaching suggestions made by the evaluator are not considered more cost effective. B. Promotional activities The Commission agrees with the evaluator's view that the promotional effort made under the Community's Enterprise Policy was a rather weak point. This is mainly on account of the limited resources available for this important activity. The evaluator recognises the improvements made between 1993 and 1995,19 but clearly, more needs to be done in order, for instance, to improve the impact of the EIC network in the Business community. In this respect, the Community shares the strengths and weaknesses of its partners in the network, and a discussion at the informal Industry Council in Biarritz of 10 March 1995 has brought to light a need for action both at Member State and Community level. 20 The proposal for a Third Multiannual Programme puts a strong emphasis on strengthening the promotional effort and it is hoped that this, together with the decentralised approach adopted by the Commission in the last two years, will bear fruit. 21 Chapter HI : Improving the business-partner-search network The evaluator recognises the merits of the business search networks (BC-NET and BRE): their public service function is recognised; their unique character is underlined as there are thus far no comparable European-wide networks available; their conception is good, as they contribute to the realisation of transnational co-operation and hence to the development of the Single Market; they have low operating costs for the Community and good geographical coverage. 22 18 See A A report, Chapter II. 19 Ibidem. 20 See also Integrated Programme in favour of SMEs and the Craft Sector (pp. 19 and 20) where the need for a stimulation of the demand for business services is considered to be a field for concerted action. 21 See A A report, Chapter II. 22 See A A report, Chapter III. While the overall evaluation of these networks is positive, their impact may appear relatively modest. 23 However, current user figures are more satisfactory than it would appear on the surface. Given that, as recognised by the evaluator, only a small percentage of SMEs have the ambition to grow and internationalise, and that not all of these will choose transnational co-operation as the approach to achieve these objectives, one should not underestimate the current utilisation figures. 24 This does not mean that considerable improvements are not necessary to achieve a higher impact. 25 As a matter of fact, these improvements are among the proposals made for the Third Multiannual Programme. These will also improve on the cost-effectiveness ratio of these networks which is well rated by the evaluator. Chapter IV : Continued development of instruments permitting direct contact between entrepreneurs and aimed at promoting transnational subcontracting A. The partnership programmes Œuropartenariat and Interprise) The evaluator states that the concept behind Europartenariat and Interprise is sound and the results achieved are good, in particular taking into account the considerable leverage and synergy effects. 26 The Commission agrees that some implementation and follow-up problems remain to be addressed. The proposal for a Third Multiannual Programme therefore contains a number of improvements, including in the area of upstream and downstream assistance to the undertakings selected for participation. B. Subcontracting The AA report states that the different measures in the area of subcontracting are cost- effective and well conceived, while customer satisfaction with their quality is generally high. 23 Ibidem. 24 At present, only about 460 000 enterprises take a significant part in transborder operations. On this basis, the objective to mobilise about one million enterprises for this type of activities would appear very ambitious. 25 See A A report, Chapter III. 26 See AA report, Chapter IV. As far as the specific pilot actions are concerned, the Commission does not share the evaluation of the actions aimed at encouraging co-operation between large and small enterprises. In particular, the evaluator seems to have underrated the impact of the consumer electronic pilot programme and the hitherto successful attempt to organise buyers' exhibitions. Both measures were strategically focused on identified weaknesses in the European subcontracting system. 27 The Commission proposes in the Third Multiannual Programme a continuing emphasis on those measures which have a high strategic impact, with a particular effort to improve their implementation. Chapter V : Ensuring consideration of SME interests in the various Community initiatives and policies While recognising the complexity of implementing this objective, the evaluator-rates the Commission's strategy in this area as good : the different measures have a considerable leverage potential, create synergy effects and address priorities. 2'8 The report places a high emphasis on inter-service consultations and on the co ordination efforts of DG XXIII. This must be welcomed. In general, the Commission also shares the recommendations made by the evaluator with a view to strengthening the co-ordination efforts inside the Commission. The poor rating of the report on co-ordination is however due, in the Commission's view, to a misunderstanding arising from the title of this report. While future reports will put greater emphasis on the developments which have taken place, they will remain reports covering the work of the Commission as a whole and not only the co-ordination efforts of DG XXIII. The question of the title of the report was discussed previously when the Second Multiannual Programme was formulated, and was taken into account Insufficient when formulating Article 5 of the new Multiannual Programme. consideration has been given in the AA report to the fact that the Integrated Programme for SMEs and the Craft Sector has brought about major progress in the co-ordination effort. The evaluator places high priority on a harmonised definition of SMEs and recognises the progress achieved by DG XXIII. The encouragement expressed by the evaluator is welcomed by the Commission. 27 Ibidem. 28 See AA report, Chapter V. 8 Chapter VI : Encouraging SMEs to adapt to structural change and to changes brought about by the Internal Market In this chapter, a variety of pilot actions launched by the Commission are assessed. The evaluator expresses strong support for the "laboratory approach" of working with pilot projects, provided that sufficient resources and Severs can be mobilised to disseminate their findings. 29 Although only a few pilot projects have reached a mature phase,30 most of them have been rated as well conceived and adequately implemented, thus laying the foundations for achieving useful and practical results. Certain question marks are expressed in view of the human resources problems of DG XXIII. As recommended by the evaluator, the Commission will continue its "test by doing" approach through the launching oi" new pilot projects under the Third Multiannual Programme. The Commission shares the view of the evaluator that this is a legitimate and sensible way of assessing new ideas without spending large amounts of money 31 As in the past new pilot actions will be drawn up in close co-operation with European SME organisations in order to clearly identify market needs ("bottom-up approach"). The Commission will also consult Member States and publish calls for proposals in the Official Journal to achieve European wide publicity. Furthermore each pilot action will be evaluated by an external consultant upon completion of the project. With regard to Euronianagement pilot actions, the Commission will encourage close co-operation between the European co-ordinator for the project (selected by the Commission) and national co-ordinators (nominated by the Member States and the Commission) in order to achieve the best possible results of the pilot action and to ensure best value for money 29 See AA report. Chapter VI. 30 The AA repoil questions the cosl-cffcctivencss of one of these pilot projects, i. e. the one aimed at training apprentices from the peripheral areas in the Community through a three year sandwich course in the Federal Republic of Germany. The special evaluator mandated by the Commission to review this project comes to similar conclusions and makes a number of important suggestions which should be taken into account before undertaking any further action in this field. For this reason the pilot action launched in the early years of DG XXIII should be considered useful. 3 1 Sec AA report. Chapter VI. Chapter VII : Promoting a better financial environment for enterprises 9 The AA report states that the different activities launched by the Commission in this field are well designed and adequately implemented, while having a good qualitative and quantitative impact and an excellent cost-effectiveness ratio. The major concern expressed, namely that the Commission tried to do too much at once, can be explained by the fact that the evaluator also assessed projects which are still in a preparatory phase (i. e. factoring and retention of title). Accordingly, the evaluator is under the false impression that too many initiatives are taken simultaneously, while a number of them are still at a very early stage. On the other hand it is true that requests for inter-service consultation add to the workload of the units involved in this work, that the limited number of responsible officials are overwhelmed with a lot of consultations and that the human resources of DG XXIII, here as in other cases, are stretched to the limit. The implementation of these measures, however, is a matter which lies largely with the operators within the Community. Here, as in other fields, the Commission is mainly working as a catalyst. The remarks by the evaluator concerning conception flaws in the case of the seed capital pilot project (i. e. that the size of some funds is too small to pay back the operating costs) calls for the following response: • It was necessary to ensure that all funds were new funds so as to make sure that Community support was not in fact used also for activities other than seed funding. New funds by definition are small; • Most funds foresee an increase in their capital base and as a matter of fact have increased their capital since the beginning of the pilot project by 40%; • It is too early to judge their ability to pay back the Community advance on their operating costs, given that most funds have up to five years before they have to reimburse the advance. In considering the suggestions for new measures made by the evaluator, the following comments are pertinent: • The creation of round tables for each of the different parties and professions involved in the financing of SMEs might put too much strain on the limited human resources of the Commission. DG XXIII has, however, very good working relationships with most of these professions; 10 • The creation of a committee for improving the financial environment to study such measures as taxation has already been undertaken with the setting-up of the steering committee for the Concerted Action concerning support mechanisms for SMEs. At present, this steering committee is considering setting up special working parties to follow up on the results of the Madrid Forum on support mechanisms in the start-up phase of firms. Chapter VIII : Promoting better observation of the economic development of enterprises While this part of the activity of DG XXIII is generally evaluated in positive terms, some critical remarks are made as to: • • the quality of the statistical data made available through national statistical institutes and Eurostat, the inclusion of statistics for co-operatives, mutuals, associations and foundations (CMAFs) in the work programme, whose priority is questioned by the evaluator, • the composition of the network responsible for the European Observatory for SMEs, • distribution policy for the publications concerning the Community's Enterprise Policy, mainly as regards the Member State level. Some of these concerns go beyond the reach of the Commission's responsibility (e. g. the collection of statistical data). However, it should be noted that the initial situation of data availability was quite bad and could not easily and rapidly be improved because of the size of the enterprise population. Considerable improvements have already been introduced and should continue in the coming years. As regards the priority given to CMAF statistics, the doubts expressed by the evaluator conflict with the remark that the statistics clearly fill a gap as no comparable publications exist at European level. 32 According to the evaluator, they provide enterprise policy makers at a national and European level with a useful tool for identifying appropriate initiatives in enterprise policy. 32 See AA report, Chapter VIII. 11 As to the composition of the network responsible for the European Observatory for SMEs, the Commission is of the opinion that reliance on an independent network with a strong research component should be pursued both in the interest of the objective interpretation of the available data and the effectiveness of co-operation within the network. However, co-operation between the European Observatory for SMEs and other organisations should be encouraged. For instance, the Third Multiannual Programme proposes to examine the possibility of developing a selection of key indicators for SMEs based on existing inquiries. Finally, the Commission agrees that the distribution policy for publications on the Community's Enterprise Policy could be improved by making greater use of new information technologies. The proposal for a Third Multiannual Programme contains a number of initiatives along those lines, which should indeed ensure greater practical use and also give a wider audience to the Commission's publications on Enterprise Policy. CONCLUSION In line with the Council's request,33 the Commission has examined the Arthur Andersen report on the implementation of the Second Multiannual Programme for Enterprise and SMEs (1993-1996). This Communication provides a non-exhaustive summary of the Commission's observations on this report. The Commission welcomes the overall positive assessment made by the evaluator and will take the valuable information contained in the evaluation report into account for devising its future policy for enterprise and SMEs, in particular in the framework of its proposals for a Third Multiannual Programme (1997-2000). 33 Article 5 of Council Decision 93/379/EEC of 14. 6. 1993 on a Multiannual Programme of Community measures to intensify the priority areas and to ensure the continuity and consolidation of policy for enterprise, in particular small and medium-sized enterprises in the Community, OJ N°L 161 of 2. 7. 1993, p. 68. Evaluation of the Multi-annual Programme to assist SMEs Executive Summary Arthur Andersen & Co. - Business Consulting Services January 3 1, 1996 /IL AARTHUR ANDERSEN Arthur Andersen & Co Specialty Consulting Services Avenue des Arts 56 B-1040 Bruxelles Tel 02 510 43 75 Fax 02 513 OS 62 January 31,1996 Mr. H. von Moltke Director-General European Commission Directorate-General XXIII R u e d ' A r l o n 80 1049 Brussels Dear Mr. von Moltke, We have the honour to present you the executive summary of our evaluation of the Multi- annual Programme to assist SMEs. The executive summary has been prepared following to Article 5 of the Council Decision of June 14,1993 that requested an external evaluation of the Multi-annual Programme to assist SMEs. We have finalized our executive summary in accordance with the specifications of tender n° 94/S 81-40 358 and our proposal for professional services of June 7,1995. We would like to thank you and Directorate-General XXIII for being offered the opportunity to carry out this evaluation. Yours sincerely, ARTHUR ANDERSEN & CO. Business Consulting'SeT^ices q : \ e e c \ d g x x i i i\ e x e c - s u r n \ e n g l i s h \ l e t t e r. d o c ( v f b) TVA 438 676 164 Banaue 435 0304191 79 RCB'r29 486 Société Coopérative yn> TABLE OF CONTENTS TABLE OF CONTENTS INTRODUCTION CHAPTER I : Improvement of the administrative and legal environment of enterprises including the area of indirect taxation CHAPTER II : Better access to community information for enterprises CHAPTER HI : CHAPTER IV : CHAPTER V : Improving the business - partner - search network Continued development of instruments permitting direct contact between entrepreneurs and aimed at promoting transnational subcontracting Ensuring consideration of SME interests in the various community initiatives and policies CHAPTER VI : Encouraging SMEs to adapt to structural changes and to changes brought about by the Internal Market ~~ CHAPTER VII : Promoting a better financial environment for enterprises CHAPTER VIII : Promoting better observation of the economic development of enterprises CONCLUSION RECOMMENDATIONS 5 9 15 19 23 27 30 34 37 39 Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII yi/ INTRODUCTION Small and medium-sized companies (SMEs) are very important to the European economy. SMEs account for approximately 99. 8% of all companies and 63% of turnover in the European Union. There are in Europe more than 15 million SMEs, representing approximately 65. 6% of total employment in Europe1. In addition, they play a primary role in a harmonious local and regional development and are a driving force behind effective adaptation to structural changes and innovation. The weight attributed to SMEs is also translated in the various contemporary national and European policies. Political momentum in favour of Community enterprise policy to assist SMEs continues to be strong: SMEs have an essential contribution to make in the achievement of the objectives laid down in the White Paper on Growth, Competitiveness and Employment and in the Integrated Programme in favour of SMEs. The report on "Small and Medium-Sized Enterprises: A dynamic Source of Employment, Growth and Competitiveness in the European Union", recently submitted by the Commission to the Madrid Summit, underlines the particular importance and the role SMEs play in the Community. Enterprise policy has historically been important. It was traditionally based on Article 235 of the Treaty of Rome. The Treaty on European Union created a new framework in which the enterprise policy has to be conducted: • • • • Article 130 addresses the competitiveness of industry: the Community and the Member States shall take action aimed at "encouraging an environment favourable to initiative and to the development of undertakings throughout the Community, particularly small and medium-sized undertakings". The Article further states that "an environment favourable to co-operation between undertakings" and a "better exploitation of the industrial potential of policies of innovation, research and technological development" should be promoted. Article 130 f. 2) refers to the encouragement of "small and medium-sized undertakings "in their research and Technological development activities of high quality". Title XIV of the Treaty is of direct concern to SMEs. This chapter of the Treaty concerns the objective of economic and social cohesion to promote a harmonious development throughout the Union and to reduce disparities between the levels of development of the various regions and the backwardness of the least- favoured regions, including rural areas. Article 118 a. concerning the introduction, by means of a Directive, of minimum obligations for the protection of the health and safety of workers, indicates that these obligations should not impede the creation and development of small and medium-sized enterprises. Despite the importance of the topic, a coherent enterprise policy at a Community level has only been institutionalised recently. A Directorate-General responsible for enterprise policy in the Commission (DG XXIII) has been created in 1989. DG XXIII took over the action programme of the SME Task Force. Directorate-General XXIII is responsible for the implementation of the Multi-annual Programme, in which a framework is set and the different objectives are defined. The Council Decision of 28 July 1989 adopted the first Multi-annual Programme for the improvement of the business environment and the promotion of the development of enterprises, and in particular small and medium-sized enterprises". The Council Decision 93/379/EEC of 14 June 1993 decided on a new "Multi-annual Programme of Community measures to intensify the priority areas and to ensure the continuity and consolidation of policy for enterprise, in particular small and medium-sized enterprises, in the Community". This second Multi-annual Programme was adopted for a period up to 31 December 1996. The same Council Decision of 14 June 1993 stipulates (Article 5) that an evaluation on the implementation of this decision is to be conducted by an external evaluator. A report, together with any proposals or comments by the Commission, is to be submitted to the European Parliament, the Council and the Economic and Social Committee before the end of March 1996. Such is the object of our report. Enterprises in Europe. Third Report, 1994, p. 42 2 This Programme has been evaluated in a First Evaluation Report (SEC (92) 1999) which the Commission presented to the European Council on November 11, 1992. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII /> - 2- The mission for Directorate-General XXIII laid down in the above Council Decision consists out of two major priorities, which are, as mentioned below, growth and internationalisation. This mission encompasses nine major objectives. To achieve these objectives, Directorate-General XXIII has initiated a number of measures to respond to market or SMEs' needs. Art. 5 of Council Decision of Tune 14,1993 The Commission shall submit. an external evaluation report on the implementation of this including a cost-effectiveness evaluation, and any proposal which it deems necessary in light of the evaluation D e c i s i on : A programme including the objectives as mentioned in Art. 2 Multi-annaal Programme Objectives OUR EVALUATION OUR RECOMMENDATIONS It was not the evaluator's task to judge on the legitimacy of the mission nor on the objectives of the Multi-annual Programme. Instead the evaluation focused on the nature of the different measures and their effectiveness in the achievement of the objectives set forth in the above Council Decision. The present report describes the extent to which the various objectives and their underlying aspects have been fulfilled and the performance made of the individual measures. A dynamic perspective was also adopted to evaluate the progress made during the current Multi-annual Programme. Consideration should be given to the fact that the current Multi-annual Programme is not terminated and runs to December 1996. It was also not our purpose to make an evaluation of the human resources dedicated to the Multi-annual Programme and of the organisation of DG XXIII. The document also includes a cost-effectiveness assessment and suggestions for improving the different measures. The scores attributed to the different objectives, measures or criteria are meant to render a clear opinion and to serve as a basis for discussion. Operating resources attributed to the Multi-annual Programme 1993-1996 amounted to ECU 112. 2 million in aggregate. Our evaluation of the different measures was made in light of the resources allocated. The scheme below describes the underlying philosophy of the evaluation methodology adopted: Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII / r Context Objectives 9 b r o ad & a m b i t i o us objectives M. A. P. through DG XXIII - Limited number of human resources - Limited budget Complex but abundant environment - Other DGs - Representative organisations - Member State organisations (national, federal, regional, local,. ) Broad population ( > 15 million SMEs) Ana lyse Environment On the one hand, the Multi-annual Programme was allocated limited resources in terms of personnel and budget. At the same time, it is confronted with a complex and abundant environment: many organisations or bodies on a local, national or international level have a similar ambit by working, directly or indirectly, on the same objectives as Directorate-General XXIII, and hence can contribute to the achievement of these objectives. This allows Directorate-General XXIII to use levers and to identify the situations in which its intervention is necessary and adds value by addressing a market failure. This can be called a ''positive subsidiarity". On the other hand, the objectives of the Multi-annual Programme are broad and extremely ambitious. The critical success factors which have to be taken into account in the conception and implementation of each measure can be summarised in the following three-step process, which underlines the primary importance to be given to the environment: Before a measure is launched, has the environment been observed and analysed ? Were lessons drawn from experience ? Have the existing levers been identified and used in the implementation of the measures ? Pilot projects can also be used to draw the attention of SMEs or direct them into a particular area in which a market failure has been identified. As these projects are meant to be temporary, the lead initiative is taken by Directorate-General XXIII; eventually, the responsibility is passed to the market. In addition, pilot projects generally provide Directorate-General XXIII with valuable information on the environment on the basis of which corrective actions or new initiatives can be undertaken-. The methodology used to evaluate the different measures of the Multi-annual Programme was primarily based on: • • • • Analysis of available documentation; Interviews with people most closely involved with the different measures (officials within the Commission, representatives of different (national) entities, independent experts); Surveys sent to various entities; Use of the Andersen InterAct Process. The individual measures have been evaluated according to a set of four key criteria: • The conception of the measure: to what extent does the measure respond to the objectives set forth in the Council Decision of 14 June 1993; Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII - 4- • • • The implementation of the measure: what are the strengths and weaknesses of the implementation of the measure (appropriate operational methods applied, accurate definition of target population); The quantitative and the qualitative impact of the measure: what is the actual impact of the measure on the environment, mainly on SMEs looking for growth and internationalisation; The cost-effectiveness which allows a comparison of the results obtained by the measure with the direct costs incurred". The various measures have been classified in one of the different phases of their "life cycle": pilot project, start-up phase, development phase and mature phase. These different phases may be characterised as : • • • Pilot project: Involvement of Directorate-General XXIII in the specific measure is temporary; the objective is to launch and test an idea in the market, which will sometimes take over responsibility; Start-up phase: The specific measure has been created recently, not all aspects have yet been implemented or covered and the impact is still limited or too early to be assessed; Development phase: The specific measure has been implemented, the impact is growing but has not reached its full potential; • Mature phase: The measure has been fully implemented and its full impact can be assessed The score attributed to the overall performance of each measure was calculated by weighing the different evaluation criteria in function of the life cycle phase of the measure. Pilot projects and measures in a start-up phase received a higher weight with respect to their conception and implementation, while the focus for mature projects lie in their quantitative and qualitative impact. An aggregate score is eventually attributed to each criterion, measure and objective using the weighing factors described above. The scores on the evaluation scale used, varied on a spectrum from "Poor", "Adequate" and "Good" to "Exceed". The meanings of the different scores are as follows: • • • • Poor: The performance gives rise to serious concern and reservations; Adequate: The performance is acceptable although there exists considerable room for improvement; Good: The performance is considered to be good and the evaluator does not need to make significant suggestions for improvement on the different criteria; Exceed: The performance significantly exceeds expectations and could indicate a high future potential. A comprehensive evaluation of each measure has been presented in a long-form report. The present executive summary conversely uses a different approach, in the sense that it evaluates the extent to which the objectives of the Multi-annual Programme have been achieved by the different measures. In some cases, measures respond to more than one objective. Although those measures are presented under one objective, the effects of the measures on the other objectives were taken into account for the scorings. The present executive summary is meant to be comprehensive and self-supporting. "Direct costs" relate to the financial resources allocated under the Multi-annual Programme. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII t1 -5 CHAPTER I : Improvement of the administrative and legal environment of enterprises including the area of indirect taxation " In particular further work on administrative simplification and promotion of follow-up measures in the Member States; assessment of the impact of Community legislation, consolidation of Community legislation, specific examination of aspects such as the transfer and creation of enterprises; regular and thorough consultation of organisations representing SMEs "4 For the purpose of the evaluation study, Arthur Andersen has considered the objective to be improving the administrative and legal environment existing at the European level5. MEASURES • • • Legal and administrative environment of SMEs - administrative simplification - business impact assessment6 Recommendation of December 7, 1994 on the transfer of SMEs Cross-border access to courts and arbitrage EVALUATION Conception "Legal and administrative simplification" pursues the improvement of the administrative and legal environment - including the area of indirect taxation - at the Commission level in a general way. This includes the assessment of the impact of the proposed legislation. The Recommendation on the transfer of SMEs8 addresses the problem of companies that fail (and the resulting job loss) because of problems related to their transfer. Cross-border access to courts and arbitrage addresses the problems SMEs encounter when going to court and examines the possibilities of alternative dispute resolution. The consultation of SME representative organisations takes place mainly in the elaboration of Recommendations and in "legal and administrative simplification"; therefore, its evaluation is subsumed in the evaluation of the aforementioned measures. The two first measures are regulatory measures: they combine a very broad impact (the entire SME population) with a limited cost (mainly DG XXIII staff costs). Especially "legal and administrative simplification" has an enormous leverage potential because of its very wide scope: it is aimed at all Community legislation that could have an impact on the business environment. Alongside the leverage potential, possibilities for synergy were identified: e. g. the Recommendation on the transfer of SMEs will be supported by the work performed by the Committee for Improving and Simplifying the Business Environment, of which one of the themes should deal with the same problem. For the Cross-border access to courts and arbitrage measure, DG XXIII works in close co-operation with other DGs. The text in italic refers to Annex 1 of the Multi-annual Programme. Administrative simplification - or improving the administrative and legal environment of business at the Member States level - is mainly dealt with by the Committee for Improving and Simplifying the Business Environment. However, this Committee was set up pursuant to the Integrated Programme and is therefore not part of our evaluation study - we mentioned it for completeness' sake. Henceforth referred to as "legal and administrative simplification": For the purpose of this evaluation, the measure refers to the interservice consultation process on legislative proposals. This process is not specifically linked to the Multi-annual Programme as such; however, it is a key*instrument in improving the administrative and legal environment of enterprises and thus in attaining the objectives of the Multi-annual Programme. Indirect taxation includes VAT. estate duties and gift taxes. Article 6 of the Recommendation on the transfer of SMEs addresses the problem of indirect taxation in the area of transfer of business (estate duties and gift taxes). The Recommendation of May 12. 1995 on payment periods in commercial transactions addresses the problem of indirect taxation in terms of the effect on firm liquidity. Regarding the topic of "creation of enterprises", this was the object of the first meeting of the Committee for Improving and Simplifying the Business Environment (Forum of Paris), which is part of the Integrated Programme; therefore, the topic is not part of the evaluation study. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII C*> The text of the annex also mentions "consolidation of Community legislation". In this area, no action was taken by DG XXIII. Arthur Andersen was told that consolidation is being handled by other DGs and the Secretariat- General. Therefore, for the purpose of the evaluation study, Arthur Andersen can only note that this part of the objective was not addressed by DG XXIII. In view of the "good" ratings of the different measures for conception on a stand-alone basis and taking into account the leverage and synergy potential, the overall conception rating for the strategy to achieve the objective is "good". Implementation On a stand-alone basis the different measures were either well or adequately implemented; in view of the importance of "legal and administrative simplification" which was rated "adequate", the overall rating for implementation is "adequate". "Legal and administrative simplification" was rated "adequate" for several reasons: û • • • deadlines set by other DGs are too often too tight - which has an adverse effect on the involvement of SME representative organisations; DG XXIII is often involved at the end and not as of the conception of the proposal submitted for consultation - which automatically limits its 'steering' power; and the evaluation of the impact of legislative proposals on SMEs still has room for improvement; e. g. the business impact assessment forms are often considered a mere formality instead of a tool to help steer a proposal. Moreover, the current system is not very sophisticated. The Recommendation on the transfer of SMEs obtained a "good" rating. DG XXIII went to great lengths to involve all relevant parties in the elaboration: other Dgs, SME representative organisations, Member States, experts,. ; there was ample time and sufficient opportunity for consultation and discussion. Cross-border access to courts and arbitrage - although currently at a low level of activity - is another good illustration of working in close co-operation with all relevant parties: DG XXIII works in close collaboration with other DGs and organisations active in the sector. Achievement of the objective (Quantitative and qualitative impact) On a stand-alone basis the impact of the different measures was either rated "good" or "adequate"; in view of the importance of "legal and administrative simplification", the overall rating for achievement of the objective is "adequate". Although the Recommendation on the transfer of SMEs requires Member States to submit a progress report only by December 31. 1996, DG XXIII has adopted a pro-active attitude to keep the momentum of the Recommendation going: interim progress reports are drafted and Member States regularly exhorted to follow up on the Recommendation. These interim reports indicate that four Member States have already taken steps, which bodes well for the future. For Cross-border access to courts and arbitrage it is still too early to evaluate the potential impact. Considering the number of parties involved in the successive stages of legislation, it is irrelevant to try to measure the impact of "legal and administrative simplification" at the level of the SMEs. Therefore, the impact was measured through the weisht DG XXIII carried with the other DGs involved. In this regard, there are a It is foremost a "collégial" measure, i. e. the way it is implemented and the impact DG XXIII can achieve depends to a certain extent on the input, collaboration and goodwill of other DGs involved. Therefore, shortcomings are not necessarily to be traced to DG XXIII but might just as well be due to insufficient involvement of another DG. DG XXIII has elaborated a more sophisticated approach of impact assessment but this new system has not yet been adopted by the Commission. "Transfer of SMEs" is also on the agenda of the Committee for Improving and Simplifying the Business Environment; this will provide DG XXIII with another occasion to push the Recommendation. We refer to our comments in footnote 5. Arthur A n d e r s en Business Consulting Evaluation of the M u l t i - a n n u al P r o g r a m me to assist SMEs - DG XXIII a*: - 7- considerable number of high-profile bench-mark success cases where the business impact assessment system was well used and co-operation between DG XXIII and the responsible DG as of the conception of the legislative proposal was sterling. But, as mentioned under "implementation", too often the input of DG XXIII comes at the end, when deadlines are near and the important decisions have already been taken; too often, the business impact assessment is considered a formality rather than a tool to help draft and 'steer' proposals. It is obvious that working in such conditions hampers the possibility to influence and thus the impact. This conclusion was borne out by interviews with officials from other DGs, members of the Article 4 Committee and SME representative organisations; at the same time it was acknowledged that the involvement of DG XXIII through this measure has a "pre-emptive effect" on the DGs originating the proposals (meaning they more and more spontaneously take account of the SME dimension). Cost-effectiven ess For all three measures listed here, the absolute cost is very low (mainly personnel costs and some, organisational costs). At the same time the penetration rate and leverage potential of the measures is enormous: regulatory measures apply to all SMEs. Therefore, the cost-effectiveness of the different measures was rated "exceed". CONCLUSION Overall, DG XXIII has done an "adequate" job in trying to improve the administrative and legal environment of enterprises in the European Union. What is most important for the future is that DG XXIII has the right tools to work towards the achievement of this objective in the long term: the overall rating for conception (overall approach - high leverage potential) is good. In addition, the measures serving this objective are to a large extent based on the exchange of best practices, the advantages of which are: (1) it involves a wide pool of experience (the Commission, the Member States, SME representative organisations, independent experts,. ); (2) it is in line with the new philosophy of partnership between the Commission and the Member States and (3) it is the most market-oriented and cost-effective approach to a problem. As to "legal and administrative simplification", the implementation and the impact can be improved. The Recommendations elaborated by DG XXIII (Late Payments and Transfer of business) and the success stories of "legal and administrative simplification" should be considered bench-marks in this regard. Regarding consolidation of Community legislation - an important tool in improving the legal environment can only note that DG XXIII has not taken any initiatives. we (A E o -C OVERALL RATING PER MEASURE • Legal and administrative environment - administra tive simplification - busi ness impact assessment • Recommendation on the transfer ot SMEs • Cross-border access to courts and arbitrage Poor Adequate Good Exceed Overall performance Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 1 RECOMMENDATIONS Discussions with officials from DG XXIII, other DGs, SME representative organisations and the members of the Article 4 Committee all point in the same direction: the objective of improving the administrative and legal environment for enterprise should be of paramount importance for DG XXIII: • • Any improvement in this area potentially benefits all SMEs; concentrating on this objective thus has a very high leverage potential. Another advantage is that it automatically benefits all SMEs; automatically because SMEs don't have to go through special procedures or incur information costs to benefit: the new administrative and legal framework will apply automatically. All SMEs because a regulatory framework applies to all. To improve "legal and administrative simplification", the following recommendations can be made: • • • Regarding Green Papers and Action Plans, DG XXIII should be systematically and up-front involved in their elaboration. Regarding the legislative proposals, an involvement of DG XXIII in the conception stage of each legislative proposal would considerably enhance its ability to steer the proposal and provide ample time for consulting SME representative organisations. It would be up to DG XXIII to judge in a later stage whether the proposal is likely to impact on the business environment and thus 'tailor' its involvement accordingly. Regarding the assessment of the impact of Community legislation, DG XXIII has done creative work to improve the system and in the process has come up with a more powerful and sophisticated system, i. e. a Modular Approach to Cost Effectiveness or Cost Benefit Analysis for Assessing the Impact of Proposed Community Legislation. To date, this system has not yet been adopted by the Commission. DG XXIII should continue to promote the system for its adoption would facilitate a more active and material involvement of DG XXIII in the assessment of the impact of Community legislation. This would put DG XXIII in a position to ensure that the system is properly used as a tool for conception rather than as a mere formality. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII O ") CHAPTER II : BETTER ACCESS TO COMMUNITY INFORMATION FOR ENTERPRISES "Qualitative development, improved operation and adaptation of the Euro Info Centre network to the new requirements of SMEs, including advice to companies likely to take part in Community programmes (such as, for example, research, public contracts, improved environmental practices); stabilisation of funding, in particular by concentrating efforts and developments on the existing network; extension of the network of liaison centres to the European Economic Area (EEA) and to the countries of central and eastern Europe (CCEE), as well as to the Mediterranean countries, in particular the Maghreb countries, in the context of specific measures to help those countries. " Although the annex to the Council Decision only refers to EICs, Arthur Andersen considered that the measures that are closely related to the Euro Info Centres such as promotion and the other measures on the improvement of information provided to enterprises - especially SMEs - also belong under this objective. MEASURES The following measures are bundled in this objective : Euro Info Centres (EICs) Subsidies to SME representative and other organisations Stands & Expositions Information/Publication Promotion by the Commission Conception The different measures correspond well with the objective and take each other into consideration. This leads to a scoring "good" on conception. The EIC-network is at the centre of the Community's enterprise policy and is its main instrument to improve SMEs' access to Community information. Almost a third of the enterprise policy's budget is allocated to the single measure of EICs. The EIC-network comes in addition to 53 other networks supported by the Commission. Although DG XXIII is aware of the need to improve the co-ordination between the different enterprise policy networks, it has not yet achieved sufficient synergies between them. With the EIC-network, DG XXIII wants to exploit different synergies offered by a network. The network's main focus is to provide information and advice on Community topics for enterprises, in particular SMEs, while allowing DG XXIII to leverage the EICs in its effort to raise awareness of Community topics with SMEs. It also wishes to use EICs as 'antennae' in the business environment. By integrating the EICs into national, regional or local 'host structures', the network tries to build on existing business networks. This approach should allow the Commission to obtain a deep penetration in the SME business environment - both geographically and organisationally - and to run a network at minimal cost by sharing a part of the financial and administrative burden with the host organisations. By subsidising seminars, colloquia, etc. organised by SME representative and other organisations, the Commission also wants to influence SMEs directly. These organisations have a dense network of contacts with SMEs which DG XXIII uses as a second platform to provide information. The idea of targeting SMEs through two different but complementary platforms is legitimate: it enables the Commission to disseminate information at a larger scale while leveraging its costs maximally by working through existing structures. However, the possible synergies between both platforms have not been fully exploited. Implementation The overall rating for implementation is "adequate". This is in line with the ratings given to the different measures on a stand-alone basis. The EIC-network's growth is basically historical. No optimal geographical implementation strategy was followed. Therefore, the geographical implementation of the network is currently not satisfactory and not adapted to address Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII I l> - 10- the needs of its (future) clients. There exists a discrepancy factor of 2513 in the number of target SMEs per-€IC. Although we did not make an analysis of what the right span of SMEs should be, the discrepancy is considered to be too high and cannot be justified by differences in the economic structures. However, we understand that other than economic factors (such as social and regional policy and the economic and social cohesion of the Union) influence the implantation of the network. The EICs' host structures consist mainly of organisations such as chambers of commerce, professional organisations, regional and national institutions, etc. Some commercial organisations as banks and accountants, which are often a first source of information and advice for SMEs, are poorly represented in the host structures. For example, banks represent no more than 5 % of the host structures and are represented in only four countries of the European Union. Considering the greater capillarity of this host structure type compared to other host structures types, it is not sufficiently represented in the network The central structure of the EIC-network provides support services to EICs in the areas of information, promotion, training and information technology,. The EICs consider the support provided by the information officers as adequate, although the response time is perceived too long. They rated the training and technical assistance provided by the central structure for the most part satisfactory. However, the current version of the ERIC-workstation is not considered to be of significant use to the EICs. With the notable exception of the conference functionality of the VANs network, its e-mail functionality is well appreciated by a majority of the EICs. The existing quarterly evaluation reports of the EIC-network do not allow the central structure to monitor effectively the quantitative and qualitative development of the network. A comprehensive performance measurement system allowing to manage the development of the network and the central structure is not in place. The subsidies granted to representative and other organisations and allocated to conferences, seminars, etc. are divided over the different organisations and Member States. The 'selected topics' of these events supplement adequately the other information efforts of the Commission. However, the co-operation with different parties such as EICs and Representative Organisations remains minimal, although some recent improvement is noted by our survey and interview respondents. There is insufficient continuous promotion on a co-ordinated basis between DG XXIII and the EICs: the promotion budget is mainly dedicated to a single media campaign a year and uses only one communication medium; moreover, this campaign is too isolated from the on-going promotional actions by the EICs and other promotional platforms of DG XXIII, e. g. 'Stands & Expositions'. Especially with respect to a timely communication of the campaigns, do the EICs consider the co-ordination of the promotional activities of DG XXIII as poor. Regarding the choice of the theme for these campaigns, the EICs judge that there has been a significant improvement between 1993 and 1995. Another weak point is that the annual promotional campaign of the Commission is too homogeneous and does not take account of the specific, local ways in which (SME) enterprises are targeted in the different Member States. Realising that its promotional campaigns had little impact, DG XXIII has drastically changed its strategy in 1995. The main philosophy behind the new approach consists of a decentralised implementation and a larger involvement of the EIC-network in the campaign. Responsibility for the global strategy, co-ordination and choice of themes still remains with DG XXIII, but in consultation and co operation with the EICs. Achievement of objective (quantitative and qualitative impact) On a stand-alone basis the impact of the different measures was either rated "good", "adequate" or "poor". In view of the importance of the EICs - which was rated "adequate" -, the overall rating for achievement of the objective is "adequate". Due to the lack of an adequate performance measurement system, there are insufficient reliable statistics available to assess the quantitative and qualitative impact in terms of visibility and support to SMEs. Interviews with SME representative organisations, members of the Article 4 Committee, EICs and their host structures have indicated that the ElC-'network has not achieved a material impact in the business community. In addition, the quality of services throughout the EIC-network is not sufficiently of a uniform high standard. The discrepancy factor is obtained by dividing the average number of SMEs that are potential clients for an EIC per Member States; the figure of 25 was obtained by dividing the number of target SMEs in Germany per EIC by the number of target SMEs per EIC in Greece. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII l «t The EICs answer an increasing number of inquiries. The increase since the beginning of the second Multi-annual Programme and the end of 1995 is estimated at 35%. In 1994, approximately 278,000 questions were processed by EICs of which an estimated 214,000 came from SMEs14. In 1995, the figures are estimated at 350,000 and 265,000 respectively. While acknowledging the positive trend in the number of questions, this activity remains relatively low compared with an estimated client base of 1. 5 million SMEs on an estimated total of 15 million SMEs in the European Community. This could indicate that either Community topics are of limited concern to SMEs; or that SMEs do not know about EICs; or that SMEs do not consult EICs. The conclusion of our interviews and analyses are confirmed by a poll conducted by Gallup for the Commission in the Spring of 1995. The poll indicated that, although the passive recognition of EICs is fairly good, the active recognition of EICs by SMEs remains low. Since 1993, the Commission has opened 20 EIC correspondence centres in the countries of the EEA, CCEE and the Mediterranean15. As most of these offices have been set up in the last two years, it is premature to give an opinion on the impact that these offices have generated. Compared to EICs, the number of SMEs directly reached by the other information measures is much smaller. The events organised by representative and other organisations from subsidies reach directly approximately 10,000-13,000 SMEs p. a. Through the monthly Euro-Info Journal, the Commission directly reaches on a continuous basis an additional 12,000 subscribing SMEs. As the EICs, consultants, representative organisations,. also distribute the Euro-Info Journal, the number of SMEs that receive the journal occasionally is probably higher. In the absence of quality performance measures, it is difficult to assess the qualitative impact of the Journal. Based on our interviews and questionnaires, the content of the Euro-Info Journal is perceived well but gets a poor scoring for timeliness of publication. that benefit The impact of the promotional campaigns and efforts of the EICs and the Commission until 1994 remained low and SMEs' awareness of different Community enterprise products, whether it be EICs, BRE, BC-Net,. or Community topics is still unsatisfactory. As mentioned above, DG XXIII has to receive credit for changing its promotion strategy. Unfortunately, the implementation of the new strategy only started in the Fall of 1995. It is too early to assess its impact on the SME business environment. Cost-effectiveness The overall rating of cost-effectiveness is "adequate", which is line with the rating of the different measures on a stand-alone basis. The cost-effectiveness of the EIC-network is extremely difficult to assess due to the lack of a comprehensive performance measurement system. Interviews with SME representative organisations, members of the Article 4 Committee, EICs and host structures have indicated that - at the current level of resources employed - the network should be able to achieve a greater qualitative and quantitative impact within the business community (especially with SMEs). Cost-effectiveness can hence be increased. On the other hand, the current financing structure of the network considerable leverages DG XXIII's resources. Therefore, the cost-effectiveness of the EIC-network is rated "adequate". The measures other than EICs have received a rating "adequate" , except for the promotion campaign where the cost-effectiveness - especially the media campaign of DG XXIII - is too low. The figures are only indicative and based upon compilation of the evaluation reports that the EICs have to submit on a quarterly basis. Arthur Andersen estimated that 75% of the questions come directly or indirectly from enterprises (SMEs) and extrapolated the figures on the total number of questions reported. Based on our interviews, we acknowledge that these figures are biased in two opposite directions: small questions are not always registered and lead to an underestimation of the figure. Follow-up or more detailed questions on the same base question inflate the figures when they are registered as different questions. Since 1994, correspondence centres in the EEA have become full-fledged EICs. Arthur A n d e r s en Business Consulting Evaluation of the M u l t i - a n n u al P r o g r a m me to assist SMEs - DG XXIII - 12 CONCLUSION The overall rating for the strategy to achieve the objective of a better access to Community information for enterprises is "adequate". This is due to the lower implementation and achievement of the objective ratings of the different measures (especially of the EICs). The EIC-network was created in 1987 to assist enterprises (in particular SMEs) that want to grow and internationalise. Its basic service is information and advice on Community topics in a cost-efficient way (the network is designed to maximally leverage DG XXIII's financial resources). Meanwhile, the network" has reached a mature phase: over the last three years, the number of EICs and their funding has stabilised; and in accordance with the annex to the Council Decision, the EIC correspondence offices in the EEA, the CCEE and Mediterranean have been created. This implies that the network should be able to create an impact in the SME business community. However - and although the idea of the EIC-network should not be questioned, the evaluation has revealed a number of weaknesses in the implementation which limit its impact. And despite efforts have been made to improve its promotion, geographical segmentation and implantation in local business networks, the total impact of the network in the overall SME business community remains limited. _ In the absence of appropriate measurement systems, DG XXIII cannot manage the EIC-network effectively and concentrate on its qualitative and quantitative development. E. g. there is not enough focus on the EICs that do generate an impact in the SMEs business environment. The choice of local host structures being subordinated to the geographical implantation of the network, has too often resulted in a poor integration into the local business environment. The promotional efforts of DG XXIII and the EICs also have not helped to increase awareness among SMEs of EICs and other Community measures. The main problems are too much emphasis on a 'one-shot' media campaign, too little on-going promotional support and little integration between the promotion of DG XXIII and the EICs. Aware of the limited impact, the Commission is re-orienting its promotional action for 1995 and addressing most of the weaknesses. As promotion is a mature measure, the criteria "quantitative and qualitative impact" outweigh the fact that DG XXIII is undertaking remedial action of which the outcome remains unknown. This resulted in a "poor" rating for the measure Promotion. The importance to SMEs of a Community information network remains beyond any doubt: the EIC-network effect cannot be exactly measured but is important in view of the considerable information requests that are formally - and informally - dispatched through the network. Its importance is further enhanced by the specialisation of EICs in different areas. However, its success depends largely on the right choice of local partners with whom EICs affiliate and the maximal exploitation of the distribution and promotion channels of these affiliates. The other platforms DG XXIII uses to reach SMEs interested in growth and internationalisation (representative organisations, Euro-Info Journal, presence at fairs and exhibitions,. ) are too isolated from the EIC-network and synergies are not fully exploited. E. g. the SME representative organisations, which represent organisations that are among the SMEs' most trusted business advisors, are not sufficiently integrated in the network. Or the representation of the Community at fairs and exhibitions could always be handled in collaboration with the local EIC whereas this is nowadays done by officials of DG XXIII, other DGs and sometimes EICs. OVERALL RATING PER MEASURE • Promotion • Euro Info Centres Information/Publication Stands & Expositions Subsidies Poor Adequate Good Exceed Overall performance Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 13- RECOMMENDATIONS The measure of subsidies to representative organisations has been useful as it has contributed to share experiences between SMEs on a pan-European scale. It also allowed the Commission to strengthen its relations with a wide spectrum of organisations that represent enterprises, in particular SMEs. The financial support to representative organisations was therefore very useful but the question of whether or not DG XXIII should continue to financially support these organisations in the long run is legitimate. The main concern of today's EIC-network is that it has not generated sufficient impact within the business community. The principal focus of the network's future development should be the amplification of its impact in the business community and an investment in its qualitative and quantitative development. To achieve these objectives, a number of recommendations were elaborated which will allow the network to improve its functioning within the existing organisational framework. The biggest challenge, increasing the impact within the business community, can be most effectively addressed through actions in the area of promotion, increased and better networking with more effective business community partners and the development-of the network's value added services. The challenge of the quantitative and qualitative development of the EIC-network requires urgently the development of a comprehensive performance measurement system. It would allow DG XXIII to monitor the current status of the network and its central structure, the effect of initiatives taken and would facilitate the further development of the network. Such system should answer three main objectives: to allow to monitor the impact on the business community, in particular on SMEs; to permit the follow-up of the qualitative development; and to install a tool to manage the cost-effectiveness. A comprehensive performance measurement system would contain performance indicators that go beyond those offered by the existing quarterly evaluation system which is not client-centred. The system would add indicators on the full cost per question, the cycle time to respond to a client enquiry, the complexity of client enquiries, the nature of the enquiring company,. and should supply the central structure with more timely, accurate and useful information than is the case today. The implementation of a performance measurement system would not only allow the central structure to monitor more closely the operation of the network, but also to identify pro-actively existing best practices within the network. These best practices should be shared throughout the network, hence increasing its quality and impact. The current promotional efforts have not generated sufficient visibility of the EIC-network within the business community. To address this problem, DG XXIII should first of all reinforce its co-operation with the EIC-network and focus primarily on enterprises looking for growth and internationalisation. The new structure DG XXIII wants to adopt - i. e. central co-ordination and national implementation in collaboration with EICs - seems the most appropriate. For an effective implementation, DG XXIII should provide the EICs with marketing and promotional support as their own marketing and promotional skills are limited. Second, the current promotional efforts should be complemented by on-going and revolving awareness raising campaigns encouraging SMEs to internationalise and making them aware of the Community's SME support measures. Attention should be given to an appropriate media mix for each Member State and/or region to guarantee a maximum impact. Journalists accredited by the Commission should be involved as well, as they are an excellent platform to spread information at relative low cost to DG XXIII. To create a bigger impact in the business community, the most effective channels which are used by SMEs in their efforts to internationalise should be identified. An active co-operation with these 'most trusted business advisors' should then be developed, by integrating them into existing EICs or by creating new EICs where necessary. The 'first-stop-shop' and 'one-stop-shop' approach as currently promoted by DG XXIII combined with on-line access to information should add further value to the network and over time increase its impact. The first-stop-shop concept formally confirms the EIC-network as the Commission's primary enterprise policy network. It will increase the synergy between the different enterprise policy networks and consequently add value to the EIC-network. The one-stop-shop concept stresses the need for a comprehensive service to SMEs and their business advisors based on the specialisation that EICs have developed in Community topics. The concept will not only allow the Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 7> - 14- broadening of the scope of expertise offered by the network but also deepen the expertise in existing areas of specialisation. The creation of a technological environment allowing on-line access to and sharing of information of interest to SMEs should be continued (e. g. currently DG XXIII and a small number of EICs are present on the Internet). On line access not only improves the access to information but also the impact of the network in the business community. The role and relevance of new technology and computerised information to the EICs should be urgently explored. More fora of greater content and value should also be added. The presence of EICs on other information networks is also highly recommended. The recommendations proposed so far focus on improving the impact and qualitative development of the EIC- network in its current organisational framework. To obtain a dramatic increase of impact however, the question of whether or not a different organisational framework becomes necessary is legitimate. This question removes the boundaries of reasoning we have imposed ourselves so far by accepting the basic principles on which the EIC- network has been built. In the following three paragraphs, an alternative scenario will be developed that challenges the basic framework of how the EIC-network operates today. All the individual recommendations developed above remain of course valid in the scenario below, which should be considered as one possible scenario within a range of alternatives. The existing network would be replaced by a new network fully operated and financed by DG XXIII. It would be implemented on a regional basis where a region should be interpreted as a large geographical area of significant economic and political cohesion. The number of EICs would significantly be reduced; their size, however, would be considerably greater in terms of knowledge and full-time equivalents per EIC. The primary objective of this network would be to become the enterprise policy network of the Commission (first- stop-shop) organised in genuine competence centres informed about the full range of Community topics (one- stop-shop). The network would act as a supporting and supplying platform to the "most trusted business advisors In a first stage, the direct contact of the EICs with SMEs would be through on-line of (SME) enterprises". networks and promotional and educational initiatives jointly organised with the trusted business advisors. Over time as the brand awareness of the new EICs becomes established with its key constituents of growing and internationalising SMEs, other forms of direct contact will develop. This scenario should allow to achieve a more homogeneous quality level within the network, the delivery of a consistent and full service to SMEs and their business advisors on the full range of Community topics, and over time dramatically increase its impact. As to the required resources: what is certain is that the transformation of the network will require investments. What remains uncertain is whether the operation of such a network will be significantly more expensive than the current network. However, in terms of value for money and dramatically increased impact, the new network should be more cost-effective and provide more value for money than the existing network. This issue should be further investigated. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII ^1% 15- CHAPTER III : IMPROVING THE BUSINESS - PARTNER - SEARCH NETWORK "Qualitative improvement and gradual adaptation of the system of charges for the confidential business - partner - search network (BC-Net) with the aim of making the network self-financing, as far as possible; qualitative development of the non-confidential partner - search network (BCQ1 " EVALUATION Conception Both networks predate the Multi-annual Programme: BC-Net was created in 1988 and BRE in 1973. Both were set up to assist SMEs in finding business partners at the local, regional or transnational level. Though they function in different ways17, there are a several parallels between both networks: • The correspondents of both networks (though less for BRE) can offer additional services to participating or interested companies, ranging from analysing the company's needs for a business partner to assisting and advising the company during the co-operation negotiations. " • Both networks are open to all companies, irrespective of the sector of activity and the type ofco-operation they want to establish. • Both networks have an excellent geographical coverage (all of the EU and for BRE also major business centres in the rest of the world) and are comparable in size: BC-Net has approximately 400 correspondents whereas BRE has 470. The success of the networks depends on the number of co-operation profiles introduced and hence on the "brand awareness and recognition". To raise the "brand awareness and recognition", DG XXIII expects the correspondents to raise their profile through active promotion and to try to create synergy effects through co operation with other networks or events, such as Europartenariat, Interprise, EICs,. In view of the "good" ratings of both measures for conception on a stand-alone basis and taking into account their broad approach and the potential for synergy with other DG XXIII measures, the overall conception rating for the strategy to achieve the objective is "good". Implementation In view of the "adequate" ratings of both measures on a stand-alone basis for implementation, the overall rating for implementation is "adequate". To improve the quality of BC-Net, DG XXIII started with a quality assessment of the correspondents (focus on active and productive correspondents), resulting in a 25% drop in the number of correspondents. The remaining correspondents now support companies more actively in their search for a business partner in order to increase the chances of success. Nonetheless, some weak points were insufficiently addressed: the software currently used is not very user-friendly, the IT infrastructure is outdated and the current nomenclatures used for encoding the co operation profiles are not precise enough. To make BC-Net self-financing, a system of charges was introduced. For BRE, DG XXIII embarked on a similar quality assessment of the correspondents. Compared to BC-Net, it is easier to use and more informal and flexible. However, also for BRE some serious flaws went unaddressed: the long delays in the translation and transmission of the co-operation profiles by the Central Unit and the insufficient computerisation of the network (although some remedial steps were taken (VANs and CRS). The impact of both networks depends on their visibility and the participation of a large pool of potential business - partners (hence the importance of synergies with other networks). Although the Central Unit makes some 16 Instead of BCC, the acronym BRE is used in the present document. 17 BC-NET operates through a network of correspondents (private or public sector bodies) linked through a computer network to a Central Unit located with DG XXIII in Brussels. The correspondents transmit encoded co-operation profiles of companies searching for business partners to the Central Unit operating the network and the matching system. Participating companies can opt for a confidential partner - search (part of the data are veiled). BRE also operates through a Central Unit (located with DG XXIII in Brussels) which receives co operation profiles directly from companies looking for a business - partner or through a decentralised network of correspondents. The Central Unit handles the translation of the profiles and then transmits them to the correspondents in the requested geographic area. These correspondents are in charge of advertising the co-operation profiles in the appropriate media at their own expense. A r t h ur A n d e r s en Business Consulting Evaluation of the M u l t i - a n n u al P r o g r a m me to assist SMEs - DG XXIII ^e, - 16- promotion for both networks (Stands & Expositions, Euro-Info Journal), the chief responsibility in this regard lies with the correspondents. Through the half-yearly activity reports (which are also used in the annual evaluation on whether or not to extend their contract) they have to submit, DG XXIII monitors these efforts. The reports are also used Interprise, Europartenariat,. to encourage and monitor synergy effects with other DG XXIII programmes, e. g. As to the creation of synergy effects, around 10% of BC-Net and BRE correspondents are also part of the EIC - network. There is also a good participation of BC-Net and BRE correspondents in the Europartenariat and Interprise events (about 1/3 of these events is co-organised with BC - NET and BRE correspondents). In addition, most BC-Net and BRE correspondents use other non-Community sponsored channels to conduct business partner - searches (Commercial attachés, national networks). Regarding the self-financing of BC-Net, the total operating charges (excluding payroll costs) are approximately ECU 500,000 per year. They are recovered in 1994 and 1995 (provisional) for about 60% by the user and subscription fees paid by the correspondents. Achievement of objective (quantitative and qualitative impact) The achievement of the objective consists in the effective use made of both networks by SMEs looking for growth and internationalisation and on the impact of the networks on SMEs. The effective use of both networks can be measured by the number of co-operation profiles introduced in both systems. For BC-Net, approximately 10,000 profiles were introduced in 1993 and 1994 each. For BRE, over 6,600 co-operation profiles were introduced in 1993 and 7,700 in 1994. In view of the fact that only a small percentage of SMEs have the ambition to grow and internationalise18, the number of co-operation profiles introduced indicates that only 1. 1% of SMEs did effectively make use of the services offered by BC-Net19 in 1994, and 0. 8% of those offered by BRE. These results are poor. We should nevertheless take into account: • • the flash profiles and additional network effect, by means of which partners are found thanks to personal contacts between network correspondents; other analysis, which show slightly better results than our estimate based on co-operation profiles. 20 With respect to the 'matches' (exchange of addresses or establishing of contacts), the results are not very promising either. There has been a 25% drop in the number of'matches' realised for BC-Net in 1994 compared to 1993 (approximately 11,000 matches in 1993 vs. 7,700 in 1994). For BRE, on the contrary, there has been a 10% increase in the number of co-operation profiles introduced on an annual basis over the period 1993 - 1995. The poor results can partially be explained by the low 'brand recognition' both networks suffer from and the quality of 'matches'. The low 'brand recognition' as identified by Arthur Andersen analysis based on questionnaires, is confirmed by the Gallup poll conducted in April 1995: only 10. 3% of SMEs recognised BRE prompted; for BC-Net the prompted recognition rate was 13. 6%. Moreover, analysis showed that professional organisations, chambers of commerce and financial institutions are the first (and natural) interlocutors for SMEs looking for business partners. Regarding the quality of matches, contacts are often not fruitful. For both networks, in about 25 - 30% of the cases in which there was a match, a co-operation attempt took place. BC - Net correspondents estimated that only 5 to 6% according to the "Integrated Programme in favour of SMEs and the Craft sector". i. e. , 10,000 co-operation profiles divided by the number of potential SME clients (900,000). The Gallup poll, conducted in April 1995 - based on the totality of SME directors interviewed - indicated that 0. 41% of total SMEs made use of BRE and 0. 7% of BC-Net. If these figures are related to the potential SME client base (900,000 SMEs), the results for both networks would be slightly better. This was also confirmed by the Gallup poll of April 1995. A r t h ur A n d e r s en Business Consulting E v a l u a t i on of the M u l t i - a n n u al P r o g r a m me to assist SMEs - DG XXIII - \ £> 17 approximately 6% of the matches lead to an actual co-operation agreement. For BRE, the corresponding score is 12%22. As to the qualitative improvement, DG XXIII has shaken up both networks of correspondents, which have become more effective. However, as mentioned above, both networks continue to suffer from serious qualitative flaws, particularly unwieldy communication channels, outdated (or insufficient) information technology, delays in translating and transmitting co-operation profiles, nomenclatures that are too vague (which leads to mismatches of potential business-partners) and insufficient central promotional campaigns. Cost-effectiveness The total annual budget for the support of both networks is approximately 800,000 ECU (65% of this amount is allocated to BC-Net; 35% to BRE). Measured against the size of the networks, this amount as such is low. The low 'brand recognition' of both networks also takes on another meaning, as DG XXIII does not have the means to organise a central promotional campaign to improve the situation. Taking into account the number of co-operation agreements both networks give rise to, it would cost DG XXIII approximately 300 ECU to bring about a co-operation agreement with BRE and 1,000 ECU with BC - Net. If the subscription and user fees of BC - Net correspondents are taken into consideration, the cost for-BC - Net is around 400 ECU per co-operation agreement. In view of the means deployed, the overall rating for cost-effectiveness is "good". CONCLUSION BC - Net and BRE have their merits: their conception is "good", as they contribute to the realisation of Cross- border co-operation and hence to the development of the Internal Market; they are not expensive to run; they are unique after a fashion and have a good geographical coverage. However, both networks do not achieve the objective completely as there has been insufficient qualitative improvement, in particular outdated (or insufficient) information technology, delays in transmitting co-operation profiles, nomenclatures that are too vague,. In view of the limited number of SMEs looking for growth and internationalisation, which made use of both co-operation networks, they can only be considered a moderate success with respect to their quantitative impact. In light of this situation, the overall rating given to both networks is "adequate". OVERALL RATING PER MEASURE • BC - NET BRE Poor Adequate Good Exceed Overall performance RECOMMENDATIONS To improve both networks in the short run, the following recommendations are made: • • • Introduction of better and more user-friendly information technology for both BC-Net and BRE; Introduction of better nomenclatures for encoding the co-operation profiles of BC-Net, e. g. based on more detailed NACE codes; Reduction of delays in the translation and distribution of the co-operation profiles for BRE. A solution in this respect can be to have the translation carried out by the correspondents themselves. 22 The difference is probably due to the fact that BRE is more flexible and that it distributes co-operation profiles on a wider scale. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII A merger of the databases of both networks with the databases of other Commission initiatives (e. g. Interprise, Europartenariat, the EICs) should be envisaged as it would create a greater pool for new matches. This should have a positive impact on the number of successful co-operation agreements. Our analysis indicated that some correspondents have already developed such a database out of their own initiative. Inclusion in the networks of some 'trusted business advisors' of SMEs (financial institutions, commercial or public institutions, etc. ), which dispose of a broad capillarity, and promotion of potential synergies with these entities. Interviews held with officials within DG XXIII showed a positive feed-back on this subject. One could raise the question as to the involvement of DG XXIII in this area. In view of the fact that the Internal Market is not fully operating and that both networks offer a public service in some regions of the Union, we believe that DG XXIII's intervention in this area continues to be legitimate. It is recommended however that the policy of charging for services for both networks be continued in order to make them self- financing as much as possible. This will allow DG XXIII to shift a part of its financial resources to other measures. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 19- CHAPTERIV : CONTINUED DEVELOPMENT OF INSTRUMENTS PERMITTING DIRECT CONTACT BETWEEN ENTREPRENEURS AND AIMED AT PROMOTING TRANSNATIONAL SUBCONTRACTING "In particular by improving the preparation, implementation and follow-up of actions carried out under the Europartenariat and Interprise programmes; improving knowledge of subcontracting markets, promotion of harmonised certification and standardisation procedures and encouragement of co-operation between large and small enterprises ". MEASURES To address the different aspects of the objective, the following measures were taken: • • • • Europartenariat and Interprise: the organisation of events providing face to face meetings between companies. Improving knowledge of subcontracting markets: the development of statistical data on subcontracting, the organisation of a pan-European conference on subcontracting and a fact-finding~mission to Japan (hereafter "group 1"). Promotion of harmonised certification and standardisation procedures: the development of a practical guide to the legal aspects of industrial subcontracting, of multilingual sectorial terminologies and of a directory of intermediary subcontracting bodies (hereafter "group 2"). Encouraging co-operation between large and small enterprises: a consumer electronics pilot programme, a human resources training programme and different purchasers exhibitions ("reverse salons") were organised (hereafter "group 4"). In addition, a pilot action to improve subcontracting across Europe was set up, the so-called Subcontracting Assistance Network (SCAN) (hereafter "group 3"). EVALUATION Conception The different measures contain three different types of levers, which should contribute to a maximum achievement of the objective: • • • Operate through networks and partners which can provide valuable feed-back to improve the initiatives: to improve Europartenariat and Interprise, DG XXIII tries to obtain feedback through a close co operation with the parties involved in the organisation: e. g. chambers of commerce, craft organisations, public authorities (local - regional - national), private consultants and the so-called "partners" (members of the EIC/BC-Net/BRE networks); for subcontracting, DG XXIII tries to improve its initiatives through close co-operation with subcontracting bodies and through SCAN. Operate through other Community initiatives: the Europartenariat and Interprise events are promoted through the Euro-Info journal, the Practical Guide for SMEs and through Stands and Expositions. Leverage financial resources: Europartenariat and Interprise events are co-financed (to different degrees) by host local authorities and companies. DG XXIII also obtains leverage by organising Europartenariat with DG XVI in the framework of the Structural Funds. Synergy effects were also identified between the different measures: e. g. the majority of the measures on subcontracting can trace their origin to the pan-European conference of 1992 in Madrid (group 1). The fact finding mission to Japan (group 1) lead to the human resources training programme and the consumer electronics pilot programme (both group 4). More than one third of Europartenariat and Interprise events are organised in co operation with the so-called "partners" (members of the EIC, BC-Net and BRE network). 23 Europartenariat and Interprise are co-organised by a main organiser (chambers of commerce, consultants, associations or public authorities) and several partners. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII V 20 In view of the "good" ratings for conception of the different measures on a stand-alone basis and taking into account the leverage and synergy potential, the overall conception rating for the strategy to achieve the objective is "good". Implementation The overall rating given to implementation of the different measures is "adequate", which is in line with the rating of the different measures on a stand-alone basis. To improve the Europartenariat and Interprise events, DG XXIII introduced a quota policy to reduce the number of Mediterranean and Central and Eastern European countries participating: more emphasis was put on bringing together companies of countries with similar industrial traditions. A standardised computer system to make appointments between visiting companies was introduced to improve the quality of the pre-arranged meetings through a better matching. In spite of these improvements, a lot of participating (host and visiting) companies continue to complain about badly matched meetings. Other weak points are that the description of the profile of the host companies in the catalogue 4 is too imprecise and that the organisers of the events can not provide DG XXIII with reliable information about the agreements concluded (exact number, quality, type of agreement, benefits in terms of jobs generated,. ) which leaves DG XXIII with a follow-up problem; in addition the questionnaires used for the follow-up are not standardised - which leads to problems of comparability. For Interprise, the events are insufficiently focused on sectors" and are not supported by a standardised computer system to make appointments between visiting companies. The success of Europartenariat and Interprise events depends on the promotional efforts of the National Counsellors in charge of promoting the events in their respective countries. In this respect, Europartenariat benefits from the fact that its National Counsellors are linked through an informal network where knowledge and experience in organising the events are exchanged. Interprise does not benefit from such a network. To improve the knowledge of subcontracting markets, DG XXIII tries to ensure a wide distribution of the subcontracting statistics developed by working through subcontracting bodies. It also changed its selection process for supporting projects: they have to be proposed by the market and fit within a certain framework. However, DG XXIII still does not succeed in setting priorities: there is no common line between the different measures (as illustrated by the regrouping conducted). Achievement of objective (Quantitative and qualitative impact) The first element of the objective was to improve the Europartenariat and Interprise events. In this respect, an important step in the right direction was taken: whereas in 1988, the number of host companies per Europartenariat event was 120, the average number in 1995 had risen to 400. The total number of visiting companies has risen correspondingly: from 200 per event in 1988 to more than 2000 in 1995. Since 1988 a total of 66,000 meetings have taken place. The success ratio" of the events is approximately 30%. For Interprise, the average number of participating companies per event is 100 (an average of 45 events are organised each year). The success ratio of the events is approximately 13%. However, in spite of the focus on countries with a similar industrial background and the introduction of the standardised computer system in order to make better matched appointments (for Europartenariat), the rate of to the number of meetings remains low for both events" ; regarding the agreements concluded compared improvement of the follow-up, some work remains to be done. 24 The catalogue helps visiting companies to select the host companies they want to meet. 2' Experience has shown that a strong sectorial focus leads to a higher rate of agreements concluded. 26 Expressed by the ratio number of agreements / number of host companies. However, as mentioned under implementation, there is a problem with the follow-up (incomplete information, questionnaires that are not standardised,. ) See the previous footnote. 2* This is in line with the fact that a lot of participating (host and visiting) companies complain that meetings are badly matched. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 3^ -21 As for subcontracting, the effectiveness of the different measures has been improved by leaving as much as possible to the initiative of the market. DG XXIII has also succeeded in banning less qualitative events, which lead to an improved efficiency of the programme. However, as mentioned under implementation and in spite of the synergy effects which were listed, DG XXIII does not completely succeed in developing a coherent set of measures; this reduces the efficiency of the programme. For group 1 and 2, DG XXIII obtains a high quantitative impact: the publications that were developed are widely distributed. However, too many measures (group 4) are narrowly focused and thus involve a very limited number of SMEs; in addition, analysis shows that the distribution on a larger scale of the findings of the consumer electronics pilot project seems to have been unsuccessful. As to the quality of the different measures, customer satisfaction is generally high. The overall rating given to the achievement of the objective is "good"; this is in line with the ratings of the different measures on a stand-alone basis. Cost-effectiveness The average cost of an Europartenariat event is 3,000,000 ECU of which 1/3 is financed by DG XXIII, 1/3 by DG XVI and 1/3 by the organisers and host companies. For Interprise, the average cost is 176,000 ECU of which 27% is financed on average by DG XXIII - the remainder of the tab is for the organisers and the hgst companies. The final reports also show that the sum of the amounts of the contracts generated by the Europartenariat events is - on average - higher than the average cost of organising the events. In view of these elements, the cost-effectiveness for both events is rated "good". For subcontracting, the different groups of measures in general achieve a good cost-effectiveness: with limited budgets a good return was achieved. Some measures combine a narrow focus (and thus small number of SMEs involved) with a high cost (e. g. human resources training, consumer electronics); but in view of the fact that the results obtained are very good, they are also rated cost-effective. In view of the overall good cost-effectiveness subcontracting measures, the overall cost-effectiveness rating for the objective is "good". for Europartenariat and Interprise and for the different CONCLUSION Overall DG XXIII's strategy to achieve the objective is properly targeted. The concept behind Europartenariat and Interprise is sound and the results achieved are good; the events that were organised all over Europe continue to gain in popularity and are well perceived. Both measures have a considerable leverage (through the involvement of public authorities, chambers of commerce, representative organisations,. ) and achieve synergy effects (through the other DG XXIII networks,. ). Some implementation and follow-up problems remain to be addressed. The fact that DG XXIII has succeeded in removing less qualitative events from its subcontracting programme and so improved the global efficiency of the different measures, considerably enhanced its stature. Nevertheless there are still an excessive number of initiatives which are organised, supported or co-ordinated by DG XXIII which limits the possible results of each of them. E. g. Group 4 has received a "poor" evaluation as the initiatives are taken without rigorous preliminary studies in order to ascertain whether they deal with real subcontracting problems on a European level which fit into the priority areas of the general strategy of DG XXIII regarding subcontracting. Group 3 is rated "exceed" as the measure responds to SME needs across Europe and is easy to implement with a limited budget. 2'' Within the year of the event, the main organiser has to submit a report containing the number and details of co-operation agreements concluded. However, as already mentioned, some qualifications are in order about the reliability and completeness of these reports. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 22 OVERALL RATING PER MEASURE • Group 2 • Europartenariat Interpnse 3 W o> E o x: (A 3 « • * •> CO • Group 4 • Group 1 Poor Adequate Good Exceed • Group 3 RECOMMENDATIONS DG XXIII officials, SME representative organisations and members of the Article 4 Committee all agree that the different measures promote the economic and social cohesion of the Union and are an important tool to help SMEs. To improve the achievement of the objective, the following short run recommendations can be made: • • • • • • Encourage a better use of the BC-Net, BRE and EIC-network by the National Counsellors and partners responsible for the organisation of Interprise and Europartenariat; this should enable them to better match the profiles of the participating companies before the event and thus improve the quality of the meetings. Introduce a first selection of visiting companies and focus on those with a stronger co-operation project. Improve the monitoring by DG XXIII of the promotional activities for Europartenariat events to guarantee a better brand recognition. Develop an informal network for the organisers of the Interprise events, modelled upon what exists in Europartenariat. Provide assistance after the (Europartenariat/Interprise) event to potential associates to increase the number of co-operation agreements. This would also solve some follow-up problems. Develop a more coherent strategy for selecting measures under subcontracting by focusing on measures with a high potential quantitative impact and dropping the remaining actions which reach a very limited number of SMEs and by developing a list of priorities where actions should be taken. For the longer term, DG XXIII should try to involve more the DGs responsible for the environment, high technology and R & D, international relations,. in the different Europartenariat and Interprise events and the subcontracting measures. This should lead to more synergy effects and a higher leverage through possible co- fipn'i< in» Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 3£ -23 CHAPTER V : ENSURING CONSIDERATION OF SME INTERESTS IN THE VARIOUS COMMUNITY INITIATIVES AND POLICIES "Promotion of Community programmes, programmes the procedures involved. " including instruments which enable SMEs to participate fully instruments, to develop technological potential, making it easier for SMEs to participate, the Structural Funds, enterprise-policy in all Community actions and and programmes inter alia, by simplifying research The objective to be achieved is essentially an internal one in the sense that the goal is to make it easier for SMEs to participate in all the Community's programmes. MEASURES: • • • • Programme consultationsJ Report on the co-ordination of activities in favour of SMEs and the craft sector'1 Definition of SMEs Euromanagement Research and Technological Development II EVALUATION Conception The different measures taken together constitute a broad approach to the different aspects of the objective. Programme consultations address the objective in a general way: through these consultations DG XXIII tries to ensure effective participation by SMEs in the different Community actions and programmes. The report on co-ordination is also a general measure. It should provide an overview of the different Community actions and programmes that might interest SMEs (including the Multi-annual Programme) and a description of the co-ordination between these different programmes with the Multi-annual Programme. It was drafted by DG XXIII in 1995. The development of specific SME programmes and policies by the different DGs and the Member States has led to a multiplicity of SME definitions. DG XXIII started working on a harmonisation of the different definitions used. It should provide for a common definition to be used within the Commission. Moreover, it is the intention to address the Member States through a Recommendation and urge them to adopt the same definition. A common definition should make it easier for SMEs to take part in the different Community actions and programmes and would facilitate co-ordination within the Commission. "Euromanagement Research and Technological Development II"J is focused on increasing the number and the quality of proposals SMEs submit to Community-funded R&TD programmes; 47 selected consultants assisted 927 SMEs to assess their technology and innovation profile and improve the quality of their proposals for participation in Community programmes. The EU R&TD programmes had a track record of low SME participation and a high failure rate (especially of SMEs). This was traced to the fact that SMEs either lacked long-term vision on their R&TD evolution or because - due to insufficient information - they simply did not apply or applied to the wrong programme. In addition, the burden in terms of time and opportunity costs to participate is relatively higher for SMEs than for larger enterprises. All the measures listed here have a high leverage potential: their ambitious goal is to ensure an effective participation of SMEs in the entire gamut of Community programmes that might be of interest to SMEs. Given the 1 he role of DG XXIII in the elaboration of the Community's actions and programmes through programme consultations is \. i\ limited. Programme consultations are also not specifically linked to the Multi-annual Programme as such; however, Uiev are a key instrument in ensuring the consideration of SME interests in the Community's policies and thus in attaining the > bieetives of the Multi-annual Programme. ''' Hencetorth the report on co-ordination. Our evaluation only concerned the Report COM (95) 362 final of September 8. 1995. " Henceforth "R&TD". Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII i> - 2 4- enormous budgets managed under these programmes, even a small overall improvement in the participation of SMEs would represent an important achievement. Opportunities for synergy exist between the different measures. E. g. the consultation and co-ordination between DG XXIII and the other DGs to ensure the consideration of SMEs' interests in the other Community programmes and actions should help DG XXIII to draft a high-quality Report on Co-ordination. Vice versa, the Report should be a useful management tool for DG XXIII and the other DGs to co-ordinate their future activities. A potential synergy will be worked out between the R&TD and the EIC network: the EICs' specialised group in R&TD matters will be invited to participate at training sessions meant to familiarise them with the different Community R&TD programmes and the Euromanagement methodology. In view of the rating of the different measures on a stand-alone basis and taking into account the potential leverage and synergy effects, the overall rating for conception of the strategy is "good". Implementation In view of the scorings of the individual measures, the overall scoring for implementation is "adequate". Regarding the programme consultations, there are so many Community programmes which all produce a lot of requests for interservice consultations - with documents attached in all official Union languages - and meetings of monitoring committees, that they overwhelm the limited number of responsible officials. With respect to the Report on Co-ordination, DG XXIII had some difficulties to obtain the necessary information to elaborate the report. This is mainly due to the limited (legal) authority of DG XXIII. However, interviews indicated that the information deficit in itself is an indication that insufficient co-ordination between the different programmes took place prior to the drafting of the Report. In view of the insufficient co-ordination in drafting the Report, the measure was rated "adequate". "Definition of SMEs" has been delayed by the complexity of having to reconcile differing national economic situations and traditions and vested interests. Nevertheless, considerable progress has been achieved by DG XXIII. Prior to the drafting of the definition, extensive research was undertaken to compare the criteria for defining SMEs in the different Member States and the Community programmes and initiatives; a consultation process took place in which the opinions of all relevant parties (the Commission, SME representative organisations, Member States,. ) was sought. A negative point however, is that DG XXIII did not take up the initiative itself earlier to work on a common definition of SMEs and push harder for its adoption. Therefore, the implementation rating is "adequate". The implementation of R&TD is rated "exceed": it has been very well implemented from a pilot project perspective. It was well organised, clearly structured and provided for feed-back and experience to be used for corrective and future action. During the first phase the consultants and the co-ordinator were selected and trained; in a second phase, 927 interested SMEs were selected and audited to define their technology and innovation profile; upon which an action plan was elaborated and assistance provided in the preparation of a proposal. Although R&TD was implemented under strict time constraints, the selection of consultants and assistance of SMEs was good. The last phase - an evaluation and follow-up conclusions - is currently taking place. Achievement of objective (quantitative and qualitative impact): In line with the ratings of the different measures on a stand-alone basis, the overall rating for achievement of the objective is "adequate". Regarding the success of DG XXIII through programme consultations in facilitating SMEs' access to Community programmes and actions, it is very difficult to measure the impact at the level of SME funding actually obtained. There are simply too many parties involved and to date the role of DG XXIII in the conception and the implementation of the programmes and actions is very limited. Therefore, the impact was measured through the weight DG XXIII carried with the other DGs involved: the impact was rated "adequate". In view of the number of different Community programmes and actions in favour of SMEs, a report detailing their co-ordination is an indispensable management and policy tool. But although the report is complete, concise and provides an overview of the status of the different measures, it has a major flaw: the report in its current format is an activity report rather than a report on co-ordination. Although there are a number of references to examples of co-operation, the references to procedures, synergies and changes introduced are cursory or absent. As also Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII <o <• - 2 5- mentioned under programme consultations, this is not really surprising given the panoply of programmes arrayed against the limited resources DG XXIII can deploy. The achievement was rated "poor". "Definition of SMEs" is still in a development phase; therefore, it is still too early to make a statement about the impact of the measure. However, the fact that a majority of the Member States have endorsed the principle of a common definition (12 out of 15) and a Recommendation (8 out of 15) in the Article 4 Committee, bodes well for the future. R&TD helped over 900 SMEs to become more familiar with European R&TD programmes. As to the success rate of the proposals that were submitted, it is still too early to make any conclusion because a considerable number still has to be filed. Cost-effectiven ess In view of the high potential leverage of the different measures and although it is still too early to assess the impact of "Definition of SMEs" and R&TD, the overall rating for cost-effectiveness is "good". All the measures combine a broad potential'impact with a low cost (mainly personnel costs); this also explains why the poor achievement of the Report on co-ordination did not impact adversely on its_ cost-effectiveness (which was rated "good"). R&TD was more expensive (2,000 ECU per SME involved), but in view of the number of SMEs reached (the original target was exceeded) and the good level of service provided to them, the cost- effectiveness was rated "good". CONCLUSION Ensuring the consideration of SME interests in the Community's actions and programmes is not an objective to be easily achieved: it is a complex field with a lot of different actors, with different priorities and interests. DG XXIII's strategy to meet the objective is good: the different measures have a considerable leverage potential, synergy effects and address priorities. However, in the implementation and achievement of the objective, the different measures underperform. Therefore, the overall rating for this objective is "adequate". The involvement of DG XXIII through programmes consultation in the conception and implementation of the programmes of other DGs is limited. So is its presence in the monitoring committees. This has negative repercussions on the achievement of the objective; therefore the rating is "adequate". The Report on co-ordination, although an indispensable tool for an effective co-ordination, is in fact an activity report. Its overall rating is "poor". A common definition of SMEs is a prerequisite for an effective co-ordination of the Community initiatives and the achievement of the objective of ensuring consideration of SMEs' interest in Community policies and initiatives. The previous Communication of the Commission in this regard had lead to insufficient convergence; DG XXIII is aware that a common definition on SMEs should be one of its priorities: as mentioned above, the fact that no common definition has been adopted yet, is not for want of efforts made by DG XXIII. But the fact that more than 2 years elapsed between the previous Communication and the start-up of the new definition leads to an overall rating "adequate". R&TD was given an overall rating of "exceed" because of its overall quality and good management, the number of SMEs involved and the measures taken to ensure a follow-up - vital for the long-term success of a pilot programme. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 37 26- OVERALL RATING PER MEASURE • Report on co-ordination • Programme constations • Definition ot SMEs • Euromanagement R&TD Poor Adequate Good Exceed Overall performance 3 </> re a> E 0) V) 3 4-1 re 4-1 CO RECOMMENDATIONS By ensuring that SME interests are considered in the Community's initiatives and policies, DG XXIII can leverage its limited means enormously. Therefore, this objective should be one of the top priorities of the Multi-annual Programme and become a fundamental goal of DG XXIII's future activities. The key priority for DG XXIII in this area should be to have the common definition of SMEs adopted by the Commission and by the Member States. This is the only way to get all policy makers on one line and guarantee an effective co-ordination between the different policies and programmes. Once the definition adopted, DG XXIII should watch over its effective use. To improve the working of the programme consultations and the Report on co-ordination, more human resources should be allocated. The extra resources should enable DG XXIII to take a pro-active attitude; to be involved as of the conception of the different actions and programmes of the Community, thus making sure that they are not only accessible to SMEs but also tailored to meet their needs. It would also make it possible to consult effectively and involve SME representative and professional organisations. The upgrade of the Report on co-ordination from a mere activity report to a genuine report on co-ordination is linked to a transformation of the programme consultations. Only real and dynamic involvement of DG XXIII in the different Community policies and programmes can guarantee that there is real co-ordination - a prerequisite for a Report on co-ordination. As a pilot programme, R&TD can be considered a success. To guarantee its long-term impact, DG XXIII should continue an effective dissemination of the experience gained to the wider SME population, to its own EIC network and to the DGs involved in R&TD to make them aware of the problems encountered by SMEs. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs-DG XXIII -27 C H A P T ER VI : E N C O U R A G I NG S M Es TO ADAPT TO S T R U C T U R AL CHANGES AND TO CHANGES BROUGHT ABOUT BY THE INTERNAL MARKET "Identification of the needs of SMEs and the development of projects, inter alia, on the basis of pilot-projects for enterprises, including small business and craft-industry enterprises, enterprises in commerce and the distributive trades, co-operatives, mutual societies and associations and foundations, as well as enterprise creators and young entrepreneurs, enabling them to adapt to structural changes, to have a better perception of the European dimension of their markets and to benefit from the opportunities offered by the internal market, in particular in the field of standardisation, certification and public contracts. " MEASURES The wide range of measures launched by the Commission in accordance with the Annex to the Council Decision, can be grouped in three broad categories: • actions and measures which relate to European policy and political issues: Green Paper on the practical arrangements for the introduction of the single currency ("questions related to the ECU"), public procurement initiatives, a pilot project to train apprentices from the peripheral areas in the~Community for a three year sandwich course to the Federal Republic of Germany. • measures, including pilot-projects, which aim to stimulate the exchange of knowledge and best practices between enterprises in the Union: Commerce 2000, Transnational Co-operation, Cross-border Offices, REGIE. • measures, including pilot projects, which aim to develop methodologies and audit tools to help enterprises better assess topics: Auto-audit and Euromanagement 'Normalisation'. their position on different It should be noted that a lot of measures which were listed under other objectives indirectly contribute to the achievement of this objective. EVALUATION Conception The Commission has opted for an approach that includes both specific measures to meet the needs of SMEs and craft industry enterprises in the context of the completion of the Internal Market,J> and measures considering the SME dimension in broad aspects of the Internal Market. All the measures developed respond to the objective. In view of the "good" ratings for conception of the different measures on a stand-alone basis and taking into account the broad approach to the objective, the overall rating for conception is "good". However, this broad approach of tackling a wide range of problems SMEs that want to grow and internationalise are confronted with, is not without its downside. Too many initiatives have been started without the allocation of sufficient financial and human resources. Because the different measures address such divergent problems, it is also difficult to create synergy effects between them. As such, a critical mass for the individual measures is not yet attained. And although DG XXIII tries to compensate by leveraging its human and financial resources through co operation and co-ordination with other DGs in the design and implementation of pilot projects, there is no substitute for a policy setting areas for priority action. Implementation The overall rating for the implementation of the strategy to meet the objective is "adequate". This is in line with the "good" and "adequate" ratings of the different measures on a stand-alone basis. In most cases, the measures are co-ordinated by outside consultants whereas the Commission monitors the status of the measures through adequate follow-up procedures. Most of these measures are either pilot projects or projects in their development phase. Pilot projects allow DG XXIII to test-market a concept or idea and to obtain empirical knowledge on specific problems and issues that enterprises - especially SMEs - face in the Internal " The need for some measures was identified at the Conference of Avignon in 1990. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII -28 Market. DG XXIII then tries to leverage the pilot project e. g. by disseminating the experience gained and lessons learnt to a wider range of enterprises (and in particular SMEs) through publications or 'exchange of best practices'. A lot of the measures are still in the implementation phase: e. g. Cross-border Offices, Transnational Co-operation, Public Procurement, Questions related to the ECU and REGIE and Commerce 2000 to a certain extent. The factor "time" lies at the basis of the lower implementation ratings for several measures. E. g. , the pilot project to train apprentices from peripheral areas in the Community for a three year sandwich course in the Federal Republic of Germany has suffered severely from unrealistic time schedules at the beginning of the project which are now the root cause of the weak result of the measure. In the case of Commerce 2000, the findings of the first phase of 1 ! pilot projects have just been published on a wider scale, which is more than one year after the first phase was terminated. The selection process for the second round of pilot projects was very slow and time- consuming. Auto-audit suffered from similar delays: the elaboration of the manual started in 1992 but too much time was lost with consultations and translation. Achievement of objective (quantitative and qualitative impact) Some of the pilot projects are too recent to have created an impact: e. g. Transnational Co-operation and Cross- border Offices are still in the implementation phase. Other measures are still in the implementation phase, which makes it too early to rate their impact: e. g. the Green Paper on the ECU sets the deadline for feed-back by industry federations, professional associations,. at December 1995 whereas the distribution of the Auto-Audit manual still has to start (planned for the near future); the measure public procurement is also still in the implementation phase. The idea behind most (pilot) projects is not to reach as many enterprises as possible directly but to leverage the knowledge and experience gained in the different (pilot) projects by an adequate level of follow-up and subsequent dissemination of the experience gained in the years to come. Depending on the penetration obtained, a multiple of the directly involved companies thus should benefit from the different projects. As mentioned in the previous paragraph, most measures are still in the implementation phase; consequently, follow-up measures were not yet taken. An illustration where follow-up measures are being taken is Euromanagement 'Normalisation': one of the objectives of the measure was to map the problems of SMEs in the field of standardisation, certification, quality and safety and - as a follow-up measure - to increase the influence of SMEs in the process of standardisation: DG XXIII decided to devote its promotional campaign for 1995 to the theme of 'normalisation' and to support the creation of NORMAPME, a non-profit organisation to defend the interests of SMEs in European normalisation bodies. For REGIE (which is still being further developed), the impact created to date within the EEIG community was rated "adequate": although the response rate of EEIGs was low, there was a considerable interest shown in the project by professionals involved with EEIGs. No overall rating for achievement of the objective is awarded in view of the fact that for more than half of the measures no evaluation of the impact could be made. Cost-Effectiveness The cost-effectiveness of the pilot project to train apprentices from the peripheral areas in the Community for a three year sandwich course in the Federal Republic of Germany was rated "poor" due to the fact that insufficient levers were used. FOF the other measures no cost-effectiveness rating is given as they are still in the implementation phase or too recent to create a real impact. Therefore, no overall cost-effectiveness rating is given to the strategy to meet the objective. CONCLUSION As mentioned above, only a few measures have reached a stage where they can have an impact and contribute towards an effective achievement of the objective. However, as most measures have a rating of "good" on conception and "adequate" on implementation, the foundations are laid to achieve useful and practical results in the years to come, provided some weak points are addressed. A lot of measures and pilot projects suffer at this stage from a lack of human and financial resources and take much more time than initially planned. This is Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 4 29 compounded by the fact that the different projects have a rather limited number of synergies as they try to cover all issues of relevance to SMEs at the same time. The real impact of most of these measures depends on their follow-up measures, which should leverage the findings and experience gained through a wide dissemination. However, in view of the human resources problems, the necessary follow-up measures will probably also suffer from serious delays. OVERALL RATING PER MEASURE • Questions related to the ECU • Auto-audit REGIE Commerce 2000 Public Procurement • Educational Project in FR Germany • EM Normalisation' • Transnational co-operation Cross-Border Offices Poor Adequate Good Exceed Overall performance •£ | iu 3 0) E o V) 3 re CO RECOMMENDATIONS DG XXIII should continue its 'laboratory' approach of working through pilot projects. Pilot projects allow DG XXIII to 'test by doing', a legitimate and sensible way of assessing new ideas without spending large amounts of money. They also allow DG XXIII to stay in almost direct contact with SMEs and to understand their concerns. However, the ultimate impact of pilot projects lies in a broad dissemination of their findings. In this regard, DG XXIII should ensure that it identifies at the earliest possible stage the different levers that can be used to this effect. DG XXIII has a central position with a pan-European dimension for enterprise policy, especially towards SMEs. It should reinforce its role of leading facilitator and animator towards all the different platforms (European Community enterprise networks, representative and professional organisations, national authorities,. ) for sharing experience, information and best practices. This will create enormous leverage and help enterprises, especially SMEs, to adapt to the structural changes of the Internal Market. In view of the limited available resources, both human and financial, DG XXIII should set priorities in the areas where action is to be taken. This will also allow a better co-ordination of some of the pilot projects. The time lags between the different phases of projects, and between pilot projects and their follow-up should be reduced. This can only improve the impact of the different measures. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII / ^ 3 0- CHAPTER VII : PROMOTING A BETTER FINANCIAL ENVIRONMENT FOR ENTERPRISES "Considering ways and means of facilitating SMEs' access to sources of credit and guarantee, including mutual guarantee systems and risk capital activity; appreciation of the opportunity and feasibility of the development of secondary markets; facilitating SMEs ' access to financial instruments provided by the Community, without involving financing of enterprises'" For the purpose of the evaluation study, we have considered the objective to be removing market inefficiencies and making Community financial instruments more accessible for SMEs. MEASURES Recommendation of May 12, 1995 on payment periods in commercial transactions ("Late Payments") Communication of the Commission of November 10, 1993 on the financial problems experienced by SMEs ("Communication") Programme consultations 34 Mutual guarantee schemes ("MGS") Round table of bankers ("Round Table") Factoring"' Retention of title Seed capital fund pilot scheme ("Seed Capital") EASD/EASDAQ To meet the objective, different approaches were used: a regulatory approach (e. g. Late Payments, Factoring, Retention of Title, Programme consultations), exchange of best practices (Mutual Guarantee Schemes, Round Table), financial support (EASD/EASDAQ) and pilot projects (Seed Capital). EVALUATION Conception The different measures together are designed to cover the objective across the board; both public authorities (i. e. Member States and the Commission) and different categories of financial intermediaries (e. g. banks, venture capitalists, stock-brokers, operators of mutual guarantee schemes) are involved. On the one hand, the First Round Table and the Communication made an inventory of the different problems regarding the financial environment of SMEs and suggested possible solutions. On the other hand, specific measures were implemented to meet the different aspects set out in the annex to the Council Decision: • Mutual guarantee systems and risk capital activity ("Seed Capital") were promoted. • • • • Feasibility studies regarding the development of secondary markets were conducted; further to these studies, DG XXIII financially supported the creation of the Association of European Securities Dealers (EASD) who will help set-up EASDAQ. The Second Round Table is considering concrete ways of facilitating SMEs' access to credit; if actively pursued, "factoring" and "retention of title" will address this aspect as well. Through programme consultations and the Round Table, DG XXIII addresses the problem of SMEs' access to Community financial instruments. Late Payments aims to improve the legal framework. ,4 The role of DG XXIII in the elaboration of Community financial instruments through programme consultations is very limited. They are also not specifically linked to the Multi-annual Programme as such; however, they are a key instrument in facilitating SMEs' access to Community financial instruments and thus in attaining the objectives of the Multi-annual Programme. These measures will be started effectively under the next Multi-annual Programme. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII hk -31 - For the achievement of the objective, it is a prerequisite that in the conception of the different measures, a maximum of potential levers are identified and built in. All the measures listed above successfully pass this test. Four types of levers were identified: • Work through regulatory measures: they combine a broad impact (the entire SME population) with a limited cost (the elaboration of the regulation). Late Payments, Factoring, Retention of Title and programme consultations fall in this category. • Work through networks and partners: the European Mutual Guarantee Association (EMGA - mutual guarantee schemes), the participating banks (Round Table), the SME representative organisations (Late payments) and the EASD (EASDAQ) are important levers for DG XXIII to realise the objective. • Work through other - more powerful - institutions and departments: through programme consultations, DG XXIII tries to steer Community financial instruments towards SMEs. • Leverage your financial resources: for Seed Capital, DG XXIII leveraged its financial resources by intervening in the operating expenses of the funds, the equity being provided by regional investors. This leads to a much greater seed capital pool via public/private sector collaboration than DG XXIII would have been able to create on its own. Synergy effects are noted between the different measures. E. g. the First Round Table helped Hate Payments and how to facilitate SMEs' access to the Community's financial instruments. Through programme consultations, pilot projects for Seed Capital and mutual guarantee schemes have obtained financing through Community financial instruments. In view of the "good" ratings of the different measures for conception on a stand-alone basis and taking into account the "across the board" approach, leverage and synergy potential, the overall conception rating for the strategy to achieve the objective is "good". Implementation The overall scoring given to the implementation of the different measures is "adequate". This is in line with the ratings given to the different measures on a stand-alone basis. A common thread runs through the lower implementation rating of most measures. DG XXIII tries to do too much at once - which has a negative impact on the implementation. E. g. factoring and retention of title will be started effectively under the next Multi-annual Programme; there are that many Community programmes which all produce a lot of requests for interservice consultations - with documents attached in all official Union languages - and meetings of monitoring committees, that they overwhelm the responsible officials. For the First Round Table, there were some flaws in the way it was organised. An implementation flaw of Seed Capital is that the size of the funds is too small to pay back the operating costs (especially after the five year period where DG XXIII funds will stop). Other measures were well implemented, such as the Mutual Guarantee Schemes, EASD/EASDAQ or Late Payments. Achievement of objective (quantitative and qualitative impact) In view of the "good" ratings of the different measures for quantitative and qualitative impact on a stand-alone basis and taking into account the synergy and leverage effects, the overall rating for achievement of the objective is "good". For several measures it is too early to evaluate the impact: retention of title and factoring are still in the start-up phase; Member States have till 31 December 1997 to report on the follow up to Late Payments (which dates from 1995) - first progress reports bode well in this respect. The biggest achievements so far are in the area of removing market inefficiencies, i. e. mutual guarantee schemes (pilot projects, European Mutual Guarantee Associations, networking, improving the regulatory framework), Seed Capital (attraction of private funding, jobs created), EASD/EASDAQ (networking, a European NASDAQ) and the Round Table (awareness function). This gains additional importance if one takes into account that, for SMEs in the European economy, the financial markets are the most important external source of finance. As to the better access of SMEs to the Community's financial instruments through programme consultations, it is very difficult to measure the impact at the level of SME funding actually obtained. There are simply too many Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXI11 LiS - 3 2- parties involved and, to date, the role of DG XXIII in the conception and the implementation of the instruments is very limited. Therefore, the impact was measured through the weight DG XXIII carried with the other DGs involved: the impact was rated adequate. The First Round Table also played an important role in this respect by raising the awareness of other DGs and the EIB of the problems encountered by SMEs. However, the approach remained high-level; there were no concrete measures. Because of its high-level approach, the impact was mainly qualitative; the overall impact was therefore rated "adequate". Cost-effectiven ess In view of the leverage obtained through the different types of levers, the cost-effectiveness was rated "exceed": for the regulatory measures, costs are limited to personnel; DG XXIII's financial resources were highly leveraged in Seed Capital; the final cost-effectiveness of the pilot scheme will depend on the degree in which the advances will be repaid. Based on the performance indicators developed by the University of Warwick in an intermediate evaluation report, the cost/benefit varies according to different repayment scenarios: in case of a 70% repayment, the cost per job created amounts to ECU 1,260; for a 50% repayment, the cost per job will amount to ECU 2,086. For the high-tech capital funds, these ratios are even "better. Working through networks and partners (EASD/EMGA/Round Table) leverages DG XXIII's human and financial resources. CONCLUSION Creating a better financial environment for an SME population of 15 million in 15 Member States with different market realities and needs is not an objective to be achieved in the course of one Multi-annual Programme. It is inherently a long-term process. To date, the efforts of DG XXIII in promoting a better financial environment for enterprises were given an overall rating of "good". DG XXIII's strategy to meet the objective is sound: the objective is ambitious but the different measures employed generated considerable leverage potential and synergy effects. The fact that DG XXIII tries to remove market inefficiencies (Round Table, MGS, Seed Capital, EASDAQ) is of primary importance. Since financial markets are the main external providers of finance to SMEs, any improvement is bound to have a large impact. OVERALL RATING PER MEASURE • • 1 First Round Table of Bankers 2 Programme consultations 1 Mutual guarantee schemes 2 Late payments 3 Communication on financial problems of SMEs • 1. E A S D / E A S O AQ 2. Factoring 3. R e t e n t i on of title • Seed Capital Fund Pilot S c h e me 3 in re o E v JZ ™ a Poor Adequate Good Exceed Overall performance RECOMMENDATIONS Discussions with officials from DG XXIII, other DGs, SME representative organisations and members of the Article 4 Committee all underscore that improving the financial environment of SMEs should be one of the top priorities of DG XXIII if the growth and internationalisation of SMEs is to be promoted: the limited availability of appropriate financial resources is a major headache for entrepreneurs and stunts the growth of too many SMEs. The following recommendations can be made to better achieve the objective in the short run: Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII / / 33- • • • • • • A close follow-up of the Recommendation on payment periods in commercial encouragement of slower Member States to take action. transactions and Ensure that the findings of the Second Round Table of Bankers are implemented and made known throughout the banking sector. Financial sector professional organisations could be involved in this regard. Activate factoring and retention of title. The organisation of a Round Table on Factoring could be investigated. For Seed Capital, the relations and exchange of expertise with established early-stage venture capitalists should be further developed. The lessons of the pilot can be extremely, valuable for DG XXIII to explore the barriers to early-stage technology investments, especially diseconomies of scale and scope for small funds. EASDAQ will become operational in 1996 but there remain significant barriers to assure its pan-European character. If DG XXIII wants EASDAQ to be successful, it will have to encourage Member States to remove the legal and regulatory barriers the project faces. Regarding the programme consultations: DG XXIII should be involved at the conception of the Community's different financial instruments, thus making sure that the financial instruments are not only accessible but also tailored to meet SME needs. An early involvement would also make it possible to consult and involve SME representative and professional organisations. A prerequisite would-be a considerable increase in the resources allocated to the process. For the longer term, DG XXIII should continue to work as much as possible through mechanisms based on the exchange of best practices because of the inherent advantages this technique offers (wide pool of experience, in line with new approach of partnership and market-oriented). The following new measures could be suggested: • • Create Round Tables for each of the different parties and professions that are involved in the financing of SMEs: e. g. venture capitalists, stock-brokers, accountants, public sector bankers,. Create a Committee for Improving the Financial Environment modelled upon the Committee for Improving and Simplifying the Business Environment: the Committee would study what measures (including taxation) can be taken at the level of the Member States to improve the financial environment of SMEs. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 47- - 3 4- C H A P T ER VIII : PROMOTING BETTER OBSERVATION OF THE ECONOMIC DEVELOPMENT OF ENTERPRISES "Promoting better observation of the economic development of enterprises as part of the dynamic of effective implementation of the internal market. European Observatory for SMEs, improved statistics on SMEs without increasing the burden on enterprises " MEASURES Business services in Europe ("Business services statistics") Enterprises in Europe ("Enterprise statistics") CMA statistics European Observatory for SMEs Conference of Berlin ( 1994) EVALUATION Conception In view of the sound approach and the potential leverage effects, the overall rating given to "promoting a better observation of the economic development of enterprises" is "good". This is in line with the rating of the measures on a stand-alone basis. The different measures constitute a complementary approach of the objective as set forth in the Annex of the Council Decision: all sectors and industries are covered by the different publications or events. The different publications (Business services statistics, Enterprise statistics, CMA statistics and the European Observatory for SMEs) respond to an explicit information need of policy makers as no comparable data sets exist at a European level. This is particularly the case with respect to the European Observatory for SMEs: the measure corresponds directly with the objective outlined in the Annex; policy makers regard the European Observatory as a unique reference document dealing with all SME-related aspects. In order to avoid adding to the burden on enterprises through questionnaires or surveys, DG XXIII clearly defined and implemented a strategy of using as much as possible statistical data existing at a national level. The collected data are generally available at National Statistical Institutes and/or professional or other organisations or are gathered by means of pilot surveys on a voluntary basis. The Conference of Berlin (1994) is a clear illustration of how DG XXIII gets direct feed-back on the different problems that companies face in the field. By exchanging and debating views of different key players in the field, including national policy makers in the craft and small businesses sector, the conference helped to identify to what extent an action at a European level is needed. Some of these proposals have already been followed up by measures or pilot schemes. With respect to the CMA statistics, questions arise as to whether it should be a priority of DG XXIII within the Multi-annual Programme. No synergies were identified between the different measures as they cover different sectors of activity and are not comparable. For nearly all the measures listed above, DG XXIII succeeded in identifying different types of levers: • • Co-operation with specialised institutions/organisations for statistical research and leverage of financial resources. For example, the different publications, except the "European Observatory for SMEs", are a co- production of DG XXIII and EUROSTAT. The Conference of Berlin allowed DG XXIII to identify areas for priority action, thanks to the input of policy makers and experts from professional organisations in the craft sector and small businesses. CMA stands for co-operatives, mutuals and associations. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 35 Implementation The overall scoring given to the implementation of the different measures is "adequate". This is consistent with the ratings given to the measures on a stand-alone basis. The implementation of the different measures has generally been well prepared and followed up. The role of DG the different XXIII varies from co-defining, in collaboration with EUROSTAT, the type of information publications should contain, to the preparation of workshops and of a detailed thesaurus of proposals expressed by the participants of the Berlin Conference. The common element in the lower implementation ratings is that some publications are incomplete and inaccurate. This is because of the frequently poor quality of data available at national institutions or because of the low response rate in the pilot surveys by which the data are gathered (e. g. "Business Services in Europe", "CMA Statistics"). Moreover, by the time the publication is released, the data are often considered obsolete by its potential users. For the European Observatory for SMEs, extensive use is made of different SME research institutes throughout Europe - which created a network effect between the different institutes. The European Observatory for SMEs has a strong academic basis, but, in the opinion of some respondents, it is not a very practical document to its target group of policy makers: its format is not practical and all information included is not always of direct use or interpretation. In view of the absence of non-research bodies in the network, some pragmatic dimensions are not enough considered. Achievement of objective (quantitative and qualitative impact) The overall rating given to the achievement of the objective is "adequate". Several measures are still in a development phase: this was the case for the CMA statistics and the Berlin Conference. While it is still too early to assess their total impact, it can be assumed that they can and will have a bigger impact as they reach maturity. The biggest achievements of the different measures are in the sphere of establishing a better and more comprehensive picture of the situation of SMEs and of analysing the impact of the Internal Market on SMEs. The statistics clearly fill a gap as no comparable publications exist at a European level. Furthermore, they provide enterprise policy makers at a national and European level with a useful tool for identifying the right initiatives in the enterprise policy. With respect to the European Observatory for SMEs, the surveys and interviews indicated that officials attach a quite high importance to the publication, which confirms the use they make of it. The Conference of Berlin resulted in a short-list of priority measures to be taken: the necessary follow-up is also taking place. Therefore, its impact was rated "good". Unfortunately, for the other measures, the impact was rated "adequate" because they are hampered by some flaws. Their impact suffered from a perceived incompleteness and a weak distribution policy: the target group for most publications is generally poorly defined and inadequately implemented. Policy makers at a European level have generally been well targeted; those at the Member State level and other people having an impact on the environment in which SMEs operate are much less effectively targeted. Cost-effectiveness An inefficient distribution policy with respect to all publications hampers the potential impact the different measures could achieve, and hence reduces their cost-effectiveness. With respect to the Conference of Berlin, the average cost per participant was acceptable in view of the good qualitative and quantitative impact of the measure. CONCLUSION The Commission's strategy to meet the objective of a better observation of the economic development of enterprises is "adequate". It disposes of considerable leverage effects by using information existing at a national level and because of the co-financing. DG XXIII's added value in this area of activity consists in the compilation of a comprehensive and unique source of information on the development of enterprises in the different Member States of the European Union. Its role in Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 36 this area would seem completely justified as no comparable compilation or information exists at the European level. The different publications provide policy makers with extensive information which can help them define the appropriate strategies. Some concern arose with respect to the number of copies distributed and the number of policy makers that have finally been reached. An improved distribution policy aimed at targeting more effectively national officials should be considered, as it could considerably increase the impact of the different publications. The development of quantitative information on small and medium-sized enterprises is an important issue. But the distinctive roles DG XXIII, EUROSTAT and authorities at national or international level play in the collection and compilation of the information did not appear to be optimal. The objective not to increase the administrative burden on enterprises has been achieved and a similar policy should be adhered to in the future. The Conference of Berlin made possible an identification of the problems in the field through direct consultation with field experts and hence helped to take appropriate action. OVERALL RATING PER MEASURE • Business services statistics Enterprise statistics European Observatory for SMEs • CMA statistics • Conference of Berlin Poor Adequate Good Exceed Overall performance S 3 (0 2 CO re O E o SZ ° I •£ o "53 </) 3 </> RECOMMENDATIONS To improve the workjng of the different measures, the following recommendations can be made: • • • • • A focus on the quality of the data included in the publications is a top priority: DG XXIII should try to achieve this by trying to encourage the national (statistical) organisations to obtain data that are both accurate and up-to-date. A clear definition of target groups at the European and Member State level for the different publications and subsequently the implementation of a focused distribution policy. Feasibility studies should be conducted in order to even better integrate new information technologies (CD- ROM, On-line Databases with interrogative software,. ) to make the data more user-friendly and accessible. Concerning the European Observatory for SMEs, the integration in the network of some non-academical organisations could help to engender a more practical approach towards SMEs. In addition, in order to avoid its heavy format, a publication per theme or segment could be considered or, preferably, a CD-ROM format with interrogative software. This argument also applies to the Enterprises in Europe publication; In view of its success in fostering closer contacts with and feed-back from the field, events like the Conference of Berlin should continue to be held; follow-up measures, however, should be implemented more rapidly (it took over a year for the Conference of Berlin). The idea of a Conference could also be used for other focused groups of SMEs. A\rthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII b& 37- CONCLUSION What is the overall evaluation of the achievement of the objectives of the Multi-annual Programme as set forth in the Council Decision of June 14, 1993 ? The table below presents the evaluation per objective for each criterion, and the number of measures. SCORINGS PER CRITERION NUMBER OF MEASURES DG 23 OBJECTIVE Admin & Legal Environm. Better access to Community information for enterprises Improving the business-partner- search network Direct Contact bt Entrepr. - Subcontracting Ensuring consideration of SME interests in the various Community initiatives and policies Encouraging SMEs to adapt to structural changes and to changes brought about by the internal market Promoting a better financial environment for enterprises Promoting better observation of the economic development of enterprises G G G G A A A A A A P G E A G G G A A G G G A A - G - E 1 2 _5 2 1 1 13 1 4 1 3 1 2 4 1 5 3 G. A A N. A. 2 Evaluation and development of enterprise policy - - - The scorings have the following meaning: "E" stands for "Exceed", "G" for "Good", "A" for "Adequate". "P" for "Poor", and "N. A. " for "Not Applicable". The last objective, i. e. "Evaluation and development of enterprise policy", has not been evaluated as it relates to the evaluation to be made by an external expert, i. e. the subject of the present report. The interpretation to be made of the above table is as follows: 1. The conception of the different measures is "Good" as they respond to the objectives of the Council Decision: in most of the cases, the different aspects of the objectives are covered; synergies between measures are to a certain extent identified (e. g. between the EIC R&TD Group and the Euromanagement R&TD programme, correspondents of BC-Net, BRE, EIC which participate in one third of Europartenariat/Interprise events,. ) although there is still room for improvement. The budgets allocated to the network related measures (EICs, BC-Net, BRE, Enterprise,. ) seem to be very important compared to other measures (e. g. pilot projects). One could ask the question if the measures have been sufficiently prioritised. 2. The implementation of the objectives is "adequate". For most of the measures, the major strengths of the implementation are that: Interactions with the target environment were sufficient; Especially for pilot projects and measures in the start-up and development phase, a structured approach has been developed; Appropriate levers have been identified and used. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII 38 The major weaknesses in the implementation of the measures are divided into a strategic and operational dimension: Strategic: S Insufficient "Customer focus", i. e. insufficient identification of the target customer for each measure (this is particularly the case for the EICs, Statistics, Information & Publication and others); Insufficient identification and use of synergy and integration potential between all enterprise related Community networks; S S With respect to mature measures, insufficient alignment on a continuous basis with the environment. Operational: S Insufficient management information allowing fine-tuning or redirection of the implementation of the different measures; Constraining and slow decision process within the Multi-annual Programme; Insufficient follow-up and delays in the implementation of the different measures. S S 3. The achievement of the different objectives is "adequate", except for the objectives which encompass the subcontracting measures and those related to the promotion of a better financial environment for SMEs. With respect to the latter two, the scoring is "good". The scorings on achievement are closely related to the implementation of the different measures. Overall the qualitative and quantitative impact increased during the Multi-annual Programme. We believe however that a more significant increase could have been achieved. 4. Concerning the cost-effectiveness ratio, scorings are generally better and vary from "adequate" to "good" and "exceed". The better scorings with respect to the cost-effectiveness ratio in comparison with those attributed to the achievement of the objectives can be explained by the following: The evaluation was made in light of the limited operational resources allocated to the Multi-annual Programme. These limited resources hamper to some extent an optimal quantitative and qualitative impact but not the cost-effectiveness; The levers, which, although valuable, could not sufficiently contribute to reach a significant quantitative impact on the total SME population. The "adequate" scoring with respect to the achievement of the objectives compared to the good cost- effectiveness indicates an existing imbalance between the broad and ambitious objectives on the one hand, and the limited resources on the other hand. Which conclusion can be drawn from the evaluation of the Multi-annual Programme from a dynamic perspective, i. e. the progress made compared to the situation two years ago ? The actual Multi-annual Programme contains a lot more objectives and measures compared to the previous one. Major progress has been achieved in the implementation of some measures (e. g. Recommendations have been adopted on Transfer of Businesses and Late Payments). For most of the measures, considerable improvement has been identified in terms of quantitative and qualitative impact. The relationship between DG XXIII and the environment has become more interactive: the environment has been more often consulted and taken into consideration in the implementation of different measures. Although it appears that progress is being made into the right direction, there is still considerable room for improvement. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII ^ 39 RECOMMENDATIONS of the Multi-annual Programme ? What is the policy recommendation we could make after the evaluation of the different measures First, a suggestion for a mission statement for the new Multi-annual Programme : in view of the ambitious and broad objectives and the limited resources, the Multi-annual Programme should foremost be about the "Creation of an appropriate environment for Growth & Internationalisation of SMEs through a uniquely conceived network and by extensively using the adequate levers". We suggest six axes to achieve this mission: - - Create a visibility on SMEs Focus on deregulation Focus on an integrated approach Focus on levers Focus on Information Technology Continuous development of a single network Visibility on SMEs A precondition for an effective SME policy is to understand the SME population and the problems they face in their attempt to grow & internationalise^. The instruments that currently exist (SME Observatory and Statistics) do not sufficiently provide policy makers with the daily realities SMEs face. We therefore recommend to set up additional measures allowing to : Create visibility on SMEs and their real needs, Analyse what kind of segmentation of SMEs could be done based on their current needs, Disseminate and integrate valuable information in the implementation of the existing measures38. To fill this information gap, alongside new measures, the existing networks should be used to serve as grass-roots points of contact with the SME population; they should help DG XXIII in identifying areas for priority action, with a continuous feed-back on the effectiveness of existing measures and projects and help fine-tune new measures by providing segmented 'market' information. Focus on deregulation Our analysis showed that the administrative and legal burden SMEs have to face should be one of the top priorities of any SME enterprise policy. Therefore, include measures concentrating on all aspects of this objective: DG XXIII should be the advocate and watch-dog of legal and administrative deregulation (or new regulation) within the Commission through the interservice consultation process, through consolidation of legislation and through a thorough impact assessment of legislation. the new Multi-annual Programme should As an important part of the administrative and legal burden is created at the level of the Member States, the new Multi-annual Programme should also address this point by making DG XXIII a facilitator of deregulation within the Member States on the basis of the new partnership approach of article 130 of the Treaty of the European Union. The Committee for Simplifying and Improving the Business Environment is a first step in this regard. Integrated approach DG XXIII should put more resources in its attempt to co-ordinate those activities resulting from other DGs within the Commission which could be considered in support of SMEs. DG XXIII should identify the adequate measures that will allow them to be more closely involved in most of the initiatives taken towards the SMEs at the Community level. >7 The objective should also be to identify the percentage of SMEs interested by growth & internationalisation, who they are. and what are the actions to be conducted to increase this percentage. "Integrated Program in favour of SMEs" (Com (94) 207 Final) indicates that only 5% of SMEs are really interested by growth & internationalisation. '* This in order to respond to the lack of a "Customer focused" approach as highlighted in the conclusion. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII S3 - 4 0- The levers DG XXIII should place yet more emphasis on the use of levers in everything they do. While DG XXIII has done a good job in trying to identify levers in the implementation phase, these levers were not always effectively used. Working through pilot projects to demonstrate the viability and feasibility of new ideas that might benefit SMEs also forms an integral part of DG XXIII's mission. DG XXIII should ensure that the ideas and projects that have passed the market test successfully are picked up by the market on a larger scale and thus create a leverage effect. The exchange of best practices is another way to create leverage effects: it draws from a large pool of experience, it takes into account the different realities, it is in line with the new partnership approach (between the Member States, the Commission and representative organisations), and it is the most market oriented approach which should guarantee a high cost-effectiveness. Therefore, it should be used extensively as a tool in the pursuit of the different objectives, DG XXIII should be a facilitator of an effective exchange through the organisation of pilot projects, conferences, Round Tables, seminars. Issues to be discussed should certainly include finance, exporting, research, co-operation,. Information Technology The next Multi-annual Programme should consider as an objective a better access to information technology for the SMEs. Moreover, DG XXIII should better integrate information technology in the existing measures. We cannot sufficiently stress the importance of the information society in providing strategic opportunities for the SMEs. The networks The networks as they actually exist cannot fulfil the objectives as set forth in this recommendation, i. e. to provide valuable information on the SMEs and to adequately use levers by focusing on the distribution channels. Moreover, the preceding chapters have identified different recommendations that could significantly increase their quantitative & qualitative impact. We therefore believe that the networks should be significantly transformed and integrated into a single network. Moreover the new single network should be the instrument through which most of the measures should be implemented. The single network concept consists of one central structure and multiple distribution channels. The central structure combines all information and competences to maximise its effectivity and efficiency. The distribution channels include different types of non-exclusive most trusted business advisors to SMEs. This should contribute to the successful integration of the first-stop-shop and one-stop-shop concepts as the basis of the single network. The single network will continue the different types of individualised services that the networks currently provide. The suggested new approach gives rise to a fundamental question: does the Multi-annual Programme provide DG XXIII with sufficient resources to achieve the objectives? First the budget of the Multi-annual Programme: based on the suggestions outlined in the previous chapter: • • • the existing non-network measures have been rated "adequate" or "good" most of ; different recommendations have been highlighted in the preceding chapters that could improve their effectiveness to achieve the objective. We therefore believe that most of them should be continued ; as previously mentioned, the network measures should be transformed, with significant investments in technology ; we believe that additional measures should be set up in the area of information on SMEs, deregulation and integrated approach. On the one hand, the transformation of the networks will require investments. However, it is too early to say if the future functioning of the networks will be significantly more expensive than the current situation. On the other hand, the new measures will require additional budget. We therefore believe that, if such a policy statement wants to be adequately implemented, additional budgets should be required. In terms of human resources, it was not the purpose of our evaluation study to review the adequacy of the human resources allocated to the execution of the Multi-annual Programme. Nevertheless, the evaluation has shown that some implementation problems were partly due to a lack of human resources. The additional measures proposed would probably also require additional human resources and specific skills. Arthur Andersen Business Consulting Evaluation of the Multi-annual Programme to assist SMEs - DG XXIII <~/ ISSN 0254-1475 COM(96) 99 final DOCUMENTS EN 08 Catalogue number : CB-CO-96-I39-EN-C ISBN 92-78-01919-4 Office for Official Publications of the European Communities L-2985 Luxembourg

Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DECISION on a series of guidelines for trans-European telecommunications networks

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 20. 03. 1996 COM(96) 108 final 95/0124 (COD) Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DECISION on a series of guidelines for trans-European telecommunications networks (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) EXPLANATORY MEMORANDUM 1. Introduction On 31 May 1995 the Commission adopted a proposal for a European Parliament and 1. 1 Council Decision on a series of guidelines for trans-European telecommunications networks (COM(95)224 final). This proposal was submitted to the European Parliament and the Council on 8 June 1995. 1. 2 1. 3 1. 4 The Economic and Social Committee endorsed the proposal on 22 November 1995. The Council reached agreement on the proposal on 27 November 1995. The Committee of the Regions endorsed the proposal on 18 January 1996. 1. 5 proposed 35 amendments to the text originally proposed by the Commission. The European Parliament adopted its opinion on first reading on 1 February 1996. This 1. 6 principle. It is unable to accept the remaining 13 amendments. The Commission can accept 13 of these amendments, 5 others in part and 4 more in 1. 7 The reasons which prompted the Commission to take these positions on the amendments are explained in Section 3 below. The full text of the original proposal (left-hand column) is set out alongside the full text of the amended proposal (right-hand column) in Annex 1. 2. Objective of the proposal the domains for projects of common The objective of this proposal is for the European Parliament and Council to adopt, following the codecision procedure, a series of guidelines (as provided for by Article 129c of the Treaty on European Union) covering the objectives, priorities and broad lines of measures envisaged and trans-European telecommunications networks. In the domains for projects of common interest identified in Annex 1 to the Decision, it is proposed that the Commission publish calls for proposals in order to select specific projects of common interest, with the assistance of a type Ilia committee, based on a work programme updated whenever necessary (probably every year). the field of interest in The proposal gives priority to applications of collective interest where, in the context of opening up the sector to competition, public intervention, particularly in the form of encouraging partnerships between the public and private sectors, can provide citizens, businesses and administrations in the Community with a series of instruments needed for them to enter the information society. 3. Commission's position on the amendments proposed by the European Parliament on first reading 3. 1 Amendments accepted The Commission accepts amendments 1, 2 (first part), 3, 4, 7 (first part), 10, 11 (with one minor amendment), 15, 16 (first part), 20, 22 (with one minor amendment), 24, 25, 26, 27 (first part), 28, 31 (first part) and 34. Amendment 1 clarifies the first recital and calls for particular attention to be paid to SMEs and the less developed or peripheral regions. The first part of amendment 2 stresses the importance of the Euro-ISDN which is the network on which the trans-European applications will be deployed in the immediate future. Amendment 3 adds a new recital rightly stressing the need for coordination with other initiatives. This need is also echoed in point 4 of Annex 1. Amendment 4 improves the original wording to render the same idea. The first part of amendment 7 puts the accent on real needs not covered by mere market forces; these correspond to the applications of collective interest for which priority is proposed. Amendments 10 and 15 bring the text closer to the wording of the Treaty. Amendment 11 is a useful addition; only the word "technical" to describe the transition towards the information society must be deleted, as it is overrestrictive. The first part of amendment 16 is justified as it clarifies the real nature of the work programme prepared by the Commission at this stage. Amendment 20 provides a reminder that the guidelines applicable to Euro-ISDN are adopted by the European Parliament and the Council. The first part of amendment 22 is acceptable since the text deleted has been moved to amendment 23. The second part rightly stresses the importance of providing non-proprietary tools for development of new applications. However, it seems unrealistic to require the generic services to provide such tools. It is therefore proposed to replace "providing" by "promoting". Amendment 24 is a useful addition to the point on "distance education and training". Amendment 25 adds to the point on "transport telematics" the domains which Parliament gave priority when adopting the provisions on the trans-European transport network. Amendment 26 draws attention to important social aspects of teleworking. The first part of amendment 27 (excluding "gradual approximation of conditions and terms of employment" which appears unrealistic) is a useful addition to the point on "telematic services for the job market". Amendment 28 is a useful addition to the point on "cultural and linguistic heritage". The first part of amendment 31 rightly extends the media which can be used for generic services to include emerging fixed or mobile networks. Amendment 34 is an acceptable simplification. 3. 2 Amendments acceptable in principle Amendments 6, 8, 23 and 35 (second part) are acceptable in principle. The proposal is to adopt the ideas in more appropriate form. Amendment 6 stresses (although the wording can be improved) the need for coordination between Community programmes and that the projects of common interest are projects to produce applications (which, although well-founded, must not preclude a demonstration or validation phase before moving on to full deployment of the project to check in a limited, but representative geographical area that the application actually provides the service expected in conditions economically acceptable to users). Recital 16 therefore now reads: 'Whereas effective coordination needs to be ensured between the implementation of the trans- excluding European telecommunications networks, which must address real-world concerns, the specific experimental projects, and the different Community programmes, particularly programmes of the fourth framework programme for research, technological development and demonstration, in favour of SMEs and with information content oriented the programmes programmes (such as INFO 2000, Media 2) and other information society activities. " Amendment 8 mentions the need to use, on a synergetic basis, all appropriate forms of aid for TEN activities, as advocated by the Commission in the fifth paragraph of Annex 1. Since references are made elsewhere in the text to the Structural Funds, the benefits for the internal market and strengthening industrial competitiveness and economic and social cohesion, repetition of these points here only complicates the text. The proposal is therefore to amend recital 19 to read: ". of Community financial aid in the field of trans-European networks; whereas, nevertheless, use should also be made, on a synergetic basis and in line with their specific rules, of the implementation of the lines of action in the Community financial telecommunications networks, with a view to deriving maximum benefit sphere of trans-European from coordination of the different sources of funding; whereas, following the abovementioned Regulation, the concerned Member State shall give. " instruments which can favour Amendment 23 includes points deleted by amendments 22 and 29 and applies to all applications. This idea is acceptable, but the part on local languages must leave open the possibility of access to non-professional services in a language other than the local language. Also, it is not possible to assess the social and societal impact of each application (see the comments on amendment 12, point 2 in section 3. 3 below) and this section is therefore too binding. Under the circumstances, the amendment accepted reads: "Applications must take account, where necessary, of local linguistic constraints and be interoperable between the the widest possible populations of users and facilitate users' Communiiv. Thev must address interest. " access to services of collective the maximum benefit to the users across themselves to bring The second part of amendment 35 adds a definition of the "transnational" nature of the projects which was included, in more appropriate form, in a declaration made by the Commission during the negotiations within the Council. The proposal is to amend Parliament's proposal as follows: ". Article 3. These projects must be transnational in the sense that they shall be conceived to satisfy needs existing in several Member States and to be implemented in several Member States. This does not prevent the initial phase of their deployment, designed to check the technical and commercial viability of the project, from being carried out in a single Member State, if it appears that the conditions prevailing in this Member State are representative of those existing in the other Member States where the project should ultimately be implemented. " 3. 3 Amendments which cannot be accepted These are amendments 2 (second part), 5, 7 (second part), 9, 12, 13, 14, 16 (second part), 17, 18, 19, 21, 27 (second part), 29, 30, 31 (second part), 32, 33 and 35 (first part). The second part of amendment 2 indicating the nature of the project selection criteria is superfluous since the criteria are specified in Annex 2. Amendment 5 suggests that broadband networks will not be available until the distant future; this is incorrect, even though they are still far from generally available. The second part of amendment 7. amendments 17. 18 and 21 and the final sentence of amendment 16 amend the committee procedure proposed and deviate from the modus vivendi between the three institutions. The Commission proposes to keep to this agreement. A new recital 18a has therefore been added reading: "Whereas on 20 December 1994 the European Parliament, the Council and the Commission reached a modus vivendi concerning the implementing measures for acts adopted in accordance with the procedure laid down in Article 189b of the EC Treaty"; The first part of amendment 9 is contrary to the Community's traditional approach to interoperability, which recommends voluntary standards with regulation only at a later stage if the voluntary approach proves to generate interoperability problems at trans-European level. The final part makes the scope of this recital too general. Amendment 12 calls for a number of comments: 1. The setting of an order of priority within the list of priorities is unacceptable in view of the flexibility which must be maintained in order to adapt to the situation of the sector and to the rapid development of the communications system when preparing the annual work programme. 2. The amendments at the start of paragraphs (a) and (c) require systematic assessment of the social consequences before any deployment of generic services and applications. It should be noted that the identification criteria (Annex 2) include the direct or indirect socio-economic effects of each project. It does not seem possible to go beyond this and assess the social and societal effects of each project (as far as this would make any sense). It is more appropriate to monitor the more general impact by assessing the effect of a series of applications introduced over a specified period, whatever the origin. Moreover, the amendment at the end of paragraph (c) deals with specific applications, which belong in Annex 1 and not in an article concerning the general priorities. 3. As regards the new paragraph (h), the conditions for cooperation with third countries are set out in Article 12. Such cooperation must be considered an advantage for some projects, but not a systematic priority. As regards amendment 13. the comment made on the second part of amendment 1 applies. Amendment 14 mentions improvement of communication in the sphere of public administration. However, this is not a general measure but a domain for action, which, logically, belongs in Annex 1. The addition before the final sentence of amendment 16 calls for the work programme to identify specific measures according to social or regional criteria to integrate individuals into all domains of the information society. This manifestly imposes an extremely ambitious objective, which is not the purpose of the work programme. Amendment 19 defines the substance of the support and coordination activities which, more logically, come under point 4 in Annex 1. The second part of amendment 27 is unrealistic. To harmonize conditions of employment in the Community, measures other than any effects of the use of trans-European telematics services for job hunting are needed. Amendment 29 deleting the point on "Citizens' access to services" is unacceptable; this domain is of great social importance. Amendment 30 adds applications already covered by Annex 1, either under point 1 on research networks or under point 2 on generic services. The second part of amendment 31 adds unnecessary details. Amendment 32 duplicates amendment 22 which applies to all generic services. Amendment 33 adds unnecessary details. The first part of amendment 35 introduces oversubjective selection criteria (exemplarity and value as an incentive and a multiplier). 4. Conclusion The Commission recommends that Parliament and the Council approve the amended proposal set out in Annex 1. Amended proposal for a Annex 1 EUROPEAN PARLIAMENT AND COUNCIL DECISION on a series of guidelines for trans-European telecommunications networks Original proposal Amended proposal THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Unchanged. Having regard to the Treaty establishing the European Community, and in particular the first paragraph of Article 129d thereof, Having regard to the proposal from the Commission, Having Economic and Social Committee, regard the opinion of to Having regard Committee of the Regions, to the opinion of the the of and 1. Whereas the implementation and the t r a n s - E u r o p e an d e v e l o p m e nt telecommunications networks aim at ensuring the circulation the exchange of information across the Union; whereas this is the a pre-condition establishment of the "information society", which will result from the availability, for each citizen, company or public authority everywhere in the Union, of any kind and quantity of information they need: to make possible the and the 1. Whereas the implementation and t r a n s - E u r o p e an of d e v e l o p m e nt telecommunications networks aim at ensuring the circulation exchange of information across the Union; whereas this is to enable citizens and a pre-condition industry - especially SMEs - in the Union to derive full benefit from the potential of telecommunications so as to make possible the establishment of "information society", the development of applications, services and telecommunications networks will be of crucial importance with a view to ensuring the availability, for each citizen, authority everywhere in the Union, including the less developed or peripheral regions, of any kind and quantity of information they need; or public in which company the Unchanged. Unchanged. Unchanged, Unchanged. the 2. Whereas, in the White Paper on "Growth, Competitiveness and Employment", the importance of Commission stressed establishing the information society, which, by introducing new forms of economic, political and social relations, will help the Union to face the new challenges of the next century, of employment creation; whereas this has been recognized by the Brussels European Council of December 1993; challenge including the still to be adopted, 3. Whereas the internal market establishes an area without borders, within which the free circulation of goods, persons, capital and services has to be ensured, and where already adopted Community measures, and other measures imply significant exchange of information between i n d i v i d u a l s, and administrations; whereas efficient means of exchanging information are vital for the improvement of industrial competitiveness; whereas these exchanges of information can be t r a n s - E u r o p e an telecommunications networks; whereas the availability of trans-European networks will strengthen social and economic cohesion at Union level; o r g a n i z a t i o ns a s s u r ed by of 4. Whereas the implementation and the d e v e l o p m e nt t r a n s - E u r o p e an telecommunications networks should ensure that information is freely exchanged between and i n d i v i d u a l s, administrations, while respecting the privacy rights of individuals and intellectual and industrial property rights; o r g a n i z a t i o ns 5. Whereas, in June 1994, in their report on "Europe and the global information society", the members of a group of prominent representatives of industry recommended to the Council to implement trans-European telecommunications networks and to secure their interconnectivity with the whole of European networks; whereas the June 1994 Corfu European Council gave its general approval to this recommendation; 6. Whereas the Commission to the Council and the European the communication of Unchanged. Parliament "Europe's way to the Information Society: an Action Plan", follows these recommendations; whereas the conclusions of the Industry-Telecommunications Council meeting on 28 September 1994 on this action rapid plan the information development infrastructures and the basis of a global, applications) on is balanced coherent indispensable to Europe; the of (networks, fact efficient approach services stressed that and Unchanged, Unchanged, 7. Whereas Article 129c of the Treaty requires that the Community shall establish a series of guidelines covering the objectives, priorities and broad lines of measures to be implemented in the sphere of trans-European networks; whereas these guidelines shall identify projects of common interest; availability 8. Whereas the information society cannot develop without of the applications, and especially applications of collective interest, optimally answering user needs, taking into account, where appropriate, the needs of the elderly and disabled; thus form an whereas applications will important part of the projects of common interest; telecommunications networks, 9. Whereas projects of common interest can, in many cases, already be implemented in the present in order to offer trans-European applications; whereas guidelines have to be drawn up, in order to identify these projects of common interest; telecommunications 9. Whereas projects of common interest can, in many cases, already be implemented in the present networks, especially the Euro-ISDN, in order to offer trans-European applications; whereas guidelines have to be drawn up, in order to identify these projects of common interest; 9a. 9a. Whereas there must be coordination between the implementation of the proposals chosen and similar initiatives adopted at national or regional level in the Union; in the selection 10. Whereas and implementation of such projects account should be infrastructures offered by telecommunications organizations as well as alternative infrastructures offered by other provi ders; taken of both in the 10. Whereas and implementation of such projects account should be taken of all infrastructures offered by incumbent and new providers; selection Whereas 11. the Commission has transmitted to the Council a series of guidelines concerning the development of Integrated Services Digital Network (ISDN) as a trans-European network; whereas the Council has reached a common position on this proposal; 12. Whereas the present networks, which include existing ISDN, are evolving towards advanced networks offering a variable data flow rate up to broadband capabilities, adaptable to different needs, in particular to the offer of multimedia services and applications; whereas the implementation of integrated broadband communication (IBC) this networks will be evolution; whereas IBC will constitute the optimal platform on which applications of the Information Society can be built; the outcome of 13. Whereas the results of the specific research and technological development programme in the field of communication technologies (RACE) have prepared the ground and the technology base for the introduction of IBC networks in Europe; 14. Whereas the results of the specific technological development research and technologies programme on (Esprit) have prepared the ground and the technological base for the introduction of applications of information technologies; information in the field of 15. Whereas the results of the specific technological development research and telematics programmes systems of general interest (1991 to 1994) and telematics applications of common interest (1994 to 1998) prepare the ground interoperable for applications of common interest across Europe; introduction the of Unchanged. Unchanged. Unchanged. Unchanged. Unchanged. 10 16. Whereas effective coordination needs to be ensured between the different Community programmes, and in particular as appropriate, with programmes in favour of SMEs and with oriented programmes (such as INFO 2000. Media 2) and other information society activities: information content trans-European 16. Whereas effective coordination needs to be ensured between the implementation of telecommunications the networks, which must address real-world concerns, excluding experimental projects, and the different Community programmes, particularly the specific programmes of the fourth framework programme for research, t e c h n o l o g i c al and demonstration, the programmes in favour of SMEs and with information content oriented programmes (such as INFO 2000, Media 2) and other information society activities; d e v e l o p m e nt Unchanged. (TEN-IBC)", 17. Whereas in its communication on "Preparatory actions in the field of Trans- European Networks-Integrated Broadband Communications the Commission identified the need to carry out preparatory actions with the sector actors to draw up appropriate guidelines; whereas the results of these actions form the basis for the guidelines related to IBC networks in this Decision; these taking this initiative; whereas 18. Whereas the telecommunications sector is being progressively liberalized; whereas the development of trans-European applications, services and networks relies mainly on private trans- European developments must respond to market needs; whereas, into account, the interested sector actors will be requested to propose, through appropriate them equal chances, procedures giving specific projects of common in chosen domains; whereas these procedures have to be defined and a list of the chosen domains has to be adopted; whereas a Committee shall assist the Commission for the identification of the specific projects of common interest; interest these initiative; whereas 18. Whereas the telecommunications sector is being progressively liberalized; whereas the development of trans-European applications, services and networks relies mainly on private trans- European developments must respond on a Community scale to market needs or to actual and sizeable needs of society which are not covered by mere market forces: the whereas, interested sector actors will be requested to propose, through appropriate procedures giving them equal chances, specific projects of common interest in chosen domains; whereas these procedures have to be defined and a list of the chosen domains has to be adopted; whereas a Committee shall assist the Commission for the identification of the specific projects of common interest; into account, taking this 18a. 18a. Whereas on 20 December 1994 the European Parliament, the Council and the Commission reached a modus vivendi concerning the implementing measures for acts adopted the procedure laid down in Article 189b of the EC Treaty: in accordance with 11 interest the Community to be considered identified within in 19. Whereas financial support to the implementation of projects of this common Decision has the framework of the Regulation laying down general principles the granting of for Community financial aid in the field of trans- European networks; whereas following this Regulation, the concerned Member States shall give a certain degree of support to the projects of common interest; interest the Community to be considered identified within in 19. Whereas financial support to the implementation of projects of this common Decision has the framework of the Regulation laying down general principles the granting of for Community financial aid in the field of trans- European networks (Council Regulation (EC) No 2236/95 of 18 September 1995): whereas, nevertheless, use should also be made, on a synergetic basis and their specific rules, of the Community financial instruments which can favour implementation of the lines of action in the sphere of trans- European telecommunications networks, with a view to deriving maximum benefit from coordination of the different sources of funding: the abovementioned Regulation, the concerned Member States shall give a certain degree of support to the projects of common interest; following line with whereas in 20. Whereas the Commission shall undertake actions to assure interoperability of the networks, and to coordinate the activities of aiming the Member the trans-European implementation telecommunications networks; States of at 21. Whereas it is important, for the optimum development of the Information Society, to assure an efficient exchange of information between third the Community and countries, in particular the States members of the European Economic Area; whereas it is to promote networks, thus necessary interconnection at interoperability and European scale; the 22. Whereas, however, activities undertaken in the context of these guidelines are subject to the full application of the competition rules set out in the Treaty and implementing legislation, Unchanged. Unchanged. Unchanged. 12 HAVE ADOPTED THIS DECISION: Article 1 This Decision establishes guidelines covering objectives, priorities and broad lines of measures in the field of trans-European telecommunications These guidelines set out the domains for projects of common interest, and a procedure for the identification of specific projects of common interest in these domains. networks. This Decision establishes guidelines covering objectives, priorities and broad lines of trans-European measures in the field of networks in the area of telecommunications infrastructure. These guidelines set out the domains for projects of common interest, and a procedure for the identification of specific projects of common these domains. interest in Article 2 of the support The Community will interconnection telecommunications networks, in particular integrated broadband communication (IBC) networks, the setting- interoperable up and services and applications and required infrastructure as well as the access to them, with the general objectives of: the deployment of support the The Community will interconnection of the networks in the area of telecommunications the establishment and the development of interoperable services and applications as well as the access to them, with the general objectives of: infrastructure, the transition towards the facilitating information to promote the satisfaction of social needs and to improve the quality of life, in particular society, the towards transition facilitating the information society as well as providing the the experience deployment and new applications on social activities and to promote the satisfaction of social needs and to improve the quality of life. of networks on of effects improving competitiveness of European industry and strengthening the internal market, improving competitiveness of European industry and strengthening the internal market, strengthening cohesion, economic and social strengthening cohesion, economic and social accelerating the development of new growth area activities leading to job creation. accelerating growth area activities creation. the development of new to job leading The priorities for the realization of the objectives mentioned in Article 2 will be: Unchanged. Article 3 13 by the deployment feasibility, The confirmation of followed of the applications supporting the development of a Community Information Society, in particular collective applications of interest. by the deployment feasibility, The confirmation of followed of the applications contributing to economic and social cohesion, by improving access to information across the whole Union building on the Community's cultural diversity. Actions aiming at the stimulation of interregional initiatives, associating less launch of favoured Community and applications. regions for telecom the services by the deployment feasibility, The confirmation of followed of the applications and services contributing to the strengthening of the internal market and job creation, those offering to SMEs means to improve their competitiveness in the European Union and at world level. in particular The identification, the confirmation of the feasibility, followed by the deployment of trans-European generic servi ces providing a seamless access to all kinds of rural and information, peripheral areas, and interoperable with equivalent services at world level. including in The confirmation of the feasibility of new fibre optic backbone high-bandwidth such networks, where the and applications promotion of such networks. required services, and for links The identification and removal of gaps and missing for an effective interconnection and interoperability in all their components of telecommunications networks in the Community and at world level, with a particular emphasis on IBC networks. 14 Article 4 lines of measures The broad implemented for reaching defined in Article 2 will cover: to be the objectives Unchanged, Identification of projects of common interest. aiming increasing the at Actions awareness of citizens, economic actors and administrations on the benefits they can draw from the new advanced trans- European telecommunications services and applications. - Actions aiming at the stimulation of combined initiatives from the users and the providers for the launch of projects in t r a n s - E u r o p e an field the telecommunications in networks, particular IBC networks. of the feasibility, Support, in the framework of the means defined by the Treaty, to the confirmation of the deployment of applications, in particular applications of collective interest, and encouragement for the establishment of public-private partnerships. followed by Stimulation of the offer and the use of services and applications for SMEs and professional users, which constitute a source of employment and growth. the Promotion of the interconnectivity of interoperability of networks, of broadband services and applications and of the infrastructure they require, in particular for multimedia, and of the interoperability between existing and broadband services and applications. 15 Article 5 of development trans-European The telecommunications networks is made under this Decision by the implementation of projects of common interest. The domains within which projects of common interest shall be identified are listed in Annex 1. of the area The development of trans-European networks in telecommunications infrastructure is made under this Decision by the implementation of projects of common interest. The domains within which projects of common interest shall be identified are listed in Annex 1. Article 6 Unchanged. The following Articles 7 to 9 describe the procedure for identifying specific projects of common interest in the domains indicated in Annex 1, using the identification criteria listed in Annex 2. The identified projects are eligible in compliance with the Council Regulation laying down general rules for the granting of Community financial aid in the field of trans- European networks. for Community support Article 7 policies, 1. A work programme shall be drawn up by the Commission, in conformity with the other trans-European in network consultation with sector actors, for selecting the areas in which specific projects of common interest can be proposed, within the domains of projects of common interest set out in Annex 1. The work programme shall be updated as necessary. the other 1. A draft work programme shall be prepared by the Commission, in conformity with trans-European network policies, in consultation with sector actors, for selecting the areas in which specific projects of common interest can be proposed, within the domains of projects of common interest set out in Annex 1. The work programme shall be updated as necessary. 2. The work programme shall be the basis for the establishment of calls for proposals for projects of common interest by the Commission. Unchanged. Article 8 1. The Commission shall be responsible for the implementation of the procedure defined in Articles 7 to 9. Unchanged. 2. For the cases specified in Article 9(1), the Commission shall be assisted by a committee composed of representatives of the Member States the and representative of the Commission. chaired by 16 The Commission representative shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on the draft within a time limit which the chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority provided for in Article 148(2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The States' representatives within the committee shall be weighted in the manner set out in that Article. The Chairman shall not vote. the Member votes of The Commission shall adopt the measures envisaged where they are in accordance with the opinion of the Committee. in the measures envisaged are not If accordance with the Committee's opinion, or if no opinion is delivered, the Commission shall without delay submit to the Council a proposal relating to the measures to be taken. The Council shall act by qualified majority. If on expiry of a period of one month from referral of the matter to the Council, the latter has not acted, the proposed measure shall be adopted by the Commission. Article 9 1. The procedure laid down in Article 8 shall apply to: Unchanged, the preparation and updating of the work programme referred to in Article 7, the identification of projects of common interest as a result of a call for proposals, - - the definition of complementary support and coordination actions, the measures to be taken to evaluate the implementation of the work programme. 2. For the particular case of the domain of projects of common interest related to ISDN 2. For the particular case of the domain of projects of common interest related to 17 (referenced in Annex 1, point 3, paragraph 1), those adopted by the Council. the applicable guidelines are Euro-ISDN (referenced in Annex 1, point 3, paragraph 1), the applicable guidelines are those adopted by the European Parliament and the Council. the 3. The Commission committee, at each of its meetings, of the progress programme the work implementation. inform shall of Unchanged, Article 10 Unchanged. take all measures Member States shall required at national, regional or local level to facilitate and accelerate the implementation of the projects of common interest, in the respect The authorization procedures which may be necessary shall be achieved in the shortest delays. of Community rules. Article 11 This Decision shall not prejudice any financial commitment by a Member State or the Community. Unchanged, Article 12 Unchanged. to concluded third countries, in The participation of particular the those being parties Agreement on the European Economic Area, or having an Association Agreement with the Community, can be authorized by the Council on a case-by-case basis, following the procedure laid down in Article 228 of the Treaty, in order to allow their contribution to the implementation of projects of common interest, and to promote the interconnection and the interoperability of the telecommunications networks. Article 13 Unchanged, The Commission shall present every two years a report on the implementation of this Decision to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions. The report shall contain an evaluation of the results achieved with Community support in different project fields, in relation to the overall objectives. Article 14 This Decision shall enter into force on the seventh day following its publication in the Official the European Communities. Journal of Unchanged, Article 15 This Decision is addressed to the Member States. Unchanged. Done at Brussels, For the European Parliament For the Council The President The President 19 ANNEX 1: DOMAINS FOR PROJECTS OF COMMON INTEREST trans-European telecommunications The networks will open the European market to the new applications and services which are the ground upon which the information society should develop. They are essential to realize the objectives of safeguarding and promoting Europe's future prosperity and creating new jobs, as well as enhancing economic and social cohesion. A three-layer model has generally been accepted as the most appropriate framework for t r a n s - E u r o p e an telecommunications networks. These layers are: d e s c r i b i ng Unchanged. Unchanged. The applications layer, through which users interact with generic services and their basic networks social professional, needs. to be interoperable between themselves to bring the maximum benefit to the users across the Community. for meeting and require Applications educational The generic services layer, made of compatible generic services and their management. Through support of the applications common requirements, these the applications services complement whilst aiding their interoperability. The basic networks layer, that provides and transport access, the physical the networks, switching elements of including and signalling. These elements are providing t he n e t w o rk interconnectivity. their management t r a n s - E u r o p e an form three layers a consistent These structure, where applications are supported by the two lower layers: generic services and In particular, applications basic networks. cannot be offered in the absence of one of the other two layers; however, each layer should be sufficiently open as to support any The applications layer, through which users interact with generic services and their basic professional, educational and social needs. for meeting networks layer, made of The generic services their compatible generic services and management. Through support of the applications common requirements and by promoting common non-proprietary tools for development and implementation of new services complement the applications whilst aiding their interoperability. applications. these Unchanged. Unchanged. 20 element of the layer immediately above. In this context, projects of common interest should be identified on the basis of their operational the capability objectives set forth in this Decision. support to Unchanged. Unchanged. financial This Decision aims at identifying a list of projects of common interest, from which projects which will benefit the from support under Community Article 129c(l), third indent, of the EC Treaty, will be selected. This selection is made within the general "Regulation principles for the granting of Community financial aid in the field of trans-European networks". framework of down the laying to recourse The the other sources of Community financing remains open, within the financing rules governing each instrument for all the projects of common interest identified. Community financial support is in accordance with competition granted policy rules, notably those dealing with the financial support of R&D and State aids. The following sections define the domains in which projects of common interest will be identified. Unchanged. 1. Applications 1. Applications take account, where Applications must necessary, of local linguistic constraints and be interoperable between themselves to bring the maximum benefit to the users across the Community. They must address the widest possible populations of users and facilitate users' access to services of collective interest. The domains in which applications projects will be identified are the following: Unchanged. The domains in which applications projects will be identified are the following: An advanced A network for universities and research centres: trans-European network, carrying multimedia applications, should be established, linking universities and research centres across Europe, with open access to their libraries. 21 Distance education and training. Advanced distance education and training services should be made accessible for all citizens, schools, colleges and businesses. Centres should be set up and made remotely accessible across Europe in order to provide courseware and training services for SMEs, large companies, education systems, and public administrations. New approaches to information professional society should be developed and promoted. training for the Distance education and training: Advanced distance education and training services should be made accessible for all citizens, schools, colleges and businesses. Centres should be set up and made remotely accessible across Europe in order to provide courseware and training services for SMEs, large companies, education systems, and public administrations. New approaches to general, academic, professional and linguistic training should be developed and promoted as part of the information society. transition towards the Health telematics: Trans-European networks and applications based on common standards should be deployed, which would link on a European scale all the partners of the health system, in particular general practitioners, hospitals and social centres. Unchanged. of t a k en transport industries and t r a n s - E u r o p e an to Transport telematics: Full advantage should be improve telecommunications networks transport network management and logistical support for the development services. Telematic systems and services, wherever applicable, should also serve as a tool for implementing common transport policy; the and necessary interoperability trans-European transport network will be ensured. complementarity with the value-added of of of of t a k en transport value-added industries and t r a n s - E u r o p e an to Transport telematics: Full advantage should be improve telecommunications networks transport network management and logistical support for the development services. non- Integrated multimodal motorized personal transport, public transport and environment-friendly modes shall be treated as a priority. Telematic systems and services, wherever applicable, should also serve as a tool for implementing Common Transport necessary complementarity with and interoperability of the trans-European Transport Network will be ensured. transport, Policy; the f or T e l e m a t i cs e n v i r o n m e n t: Trans-European networks can bring an important contribution to the monitoring and environment, the management of including emergency management. the Unchanged. The development Teleworking: of teleworking (in homes and satellite offices) supported by communication advanced systems will help provide new forms of flexibility in terms of the place of work and the way work is organized. Through the decentralization of professional activities, the teleworking can also help reduce 22 in The satellite development offices Teleworking. of and teleworking conceivably in homes supported by advanced communication systems will help provide new forms of flexibility in terms of the place of work and the way work is organized. Through the decentralization of professional activities, teleworking can also help reduce environmental commuting to population centres. consequences of daily to population the environmental consequences of daily commuting centres. Applications should be set up to allow for such developments while ensuring the preservation of workers' rights and preventing the risks of social isolation that could be involved with teleworking. Special attention should be paid to the evaluation of the social consequences of these applications. links Telematic services for SMEs: Projects of common interest will support the use of telecommunications trans-European applications and services by European SMEs, with trade associations, consumers, customers and suppliers and including information services and electronic commerce. The awareness of telematics-based solutions in general should be raised among SMEs. to public authorities, for Public Trans-European Network Administration: Interconnected networks between public administration networks in Europe should be established, aiming at interchange of data between facilitating administrations, particular when in implementing European Union regulations providing an effective and less expensive information interchange. This interconnected network should be further extended to link public administrations and European citizens. tendering: A Electronic trans-European Electronic Tendering Network should be set up, based on electronic procedures for public procurement between public administrations and suppliers in Europe. City information highways: Networks and services should be promoted interconnecting households, businesses, social organizations and administrations and providing access to on-line multimedia information, education, cultural, entertainment and tourism services on a local, regional, national and European basis. Links between city and regional networks should be promoted. Unchanged. Unchanged. Unchanged. Unchanged. 23 Unchanged. Library services: Trans-European advanced networked library services involving all types libraries (national, university/research, of public, etc. ) should be deployed to provide effective access to both the reservoir of organized knowledge and the cultural wealth held in libraries across Europe, in support of the economic, social, educational and cultural life of the EU Telematic services for the job market: Networked services, such as job information databases, should be developed to support the changing labour market in Europe and to help tackle unemployment. Telematic services for the job market: Networked services, such as job information databases, should be developed to support the changing labour market in the Community, publicize EU-wide job opportunities and encourage workforce mobility. Cultural and linguistic heritage: Initiatives should be launched to foster the preservation of and access to the European cultural heritage, and to demonstrate the potential of the information infrastructure to support the local development of languages. local content in Citizens' access to services: Applications demonstrating citizens' access to services of collective set up. Examples might include the establishment of kiosks and access points in public areas, and the use of smart cards and electronic wallets. should be interest 2. Generic services The domains in which projects of common interest for generic services networks will be identified are the following: Cultural and linguistic heritage: Initiatives should be launched to foster the preservation of and access to the European cultural heritage (including support for museum and cultural site multi-media networks) and creation, and to demonstrate the potential of the information infrastructure to stimulate and and achievements as well as to encourage 1 ocal content and its dissemination. endeavours enhance creative Unchanged. 24 Implementation of operational trans- European generic services: They should include in particular electronic mail, file transfer systems, on-line access to electronic data bases, and video services. As there is an urgent need for these trans-European generic services, they will use existing or emerging networks, fixed or mobile, and user access. They should include sen/ice elements scale, European operating at European rate compensation, directories, exchange authentication, and data information security, trans-European "kiosk" and network navigational aids, etc. protection Unchanged. Unchanged. Implementation of operational trans- European generic services: They should include in particular electronic mail, file transfer systems, on-line access to electronic data bases, and video services. As there is an urgent need for these trans-European generic services, they will use existing switched basic networks and user access. service elements They include scale, European operating at European rate compensation, directories, exchange authentication, and data information security, trans-European "kiosk" and network navigational aids, etc. protection should Progressive extension of the generic services toward a multimedia environment: These services will offer end-users access to multimedia services, and might cover, but should not be limited to, multimedia mail, high speed file transfer and video services, including video-on-demand. Use of these multimedia and residential users should be encouraged, as integration of new service well as the elements such as automatic translation, speech recognition, graphical user interfaces. services by business Introduction of non-proprietary digital signature as a basis for open service provision and mobility of use: Generic services will rely on a large number of complementary services providers. Open service provision and mobility of use will be of key importance and (digital signatures) to be generally available and supported. electronic names and competing require 3. Basic networks Unchanged. The domains in which projects of common interest for basic networks will be identified are the following: Euro-Integrated Services Digital Networks: For reasons of immediate commercial and technical transEuropean availability, ISDN is today the most appropriate and efficient that can digital switched basic network Its support new services and applications. Unchanged. 25 be justified present development makes it an opportunity for Europe, and its market and geographical the extension will implementation of these new services and applications scale. However, it should be borne in mind that ISDN is only a first step, and that it is going to evolve toward becoming merely a user access to broadband basic services. pan-European by at Unchanged. Unchanged. Commercial introduction of managed Asynchronous Transport Mode (ATM) and other broadband networks: This domain must be considered as being of utmost common European interest. networks: Interoperation of existing and broadband communication Existing networks (for fixed, mobile and satellite interconnected and services) should be interoperate between themselves and with ATM-based high speed networks, in order to offer the most appropriate economic solutions to the various situations which will occur during the setting up of the information society. This issue is at the core of the development of the Integrated Broadband Communications network, and is particularly relevant for SMEs, as well as for the professional and residential markets. 4. Support and coordination actions Unchanged. and In addition to its support to projects of common interest, the Community should initiate actions aiming at providing the appropriate They will environment. contribute to consensus development and concertation of national regional activities for stimulation and promotion of new applications and services in conformity with the implementation of programmes in other areas, as well as the development of broadband basic networks. They will involve concertation with European standardization and strategic planning bodies, coordination the different with actions funded by Community financial This includes: instruments. 26 Unchanged. Unchanged. Unchanged. Development of target specifications, and transition towards these targets. These specifications will support sector actors to make sound economic investment decisions. This will be done in consultation with all sector actors, including telecommunication emerging operators, operators, trade associations and consumer associations for: cable service providers, operators, identifying the missing elements and the bottlenecks trans-European the in telecommunications networks, the target networks developing specifications for the three identified network layers. This includes terrestrial, satellite, mobile, as well as management and operation on a European scale. Sector actors will build on the RACE and Telematics common Programme functional specifications, the Eurescom work and other technical bodies set up by results of and sector broadband trials underway as well as the results of the Esprit and IT programmes, actors, the developing the network towards the target networks, and Unchanged, encouraging the development of open, interoperable and user friendly systems. Unchanged, Definition of means to access broadband networks, at the three specified layers. Definition of means networks. to access IBC Establishment of common specifications, based on European and world standards. Unchanged. Furthering the cooperation among sector the emerging and actors, cable as fragmented television networks, as well as with users. in particular operators, such Unchanged. and coordination with Cooperation Community, European and national programmes. Unchanged. 27 Annex 2 Identification criteria The identification of projects of common interest among the projects presented by interested sector actors in response to a call for proposals as mentioned in Article 7 is made on the basis of their compliance with the objectives and priorities laid down in Articles 2 and 3 respectively. These projects shall be transnational with special emphasis on projects of an interregional nature. The identification of projects of common interest among the projects presented by interested sector actors in response to a call for proposal as mentioned in Article 7 is made on the basis of their compliance with the objectives and priorities laid down in Articles 2 and 3 respectively. These projects must be transnational in the sense that they shall be conceived to satisfy needs existing in several Member be implemented in several Member States. This does not prevent the initial phase of their deployment, designed to check the technical and commercial viability of the project, from being carried out in a single Member State, if it appears that the conditions prevailing in this Member State are representative of those existing in the other Member States where the project should ultimately be implemented. States and to Unchanged. In addition, the economic and financial criteria spelt out in the "Regulation laying down the general rules for the granting of Community financial aid in the field of trans- into European networks" shall be taken account. These criteria, which will be used in the framework of this Regulation to decide on the granting of a financial support to a specific project, are - - - the potential economic viability of the project, which should be assured, Unchanged. the maturity of the project, the stimulative effect of Community intervention on public and private financing, Unchanged. Unchanged. - the effectiveness of the financial package, Unchanged. the direct or indirect socio-economic effects, in particular on employment, Unchanged. 28 the consequences for the environment, Unchanged. for specially transborder projects, coordination of the timing of the different parts of a project. Unchanged, 29 ISSN 0254-1475 COM(96) 108 final DOCUMENTS EN 15 Catalogue number : CB-CO-96-116-EN-C ISBN 92-78-01644-6 Office for Official Publications of the European Communities L-2985 Luxembourg ?>o

Council Regulation (EC) No 499/96 of 19 March 1996 opening and providing for the administration of Community tariff quotas for certain fishery products and live horses originating in Iceland

http://publications.europa.eu/resource/cellar/815c7dc9-2fee-492e-bbb5-955838236d98

eng

L_1996075EN. 01000801. xml 23. 3. 1996    EN Official Journal of the European Union L 75/8 COUNCIL REGULATION (EC) No 499/96 of 19 March 1996 opening and providing for the administration of Community tariff quotas for certain fishery products and live horses originating in Iceland THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof, Having regard to the proposal from the Commission, Whereas an Agreement was concluded between the European Economic Community and the Republic of Iceland (1); Whereas, following the accession of Austria, Finland and Sweden, the abovementioned Agreement should be adjusted to take into account, in particular, the existing trade arrangements for fishery products between Austria, Finland and Sweden, of the one part, and Iceland, of the other part; Whereas to that end an Additional Protocol to the above Agreement, approved by Decision 96/147/EC (2) as well as an Agreement in the form of an Exchange of Letters approved by Decision 95/582/EC (3) have been concluded between the Community and Iceland; whereas by virtue of those instruments the Community has undertaken to open, subject to certain conditions, from 1 January to 31 December each year Community tariff quotas at zero duty for a number of products originating in Iceland; Whereas the tariff quotas in question relate to an indefinite period and accordingly, for reasons of efficiency and in order to simplify implementation of the measures concerned, it appears appropriate to provide for the application of this Regulation to be placed on a multiannual footing; Whereas, for reasons of simplification, provision should be made to empower the Commission to give effect, following receipt of the opinion of the Customs Code Committee, to necessary amendments and technical adaptations of this Regulation arising from amendments to the combined nomenclature and Taric codes, extensions of tariff measures, necessary adaptations following the conclusion of protocols or exchanges of letters, amendments to this Regulation for the implementation of any other instrument in the framework of the abovementioned Agreement as well as adaptations of volume, periods and quota rates arising from decisions by the Council; Whereas all Community importers should be ensured equal and continuous access to the said quota and the duty rate laid down for the quota should be applied without interruption to all imports of the product in question into all Member States until the quota is exhausted, during the whole period of the validity of the agreements with Iceland; Whereas the decision for the opening, in execution of its international obligations, of tariff quotas should be taken by the Community; whereas, to ensure the efficiency of a common administration of these quotas, there is no reason why the Member States should not be authorized to draw from the quota volumes the necessary quantities corresponding to actual imports; whereas this method of administration requires close cooperation between the Member States and the Commission and the latter must in particular be able to monitor the rate at which the quotas are being used up and inform the Member States accordingly, HAS ADOPTED THIS REGULATION: Article 1 1. From 1 January to 31 December of each year, the customs duties applicable to imports of the products originating in Iceland referred to in this Regulation shall be suspended within the limit of the Community tariff quotas shown for each product. 2. Imports of fishery products shall not qualify for the tariff quotas unless the free-at-frontier price laid down in Article 22 of Council Regulation (EEC) No 3759/92 of 17 December 1992 on the common organization of the market in fishery and aquaculture products (4) is at least equal to any reference price which has been fixed by the Community for the products or categories of products in question. 3. The provisions of Protocol 3 of the Agreement between the European Economic Community and the Republic of Iceland defining the concept of originating products and setting out the arrangements for administrative cooperation, as last amended by Decision No 1/94 of the EC-Iceland Joint Committee (5), shall apply. Article 2 The tariff quotas referred to in Article 1 shall be administered by the Commission, which may take any appropriate administrative measures in order to ensure efficient administration. Article 3 If an importer presents in a Member State a declaration of entry into free circulation including a request for preferential benefit for a product covered by this Regulation, and if this declaration is accepted by the customs authorities, the Member State concerned shall draw, from the quota volume by means of notification to the Commission, a quantity corresponding to those needs. The requests for drawing, with an indication of the date of acceptance of the said declarations, must be communicated to the Commission without delay. The drawings are granted by the Commission on the basis of the date of acceptance of the declaration of entry into free circulation by the customs authorities of the Member States concerned, to the extent that the available balance so permits. If a Member State does not use the quantities drawn, it shall return them as soon as possible to the corresponding quota volume. If the quantities requested are greater than the available balance of the quota volume, allocation shall be made on a pro rata basis with respect to the requests. Member States shall be informed thereof by the Commission. Article 4 Each Member State shall guarantee importers of the products in question equal and continuous access to the quotas as long as the balance of the corresponding quota volume allows. Article 5 1. The provisions necessary for the application of this Regulation, in particular: (a) the amendments and technical adaptations, in so far as necessary, arising from amendments of the combined nomenclature and Taric codes; (b) the necessary adaptations resulting from the conclusion by the Council of protocols or Exchanges of Letters between the Community and Iceland in the framework of the Agreement referred to in this Regulation; (c) the prorogation of tariff measures conforming to the provisions contained in the Agreement referred to in this Regulation; (d) the necessary adaptations of volumes, periods and quota duty arising from decisions adopted by the Council; and (e) the amendments to this Regulation necessary for the putting into practice of any other act within the framework of the Agreement referred to in this Regulation shall be adopted in accordance with the procedure laid down in Article 6 (2). 2. The provisions adopted pursuant to paragraph 1 shall not authorize the Commission to: — carry over a balance of preferential quantities from one quota period to another, — modify the timetable laid out in the agreements or protocols, — transfer quantities from one quota to another, — open and manage quotas resulting from new agreements, — adopt legislation effecting the management of quotas which are the subject of certificates of importation. Article 6 1. The Commission shall be assisted by the Customs Code Committee set up by Article 247 of Regulation (EEC) No 2913/92 (6). 2. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on a draft within a time limit which the chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148 (2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States within the Committee shall be weighted in the manner set out in that Article. The chairman shall not vote. The Commission shall adopt the measures, which shall apply immediately. However, if these measures are not in accordance with the opinion of the Committee, they shall be communicated by the Commission to the Council forthwith. In that event: — the Commission shall defer application of the measures which it has decided for three months from the date of such communication, — the Council, acting by qualified majority, may take a different decision within the period referred to in the first paragraph. 3. The Committee may examine any question concerning the application of this Regulation which is raised by its chairman either on his own initiative or at the request of a Member State. Article 7 Member States and the Commission shall cooperate closely in order to ensure that this Regulation is complied with. Article 8 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. It shall apply from 1 January 1995. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 19 March 1996. For the Council The President W. LUCHETTI (1)  OJ No L 301, 31. 12. 1972, p. 2. (2)  OJ No L 34, 13. 2. 1996, p. 33. (3)  OJ No L 327, 30. 12. 1995, p. 17. (4)  OJ No L 388, 31. 12. 1992, p. 1. Regulation as last amended by Regulation (EC) No 3318/94 (OJ No L 350, 31. 12. 1994, p. 15). (5)  OJ No L 204, 6. 8. 1994, p. 62. (6)  OJ No L 302, 19. 10. 1992, p. 1. Regulation as amended by the 1994 Act of Accession. ANNEX Order No CN code Taric code Description Amount of quotas (in t) Quota duty ( %) 09. 0791 0101 19 10 — Live horses 100 head 0 0101 19 90 — 09. 0793 0302 12 00 — Salmon, fresh or chilled 50 0 0304 10 13 — Salmon fillets, fresh or chilled 0304 20 13 — Frozen salmon fillets 09. 0794 0302 23 00 — Sole, fresh or chilled 250 0 0302 29 — Megrim and other flat fish, fresh or chilled 0302 69 85 — Blue whiting, fresh or chilled 0303 32 00 — Frozen plaice 0303 79 96 — Other frozen fish 0304 10 19 — Coalfish fillets, chilled or frozen 0304 10 33 — Fish of coalfish, fresh or chilled 0304 10 35 — Redfish fillets, fresh or chilled ex  03041038 03041038 *10 *20 *50 *90 Other fish fillets, other than herring and mackerel, fresh or chilled 0304 10 98 — Other fish meat, fresh or chilled 0304 20 19 — Frozen fillets of other freshwater fish 0304 90 35 — Frozen cod meat of the species Gadus macrocephalus 0304 90 38 — Frozen cod meat of the species Gadus morhua 0304 90 39 — Frozen cod meat of the species Gadus ogac and frozen fish meat of the species Boreogadus saida 0304 90 41 — Frozen coalfish meat 0304 90 47 — Frozen hake meat of the genus Merluccius 0304 90 59 — Frozen blue whiting meat ex  03049097 03049097 *31 *39 *50 *60 *70 *80 *90 Other frozen fish meat, except mackerel 09. 0795 0305 61 00 — Herring, salted but not dried or smoked, and herring in brine 1 750 0 09. 0796 0306 19 30 — Frozen Norway lobsters (Nephrops norvegicus) 50 0 09. 0797 1604 12 91 — Other prepared or preserved herring, in hermitically sealed containers 2 400 0 1604 12 99 — Other prepared or preserved herring, other 09. 0798 1604 19 98 — Other prepared or preserved fish, whole or in pieces 50 0 ex  16042090 16042090 *20/80 *30/80 *35/80 *50/80 *90/80 Other prepared or preserved fish meat, except herring and mackerel

Proposal for a COUNCIL REGULATION (EC) repealing Regulation (EC) No 2674/94 imposing definitive anti- dumping measures on imports of Furazolidone originating in the People' s Republic of China

http://publications.europa.eu/resource/cellar/0182e73b-1a56-4877-8368-48e0977f489e

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 19. 03 1996 COM(%)110 final Proposal for a COUNCIL REGULATION (EC) repealing Regulation (EC) No 2674/94 imposing definitive anti-dumping measures on imports of Furazolidone originating in the People's Republic of China (presented by the Commission) Explanatory memorandum Consumption of Furazolidone was banned in the European Union by Regulation (EC) No 1442/95. As a result, the sole Community producer, Orphahell BV, informed the Commission that it intended to cease production of the product concerned and it was, therefore, no longer interested in the existing anti-dumping duty on imports from Furazolidone originating in China imposed by Regulation (EC) No 2674/94. Consequently, it is proposed that the Commission approve the attached proposal for a Council Regulation repealing the existing anti-dumping measures on imports of Furazolidone originating in China imposed by the above-mentioned Regulation. st Proposal for a COUNCIL REGULATION (EC) No repealing Regulation (EC) No 2674/94 imposing definitive anti-dumping measures on imports of Furazolidone originating in the People's Republic of China THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 3283/94 of 22 December 1994 on protection against dumped imports from countries not members of the European Community(1), and in particular Article 23 thereof, Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidised imports from countries not members of the European Economic Community^), Having regard to the proposal submitted by the Commission after Consulting the Advisory Committee, Whereas: 1 OJ No L 349, 31. 12. 1994, p. 1. Regulation as last amended by Regulation (EC) No 1251/95 (OJ No L 122, 02. 06. 1995, p. 1). 2 OJ No 209, 02. 08. 1988, p. 1. Regulation as last amended by Regulation (EC) No 522/94 (OJ No L 66, 10. 03. 1994, p. 10). * A. Previous procedure (1) By Regulation (EC) No 2674/94(3), the Council imposed a definitive anti-dumping duty on imports of Furazolidone originating in the People's Republic of China following a complaint lodged by Orphahell B V, the sole Community producer of the product concerned. B. Prohibition of the product concerned, repeal of the existing measures (2) By Regulation (EC) No 1442/95(4), the Council prohibited the use of the product concerned in animal foodstuffs throughout the Community. (3) As a result, the complainant informed the Commission that it had decided to cease production of Furazolidone. There is therefore no longer any reason for maintaining Council Regulation (EC) No 2674/94 as Community production of Furazolidone has ceased and the sale and import of the product concerned is banned. C. Repeal of anti-dumping duties (4) In view of the foregoing, the anti-dumping duty in force on imports of Furazolidone originating in the People's Republic of China should be repealed, thereby terminating the proceeding. HAS ADOPTED THIS REGULATION: 3 OJ No L 285, 04. 11. 1994, p. 1. 4 OJ No L 143, 27. 06. 1995, p. 26. </ e Article 1 Regulation (EC) No 2674/94 is hereby repealed. Article 2 This Regulation shall enter into force on the day of its publication in the OffidalJoufnal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States; Done at Brussels, ISSN 0254-1475 -COM(9d) 110 final DOCUMENTS EN 02 11 Catalogue number : CB-CO-96-120-EN-C ISBN 92-78-01710-8 Office for Official Publications of the European Communities L-2985 Luxembourg 6

Commission Regulation (EC) No 482/96 of 19 March 1996 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code

http://publications.europa.eu/resource/cellar/9aef977a-f047-4141-937d-c27ebb686e1e

eng

L_1996070EN. 01000401. xml 20. 3. 1996    EN Official Journal of the European Communities L 70/4 COMMISSION REGULATION (EC) No 482/96 of 19 March 1996 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (1), as last amended by the Act of Accession of Austria, Finland and Sweden, and in particular Article 249 thereof, Whereas it is necessary to define specifically the cases where certain documents need not be required to accompany the customs declarations; Whereas where the declarant refuses to be present at the taking of samples or to designate a representative, or else fails to render the customs authorities all necessary assistance, the customs authorities should have the option of deeming the declaration invalid; Whereas Articles 325 to 340 of Commission Regulation (EEC) No 2454/93 (2), as last amended by Regulation (EC) No 1762/95 (3), establish a special method of administrative cooperation for the purpose of proving the Community status of products of sea-fishing caught by Member States' vessels and of goods obtained on board such vessels from the products caught; Whereas, in view of the particular way in which such products are caught, in which the goods are obtained and in which both are routed to the Community, a separate section setting out the specific conditions applying to such products and goods should be added to Part II, Title II, Chapter 3 — Community status of goods — of Regulation (EEC) No 2454/93; Whereas the Community status of such products and goods should be assessed independently of their tariff treatment and classification, the nationality and means of transport used or the Member State through which they enter the Community; Whereas fishing vessels and Community factory ships should be strictly defined; Whereas to avoid excessive paperwork, customs authorities may allow exceptions to the procedure for landing such products and goods from fishing vessels; Whereas, to improve checks on the way the procedure is used, T2M forms should be endorsed by the authority responsible for registering the vessels for which the forms were issued; whereas any certification by a third party should be included in the forms and the customs authority which issued them should be informed of how they have been used; Whereas because of a continuous problem of fraudulent operations under the Community transit procedure, provisions should be introduced which allow for the prescription of binding itineraries and prohibit the change of an office of destination as regards, in particular, the movement of goods for which the comprehensive guarantee is suspended; whereas it is necessary to strengthen the system for the use of the comprehensive guarantee and to introduce further flexibility in the provisions for suspension of the comprehensive guarantee by amending these provisions; whereas, for reasons of clarity, Articles 360, 361 and 362 of Regulation (EEC) No 2454/93 need to be rearranged; whereas it is necessary to align the corresponding provisions of Article 368 and Article 376 of the abovementioned Regulation; Whereas it is appropriate to introduce more flexibility in supplying alternative proof permitting the discharge of Community transit operations in the case of non-return of Copy 5 of the single administrative document; Whereas the Community customs territory constitutes a single territory for the purposes of the rules governing the use of the TIR carnet; Whereas the increasing incidence of fraud related to the transport of goods under the TIR procedure can lead the competent authorities to adopt, on the basis of Article 38 of the TIR Convention, exclusion measures; Whereas the rules governing the application of Article 38 of the TIR Convention should be harmonized at Community level; Whereas, the economic conditions that are provided for in the context of the inward processing procedure should be applied uniformly throughout the Community; Whereas it has become apparent that the customs offices of the Member States have difficulties in authorizing temporary importation of goods referred to in Article 684 of Regulation (EEC) No 2454/93; whereas when a high amount is involved they must ask for a written declaration making the provision of a security equal to the precise amount of the customs debt in question obligatory; whereas this leads in many cases to the undesirable obstruction of travellers at the frontiers of the Community or, on the other hand, to the authorization of temporary importation without security though a high of amount of duties is involved; whereas a pertinent solution of these difficulties requires that, in such cases, the authorization of temporary importation and the entry of goods referred to in Article 684 for the procedure can be accomplished by an oral customs declaration; whereas this requires the adaption of the corresponding rules; Whereas where import goods previously entered for the procedure of temporary importation are released for free circulation, compensatory interest is levied; whereas for reasons of equality of treatment, compensatory interest should also be levied where a customs debt is incurred for other reasons than because of release for free circulation; whereas customs debts incurred through the placing of goods under the temporary importation procedure with partial relief from import duties should be exempted herefrom, because no financial advantage is acquired; whereas the same reasons prevail where a security is provided by a cash deposit equal to one of the amounts of customs debt set out in Article 192 (1) of Regulation (EEC) No 2913/93; whereas to achieve a greater level of legal certainty it is necessary to strive for maximum coherence in the legal provisions concerning the levying of compensatory interest; whereas this requires a modification of Article 709 of Regulation (EEC) No 2454/92 and its adaption to the provisions of Article 589; whereas in the course of this modification and adaption it is appropriate to carry out some editorial corrections to Article 709; Whereas the single administrative document must be adopted to take account of the provisions of Council Regulation (EC) No 1172/95 of 22 May 1995 on the statistics relating to the trading in goods by the Community and its Member States with non-member countries (4) and any regulation laying down provisions for its application; Whereas it is appropriate to align the provisions for the completion of box 33 of the control copy T5, copy T5 a and the column entitled ‘Commodity’ of the T5 loading list with the provisions relating to the single administrative document; Whereas the list of compensating products in the framework of the inward processing procedure to which specific duties may apply should be extended; Whereas for economic reasons it appears appropriate to extend the list contained in Annex 87 of Regulation (EEC) No 2454/93; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Customs Code Committee, HAS ADOPTED THIS REGULATION: Article 1 Regulation (EEC) No 2454/93 is amended as follows: 1. Article 218 (3) is replaced by the following: ‘3. Where goods qualify for the flat rate of duty referred to in Section II (D) of the preliminary provisions of the combined nomenclature or where goods qualify for relief from import duties, the documents referred to in paragraph 1 (a), (b) and (c) need not be required unless the customs authorities consider it necessary for the purposes of applying the provisions governing the release of the goods in question for free circulation. ’ 2. Article 243 (2) is replaced by the following: ‘2. Where the declarant refuses to be present at the taking of samples or to designate a person to attend, or where he fails to render the customs authorities all the assistance needed to facilitate the operation, the provisions of the second sentence of Article 241 (1) and of Article 241 (2), (3) and (4) shall apply. ’ 3. In Part II, Title II, Chapter 3, the following subheading is inserted after the chapter heading ‘Community status of goods’: ‘Section 1 General provisions’ 4. The following sub-heading is inserted after Article 324: ‘Section 2 Specific provisions concerning products of sea-fishing and other products taken from the sea by boats’ 5. Articles 325 and 326 are replaced by the following: ‘Article 325 1. For the purposes of this section: (a) Community fishing vessel means a vessel which is listed and registered in a part of a Member State's territory forming part of the customs territory of the Community, flies the flag of a Member State, catches products of sea-fishing and, as the case may be, processes them on board; (b) Community factory ship means a vessel which is listed or registered in a part of a Member State's territory forming part of the customs territory of the Community, flies the flag of a Member State and does not catch products of sea-fishing but does process such products on board. 2. A T2M form, made out in accordance with Articles 327 to 337, shall be produced to prove the Community status: (a) of the products of sea-fishing caught by a Community fishing vessel, in waters other than the territorial waters of a country or territory outside the customs territory of the Community; and (b) of the goods obtained from such products on board that vessel or a Community factory ship, in the production of which other products having Community status may have been used, which may be in packaging having Community status and are to be brought into the customs territory of the Community in the circumstances set out in Article 326. 3. Proof of the Community status of the sea-fishing products and other products taken or caught in waters other than the territorial waters of a country or territory outside the customs territory of the Community by vessels flying the flag of a Member State and listed or registered in a part of a Member State's territory forming part of the customs territory of the Community, or of such products taken or caught in territorial waters within the customs territory of the Community by vessels of a non-member country, must be provided by means of the logbook or any other means which establishes the said status. Article 326 1. A T2M form shall be presented in respect of the products and goods referred to in Article 325 (2) which are transported directly to the customs territory of the Community: (a) by the Community fishing vessel which caught the products and, where applicable, processed them; or (b) by another Community fishing vessel or by the Communitry factory slip which processed the products following their transhipment from the vessel referred to in point (a); or (c) by any other vessel onto which the said products and goods were transhipped from the vessels referred to in points (a) and (b), without any further changes being made; or (d) by a means of transport covered by a single transport document made out in the country or territory not forming part of the customs territory of the Community where the products or goods were landed from the vessels referred to in points (a), (b) and (c). Thereafter the T2M form may no longer be used as proof of the Community status of the products or goods to which it refers. 2. The customs authorities which are responsible for the port where products and/or goods are landed from a vessel referred to in point (a) of paragraph 1 may waive the application of paragraph 1 where there is no doubt about the origin of those products and/or goods, or where the attestation referred to in Article 8 (1) of Council Regulation (EEC) No 2847/93 (5) is applicable. (5)  OJ No L 261, 20. 10. 1993, p. 1. ’" 6. Articles 328 to 337 are replaced by the following: ‘Article 328 The booklet of T2M forms shall be issued at the request of the appropriate person by the Community customs office responsible for supervising the base port of the Community fishing vessel for which the booklet is intended. The booklet shall be issued only when the person concerned has completed boxes 1 and 2 in the language of the form, and has completed and signed the declaration in box 3 of all the originals and copies of the forms contained in the booklet. When issuing the booklet, the customs office shall complete box B of all the originals and copies of the forms in the booklet. The booklet shall be valid for two years from the date of issue shown on page 2 of its cover. In addition, the validity of the forms shall be guaranteed by the presence in box A of each original and copy of a stamp applied by the authority responsible for registering the Community fishing vessel for which the booklet is issued. Article 329 The master of the Community fishing vessel shall complete box 4 and, if the catch has been processed on board, box 6, and shall complete and sign the declaration in box 9 of the original and copy of one of the forms in the booklet whenever he: (a) tranships products to one of the vessels referred to in point (b) of Article 326 (1) which processes those products; (b) tranships products or goods to any other vessel which will not process them but take them directly either to a port in the customs territory of the Community or to another port for subsequent consignment to that territory; (c) without prejudice to Article 326 (2), lands products or goods in a port in the customs territory of the Community; (d) lands products or goods in a port outside the customs territory of the Community for subsequent consignment to that territory. Any processing of such products shall be recorded in the vessel's logbook. Article 330 The master of a vessel referred to in point (b) of Article 326 (1) shall complete box 6 and complete and sign the declaration in box 11 of the original of the T2M form whenever he lands goods either in a port in the customs territory of the Community or in a port outside the said territory for subsequent consignment to that territory, or whenever he tranships goods onto another vessel for that purpose. Processing of products transhipped to the vessel shall be recorded in its logbook. Article 331 When the products or goods referred to in point (a) or point (b) of Article 329 are transhipped for the first time, box 10 of the original and the copy of a T2M form shall be completed; if a further transhipment, of the type referred to in Article 330, takes place, box 12 of the original of that T2M form shall also be completed. The transhipment declaration shall be signed by both the masters concerned and the original of the T2M form shall be given to the master of the vessel to which the products or goods are transhipped. Any transhipment operation shall be recorded in the logbooks of both the vessels involved. Article 332 1. Where products or goods covered by a T2M form go to a country or territory not forming part of the customs territory of the Community, the said form shall be valid only if the certification in box 13 of the form has been completed and endorsed by the customs authorities of that country or territory. 2. Where some of the products or goods do not come to the customs territory of the Community, the name, kind, gross mass and treatment or use assigned to those consignments shall be entered in the “Remarks” box of the T2M form. Article 333 1. Where products or goods covered by a T2M form go to country or territory not forming part of the customs territory of the Community for subsequent despatch in split consignments to that territory, the person concerned or his representative shall: (a) enter in the “Remarks” box of the initial T2M form the number of kind of packages, the gross mass, the treatment or use to which the consignment has been assigned and the number of the “Extract” referred to in point (b); (b) make out a T2M “Extract”, using for this purpose an original form taken from a booklet of T2M forms issued in accordance with the provisions of Article 328. Each “Extract”, and its copy which shall remain in the T2M booklet, shall include a reference to the initial T2M form referred to in point (a) and shall be clearly marked with one of the following words: — Extracto, — Udskrift, — Auszug, — Απόσπασμα, — Extract, — Extrait, — Estratto, — Uittreksel, — Extracto, — Ote, — Utdrag. The T2M “Extract” accompanying the split consignment to the customs territory of the Community shall state in boxes 4, 5, 6, 7 and 8 the name, kind, CN code and quantity of products or goods making up that consignment. In addition, the certification in box 13 shall be completed and endorsed by the customs authorities of the country or territory where the products or goods remained while in transit. 2. When all the products and goods covered by the initial T2M form referred to in point (a) of paragraph 1 have been sent to the customs territory of the Community, the certification in box 13 of the form shall be completed and endorsed by the authorities referred to in that paragraph. The form shall then be sent to the customs office referred to in Article 328. 3. Where some of the products or goods do not come to the customs territory of the Community, the name, kind, gross mass and treatment or use assigned to the products or goods shall be entered in the “Remarks” box of the initial T2M form. Article 334 All T2M forms, whether initial or “Extract”, shall be presented at the customs office where the products or goods to which they refer are brought into the customs territory of the Community. However, where the products or goods are brought in under a transit procedure commencing outside that territory, the forms shall be presented at the customs office of destination for that procedure. The authorities of the office may request a translation of the form. In addition, with a view to checking the accuracy of the particulars given in the T2M form, they may require the production of all relevant documents, including the vessels' papers where necessary. The office shall complete box C of each T2M form, a copy of which shall be sent to the customs office referred to in Article 328. Article 335 By way of derogation from Articles 332, 333 and 334, where products or goods covered by a T2M form go to a third country that is a contracting party to the Convention on a common transit procedure, for reconsignment in full or split consignments to the customs territory of the Community under “T2” procedure, the particulars of the said procedure shall be entered in the “Remarks” box of the T2M form. When all the products and/or goods covered by this T2M form have been sent to the customs territory of the Community, the certification in box 13 of the form shall be completed and endorsed by the customs authorities. A completed copy of the form, shall be sent to the customs office referred to in Article 328. The provisions of Article 332 (2) shall apply as appropriate. Article 336 The booklet containing the T2M forms shall be produced whenever the customs authorities so require. When a vessel for which a booklet of T2M forms as referred to in Article 327 has been issued ceases to satisfy the conditions laid down, before all the forms have been used, or when all the forms in the booklet have been used or its period of validity has expired, the booklet shall be returned immediately to the customs office of issue. Article 337 The provisions of Article 324 apply mutatis mutandis. ’ 7. Articles 338, 339 and 340 are deleted. 8. In Article 348 the following paragraphs la and 1b are inserted: ‘1a. In cases where the provisions of Article 362 are applied, or whenever the customs authorities consider it necessary, the office of departure may prescribe an itinerary for the consignment. The itinerary shall be changed, upon application by the principal, only by the customs authorities of the Member State in which the consignment is located in the course of its prescribed movement. The customs authorities shall record the relevant details on the T1 document and inform the customs authorities of the office of departure without delay. Member States shall take the necessary measures to deal with any offence or irregularity and to impose effective penalties. 1b. In the case of force majeure the carrier may diverge from the prescribed itinerary. The consignment and the T1 document shall be presented without delay to the nearest customs authorities of the Member State in which the consignment is located. The customs authorities shall inform without delay the office of departure of the diversion and record the relevant details on the T1 document. ’ 9. In Article 356 the following paragraph 3a is inserted: ‘3a. Whenever the customs authorities consider it necessary, or in cases where the provisions of Article 362 are applied, the office of destination may be changed, upon application by the principal, only by the customs authorities of the Member State in which the consignment is located and with the agreement of the office of departure. The customs authorities shall inform the previously intended office of destination and record the relevant details on the T1 document. ’ 10. Articles 360, 361 and 362 are replaced by the following: ‘Article 360 1. The use of the comprehensive guarantee shall be granted only to persons: (a) who are established in the Member State where the guarantee is furnished; (b) who have been regular users, either as principals or as consignors, of the Community transit system during the previous six months or are known by the customs authorities to have a good financial standing which is sufficient to fulfil their commitments; and (c) who have not committed any serious or repeated infringement of customs or tax laws. 2. A comprehensive guarantee shall be lodged with an office of guarantee. 3. The office of guarantee shall determine the amount of the guarantee, accept the guarantor's undertaking and issue an authorization allowing the principal to carry out, within the limits of the amounts guaranteed, any Community transit operation irrespective of the office of departure. 4. Each person who has obtained authorization shall, subject to the conditions laid down in Articles 363 to 366, be issued with one or more guarantee certificates made out on a form conforming to the specimen contained in Annex 51. 5. Reference to the guarantee certificate shall be made on each T1 document. 6. The office of guarantee shall revoke the authorization for the use of the comprehensive guarantee if the conditions refered to in paragraph 1 no longer obtain. Article 361 1. The amount of the guarantee shall be set at least at 30 % of the duties and other charges payable, subject to a minimum level of ECU 7 000 in accordance with the procedures laid down in paragraph 2. 2. The office of guarantee shall make an evaluation over a period of a week of: (a) consignments made; (b) the duties and other charges payable taking account of the highest level of taxation applicable in one of the countries concerned. This evaluation shall be made on the basis of the commercial and accounting documentation of the person concerned in respect of goods transported during the past year, the amount obtained then being divided by 52. In the case of applicants for the use of the comprehensive guarantee the office of guarantee shall, in collaboration with the person concerned estimate the quantity, value and taxes applicable to the goods being transported over a given period based on data already available. The office of guarantee shall, by extrapolation, determine the likely value of and taxes on the goods to be transported during a period of one week. 3. The office of guarantee shall carry out an annual review of the amount of the comprehensive guarantee, in particular on the basis of information from the office of departure, and shall if appropriate adjust the amount. Article 362 1. Either upon initiative of the Commission or following a request of a Member State, the use of the comprehensive guarantee shall be temporarily forbidden, when it is intended to cover external Community transit operations concerning goods which are the subject of a decision of the Commission, in accordance with the committee procedure, by which these goods are considered to present an increased risk of fraud. 2. The Commission shall publish, when necessary but at least once a year, the list of the goods to which the provisions of paragraph 1 apply, in the Official Journal of the European Communities, C series. 3. Periodically, but at least once a year, the Commission shall decide, in accordance with the committee procedure, whether or not the measures taken under paragraph 1 need to be continued. Article 362a For external Community transit operations concerning goods for which the provisions of Article 362 are applied the following measures shall apply: (a) the CN code shall be entered in the T1 document; (b) one of the following mentions in red should be marked diagonally across all copies of the T1 document and should occupy a space of not less than 100 mm by 10 mm: — Articulo 362 del Reglamento (CEE) no 2454/93 — Forordning (EØF) nr. 2454/93, artikel 362 — Artikel 362 der Verordnung (EWG) Nr. 2454/93 — Άρθρο 362 του κανονισμού (EOK) αpιθ. 2454/93 — Article 362 of Regulation (EEC) No 2454/93 — Article 362 du règlement (CEE) no 2454/93 — Articolo 362 del regolamento (CEE) n. 2454/93 — Artikel 362 van Verordening (EEG) nr. 2454/93 — Artigo 362ọ do Regulamento (CEE) nọ 2454/93 — Asetuksen (ETY) N:o 2454/93 362 artikla — Förordning (EEG) nr 2454/93 artikel 362; (c) return copies of T1 documents bearing this statement must be returned to the office of departure no later than the working day following the day that the consignment and the T1 form were presented at the office of destination. ’ 11. In Article 368 (2) the second subparagraph is replaced by the following: ‘In particular, a transport operation shall be considered as involving increased risks when it concerns goods to which, with respect to the use of the comprehensive guarantee, the provisions of Article 362 are applicable. ’ 12. Article 376 (2) is replaced by the following: ‘2. The guarantee waiver shall not apply where, in accordance with the provisions of Article 362, the use of the comprehensive guarantee is forbidden. ’ 13. Article 380 is replaced by the following: ‘Article 380 Proof of the regularity of a transit operation within the meaning of Article 378 (1) shall be furnished to the satisfaction of the customs authorities: (a) by the production of a customs or commercial document certified by the customs authorities establishing that the goods in question were presented at the office of destination or, where Article 406 applies, to the authorized consignee. That document shall contain enough information to enable the said goods to be identified; or (b) by the production of a customs document placing the goods under a customs procedure in a third country or by a copy or photocopy thereof; such copy or photocopy must be certified as being a true copy by the organization which certified the original document, by the authorities of the third country concerned, or by the authorities of one of the Member States. The document shall contain enough information to enable the goods in question to be identified. ’ 14. In Article 453, paragraph 2 is replaced by the following: ‘2. The Community status of the goods referred to in paragraph 1 shall be determined in accordance with Articles 314 to 324, or, where appropriate, with Articles 325 to 334 within the limits laid down in Article 326. ’ 15. The following Article 457a is inserted: ‘Article 457a Where customs authorities of a Member State decide to exclude a person from the TIR procedure under the provisions of Article 38 of the TIR Convention, this decision shall apply throughout the customs territory of the Community. To that end, the Member State shall communicate its decision, together with the date of application, to the other Member States and the Commission. This decision shall apply to all TIR carnets presented to a customs office for acceptance. ’ 16. Point (a) of Article 503 is replaced by the following: ‘(a) “agricultural goods” means goods covered by the Regulations referred to in Article 1 of Council Regulation (EEC) No 565/80 (6). Goods coming under Council Regulation (EC) No 3448/93 (7) or Commission Regulation (EC) No 1222/94 (8) shall be treated as agricultural goods; (6)  OJ No L 62, 7. 3. 1980, p. 5. " (7)  OJ No L 318, 20. 12. 1993, p. 18. " (8)  OJ No L 136, 31. 5. 1994, p. 5. ’" 17. Article 536 (1) is replaced by the following: ‘1. Where the customs authorities require Community goods other than those referred to in Article 98 (1) (b) and (3) of the Code which are stored on the premises of a customs warehouse to be listed in the stock records referred to in Article 105 of the Code in accordance with Article 106 (3) of the Code, the entry must make clear their customs status. ’ 18. The first subparagraph of Article 552 (1) (a) (v) is hereby replaced by the following: ‘operations in which the value of the goods, by eight-digit CN code, does not exceed ECU 300 000 per applicant and per calendar year, irrespective of the number of operators carrying out the processing operation. ’ 19. The second subparagraph of Article 696 (2) is replaced by the following: ‘The oral declaration of entry for the procedure shall constitute the application for authorization and the endorsement of the inventory by the customs office shall be equivalent to authorization. ’ 20. Article 698 is amended as follows: (a) The first subparagraph of paragraph 1 is replaced by the following: ‘Travellers' personal effects and goods imported for sports purposes referred to in Article 684 shall be authorized for the temporary importation procedure without written or oral application or authorization. ’ (b) The following sentence is added to paragraph 2: ‘In this case the simplified procedure provided for in Article 696 shall apply mutatis mutandis’. 21. Article 705 (2) is replaced by the following: ‘2. Where Article 695 or Article 696 is applied, either the declaration referred to in paragraph 1 or the inventory, as the case may be, shall be lodged at the customs office which issued the authorization. ’ 22. Article 709 is replaced by the following: ‘Article 709 1. Where a customs debt is incurred in respect of goods previously entered for the procedure of temporary importation, compensatory interest shall be paid on the total amount of the import duty applicable. 2. Paragraph 1 shall not apply: (a) where a customs debt is incurred pursuant to Article 201 (1) (b) of the Code; (b) where a customs debt is incurred and a security is provided by a cash deposit equal to one of the amounts of customs debt set out in Article 192 (1) of the Code; (c) where a customs debt is incurred due to the release for free circulation of goods which were entered for the temporary importation procedure under Article 673, Article 678, Article 682, Article 684 or Article 684a; (d) where compensatory interest, calculated in accordance with paragraph 3, does not exceed ECU 20 per case of a customs debt incurred; (e) where the holder of the authorization requests release for free circulation and supplies proof that particular circumstances not arising from any negligence or deception on his part make it impossible or uneconomic to carry out the re-export operation under the conditions he had anticipated and duly substantiated when applying for the authorization. Article 589 (3) shall apply mutatis mutandis. 3. (a) The annual interest rates shall be those in force at the time when the customs debt is incurred and set pursuant to Article 589 (4) (a). (b) Interest shall be applied per calendar month for the period running from the first day of the month following the month in which the import goods were first entered for the procedure to the last day of the month in which the customs debt is incurred. The material period for the application of compensatory interest shall not be less than one month. (c) The amount of interest shall be calculated on the basis of the import duties applicable, the interest rate referred to in (a) and the period referred to in (b). ’ 23. Annex 37 is amended in accordance with Annex I hereto. 24. Annex 38 is amended in accordance with Annex II hereto. 25. Annexes 43 and 44 are replaced by Annexes III and IV hereto. 26. Annexes 63, 64 and 65 are amended in accordance with Annex V hereto. 27. Annex 79 is amended in accordance with Annex VI hereto. 28. Annex 87 is amended in accordance with Annex VII hereto. 29. Annex 108 is amended in accordance with Annex VIII hereto. 30. Whenever they appear, the words ‘Council Regulation (EEC) No 1736/75’ are replaced by the words ‘Council Regulation (EC) No 1172/95’. Article 2 This Regulation shall enter into force on the seventh day following its publication in the Official Journal of the European Communities. The measures which, in the context of external Community transit operations for certain goods, fixed the amount of the comprehensive guarantee at the level of either the total amount, or at 50 %, of the duties and other charges applicable or in respect of which use of the comprehensive guarantee is forbidden, and which were adopted on the basis of the rules applicable before the date of entry into force of this Regulation shall remain in force until the date of the first decision taken pursuant to Article 362 (1) of Regulation (EEC) No 2454/93, as amended by this Regulation, and in any event no later than 31 December 1996. The new model forms provided for in this Regulation may be used as soon as it enters into force. Forms employed before that date may be used until stocks are exhausted but not after 31 December 1996. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 19 March 1996. For the Commission Mario MONTI Member of the Commission (1)  OJ No L 302, 19. 10. 1992, p. 1. (2)  OJ No L 253, 11. 10. 1993, p. 1. (3)  OJ No L 171, 21. 7. 1995, p. 8. (4)  OJ No L 118, 25. 5. 1995, p. 10. ANNEX I Annex 37 is amended as follows: In Title II, A, Box 15, the following text is inserted as the penultimate paragraph: ‘Regarding export formalities, the “Member State of actual export” is the Member State, other than the Member State of export, from which the goods were initially dispatched for the purpose of export, if the exporter is not established in the Member State of export. When the goods were not initially dispatched from another Member State for the purpose of export or when the exporter is established in the Member State of export, the Member State of export shall be the same as the Member State of actual export. ’ ANNEX II Annex 38 is amended as follows: The table in ‘Box 24’ is replaced by the following: Column A Column B ‘1. Transactions involving actual or intended transfer of ownership against payment or other consideration (other than the transactions listed under 2, 7 and 8 (1)  (2)  (3) 1. Final purchase/sale (2) 2. Goods dispatched for viewing, trial samples, goods dispatched with right of return and transactions involving commission 3. Transactions involving payment in kind 4. Sale to foreign travellers for their personal use 5. Financial leasing (3) 2. Return of goods already recorded under code 1 (4); replacement of goods free of charge (4) 1. Return of goods 2. Replacement for returned goods 3. Replacement (e. g. under terms of guarantee) for goods not returned 3. Transactions (not temporary in nature) involving transfer of ownership but without consideration (financial or otherwise) 1. Deliveries of goods under programmes wholly or partly financed by the European Community 2. Other government-aid deliveries 3. Other aid deliveries (individuals and non-governmental organizations) 4. Other transactions 4. Transactions with a view to processing under contract (5) or repair (6) (other than the transactions recorded under 7) 1. Processing 2. Repair and maintenance against payment 3. Repair and maintenance free of charge 5. Transactions after processing under contract (5) or repair (6) (other than the transactions recorded under 7) 1. Processing 2. Repair and maintenance against payment 3. Repair and maintenance free of charge 6. Transactions not involving transfer of ownership, e. g. hire, loan, operational leasing (7) and other temporary uses (8), with the exception of processing under contract or repair (delivery and return) 1. Hire, loan, operational leasing 2. Other temporary uses 7. Transactions in connection with joint defence programmes or other intergovernmental production programmes (e. g. Airbus)   8. Delivery of building material and equipment in connection with construction or civil engineering activities constituting part of a general contract (9)   9. Other transactions   (1)  This item covers most exports and imports, i. e. transactions in respect of which: — ownership is transferred from resident to non-resident or vice versa, — payment or other compensation (payment in kind) is or will be made. It should be noted that this also applies to goods sent between entities of a same enterprise or of a same group of enterprises and to goods sent from/to central distribution depots, unless no payment or other compensation is made in respect of these transactions (in which case such transactions shall be listed under heading 3). (2)  Including spare parts and other replacement deliveries made against payment (3)  Including financial leasing: the lease instalments are calculated in such a way as to cover all or virtually all the value of the goods. The benefits and risks of ownership are transferred to the lessee. At the end of the contract, the lessee becomes the legal owner. (4)  Return and replacement dispatches of goods originally recorded under headings 3 to 9 of column A should be recorded under the corresponding headings. (5)  Processing operations (whether or not under customs supervision) should be recorded under headings 4 and 5 of column A. Own-account processing operations are not covered by these headings and should be recorded under heading 1 of column A. (6)  Repair entails the restoration of goods to their original function; this may involve some structural alterations or improvements. (7)  Operational leasing: all lease contracts other than financial leasing (see note 3). (8)  This item covers goods exported/imported with the intention of subsequent re-import/re-export without any change of ownership taking place. (9)  The transactions recorded under heading 8 of column A involve goods which are not separately invoiced but for which a single invoice is made covering the total collective value. Where this is not the case, the transactions should be recorded under heading 1. ’ ANNEX III ‘ANNEX 43 FORM T2M ANNEX IV ‘ANNEX 44 NOTES (to be added to the booklet containing the T2M forms) I. General considerations 1. The purpose of a T2M form is to prove the Community status, upon entry into Community customs territory, of a catch made by a Community fishing vessel outside the territorial waters of a country or territory not forming part of Community customs territory and/or of goods obtained from such catches by processing carried out on board the Community fishing vessel which made the catch, another Community fishing vessel, or a Community factory ship. 2. The Community fishing vessel is a vessel which is registered and listed in a part of a Member State's territory forming part of Community customs territory, flies the flag of a Member State, makes the catch and may process it on board. The Community factory ship is a vessel, similarly registered or listed, which processes only transhipped catches. 3. This booklet contains 10 forms, each consisting of an original and a copy. The copies must not be separated from the booklet. 4. The booklet must be produced whenever the customs authorities so require. 5. It must be returned to the customs authorities by which it was issued when the vessel for which it was issued ceases to fulfil the conditions laid down, when all the forms contained in the booklet have been used or when the period of validity of the booklet expires. II. Authentication of T2M forms 6. The forms must be completed in typescript or legibly by hand; if the latter, in ink and in printed characters. No erasures or alterations may be made. Amendments must be made by striking out the incorrect particulars and adding those required where appropriate. Any such amendments must be initialled by the person who signed the declaration containing them. 7. Boxes 1 to 3 of the form must be completed by the person indicated, in the language in which the form is printed. Boxes 4 to 12 of the form must be completed in one of the official Community languages. 8. The validity of the T2M forms contained in a booklet is guaranteed by the persence, in box A of both originals and copies, of an endorsement by the authority responsible for registering the Community fishing vessel for which the booklet was issued. The booklet is valid for two years from the date shown on page 2 of its cover. III. Use of T2M forms 9. The master of the Community fishing vessel must complete boxes 4, 5 and/or boxes 6, 7, 8 and complete and sign the declaration in box 9, of the original and the copy of a T2M form whenever: — a catch and/or the goods resulting from on-board processing of a catch are landed either in a port in Community customs territory, or in another part from which they will leave for that territory, — the catch and/or goods are transhipped onto another Community fishing vessel, a Community factory ship — where the catch undergoes on-board processing — or any other vessel which transports the catch and/or goods without processing them, either directly to a port within Community customs territory or to a port not in Community customs territory from where they will leave for that territory. In this case the master of the Community fishing vessel and the master of the vessel onto which the catch and/or goods are transhipped must complete and sign box 10 of the original and the copy. 10. Where appropriate, the master of the vessel onto which a Community fishing vessel's catch has been transhipped to undergo on-board processing must complete boxes 6, 7 and 8, and complete and sign the declaration in box 11 of the original whenever: — goods resutling from on-board processing are landed either in a port in Community customs territory, or in a port not in Community customs territory from which they will leave for that territory, — the goods are transhipped onto any other vessel which transports them without processing, either directly to a port in Community customs territory or to a port not in Communitry customs territory from where they will leave for that territory. In this case, the master of the processing vessel and the master of the vessel onto which the goods are transhipped must complete and sign box 12 of the original. 11. Where catch or goods have gone to a country or territory not forming part of Community customs territory before being shipped to Community customs territory, box 13 of the form must be completed and signed by the customs authorities of the country or territory. If a part of the catch or goods does not go to Community customs territory, the name, kind, gross mass and treatment or use assigned to the consignments concerned must be entered in the “Remarks” box of the form. 12. Whenever catch and/or goods are transhipped for carriage to Community customs territory, they must be accompanied by the original of a T2M form. IV. Use of “ Extracts” of T2M forms Where catch and/or goods have been transported to a country or territory not forming part of Community customs territory for later reconsignment to that territory in split consignments: 13. A number of original T2M forms equal to the number of split consignments must be taken from the booklet issued to the fishing vessel which made the catch and/or processed it into goods, and clearly marked with the word “Extract” and particulars of the T2M form for the initial consignment. This information must also be entered in the copies of the “Extracts” which must remain in the booklet. 14. For each split consignment: — boxes 4, 5 and/or 6, 7, 8 of the T2M “Extract” form must be completed, stating the quantities of catch and/or goods consigned, — box 13 of the original of the “Extract” form must be completed, endorsed and signed by the customs authorities of the country or territory concerned, — the number and kind of packages, the gross mass, the treatment or use assigned to the consignment and the number and date of the “Extract” form must be entered in the “Remarks” box of the initial T2M form, — the “Extract” form must accompany the consignment of catch and/or goods. 15. When all the catch and/or goods covered by the initial T2M form have been shipped to Community customs territory, box 13 of the form must be completed, endorsed and signed by the customs authorities of the country or territory concerned. This form must be sent to the office which issued the T2M booklet. If a part of the catch or goods does not go to Community customs territory, the name, kind and gross mass of the consignments concerned, and the treatment or use assigned, must be entered in the “Remarks” box on the form. V. Discharge of T2M forms 16. All original T2M forms (initial or “Extract”) must be presented to the customs office where the catch or goods to which it refers have been brought into Community customs territory. However, where such catch or goods are brought into Comunity customs territory under a transit procedure and the corresponding operation began outside that territory, the T2M forms must be presented to the customs office of destination for that procedure. ’ ANNEX V Annexes 63, 64 and 65 are amended as follows: The separation between the second and third subdivisions of: — box 33 of the Control Copy T5, — box 33 of the Control Copy T5a and — the column entitled ‘Commodity’ of the T5 loading list shall be moved one-tenth of an inch (2,54 mm) to the left. ANNEX VI In Annex 79, the following serial numbers shall be replaced by the following: Serial No CN code and description of the compensating products Processing operations from which they result ‘12 0504 00 00 — Guts, bladders and stomachs of animals (other than fish) whole and pieces thereof Slaughtering and cutting animals of Chapter I 22 ex 0511 99 — Waste from the procedures in column 3 Slaughtering animals of Chapter I, any working or processing of meat’ ANNEX VII The following point is added to Annex 87: Order No Column 1 Column 2 Goods for which processing under customs control is authorized Processing which may be carried out ‘15 Castor oil falling within CN code 1515 30 90 Processing into: — hydrogenated castor oil (“opalwax”) of CN code 1516 20 10 — 12-hydroxystearic acid (purity less than 90 %) of CN code 3823 19 10 — 12-hydroxystearic acid (purity 90 % or more) of CN code 2918 19 90 — glycerol of CN code 2905 45 00’ ANNEX VIII Annex 108 is modified as follows: The text after ‘HELLENIC REPUBLIC’ is replaced by the following text:   ‘Free zone of Piraeus   Free zone of Thessaloniki’

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - Annual Report 1995 on Humanitarian Aid

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T V ** COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 18. 03. 1996 COM(96)105 final REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Annual Report 1995 on Humanitarian Aid Table of Contents Executive Summary 1 2 3 4 Institutional Framework Legal Basis 1. 1 Emergency Food Aid 1. 2 Financial basis 1. 3 Means of action 2. 1 2. 2 Framework Partnership Agreements Databases and management systems Humanitarian operations in 1995 Statistical overview 3. 1 General issues 3. 2 Former Yugoslavia 3. 3 Africa, Caribbean and Pacific Countries 3. 4 3. 4. 1 The region of the Great Lakes 3. 4. 2 Angola 3. 4. 3 Sudan 3. 4. 4 Somalia 3. 4. 5 Liberia 3. 4. 6 Sierra Leone 3. 4. 7 Haiti Commonwealth of Independent States Eastern Europe Asia 3. 5 3. 6 3. 7 3. 8 Middle East and North Africa 3. 9 Latin America Horizontal Activities 4. 1 4. 2 4. 3 Inter-service coordination Information and Visibility "Humanitarian Summit" in Madrid Coordination/cooperation 4. 3. 1 4. 3. 2 Member States 4. 3. 3 European Parliament 4. 3. 4 Non-Governmental Organisations 4. 3. 5 United Nations 4. 3. 6 United States third 4. 3. 7 Other organisations countries. and , '. international 4. 4 4. 5 Evaluation Disaster Preparedness 5 Prospects for 1996 and beyond 5. 1 5. 2 Foreseeable needs in 1996 Conclusions and future strategy P\ 1 1 2 2 3 3 3 4 4 8 10 11 11 13 13 14 15 15. 15 15 16 16 18 18 19 19 20 21 21 22 22 23 24 26 26 27 28 29 29 30 and regional DOCUMENTARY ANNEXES MADRID DECLARATION List of Disaster Preparedness Projects financed in 1995 EU-USAID High Level Meeting The NOHA Diploma ACRONYMS USED IN THE REPORT STATISTICAL ANNEXES NOTE ON THE STATISTICAL ANNEXES 32 33 37 39 41 42 43 44 Annex SI, of Finance 1991-95 Overview of Financial Decisions for EC Humanitarian Aid by Source Annex S2, Humanitarian Aid 1993-95 Summary of Financial Decisions for Countries Benefitting from EC Annex S3, Financial Decisions for Humanitarian Aid by Region in 1994-95 Annex S4, EC Contracts for Humanitarian Aid 1991-95 Annex S5, of the affected Population (Oct. 1993-Dec. 1995) Rwanda/Burundi Operations: Summary of Financial Decisions in favour Annex S6, 1991-1995 ; By Relief Items, 1995 Breakdown of Community Aid to the Former Yugoslavia: By Republic, Annex S7, Breakdown of Items for Humanitarian Assistance, 1993-1994-1995 FIGURES IN THE TEXT Figure 1, Financial Decisions for Humanitarian Aid by Region in 1994-95 (page 5) Figure 2, Financial decisions by Source of Finance 1993-1994-1995 (page 6) Figure 3, EC Contracts For Humanitarian Aid 1991-95 (page 7) > Executive Summary In the last five years the humanitarian operations carried out by the Commission on behalf of the Union have grown sevenfold to make the EU now the foremost single public donor of humanitarian aid. From ECU 114 million in 1991, the figure reached ECU 764 million in 1994, and in 1995 stood at around ECU 692 million. As in 1994, the main theatres of operation this year continued to be former Yugoslavia and Rwanda/Burundi. This notwithstanding, a presence was maintained in some sixty crisis-stricken countries around the globe, most significantly in Angola, Sudan, Haiti, the Russian Federation (Chechnya), Armenia, Azerbaijan, Georgia, Tajikistan, Iraq, Afghanistan and Cuba. Humanitarian assistance is implemented within the Commission by its Humanitarian Office (ECHO). ECHO was established in 1992 and became fully operational in 1993. 1995 was therefore the third full year of operations. Although the Commission has been involved in humanitarian operations on a smaller scale for many years, the dimension that the problems have taken since the end of the Cold War clearly more than justify a dedicated structure. 1995 may be seen as the year in which ECHO moved towards completing the consolidation of its functions. The year saw the Office take full responsibility for all the Commission's humanitarian operations, as well as the essential work towards the setting-up of its own database and the adoption of a Council Regulation covering EC humanitarian aid. It also reinforced its efforts in the field of evaluation, as well as its policy instruments and capacity. 1995 saw a new Commission take office. As far as humanitarian aid is concerned, the basic principles underlying ECHO'S work were reinforced rather than changed. As in the past, its modus operandi continued to be based on the principle of partnership together with some 170 NGOs - for the most part European - UN agencies and the Red Cross, signatories in almost all cases to a Framework Partnership Agreement with the Commission. ECHO aid continued to be granted without discrimination on the basis of race, religion or political ideology, to benefit the many millions of human beings victims in 1995 of natural disasters and of man- made chronic crises, but above all of civil war. In recent years humanitarian operations funded by the Commission have taken place in increasingly difficult and wide-ranging contexts, and 1995 was no exception to this trend. The conflict-related crises which account for the vast majority of interventions have proven to be complex and persistent. In general, the roots of such conflicts lie in deep socio-conomic imbalances, which sometimes take on an ideological or ethnic tinge. Neither their causes nor their effects disappear from one day to the next. In many cases, the Commission assumed a key role amongst donors in such crises. It was the single biggest donor not only in ex-Yugoslavia, but also in Afghanistan. South Sudan, Liberia and Sierra Leone, among others. While tenaciously defending the autonomy and independence of humanitarian assistance, this presence also allowed it - indeed obliged it - to draw attention to conflict prevention and resolution issues both at country level and more widely, even where such issues were not prominent on domestic or international political agendas. The year saw the adoption by the Commission of a communication on the external X dimension of human rights policy noting their relevance to conflict prevention1. On other In such occasions, humanitarian assistance helped prevent a tragedy from getting worse. countries as Haiti, Angola, Liberia and parts of Latin America, and even in the Israel/Palestine context, it contributed to fostering the first fragile moves towards peace, reconciliation and reconstruction. Throughout the year the Commission has taken a close interest in the debate staged in the international humanitarian community on the need to reinforce links between relief and development, and the discussion paper it produced on the subject has already been widely debated and will be developed in 1996. Flagrant violations of international humanitarian law sadly continued to mark the context of the Commission's work in 1995. Atrocities carried out on civilians in many theatres of conflict caused outrage in the international community and led to situations in which assistance was rendered difficult, dangerous and sometimes outright impossible. This notwithstanding, the Commission continued to be present through its partners in such countries as the Sudan, Somalia, and Sierra Leone, even where other donors withdrew, shouldering a correspondingly greater burden and responsibility. indeed Even where an uneasy peace was established, fundamental humanitarian and socio-economic problems remained, most notably that of land-mines, the elimination of which remains a top priority for action by the international community. If natural disasters cause in general less loss of life and suffering, they nonetheless can have an enormously damaging impact on developing societies. An approach aiming at preparedness is often preferable from the point of view of reducing suffering and diminishing the economic consequences of disasters, and this was an important element of ECHO'S often pioneering work in this field in 1995. Even in the absence of large-scale conflict or natural disaster, chronic and deteriorating situations such as those in Algeria, Cuba and Iraq similarly called for humanitarian assistance to alleviate the worst sufferings of particularly vulnerable groups of population. Outside of particular crises, the Commission's role and influence within the international humanitarian community in general continued to develop throughout the year. Links with the US were significantly strengthened within the overall context of the EU-US Action Plan agreed in Madrid at the end of the year. Operational and policy links with the UN and its agencies, especially UNHCR, but also WFP and DHA, were also developed, in crisis situations and in overall planning, including support to initiatives such as ReliefWeb, MCDA, and IDNDR. Information and transparency remain a top priority for ECHO and continued to be developed, not only as regards the Member States but also vis-à-vis the whole array of humanitarian actors. The statistics annexed to the present report once again demonstrate the COM(95) 567 final Commission's commitment to this principle. This year also saw the finalization of the refugee reporting system and a new ECHO presence on Internet. Towards the end of the year a number of leading humanitarian agencies and donors attended a particularly significant event organized in Madrid on the initiative of Commissioner Bonino to discuss the problems confronting humanitarianism at the dawn of the twenty-first century. The event culminated in the adoption of the "Madrid Declaration", attached to this report, underlining a remarkable degree of convergence in the analysis of the major challenges on the part of all participants. The coming year is likely to see humanitarian efforts being deployed at least on a par with 1995. While there are encouraging developments in some parts of the world, instability in others is unlikely to disappear and may well worsen. New forms of humanitarian assistance, particularly in aid of displaced persons, are likely to play a key role in the Bosnian peace process and in calming tensions in the region of the Great Lakes in East Africa and elsewhere. If the destructive impact of natural disasters is to be reduced, important challenges are before us in terms of preparedness, prevention and mitigation. Links between relief and development have to be reinforced to the benefit of both. The Union's humanitarian assistance enjoys widespread support and growing visibility. With the hopefully imminent adoption of the new legal basis, it will enter a new phase. Yet it is still important to underline that it addresses the symptoms, not the causes, of conflict. Indeed, conflict prevention and resolution lie, needless to say, in the political, diplomatic or sometimes military spheres and require formal instruments and policies which the Union does not yet have. The task of the 1996 Inter-Governmental Conference will be to rise to this challenge. m 1 1. 1 Institutional Framework Legal Basis 1995 was marked,. among other things, by discussions with the Council and the European Parliament over the Commission proposal for a Council Regulation concerning humanitarian aid2. Hitherto, European Union activities in this field have been conducted only on the ad hoc basis afforded by the allocation of funds within the budgetary procedure. In view of the importance of the sums involved - over two billion ECU from 1992 to 1995 - the Commission and the Member States shared the view that the time had come to formalise this, and the new Regulation aims to provide a more precise legal basis for the management by the Commission on behalf of the Community budgetary resources made available for humanitarian aid. The Commission's proposal, based on Article 130w of the Treaty, seeks notably to codify the scope and nature of humanitarian aid, the relationships with humanitarian partners, and introduce procedures for consultation with the Member States before decisions are finalised. The draft regulation has been examined at length by the European Parliament under the cooperation procedure. Parliament delivered its opinion following the first reading during its second plenary session of November. Its reaction to the Commission's proposal was very favourable, and most of the amendments proposed by it were incorporated by the Commission into a revised proposal. The debate in the Council showed that a majority of Member' States sought a much more constraining mechanism than the consultation procedure proposed by the Commission, wishing themselves the conception, decision-making and implementation of humanitarian aid. The Council's common position was adopted at the Development Council held in Brussels on December 20. It responds to Member States' wishes while preserving the Commission's room for manoeuvre, especially in emergency situations. to become an effective party to Partner NGOs have also assiduously followed the debate in Council and Parliament. They are clearly keen to ensure that their interests, including flexibility, speed of response and political impartiality, are given due recognition and support in this exercise. They have made substantial efforts in their own right to ensure that these interests are duly heeded in the decision-making process of the Union's institutions. If Parliament now endorses something similar to the Council's common position, it is hoped that the latter will be able to take its final decision on the Regulation in April or May 1996 under Italian Presidency. COM (95) 201 final of 31 May 1995 COM (95) 721 final of 15 December 1995 1 1. 2 Emergency Food Aid Together with the proposed new legal basis for humanitarian aid, the Council received a Commission proposal for a new Regulation to replace the existing Food Aid Regulation. This Regulation is the responsibility of DG VIII and covers food aid, food aid management and special operations in support of food security. The proposal defines the objectives, means and procedures for long-term food security policy. It no longer refers, as before, to emergency food aid operations, which have been under the responsibility of ECHO since a Commission decision of December 1994. This decision, which completes the transfer to ECHO of operational responsibility for all areas placed under its competence by the Commission, led to responsibility for funds totalling ECU 51 million being transferred from DG VIII to ECHO in 1995 for implementing humanitarian food assistance operations in favour of refugees, displaced persons and the most vulnerable groups in crisis situations, mainly through the World Food Programme (WFP), UNHCR, the International Committee of the Red Cross (ICRC) and NGOs. This aid was for the main part disbursed in the region of the Great Lakes, Angola, Iraq and the Caucasus. ECHO's involvement in food aid is not confined to the crisis period, but continues in the post-emergency period so long as imperious humanitarian needs remain. The transition is closely managed to the point where DG VIII may (as necessary) take over. 1. 3 Financial basis The great majority of the Commission's operations through ECHO are financed from the General Budget of the European Union. To a small extent, and in 1995 much less than in previous years, operations in favour of ACP countries have also been financed under the financial protocol to the Lomé IV Convention. In the last five years the humanitarian operations carried out by the Commission on behalf of the Union have grown sevenfold, to make the EU now the foremost single public donor of humanitarian aid. From ECU 114 million in 1991, the figure (including a special allocation of ECU 150 million from Lomé convention funds for the Rwanda crisis) reached ECU 764 million in 1994, and in 1995 stood at around ECU 692 million. In 1996, initial appropriations under the "humanitarian aid" chapter of the EU Budget (B7-21) were' ECU 319. 5 million. Other funds may be made available during the year depending on the evolution of the humanitarian situation to which the Commission may be called upon to respond. The financial position of EC humanitarian aid is nonetheless less than satisfactory in some ways. The main problem is the lengthy procedure required to release appropriations from the reserve part of the EU budget, coupled with the requirement first to have disbursed 80% of the funds initially attributed. These administrative requirements have sometimes proved to be at variance with crisis needs. 2 2. 1 Means of action Framework Partnership Agreements In the course of the year a further 17 NGOs and international organisations signed the Framework Partnership Agreement (FPA) with the Commission, bringing the total to 170. Naturally enough, NGOs from the three new Member States of the EU - Austria, Finland and Sweden - were prominent among the newcomers. Partner NGOs played a leading role in the work of the extended Dialogue Group set up to review the functioning of the FPA and identify possible improvements. The Dialogue Group did submit, in November 1994, a proposal to revise the FPA, which was carefully examined by ECHO at the beginning of 1995. Although the suggestions formulated by the group were very helpful, the result of the legal basis exercise (see section 1. 1) will clearly be important in determining the Commission's future way of working and the policy options. ECHO is therefore awaiting the outcome of this exercise before deciding how to proceed with the further development of the FPA. 2. 2 Databases and management systems Humanitarian assistance embraces a wide variety of scenarios, conditions, actors and requirements, spread across the surface of the planet. Proper communication is a must if all the various factors are to be mobilised with adequate cohesion to help the massive victim population and make best use of the available resources. Modern electronic databases and informatics-based communication and management systems have an increasingly key role to play, and the Commission has gone out of its way to develop such capacities and skills. Its first concern was to rethink and modernise its own informatics tools. Late 1995 saw the operational commissioning of the first phase (relating to financial management) of ECHO'S new database, the Humanitarian Office Programme Environment (HOPE) under development since spring 1994. Early in 1996 the contract management modules too will be commissioned. Increasingly, HOPE will permit the storage and active management of all data pertinent to ECHO'S work. Migration in early 1996 to the X400 Commission e-mail facility (Route 400) will open up new and advanced scope for electronic communication within and between services, between institutions of the Union and above all with the outside world: ECHO's partners and theatres of operations. informatics-based The Commission's longer-term goal is to help promote international communication and management tools between the main actors in the international humanitarian community. To this end, ECHO has been actively involved in discussions with several international partners, including the United States authorities and the United Nations Department of Humanitarian Affairs, with a view to promoting a humanitarian Relief Web to foster information exchange. ECHO is also seeking ways of promoting closer interchange between the humanitarian bodies of the Member States of the Union and between these and It is also aware that there is much to learn from the experiments in the Commission. electronic database and communications systems that are being carried out by NGOs and other international agencies specialising in humanitarian relief. ECHO went up on the Commission's World Wide Web server (EUROPA) with a range of information in November 1995 (see section 4. 1). The address of the home page is: http://www. cec. lu/enJcommlecho/echo, htm] 3 Humanitarian operations in 1995 3. 1 Statistical overview The production of comprehensive and sound statistics has been a priority for ECHO and the means to achieve this goal were further developed in 1995. Such statistics are a vital management tool, and also serve important information, coordination and transparency needs. Statistics are now issued from ECHO on a quarterly basis, to which refugee statistics from the PISG database will soon be added (see section 4. 3. 1. 1). A number of the statistical reports ECHO produces are annexed to the present report (Statistical Annexes SI to S7). Operations in 1995 were on a comparable scale to those in 1994 with, as has been said, a headline figure of ECU 692 million for decisions adopted during the year. While statistics by country are available for the entire sum committed during the year, it should be noted that contracting inevitably continues, in some cases, into the following year. Statistics by partners are based on amounts contracted by end of year and therefore come to a lower figure. At the end of 1995, this amount was ECU 494 million, representing a contract to decision ratio by end of year of 71% (in 1994, the figure was 79%. and reached 99%) in the course of 1995). A list of funding decisions by country is provided in Annexes S2 and S3 and by partner in Annex S4. These figures are summarised in figures 1 and 3 overleaf. In order to avoid repetitiveness. the amounts involved are not always mentioned in the country sections which follow. At the end of its third full year of operations, ECHO is still, at a relatively early stage of its development, and any talk of trends needs to be cautious. Nonetheless, it should be noted that the figures show a striking increase in the proportion of aid channelled through NGOs in 1995 as compared to 1994, up from 41% to 56%, mainly at the expense of the UN system. FINANCIAL DECISIONS FOR HUMANITARIAN AID BY REGION 1 9 94 Figure 1 As per: 09/01/96 (35,3%) EX-YUGOSLAVIA (0,5%) GLOBAL (2,8%) LATIN AMERICA (0,5%) NORTH AFRICA (3,4%) ASIA %) IRAK EASTERN EUROPE (11,9%)C. I. S (42,4%) ACP (0,4%) EASTERN EUROPE (3,6%) IRAK (0,6%) GLOBAL (33,9%) EX-YUGOSLAVIA (30,6%) ACP (0,6%) DISASTER PREPAREDNESS (4,0%) LATIN AMERICA (0,7%) NORTH AFRICA (5,7%) ASIA (19,9%) C. I. S Financial Decisions by Source of Finance 1993 -1994 -1995 Figure 2 o LU CT\ 1000 800 600 400 200 0 LOME III LOME IV BUDGET TOTAL Total Humanitarian Assistance 1991 -1992 -1993 -1994 -1995 Figure 3 amounts in ECU UNITED NATIONS ! OTHER INTERN. ORG. 400 300 to c o = 200 100 0 D 1991 0 1992 B 1993 1 1994 S 1995 2 013 855 11 368 642 55 194 966 116 225 415 69 062 696 13 461 500 21 526 340 3 546 195 6 173 000 7 920 000 0 25 325 000 10 400 000 1 800 000 119 578 87 685 529 111 446 577 264 250 750 308 334 733 275 783 820 4 778 000 1 552 000 2 424 257 7 089 870 3 652 676 3 652 400 1 089 626 4 740 000 600 000 1 513444 46 524 500 122 843 166 189 723 733 240 672 705 83 941 166 33 244 000 36 809 900 67 674 267 72 434 812 52 359 152 A part of this increase is probably due to random factors during the year, and in any case the final disbursement figures may be expected to redress the imbalance somewhat. Another part is arguably due, however, to a diversification of ECHO's activities as it continued to develop in 1995 and as the context of its work shifted somewhat, both geographically and functionally. Although ECHO was involved in slightly fewer countries in 1995, its funds were spread more evenly than in 1994. In this respect, it should be borne in mind that the UN agencies are more geared to immediate crisis response, whereas NGOs often have a comparative advantage in emergency rehabilitation, chronic disaster relief and first steps towards reconstruction, which constituted a greater proportion of ECHO'S activities in 1995 as it was able to improve its perspective vis-à-vis crisis situations. It is interesting also to see how ECHO aid may be broken down by type of assistance. This is done in Annex S7. Unsurprisingly, and as in previous years, some 40% of ECHO assistance was spent on food aid. The other major items were transport, medical supplies, and local and expatriate staff costs, making up altogether 83% of the overall total. Communications equipment accounted for another 7. 5%. 3. 2 General issues In the increasingly difficult environment in which the Commission has had to provide humanitarian assistance in recent years, a number of general issues have emerged which were highlighted by events in 1995 and which will be discussed in this section. In the following sections, country-by-country accounts outline briefly the specific operations in which the Commission was involved and the backdrop against which they took place. (i) Humanitarian aid in relation to crisis resolution It is evident that humanitarian assistance does not have the means to address the root causes of conflicts, and cannot be a substitute for other measures to resolve them. On the other hand, it may accompany and provide breathing space for the resolution of conflicts in cases where the necessary political will is present. Such has been the case in Haiti, Angola or even Liberia and parts of Latin America where it has contributed to restoring peace by diminishing the inevitable tensions ensuing from struggles over resources which the crisis has made scarce. While such synergies exist, lines need to be clearly drawn if the impartial, neutral and independent character of humanitarian aid - so essential to its effective and safe delivery - is not to be compromised. (ii) • Linking relief and development The Commission is well aware of the need to ensure a smooth transition from humanitarian assistance to rehabilitation, reconstruction and development measures as soon as possible once the crisis is over - always with an eye to addressing the factors which caused it in the first place. Indeed, even during a crisis every attempt must be made not to undermine but to reinforce local capacity to cope and to recover. In some instances, ECHO has been successful in preparing long-term activities but more has to be done to achieve this aim. In full recognition of the inter-service character of such linkages, in December 1995 the Commission produced a Discussion paper on "Linking Relief, Rehabilitation and Development". The document was the result of a joint exercise by ECHO, DG VIII, DG IA and DG IB. Before the paper was finalized it was further discussed in a workshop, financed by ECHO, with experts drawn from Member States, USAID, UN agencies, NGOs and academic institutions. The final document, which incorporates many of the ideas presented during the workshop, was put to informal meetings both of Member State Directors-General for development and for humanitarian aid as well as to the Development working group in the Council. The document was well received and it was decided to develop it further during the first half of 1996 by, inter alia, including reference to linkage efforts by the Member States before a final document is presented to the Development Council, due in May. (Hi) Crisis prevention Involvement in humanitarian assistance can scarcely fail to evoke a strong sense of the need for more efficient measures to address crises in the making. Not only is this a moral imperative: it also makes far more financial sense. However, existing provisions have yet to prove their worth, and it seems clear that a qualitative leap forward is required. Crisis prevention has both developmental and diplomatic dimensions - as well as, no doubt, a military one on occasions. If it is true that these are not issues for humanitarian assistance in the strict sense, they can often benefit from a humanitarian stimulus to their discussion. The humanitarian services of the Commission have often been called upon, in many different European and international fora, to contribute to discussions of "lessons learned" from various field operations. (iv) Development of global humanitarian plans to address major crises Major crises call for global plans, be it in terms of types of aid or geographical strategies and priorities. The Commission has continued to develop such plans in 1995, within which all the operations it finances are integrated. The added coherence and synergy thus generated have enabled the impact of operations to be maximised while avoiding overlaps or gaps in the coverage of humanitarian needs. Such global plans relate to a fixed amount of funding, providing for rational use of available funds. The perspective necessary to develop such plans is not always present in crisis situations, however. Apart from the Great Lakes region and former Yugoslavia, such plans were developed in Cuba, Haiti, the southern Caucasus and Iraq; on the other hand, the unstable situations their development. in Sierra Leone, Afghanistan and Somalia, for example, prevented (v) "Forgotten" crises The Commission is present in a number of "forgotten" crises - such as those in Afghanistan, southern Sudan, Liberia or Sierra Leone, in all of which it is the premier donor of humanitarian aid. This fact should not allow other donors to evade their responsibilities, and the Commission therefore intends to continue working to draw attention to these tragedies, often as terrible as others relayed more directly to our living rooms. "Forgotten" crises may also be of a sectoral nature, such as the diphtheria epidemic throughout the former Soviet Union and the ongoing effects on health of the Chernobyl disaster. (vi) Obstacles set in the way of humanitarian assistance While ECHO'S partners are ever more solicited by the demands the humanitarian situation places on them, their work is severely handicapped in many parts of the world by flagrant and unacceptable violations of international humanitarian law. In internal conflicts under conditions often approaching anarchy, civilians have far too often become the target of atrocities explicitly orchestrated by the belligerent parties. The inevitable consequence of such disregard for the principle of humanity is a similar lack of respect for humanitarian assistance. In a disturbingly long list of countries, humanitarian operations have been compromised, threatened and attacked: restrictions on access to victims, deviation of aid, theft, kidnapping and physical attacks on aid workers, sometimes even assassinations, have occurred. Local authorities may see aid entering or passing through the territories under their control as a legitimate tool to gain tactical advantage in conflict situations. In any case, security measures regularly hinder or entirely prevent the deliver}' of aid. The Commission has paid more attention than ever to avoiding that its aid "feed" the war or fall victim to it. At the same time, it is evident that humanitarianism - based as it is on a minimum of civilised values - needs to be emphatically reaffirmed. 3. 3 Former Yugoslavia Following initial optimism at the end of 1994 and a static though tense situation during the first months of the year, former Yugoslavia was characterised in 1995 by extremely dramatic and contrasting developments. Throughout the conflict, the European Union has been the main donor of humanitarian relief assistance and in 1995 the Commission granted ECU 234 million in aid to the victims, taking the total figure for 1992-95 to ECU 1 185 million. More detailed statistics are provided in Annex S6. The failure of the warring parties to extend the Cessation of Hostilities Agreement upon its expiry in April 1995 was followed by an alarming deterioration of the overall situation in Bosnia-Herzegovina. Fighting escalated and humanitarian operations as a whole faced increased levels of obstruction. The Commission committed ECU 94 million in humanitarian aid in May. In July and August tens of thousands of civilians were uprooted as a result of the fall of the Srebrenica and Zepa enclaves and more fighting in both central and north-western Bosnia; to which the Commission responded with a further grant of ECU 5 million to reinforce the assistance provided. The Croatian army offensive on former Sectors West (May 1995), North and South (August 1995) triggered the massive movement of 200 000 refugees into northern Bosnia, most of whom subsequently proceeded into Serbia and Montenegro. More fighting in north-western Bosnia in September and early October sparked off further movements of population, as approximately 100 000 persons fled towards Banja Luka, making it necessary to commit a further ECU 15 million in relief assistance. 10 In the first weeks of August approximately 25 000 refugees from Velika Kladusa (Northern Bihac) fled to Croatia to seek refuge and were stopped in Kupljensko. They subsequently endured inhumane living conditions on account of harassment by the Croatian police, who were obstructing the delivery of vital supplies to the camp, as well as the unsuitable site of the camp itself. The Commission granted ECU 4. 6 million for the refugees in the Kupljensko camp in September. The fighting in Bosnia-Herzegovina resulted not only in ever larger groups of population being moved and displaced, but also led to such movements occurring in increasingly distressing conditions, with mental and physical injuries being inflicted, in a climate of flagrant disregard for human rights. Vulnerable groups - the elderly, the disabled and children - were resettled in destroyed "newly liberated" cities taken during recent offensives and/or on the front line. Thousands of displaced or expelled civilians, isolated, lacked the most essential utilities and relief supplies. The practice of ethnic cleansing continued unabated. Brutal evictions of minorities from the Banja Luka region in northern Bosnia intensified from August onwards. From October on, substantial progress was nonetheless made in the search for a solution to the conflict. The upholding of the cease-fire agreement since mid-October, coupled with the restoration of utilities and access to Sarajevo, as well as the opening of land access to the enclave of Gorazde, led to optimism regarding the prospects of finally reducing the scope of the humanitarian tragedy. In November, the Commission decided to provide an additional ECU 110 million in relief assistance to cover the winter needs of the 3. 6 million beneficiaries of humanitarian aid in the region. The signing of the peace agreement on 14 December in Paris gives grounds for hope that the humanitarian situation in Bosnia-Herzegovina will gradually improve. By the end of the year, the encouraging political and military developments had already had a positive impact. The end of the year was characterised both by greater access to humanitarian aid for victims and the prospect of greater freedom of movement for civilians and goods, together with the dismantling of internal checkpoints by the end of December. 3. 4 Africa, Caribbean and Pacific Countries In 1995 the Commission spent ECU 212 million on humanitarian aid for refugees, displaced persons, returnees and the most vulnerable groups of population in ACP countries. 3. 4. 1 The region of the Great Lakes The situation in the region of the Great Lakes (Rwanda, Burundi, Tanzania, Zaire and Uganda) hardly improved in 1995 and was characterized by instability due to three factors: the presence of 1. 7 million Rwandan refugees and over 200,000 Burundian refugees, which represent a heavy burden for the host countries and for the international community; the frequent incursions and acts of sabotage in western Rwanda perpetrated by armed Hutu bands 11 based in Zaire, and the increasingly confrontational stance of the Hutu and Tutsi ethnic populations. Faced with such large numbers of refugees, the regional approach developed by the Commission since the onset of the crisis in Rwanda in April 1994 was confirmed. In order to maximise coordination, speed and efficiency, the novel step was taken of designating UNHCR as lead agency, granting it ECU 118 million from April 1994 to date for humanitarian operations in favour of the refugees and returnees in the region, to finance both the operations of UNHCR itself and those- of a number of NGOs. At the same time a joint ECHO/UNHCR Task Force was set up in order to organize practical initiatives to encourage the return of refugees to their country of origin. Thus, information programmes were launched for refugees, and justice and confidence-building measures were also supported. A further ECU 42. 25 million for UNHCR to use in the region was granted by the Commission in November 1995. Within Rwanda, the Commission continued to support twenty or so NGOs working in the health field, providing care for unaccompanied children, support to vulnerable groups and basic rehabilitation. Through these activities, it proved possible to reopen health centres, pharmacies and hospitals throughout the country so as to ensure adequate health cover for the population. Supply of medical and sanitary products was mainly carried out by ECHO'S partners. This assistance culminated in the reopening and reorganisation of the Rwandan Pharmaceutical Office (OPHAR). In addition, more than two hundred schools were restored and re-equipped making it possible to resume school education. Beyond supporting nutritional programmes for children and pregnant and nursing mothers, the Commission lent its support to the work of care centres for unaccompanied children as well as to the ICRC tracing programme aimed at reuniting families. In all its operations the Commission was careful to respect local salary levels and administrative requirements such as the need for NGOs to be registered with the government, and encouraged its partners to think in terms of the transfer of their activities to development organisations or local authorities by including training elements and making use of local staff. Some such programmes were indeed successfully transferred in this way in 1995. Lastly, the Commission supported the restoration of the judicial system as. well as other confidence-building measures within the country. In Burundi the situation within the country worsened considerably during 1995. At the beginning of the year the Commission launched a global plan of assistance to displaced and dispersed persons to encourage them to return to the villages by re-establishing acceptable living conditions there. By funding ten or so NGOs, medical, nutritional and sanitary assistance was provided, "as well as support for some small-scale housing and water supply rehabilitation programmes. Despite the caliber of the partners chosen to carry out these programmes, their activities were hindered by serious security problems, daily outbreaks of renewed violence, lack of protection for their staff and difficulties in reaching affected populations. Humanitarian work in Burundi became and remains very difficult. 12 Tliroughout the Great Lakes region the Commission has provided constant support for the international organisations and NGOs carrying out assistance programmes addressing the needs of the stricken populations. A specialist team based in the region regularly evaluated needs and monitored operations. A statistical overview of operations carried out in response to the Rwanda/Burundi crisis is provided in Annex S5. 3. 4. 2 Angola In Angola the end of the civil war signalled by the signature of the peace agreement at Lusaka in November 1994 meant only a small reduction in the level of humanitarian assistance, from ECU 24 million in 1994 to ECU 17 million in 1995. Access to whole regions which had been inaccessible due to the war was restored. Funding was therefore channelled to these regions as a priority, and to the health sector in general. The peace process and the country's economic reconstruction cannot be expected to be anything but slow and fragile after twenty years of civil war. Mine clearance and the demobilisation of troops are specific obstacles to economic recovery. To meet the still pressing needs of the most vulnerable groups and to support and encourage the peace process, the Commission funded the programmes of twenty NGOs in 1995, covering all the accessible. areas. Support for mine clearance is also provided to NGOs within the limited framework of their operational contracts, and significant assistance has been provided to war wounded. 3. 4. 3 Sudan The civil war in Sudan which opposes the predominantly Islamic Government in the North and the animist/Christian South started in 1983. In addition, there is open warfare between factions in the South, whose loyalties are often divided along tribal lines. In spite of the official four-month cease-fire declared in April 1995, fighting actually intensified with disastrous consequences from the humanitarian standpoint as politics took priority over humanitarian concerns for all warring parties. NGOs were forced to evacuate sites for extended periods; compounds were looted; staff threatened and some even taken hostage. This situation culminated in a 13-day total flight ban in November-December on all humanitarian flights into South Sudan instigated by GOS while the SPLA gained ground around. Tuba. It is estimated that there are 4. 25 million war-affected persons in Sudan, of which 3. 6 million in South Sudan, 350 000 in the Transitional Zone and 300 000 in camps around Khartoum (out of a total of 1. 2 million forced from their homes and living around Khartoum). A further 200 000 Sudanese are refugees in transit and settlement camps in northern Uganda. In 1995 the Commission granted over ECU 20 million to humanitarian programmes in Sudan and to assist refugees in Uganda. Needless to say, it targeted its assistance in such a way as to avoid "feeding the war" while ensuring effective implementation of aid programmes. Programmes in the North have focused on essential needs for the displaced around Khartoum, while in the South they have focused on three elements: household food security (fishing programmes, seed-barter shops, veterinary programmes, etc. ) in order to counter food-aid dependency and food-aid diversion while creating a minimum of sustainability; primary health care coverage using low-value commodities; and basic relief (shelter, domestic items, water and sanitation, nutritional programmes, etc. ) especially for the large number of displaced persons. 3. 4. 4 Somalia March 1995 saw the final withdrawal of UN peacekeeping forces from Somalia, and with that the withdrawal of a large number of humanitarian organisations. Though the predicted intensification of the conflict did not occur, low-level fighting continued throughout the country, encouraged by massive unemployment, the removal of the dollar economy and increasingly limited access to food. Where the situation has stabilized, however, rehabilitation programmes have begun. In such areas a number of ECHO-funded programmes were taken over by DG VIII. can other regions, the In Commission has continued to limit funding for Somalia to e s s e n t i al h u m a n i t a r i an programmes where effective implementation be g u a r a n t e e d. T h e se programmes have focused on primary and specialist health care, supplementary feeding, water and sanitation, and food security. Partners have been careful to target only the most vulnerable groups and to use operating procedures which limit exposure to risk and the need for protection to the minimum. Nevertheless, and threats, kidnappings forced evacuations repeated have in November a staff member of Caritas was assassinated. continued, and The Commission continued to provide considerable support to efforts to control cholera and measles epidemics and funds to assist the victims of the the armed conflict North West of the country. in ECHO-FLIGHT 1995 saw the continuation of the ECHO-Flight service to the Horn of Africa which was set up in May 1994 in order to fly essential cargo and passengers into areas where no other access is possible. The service is primarily at the disposal of NGOs working in humanitarian operations and is free of charge to them. There are eight aircraft currently involved in the operation, based in Nairobi. Entebbe, Djibouti, Mandera and Lokichoggio. and serving humanitarian operations in Somalia, Kenya, southern Sudan and Uganda. Although security conditions forced the suspension of flights to various destinations on a number of occasions during 1995. notably in Sudan, on other occasions ECHO-Flight proved to be an invaluable asset in carrying out emergency evacuations. As part of the ECHO-Flight network, the Commission also supported a Hercules C-130 from the Belgian Air Force, which, based in Lokichoggio, air-dropped essential food aid into South Sudan as well as transporting seeds, tools, logistical equipment and so on, mostly into Sudan but also, when necessary, into Somalia. In July 1995 the Sudanese Government banned the BAF C-130 and, even after considerable pressure, this decision was not reversed. As the year came to a close, there was no heavy lift capacity in Lokichoggio, hampering the humanitarian operation and, as the hunger gap approached early in the new year, this situation risked threatening the effective implementation of aid. From May 1994 to the end of 1995, ECHO-Flight transported over 50 000 passengers, airfreighted over 13 000 million tonnes and flew over 15 500 hours. In 1995 ECU 16 million went to fund ECHO-Flight operations, including the C-130. 14 3. 4. 5 Liberia In Liberia, despite the peace agreement concluded between the various warring factions in August, the overall political situation remained highly volatile. Nevertheless the peace accords permitted access to several regions which had been isolated for the last two or three years, enabling the Commission to fund the programmes of ten or so NGOs to provide medical care, food aid and dietary supplements, and sanitation. In addition, the Commission funded a number of small-scale schemes to control cholera outbreaks and two major immunization programmes to control a yellow fever epidemic in Buchanan and Monrovia. Besides initiatives in Liberia, the Commission provided support for a number of programmes to assist Liberian refugees (about 1 million) mainly settled in Guinea and Côte d'Ivoire. 3. 4. 6 Sierra Leone In Sierra Leone relief efforts continued to be hindered by the climate of violence which prevails in the country as a result of the civil war. Numerous international organizations responded to the situation by repatriating their staff and keeping their aid programmes just ticking over. In such difficult circumstances, the Commission funded "strategic" programmes (in carefully targeted areas and sectors) so as to prevent further deterioration in the living conditions of both the displaced groups of population and those living in large towns who depend heavily on international assistance. 3. 4. 7 Haiti Following the return to power of President Aristide in Haiti, the European Union expressed its desire to play an active role in the reconstruction of the country. An ambitious programme worth ECU 23 million for 1994/5 was immediately approved. It included over twenty projects spanning health care, food and water supply and water purification. 3. 5 Commonwealth of Independent States As was feared at the end of 1994, events in the Northern Caucasus region of the Russian Federation provoked a major humanitarian crisis in Chechnya and other surrounding Autonomous Republics. After an initial response of ECU 310 000 at the end of 1994, aid granted during 1995 to this region totalled ECU 26 million. A careful choice of partners, limited to those who could already demonstrate an ability to bring the necessary relief into the area and to distribute it fairly among all the needy groups of population, ensured the success of the programme, the emphasis of which shifted as the population moved and, in most cases, returned to their areas of origin. What began as assistance in the form of food, medicines and basic shelter for up to one million affected people, developed into a carefully targeted programme of medical supplies for the entire population, food for vulnerable groups and the restoration of shelter, sanitation and water supplies. 15 The sums allocated to the Northern Caucasus meant less aid elsewhere in the CIS, but the Southern Caucasus - Armenia, Azerbaijan and Georgia - continued to benefit from a high level of support, receiving aid totalling over ECU 80 million as compared to ECU 55 million in 1994. Distribution was made marginally easier by the continued, if uneasy, peace within and between the three countries, but the basic humanitarian problems remained as daunting as ever. In addition to normal humanitarian aid (food, medicine, relief items and shelter), the problem of energy supplies was tackled, with heavy fuel and gas supplied to Armenia and Georgia and specially targeted supplies to vulnerable groups and social centres in all three countries. The three Southern Caucasus countries were once more the recipients of a special food aid programme, as did Kyrgyzstan and Tajikistan, although special assistance was no longer required for Moldova. This programme totalled ECU 197 million, as against ECU 204 million in 1994, with ECHO participation at the same level in both years at ECU 35 million. Kyrgyzstan and Tajikistan both received extra humanitarian assistance from the Commission, largely medical. Unfortunately, other claims left no room to continue aid to Belarus and Ukraine, although these countries did continue to benefit from two multi-country programmes covering the CIS. The multi-country programmes continued to address the aftermath of the Chernobyl disaster, affecting Belarus, the Russian Federation and Ukraine, and to fund a large scale immunization campaign. Aid in the wake of Chernobyl consisted mainly in continued support for ongoing activities providing consumables for equipment already delivered, ongoing monitoring programmes and the supply of additional specialist equipment. In 1995 the focus of the 1994 immunization programme against common childhood illnesses shifted to the fight against diphtheria, some 200 000 cases of which were recorded in 1994, and was threatening to extend westwards into the European Union. Again a global programme was drawn up by UNICEF, IFRC and WHO with responsibility for activities in specific countries allocated to the first two organisations. The Commission has undertaken to continue playing a prominent role in what should be a three year campaign to control and eradicate this and other epidemics. 3. 6 Eastern Europe Leaving aside former Yugoslavia, humanitarian assistance in Eastern Europe was limited to providing ECU 1. 2 million for Albania, supplementing other Commission-funded aid; including the three Baltic States in the overall campaign against diphtheria; and providing ECU 0. 5 million for Romania to deliver food and medical aid to hospitals and other institutions. 16 3. 7 Asia If the man-made humanitarian crises in Afghanistan and Iraq continued to dominate the Commission's humanitarian activities in Asia, 1995 was also a year of natural disasters in the continent, particularly floods. In Afghanistan, the Commission continued to provide assistance to refugees and internally displaced populations, dovetailing with its other activities. Outbreaks of fighting in various parts of the country continued to make the delivery of humanitarian aid a complex and dangerous task. As in 1994, the emphasis was on providing medical and sanitation assistance with a view to ensuring minimum levels of health care and preventing the worst epidemics. Assistance provided by ECHO in 1995 stood at similar levels as in 1994 (around ECU 12. 5 million). In Iraq, the Commission continued to be among the largest providers of assistance with ECU 24. 9 million - a slightly higher total than in 1994. However, emphasis in the programme for the country shifted as it became ever clearer that humanitarian needs in the areas under central government control are rapidly equalling those of both the North and the In the North, food aid for targeted groups remained essential and Southern marshes. rehabilitation of social, medical and water facilities was undertaken, together with a continued programme aimed at restoring local agricultural production in close collaboration with the ODA. Such is the number of mines laid in the area, running into several millions, that mine clearance programmes could be continued virtually forever, and support has continued for the provision of artificial limbs for a still large number of victims. The current mine clearance programme is being undertaken jointly with the UK. Food and medical assistance continued to be given to Iraqi refugees in Iran who fled the southern marshes region and assistance was further expanded in areas under central government control, but again under strictly monitored conditions. From over 90% of aid disbursed in the North some two years previously, only ECU 17. 3 million — slightly under 70% of the total — was allocated to that region in 1995. Natural disasters called for assistance to Cambodia, Indonesia, Laos and Pakistan, and twice to Bangladesh and the Philippines. Refugees from Bhutan, Myanmar and Tibet received assistance administered in Nepal, Thailand and India. For the first time, responding to appeals from a number of partners, emergency aid was provided to North Korea following exceptional floods in many provinces. The fighting in Sri Lanka, which had already necessitated assistance in 1994, was the subject of two Commission decisions in mid 1995. However, violence broke out again later in the year requiring an additional decision to assist those forced to flee the northern city of Jaffna. At the end of the year the threat of a major man-made humanitarian disaster in the northern part of the island could not be ruled out. 17 3. 8 Middle East and North Africa The Commission continued to provide humanitarian assistance under its overall programme for the Autonomous and Occupied Palestinian Territories with a 1995 contribution of ECU 5. 3 million. Aid went to supplying urgently needed equipment and training in private and public hospitals inherited by the Palestinian authorities, and followed on from similar initiatives in 1994. Palestinian refugees in camps in Lebanon received medical aid worth ECU 1. 3 million, while the displaced and most vulnerable Lebanese populations received ECU 0. 6 million in food aid. In North Africa, in response to the exacerbation of civil strife in Algeria, humanitarian support in the form of food aid for the Sahrawi refugees was stepped up, to a total of ECU 4. 5 million. Medical and tune of ECU 0. 5 million. logistical aid was also supplied the to The Commission also provided assistance following an earthquake in Turkey, and, together with other donors, made a small contribution to Yemen towards an immunization campaign and to assist with the aftermath of civil war. Note that operations in Lebanon and for the Sahrawi refugees were preceded by specific needs-evaluation missions undertaken with Commission funding, and by consultation with the EU Member States directly interested in helping these populations. 3. 9 Latin America While the principal recipient of humanitarian aid in this region continued to be Cuba, there was nevertheless an overall increase in ECHO activities both in the aftermath of earlier civil wars and in response to natural disasters in Central America. In view of the worsening crisis affecting the health system and the provision of basic health services to the population, aid to Cuba was slightly higher in 1995 than in 1994, reaching a total of ECU 15 million, and provided essential medical and sanitary supplies, food for hospitals and purification products to avoid epidemics. The programme is being carried out by a number of European NGOs with full responsibility for the proper implementation of the programme down to beneficiary level. The aftermath of conflicts, and in particular the weakening of the health system, necessitated aid for Mexico and Nicaragua, while conflict between Ecuador and Peru affected the population of both countries. It should be noted that medical assistance provided through NGOs to the civilian population affected by the uprising in Mexico contributed to stabilizing the situation, which was seen as a precondition to successful peace negotiations. In Guatemala the Commission funded a general aid programme for returnees and internally displaced persons, closely coordinated with its other development activities. Natural disasters required assistance to Bolivia, which suffered from both drought and floods; and to Colombia and El Salvador. 4 4. 1 Horizontal Activities Information and Visibility Humanitarian aid is one of the success stories of the EU in the past three years, in terms of both its magnitude and the diversity of theatres of operation. It is therefore natural that the Commission should want to emulate its partners in providing information and publicizing its activities on behalf of the Union both in the Member States and in recipient countries. Indeed, the impact of humanitarian activities often depends on how visible they are. No doubt, visibility is primarily the result of immediate response in an emergency, using effective NGOs or international relief agencies as partners. But it is equally true that raising awareness of a crisis and informing the public on the way available resources are managed are also essential elements in humanitarian assistance. The Commission spends a very small proportion of its budget on visibility compared with the organisations it finances. The latter have a further advantage in that, as operators in the field, they naturally often get all the credit for an operation. In 1995, only approximately ECU 1. 5 million was spent on visibility measures, whence the need for the Commission to work closely with its partners to obtain a profile commensurate with its contribution. The strategy pursued has four main components: the media, publications and audio-visuals, joint activities together with NGOs and international organisations, and joint activities with Member States. To target the media, this year again a press release was issued for every allocation of aid: over 150 went out during the year. Material also started to be regularly made available on INTERNET (see section 2. 2). Thirdly, facility visits for journalists to theatres of operation were organised. This resulted in good coverage both in the press and on television. Some such visits were arranged on the initiative of NGOs and UN agencies. The media operation is backed up by a number of publications and audio-visuals. Publications currently comprise: (a) This 'Annual Report', distributed widely inside and outside the EU; (b) (c) 'ECHO News' - a quarterly newsletter in French and English, mainly aimed at a more limited audience within the European Union; 'ECHO Files' - comprehensive background briefings on particular humanitarian crises, eg. Rwanda, Somalia, Haiti; (d) An 'ECHO Calendar'; (e) Various brochures explaining how the Commission operates through ECHO and describing some of its major operations, for example in former Yugoslavia. 19 The audio-visual aspect relies on videos explaining the role of ECHO and giving the profile of the organisations and aid workers it finances, plus television news clips and a documentary. The Framework Partnership Agreement with NGOs and International Organisations (see section 2. 1) requires them to give visibility to the EU as the donor. This is done largely through stickers and other ECHO distinctives being affixed to the material that is distributed in the field, and is now by and large standard practice. However, the concept of visibility should go beyond mere stickers. In the past two years ECHO has been encouraging its partners to include it in their media projection just as ECHO does in its own. During the past year many NGOs have given extensive coverage to ECHO- fmanced operations in their own publications, which have a circulation that runs into tens of thousands. ECHO has now published brochures for general distribution jointly with the French and Spanish NGOs. Similar publications with the German and Italian NGOs are planned for next year. the French presidency, while To promote cooperation with the Member States, in view of the success of the Humanitarian Day in Berlin during the German presidency in 1994, this was repeated in Paris the Spanish presidency, a during "Humanitarian Summit" was organised (see next section). In both instances this was done in close collaboration with national authorities and NGOs. In Paris it included a two-day "green line" phone-in operation and a two-week exhibition at the Arche de la Défense. in Madrid, during 4. 2 "Humanitarian Summit" in Madrid On the initiative of Commissioner Emma Bonino, a meeting was arranged in Madrid on 14 December, with the purpose of highlighting issues of humanitarian concern common to donors and humanitarian agencies alike. The meeting brought together - for the first time ever - the EU and US, together with UNHCR, UNICEF, WFP and DHA, the Red Cross, and representatives of Médecins sans frontières and of EU and US NGOs. The event, which all participants rated a success, culminated in the adoption of an action-oriented paper setting out a new humanitarian agenda, termed the "Madrid Declaration". The Declaration, which draws attention to the limits of humanitarian aid and the need to address the root causes of crises promptly and effectively, is attached as Annex 1. Although unable to be present personally, Mrs Hillary Clinton, the wife of the US President, underlined her support for the event through a video which was shown at the meeting. The prominence of the event was also enhanced by a message of support from Pope John-Paul II, and by the active patronage of Queen Sofia and the interest taken by Prime Minister Felipe Gonzalez of Spain in his capacity as President of the European Council. 20 4. 3 Coordination/cooperation 4. 3. 1 Inter-service coordination The value of individual humanitarian operations is not only determined by their intrinsic qualities but also by the place they occupy within a global analytical framework covering all the political, humanitarian and developmental aspects of a given crisis. This being so, the Commission is careful to coordinate its humanitarian activities closely with those it undertakes in other fields. Such coordination covers all stages from design to implementation. In view of the need to further expand the conceptual basis, however, the debate on how to link relief and development (see section 3. 2) took a broader look at some of the issues. 4. 3. 1. 1 Refugees, internally displaced persons and returnees As mentioned in the Annual Report for 1994, ECHO has been at the forefront of efforts to set up a permanent inter-service group (PISG) on refugees, internally displaced persons and returnees in third countries, as a forum to coordinate the Commission's policy in respect of these groups of people. The group is also responsible for preparing the Commission's position in high-level discussions with UNHCR (see below, section 4. 3. 5. 1). In 1995 the working of this group was consolidated. The inter-service clearance procedure has proven to work well both as a stimulus to internal coordination and on the rare occasions when, for one reason or another, a proposal had to be revised. The PISG has its own internal database which records all programmes related to refugees carried out by this or that department, and supports the production of a wide range of statistics. The database has logged all Commission activity since 1st January 1995. The first statistical report will be available early in 1996, and will be updated regularly. 4. 3. 1. 2 Other inter-service groups In order to increase the impact of the ECHO disaster-preparedness programme, and to avoid any risk of duplication between Commission departments, an Inter-Service Group for Disaster Preparedness was created. This met on average once every two months to discuss relevant issues and opportunities for further programme development. ECHO also participates in the permanent inter-service groups on Human Rights chaired by DG 1 A, and on immigration and asylum chaired by the Secretariat General. In the Human Rights context, it was involved in the preparation of the Commission's communication to the Council and Parliament on the external aspects of human rights policy. 4. 3. 1. 3 External relations coordination With a new Commission taking office as of January 1995, the Commission's external relations departments were reorganized, both at Commissioner and at departmental level. The four Directorates-General geographically responsible for external relations (DGs I, IA, IB and 21 VIII), together with ECHO and with the Directorate-General for Economic and Financial Affairs (DG II) now meet regularly within coordination structures known as "Relex" coordination. This consultation mirrors the Relex group of Commissioners which also meets regularly to discuss issues of common concern. 4. 3. 2 Member States Discussions with Member States during 1995 focused heavily on the Commission's draft proposal for a Council Regulation on humanitarian aid, as discussed above (see section 1. 1). In addition to this, working relations with the Member States were maintained informally in crisis situations on the ground and in consultations in various international fora, particularly within the United Nations system, where the world's donor community discussed aid programmes. More specifically within the Union's own institutional framework, the regular Quarterly Meetings, which bring together Member State Directors of humanitarian aid and the Commission, continued their useful function as a discussion forum. Particularly exemplary in this respect was the meeting in early November which examined in detail the Commission's pending decisions for new humanitarian aid packages for former Yugoslavia and the region of the Great Lakes in East Africa. An initial discussion paper on linking relief, rehabilitation and development was also examined at this meeting (see section 3. 2). Bilateral contacts and cooperation with individual Member States were pursued in various forms and fora both officially and on a more informal basis, making an important contribution to constructive dialogue. It is worth mentioning that clear support for ECHO'S operations was expressed by the Members States at the meeting of April 1995. On that occasion, most countries argued against cuts in humanitarian aid despite current budgetary constraints. They also called for greater Commission involvement in rehabilitation programmes and for a gradual switch from straightforward humanitarian aid to "sustainable programmes". The enlargement of the Union on 1st January 1995 to include Austria. Finland and Sweden brought with it an unarguable enrichment of the context in which ECHO carries out its work. As neutral countries with a long tradition of humanitarian concern, they have taken a keen interest in ECHO'S work from the outset. 4. 3. 3 European Parliament 1995 was a year of intense parliamentary activity on themes directly or indirectly related to humanitarian aid. The discussions on the proposal for a Council Regulation on humanitarian aid have already been mentioned (see section 1. 1). It is in this context and on the occasion of one of its ordinary meetings that the parliamentary Committee on Development convened a meeting on 17 October bringing together Ms Bonino, the Community's partners involved in humanitarian 22 work (NGOs and international agencies) and representatives of the Member States. The meeting indicated that the proposal as put forward by the Commission enjoyed the support of both the parliamentary commission and the Community's partners. In addition, the committee monitored closely developments in the countries concerned and in their relief needs. In particular, the situation in the region of the Great Lakes in East Africa featured regularly on its agenda. The Committee on Foreign Affairs focused its attention on former Yugoslavia and the war in Chechnya. Besides ordinary parliamentary work, written and oral questions, resolutions, initiatives and reports, a number of significant events were organized within Parliament, namely the public hearings on anti-personnel mines on 21 and 22 March; on "50 years of United Nations: the humanitarian challenge" on 22 and 23 May and on "Evaluation, impact and perspectives of the human rights clause" on 20 and 21 November. The hearings have been a constant reminder of the keen interest shown by the European Parliament in all aspects of humanitarian work, cooperation and development, and observance of human rights. Meanwhile the European Forum for Active Conflict Prevention (FEPAC) continued to meet once a month in Strasburg to discuss topical matters in the presence of prominent personalities directly involved in its work. The forum enables views to be exchanged in a lively atmosphere and bears witness to the fact that however difficult dialogue might be, it is never impossible. Under the auspices of the ACP-EU Joint Assembly, a Refugee Working Group was established in 1994 (rapporteur the Hon. Mr. Vecchi, MEP). At the first meeting it was agreed that ECHO should attend future sessions, two of which were held in 1995. ECHO has taken an active part in discussions within this forum, which has shown a keen interest in the development of the Permanent Inter-service Group for Assistance Towards Refugees, Internally Displaced Persons and Returnees (PISG) (see section 4. 3. 1. 1). 4. 3. 4 Non-Governmental Organisations During 1995, about half of humanitarian aid funds administeried by ECHO were committed for operations carried out by non-governmental organisations (NGOs). This represents an increase even on the figures for preceding years, and underlines yet again the Commission's commitment to the partnership principle for its humanitarian operations and in particular the prominent role of NGOs in that partnership: they were involved in virtually every one of the almost sixty countries in which humanitarian assistance was funded. ECHO has continued throughout the year to seek opportunities for. and devote time to, dialogue with various groupings of partner NGOs in a number of Member States. This has been a valuable investment in that it has allowed all parties to keep up to date with trends in humanitarian affairs and to tackle problems, clear up any misunderstandings and familiarise each other with the constraints under which each has to work. 23 While giving scope for joint review of policy issues pertinent to humanitarian work, these organised contacts proved particularly fruitful as a way of looking at the many practical issues involved in managing humanitarian operations. As time goes by, it is clear too that increasingly close working relationships are developing between NGOs and ECHO desk officers and field correspondents. 4. 3. 5 United Nations Where humanitarian assistance is concerned, the Commission's stake in the UN system remained very important in 1995, although figures were down compared to the previous year. Of the total of ECU 494 million committed by the end of the year, 17% was channelled through UN agencies (as compared to a final figure of 32% in 1994). This figure breaks down as follows: UNHCR WFP UNICEF DHA UNRWA Others ECU 46. 9 million ECU 29. 2 million ECU 4. 7 million ECU 0. 55 million ECU 0. 14 million ECU 1. 45 million 9. 5% 5. 9% 0. 9% 0. 1% 0. 0% 0. 3% ECHO also contributed to the publication of a brochure on relations between the European Union and the United Nations to mark the latter's 50th anniversary. 4. 3. 5. 1 Office of the High Commissioner for refugees (UNHCR) UNHCR is by far the Commission's most important single operational partner in delivering humanitarian assistance, and the converse is also true (in 1994, the Commission financed an estimated 22% of UNHCR"s budget, of which the lion's share came from ECHO). Indeed, support to UNHCR in 1995 went beyond simple financing of operations to encompass wide-ranging policy discussions and coordination initiatives, exemplified by the case of Rwanda/Burundi (see section ?). This symbiotic relationship has found expression in the establishment of a high-level group which met for the second time in May 1995. All relevant Commission and UNHCR departments take part in this structured dialogue, which is chaired by ECHO. Not limited to this context, constant dialogue and policy discussions with UNHCR at all levels and in various fora led to the development of targeted strategies and a good deal of convergence in the analysis of needs and priorities. In summary, as far as the operations funded by the Commission are concerned, UNHCR has proven to be an efficient implementing agency and relations between the two are good, to such an extent that it could be said that their relationship has been and is a major contributory factor to a more efficient international humanitarian relief effort. 24 4. 3. 5. 2 DHA (Department of Humanitarian Affairs) The Commission has continued to follow with interest DHA's efforts to become an effective coordinating instrument within the overall UN humanitarian system. Some recent discussions in the revitalised Inter-Agency Steering Committee hold out the hope of specific progress with respect to issues such as internally displaced persons and the use of military and civil defence assets in humanitarian operations (MCDA). Relations with DHA have been good, concentrating specifically on the MCDA project and discussions over the development of the ReliefWeb concept. Work has also proceeded on the IDNDR project supported in 1994 (see section 4. 5). Training and standing procedures for air operations were supported under the MCDA project in 1995, followed by additional support, agreed upon towards the end of the year, for the development of a register of assets. ECHO has participated in and closely monitored work in the MCDA steering committee. Another area of cooperation with DHA has been in the context of the so-called Escrow account, a facility set up by the US government which enables DHA to carry out humanitarian assistance operations in Iraq by providing it with counterpart funds released from frozen Iraqi assets, equivalent to the pledges of other donors. 4. 3. 5. 3 World Food Programme (WFP) In 1995, WFP was once again a very important operational partner in delivering the Commission's humanitarian assistance. The operational problems highlighted in 1994, however, have not been solved. Specific failings have been highlighted in external evaluations commissioned by ECHO, notably in Tajikistan. WFP"s structure has been slow in adapting itself to the requirements of handling emergency aid. a fact which has been observed also by many other donors and by WFP's own external audits. On the other hand, the organization has considerable strengths when it comes to delivering large-scale food aid, e. g. in Rwanda/Burundi. WFP signed a Framework Partnership Agreement with the Commission in May 1995, and high-level contacts were pursued throughout the year with a view to ironing out some of the operational difficulties, not without some progress. 4. 3. 5. 4 United Nations Children 's Fund (Unicef A smaller but still significant partner. Contacts with Unicef were also frequent throughout the year. Relations are set to develop following the signing of a Framework Partnership Agreement between the two parties on 29 June 1995. Unicef s Executive Director, Mrs Bellamy, came to Brussels for the occasion, and this provided the opportunity for a fruitful exchange of views between herself and Ms Bonino. 25 4. 3. 6 United States Good relations with the US in the field of humanitarian assistance are a natural priority for the Commission in view of the fact that the EU, its Member States, and the US together accounted for some 86%) of all official humanitarian aid in 1994. Links already established in 1994 were strengthened in 1995. Alongside regular exchanges of information and contacts at working level, dialogue on matters of mutual interest in the humanitarian field was pursued through high-level consultations between the Commission and the Americans. On 24 and 25 May Ms Bonino had very fruitful meetings in Washington with Mrs Clinton, US politicians and high-ranking officials from the State Department and from the Agency for International Development (USAID). A further high level meeting between the Commission and USAID was arranged on 21-22 September in Brussels, in which ECHO took an active part. On this occasion, agreement was reached to cooperate on a number of joint concerns. Partly as a result, humanitarian aid and related issues were also identified as one of the priority areas for closer overall relations between the EU and the US in the context of transatlantic dialogue. This was expressed in the drawing up of a Joint EU-US Action Plan, which was released at the EU-US Summit of 3 December. The Plan covers many specific humanitarian concerns, including peace and reconstruction in former Yugoslavia and the Middle East, preventive diplomacy, development assistance, human rights, democracy, asylum and refugee issues, nuclear safety and health. The Plan also foresees the setting-up of a High- Level Consultative Group on Development Co-operation and Humanitarian Assistance with a wide mandate, including all of the areas identified at the meetings with USAID in September (see Annex 3). To improve the exchange of information, the Commission continues to work together with the US in attempting to set up a global financial tracking system for humanitarian aid. Problems with collecting data from the various US departments responsible for humanitarian aid which would be comparable with Commission statistics mean, however, that the picture is still very incomplete. 4. 3. 7 Other third countries and international and regional organisations 4. 3. 7. 1 Other third countries Following contacts in 1994 when membership of the Union was under consideration, the Commission has maintained a working relationship with aid authorities in Norway, traditionally a country with significant involvement in humanitarian issues. Preliminary contacts were also pursued with Canada during the year and are likely to be intensified in 1996. 26 4. 3. 7. 2 Red Cross An important partner of ECHO's is of course the Red Cross, guardian of the Geneva Conventions of 1949. Close working relationships were was maintained and even intensified in 1995, both with the International Committee (ICRC), the International Federation of Red Cross and Red Crescent Societies (IFRC) and national Red Cross Societies. Regular planning and policy meetings with these two partners have been organized so as to capitalize on their expertise in complex humanitarian situations. During 1995 the Commission contributed ECU 40. 4 million towards ICRC activities to protect prisoners and their basic rights, trace family members and missing persons, and implement numerous medical and first aid programmes, most notably in Rwanda and Burundi. Through its liaison office in Brussels, in 1995 the IFRC was able to reinforce coordination between national Red Cross societies involved in ECHO operations, and remained an important operational partner in its own right. 4. 4 Evaluation The year was marked by growing interest on the part of the Member States and of ECHO'S partners in the evaluation of humanitarian aid operations and its methodology. This coincided with the Commission's resolve to evaluate its activities in all fields under the "Sound and Efficient Management 2000" initiative launched by the new Commission. ECHO has been among the first in responding to the challenge of evaluation, while bearing in mind the very specific nature of its own work. Good progress was made in 1995 both in finalizing an updated methodology which would fit in with ECHO's needs and its own modus operandi as well as those of its partners, and increasing the overall number of evaluations carried out. With the publication of a methodological manual containing practical and systematic guidelines for evaluating humanitarian aid, the first phase is now over. This handbook will not only serve the needs of the Commission, but also those of its partners and indeed of all those involved in humanitarian work. The Commission continued to evaluate operations funded by the EU and implemented by NGOs or UN agencies. Accordingly, operations carried out by 46 NGOs and by 5 UN agencies were evaluated in the course of the year. The evaluations covered all types of programmes and all theatres of operation. Having developed its own evaluation methods, the Commission has acquired sufficient experience to evaluate its own programmes, and in particular those in Southern Caucasus and Iraq. Evaluation has enabled the Commission to obtain first-hand information on the socio economic situation and on the impact of its work in each sector (medical, food aid, etc. ) with a view to improving the targeting of its activities in those regions. For instance, the evaluation of an immunization campaign in Southern Caucasus, Ukraine, Russia and Belarus carried out by different partners has enabled the Commission to identify the pros and cons of the various methods. In addition, in 1995 the Commission for the first 27 time evaluated 12 disaster-preparedness operations in Africa, Latin America and Southern Asia. Besides looking closely at the effectiveness of relief operations, the Commission has carefully monitored the impact of its initiatives, in particular on health indicators, the local market, the environment and on local institutional capacities throughout its evaluation effort, and has considered the need for continued funding of relief operations in the region. Despite the large number of evaluations carried out, it is too early to draw meaningful conclusions at this stage, since humanitarian operations differ widely reflecting as they do the complex and very specific situations in which they are carried out. The Commission sees to it that evaluation results are extensively discussed with its partners. Generally speaking, it could be said that a sound partnership is being built since the role of evaluation is well understood and its findings are an effective way of obtaining better results. 4. 5 Disaster Preparedness ECHO's Disaster Preparedness Programme, begun in 1994, was consolidated in 1995 and received increasing attention from international organizations and NGOs active in both emergency and development programmes. The budget reserved for disaster-preparedness activities in 1995 amounted to ECU 4. 2 million. ECHO started supporting 27 Preparedness and Prevention projects in Africa, Asia, Latin America and the NIS in 1995, and continued funding 6 projects which were launched in 1994. A list of the projects is attached at Annex 2. In addition to the three key elements of the Programme, namely: the development of human resources, the strengthening of institutional capacities, and the implementation of community-based, low-cost technology projects for preparedness and prevention, projects favoured in the selection process met several'of the following criteria: implementation in countries ranked unfavourably in the Human Development Index; focus on the needs of the most vulnerable groups; complementarity to national development programmes and relief operations: sustainability over the long term, and environmental soundness; community participation/management, strengthening of local capacities, and emphasis on the involvement of women. Besides supporting field operations, ECHO also contributed to the development of international policies and awareness raising on the subject of prevention and preparedness. In this context, a meeting of experts on "The Environmental Impact of Displaced Populations" 28 was organized in Brussels on 23-24 September 1995. Recommendations and technical papers, presented during the workshop, are currently being prepared for publication and dissemination. As stated above (see section 4. 4), by the end of 1995 evaluations of most of the operational projects had been conducted. Most of the evaluations have shown very positive results, despite modest financial support and often a small geographical impact area. Evaluators have praised the projects' cost-efficiency, their being rooted in local resources and their effective potential in preventing or mitigating disaster. The Commission's activities in the field of disaster preparedness take full account of the recommendations of the Yokohama Plan of Action agreed upon in the context of the UN International Decade for Natural Disaster Reduction (IDNDR), in support of which it has played and continues to play an active role. The challenge for the future will be to further consolidate and develop the experience gained in 1995. A'particular challenge in 1996 will be to develop further some specific elements of the Disaster-Preparedness Programme, including the Preparedness Technical Advisory Committee (PREP-TAG) as an expert group to give advice on the Programme, and the regionally-based Focal Centres which will be set up to allow ECHO to implement training programmes directly at a regional level. As part of its mandate to coordinate Commission policies in the field of disaster-preparedness outside the territory of the EU, since March 1995 ECHO has been chairing an ad hoc inter- service group with the aim of addressing off-site nuclear emergency preparedness in Central and Eastern Europe. Following a successful meeting with prospective beneficiary countries in August, a major needs assessment study was commissioned in September. This study,due to be completed by January 1996, has the twin objectives of determining the current state of off-site preparedness in the partner countries and of identifying areas where assistance is needed to bring these arrangements to an adequate level. Following analysis of the results, a coherent multiannual programme aimed at improving local preparedness systems will be developed. Lastly. 1995 saw the further consolidation of the NOHA Diploma launched by ECHO together with DG XXII at the end of 1993 with the aim of upgrading the qualifications of humanitarian staff. Additional information on this can be found in Annex 4. 5 5. 1 Prospects for 1996 and beyond Foreseeable needs in 1996 No crystal ball is necessary to predict that instability, with its heavy toll of human suffering, will continue to haunt several regions of the world in 1996 and beyond. Humanitarian assistance in former Yugoslavia has acquired a dimension never yet known in Europe. The international relief aid on which millions of people have had to depend during 29 more than four years of fighting has become a constant of daily life for the population of this stricken zone. The enormous material and psychological damage inflicted by the conflict means that the population is highly vulnerable and will remain so for a long while. Moving back to normality will necessitate continued external support, with humanitarian assistance remaining high on the agenda in the short term, while needing to be conceived so as to reduce aid dependency and allow reconstruction to take over. The Commission's support for humanitarian agencies, notably the UNHCR as the lead agency for repatriation and resettlement questions, and the ICRC as regards protection, therefore remains crucial. At the same time, aid will need to be evaluated and re-examined on a permanent basis to respond to changing needs. Aware of the importance of the return and resettlement of displaced persons and refugees to the success of the overall peace process, the Commission will be increasing its humanitarian presence on the ground so as to monitor the situation and develop appropriate responses on a permanent basis. The granting of aid will continue to be guided by considerations only of needs, regardless of ethnicity, religion or political persuasion of the recipients. It may be hoped that this even-handed approach will in itself encourage some measure of conciliation between the communities. With the continuing Rwandan refugee crisis and the deterioration of the situation in Burundi, an EU humanitarian presence will remain indispensable in Africa, especially in the region of the Great Lakes, but also in Sudan, Somalia, Liberia and Sierra Leone as well as Angola. Short of any clear signs of stabilisation, humanitarian needs are likely to persist in northern Iraq and in Afghanistan as well as in parts of South-East Asia and of the CIS, especially the Caucasus. In each of these regions, ECHO is unlikely to be able to phase out its intervention in the short term. Building on results to date, the Commission has also identified disaster preparedness and prevention as a special priority for ECHO's work in 1996. Well-chosen activities in this field have proven their effectiveness and value many times over. ECHO will also continue to liaise closely with other Commission departments and relevant outside bodies to ensure that humanitarian concerns are addressed in a timely and effective fashion. This includes contributing to discussions aimed at establishing links between relief and development and making sure that integrated Commission strategies vis-à-vis third countries take sufficiently into account the risk of disasters and the need to act to prevent them, as well as to be ready when disaster does strike. 5. 2 Conclusions and future strategy It is evident that ECHO operates in an environment where speed of response and efficiency are of the essence. Its activities enjoy ever-increasing visibility and widespread support amongst the general public. It has become a leading partner for the major international organisations dealing with humanitarian relief and the many NGOs representing the 30 commitment and concern of ordinary citizens faced with enormous humanitarian needs. It has acted as a powerful force to draw the attention of the EU and the international community to the need for political solutions to crises and for genuine preventive strategy. It has fostered the conditions necessary for moves towards peace in more than one troubled region of the world. It has helped towards the affirmation of a new but precarious solidarity of the rich world towards the victims of disasters. It has contributed substantially towards more effective coordination of international humanitarian efforts. ECHO's work is about people. People in need, who have nowhere else to turn. It is a task and a commitment which does the European Union credit and gains it enormous sympathy. In presenting its proposal for a new Regulation on humanitarian aid, the Commission has asserted its belief that ECHO has to carry out its work with neutrality and impartiality, guided only by the needs of victims of humanitarian emergencies. This vision was recently endorsed by the world's major humanitarian actors as they met in Madrid on 14 December. In adopting their common position on the Commission's proposal for a legal basis, the Member States have also affirmed that they share that vision and wish to be an active party in translating it into action. In this spirit, the Commission intends to continue fostering its relations with the US and bringing issues connected with the UN and other humanitarian partners into focus so as to develop this model of cooperation further. There is a need for relations to be built up with countries which already share or are desirous of sharing in the international humanitarian relief effort and, of course, are in a position to do so. 1996 will also see the opening of the Inter-Governmental Conference (IGC) intended to review the functioning of the Maastricht Treaty and prepare the necessary treaty changes, notably, to allow the Union to continue to function effectively after enlargement. The future development of the Union's Common Foreign and Security Policy, which has not, it is generally agreed, worked well so far, will be one of the major challenges. In this context, it should be underlined that humanitarian assistance is neither an element of foreign policy nor an instrument of conflict resolution, since it treats the symptoms, not the cause. This is the principle which has guided the Commission's work through ECHO in the past and which it is crucial to uphold. However, the crisis situations in which ECHO is called upon to provide assistance highlight the need to strengthen the Union's capacity to act in the political arena, and especially, where foreign relations are involved, when conflict prevention and conflict resolution issues are at stake. As the Madrid Declaration underlined, recognition of the fact that humanitarian assistance does not have the wherewithal to address these issues must lead to the determination to use the political tools which are available. In the case of the European Union this also means reviewing the Treaty in such a way as to give the Union sufficient power to act - in defence of its own interests, and in defence of the defenceless. To do so is a matter which is independent from humanitarian aid, but which is central to humanitarian concerns. DOCUMENTARY ANNEXES iZ. MADRID DECLARATION ANNEX 1 We, leaders and representatives of prominent humanitarian agencies and donors, met this day, the 14th of December 1995, for a Humanitarian Summit. RECALLING: 1. 1 1. 2 1. 3 1. 4 1. 5 That in response to ever-growing needs, global humanitarian assistance has increased many-fold in the past five years to exceed today 4 billion dollars. In 1994 an estimated 45 million people depended on humanitarian assistance. However, it is clear that humanitarian assistance is neither a solution, nor a panacea for crises which are essentially man-made. This is true in Rwanda and Bosnia, but also in many other parts of the world, such as Afghanistan, Northern Iraq, Liberia and Sierra Leone, Tajikistan, and the Sudan; That in line with our respective mandates and responsibilities, we remain committed to relieve the plight of victims of man-made and natural disasters when and where we can, and to support and encourage local and regional initiatives to address crises. We will provide assistance, in particular, to protect and feed the victims, to organise shelter, to provide medical care and counselling and to reunite children with their families. We will ensure we coordinate closely amongst ourselves and with our partners to achieve maximum impact to reduce suffering; That since the end of the Cold War, the world is torn by some 50 armed conflicts. A large number of civilians have been and are being brutally murdered, wounded or forced to flee their homes on a scale unseen since the UN Charter was drawn up. Those who cannot flee, or have nowhere to go, have suffered untold misery and seen their lives traumatized and, in many cases, their existence rendered more fragile than ever. Basic principles of international humanitarian law are often disregarded; human rights continue to be trampled underfoot in many areas of the world; That too often the causes of humanitarian disasters still lie deep in the social and economic injustice existing within and between nations. Power struggles, poor governance and competition over scarce resources are also related to widespread abject poverty, overpopulation, and social inequality; That the work of humanitarian organisations is guided by the principles of humanity, impartiality, neutrality and independence; WE APPEAL TO THE INTERNATIONAL COMMUNITY AT* LARGE FOR: 2. 1 2. 2 2. 3 2. 4 2. 5 2. 6 2. 7 Determination to take whatever resolute decisive action may be necessary to resolve crisis situations and not to use humanitarian activities as a substitute for political action. The independence and impartiality of humanitarian assistance must be fully recognized and respected. This is indispensable for saving lives in crisis situations. The development of a global system of proactive crisis prevention. Determination and political will are needed to address both the direct and indirect causes of conflict and other humanitarian emergencies. Early warning should lead to early action. A new and imaginative commitment to development assistance. Crises are greatly exacerbated by the current decrease in development assistance, just at a time when it needs to be increased to reduce the severity of humanitarian crises. Poverty leads to vulnerability and forces people into survival strategies that can further hasten the onslaught of crises. As a result, crises become more likely and more deadly when they strike. A global campaign against hunger which afflicts one out of every seven people on earth. Food security is one of the issues which must be singled out in view of the particular importance that food has in poor rural households in the developing world. Not only must food production and supplies be assured but also access at affordable prices for the poorest segments of society. Similar attention must be given to the supply of clean drinking water. Greater stress on and support for preparedness measures, especially for natural disasters. Reluctance to fund local initiatives, carry out preparedness programmes and support self-reliance may not only cause human suffering when the crisis strikes but it will also lead to much larger costs for victims and donors alike. Resources to bring relief and political solutions also to the many "forgotten" crises which do not hit. or quickly slip from, the international headlines. These crises, just like any others, threaten the survival of millions of people and can destabilise whole regions. Urgent steps to address the deliberate targeting of civilians in today's conflicts. Atrocities such as ethnic cleansing, torture and rape have become in many cases tools and objectives of warfare, in flagrant disregard for international humanitarian law. All parties to conflict should be held accountable. Impunity for human rights abuses must end. The International Criminal Tribunals for Former Yugoslavia and Rwanda must be enabled fully to carry out their mandates, with a view to the establishment of a permanent International Criminal Tribunal for the punishment of «zenocide, war crimes and crimes against humanity. 34 2. 8 2. 9 2. 10 2. 11 Measures to address the specific protection and assistance needs of the millions of people who have fled within their own countries as a result of conflict. Guiding principles must be formulated to improve their plight, and to safeguard their right to physical and material security. We also support the development by the UN of improved facilities to prevent human rights abuses in cases of internal conflict. Moreover, the right of refugees to seek and enjoy in other countries asylum from persecution must be upheld. Urgent attention to be given to the needs and protection of all victims, with priority to women, children and the elderly, who are invariably the vast majority of all victims of armed conflict. The central role of women must be recognised and women must be reasserted in the planning, management and distribution of relief assistance, as the best way of ensuring that relief reaches the most vulnerable. Their into consideration. reproductive health must be systematically taken Children, in particular, should not be deprived of their home and family, of their right to life, physical and psychological health and education, and to a peaceful existence. Resources to remain available to meet the challenge of rebuilding war-shattered societies and thus consolidate a peace settlement and prevent the seeds of future disaster from being sown. The links between relief and development must be strengthened and local capacity to cope must be reinforced. Reconstruction involves not only water systems, bridges and roads but also civil society: the demobilisation of soldiers and the rebuilding of the judiciary and administration and of education and social services. Flexible mechanisms to provide more funding for emergency rehabilitation must be found. At the same time, relief must be managed efficiently in order to phase out humanitarian aid as soon as the emergency period is over, switching over rapidly to other forms of assistance. All concerned to respect the humanitarian and non-political nature of our work, as well as our respective mandates, to give us full access to all persons in need, to ensure the safety of humanitarian personnel, and to provide us with a more secure basis for funding. In this connection we reaffirm international concern and commitment. The resourcefulness of human solidarity is enormous. Yet fatalism and compassion fatigue are real threats. Governments and leaders need to recognise that, in an ever more interdependent world, the vital interests of every nation in global peace and security can only be achieved through concerted international action. 35 [Signed by:] Mr Brian Atwood USAID Administrator Ms Carol Bellamy Executive Director of UNICEF Ms Catherine Bertini Executive Director of the World Food Programme (WFP) Mrs Emma Bonino European Commissioner for Humanitarian Aid Mr Agostinho Jardim Gonçalves President of the Liaison Committee of Development NGOs to the European Union Mr Peter Hansen United Nations Under-Secretary General responsible for Humanitarian Affairs Mrs Sadako Ogata United Nations High Commissioner for Refugees Mrs Doris Schopper President of Médecins Sans Frontières Mr C o r n e l io S o m m a r u ga President of the International Committee of the Red Cross Mrs Julia Taft President of InterAction (the American Council for Voluntary International Action) 36 List of Disaster Preparedness Projects financed in 1995 ANNEX 2 In Central/Latin America and the Caribbean. 1. Building hazard-resistant features into Central American schools: 273,000 Ecu 2. Risk assessment in Costa Rica, Ecuador and Jamaica: 179,000 Ecu 3. Safer roads and bridges in Central America and the Andean countries: 184,000 Ecu 4. Safer, healthier housing for low-income families in Lima, Peru: 34,000 Ecu 5. A network of experts in Latin America: 70,000 Ecu 6. Environmental planning in Jamaica: 13,500 Ecu 7. Developing hurricane-proof low-cost housing in Jamaica: 18,200 Ecu 8. Disaster mitigation Latin America and Caribbean Region: 18,400 Ecu in hospitals and health facilities: formulation of guidelines for 9. Strengthening Latin America: 148,871 Ecu institutional capacity in disaster management and prevention in 10. Community-based disaster prevention and management in Peru: 93,977 Ecu In Asia. 11. Early warning systems in coastal Andhra Pradesh, India: 65,000 Ecu 12. Cyclone preparedness in Andhra Pradesh, India: 37,300 Ecu 13. Waste management project to prevent outbreaks of plague in Baroda, Gujarat, India: 69,000 Ecu 14. Preparedness training in Myanmar: 225,500 Ecu 15. Preparedness training in the Philippines: 119,500 Ecu 16. Preparedness and disaster mitigation in Quang Binh, Vietnam: 209,600 Ecu 17. Disaster preparedness, mitigation and response project in Nepal: 204,200 Ecu 37' 18. Community-based disaster preparedness and management system in Northern Bangladesh: 310,086 Ecu In Africa. 19. Local radio warnings in Sahel countries: 101,000 Ecu 20. Kits for displaced people in southern Sudan: 458,300 Ecu 21. Monitoring and preparedness activities in Fogo Island, Cape Verde: 20,700 Ecu 22. Refugee women and health: relief strategy for self-help in emergency situations in Ethiopia: 236,100 Ecu In the former Soviet Union. 23. Landslide prevention in Kyrghyzstan: 110,300 Ecu 24. Training for emergency personnel in Spitak, Armenia: 67,000 Ecu On a global level. 25. Streamlining procedures for the use of military and civil defence assets in getting emergency relief goods to disaster spots, together with the UN Department of Humanitarian Affairs: 178,000 Ecu 26. Disaster preparedness training programme in Latin America and East Africa, together with the International Federation of the Red Cross: 270,066 Ecu 27. Disaster preparedness programme development and monitoring project, together with the Centre for Research into the Epidemiology of Disasters (CRED): 222,500 Ecu ANNEX 3 EU-USAID High Level Meeting 21-22 September in Brussels AIDE -MEMOIRE Breakout Session on Humanitarian Assistance 1. Public and Political Support for humanitarian assistance and emergency food aid US and EU agreed to mutually reinforce each other's efforts to secure public and political support for humanitarian assistance. 2. Chronic Crises Agreement to promote concrete measure to follow up relief in terms of mobilization of development funds. 3. Relations with UNHCR Agreement to suggest tripartite meetings EU-US-UNHCR to discuss operational and policy matters with UNHCR. Joint consultations with UNHCR to encourage voluntary repatriation in long-term crises (e. g. in Horn of Africa and Afghanistan) 4. Relations with WFP Joint consultations with WFP to encourage on-going internal reforms in that organisation. Joint US-EU consultations on Protracted Refugee Operations (PRO) Joint prior EU-US consultations prior to CFA (especially on cost agreements) 5. DHA Agreement on analysis on DHA's needs to meet goals. Continuous US-EU consultations on DHA's horizontal programmes, not least ReliefWeb. Action: continue their own information sharing systems. In parallel with DHA's efforts to develop ReliefWeb, EU/US should Agreement that both sides would consider secondment of staff to DHA on an experimental basis to improve the human resource base of that organisation. 39 6. Joint EU-US Assessments Any impediments to joint assessment missions should be removed. Joint missions should be considered whenever possible. 7. Security in refugee camps Support for military to improve camp security was discussed (ref. UNHCR support of Zairian troops in Rwanda refugee camps). It was agreed that each situation must be considered carefully and prior EU-US consultations were encouraged. 8. Relations with Military Agreed that US deployment of humanitarian advisers to military forces (to avoid that military action causes unnecessary harm on civilians and humanitarian aid personnel) is useful (ref. recent US adviser in former Yugoslavia). Suggested that EU humanitarian advisers should be humanitarian advisers to military forces on future occasions. invited to join US 9. General Operational Coordination Move operational coordination to include planning phase ("upriver") to avoid overlapping. Continue and improve US-EU operational information sharing on decisions taken or proposals under consideration. Active search on both sides of the Atlantic for complementarity (you provide blanket we do food; you do region A, we do region B). Appoint humanitarian US/EU focal points on both sides of Atlantic responsible for: (1) (2) (3) to arrange policy discussions consultations on UN humanitarian matters and to set up meetings of operational experts. 10. Staff Relations Exchange of Staff Mutual training of officials administering humanitarian aid. 40 The NOHA Diploma ANNEX 4 The NOHA (Network On Humanitarian Assistance) Diploma was designed as a means of enhancing the professionalism of relief workers. The need had become increasingly obvious in view of the considerable increase in disasters calling for humanitarian aid throughout the world. Confronted with the dearth of options, at European level, offering specific training in this field, at the end of 1993 ECHO launched a multidisciplinary diploma, European in spirit, covering the major subjects related to humanitarian work. The NOHA Diploma was developed in collaboration with DG XXII (Education, training and youth), which is responsible for the Erasmus/Socrates programme,within which framework this post-graduate diploma is implemented. Five universities take part in the programme: Aix-Marseille III (F), Bochum (D), Deusto- Bilbao (ES), Université Catholique de Louvain (B), and Oxford (UK). The academic year is subdivided into four parts: a two-week intensive programme in one of the five universities (at the beginning of September), followed by a foundation course at the university of origin (October-February), then by specialised tuition in one of the other four international universities (February-May) and lastly two-months' work experience organizations, NGOs or national administrations responsible for humanitarian assistance. in Subjects taught cover the major aspects of humanitarian aid, namely humanitarian law. economics, logistics, geopolitics, anthropology, medicine/epidemiology. : international A course book has been written for each of the five modules. These manuals, intended for both teachers and students, have been translated into the four working languages of the participating universities. Demand for them has been such, mainly from persons who are unable to attend lectures, that it was decided to publish a new, up-to-date edition of the manuals in 1996. So as to reach a wider audience, the volumes will be available for sale. Two new modules - geography and psychology - are being written and will be published in September 1996. 41 ACRONYMS USED IN THE REPORT ANNEX 5 ACP CEC DGI DG IA DG IB DG VIII DHA EC ECU EU FPA HOPE ICRC IDNDR IFRC MCDA NGO PAHO PISG UNHCR UNICEF UNRWA USAID WFP WHO African, Caribbean and Pacific Countries signatory to the Lomé IV Convention Commission of the European Communities (European Commission) Directorate-General for External Relations (Trade Policy, Relations with North America, the Far East, Australia and New Zealand) of the European Commission Directorate-GeiTeral for External Relations (Europe and the newly independent States, common foreign and security policy and external missions) of the European Commission Directorate-General for External Relations (Southern Mediterranean, Middle East, Latin America, South and South-East Asia and North-South Cooperation) of the European Commission Directorate-General for Development of the European Commission Department of Humanitarian Affairs of the United Nations European Community European Currency Unit (value at date of going to press: 1. 33 US dollars, 1. 87 DM) European Union Framework Partnership Agreement Humanitarian Office Programme Environment (ECHO database system) International Committee of the Red Cross International Decade for Natural Disaster Reduction (DHA) International Federation of Red Cross and Red Crescent Societies Military and Civil Defence Assets Non-Governmental Organisation Pan-American Health Organisation Permanent Inter-Service Group on Refugees, Displaced Persons and Returnees in third countries United Nations High Commissioner for Refugees United Nations Children's Fund UN Relief and Works Agency for Palestine Refugees in the Near East United States Administration for International Development World Food Programme World Health Organisation 42 STATISTICAL ANNEXES </3 NOTE ON THE STATISTICAL ANNEXES The figures in the annexes for 1995 deal with decisions adopted up to the end of that year and contracts concluded by then. It should be understood that, while the figure contracted the decisions is a final one, funds relating to a number of decisions will only be committed or, a fortiori, disbursed in 1996 and that, in view of the above, the 1995 figures for contracted amounts and payments are far from definitive. The final figures for 1995 contracts will be included in the Annual Report for 1996. It should be noted that ECHO publishes up-to-date quarterly statistics which are available on demand. 44 OVERVIEW OF FINANCIAL DECISIONS FOR EC HUMANITARIAN AID BY SOURCE OF FINANCE 1991-1995 ANNEX S1 Source of finance / Budget Line Description DECISIONS (in ECU) L O ME III NATiOtUUNBICATrVS PROGRAMME (NK*) tl) 40000000 esooobo L O ME III ART203 :: 42445 000 isgédoo:; F E O GA FOND BWR. D'ORIENTATION IT DC GARANTIE AORL p» 72SO0O0O B 7 - 5 Q 00 HUMANTTAWANSEMeROfiNCYAlO iSS^OOO 154 867 297 19 9 4 Aiper: 09/01/9S 19 9 5 DECISIONS I CONTRACTS I PAYMENTS (in ECU) (in ECU) (in ECU) DECISIONS I CONTRACTS I PAYMENTS (in ECU) (in ECU) (in ECU) B 7 - 6 0 00 PHARE L O ME IV « r m | ï) 69000000 mmmmêmmmâm i35QQt>Û0: 31 €75 000 82 185 0001 :;2èi;|&:603: ^é^S^âSS:; :|:280;:6i9 007 :;46:456 000 • : :4S:$38;:927 26 W 798- B 7 - 5 10 DIS ASTER AID DEVELOPING COUNTRIES 70 033 195 ;:iOS^22;:247:: • 105 308 025 : :83 085 236 B 7 - 2 10 B 7 - 51 1 EMERGENCY r-ooo A» B7-211 B 7 - 5 14 HUMANITARIAN AID TO C » B EUROPE B7-214 B 7 - 5 15 HUMANITARIAN AID To EX-USSR B7-215 B 7 - 5 1G HUMANtTAWAN ACTION M 3RD COUNTRIES B7-216 B 7 - 5 17 R6TU0BES * DISPI. PERSONS INOEV. COUNTRIES B7-217 B 7 - 2 19 OPERATIONAL SUPPORT, DISASTER PREPAREDNESS m_ m_ I4|_ |4) (4i_ HI TOTAL I FOOTNOTES: 17425000 46 boOÔOO •• ;:45 567 650 ;39 850 699 33 710 000 29 453 388 21130 160 385 000 000 271 380 ÔO0 : 267 503 758: 226 876 033 238 339 500 123 912 958 47 607 710 30 000:000 :;S:7:1:30bO ::3 «91:008 IiSOi'OiD^OOO;: :: ;: 4â:ê60;ië8: £3$i3Zt:$7i ||::3:|9i:57;4: ïff &0$iM M^-^^i lio:|pèi;ooj: 3||!i^6||i^ :-f:fcs$&:m 236 670 000 176 991 075 67 835 531 93 350 000 80 658 509 42 254 913 38 540 000 34 141000 19 312 150 :-;%i0$fôy :;::ijt62;Éi2: :. ;• yïà0t&ï 195 320 000 764 169 424 753 330 S35 689 544 001 692 092 512 494 352 532 226 051 064 (1) NATIONAL INDICATIVE PROGRAMME FOR SOMALIA (2) 5-YEAR ALLOCATION (1991-35) UNDER LOME N IS 250,000,000 ECU (3) DECIDED ON A CASE-BY-CASE BASIS (4) IN 1995, THE BUDGET CHAPTER THAT CORRESPONDS TO ECHO BECOMES Bl-200 INSTEAD OF87-500 Financial Decisions for EC Humanitarian Aid 1991-1995 O PAYMENTS M CONTRACTS m DECISIONS $':§':•:•!?:•:•: 1000 800 600 400 200 1991 1992 1993 1994 1995 ^ Summary of Financial Decisions by Countries Benefitting from Humanitarian Aid 1993-94-95 LOME IV :„ i 1 9 93 DECISIONS InECU) 1 9 94 DECISIONS (nECU) 1 9 95 DECISIONS (nECU) UJMEiWlJi 1992 1993 B U D G ET DECISIONS DECISIONS («ECU) I n E C ll Asppr 09ft 1/96 1 9 93 t€ OSONS (ai ECU) 1 9 94 DECISIONS («. ECU) 1 9 95 DECISIONS (. ECUI ANNEX S2 vrac* 1 000 000 1 000 000 AFRICA Burundi Refuoee» u 300 ooo 13 500 000 tflKA Burundi I Rwv»ndan Refus 151 000 000 25 000 000 «NGOLA fW 3LW94AFAS0 3UHLM* c a r e v c « oe 3 «0 DJBOLrn ;«TXîEA L T M O PH •CVJ > WU > J T «A X ŒE BISSAU -WT1 VORY COAST <EWYA jeERm AOAGASCAR UAJAM 4AURTÏANW «uroTTE «CZAMBIOUE *WA«SlA •»jÇR *3£RIA 6 0 00 000 la ooo ooo t 000 000 500 000 4 000 000 16 000 000 447 000 515 000 355 000 1 000 000 J50 000 60 000 1 000 000 500 000 1 000 000 220 000 1 000 000 300 000 540 000 300 000 100 000 2 000 000 1 010 000 950 000 2 400 000 1 204 163 5 8 1 0 00 8 9 90 000 7 473 550 2 125 000 1 170 000 300 000 400 000 500 000 3 000 000 1 180 000 180 000 70 000 465 000 340 250 400 000 3APUANEWGL»CA 123 440 RWANDA SEMEC-AL 9 000 000 15 500 000 1 000 000 SS=?RALEONE 1 850 000 2 773 200 4 520 000 51 LUCIA SLOAN TAACAMA I D 53 >>ANDA !ARE 125 000 9 300 000 IB 507 000 9 950 000 2 000 000 1 810 000 500 000 200 000 1 000 000 500 000 * 500 000 7 320 000 C r t tt »n Rejion -loods n Senin, Cong: and Maurta. 14 1 0 05 000 700 000 | j 1 | 1 1 1 1 ! | 1 1 I SOMALIA 40 0 00 000 7 796 000 AfGHAMSTAN 2 750 000 12 315 000 12 695 000 •J-BAMA ALGERIA «NGOLA ARMEUA A2EREAUAN 1ANGLADESH 3ELARUS 30LMA 3RAZI_ 3UL0ARW 3URUN0I CAMBODIA ^ P E V E R PE ZHLE COLOMBIA CUBA ECUADOR 5C. YPT ÏL SALVADOR ÏTH0PIA EX-USSR 456 000 1 675 000 1 150 000 1 225 000 2 935 000 1 000 000 6 0 00 000 5 000 000 17 000 000 19 089 000 23 955 218 18 850 000 28 831 010 500 000 3 520 000 2 100 000 2 735 000 1 115 000 1 150 000 600 000 1 004 000 5 0 00 000 445 000 470 000 1 785 000 2 236 000 5 9 60 000 220 720 500 000 470 000 700 000 2 320 OOO 7 805 000 14 054 500 15 000 OOO 350 000 450 OOO 630 000 340 000 750 000 236 100 51 295 000 ;x- YUGOSLAVIA 395 080 195 269 376 000 234 670 000 3EORGK 3UATEMALA -tA/Tl HONDURAS NO» NDONESIA RAK RAN VORY COAST ORGYZSTAN -AOS -E6ANON JBER1A 4EMCO V. OLDOVA U. ONOOUA VIYANMAR « P AL «CARAGUA N»C€R JORTH COREA PAKISTAN =ALESTMVISRAEL 'ERU 'HTJPPNES 31MAT4A 3L»SSIA RWANDA 5IERRA LEONE SOMALI» :. Rt LANKA 3UDAN TAJIKISTAN THAILAND TURKEY. «RAWE. t N E A Ç LA ^ETNAM rTMCN IWRE 3MBAEWE. (-nrr8lSlu*es : hsaslpr Preparedness Rwanda & Burundi Reluaee }e(ug (. «sell r\Cenfr fcEastAfnee THirteryn Estonia. Law». Lanu Cyclon n the Caribcan (AnTroua, Bartwda) IVect Action Alnca. SouCh Amenca "oorrjmation and Momlonng 17 806 000 27 469 772 250 000 830 000 2 770 000 17 000 000 11 580 000 595 000 920 000 1 100 000 J 21 500 000 22 515 000 24 873 500 230 000 1 800 000 1 000 OOO 6 250 000 8 050 000 1 500 000 1 180 000 1 875 000 4 000 000 1 050 000 1 225 000 2 5OC0O0 320 000 1 820 000 1 OOC 000 240 OOO 1 800 000 950 000 700 000 500 000 1 990 000 430 000 200 000 100 000 290 000 200 000 10 400 000 4 700 OOO 5 350 OOO 510 000 2 320 OOO 1 730 OOO 550 000 2 619 57» 350 000 500 000 9 870 000 29 523 000 2 000 000 1 900 000 4 500 OOO 8 338 359 6 010 000 150 000 615 000 3 125 000 1 100 000 8 000 000 ] 1 450 000 9 R25 000 16 105 000 2 320 OOO 250 000 500 OOO 500 000 200 OOO 3 300 000 150 OOO 110000 750 000 75 000 1 220 000 1 300 000 12 OOO 500 000 100 000 3 481 962 4 000 614 12 000 000 82 000 OOO 4 500 000 20 595 000 1 OOO OOO 900 000 8 570 OOO 4 290 000 T o t a ls 82 1S5 0 00 2 63 2 61 6 03 46 4 36 0 00 T o t a l! : 40 0 00 0 00 7 796 000 T o t a ls : 5 14 8 33 195 5 00 9 00 1 21 6 45 6 36 5 12 Grand l o t a M I» : Grand t o l i M IM : Grand total 1 1 1 5: | | I 6 04 « 14 193 | ECU 7 64 1 69 4 24 | ECU 6 92 0 9 2 7 T 7I ECU H6 FINANCIAL DECISIONS FOR HUMANITARIAN AID BY REGION IN 1994 AND 1995 ICOUNTRY/REGION DECISION IN ECU Nr of CONTRACTS ICOUNTRY/REGION DECISION IN ECU Nrof CONTRACTS As B ar 09101/96 ANNEX S3 EX-YUGOSLAVIA ACP TOTAL AFRICA: Burundi Refugees AFRICA: Burundi 4 Rwandan Refuc, ANGOLA BURUNDI DJIBOUTI ERITREA ETHIOPIA GHANA SUINEA GUINEA BISSAU HAITI KENYA LIBERIA MADAGASCAR MALAWI MAURITANIA MAYOTTE MOZAMBIQUE NIGER NIGERIA PAPUA NEW GUINEA RWANDA SIERRA LEONE SOMALIA ST. LUCIA SUDAN TANZANIA CHAD TOGO UGANDA ZAIRE C. I. S(1) ^ARMENIA AZERBAIJAN GEORGIA BELARUS KIR6Y2STAN MOLDOVA RUSSIA FED TAJIKISTAN UKRAINE 269 376 000 324 106 962 13 500000 168 500 000 24 000000 21 000 000 355000 1 000 000 6 0 0 00 1 000 000 300 000 100 000 18 010 000 1 204 163 7 473 550 1 170 000 300 000 400 000 500000 1 180 000 70 000 340 250 123 440 15 500 000 2 773 200 8 338 359 125000 26 507 000 1 8 1 0 0 00 447 000 200 000 500 000 7 320000 91010 000 19 089 OOO 18 850 000 17 806000 3 520 000 6 250 000 2 500 000 9 870 000 9 825 000 3 300 000 EASTERN EUROPE ALBANIA BULGARIA 2 679 000 ; 1 6 7 5 0 Q& 1 004 000 419 480 14 112 57 34 3 3 1 2 1 1 55 3 18 5 1 3 1 3 1 1 1 23 7 35 1 69 3 2 1 1 18 228 53 57 55 4 17 2 17 16 7 IRAK ASIA (2) AFGHANISTAN BANGLADESH CAMBODIA LAOS MONGOLIA MYANMAR PALESTINE/ISRAEL PAKISTAN PHILIPPINES SRI LANKA VIETNAM YEMEN NORTH AFRICA ALGERIA EGYPT LATIN AMERICA BOLIVIA BRAZIL COLOMBIA CUBA EL SALVADOR GUATEMALA MEXICO NICARAGUA PERU General Studies Disaster Preparedness G R A M Ï O T AL 25 826 000 12 315 000 500 000 2 236 000 1 500 000 1 000 000 240 000 4 700000 200 000 550 000 615 000 750 000 1 220 000 3 565 000 2 935 000 630 000 21 509 500 1115000 600 000 700 000 14 054 500 340 000 830 000 1050 000 500 000 2 320 000 100 000 3 481 962 EX-YUGOSLAVIA ACP TOTAL AFRICA: Food Aid AFRICA: Burundi & Rwandan Refug EASTERN 4 CENTRAL AFRICA IVORY COAST KENYA LIBERIA NIGERIA NIGER SIERRA LEONE SOMALIA SUDAN ANGOLA HAITI CAPE VERDE GUINEA CARIBBEAN Region ETHIOPIA Floods : Congo, Benin, Mauritania 234 670 000 212 017 820 8 570 000 107 000 000 20 595 000 1 950 000 581000 6 125 000 400 000 565 000 6 420 000 6 010 000 21400 000 17 000 000 11 580 000 440 720 540 000 1 905 000 236 100 700 000 C. I. S(1) ARMENIA A7FRBAIJAN GEORGIA BELARUS KIRGYZSTAN MOLDOVA RUSSIAN FED TAJIKISTAN UKRAINE EASTERN EUROPE ALBANIA Baltic States RUMANIA TURKEY IRAK ASIA (2) CAMBODIA NEPAL LEBANON AFGHANISTAN BANGLADESH SRI LANKA ISRAEL PHILIPPINES THAILAND YEMEN INDONESIA NORTH KOREA PAKISTAN LAOS VIETNAM NORTH AFRICA [ALGERIA LATIN AMERICA PERU NICARAGUA BOLIVIA COLOMBIA GUATEMALA ECUADOR CUBA MEXICO EL SALVADOR Coordination & Monitoring Disaster Preparedness :V1:335 GRANQTOTAL *l 137 491 000 23 955 218 28 831010 27469 772 2 735 000 8 050 000 326 000 29 525 000 16 105 000 500 000 2 900 000 1150 000 1 000 000 lOO 000 250 000 39 464 578 5 960 000 950 000 1 875 000 12 695 000 2 1 00 000 3 125 000 5 350 000 2 619 578 2 320 000 200 000 100 000 290 000 200 000 1 180 000 500 000 5 000 000 5 000 000 27 385 000 1 730 000 1 990 000 1 150 000 2 320 000 2 770 OOO 450 000 15 000 000 1 225 000 750 000 4 290 000 4 000 614 223 212 1 17 10 5 4 13 1 4 8 20 49 39 25 5 3 2 225 42 47 54 3 11 1 38 28 1 30 865 EC CONTRACTS FOR HUMANITARIAN ASSISTANCE 1991 - 92 - 93 - 94 - 95~ AS PER : 09/01/96 TYPE OF CONTRACT 1991 1992 1993 1994 ECU ECU ECU ECU 1995 ECU IN % OF T O T AL IN % OF T O T AL EC COMMISSION-DIRECT COMMISSION/ECHO COMMISSION/AEC DELEGATIONS S U B T O T AL MEMBER STATE GOVNTS B E L G I UM DENMARK FRANCE ITALY NETHERLANDS SPAIN UK S U B T O T AL OTHER GOVERNMENTS W E S T E RN S A M OA M O Z A M B I Q UE G R E N A DA TRINIDAD A ND T O B A GO W A L L IS A ND F O R T U NA NEW C A L L E D O N IA P H I L I P P I N ES FIDJI CROATIA/MACEDONIA S U B T O T AL EC NGOs (1) AUSTRIA B E L G I UM DENMARK FINLAND FRANCE G E R M A NY GREECE IRELAND ITALY L U X E M B O U RG NETHERLANDS P O R T U G AL SPAIN SWEDEN UK S U B T O T AL OTHER NGOs (1) NORWAY A U S T R A L IA SWITZERLAND USA S U B T O T AL LOCAL NGOs (1) A N G O LA B A N G L A D E SH BOLIVIA CHILI EL S A L V A D OR ETHIOPIA G H A NA I R A Q - M I S C - 1 9 90 J A M A I CA LEBANON OCC. TERRITOTY (ISRL) PAKISTAN PHILIPPINES SUDAN TURKEY S U B T O T AL UNITED NATIONS W FP FAO W HO UNDRO UNHCR UNICEF UNDP UNRWA SPECIAL UN OPERATIONS S U B T O T AL OTHER INTERNATIONAL ORG. ICRC FIRC CARITAS INTERNATIONAL LUTHERAN W O R LD FEDERATION THE W O R LD C O U N C IL OF CHURCHES S U B T O T AL D e c o m l t m m e n ts 1 793 855 0 220 000 2 013 855 8 474 142 2 524 500 370 000 11 368 642 45 324 321 8 318 645 1 552 000 55 194 966 104 3 8 1 8 38 1 1 5 8 1 5 77 262 000 116 225 415 13,9% 1,5% 0,0% 15,4% 64 026 854 4 535 842 500 000 69 062 696 13,0% 0,9% 0 , 1% 14,0% 4 648 000 100 000 500 000 129 000 796 000 6 173 000 1 300 000 20 000 000 25 000 0 0 0 0 3 521 195 3 546 195 4 812 000 42 500 1 822 000 1 233 000 4 252 000 13 461 500 1 526 340 21 526 340 300 000 75 000 250 000 0 24 700 000 25 325 000 400 000 10 000 000 10 400 000 1 800 000 1 800 000 NA 28 155 900 4 630 000 NA 27 057 209 6 374 000 4 296 000 4 273 500 0 5 274 500 ? 216 100 NA 7 408 320 87 685 529 727 000 3 761 000 290 000 4 778 000 NA 20 187 650 26 313 000 NA 38 579 700 4 6 0 1 87 1 745 000 2 105 000 8 943 500 0 9 314 040 244 000 1 160 000 NA 2 394 500 111 446 577 NA 25 098 353 48 724 057 NA 88 634 711 24 769 700 886 500 1 026 000 16 406 961 0 15 212 795 862 990 19 021 832 NA 23 606 851 264 250 750 625 000 35 256 810 27 128 000 0 110 942 799 29 357 380 980 000 2 335 250 18 9 0 1 2 37 445 26$ 24 496 993 1 945 000 2 1 5 16 375 350 00Û 34 054 623 308 334 733 3 2 0 0 00 1 232 000 1 552 000 0 744 692 1 679 565 2 424 257 4 170 000 250 000 1 237 140 1 432 730 7 089 870 338 000 300 000 130 000 420 000 70 000 58 000 364 400 2 400 000 3 652 400 50 000 500 000 41 000 70 626 1 089 626 175 000 2 520 000 800 000 1 245 000 600 000 4 740 000 600 000 16 853 000 35 831 586 0 0 22 640 500 5 547 000 198 000 3 809 500 110 000 78 232 580 4 127 000 470 500 1 2 86 000 46 524 500 262 000 122 843 166 71 318 781 868 000 9 250 000 47 355 716 0 500 000 87 955 354 13 631 598 177 336 429 1 1 9 08 135 6 000 000 700 000 189 723 733 450 000 3 122 425 240 672 705 27 593 000 5 651 000 35 073 900 1 666 000 70 000 33 244 000 36 809 900 38 006B20 26 001 135 491 560 3 160 440 1 000 000 68 659 955 (985 688 32 327 000 37 163 603 2 852 105 92 104 72 434 812 0,6% 0,0% 0 , 1% 0,0% 0,0% 0,0% 0 , 1% 0,8% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,2% 0,2% 0 , 1% 4,7% 3,6% 0,0% 14,7% 3,9% 0,4% 0,3% 2,5% 0,0% 3,3% 0,3% 2,9% 0,0% 4,5% 40,9% 0,6% 0,2% 0,2% 0,9% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0 , 1% 0,0% 0,0% 0,0% 0,0% 0 , 1% 6,3% 0,0% 0 , 1% 0,0% 23,5% 1,6% 0,0% 0 , 1% 0,4% 31,9% 4,3% 4,9% 0,0% 0,4% 0,0% 9,6% 6 600 000 1 320 000 7 920 000 119 578 119 578 1 280 000 28 000 000 8 800 000 0 91 636 000 32 629 000 915 750 2 368 000 23 206 556 850 000 25 157 910 3 130 720 21 121 500 940 000 35 748 384 275 783 820 800 000 0 1 746 000 1 1 06 676 3 652 676 13 444 1 500 000 1 513 444 29 155 000 493 500 46 885 500 4 684 000 575 000 140 000 2 008 166 83 941 166 40 385 000 1 1 3 49 066 625 086 52 359 152 1,3% 0,0% 0,0% 0,0% 0,0% 0,0% 0,3% 1,6% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,3% 5,7% 1,8% 0,0% 18,5% 6,6% 0,2% 0,5% 4,7% 0,2% 5 , 1% 0,6% 4,3% 0,2% 7,2% 55,8% 0,2% 0,0% 0,4% 0,2% 0,7% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,3% 0,0% 0,0% 0,0% 0,0% 0,3% 5,9% 0 , 1% 0,0% 0,0% 9,5% 0,9% 0 , 1% 0,0% 0,4% 17,0% 8,2% 2,3% 0,0% 0 , 1% 0,0% 10,6% T O T AL 191 359 784 331 961 251 597 954 168 753 330 535 100,0% 494 352 532 100,0% (1) INCLUDING NATIONAL RED CROSS ASSOCIATIONS (2) THE MAIN REASON WH Y IN 1992 THE CONTRACT AMOUNTS (122 MECU) ARE SUBSTANTIALLY LOWER THAN THE DECISION AMOUNTS (168 MECU) IS THAT 23 5 MECU HAS KEEN DIRECTLY ADMINISTER ED RY DG VI (FEOGA) IN ACCORDANCE WITH THE COMMISSION DECISION OF 2 JULY 1992 HENCE. CONTRACTS HAVE MEN SIGNED RY DG "I FOR THIS AMOUNT AND NOT ECHO THE REMAINING DIFFERENCE (12 5 MECU 1 CONSISTS OF ACCUMULATED AND UNUSED RESERVES FROM A LARGE NUMBER OF ACTIONS IN 1992 WHEN ECHO BECAME FULLY CI EFATIONAL IN EARLY 19' ARE EITHER UTILIZED OR DECOMMnTED SO THAT THE QUESTION OF SUEKENDTNG RESERVES WILL NOT ARISE AGAIN ? MEASURES WERE IMMEDIATELY TAR:EN TO ENSURE THAT ALL RESERVES H\ ANNEX S5 EUROPEAN COMMISSION (ECHO) FINANCIAL DECISIONS IN FAVOUR OF THE AFFECTED BURUNDI/RWANDAN POPULATION since the 2 i st October 1993 until December 1995 AMOUNTS IN ECU As pet 09- January-VSA COUNTRY DATE Reason for Contribution PARTNER AMOUNT TOTAL BURUNDI 25/11/93 Displaced Population ICRC/ONG 1 000 000 25/11/93 Displaced Population 25/11/93 Displaced Population 22/12/93 Displaced Population 03/02/94 Displaced Population 28/03/94 Displaced Population 17/05/94 Burundi Repatriates and Rwandan Refugees 15/12/94 Displaced Population UN ONG ONG 1 000 000 1 000 000 1 000 000 ONG/UN 1 000 000 ONG/UN 14 000 000 ONG ONG 1 000 000 5 000 000 REGIONAL 21/12/93 Burundi Refugees 16/03/94 Burundi Refugees ONG/UN/IFRC 18 300 000 ONG/UN 13 500 000 27/05/94 Rwandan, Burundi, Tanzania Refugees UNHCR/ICRC 12 000 000 21/06/94 Rwandan, Burundi, Tanzania Refugees UNHCR 19 000 000 20/07/94 Rwanda, Burundi. Zaire, Uganda, Tanzania HCR/ONG/IC 12 000 000 27/07/94 Rwanda, Burundi. Zaire, Uganda, Tanzania UN/ONG/ICRC 75 000 000 21/09/94 Refugees & Disp. pop. in Central/East Africa ONG 4 500 000 20/12/94 Rwandan/Burundi Populations ONG/UN/IFRC 45 000 000 09/03/95 Rwanda, Burundi, Zaire. Tanzania WFP 12 000 ftOO 25/07/95 Rwanda, Burundi, Zaire. Tanzania UNHCR/NGO 25 000 000 21/11/95 Rwanda, Burundi, Zaire. Tanzania UN/ONG/ICRC 70 000 000 RWANDA 28/10/93 Burundi Refugees 28/10/93 Burundi Refugees 28/10/93 Displaced population 10/11/93 Burundi Refugees 15/12/93 Burundi Refugees ONG ONG 1 000 000 1 000 000 ONG/UN 1 000 000 UN ONG 1 000 000 1 000 000 04/02/94 Refugees and displaced population ICRC/ONG 8 000 000 09/04/94 Conflict 12/04/94 Conflict & Drought 11/05/94 Conflict ONG ONG 500 000 1 000 000 ONG/ICRC 1 000 000 17/10/94 Rehabilitation-Electricity & Water GTZ 5 000 000 TANZANIA ! 15/11/93. Burundi Refugees 11/11/93 Burundi Refugees 29/04/94 iRwandan Refugees 29/04/94 iRwandan Refuqees ONG UN/ONG ONG ONG 1 000 000 1 000 000 680 000 450 000 ZAIRE 15/11/93 Burundi Refugees UN/ONG 500 000 25 000 000 306 300 000 20 500 000 3 130 000 500 000 TOTAL 1993-December 1995 3 55 4 30 0 00 »o ANNEX S6 Breakdown of Community Aid to the Former Yugoslavia, 1991-1995 by Republic Republic Bosnia-Herzegovina Croatia (+ UNPAS) Serbia and Montenegro Slovenia F. Y. R. of Macedonia All Republics Turkey and Hungaiy Total % 52,4% 21,4% ] 8,0% 0,1% 4,2% 3,1% 0,2%0 100% Breakdown of Community Aid to the Former Yugoslavia, 1995 by Relief Items Relief Items Food Aid Sanitation Medical Aid Logistics Psychosocial Emergency Rehabilitation Mi see l la ne o us Total % 32,4% 8,6%o 16,3% 8,4%o 3,3% 17,6%o 13,3 % 100% ~^> o ANNEX S7 | Breakdown of Items for Humanitarian Assistance | (37,9%) FOOD ^ ' ^ ^ S i ï ï J' [ £^ ; ; [^ ^ ^ ^ '^ (3,6%) OTHER SERVICES / MISCELLANEOUS (13,8%) TRANSPORT Breakdown of Items for Humanitarian Assistance (28,0%) NON-FOOD (34,0%) FOOD (2,4%) CONTINGENCY RESERVE (9,1%) EXPATRIATE STAFF (2,7%) LOCAL STAFF (14,6%) TRANSPORT (9,1%) OTHER SERVICES / MISCELLANEOUS 1 9 93 1 9 94 Breakdown of Items for Humanitarian Assistance 9,6%) EXPATRIATE STAFF (2,1%) RESERVE (0,8%) MISCELLANEOUS (STAFF) (3,2%) LOCAL STAFF (0,8%) OTHER SERVICES (16,0%) TRANSPORT (39,3%) FOOD 1 9 95 (28,2%) NON-FOOD S-\ ISSN 0254-1475 COM(96) 105 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-113-EN-C ISBN 92-78-01446-X Office for Official Publications of the European Communities L-2985 Luxembourg XV

MONITORING THE COMMON FISHERIES POLICY - COMMISSION REPORT

http://publications.europa.eu/resource/cellar/ed1bb127-7bf9-4d53-ad0d-ed797cb85001

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 18. 03. 1996 COM(%) 100 final MONITORING THE COMMON FISHERIES POLICY - COMMISSION REPORT - C O N T E N TS I. INTRODUCTION II. RESOURCES AVAILABLE AND DEPLOYED 1. Resources available for control work 2. Inspection and monitoring of fishing vessels and their activities III. IMPLEMENTATION OF THE CONSERVATION POLICY 1. Catch registration, estimation and validation in the Member States 2. Monitoring of observance of restrictions other than on catch volume 3. Overall assessment IV. ASPECTS OTHER THAN CONSERVATION 1. Market policy 2. The transport of fishery products 3. The structural policy V. SANCTIONS AND LEGAL ISSUES 1. National legal systems of fisheries enforcement 2. The Community legal framework 3. Cooperation VI. CONCLUSIONS Annex I Reports for each Member State Annex II Tables Annex III Satellite monitoring pAc3l\rapports\ctrl\report\en - 2 I. INTRODUCTION This report is made in response to a formal obligation (Article 35 of Council Regulation (EEC) No 2847/93) and to an overriding need for transparency. The report is the first exercise of its kind, surveying monitoring activities in 1994. It accordingly suffers from the defects attendant on any new production. There are many gaps in the information passed to the Commission by the Member States. It is indispensable nonetheless to take stock of the situation as regards the areas covered by the new control Regulation adopted in 1993. On the conservation side a fairly detailed picture can be drawn, but as regards extension to other aspects of the common fisheries policy initial findings only are possible. Fisheries monitoring in third-country waters and the NAFO framework is not covered. This is a subject of crucial importance given both the economic scale of the fisheries concerned and the political stakes in the international arena. It absorbs considerable resources of both the Commission and the Member States, and the NAFO fisheries for example are the best monitored of those exploited by Community vessels. These matters are moreover being discussed in the relevant forums (NAFO, Moroccan negotiations). Nor is any mention made, with some exceptions, of the content of the very recent report on the Community's contributions towards expenditure on monitoring (COM(95) 243 final of 9 June 1995). The body of the report presents a general survey. Annex I contains a report on each Member State and Annex II statistics. Annex III deals with satellite monitoring. p:\c3l\rapports\ctrl\report\en I I. R E S O U R C ES A V A I L A B LE A ND D E P L O Y ED 1. RESOURCES AVAILABLE FOR CONTROL WORK The resources available in the Member States are summarized in Table 1. Direct comparisons are not, however, possible. The organisation of monitoring, control and surveillance differs considerably from one Member State to another. Some Member States have a single competent authority for fisheries control, others call on several government departments which also have tasks not related to fisheries, or even to the maritime field. This is further illustrated in Table 2. Furthermore, in some countries, competence is shared between national and regional governments. This results in a broad range of organisation types, varying from a comparatively well- organised service using qualified staff in one Member State to a poorly coordinated set of national and regional departments with non-specialised personnel in another Member State. The number of inspectors in each port differs substantially from one Member State to another. For some countries there are several inspectors in each fishing port, whilst in others one fisheries inspector is in charge of several ports. The low level of human resources in some Member States raises doubts as to whether the control regime applicable to the common fisheries policy is applied there. Several Member States have insufficient specialised equipment to meet their monitoring obligations, even if some of them have used Community financing to upgrade their resources during the past five years. A small number of Member States even have no airborne surveillance, which considerably reduces the efficiency of inspections at sea. 2. INSPECTION AND MONITORING OF FISHING VESSELS AND THEIR ACTIVITIES Most Member States have indicated figures corresponding to the inspection activities. These numbers are, however, difficult to compare because the quality of the inspections has not been specified consistently. Table 3 shows the number of port inspections and the number of inspections offshore. This is compared with the total size of the vessels in the fleet. p:\c3l\rapports\ctrl\report\en - 4 - The Table clearly shows that there are very big differences in the level of inspection between the various Member States. One reason for the differences can be attributed to the definition of an inspection: from a simple sighting to a detailed inspection. The Regulation also provides for the possibility to control transport of fish on land (Reg. (EEC) No 2847/93, Article 13). All transports on land must be accompanied by transport documents which describe the origin of the consignment, the content of the transport as well as the destination and the transport vehicle, the consignee and the place and date of loading. The control of these transports can be used to ensure that fish destined for destruction are not re-sold, undersized fish are not exported and sold in other countries hiding their origin, as well as the hygienic aspect that the fish should be chilled or frozen during transport so that the quality is not reduced dramatically. The reports from UK, Ireland, and Denmark say that transports are randomly checked but no numbers are supplied. In Denmark the checks involve not only the fishing authorities but also the police. Belgium makes no explicit remarks about this subject but the imports - at least - seem to be monitored closely. There is no information in the Portuguese and French reports. The author of the German report states that he sees no point in controlling transport on land. An essential aspect of the inspection and monitoring of fishing vessels is the coordination between Member States. Most reports do not mention this point. The only exceptions are the UK report, where it is said that some agreements exist, and the Belgian report, which mentions that there is regular data exchange with Denmark (via modem), the Netherlands and the UK. The Danish, Irish, Portuguese, German, and French reports have no information on this point. However, some Member States (Denmark, Ireland and the United Kingdom) have bilateral agreements with Norway. It would be very disappointing if no more agreements existed. It is, however, impossible at the moment' to get an overview of the number of bilateral agreements and their coverage (types of data exchanged, how regular, method of exchange, etc. ). p:\c3l\rapports\ctrl\report\en - 5 - Generally, all Member States have stressed, during the annual monitoring meetings of the Expert Group Fisheries Control (which is made up of representatives of the Member States and the Commission who are responsible for the control matters of the CFP), the need for more and better coordination and cooperation. The Commission has offered its support but experience shows that practical consequences are still limited. III. IMPLEMENTATION OF THE CONSERVATION POLICY 1. CATCH REGISTRATION. ESTIMATION AND VALIDATION IN THE MEMBER STATES The monitoring of catches is based on logbooks, landing declarations, and sales notes. Some member countries have chosen to combine either the logbook and the landing declaration or the landing declaration and the sales note into one document. Derogations exist for certain categories of vessel, in which case the catches must be estimated through sampling. The number of returned documents seems in general to be high even though this may reflect different interpretations of what is meant by returned (see Table 4). None of the reports describe either possible problems with incomplete documents or the time taken for documents to be returned to the authorities, with the exception of the Danish report. The next step after the collection of data is to detect missing information. This is usually combined with some cross-validation of the different sources. There are large differences in the approach to and effectiveness of data collection and verification - even though the official reports always try to present the existing systems in a positive light. It is also evident that all Member States could benefit from the experience of other Member States in refining their own systems. Two specific problems for most countries are landings outside auctions and how to estimate the catches made by vessels which are not obliged to use a logbook. These problems are far from being solved satisfactorily in all countries (see Table 5). p:\c31\rapports\ctrl\rcport\en - 6 - Checks at sea allow some comparison of logbook entries with direct observation. Inspection at sea is an important aspect of the work of control agencies but the proportion of this devoted to direct validation of logbooks cannot be specified from the national reports. Combining the information in logbooks with the information in landing declarations/sales notes should offer a systematic validation procedure. From the reports it seems that only Belgium, Denmark, Germany and the Netherlands regularly combine these information sources to improve the quality of data (see Table 6). This point is not mentioned in the rest of the reports. Nor does there seem to be any systematic use of other sources of information downstream of first sale. 2. MONITORING OF OBSERVANCE OF RESTRICTIONS OTHER THAN ON CATCH VOLUME The difficulties involved here, pointed out in a Commission communication reviewing these technical measures, are analysed in detail in a Commission working paper. Observance of zonal restrictions is the easiest of these measures to monitor, at least if the area in question is sufficiently close to the coast to be easily patrolled. A check by an aircraft suffices to confirm fishing activity in a prohibited zone. Checking observance of the rules on fishing gear (length of nets, number of hooks, mesh sizes) is particularly difficult. It can be backed up by inspection on land but inspection at sea is indispensable, even more so given the absence of rules of the "single net" type. One of the most difficult things to check is respect for catch composition rules imposed when waivers are granted on mesh sizes. Ensuring that size minima are complied with is at first sight less difficult but where trading channels exist, firm determination is required with a strategy combining inspection at sea, on landing, after first sale and if possible on consignment. p:\c3l\rapports\ctrl\report\en - 7 - Where problems are most serious (English Channel and Region 3), none of the Member States concerned has applied or even defined such a strategy. 3. OVERALL ASSESSMENT The reports of the working groups covering the various stocks permit detailed analysis of the size and trend of the misreporting problem. The overall gravity of the situation has recently been stressed by ICES experts1. An earlier Commission report(2) summarises estimates of the amount of this for key stocks. Reference may also be made to a recent article by G. Biais (1995)f3) for a wide overview that compares the misreporting problem with that of discards, with which there is often a connection. Table 7 is adapted from the conclusions of that article. Small pelagic species. The proportion of catches not declared is considerable and has shown no tendency to improve since introduction of the CFP. One of the biggest problems is misreporting of species (confusion of mackerel and horse mackerel, herring and sprat) or catch zone. On landing, inspections targeted at catch composition would be more useful if concentrated on a relatively small number of ports. These catches are primarily intended for processing, which for control purposes gives a much more favourable situation than for high value species, where the multiplicity of landing points and shortness of the distribution periods seriously complicate the work of monitoring services. However, economic integration of producers and processors and direct-sales contracts allowing markets to be by-passed can also make a specific control plan for pelagics necessary. 1 Report of the Statistics Committee Liaison Working Group (ICES CM 1995/D:1) (2) See Annex 2 to COM(95) 243 final. (3) G. Biais: An evaluation of the policy of fishery resource management by TACs in European Community waters from 1983 to 1992. Aquat. Living Resources, 1995, 8, N° 3, 201-288. p:\c3l\rapports\ctrl\report\en - 8 - As for the geographical origin of catches, analysis of logbooks ought to be able to show up inconsistencies. Combination of this with controls at sea and continuous monitoring (by satellite) is however the only way to tackle the problem really effectively. The problem of discards used to be almost negligible when set against the volume of pelagic catches but is growing and - a serious development - is centring on specific fisheries where on-board sorting results in retention of only a fraction of the catch, e. g. herring fisheries targeted on the sale of roes. Demersal fisheries In the Community's central and southern Atlantic waters misreporting is limited, as are discards. The reasons for this favourable impression are not, however, necessarily that conservation principles are being observed. Many TACs in this zone are precautionary and set at levels imposing no real quota constraints on Member States, barring some specific difficulties over allocation (anchovy for France, northern hake and monkfish for Spain, megrim or southern hake for Portugal, etc. ). The lower proportion of discards compared with the North Sea is partly explained by the fact that southern markets see catches of species not valued and sometimes discarded in the north, and of small fish, even undersized ones. Ready acceptance of the latter means that control problems are more of non-compliance with technical measures than of quota overruns. Further north, on the Atlantic coast, catch misreporting problems become more serious. In general terms they remain limited by the existence of numerous precautionary TACs, set at a level often still too high to impose constraints on Member States or guarantee effective conservation. The overall figure for 1994 in Table 7 is however misleading in this regard; for western Scotland the scientific conclusions have had to be adjusted to take account of under-declarations of roundfish catches, as described in detail in the ICES report mentioned above. The discard problem is also greater than in the south but without any distinct trend. p:\c3l\rapports\ctrl\report\en In the North Sea and adjacent sectors (see Table 7), the under-reporting problem is particularly acute and has worsened, particularly for roundfish. This stems from a problem to which attention was drawn in a previous report (COM(95) 243 final). In line with the scientific recommendations, which have been more readily followed given that the situation for certain stocks is now recognized to be very serious, TACs in the North Sea have in the last few years been set at levels corresponding to strongly reduced exploitation rates. But fishing efforts have not been reduced: the Commission has not been followed when it has proposed substantial capacity reductions and considerable direct restrictions of fishing time. All conditions come together for the encouragement of fraud and discarding and the persistently high level of the latter, despite increases in authorized mesh size, will be noted. The twin phenomena of fraud and discarding amply illustrate the urgency for restriction of fishing effort in the North Sea. In the Baltic the situation for cod has developed in a very similar way to that in the North Sea: actual catches in the last few years have been substantially above quota, the problem not being restricted to any particular Member State or Union countries alone. The recent satisfactory recruitment to the cod stock has meant that, in the absence of effort restrictions, catches have exceeded those authorized. Control work has run into the problems of probable fraudulent misrepresentation of the geographical origin of catches made by Community fishermen and exportation to the Union of cod fraudulently fished in the Baltic by non-Union vessels, large quantities of Baltic cod having been declared on the market of Member States not bordering it. p:\c3l\rapports\ctrl\report\en , - 10 IV. ASPECTS OTHER THAN CONSERVATION 1. MARKET POLICY The rigorous application of the relevant body of Community rules should ensure that the proper functioning of the common organisation is not disturbed by, for example, undeclared imports and that undersized fish are not presented for sale through publicly or privately owned auction centres or benefit directly or indirectly from the price withdrawal system. In addition, fishery products presented for sale are required to comply with specific freshness and grading standards in order to protect consumers, etc. Each Member State is required to organise regular checks on its own territory in order to ensure compliance with the technical aspects of the common organization of the market in fishery and aquaculture products. The withdrawal of products from the market for purposes other than human consumption and the storage and/or processing of products so withdrawn must also be monitored. Member States must notify the Commission about the specific control measures adopted to implement the controls outlined above, the identity of the competent national control authorities, the type of infringements discovered and subsequent action taken. Within each Member State, the task of monitoring and control is shared between a number of national services. This division is partly explained by the fact that different services (health, antifraud, quality control, etc. ) have traditionally been involved in controls and that different entities (producers' organizations in particular) have a major role to play in the common organization of the fisheries market. p:\c31\rapports\ctrl\report\en - 11 As regards the actual implementation of technical controls, the Commission notes that checks on minimum sizes are undertaken by either the national fisheries inspectorate based in ports (United Kingdom, Ireland, Denmark), specialised services (France, Portugal), or a combination of both. In Member States where more than one service is associated with this type of control, it is not clear how and to what extent this task is shared or coordinated. In their submissions to the Commission, Member States, whilst indicating that this type of control is indeed exercised, gave few details on their level, frequency or extent. Consequently, the Commission cannot conclude that these have been satisfactory. As for controls on the procedures governing the withdrawal of fish from the market, Member States' reports indicate that in most cases these are adequately monitored and that the procedures are properly applied. Member States were also asked to supply information on the outcome of market-based inspections and controls (types of infringement, etc. ) and the action taken in cases of non compliance. Almost without exception, Member States have not supplied this information. 2. THE TRANSPORT OF FISHERY PRODUCT'S The proper functioning of the rules governing the transport of fishery products(4) should ensure that the national monitoring authorities are in a position to intervene in order to prevent the carriage and eventual sale of quantities of fish (particularly those subject to total allowable catch restrictions) which have not been comprehensively or correctly registered at the point of landing or importation or whose precise origin is unclear. Such controls can also assist in the prevention of fraudulent imports into the Community. Moreover, conducting routine checks on transporters constitutes a deterrent against the carriage of quantities of fish which have not been properly registered and/or of undersized fish. Both practices present persistent problems for national monitoring services. (4) Detailed rules applicable to the market sector are set out in Council Regulation (EEC) No 3759/92, and the enforcement of these is incorporated into the integrated control approach provided for in Articles 24-28 of Council Regulation (EC) No 2847/93, while the transport of fisheries products is regulated in Article 13 of Council Regulation (EC) No 2847/93. p:\c3l\rapports\ctrl\report\en - 12 - Port landings are normally controlled in the course of routine dockside inspections and new obligations apply in particular to quantities transported through Community territory. The controls focus primarily on whether: - such quantities are accompanied by a transport document, - the document in question contains the proper information. Responsibility for drawing up and keeping the document rests with the transporter. Checks on the transport of fishery products is a new task for the national monitoring authorities. The overland transport of fishery products has increased substantially in recent years and has particular relevance for different groups of Member States. The monitoring of the movement of fishery products has assumed greater importance in recent years because of the increase in the volume of fishery products transported for either marketing or/and specific consumption reasons. In their reports, Member States have not indicated the extent to which random checks have been conducted to check on the distribution of fish catches, nor do they report that their particular checks/controls yielded significant results. On the basis of these reports and missions conducted to Member States in 1994 by the Commission's Fisheries Inspectorate, the Commission takes the view that these controls have been at best very limited in the majority of Member States and that they cannot be considered to be of any significance in terms of overall control Consequently, the Commission concludes that the monitoring opportunities provided by this measure are not being fully exploited by Member States, particularly in the context of dealing with the problem of undersized fish. 3- STRUCTURAL POLICY(S) The input and output (catch) management requirements in the basic Regulation, reflecting as they do the scientific analytical work identifying excessive fishing effort and over-capacity as the primary cause of the CFP's difficulties, have given monitoring of capacity and effort an increasing importance that will continue to grow very rapidly. (5) The specific rules are contained in Articles 25 to 27 of Regulation (EEC) No 2847/92 p:\c3I\rapports\ctrl\report\en - 13 - Fishing-capacity adjustment, whether expressed in vessel size, engine power or in the number, size or gear characteristics of vessels, is to be properly monitored and the different means employed, e. g. restrictions etc. , to implement the different objectives are to be checked on a regular basis. Fishing-activity limitations accepted for some Member States as a complement to capacity reduction within the third-generation MAGPs must also be monitored. It is also necessary to ensure that, for example, vessels in receipt of financial aid for modernisation or cessation of activity, whether temporary or permanent, are checked by national monitoring authorities. From the various submissions and reports forwarded by Member States, a wide variation in both the type and depth of controls conducted by national monitoring services is apparent. On the one side, a number of Member States (United Kingdom, Germany, Denmark) have a relatively well-developed and integrated control framework (databases on vessel activity, fleet register, systematic checks on vessels entering the fleet, etc. ), while on the other side, other Member States appear to have a more ad hoc approach to these particular technical controls. With respect to the latter group of Member States, the Commission has noted that the technical controls are at best carried out intermittently and in an uncoordinated manner. In general, such controls are conducted only when vessels are initially modified etc. and there appears to be no or little attempt at follow-up checking. This is particularly important in the case of vessels which are subject to restrictions on gear usage or engine power. A second and equally important unsatisfactory element associated with the implementation of these technical controls is that many of them are carried out by services which are often not part of fisheries control services or departments. In addition, responsibility is sometimes shared by different services; in Portugal, for example, five different services are responsible for such controls while in others, two or up to three different ministries are involved. Whilst acknowledging that certain aspects of shipping (including fishing vessels) traditionally fall within the remit of different ministries, the Commission expects Member States to take steps to ensure that these tasks are centralised or closely coordinated by the service which has overall responsibility for fisheries control. As a first step in that direction, Member States should ensure that the information in the fishing-fleet register is more systematically utilised and complemented by databases on vessel activity linked to the fishing-fleet register, e. g. logbook returns, landing declarations, sales notes, etc. p:\c3l\rapports\ctrl\report\en - 14 - With respect to the actual implementation of technical controls, most Member States have not yet given sufficient attention to this type of controls. Few Member States, in the context of their annual reports, have provided sufficient information on the extent to which these controls are conducted. v. SANCTIONS AND LEGAL ISSUES The record on compliance with the provisions of the common fisheries policy is the result of the quality and frequency of inspections and the level of sanctions in cases of non compliance. This is an area where the Member State have sole competence. In order to get a better understanding of the legal systems applicable in the Member States concerning fisheries enforcement, the Commission ordered a study which covers most Member States. The results of this study are reflected in this chapter. 1. NATIONAL LEGAL SYSTEMS OF FISHERIES ENFORCEMENT Fisheries enforcement can be divided into three different stages, i. e. disclosure of apparent infringement by monitoring, initiation of infringement procedures and sanctions. 1. 1. Monitoring powers Traditional monitoring powers are rather similar in all Member States. Control authorities in all Member States have wide ranging powers, such as the power to board vessels and search any relevant compartment; to examine fish; to initiate inquiries; to require any paper or document for investigative purposes;'to take samples and to measure and weigh goods. But there are considerable differences in the scope of these powers. This scope may vary according to a number of factors. One of the most important factors is the nature of the enforcement system, i. e. criminal or administrative. p:\c3l\rapports\ctrl\rcport\en - 15 - 1. 2. Infringement procedures Infringement procedures in respect of fishery offences are very different as between the Member States. These differences are for instance apparent in matters relating to the rules of evidence. Problems sometimes occur when evidence is transferred from one Member State to another. Differences also exist as far as the settlement of fishery offences out of court is concerned. 1. 3. Sanctions Differences between the national systems are also reflected in the way in which sanctions are imposed for fishery offences. In some Member States, decisions on fishery offences fall under the jurisdiction of the criminal courts, whilst other Member States have an administrative system of fisheries enforcement in which such decisions are taken by administrative authorities instead of courts of law. In some Member States combined systems apply. Sanctions can be classified in three main categories : - penalties imposed in criminal court proceedings (money fines, imprisonment, forfeiture of catch or gear, licence withdrawal); - civil fines, which are imposed only in Denmark and the Netherlands. - administrative penalties imposed by administrative authorities in the countries having an administrative system of fisheries enforcement. 2. THE COMMUNITY LEGAL FRAMEWORK As the frequency of inspections is generally low, fishermen can calculate the risk of being fined as another operating expense. In many cases, the impact of penalties on the behaviour of fishermen is, therefore, negligible. If even a fine deprives a fisherman of the gains of the fishing trip in question, it will at most only marginally increase annual costs. In addition, national courts have been known to impose very low fines because they consider Community legislation too complex and do not expect the fishermen to understand it. Unfortunately, there are too many examples where the fishing industry and in some cases even national administrations have promoted this image of the common fisheries policy. p:\c3l\rapports\ctrl\report\en - 16 In order to safeguard the objectivity and transparency of the action taken following infringements, the Commission proposed - and Member States adopted, as part of Council Regulation (EEC) No 2847/93 of October 1993 establishing a control system applicable to the common fisheries policy - certain provisions relating to the effectiveness of sanctions to be applied in cases where the Community measures are not observed. In the light of these provisions, Member States are required to take all the necessary non discriminatory measures to ensure compliance with the rules of the common fisheries policy and prosecute irregularities, by establishing a roster of sanctions effectively depriving the wrong-doers of the economic benefit of the infringements or producing results proportionate to the seriousness of such infringements. In addition, and in accordance with Article 34(2) of the Council Regulation, Member States are obliged to notify the Commission regularly of the results of all inspections or monitoring carried out, including the number and type of infringements discovered and the action taken. Most Member States do not provide information on their penalty practices. Although it is easy to find examples illustrating the insufficient level of penalties, there is little information supporting an assessment of the efficiency of sanctions in fisheries. Even if Member States notify the number of infringements prosecuted, little or no information about the eventual penalty inflicted, if any, is available. The statistics provided in Annex II demonstrate the inefficiency of the information transmitted. Moreover, certain Member States capitalize on the obligation of notification to systematically indicate all infringements committed by vessels from other Member States and even non- member countries. As long as the Commission does not receive systematic information on the amount and type of penalties imposed by national courts or administrative authorities, it cannot properly assess the efficiency of fisheries enforcement in the Member States. p:\c3l\rapports\ctrl\report\en - 17 3. COOPERATION It appears that the legal framework applicable in the Member States concerning fisheries enforcement provides very few opportunities for cooperation between Member States. A Member State has jurisdiction over all fishing vessels operating in its waters, and beyond in the case of its own vessels. Non-compliance may be disclosed and sanctioned under its jurisdiction. However, in many other cases where fishing vessels operate in the waters of several Member States and land their catch again in another Member State, it may be difficult for the flag Member State to monitor the activities of its vessels. This arises particularly when, for example, the flag Member State allocates individual catch quotas to its vessels. However, such cooperation is particularly non-existent. Furthermore, cooperation between Member States is meant to involve procedures for the exchange of information and evidence as well as taking action against vessels which have escaped inspection in another Member State. But problems can occur due to different national systems of fisheries enforcement. Member States have, for instance, widely diverging rules of evidence. The current lack of cooperation may reflect the permissive attitude towards the national fishing industries which attempt to exploit fishing possibilities beyond the limits set in accordance with the common fisheries policy. As long as the fishing industry in most Member States exploits such fishing possibilities, none of them will gain, but obviously the conservation of fish stocks will be undermined for everyone. To overcome some of the obstacles between national procedures, close cooperation between the authorities of the flag Member State and the authorities of the coastal state is recommended. It is submitted that effectiveness of fisheries enforcement should not vary according to the national system of law involved. As regards enforcement, it is therefore necessary to enhance cooperation between Member States, increase the deterrent effect of sanctions and create improved transparency. p:\c31\rapports\ctrl\report\en - l! VI. CONCLUSIONS This report, completed in 1995, has clearly indicated the delays occurring in implementation of the new provisions contained in the control Regulation (Regulation (EEC) No 2847/93), the impact of which cannot yet be fully assessed. The next report, which will be completed in 1996, will be of primary importance in this regard. It will have to take account of the conclusions of the December 1994 meeting of the Council calling for a report on fishery controls in the Atlantic and experience acquired in 1996 following the computerization, now compulsory, of databases of logbook and landing-note information. The value of this will be all the greater as the information transmitted by the Member States becomes more precise, particularly as to actual resource allocation to monitoring work and the statistics on infringements detected and penalties imposed. Incomplete though it is, the present report is in the Commission's eyes eminently useful. It can only help to diminish the lack of transparency between Member States on control matters. Invariably unwilling to draw attention to their own weaknesses, the Member States have nonetheless made big efforts to describe their control mechanisms. Experience gained in preparing this report will enable the Commission to frame its requests for information from the Member States more accurately, which will increase the contribution of this type of report to transparency. The Commission is also now in a better position to adjust the deployment of its own resources, though this is unfortunately restricted by the increased burden of control work in international waters (NAFO, driftnets). The Commission continues to hope that, in line with the rules on sharing of responsibility, the Member States concerned will rapidly take up the burden of work falling on them. Irrespective of this the Commission considers that it must in future give priority to: validation, for the sake of transparency, of the information transmitted by each Member State on resources devoted to control work and the outcome of this work; p:\c3l\rapports\ctrl\report\cn - 19 new areas being covered by control work at Community level: structural measures, particularly the adjustment of fleet capacity, parallel monitoring of fishing effort, market monitoring liaison, checks during transport, and the development of systematic cross checks between different sources of information; the problems in each fishery that lie behind major infringements of Community regulations to the possible detriment of other Member States, e. g. quota overruns in the North and Baltic Seas and disregard of technical conservation rules in Region 3; coordination between national administrations and between them and DG XIV. Accelerated implementation of new technology (satellite monitoring, computer links) is a first field for consultation but not the only one. Coordination of action at sea, as control work in the Atlantic tuna fisheries has demonstrated, requires action at Community level. The same applies to checks on catches by vessels operating in the EEZ of one Member State and landing at a port in another. Generally the Commission has an important role to play in promoting synergy and dissipating suspicion. The detailed priorities of national administrations will certainly vary but for 1996 the Commission considers there to be two general priorities: computerization and control work on capacity and effort. p:\c31\rapports\ctrl\report\en - 20 - A N N EX I REPORTS FOR EACH MEMBER STATE The report on each Member State is in two parts: I. Inspection and monitoring of fishing activities A summary of the description provided by the Member State of the provisions it has implemented for the enforcement of the CFP. The Commission has been obliged to provide summaries because of the volume and non-uniform presentation of the reports from the national authorities. II. Evaluation This is an evaluation carried out by the Commission and notified to the relevant Member State, whose comments have been incorporated. In all cases the Commission's evaluation contains a description of the particular circumstances in each Member State. In the mind of the Commission, this part is intended to promote mutual understanding between Member States. p:\c3l\rapports\ctrl\annexel\en 6 1 BELGIUM I. Inspection and monitoring of fishing activities A. ORGANIZATION Responsibility for monitoring fishing activities of Belgian and non-Belgian fishing vessels rests primarily with the Ministry of Agriculture, although some specific aspects of fisheries monitoring are allocated to the Ministry of Communications and Infrastructure, the Ministry of the Economy and the Regional Flemish Government. Within the Ministry of Agriculture, the Sea Fisheries Service has responsibility for the collection of data on fish landings, controls on imports, markets and the management of national quotas. Sea inspections are assisted by the national Naval Service, which is under the authority of the Ministry of Defence. These inspections are carried out in cooperation with the Sea Fisheries Service and personnel from that service accompany naval vessels. Structural aspects (licences, vessel characteristics) are dealt with by the Sea Fisheries Service, while the technical aspects (engine capacity, tonnage) are monitored by the Ministry of Communications (Maritime Inspection Service). Fleet development is regulated by licences issued by the Sea Fisheries Service and finance (loans etc. ) is provided by the Regional Government of Flanders. In the area of markets (quality grading, withdrawal price levels, etc. ) responsibility is divided as follows: Quality/grading is monitored by the Ministry of Agriculture (National Service for the Promotion of Agricultural/Horticultural products) (N. D. A. L. T. M. ) Withdrawal of fish etc. : Ministry of Economy (General Economic Inspection Service) Price levels: Ministry of Agriculture (See Fisheries Service). p:\c3l\rapports\ctrl\annexe l\en Z <L B. RESOURCES 1. Human The Sea Fisheries Service has a staff of approximately 25 persons. The Fisheries Inspectorate, which is a separate unit inside the Sea Fisheries Service, is composed of one inspector and four fisheries officers and is based in Ostende. The Inspectorate visits ports and auctions on a regular basis, and participates in naval inspections and aerial surveillance missions. A small staff within the Sea Fisheries Service covers catch registration and quota management. When conducting auction/port inspections in Zeebrugge, the national inspectors are assisted by the local port police. From time to time the Fisheries Inspectorate can avail itself of the services of the Investigation Branch of the Custom and Excise Service. Monitoring at the marketing stage and the technical aspects (grading, freshness) are covered by two inspectors from the N. D. A. L. T. P. (Ministry of Agriculture). One inspector (from the Ministry of the Economy) conducts checks on the destination of fish withdrawn from the market and general compliance with withdrawal prices. 2. Vessels/aircraft Three naval vessels (2 tugs and 1 inshore minesweeper) are available for fisheries protection duties. An aircraft under the control of the regional government (Dept. of the Environment) is leased for a total of forty hours per year. This is used for aerial surveillance during specific periods of the year (spring - for the flat fish season). p:\c31\rapports\ctrl\annexe l\en I 3 3. Computerization A centralised computer service based in Ostende has been established (AS-400 IBM mainframe computer). This is used to store data on catches - logbook, landing declarations, sales notes, information on marketing (prices, quantities, quality grading, etc. ) and the list of licences issued. The registration of vessels, which is the responsibility of the Ministry of Communications, is also computerized. Data (sales notes etc. ) from the Zeebrugge Auction are transmitted on-line to the Sea. Fisheries Service on a daily basis. Data from other auction centres are entered manually in Ostende. C. ACTIVITIES The inspections conducted onshore (in auctions/on buyers and vessels) in 1994 totalled 208. These were carried in the following port/auctions: Zeebrugge: 99, Ostende : 71, Nieuwpoort : 17, Others : 21 These checks detected 64 apparent infringements (the majority of these concerned logbooks or landing declarations). Approximately 30% of all recorded landings were checked. Approximately 95% of all logbook information is returned. The same applies for landing declarations and sales notes. Exchange of information is furthermore carried out on a regular basis with Denmark (via modem), the Netherlands and the UK. Validation of logbook/landing declaration data is carried out by use of sales notes and this is undertaken with respect to approximately 75% of landings. Discrepancies etc. are identified and transmitted to the Fisheries Inspectorate for subsequent follow-up. p:\c3l\rapports\ctrl\annexel\en ^M Naval Inspections 1994 In 1994, sixty-eight vessels (mainly Belgian and Dutch) were inspected and a total of nine infringements were detected. Sea patrols were conducted in area IVc and totalled 34 days during 1994. Aerial surveillance (40 hours) resulted in 302 sightings. p:\c3l\rapports\clrl\annexel\en L S II. Evaluation A. General The fishing fleet comprises a limited number of medium-sized vessels. A relatively large part of the catch is landed in other Member States (UK, Netherlands and Denmark). In 1994, the quota for 9 stocks was exhausted. Quota management for sole in particular is very restrictive. The EEZ is limited in size and the coastline is relatively short with a small number of ports. B. Strengths and weaknesses The recording of catches is computerized. It is based on data from logbook sheets, landing declarations and sales notes. About 75% of landings are cross-checked. The catch registration of landings offered for first sale at auction seems to be reliable. Landings in other Member States are scrutinized on the basis of logbook sheets. This information is checked against the information on landing and sales provided by the Member States concerned. Although the number of officials responsible for inspection has increased over the last years, their numbers are still considered insufficient. Furthermore these officials do not have the necessary legal powers required to carry out their tasks on land and at sea. Three navy vessels with limited capacities for fisheries surveillance carry out part time inspections at sea. Aerial surveillance is limited to 40 hours per year. The legality of findings obtained by this means of inspection is contested. It is believed that unrecorded landings still occur. Fisheries inspectors are accompanied by customs or police officials with a view to disclose such practices. p:\c31\rapports\ctrl\annexel\en Z-Q DENMARK I. Inspection and monitoring of fishing activities A. Organization Responsibility for monitoring fishing activities rests with the Fisheries Directorate, which now forms part of the Ministry of Agriculture and Fisheries following restructuring which took place in 1994. Within the Fisheries Directorate there is a division which has specific responsibility for controls including actual inspection. Other tasks ascribed to that division include registration of catches, the issuing of licences and structural and market aspects associated with the fishing industry. The actual Fisheries Inspectorate is decentralised, that is to say, the majority of inspectors are based in the main fishing ports and their activities are coordinated through the Division's Secretariat. In specific areas of responsibility, e. g. structures and markets, the Inspectorate is assisted or cooperates with other specialised public organizations such as Customs and Excise, the health and veterinary services. The Inspectorate has its own inspection resources - patrol vessels and computer systems which are under its own exclusive control. The main objective of the inspectorate both centrally and locally is the collection of catch data from logbooks/landing declarations and comparison with data obtained from sales notes supplied by auction centres and buyers. This data is systematically analyzed and discrepancies noted are investigated. In. order to facilitate analysis, two data bases have been created, covering landings and sales. p:\c3l\rapports\ctrl\annexe 1 \en M B. RESOURCES 1. Human In terms of actual inspectors, the Inspectorate has a staff of 143 inspectors divided between the main fishing port areas. In addition, the Secretariat has a staff of 25, while the Computer Service used to process data from logbooks/landing declarations/sales notes has a staff of 24. Analysis and updating of catches subject to total allowable catch restrictions is undertaken by an additional staff of 3 persons. 2. Vessels/aircraft A total of five vessels are used for fisheries patrol purposes. These vessels have a total crew of 102 persons. No aircraft surveillance is carried out by the Fisheries Inspectorate. 3. Computerization Computer systems have been installed to process logbook/landing declaration data and sales note data, record catch returns and conduct ongoing analysis of fishing activity and effort. The data is stored in a mainframe, access to which is available to staff via a local network. Locally based inspectors are linked by a network and also have access to the mainframe. p:\c3l\rapports\ctrl\arinexel\en 2E C. ACTIVITIES Inspection activity, by port, by type of activity Table 1 Inspectorate based in N " of Employees N ' of inspections of vessels N * of inspections of buyers Esbjerg Fredericia Frederikshavn Nykobing Mors Randers Roskilde Total 21 19 29 25 18 31 143 1475 107 1524 457 83 1107 4573 1016 50 2617 993 293 205 5174 p :\c3 l\rapports\ctrl\annexe 1 \en 19 Inspections at Sea - Patrols conducted per patrol vessel, by number of days, by ICES area Table 2 AREA IV A IV b III AN III AS III B III C III D VESSEL Jens Vaever Nords0en Nordjylland Vestkysten 12 Viben Various other vessels 2 49 97 142 14 117 1 26 28 21 2 80 1 1 5 102 3 51 16 31 98 Total 12 274 148 75 83 111 Number of inspections at sea by ICES area. IV A IV b III AN III AS III B III C III D AREA 200 5 68 1 48 89 293 128 10 15 14 39 13 ' 71 84 7 7 39 20 6 65 VESSEL Jens Vaever Nordsoen Nordjylland Vestkysten Viben Total Results Number of apparent infringements detected during the course of sea and port inspections: Port Inspections: 182 - largest category: logbook/landing declaration obligation (57). Sea Inspections: 59. p:\c3 l\rapports\ctrl\annexe 1 \en ?>0 Validation of landings, auction data, etc. Validation is conducted primarily through the systematic comparison of logbook/landing declarations and sales notes. Landing and sales data is collected in port by local inspectors and transmitted to the central authorities. Purchases made at auctions or by major buyers (fish-processing plants) are transmitted within forty-eight hours. Cross-checks on this data are made on a daily basis to identify errors, missing information and discrepancies. In addition, the larger auction centres are visited on a regular basis to make checks on quantities, their grading and freshness and in the context of monitoring market regulations generally. Validation of landings by means of physical controls (monitoring and recording quantities landed - number of boxes and their weight) is limited to approximately 3% of landings. There exists a licensing system for vessels with no logbook and their catch is recorded using the sales notes. Landings in non-member countries Landings made by Danish vessels in ports located in non-member countries are checked using logbooks/landing declarations and comparing these with subsequent sales notes if the catch is sold in Denmark. In 1995, the sales-note format was modified to include information on the economic zone where the catch was taken. Monitoring of technical conservation measures (gear type, fish sizes, etc. ) Checks are undertaken by the Fisheries Inspectorate in the course of port inspections and during sea patrols. No precise details are available with respect to the number (or frequency) of these types of inspections. In general, they are carried out in the context of routine port inspections. p:\c31\rapports\ctrl\annexel\en 31 Problems with respect to undersized fish (Norway lobster in particular) have been noted by the national authorities but their efforts to suppress such practices have been hampered by the fact that many occur in the context of smaller landings which cannot be subjected to continual monitoring. Control on mesh sizes and gear generally is carried out in the context of sea patrols. No precise figures are available as to the rate of inspection or detection. Effective monitoring is hampered by the fact that vessels can retain different gear types/mesh sizes while at sea and is restricted to the inspection of the last haul. Transport of fish Monitoring of fish transported overland is, in the first instance, carried out on a sample basis and through random checks. The authority to stop transport vehicles is confined to the national police authority and this inhibits more general controls. A satisfactory level of monitoring can be effected through cooperation with the national police authority. p:\c31Vrapports\ctrl\annexel\en 3 2. II. Evaluation A. General The Danish EEZ is limited, but Denmark has a long coastline with over 200 harbours. The fishmeal industry is located on the West Coast of Jutland. A large number of small ports are located along the Danish coast and among the islands. The most important Baltic port is Nekso on Bornholm. The Danish fleet carries out a number of various fisheries. The overcapacity of the fleet has been gradually reduced and there is no excessive pressure on quotas, except for certain species such as cod and North Sea sole. The major volume of the catch consists of small species destined for fish meal and oil. A sampling scheme recently revised indicates that the landings of herring for reduction have diminished as a result of the management regime and probably certain biological developments including increased sprat occurrences. The monitoring of industrial fisheries remains difficult, however. An important problem in this respect is the mixed clupeoid fishery in the Skagerrak/Kattegat, where ambiguities in the regulations are exploited to the fullest extent possible. By-catches in certain other industrial fisheries can also create problems. Even the so-called clean fisheries deserve attention because of the risk of species misreporting, e. g. herring being reported as sandeel. The fishermen in the industry are well organised, which should facilitate controls. B. Strengths and weaknesses Danish fisheries policy has a long history and covers a large number of aspects. It has been translated into a comprehensive set of national regulations. The authorities have set up a fairly extensive system to register catches. Computerised procedures have been set up to process logbook sheets and sales accounts transmitted by fish buyers. The consistency of the data is systematically cross-checked. Physical inspection is however not so extensive. 0'. \c^l\rannnrts\ctrl\annexe I \en ij Logbook entries are not profoundly checked. Sales notes, which are actually used as landing declarations, are not sufficiently checked by the national inspectors, although illegal arrangements between fishermen and buyers may exist. Cross-checks between logbooks and sales notes should be more-often complemented by physical checks. The Danish system for registering catches and landings has three components: physical inspection, scrutiny of documents and checking of accounts. The scale of each of these depends on an assessment of where resources can be most effectively applied. The physical monitoring of landings allows cross-checking of logbook data and sales accounts. The national regulations for the fisheries in all major species are controlled by document checks carried out regularly by local inspectorates and by checks on business accounts. The document checks involve comparing logbooks and sales notes against the allowable catches in regulated fisheries. Individual fisheries are comprehensively surveyed at vessel level. Local inspectors also carry out checks on business accounts. On a sample basis, for a given period, a complete input/output analysis is made of the flow of products and the flow of money to see whether goods received/bought tally with goods sold. This ensures that any data errors in registers will be identified. The registration of industrial catches through the administrative circuit is not fully satisfactory. The buyers of industrial landings only mention the main species in the catch; the composition of individual catches is in general not known to the authorities. In this way an industrial catch of pout mixed with protected species can be declared entirely as pout. This results in certain species being over-reported in the catch reports, whilst others are under-reported. An overall scientific evaluation of industrial catches, based on the sampling scheme, helps however to correct these shortcomings. Nevertheless, the Commission is not in a position to guarantee the full effectiveness of the sampling scheme in question. There is also insufficient direct monitoring at sea of the specific management measures aimed at limiting industrial fisheries in problem areas. A satellite tracking system would overcome this problem. p:\c3l\rapports\ctrl\annexe 1 \en ^ On the registering of industrial catches, the Danish authorities comment as follows: The registration of industrial catches is in accordance with the rules for registering catches set out in Article 5(1) of Council Regulation (EC) No 3362/94 of 20 December 1994 fixing, for certain fish stocks and groups offish stocks, the total allowable catches for 1995 and certain conditions under which they may be fished, this registration system is also well-suited to managing quotas if it is supplemented by a sampling system for use in formulating scientific advice. The sampling arrangements and the volume of samples taken can of course be modified. Furthermore, the legal authorities require a significant excess of the by-catch limits before they sentence fishermen. If the by-catch limit is e. g. 10%, prosecution will only start if the by-catch is at least 20%. A conviction results in a fine and in the confiscation of the value of the illegal part of the catch. Enforcement at sea is in general limited. The patrol vessels are also assigned to other task such as assistance to fishermen. Their efficiency could be increased by the establishment of airborne surveillance. The Danish authorities comment as follows: The seagoing patrols spend about 80% of their time on surveillance, with the remaining 20% being spent on rescue and towing activities. The number of days at sea in 1994 came to 801, with 120 127 nautical miles sailed in total. p:\c31\rapports\ctrl\annexe l\en 2. -T During 1994, the controls on the cod fishery in the Baltic sea caused particular problems. The inspection service faced difficulties to cope with the numerous third country landings and had therefore insufficient resources left to control fisheries. Moreover, one of the inspection vessel then operating in the Baltic was not adequate for the task. Pursuant to the request of the Commission, the Danish authorities have conducted an administrative inquiry into this fishery. p:\c31\rapports\ctrl\annexe l\en 2>C GERMANY I. Inspection and monitoring of fishing activities A. ORGANIZATION Responsibility for monitoring fishing activities in the Federal Republic is divided between the central authorities and their counterparts in the Lander. The central authorities are based in the Ministry of Food, Agriculture and Forestry. Fisheries inspectors are based in the Ministry and in the Lander. Both inspectorates are responsible for the following tasks: monitoring landings, gear and vessel characteristics, conducting checks on quality and compliance with market and technical rules (prices, withdrawal freshness, grading, etc. ) validation and cross-checking of catch and sales records. A number of specialized public organizations are also involved in monitoring different aspects of fishing activity: technical aspects of vessels and gear: Federal Office of Sea Navigation and Hydrography. markets: Federal Veterinary Office Federal Agriculture and Food Office - BLE The national intervention agency. imports: Custom and Excise Service. control vessels: Coastguard Service. B. RESOURCES 1. Human Fisheries Inspectorate The total number of shore inspectors in the Federal Republic is 30, with 4 at federal level and 26 in the Lander (Schleswig-Holstein 10, Mecklenburg-W. Pomerania 12, Hamburg 1). p:\c3l\rapports\ctrl\annexel\en "àv This core group of inspectors is assisted by additional local staff during major control operations. 2. Vessels/aircraft A total of 21 surveillance vessels are utilised in the Federal Republic, 4 operated by the central authorities and 17 by the Lander. In addition, 12 customs vessels carry out limited control duties, for example patrols are conducted on the outer limits of the German fishing zone and in certain protected areas to monitor flatfish. However, these vessels do not conduct actual fisheries inspections. Surveillance vessel activity is coordinated by the National Coastguard Service. No aircraft are assigned to fisheries surveillance. 3. Computerization Information on the administration of quotas, the national fishing fleet and markets is computerized at the Federal Agriculture and Food Office (BLE). In addition, some of the individual Lander have computer systems while others are installing them at present. p:\c3l\rapports\ctrl\annexe l\cn 2>S C. ACTIVITIES Fisheries Inspectorate Port inspections A total of 10 539 port inspections were conducted in 1994. These were located as follows: Lander Number of port checks Mecklenburg-Western Pomerania Lower Saxony Schleswig-Holstein TOTAL 7 383 2 473 683 10 539 In the context of these inspections a total of 176 infringements were detected. The bulk of the infringements involved logbook/landing declaration offences. Type of infringement Nationality of vessel German Danish 4 Logbook/landing decl. Illegal gear Vessel tonnage/engine capacity By-catch Undersized fish Unauthorised fishing Gear marking Vessel marking Others r 53 10 1 1 8 5 5 17 76 p:\c3l\rapports\ctrl\annexel\en 3 3 In addition to vessel inspection, the monitoring authorities were involved in checking landings at the point of unloading or in auction centres. An estimated 30% were checked mainly in auction markets in 1994. No checks were performed on transport on land. Cross-checks between logbook entries, landing declarations and sales notes were conducted on all vessels of ten metres or more in length. These landings represented 95% of total landings at ports in the Federal Republic. Catches made by vessels under 10 metres are reported monthly to the authorities. Specific control activity focused on compliance with minimum fish-size requirements (both at sea and in port), minimum mesh sizes and, to a limited extent, on the transport of fish. Inspections at sea Area Number of days Inspections ICES III ICES IV ICES V ICES VI ICES XII ICES XIV TOTAL 1 415 1 344 4 2 14 68 2 847 2 843 1 645 4 488 Sea patrols detected a total of 265 infringements. Infringements detected at sea by nationality of vessel by type of infringement break down as shown below. Total number of vessels involved in infringements Nationality of vessels Belgian German Danish Dutch 2 240 7 15 UK 1 TOTAL: 265 The main types of infringement were logbook irregularities, unauthorised gear, unauthorised fishing, entry into a closed area, etc. p:\c3l\rapports\ctrl\annexel\en Mo Number of fishing vessels inspected by nationality German Danish Dutch UK Belgian TOTAL 3 778 138 503 45 24 4 488. p:\c31\rapports\ctrl\annexe 1 \en W4 II. Evaluation A. General The size of the German fisheries has dwindled drastically in the past 15 to 20 years. Germany has adapted the structure and size of its fleet to the available quotas. There is no overcapacity. The EEZ is limited in size, and the North Sea coast is relatively short with only a small number of ports. The Baltic coast counts a larger number of mainly small harbours. Germany has an important fish processing industry relying largely on imported products. B. Strengths and weaknesses There is little problem with breaches of technical measures discoverable in ports and control seems to be adequate, although hampered by staff shortages in the Lander. The situation is rather different at sea; the fisheries protection vessels appear not to be optimally utilized because of the division of competence between the Federal authorities and those of the Lander. The German deep-sea fleet is active in the entire North Atlantic. The fleet is most of the time escorted by a German fishery protection vessel (Fischereischutzboot). Therefore the German authorities have a good knowledge of the activities of this fleet segment in the fishing grounds. The landing controls made on freezer-trawlers are very detailed. The inspectors tally the unloading and verify at irregular intervals the marking of the units. They also take samples from frozen fillet blocks and send them to a veterinary office for species identification. Catch registration is based on logbook sheets, landing declarations and sales notes. A comprehensive set of conversion factors is in use. In general, the catch reporting system seems to be reliable. p:\c3l\rapports\ctrI\annexel\en V During 1994, the monitoring of the cod fishery in the Baltic caused particular problems. The inspection services could not cope with the numerous cases of species mis-declaration and with cod imports and transits. Initiatives were taken by the competent authorities with respect to monitoring German vessels fishing in the Danish zone and reciprocal arrangements for Danish patrol vessels. At the request of the Commission, the German authorities have conducted an administrative inquiry into this fishery. p:\c31\rapports\ctrl\annexe 1 \cn 4 3 GREECE I. Inspection and monitoring of fishing activities A. ORGANIZATION Responsibility for monitoring fishing activities is shared between a number of ministries and public organizations. With respect to the ministries associated with controls, these are the Ministry of Agriculture (Directorate-General for Fisheries) and the Ministry of the Merchant Marine (Coastguard-Police Division) and, to a lesser extent, the Ministry of Commerce. Actual controls are carried out by the port authorities (172 in total), which come under the Ministry of the Merchant Marine. These coastguard authorities are responsible for issuing safety certificates to fishing vessels and monitoring fishing activities up to the point of landing of catches and for verifying compliance with national and Community legislation in the context of the common fisheries policy (mesh sizes, technical measures, etc. ). In addition, they also process infringement proceedings. Specialised services of the Ministry of Agriculture and the Ministry of Commerce are responsible for controls on domestic and imported fishery products transported from the port of landing to fish markets and processing units and for verifying compliance with national and Community legislation applicable to marketing, health and sales matters. B. RESOURCES 1. Human As stated above, controls are carried out, in the main, by the one hundred and seventy-two coastguard-designated port authorities. No details of precise personnel figures are available with respect to port inspections, etc. Inspections are concentrated on vessels over 10 metres and these number 2 416 in total (12 % of fleet); in addition, the 12 main auction centres which sell approximately 30% of all landings are monitored. Cross-checking of logbooks/landing declarations and sales notes is not undertaken because of the deferment until 1 January 1999 of the provisions of Article 40 of Council Regulation (EEC) No 2847/93. p:\c3l\rapports\ctrl\annexel\en 4 W 2. Vessels/aircraft A total of 120 surveillance vessels and 70 onshore vehicles are available for control purposes. No details are available with regard to how these are utilised and the results of patrol activities. Four light aircraft are available for aerial surveillance. Again no details on their operation have been reported to the Commission. 3. Computerisation The Greek authorities have created the following computer systems : Using the HELLAS-PAC facility, the Ministry for the Merchant Marine has set up a network of computers and terminals for its headquarters and regional services and 12 port authorities (Piraeus, Thessaloniki, Patras, Kavala, Chios, Corfu, Heraklion, Volos, Rhodes, Halkida, Lalamata and Syros). The whole data network functions under the TCP/IP communications protocol. The computers carry data on the Greek fishing fleet. Client/server-environment applications are operated through the network, and there is a facility for automatic information exchange. Information is stored in databases on the Ministry for the Merchant Marine's central computer and is available to all of the network users. The Ministry for the Merchant Marine has installed a SUN 690 MP computer and developed an ETHERNET network linking 50 terminals and printers via 5 terminal servers and personal computers. SCO-UNIX systems have been installed at the offices of the coastguard authorities in ports. Fishing fleet data is stored in a data base on the central computer. The database is fed daily with information from the coastguard authorities about the current situation of fishing vessels and about any changes in their characteristics, as required by Regulation (EC) No 10. 9/94. p:\c3I\rapports\ctrl\annexe 1 \en Mr The final phase of control/approval of all changes made to fishing vessels, as specified in Regulation (EC) No 109/94, is carried out before forwarding to the Ministry of Agriculture, which has ultimate competence and is responsible for implementing the common fisheries policy and for the management of fisheries resources. All data are stored via magnetic means on a daily basis. A pilot fishing-activity control application via satellite is already being implemented and is providing satisfactory results. 18 fishing vessels and 6 coastguard patrol boats are participating in this pilot application. C. ACTIVITIES The specialised services of the three Ministries involved in controls and monitoring are engaged in a wide range of inspection activities. These include: safety certificates, fishing licences, landings, fish sizes and species, fishing gear, fishing methods, checks on imports and transportation of fish landed, technical inspections with respect to vessel characteristics and fleet composition, including up-dating the national fishery register, markets - quality grading and the withdrawal regime. No details are available as to the number of personnel and other resources actually deployed to cover the range of tasks indicated above. p:\c3I\rapports\ctrl\annexe 1 \en M6 II. Evaluation Like Italy, Greece is not yet fully integrated into the control system applicable to the common fisheries policy. Consequently, the main task of the national monitoring services is to enforce national legislation and specific aspects of Council Regulation (EEC) No 2847/93. A. Organization of monitoring The bulk of control duties are allocated to the Coastguard Service which is based in, and operates in, the main ports. This service appears to be well-organised and integrated into all major aspects of monitoring. Further development of the monitoring service will be necessary in order to complete the control infrastructure in time for the application of all provisions of Council Regulation (EEC) No 2847/93. B. Management of the structural and market aspects of fisheries The task of monitoring structural and market aspects of fisheries products in shared between a number of public organizations drawn from different ministries. Consideration should be given by the Greek authorities to ensuring that this task is carried out, as far as possible, by the service responsible for monitoring generally. The Greek authorities wish to point out the following: The management of the structural and market aspects concerning fishery and aquaculture products is the responsibility of the Ministry of Agriculture, with the Directorate-General for Fisheries and the EAP (Coastguard) playing a substantial coordinating role. Where markets are concerned, there are obviously certain other departments of the Ministry of Agriculture involved (DIDAGEP, Veterinary Service) under the supervision of the Ministry of Agriculture as well as departments of other Ministries (Commerce, Economic Affairs), whose activities are however based on cooperation and agreement with the Directorate-General for Fisheries and the EAP. p:\c3l\rapports\ctrl\annexel\en H} C. Monitoring of the transport and sale of fishery products The Greek authorities have acknowledged that enforcement of these two aspects is not yet complete and that steps are currently being taken to facilitate full implementation of these two types of control (development of sales notes etc. ). p:\c31\rapports\ctrl\annexel\en V* SPAIN I. Inspection and monitoring of fishing activities A. ORGANIZATION Responsibility for the monitoring of fishing and related activities is divided between the central authorities in Madrid, based in the Ministry of Agriculmre, Fisheries and Food, and the 10 fisheries authorities of the "coastal" autonomous communities. This division is based on the origin of catches landed, that is, catches taken in waters located outside the baselines are the responsibility of the Madrid authorities while those taken inside are under the responsibility of the autonomous community authorities. In effect, this means that the registration of catches and associated aspects (logbooks, landing declarations and sales notes) are monitored by the respective control authorities. With respect to controls on marketing aspects, e. g. first-stage sale, this is the responsibility of the Madrid authorities regardless of the origin of catches. However, subsequent sales fall within the competence of the (17) autonomous, communities. On the other hand, monitoring of the structural aspects of fisheries policy (fleet register, vessels characteristics and capacity) falls within the competence of the central authorities - the Ministry of Transport (Directorate-General of the Merchant Marine), which is responsible for all national fleets. The Secretariat-General of Fisheries within the Ministry of Agriculture, Fisheries and Food is responsible for recording vessel activity and issuing. licences and the use of specific gear types, etc. The Fisheries Inspectorate which monitors external landings is based in Madrid and is deployed throughout the country on a regular on-going basis. p:\c31\rapports\ctrl\annexel\en M 3 B. RESOURCES 1. Human and other resources Organisation Inspectors Patrol Vessel Helicopters Vehicles Madrid based 30 31(1) 2 26 Guardia Civil (Maritime Division) Basque Country Cantabria Asturia Galicia Andalusia Murcia Valencia Catalonia Balearics Canaries 9 15 12 117 25 3 12 18 7 24 19 2/5(2) 6 / 3<io) 3 / 6( i o) J(3) 21/3UO) 2 1 1 / 8( i o) 1(4) 1 1 4 / 3( i o) 3 7 4 52 11 1 5 9(5) 14 The inspectorates based in the autonomous communities focus primarily on the local small- scale fleet and shellfish vessels. (i) (2) (3) (4) (5) 31 patrol vessels the majority of which belong to the navy. Auxiliary vessels In association with Guardia Civil 300 hours per year. 3 trailers. i^O p :\c3 l\rapports\ctrl\annexe 1 \en With respect to structures, 145 local agents of the Merchant Marine conduct checks on fishing vessels and maintain a technical datasheet on each vessel. Authorizations for modernisation, construction and changes to the engine capacity of fishing vessels are within the competence of the Autonomous Communities in conjunction with the Directorate-General of Fisheries. The enforcement of market regulations including producer organisations is the task of the Ministry of Agriculmre, Fisheries and Food and is conducted with a staff of 70 persons. C. COMPUTERIZATION No Information is available from the Spanish authorities. D. ACTIVITIES IN 1994 (inspections at sea, in port, aerial surveillance) Inspections at sea by area and nationality of vessels inspected: AREA NATIONALITY OF VESSEL Spanish Portuguese French Italian VIII IX CECAF Mediterranean TOTAL 3. 532 5. 316 205 •4. 958 14. 011 4 8 - <- 12 9 - - 2 11 - - - 33 33 Infringements detected by nationality of vessel (all areas) AREA NATIONALITY OF VESSEL Spanish Portuguese French Italian ALL 4. 578 3 6 13 p:\c3l\rapports\ctrl\annexe l\en SA Aerial surveillance by region and result (conducted by central authorities) REGION Number of inspection days Sightings Infringements noted Cantabria & NW South Atlantic Mediterranean Canaries TOTAL 165 78 101 21 365 636 ' 416 499 20 1 571 50 167 58 0 275 Infringements detected in port by nationality of vessel: Type of infringement Nationality of vessel Logbook/landing declaration Use of prohibited gear Fishing in prohibited area Excessive engine/ tonnage capacity E 133 78 53 2 Illegal directed fishery 2681 15 2 755 115 8 1 By-catch violations Undersized fish violations Fishing licence Incorrect gear marking Incorrect vessel identification Other TOTAL P 7 1 - - - 2 1 4 - - UK IRE 4 4 - - - - - 1 - - - 9 2 2 - - - - - - - - - 4 I 2 2 - - - - - - - - 1 5 F TOTAL 2 2 - - - - - 1 2* - - 7 150 89 53 2 2 681 17 2 756 121 10 1 47 5 927 40 5 881 6 21 p:\c3l\rapports\ctrl\annexel\en s^ Future development of the inspection service In the immediate future, the Spanish authorities intend to recruit 20 Madrid-based inspectors, deploy additional patrol vessels and purchase and deploy an additional helicopter for use in patrols in the Mediterranean. In order to facilitate the implementation of the transport- document control procedure, the central authorities are presently seeking agreement with the Guardia Civil in order for the latter to undertake this particular task. Monitoring of quotas and catch registration Personnel are located in 19 main ports to key in information taken from logbooks and landing declarations. This information is transmitted to a central database which allows catches by vessel to be registered. p:\c3l\rapports\ctrl\annexcl\en s 2» IL Evaluation A. General Mainland Spain has a very long Mediterranean coastline and a shorter Atlantic one. Coastal indentation adds to the number of landing places. The EEZ is relatively large but the narrowness of the continental shelf reduces considerably the true extent of the fishing grounds, with the exception of those for large pelagic species. There is ready demand on the Spanish market for a wide variety of species. Small fish, including the biologically undersized, offer high returns. The Spanish authorities wish to point out the following: The Spanish market covers a wide variety of species and there is consumer demand for small-sized fish that are within regulatory requirements. This demand, a large part of which is met by imports from other countries, makes worse the problem of consumption of immature fish. Action is being taken against this consumption of juveniles by stepping up inspections and information campaigns. The fishing fleet is large but its heterogenous nature is not always widely known about outside Spain. Spain is meeting its obligations under the multiannual guidance programme now under way. While it has not completely resolved its problem of overcapacity, it has achieved very significant progress, much better than in many other Member States. The rate of uptake of the hake and monkfish quotas demonstrates that the problem of overcapacity persists in areas VI, VIA and VIII. The Spanish authorities point out that: To help resolve this problem, a system for regulating effort has been developed and there has been a significant increase in exchanges of quota with other Member States. A considerable proportion of the fleet is made up of vessels specializing in techniques other than trawling, with bottom trawling being in widespread use. p:\c3l\rapports\ctrl\annexel\en Traditionally this technique is very opportunistic and catches in effect include pelagic fish (horse mackerel and blue whiting) as well as demersal and benthic species. Spain has always been able to rely on a solidly structured fishing industry. Effective monitoring of fishing activities, at least in the sense of conservation measures, did not, on the other hand, figure among the authorities' top priorities until relatively recently. B. Strengths and weaknesses Resources Spain has equipped itself with substantial sea-patrol and aerial surveillance resources. The installation of the computer systems necessary for enforcement seems to have suffered a delay, however. The human resources deployed are especially difficult to evaluate given that more than one agency is involved. Numbers have increased but, according to the information presented to the Commission, do not yet appear capable of meeting the challenges that Spain should and will face in terms of enforcement, particularly on land. The burden of monitoring international fisheries is going to add to the problem. Organisation Organizational problems in Spain appear to be particularly complex. Not alone do the civil and military authorities play a part and, in some cases, different ministries, both before and after landing, but there is a complex share-out of responsibilities with the regional authorities. More than in any other Member State, in Spain the Commission's inspectors have repeatedly encountered problems arising from the share-out of responsibilities. p:\c31\rapports\ctrl\annexcl\en SS C. Inspection of technical measures Compliance with the technical rules governing bottom trawls and minimum catch sizes is presenting Spain with considerable long-running difficulties. The Commission notes that some regions have taken forceful action, notably to inspect the composition of hake catches. It has nonetheless failed to obtain assurances as to the effective introduction of rules determining a minimum mesh size of 65 mm and requirements for the authorization, as an exception, of other sizes. Spain has emphasized on several occasions, with just cause, the problems created for it by exports of undersized fish from other Member States, but, no more than the exporting states, and despite repeated requests to all of them to do so, has not implemented the body of rules available to it for conducting checks during transportation and at market. The problems are particularly acute in Region 3. France and Portugal, which also operate in the demersal fisheries in that region, share responsibility with Spain for the situation. However, shortcomings in enforcement in Region 3 may also prove harmful to fishermen from other Member States, especially in the case of the hake fishery in the Bay of Biscay. D. Checks on quotas and effort The Commission considers that the procedures and resources put in place for ensuring proper filling-in and use of logbooks, landing declarations and sales notes do not offer the necessary guarantees. However, while direct checks on catches have not always been Spain's strong point, the existence of specific provisions aimed at limiting effort in the EEZ of the other Member States means that Spain (and, to a certain extent, Portugal) can avail itself of rules not available to the other Member States operating in the Atlantic. Effective restrictions on effort have been introduced, even if the inspection of Spanish vessels has come up against problems - although these have diminished in recent times. v :\c3 l\raDDOrts\ctrl\annexe 1 \en S(> E. Conclusions %. The difficulties, mainly historical ones, in Spain are genuine. Progress achieved has been considerable and the Commission is anxious to point out that the type of illegal activity leading to escape from, or even clashes with, the French enforcement authorities in the Bay of Biscay does not appear to have recurred for some time. The monitoring of the NAFO fisheries has required considerable resources and energy and has proved fruitful. The Commission acknowledges therefore the efforts deployed by the Spanish authorities to secure these initial results. It is very satisfied with the cooperation shown by Spain in promoting the use of satellite surveillance techniques. It must point out, however, that much has still to be done. Future progress can only be assisted by the adoption of new general arrangements for the management of effort of a type that will dispel any feeling of discrimination in Spain. The use of modern methods such as computer systems and satellite surveillance should accelerate that progress. They will only suffice, however, if Spain allocates the necessary material and human resources to fisheries inspection. p:\c3l\rapports\ctrl\annexcl\en ^ FRANCE I. Inspection and monitoring of fishing activities A. ORGANIZATION The Affaires Maritimes (AFFMAR) administration, based in the Ministère de l'Équipement, has responsibility for conducting the monitoring of all fishing vessels (French and non- French registered) engaged in fishing activities. Overall control for fisheries is determined from the Ministry of Agriculmre. Other surveillance tasks undertaken by AFFMAR include vessel safety, pollution prevention and rescue at sea. The Gendarmerie Maritime (GM), which is under the responsibility of the Ministry of Defence, is also authorised to carry out fisheries enforcement tasks such as checking fish minimum sizes, gear, landings, etc. Navy vessels are deployed for specific tasks, including enforcement, in international waters. In addition, AFFMAR shares with the Customs Service the responsibility for monitoring aspects of the structural policy such as engine power and tonnage. Regarding the monitoring of minimum commercial sizes, withdrawal prices and market regulations, responsibility is shared between AFFMAR, the Fonds d'Intervention et d'Organisation des Marches des produits de la pêche maritime et des cultures marines (FIOM), which is based in the Ministry of Agriculture, and anti-fraud services which are under the responsibility of the Finance Ministry. Cross-checking of data concerning fleet activity is carried out by AFFMAR in collaboration with the Centre Regional des Traitements Statistiques (CRTS), which is under the authority of the Ministère de l'Équipement. p:\c3l\rapports\ctrl\annexe l\en ^ç B. RESOURCES 1. Human Personnel involved in fisheries enforcement monitor catches, landings, minimum fish sizes and technical measures and are also employed to carry out other tasks, e. g. safety at sea, pollution prevention, rescue at sea, etc. The AFFMAR personnel based onshore is divided between Sindics des gens de mer (SGM) (164), inspectors of the technical arm of the Affaires Maritimes administration (82 personnel) (CAM/BT) and Techniciens du contrôle des établissements de pêches maritimes (47 personnel) (TCEPM). In addition, a limited number of GMs (42 personnel) are seconded to AFFMAR. During 1994, five new Unités de Surveillance du Littoral (USL), based in administrative departments, have been created thus increasing the total number of USLs to 11. They are composed of personnel from SGM, CAM/BT, TCEPM and other unidentified administrative services. Approximately 335 personnel are involved in fisheries monitoring. 2. Vessels Eight long-range, six mid-range and twenty-one inshore fishery protection vessels are operated directly by AFFMAR. Crews total 202 persons. 3. Computerization Different databases (fleet capacity, catches, landings, sales, etc. ) are maintained by the Centre Administrative des Affaires Maritimes (CAAM), Direction des Pêches Maritimes et Cultures Marines (DPCM/BCS), CRTS, IFREMER and FIOM to cross-check and control the activity of the fleet(6). (6) see Annex 1 p:\c3 l\rapports\ctrl\annexe 1 \en C. ACTIVITIES On land Eleven administrative departments have their own ULS units which are under the control of the Directeur départemental des AFFMAR, and these cover controls in ports and markets etc. Other departments without their own ULS units are covered by a combination of Sums, CAMs, TCEPMs and GMs, under the control of the Chef de Quartier. Main infringements detected in port by nationality of vessel and type of infringement Main infringement type Nationality of vessel French Spanish Belgian 1 3 3 Logbook/landing decl. Prohibited gear Illegal Fishing Prohibited zone Illegal catch Undersized fish By-catch Excessive vessel tonnage At sea 184 49 110 22 1 2 The French authorities have reported that their fishery protection vessels conducted 1 404 sea-patrol and 49 air surveillance days in ICES areas VII, VIII and the waters of French Guiana. p:\c3l\rapports\ctrl\annexel\en €o Inspections at sea Total Number of vessels inspected by nationality and ICES area. Area Nationality Belgian Spanish French Dutch VII VIII CECAF TOTAL 6 2 3 062 859 4511 220 6 861 7 793 3 3 UK 2 2 Other 63 63 p:\c3l\rapports\ctrl\annexe l\en CO Type of Infringement Belgian Spanish French Total Nationality 182 933 1116 Total number of vessels involved in all infringements Logbook/landing declaration Illegal gear Illegal fishing: prohibited zone Excessive tonnage Illegal catch: directed fishery 1 1 2 24 14 1 12 20 11 1 82 27 128 484 1 23 24 39 48 27 14 321 1136 52 142 490 2 23 24 51 68 38 15 401 3 165 By-catch Undersized fish Unauthorised fishing Marking of gear Marking of vessel Other Total There is no information given concerning the return rate of logbook information, landing declarations and sales notes, or about cross-checking of this information. p:\c3l\rapports\ctrl\annexel\en G 2. //. Evaluation A. General France is required to monitor a large EEZ and a long coastline. Fisheries are very varied and enforcement problems take many forms. The proportion of landings sold at auction centres has grown significantly. Computerization of auction centres and the installation of links between them are well advanced. Landings disposed of elsewhere than at auction centres continue to be considerable, particularly in the case of species with a high commercial value and from certain inshore fisheries. In France there is demand for small-sized fish, for home consumption or export to neighbouring countries, particularly Spain. From the point of view of quota enforcement, France is at a considerable advantage in that there are very few quotas that can really restrict catches. Since the introduction of the CFP there have even been cuts in some deep-water fleets which fished mainly for whiting in the North Sea. Quotas have had a restrictive impact, therefore, only in the case of some stocks in Norwegian waters, saithe off the west of Scotland, anchovy in the Bay of Biscay and from time to time cod and whiting stocks in the Celtic Sea. From now on the whiting fishery in the Bay of Biscay will also be affected. France, consequently, does not suffer from an overall imbalance between the capacity of its fleet and the available nominal quotas. Problems created for some stocks are nevertheless recurrent. They would be greater if, as a demanded by improved stock management, a number of precautionary TACs were to be adjusted downwards. The French fleet employs a variety of techniques. Bottom and pelagic trawling constitute separate fishing methods and gears, except in the Mediterranean. This means that certain problems encountered elsewhere, in Spain for example, can be avoided. The problems created by multispecies catches taken during a fishing haul exist nevertheless. There is even a growing tendency to use pelagic trawls when fishing for demersal species, particularly hake. p:\c31\rapports\ctrl\annexe 1 \en Q1 France has never regarded the physical monitoring of fisheries as a top management priority. The close links that have developed between the authorities and fishermen, undoubtedly invaluable in certain respects, have done more to promote a climate of tolerance and permit exceptions so as to protect groups, in some cases small ones, than to establish straightforward and effective monitoring. The French authorities wish to state the following: The situation has changed noticeably since the albacore crisis in 1994, during which the industry itself saw the necessity of conforming with developments in the Community rules (abolition of the 5-km exemption) in the general interest, while the public authorities introduced an effective monitoring system. B. Strengths and weaknesses France states that it has substantial physical and human resources both onshore and at sea. A precise determination of the resources genuinely allocated to enforcement is not possible, however, given the many tasks that must be undertaken by the different agencies. Great strides have been made in installing computer systems. The time required for data processing and transmission and shortcomings detected in the validation of certain catch data are evidence, however, of an alarming shortage of specialist personnel. The French authorities are present all along the coastal areas and especially in fishing ports. The number of government departments and ministries involved is considerable, however. The French authorities wish to add here: Monitoring of fishing activities in France is the responsibility of services coming under several different ministerial departments. While appearing complex, the system works well in both normal times and times of crisis. In addition, it gives access to greater human and physical resources and to the assistance of staff competent in many fields and used to dealing with very diverse situations. p:\c3l\rapports\ctrl\annexe l\en &M This applies particularly to the coastal maritime-affairs units which carry out controls at sea, on land and at the marketing stage. Because of their mobility, they are a core component in the fisheries enforcement strategy. Events in the albacore fishery demonstrate that an operational force can be put together where there is a major problem. Cooperation in normal circumstances can be more problematical. The fact that the agencies involved have duties other than CFP enforcement means that there is a risk of their being spread too thinly. A survey of mission reports from Community inspectors indicates that strict enforcement of Community rules is not perceived to be a priority by all the agencies concerned. Moreover, extensive mechanisms for joint responsibility involving the industry in inspection duties, on the lines of those the Netherlands is endeavouring to develop, do not generally exist for CFP enforcement. However, they do exist for certain fisheries (in particular anchovy and albacore) and for the inshore fisheries which are subject to national rules. A law passed on 2 May 1991, in fact, confers powers on the national trade organization in the fishing industry to help it participate in a balanced management of resources. C. Technical measures Fishing vessels operating beyond the French EEZ are barely distinguishable from other fleets operating in the same fisheries. In a number of high-seas fisheries the problems associated with keeping small-sized fish on board, for example Norway lobster or hake, lessen the financial incentive that illegal trade in undersized fish may offer to fishermen operating far from their home port. Illegal activities involving technical measures create particular problems in the French EEZ, and especially in the inshore fishery. The French authorities have made no real progress nor devised a convincing strategy for the future to tackle the problem of fishing for undersized hake in the Bay of Biscay. Enforcement measures are inadequate, both at sea for preventing the use of illegal mesh sizes, and in many ports for terminating the marketing of undersized fish. France has made use of the opportunities afforded by Article 13 of Regulation (EEC) No 2847/93 to take action after first marketing (during transportation) so as to control illegal n \r3l\ranDorts\ctrl\annexe 1 \cn Cr. imports but not to enforce compliance with minimum mesh sizes. One would have thought it possible with a few firm measures to prevent exports to Spain of undersized fish. The French authorities note: In relation to fraud involving infringements of technical measures, the Ministry of Agriculture, Fisheries and Food is preparing a measure which will make it mandatory to display the permitted commercial sizes for fish at all points of sale. Specific monitoring of the length of driftnets only became effective in 1994 with the adoption of stringent measures. In 1995, there has been ample evidence that the shortcomings noted previously had now been remedied. D. Monitoring of catches The rate of non-returns and late returns of logbooks continues to be high. As far as the Commission is aware, France has no systematic procedure for the validation of logbooks or landing declarations, either by direct statistical analysis or cross-checking against other information sources. France has wide-ranging scientific experience of the statistical evaluation and validation of catches, particularly insofar as the monitoring of small-vessel fishing and the evaluation of non-auction centre catches are concerned. This experience has been under-utilized, however, and the administrative data are far from being fully exploited. The quality of French statistics, having improved, has tended to deteriorate in recent years, but to a varying degree depending on the fishery. It is unlikely that this deterioration has led to the overrun of more than a handful of special quotas, such as the anchovy quota in the Bay of Biscay. In that particular case the shortcomings were patently obvious and recurrent. p:\c3l\rapports\ctrl\annexe l\en c& The French authorities would like to stress the following: Concerning the rate of return of logbook sheets, the deterioration seen in 1993 and early 1994 has been reversed. The ports in which rates of return have not been good have been very clearly identified as the result of a survey conducted in 1995. A study has also been embarked on to implement a system for forecasting landings which, once operational, should help to improve the quality of landing statistics. E. Conclusions Despite possessing substantial resources and having laid the material, human and administrative foundations for the effective control and up-to-date management of catch data, France still needs to improve its monitoring and inspection procedures considerably. De facto liberties and concessions involving a number of rules (non-compliance with minimum sizes, catches of undersized juvenile hake, negligence in keeping logbooks), taken at a time of crisis for example and now the norm, will only cease if purposeful action is taken. At present, the prosecution of infringements does not generally result in the imposition of penalties commensurate with the seriousness of the offence. Progress achieved in controlling the albacore fishery demonstrates the type of action that needs to be taken. The essential elements are in place and improvements will depend on the definition of a comprehensive strategy based on a firm desire for progress together with action to alert all parties involved to the opportunities afforded by enforcement and to the assignment of highly qualified staff to key tasks (such as informatics or statistics). The French authorities note in this connection that they are preparing for the implementation in France of a system to manage fishing effort. All the operational services concerned with fisheries enforcement are being involved in the scheme, which is to come into effect on 1 January 1996. p:\c31\rapports\ctrI\annexel\en G } IRELAND I. Inspection and monitoring of fishing activities A. ORGANIZATION Responsibility for conducting the monitoring of all fishery vessels (Irish and non-Irish registered) engaged in fishing activities is shared between the Department of the Marine's Fisheries Inspectorate and the Naval Fisheries Protection Service. This responsibility is divided along the following lines. The Fisheries Inspectorate is charged with the task of carrying out inspections in port, whilst the Naval Service conducts inspections at sea through the deployment of seven fishery protection vessels. The fishery protection vessels are under the command of the Naval Service, which is responsible to the Ministry of Defence. These vessels are used for security and other purposes. Their fisheries responsibilities are decided jointly by the two Ministries. In practice, the vessels are deployed for fisheries purposes on request by the Ministry of the Marine. In addition, the Department of the Marine has overall responsibility for controls relating to markets and the structural aspects of the industry. With respect to markets, the Sea Fisheries Inspectorate is assisted by a number of fish quality officers who deal specifically with the administrative and qualitative aspects of fish withdrawals. In the context of monitoring structural aspects (vessel characteristics), the Dept. of the Marine utilises the Marine Survey Office, which is an integral part of that department. p :\c3 l\rapports\ctrl\annexe 1 \en eg B. RESOURCES 1. Human With respect to the Sea Fisheries Inspectorate, the Dept. of the Marine currently employs 18 Inspectors which are based in the major fishing ports in the State. [East Coast: 2 sea fisheries officers (SFOs), 2 fish quality officers (FQOs), South Coast: 45 SFOs, West Coast: 5 SFOs and 1 FQO] Vessel registration is managed by the Register General assisted by local Registers and department staff (one full time, 2 part-time) 2. Vessels/Aircraft Seven fishery protection vessels are operated by the Naval Service to conduct inspections and surveillance at sea. In addition, three inshore sea fisheries surveillance craft are deployed to monitor the salmon fishery. With respect to aerial surveillance, the Dept. of the Marine relies upon the Air Corp. Service, which during 1994 made one CASA patrol aircraft- available for fisheries surveillance. 3. Computerization Monitoring of fleet activity etc. is augmented through the creation of various computer systems, which are supplemented by a variety of computer software packages, databases, spreadsheets etc. More specifically, the following systems are maintained: fishing vessel register fish catch reporting system (landings) fishing licensing system. p:\c31\rapports\ctrl\annexe 1 \en G9 C. ACTIVITIES Sea Fisheries Inspectorate Inspection and monitoring of fishing activity is coordinated by the national Sea Fisheries Control Manager based in departmental offices in Dublin. Regional coordination is effected through three senior sea fisheries officers based in Dublin, Cork, and Killybegs respectively. In 1994, the Sea Fisheries Inspectorate carried out a total of 10 500 inspections on land. These were divided as follows: 1 500 inspections in east coast ports 4 500 inspections in south coast ports 4 500 inspections in west coast ports. It is not clear if these inspections are confined exclusively to landings, checks on gear, etc. or include the activities of the Inspectorate with regard to market and structural aspects or whether it includes the inspections by inshore fisheries authorities. p:\c3l\rapports\ctrl\annexe l\en -) o The port inspections detected approximately 159 infringements as indicated in the table below: Port inspections by type of infringement and nationality of vessel Type of offence Irish Spanish Nationality of vessel UK 4 Logbook/landing declaration Illegal gear Fishing in prohibited area Illegal catches Directed fishery By-catch Undersize Unauthorised fishing Marking of gear Marking of vessel TOTAL (159) 5 51 30 2 2 4 28 1 10 22 150 5 4 The Fisheries Officers inspect landings (35 % of all landings are validated by physical checks in port and/or in auction centres) and seek to provide 100% monitoring of the landings of certain TAC and quota species (unspecified but probably herring and mackerel). Landings made by vessels under 10 metres are not registered. The Officers also cross-check logbook and landing declarations and sales notes and monitor the transport of fish. In addition, all nets are measured ashore twice annually. p:\c3l\rapports\ctrl\annexe ! \en 1A Naval Service The Irish authorities have reported that the seven fishery protection vessels operated by the Naval Service conducted the following patrol activities in 1994. ICES Area of Activity Days on Patrol VI A VI B VII A VII B VII C VII G VII J VII K VII H VIII E 35 22 247 143 25 344 380 31 12 17 TOTAL 1 258 Inspection at sea: by ICES area and nationality of vessel inspected Area Nationality VI VII VIII Belg. Germ. Sp. Fren. Irish Dutch UK Other 1 9 3 103 164 n J 2 3 248 4 39 294 11 p:\c3l\rapports\ctrI\annexe 1 \en } <^ Number of vessels detected in an infringement, by nationality and type of infringement Main types of Belg. Germ. Sp. Fren. Irish Dutch UK Others Infringement Logbook/Landing 1 1 8 1 12 25 declaration Prohibited gear Illegal fishing: closed area Illegal catch: directed fishing Undersized fish Gear/vessel marking Other Aerial Surveillance 5 2 2 9 4 7 1 15 14 39 8 1 24 In 1994 one CASA fixed-wing aircraft was available for fisheries surveillance functions. The aircraft conducted 91 patrols over a period of 447 hours. These patrols yielded sighting information (1132 sighting) over ten different ICES zones (in particular areas VII J. , VII G, VII E, VII A). p:\c3l\rapports\ctrl\annexe 1 \en } 3 //. Evaluation Ireland has a large exclusive fishery area in which there is a high level of activity by fishing vessels from other Member States. There is also a large number of landing places, many of which are not permanently supervised, which makes it difficult for the inspection authorities to effectively verify catch/landing declarations against physical checks on catches. In 1994 there was adequate quota allocation to provide sufficient fishing opportunities for the Irish fleet. However, the uptake of the herring and mackerel quota required close supervision. In Ireland there is considerable difference between the way the inspection and monitoring task is performed at sea and in port. The enforcement task at sea is compounded by the size of the patrol area and the diverse nature of the different fisheries. There is, therefore, a need to maximise the efficient use and deployment of resources to ensure that Ireland discharges its surveillance and inspection obligations. In this regard, it is important to develop certain strategies which will allow the inspection authorities to focus on the most effective monitoring and enforcement measures. The Commission is aware of the efforts undertaken in recent years to monitor the activities of vessels which are registered in other Member States and which fish within Irish exclusive fishery limits. Whereas the Irish authorities have undertaken the control and inspection of vessels engaged in the albacore fishery, and when appropriate strictly applied the Community regulations, there is, nevertheless, a requirement to sustain the inspection enforcement presence throughout the albacore season. The inspection activities on land need to be intensified as there is still insufficient compliance with conservation measures and the pace of implementation of Council Regulation (EEC) No 2847/93 appears to be slow. Transport documents were not widely utilised in 1994. Furthermore, even though sea fishery officers are now empowered to examine the records of fish buyers, merchants, agents, etc. the Commission is not in a position to evaluate how the additional powers are relied on to detect illegal activity and to what extent such measures are invoked. p:\c3I\rapports\ctrl\annexel\en VM> The monitoring of catches and fishing gear utilised has significantly improved in the principle landing ports. Nevertheless, the coverage of smaller ports remains inadequate. In terms of catch registration generally, there is a major difficulty created by the incomplete submission of logbooks and landing declarations. With respect to the processing of catch data, although the Irish authorities have acquired the necessary computer equipment and appropriate software to comprehensively register catch data, the expected operational efficiency has not materialised. The Commission is aware of special problems posed by the technical monitoring of structural measures and would emphasis the importance of undertaking frequent checks within the market sector. Conclusions The enforcement authorities in Ireland have to overcome two challenges, which are - at sea - the extent of the Irish EEZ and - in ports - the absence of a long tradition of inspections and monitoring with respect to the control task. A real commitment has been given by the Irish authorities to overcome the problems posed. This has been facilitated by the Community financial aid programme towards the acquisition of essential equipment. In this regard, the absence of sufficient personnel to undertake the enforcement task weakens the national control system. This problem may be further aggravated with the conclusion and implementation of the Western Waters Fisheries Agreement in 1996. p:\c3l\rapports\ctrI\annexel\en }r ITALY I. Inspection and monitoring of fishing activities A. ORGANIZATION Overall responsibility for monitoring and control within the fisheries sector is allocated to the Directorate-General for Fisheries, which is a separate service of the Ministry of Agriculture Resources, Food and Forestry. Prior to 1994, the service formed part of the Ministry of the Merchant Marine. The Directorate-General for Fisheries does not have a separate fisheries inspection unit within its service but relies upon a variety of other specialised services which are under the authority of different ministries. Land and sea inspections are conducted by the: Guarda di Finanza Polizia di Stato - Ministry of Finance - Ministry of the Interior Arma dei Carabinieri - Ministry of Defense Unità Sanitarie Locali - Ministry of Health Local authorities A key role is played by the port authorities - the "capitanerie di porto" - which have resources to conduct inspections in port and within the territorial limits. (See further below). Logistical support with respect to sea inspections is provided by the Coastguard Service, which is part of the Ministry of Defense. B. RESOURCES 1. Human As noted above, a variety of public organisations carry out monitoring and control tasks with respect to fisheries. Consequently, it is difficult to estimate the approximate number of personnel allocated to the specific control tasks associated with inspection at sea and ashore. p:\c3l\rapports\ctrl\annexe 1 \en 1G With respect to the "capitanerie di porto" service, this is composed of 4 500 personnel distributed in 47 administrative units ("compartimenti marittimi"). Approximately 30% (1200) of its personnel deals exclusively with sea inspections to monitor compliance with national and Community measures (licences, technical measures, etc). The remainder of the service carry out a variety of control tasks ashore. It is not possible to identify or estimate with any real precision the extent to which the personnel of this service is devoted to classic control tasks as envisaged in Council Regulation (EEC) No 284. 7/93. 2. Vessels/Aircraft The capitanerie di porto possess: - 300 vessels of varying lengths - 16 aircraft. 3. Computerization No system of computerization functions at present. The Italian authorities have, however, indicated that an integrated information system is being proposed in order to link the various services involved in monitoring. C. ACTIVITIES 1. "Capitanerie di Porto" Activities at Sea In 1994, 8 247 seagoing missions were conducted by this service. During the course of these missions, 10 793 inspections were carried out and 2 884 infringements of national/Community law were recorded. The majority of these were of an administrative nature ( breach of licence conditions etc. ). Aerial surveillance A total of 57 aerial surveillance missions were conducted in 1994. p :\c3 l\rapports\ctrl\annexc 1 \en }3 Shore based inspection (in ports, markets, restaurants) A total of 10 692 inspections/controls were conducted: landings, distribution, sales 7 165 ' controls on gear 3 527 These controls resulted in the detection of 477 infringements, the majority of which were violations of administrative regulations. In the course of the year the "capitanerie di porto" confiscated 37 727 kilograms of catch and 1 012 items of gear (not detailed in the report). Costs incurred in 1994 amounted to LIT 9 796 831 200 lire (ECU 4. 5 million). 2. "Polizia di Stato" In 1994 the "Polizia di Stato" inspected a total of 1 700 vessels, of which 343 were fishing with driftnets. A total of 1 009 infringements (unspecified) were detected, of which 41 related to vessels using driftnets. A total of 8 vessels were seized as well as 352 nets. 3. "Guarda di Finanzau No precise figures are available with respect to the number of inspections carried out. Information is available on the results of these inspections: Infringements detected. 2 060 Seizures/confiscations carried out: nets 1 518 quantities of fish 65 525 kilograms p:\c3I\rapports\ctrl\annexc 1 \en -1 6 //. Evaluation Monitoring fishing activities in Italy presents a number of specific problems: the long length of the coastline and the numerous landing places. The absence of an exclusive fishery zone in Italy mitigates against rigorous controls on Italian fishermen who fish in international areas alongside foreign fishermen engaged in fishing for large pelagic species and for some demersal stocks. Although Italy is not yet fully integrated into the control system applicable to the common fisheries policy as set out in Council Regulation (EEC) No 2847/93, the national control authorities have a number of specific monitoring functions to carry out. These include monitoring the use of driftnets, management of structural aspects of the national fishing fleet, technical measures, controls with respect to markets and the creation of an adequate/ comprehensive control system over the next three years. A. Controls on fishing vessels using driftnets Italy has authorised approximately 650 vessels to use driftnets and these vessels fish in both international and national waters. The large number of vessels and their wide diffusion contribute to the difficulties in adequately monitoring the use of this type of gear. It has been clearly shown that the prescribed net length (2. 5 kilometres) does not generally speaking allow an economic fishery. It has consequently been found that a number of vessels have been using nets in excess of 2. 5 km. B. Management of structural and market aspects of fisheries In their report to the Commission, the Italian control authorities have not presented sufficient information on markets and structural aspects as set out in Council Regulation (EEC) No 2847/93. Consequently, the Commission would like Italy to present this information as soon as possible. p:\c31\rapports\ctrl\annexe l\en ")3 C. Monitoring of the transport and sale of fishery products Articles 8 and 13 require that sales notes and transport documents be designed and their use monitored in order to identify quantities of fishery products sold and transported in Italy. It appears to the Commission that these documents are not yet in use by the industry in Italy. D. Creation of a validation system Although Italy is not obliged to create a validation system until 1999, the Commission notes that steps are being taken by the Italian authorities to establish such a system. The early establishment of a validation system would facilitate cross-checking and would be a useful addition to national controls. p:\c3l\rapports\ctrl\annexe l\en So NETHERLANDS I. Inspection and monitoring of fishing activities A. ORGANISATION The primary responsibility for monitoring fishing activities rests with the AID (General Inspection Service), which works within guidelines approved by the Ministry of Agriculmre, Environment and Fisheries. Within the inspection service, a number of inspectors are assigned to fishery inspection duties. These inspectors are based in the ports with a large auction or where a significant number of landings take place. In addition, the inspectors are supported by administrative support staff in the district offices and at headquarters. The AID inspection services monitor the registration of catches, technical measures, licences and some aspects of markets and structures. The inspections at sea are carried out by the AID, which itself has no inspection platforms, in cooperation with the Royal Navy, customs and police. The technical monitoring of market measures is carried out by the "Produkschap Vis", and infringements are reported to the AID for further action. B. RESOURCES Human The inspectorate has a staff of 58 inspectors divided between the main fishing ports. In addition, the inspectorate was assisted for a total of 37 500 hours by private security agents. n :\c. 1 l\rannorts\ctrl\annexe I \en 8-1 Vessels/aircraft In addition to the vessels provided by customs and police, 3 minesweepers are used. In 1994, the minesweepers conducted 80 days of sea inspections while the customs/police conducted 106 days. Aerial surveillance was conducted by the Navy and the police service. A total of 438 hours was devoted to aerial surveillance. Computerization The following computer systems are in operation: VIRIS I : monitoring of the national and individual allocated quotas COVIS : registration of catch and sales information together with control findings and detailed information on fishing trips. Corrections on catch information are sent to VIRIS I. CVR : C-Day : registration and specification of fishing vessels registration of consumption of days at sea COBRA : registration of controls and fixing of penalties. C. ACTIVITIES A total of 91 255 control hours were carried out. On average controls covered approximately 12% of the total of 32 785 landings recorded. The level of control was the highest for the sole and plaice fisheries. Summary of controls and infringements by Member State in the Dutch North Sea E. E. Z. Member State NL B 30 191 - Physical controls Air/sea sightings N/A 127 Infringements 44 7 p:\c3l\rapports\ctrl\annexel\en F 0 1 1 UK Other 4 87 — 2 0 2 D 13 54 4 DK 7 98 2 §e Validation of landings, auction data, etc. All data from logbooks, sales information of auctions and landing declarations are compared in self-operating computer systems (100% cross-checking). In addition, for each vessel and for each fishing trip total catches in live weight are calculated per species. Monitoring of structural measures All fishing vessels must be registered in the Central Fishery Register. After registration a licence stipulates the fish species which may be targeted. Special documents are needed for fishing on quota species in general. A system of individual transferable quotas or group transferable quotas regulates the fisheries in certain quota species. A days-at-sea regulation limits the fishing effort per category for each vessel. Technical Monitoring of Market Measures Fresh fish presented for sale must be sold through an auction. After sorting, each lot is examined by a agent of the "Produktschap Vis" taking into account the grading and freshness of the fish. Controls on sizes are carried out on a sampled basis and through random checks. The producer organizations each year establish the withdrawal prices for the different products. Agents of the "Produktschap Vis" monitor compliance with withdrawal prices and each intervention is recorded and transmitted to the producer organisations. All sales information is subject to an administrative follow up. Physical control of the withdrawal process is carried out on a sample basis and in 1994 no irregularities were detected. p:\c3l\rapports\ctrl\annexel\en «i //. Evaluation A. General Quota management is mainly directed to three fleet categories, i. e. beam trawlers, a small number of specialized demersal vessels and pelagic freezer-trawlers. There is a potential overcapacity particularly in the beam trawler fleet. The pelagic fleet has shifted capacity from its traditional herring/mackerel fishery to species such as blue whiting and horse mackerel. The current quota management scheme and system of monitoring landings was introduced a few years ago, as a result of extensive discussions with the fishing industry, in order to stop the practice of unrecorded landings. These arrangements are based, in particular, on a limitation of fishing days to those necessary to catch vessel quotas as well as on the commitment of the fishing industry to market all quantities landed through auctions. Therefore, the fishing industry is co-responsible for the proper implementation of the agreed arrangements. Oversight and monitoring of quota compliance is the job of the AID. The EEZ covers a limited part of the North Sea. The coastline is relatively long and a number of ports (some which are located away from the coast) can be accessed by fishing vessels. Fishing vessels are only authorized to land their catches in designated ports after being authorized to do so by the competent authorities. A limited number of landings also takes place in other Member States, although these quantities are often offered for first sale in the Netherlands. Vessels from other Member States as well as third-country vessels land their catch frequently in the Netherlands. p:\c3l\rapports\ctrl\annexe l\en £<-) B. Strengths and weaknesses The reliability of catch recording has improved over recent years mainly because of reinforced quota management measures and an improved monitoring system. This seems in particular to be true for total quantities. The proper recording of catches by area cannot be guaranteed in all cases. Fishing effort has been adjusted on an individual basis to the allocated fishing possibilities, notably by reducing the number of fishing days. Dutch fisherman have also formed voluntary management groups. These are associations with their own articles of association and internal rules of procedure. These lay down, inter alia, that a fishing plan is to be drawn up and that all fish is to be sold through auctions. Also laid down is the fact that infringements of these arrangements can be sanctioned internally, in addition to any procedure in public law, and fines are specified. Landings are subject to administrative and physical inspection. Catch recording is fully computerized. Catch data, landing data and sales note data are cross-checked. Taking into account the role which some fishing ports play in the distribution of fish in Europe, the physical organization of landings and marketing in fishing ports seems not very transparent. AID's controls are systematic, in the sense that the whole chain from landing to sale is followed round the clock. This is to prevent landings from going unreported. The AID supplements this with checks at business premises. In such cases, fishery inspectors may be accompanied by officials from other specialised inspection agencies such as customs, tax officers and police. Aerial surveillance is carried out by the Navy and the police, whilst surveillance at sea is carried out by the Navy and by coastguard vessels operated by customs and the police. AID officials are always present during these controls and they carry out the actual controls themselves. However, the limited use made of these surveillance means suggests that fisheries inspection is not their priority. p:\c3l\rapports\ctrl\annexe 1 \en ss C. Conclusions The Commission has observed over recent years a real improvement in catch recording in the Netherlands. It is following with great interest the experience being gathered in the Netherlands, in particular the co-responsibility of the fishing industry in enforcing its commitment to market all quantities landed through auctions. The efficiency of the current arrangements has to be observed under varying levels of resource abundance to be able to assess the real strength of all components of the scheme. p:\c3l\rapports\ctrl\annexe l\en •?€ PORTUGAL I. Inspection and monitoring of fishing activities A. ORGANIZATION In Portugal a number of different departments and public organizations have responsibility for and authority to monitor fishing activities. These are listed below. 1. Directorate-General for Fisheries - Inspection Service Department (DEI) - Structural Service Department (DE) 2. Maritime Authority (ADAR) 3. 4. Inspection Brigade of National Guard (B) Inspectorate-General for Economic Activities (AG) 5. Directorate-General for Customs (DAG) 6. Directorate-General for Ports, Navigation, Transport, Maritime Safety (INS) All these organizations are involved to a greater or lesser extent in control and monitoring functions. The DEI is a separate department of the Directorate-General of Fisheries (Ministry of the Sea) and operates all along the coast, visiting ports and coordinating control activities with respect to landings in particular. The other five organizations listed above devote some of their resources and time to specific aspects of fishing industry. For example, the ADAR works along with the inspectors of DEI in the context of controls on fishing gear and vessel characteristics, whilst the agents of the INS are involved in monitoring the construction or modification of vessels granted fishing licences. Sea inspections are carried out by the Naval Service, which is under the control of the Ministry of Defence. p:\c3l\rapports\ctrl\annexel\en Patrol activity at sea is conducted at the request of the Ministry of the Sea, as is aerial surveillance is provided by the Air Force. The three services are linked through a series of computer networks which exchange information on sightings and boarding (see further below). Responsibility for monitoring the market and structural aspects of fisheries is also widely diffused. With respect to markets the following four organizations have specific responsibilities : Directorate General for Fisheries - Market and Quality Service Dept - DSM. - Inspection Service Dept. - DEI Inspection Brigade of the Republican National Guard - B Inspectorate General for Economic Activities (AG). Specialised services from the organizations listed above monitor marketing standard, prices, withdrawals and fish quality. Structural aspects - surveillance of fishing capacity and its modifications - are the responsibility of: Directorate-General for Fisheries - Structural Service Dept. - DE, Maritime Authority Agents (based in ports) - ADAR, Directorate-General of Ports Navigation and Maritime Transport Inspection and Maritime Safety - INS Fishing capacity (including adjustment of fishing activities) is monitored by means of joint action by the DE, the ADAR and INS. p:\c31\rapports\ctrl\annexel\en «"8 B. RESOURCES 1. Human The following table shows the number of inspectors and/or inspection agents from the various public authorities with responsibility for monitoring fishing activities by region of the country. Authority DGP ADAR B AG DAG NORTH (Valanca- Péniche) CENTRE (Ericeira- Sesembra) SOUTH * (Setubal - U. R. Sâo Antonio) Number of inspectors - 25 36 21 8 12. ** 18 21 24 1 - 42 40 25 6 The ADAR performs other duties besides monitoring fishing activities and has a total of approximately 491 inspectors engaged in a wide range of monitoring activities. Equally, the B, AG and DAG allocate a small percentage of their overall personnel (approximately 2 500 inspectors) to monitoring fishing activities. » * includes Autonomous Regions of the Azores and Madeira. ** These are the Fisheries Inspectors from the Inspection Service Department of the DGP, based in Lisbon and who operate all along the main land coast as a type of "flying squad". p:\c3 t\rapports\ctrl\annexe I \en ^9 2. Vessels/aircraft The number of vessels from the Ministry of Defence/Navy carrying out inspection duties at sea is set out below, per type of vessel. "CACINE" class patrol boats "Joâo Coutenho" class corvettes "Baptista Anrade" class corvettes "Albatroz" class fast launches "Dragas" class fast launches Other inspection vessels (unspecified) Total 10 6 4 5 5 41 71 These vessels, apart from fishery inspection duties, carry out mainly military and search and rescue operations. Aircraft Three Casa 100 AVIOCAR aircraft are deployed for aerial surveillance/inspection duties. p:\c3l\rapports\ctrl\annexel\cn 3o 3. Computerization The computer resources and network of the DGP, the Navy and Airforce are set out below. DIRECTORATE-GENERAL FOR FISHERIES FISHING ACTIVITIES INSPECTION DEPARTMENT SIFICAP SYSTEM OF INSPECTION AND MONITORING FOR FISHING ACTIVITIES STRUCTURE/LINK WITH THE NAVY AND AIR FORCE NAVY B D SIFICAP (Oracle) X - 25 s ec AIR FORCE B N DP 2 NCR 32/650 Unix 5000/95 Fleet Licensing Missions Activity/Results Unix - 5000/85 Unix - 6000/65 SunSparc2 - scc-Gl SunSparc2 - scc-G* SunSparc2 - scc-G3 SCC - Central Monitoring System BD - SISIFICAP Data Base BNDP - National Fisheries Data Base Fleet Licensing PIDDAC EAGGF Market sales Aquaculture Financial compensation and forfeiture Oil refunds Processed product production p:\c3l\rapports\ctrl\annexe l\en 9-1 PORTUGUESE NAVY STRUCTURE OF NAVAL SECTION - SIFICAP B. D. SIFICAP B. N. D. P. DGP Directorate- General for Fisheries EMGFA (standard-C) Navy section • SCC DGP Fishing Activities Monitoring Department X - 25 EPM 1 MAIN NAVAL STATION ETMs 1 Unisys 5000/55 1 Microcomputer 1 Graphics station 4 Printers 27 vessels Standard-C Grid 1530 Printer DGM COMMAND DISTRICTS ETT ETT ETT ETT CZM-North CZM-South Unisys PW 800 Unisys PW 800 CZM- Azores • CZM- Madeira Unisys PW 800 Unisys PW 800 BD SCC BNDP EMGFA EPM1 ETT EMT DGM CZM - SIFICAP Data Base - Central Monitoring Service - National Fisheries Data Base - Armed Forces General Staff Headquarters - Main Naval Station - Land Terminal Station - Mobile Terminal Station - Navy Department - Maritime Area Command p:\c3l\rapports\ctrl\annexe l\en Di PORTUGUESE AIR FORCE STRUCTURE /LINK WITH AIR SECTION-SIFICAP SCC B. D. B. N. D. P. DGP Fishing Activities Monitoring Department SIFICAP DGP Directorate-General for Fisheries Emgfa AERO - C (standard-C) EPA 1 X - 25 Air Force operational command Air section Unisys 5000/Xenix/X-25 Sun Sparc2/Xenix/X-25 3 ETM 3 Casa 100 3 MSs 3 Grid 1530/Xenix Standard-C Grid 1530 Printer ETT-1 ETT ETT SINTRA/ MAINLAND Unisys PW 800 /MSS Unisys PW 800 /Xenix/X-25 Unisys MP14666/Dos PORTO SANTO /MADEIRA Unisys PW 800 /Xenix/X-25 Unisys MP 14666/Dos LAJES/AZORES Unisys PW800 /Xenix/X-25 Unisys MP 14666/Dos BD SCC BNDP EMGFA EPM1 ETT EMT DGM CZM - SIFICAP Data Base - Central Monitoring Service - National Fisheries Data Base - Armed Forces General Staff Headquarters - Main Naval Station - Land Terminal Station - Mobile Terminal Station - Navy Department - Maritime Area Command p:\c31\rapports\ctrl\annexc l\cn 33 C. ACTIVITIES 1. Inspection Services The table below shows the number of port inspections made in 1994, per region of the country. NORTH Valance- Péniche CENTRE Ericeira- Sesembra Total SOUTH Setubal U. R Sâo Antonio Azores/Madeira Authority N ° of inspectors DGP ADAR B AG DAG Total 957 2861 1978 3360 251 9407 203 2233 1176 3840 2 877 3560 2209 4594 241 74541 11481 2037 8654 5363 11794 494 26342 These inspections identified a total of 820 infringements divided into the following main categories: Failing to place fish in the registered auction centre Use of prohibited gear Logbook/landing declaration (irregularity) Minimum size violations Fishing without a licence Fishing in a prohibited area The table below shows the number of inspection days at sea per ICES division and per class of inspection vessel deployed. p:\c31\rapports\ctrI\annexe l\en 9^ AREA PATROLS CORVETTES Mainland (ICES IX,a,b) Madeira (CECAF) AZORES (ICES X) 400 438 - Total 838 365 - 298 663 FAST LAUNCHES OTHERS 1 624 1 109 - - 60 63 1,624 1 232 INSPECTION DAYS AT SEA/VESSELS INSPECTED AREA INSPECTION DAYS VESSELS INSPECTED ICES IX a,b ICES X CECAF TOTAL 3 498 361 498 4 357 8 000 282 48 8 330 The inspections at sea detected 181 vessels having committed an infringement of national or Community rules. 2. Aerial surveillance The table below details the aerial inspection of fishery activities per ICES division. Area Mainland Madeira Azores Total N ' of flying hours N° of Missions Aerial Detections Inspected violations Prosecutions 367'15" 93'35" 166'35" 627'35M 126 22 33 181. 747 59 135 941 195 8 11 214 117 3 3 123 p :\c3 l\rapports\ctrl\annexe 1 \en 3 s The table below details the aerial inspection activity per aircraft and the respective result. Aircraft Flying hours Number of Missions Sightings 1 2 3 158 184'35" 285 56 60 65 320 372 249 On the basis of aerial surveillance a total of 123 vessels were identified as having committed the following infringements: fishing in a prohibited zone 61 fishing without a licence other 60 2 Landings checked on unloading or at fish markets In 1994, approximately 440 000 landings were made by fishing vessels in national ports. Under Portuguese law the first sale of fresh or frozen fish must be held in a registered fish market and in 1994 approximately 80% of fish offered for sale was sold in a fish market which quantities were inspected by Doca pesca. The various national inspection authorities monitored approximately thirty to thirty five percent of all landings. Verification of landings by means of cross-checks Monitoring by means of cross-checking data from logbooks, landing declarations and sales notes was carried out with respect to the deep-sea fishing fleet and the inshore crustacean trawl fleet operating in Portuguese waters. The percentage of landings cross-checked was 100% with respect to the fleets operating in the NAFO area off Norway and Spitsbergen and 60% with respect to the crustacean fleet. p:\c3 I\rapports\ctrl\annexe 1 \en S€ //. Evaluation A. General Portugal has a very large EEZ. The narrowness of the continental shelf reduces the true extent of the fishing grounds considerably, however, apart from those for large pelagic species. The. coastline of mainland Portugal is moderately long. The market is typically southern European with demand for a wide range of species, including small-sized fish. Despite the setting of precautionary TACs, management by quota places serious constraints on the Portuguese hake and megrim fisheries. Another characteristic feature of the Portuguese fisheries is the lightness of the trawl employed. Static gear is used generally to fish for demersal species while purse seines take precedence in the small pelagic fisheries. The Portuguese fleet also includes a number of bottom trawlers which fish for a wide range of species. B. Strengths and weaknesses Means available for and assigned to monitoring The twelve inspectors directly responsible for inspection duties are too few in number to be able to act at the appropriate time at all landing places. The wide range of tasks that must be undertaken by the other agencies which may be involved rules out any quantitative assessment of their actual contribution to enforcement. In addition, the monitoring of catches in the NAFO zone and the waters of non-member countries restricts the resources allocated to inspection of catches from Community waters. - T l \ — « „ „ r f c V r » r l \ i r > r , » v , > l \ pn 99 Portugal is able to avail itself of considerable sea-patrol and aerial surveillance resources and assigns substantial effort to fisheries protection. It can avail itself of considerable data-processing and satellite-tracking resources. Organisation More so perhaps than in any other Member State, fisheries protection arrangements in Portugal are complicated by the involvement of a large number of agencies - if only in the compiling of statistics - and by the many tasks which most of these agencies undertake. The requirement that a large proportion of catches be marketed at auction centres is expected to make enforcement more effective. C. Monitoring of technical measures In the demersal fisheries, problems arise mainly in the case of trawling, as mentioned above. It is up to Portugal to define a strategy for preventing the use of illegal mesh sizes. The extent of the problem is reduced, however, by the size of the fleets in question and by the introduction of boxes for hake. Substantial effort appears to have been invested and considerable progress achieved in monitoring these boxes. Aerial surveillance, in particular, has been used, and satellite tracking undoubtedly makes the task easier. The existence of these boxes will not, however, mean that Member States do not have to monitor the other technical measures contained in the Community rules. In the case of pelagic species, steps will have to be taken to put an end to the liberties that fishermen have been taking regarding lawful minimum sizes. p:\c3l\rapports\ctrI\annexel\en 3£ D. Monitoring of catches As far as the Commission is concerned, the procedure for converting landing declarations and logbooks into comprehensive statistics is not sufficiently reliable. Methods of validating the data contained in these documents have yet to be devised and estimates of the proportion of sales not recorded are too subjective. Doubts raised by the overall shortcomings of catch monitoring are especially serious in the case of stocks for which official catch statistics disclose a very high level of uptake. While Portugal has been a pioneer in the use of satellite surveillance, the installation of this type of equipment on board fishing vessels is still too recent and fragmentary to prevent unlawful landings or represent a real tightening-up of catch control. E. Conclusions Portugal has the requirements necessary to achieve rapid progress: catches must be sold at public auction centres, an extensive satellite monitoring network is in place and quotas can be exchanged with France, thus enabling it to offset the difficulties created by a number of very restricted quotas. It will still be necessary that quota exchanges with France do not shift the difficulties from one species to another (we are thinking mainly of anchovy), that the necessary human resources be deployed and that coordination problems between services do not result in the effectiveness of the arrangements being undermined. p:\c31\rapports\ctrl\annexe l\en 9© UNITED KINGDOM I. Inspection and monitoring of fishing activities A. ORGANIZATION Responsibility for monitoring and enforcement is shared between four UK Departments: Ministry of Agriculture, Fisheries and Food (MAFF) Welsh Office Agriculture Department (WOAD) Scottish Office Agriculture and Fisheries Departments (SOAFD) Department of Agriculmre for Northern Ireland (DANI) In England and Wales surveillance and enforcement are undertaken by MAFF's Sea Fisheries Inspectorate assisted by the Royal Navy; in Scotland by the Scottish Fisheries Protection Agency (an executive agency of the Scottish Office) using its own ships and also with support from the Royal Navy; and in Northern Ireland by DANE s own Fisheries Inspectorate. Both MAFF and SFPA use aerial surveillance. The Inspectorates are charged with enforcing both national and Community fisheries legislation. Limited enforcement duties in England and Wales are also carried out by the various Sea Fisheries Committees (SFC). The SFCs operate independently of both MAFF and WOAD and their jurisdiction extends as far as the six-mile limit. Whilst the main task of the SFCs is to enforce local by-laws promoting and regulating fishing activities, they are also authorised to enforce certain technical conservation measures (minimum landing and mesh sizes) adopted nationally or by the European Union and, in that capacity, cooperate with the MAFF Sea Fisheries Inspectorate. The Sea Fisheries Inspectorate is also responsible for monitoring both marketing and structural measures. Monitoring of the former consists of controls on marketing standards involving both visual and specified sampling checks of fish offered for sale and checks on price arrangements in the context of fish withdrawn from sale. In the context of monitoring structural measures, the Sea Fisheries Inspectorate assist specialised services located in MAFF WOAD, SOAFD and DANI. p:\c31\rapports\ctrl\annexel\en "loo B. RESOURCES 1. Human In order to discharge the various tasks assigned to it, the Sea Fisheries Inspectorate has a total of 169 shore-based inspectors. These are divided as follows. - England and Wales - Scotland - Northern Ireland 81 71 17 Inspectors are located in districts/areas. SCOTLAND NORTHERN IRELAND 10 2 7 12 10 7 6 6 11 17 10 11 13 7 North North East Moray Firth East South East South West North West 13 71 17 ENGLAND North East Humberside East South East South West West Wales North West Head office Total 2. Vessels/aircraft A total of 17 inspections vessels are deployed for enforcement purposes in the following manner: Department Number MAFF SFPA SFPA DANI 7 vessels operated and provided by Royal Navy 2 " " 7 vessels owned and operated by SFPA 1 inshore vessel owned and operated by DANI With respect to the number of aircraft available for surveillance, 5 were put at the disposal of MAFF and SFPA in 1994. p:\c3l\rapports\ctrl\annexel\en SUMMARY OF EQUIPMENT AND SOFTWARE USED IN THE COLLECTION, PROCESSING AND ANALYSIS OF DATA REQUIRED BY THE CONTROL REGULATION - 1994. MAFF (covering England and Wales) Statistics required by the control Regulation are collected mainly by Inspectorate staff at port offices, manually checked and keyed into micro-computers connected to the main government databases. Data is again checked before being reflected on the main databases (which hold vessel information for England, Wales and Northern Ireland). Further credibility checks are applied by the Fisheries Statistics Unit, who compile the catch and landings statistics to meet EC regulatory requirements. HARDWARE SOFTWARE Headquarters Statistics Unit Compaq System PRO XL Fileserver 9 PCs (Siemens Nixdorf and Compaq 486) connected to Fileserver, MAFFNET EXCEL, SPSS, Word for Windows, and 6 main control, landings and vessel databases Several high quality printers Powerpoint, Access, Lotus Spreadsheet, Reflections, Relay Gold, anti-virus. PC mail SCO-UNIX SPSS connected to MAFFNET DFR Lowestoft processing catch statistics Digital VAX cluster - Vax 17610 Vax 6510. Micro Vax 3100. HSJ disk storage array Ethernet LAN connecting to MAFF net WAN (for remote access by SFI and HQ) INGRES relational database management system Transfer of data from DFR to Guildford (MAFF IT HQ) - IBM-compatible PC SFI Licensing Desk (HQ) and Port Offices 37 Apricot Xen PC 15 Apricot Xen LS II 17 Siemens Nixdorf PC 1 Compaq PC (486) INGRES ABF/VISION application. FORTRAN programmes Digital pathworks networking software Relay Gold file transfer software. Microsoft Office, Anti-virus, Reflections 4, bespoke Ingres V6 package for data entry. | PC-mail (X 400) _J p:\c3l\rapports\ctrl\annexel\en 1 0£ SFPA and Scottish Office Agricultural Dept (SOAFD) (covering Scotland) The current system uses facilities on a central Scottish Office IBM mainframe computer. The facilities listed below are being developed to fulfil the requirements of the control Regulation. The equipment is in place and is being used to capture information for the existing system. A new database is under development which should be operational early in 1995. Equipment There are some 36 microcomputers at the 22 port offices to capture information on fishing activities (and to issue licences). The full system will allow linkage to the central processor and local offices will be able to access the central database, mainly through pre-written interrogations using ORACLE. The HQ network has two file-servers available. The new Fisheries Information System (FIN) database will be held on an ICL DRS6000 Level 750 server and is being developed in ORACLE. This server also supports database and SAS software. An ICL DRS6000 Level 450 file server supports the ICI Team Office software providing e-mail facilities etc. Back-up and archiving is to tape. There are 26 ICL ErgoPro D433d(486) machines with 20 mb RAM and 6 ICL 486 machines with 16mb RAM on the Headquarters network supporting the activities. of the Fisheries Group. The machines are fully networked. The main access to the FIN database will be through pre-written ORACLE functions but, in addition, 4 machines are equipped with a wide range of SAS software for use by the Statistics Unit. Additional machines (currently used for development) will be added to the network as the system nears completion. The network supports a variety of good quality printers and further ancillary facilities. The hardware and software is itemised below for ease of reference. p:\c3l\rapports\ctrl\annexel\en /JO 3 HARDWARE SOFTWARE Headquarters ICL DRS6000 Level 750 file server ICL DRS 6000 Level 450 file server Backup/archiving on tape 26 ICL Ergo PRO D433 (486) - 20 mb RAM 6 ICL 486 CX - 16 mb RAM (networked) several high quality printers Ports 36 microcomputers (ICL Ergo PRO D4/25 d (486) - 16/20 mb RAM and Hewlet Packard Laserjet 4si printers Database and SAS software. Fisheries Information System (FIN) to be developed in ORACLE (from early 1995) ICL Team Office software (e-mail etc) ORACLE packages and SAS software on 4 of these machines. These machines will access the FIN database from early 1995 which will contain landings, sightings, boardings and prosecution information, The number of machines and the exact functions available are yet to be decided. Database. Windows, Microsoft Office. p :\c3 l\rapports\ctrl\annexe 1 \en A o^f DANI (covering Northern Ireland) In Northern Ireland statistics are also collected, checked and keyed into microcomputers by port staff connected to a central mainframe database. Links with MAFF's database are being progressed for periodic capture of this data. HARDWARE SOFTWARE Headquarters OLIVETI M380-XP9 (File Server) WANG PC 321/16 & 1414 monitor Database management/application software - SIR 3. 2. SAS 6. 03 Network software NOVELL 2. 2 (operating system DOS 5. 0. ) comms : MASS BREAKOUT REFLECTIONS 2 BREAKOUT REPRO BREAKOUT PLUS Anti-virus : DR SOLOMONS J2, catch and validation programmes written by DANI in DATAFLEX OLIVETTI PC M290-30 incl. monitor (with tape streamer) TAPE backup software NOVELL software to access server NEWBURN PC : 486 DX 33 incl VGA monitor 2 no Olivetti PC M290-30 incl. monitor LASERJET III printer EPSON FX-1050 dot-matrix printer NOVELL software to access server As Newburn machine - contingency port PC (see below) (COMPAQ PC : DESKPRO 4/33i incl. monitor. provided by MAFF for MAFF net WAN development. Ports Portavogie. Ardglass. Kilkeel. Londonderry. WANG PC 321/168 & 1414 monitor Operating system : DOS 5. 0 Comms : REPRO(DATAFLEX internal modem) J2, catch & validation programmes | written by DANI in DATAFLEX. | p:\c31\rapports\ctrl\annexel\en ^ oS C. ACTIVITIES 1. Inspections on land In 1994, the Sea Fisheries Inspectorate conducted a total of 12 434 inspections on fishing vessels in United Kingdom ports. In addition, a further 64 044 inspections/checks were carried out at auctions, markets and in the offices offish merchants and agents. The majority of vessel inspections took place in Scotland (in the North and, North East Districts 8. 774) while 2. 768 and 892 were undertaken in England/Wales and Northern Ireland respectively. Inspections in ports Infringements detected during port inspections by nationality of vessel Main types of infringement Nationality Belgian Danish British Logbook/landing declaration 1 1 Prohibited gear Undersized fish Unauthorised fishing Vessel marking Other Total (909) 1 2 1 776 19 106 2 1 2 906 In addition to conducting inspections in port, the Sea Fisheries Inspectorate is also engaged in the cross-checking and validation of logbook and sales notes/landing declarations. While no precise figures are available on the percentage of total landings validated by physical checks on the vessels discharging, catches are physically checked wherever possible. On the other hand, auctions are visited by the Inspectorate on a regular basis and particular attention is paid to the detection and inspection of off-market landings. p :\c3 l\rapports\clrl\annexe l \en • 1 0o In 1994, the Sea Fisheries Inspectorate conducted random checks to monitor compliance with the transport-of-fish provisions of Council Regulation (EEC) No 2847/93. No details are available as to the results of these checks. 2. Inspections at sea At sea, the 17 fishery inspection vessels at the disposal of the national control authorities made 4 509 boarding of which 2 495 were on national and 2 014 were on foreign vessels. The following table indicates the number of areas patrolled, the duration of patrols and the number of boarding of UK and non-UK vessels during 1994. ICES Area N ° of days in area N ° of boarding in UK non-UK vessels Ha IV Vb Via VIb VII VIII 5 1 469 5 837 728 51 TOTAL 3 095 Inspection at sea 0 1 420 0 659 415 1 2 495 4 935 1 560 513 1 2 014 Total number of vessels (by nationality) detected in an infringement (343). Main types of infringment N° of vessels showing infringement Logbook/land, declaration Nationality UK Belg. Ger Dan. Span. Fren. Irish Dut Total 10 19 2 15 28 11 1 8 6 2 32 56 8 150 15 6 1 2 4 3 71 51 Prohibited gear 30 7 p :\c3 l\rapports\ctrl\annexe 1 \en 5 1 'lo'} Nationality UK Belg. Ger Dan. Span. Fren. Irish Dut Total 1 2 2 3 1 5 2 16 6 1 1 2 1 1 1 1 13 10 26 3 1 5 4 3 23 30 34 119 43 3 31 22 73 62 18 371 Main types of infringment Illegal fishing Prohibited area Illegal catches Directed fishery By-catches Undersized fish Marking of vessel Other Total p:\c3I\rapports\ctrl\annexel\en 1=> s 2. Results of aerial surveillance by area With respect to the aerial surveillance conducted by the aircraft at the disposal of the national control authorities, the following table indicates the location and results achieved in 1994. ICES AREA Number of sightings of Number of sightings of UK vessels foreign vessels lia IVa IVb IVc Vb Via VIb Vila Vlld Vile Vllf Vllg Vllh VIIj VIII 0 8 632 6 026 663 0 3 759 43 4 276 941 2 _m 923 338 2. 3 36 5 Total 28 016 6 1 575 2 104 1 172 15 1 491 52 464 861 845 543 1 863 859 561 23 12 434 D:\c31\raDDorts\ctrl\annexe l\en •lo g IL Evaluation A. General The United Kingdom has a well developed national fishery control system, which is matched by the allocation of substantial resources. These resources have to be seen against the background characterizing the UK fisheries sector: the UK has a coastline of some 16 000 km and some 850 000 km2 of water under her jurisdiction. At 1 January 1995, the UK fishing fleet comprised some 3 000 licensed vessels over 10 metres, and a further 5 800 licensed vessels under 10 metres which mainly fish inshore within the 6 mile limit. There are over 450 locations at which fish may be landed and more than 1 500 businesses engaged in the merchandising, processing, distribution or transportation of fish. In addition to UK vessels, up to 1 000 vessels from other Member States and non-member countries fish in UK waters. B. Strengths and weaknesses The regional significance of the different fisheries certainly varies considerably. This does not, however, justify the major disparity between the number of quayside inspections/checks of vessels undertaken in Scotland (North and North East District) and the number of quayside inspections/checks of vessels undertaken elsewhere in the United Kingdom. This disparity may partly reflect the different levels of fishing activity and be affected by the division of inspection competence among several different authorities, if they are not using the same definition of inspection. The United Kingdom authorities have stated that the main reason for the disparity is the absence of standard definitions for land-based inspections and of a comprehensive recording system for inspectoral activity in England and Wales. In their view the development of standard definitions for inspectoral activity is an issue which needs to be pursued on a Community-wide basis, otherwise it is not possible to make meaningful comparisons of enforcement activity between one Member State and another. This is already evident from the material which the Commission publishes annually on vessel inspections at sea and prosecutions. So far as the situation within the UK is concerned, it has not been considered necessary in the past to maintain a complete inventory of the checks undertaken by the Sea Fisheries Inspectorate for England and Wales. The situation is being reviewed and changes are likely to be instituted during the course of 1996 which will bear fruit in 1997 and be reflected in the annual report on enforcement activity to be submitted in 1998. n :\c3 l\rannorts\ctrl\annexe 1 \en The majority of offences detected and prosecuted in the United Kingdom during 1994 related to apparent infringements committed and detected at sea or as a result of quayside inspections/checks. On the other hand, there appears to be less inspection effort/checks and follow-up action undertaken at certain auctions, markets, merchants, agents etc. , which might partly be a consequence of the concentration of distribution centres and other downstream infrastructure in particular districts (e. g. North West District). However, the UK report states that precise figures cannot be given for the percentage of total landings validated by physical checks on vessels and in auctions. The figures presented in the UK report may not, therefore, reflect reality in all cases. On the other hand, the importance of undertaking inspections/checks in the downstream sector is emphasised by the tendency of vessels to land catches as close as possible to the fishing grounds, sometimes at ports which are not permanently supervised, which makes it difficult for the inspection authorities to verify logbooks/landing declarations. The validation of information provided in logbooks, landing declarations and sales notes needs to be consistently supplemented with regular physical checks on fishing vessels and in the auctions. In this regard, the United Kingdom is unable to provide precise figures on the percentage of total landings cross-checked accordingly. On the other hand, the checking of transport documentation, which appeared to be limited in 1994, will assist in verifying that catches landed are properly accounted for in logbooks and landing declarations. It is the view of the United Kingdom authorities that enforcement activity should be focused at sea and at the point of landing. Their experience has shown that it is difficult, time-consuming and costly to bring successful enforcement action based on checks undertaken after the point of landing. This reflects the need to satisfy rigorous evidential standards in the UK courts. There is little to be achieved from carrying out inspections if they are unlikely to have an impact on compliance by being backed by successful court action. The Commission notes the special problems posed in monitoring the activities of British- registered vessels which land substantial volumes of their catches in other Member States and the initiatives undertaken on a bilateral basis to achieve satisfactory solutions and to ensure compliance with quotas. p:\c3l\rapports\ctrl\annexe 1 \en - 4 11 The technical monitoring of structural measures is undertaken by different organisations in the United Kingdom. The technical monitoring of marketing standards has posed special problems where the standards have conflicted with traditional trading practice. In its report, the United Kingdom states that the enforcement action taken has a significant deterrent effect on preventing illegal activity although it is not possible to quantify the level of deterrence. It is the Commission's view that it is important to develop certain parameters which will allow it to focus on the most effective monitoring and enforcement measures. The Commission acknowledges the efficient and competent manner with which the United Kingdom has tackled the enforcement task at sea and, in particular, the steps that have been taken to improve the monitoring of the albacore fishery. However, despite the considerable experience of the competent authorities in the United Kingdom and the significant resources deployed for controlling fishing activities, "black landings" have been reported from several important fisheries in recent years. From the enforcement perspective, this indicates that when quota restrictions are set without effective effort limitations, then catch limitations are extremely difficult to implement. It is anticipated by the Commission that the administrative inquiry undertaken in Scotland, during 1994/1995, to investigate the landing of catches which may not have been properly accounted for under national quota allocations, will result in appropriate remedial action which will prevent the reoccurrence of this problem. C. Conclusions Apart from some shortcomings, in particular concerning the closure of fisheries and the prosecution of infringements, the means and the commitment invested in control and inspection in the UK provide an example of how the CFP should be enforced. On the other hand, the UK will have to undertake supplementary efforts to further adapt its capacities to available resources. p :\c3 l\rapports\ctrl\annexe 1 \en A^z, ANNEX II - TABLES p:\c3l\rapports\ctrl\annexe2\en T) 3 Means theoretically available for fisheries control in the Member States Table 1 Member State Inspectors Vessels Planes Helicopters Belgium Denmark Germany Greece Spain France Ireland Italy Netherlands Portugal 8 143 30 1803 304 1445 18 6 58 12 United Kingdom 169 5 212 30 31 35 10 300 i J 71 17 1 4 1 16 5 2 Vessels belonging to the Naval Service. Some of these vessels belong to the Ministry of the Environment. Greece: Primary role played by the Coast Guard Service which is based in all ports (180). In theory one person could conduct inspections. Spain : This figure only includes the national Madrid-based inspections. In addition there are 232 inspectors employed by the various authorities in the Autonomous Regions. France : Figure is based on 1) Unités Littoral Affaires Maritimes (88) 2) Gendarme Maritime (44) 3) Seagoing inspectors from Affaires Maritimes (12). Italy Potentially there are 1 200 persons engaged in some form of fisheries inspection work. The real figure is probably much smaller. p:\c31\rapports\ctrl\annexe2\en 1^ M Sharing of responsibilities for fisheries inspection in the Member States Table 2 Member State Total number of Regional Specialized service competent authorities authorities competent up to first sale Belgium Denmark Germany Greece Spain France Ireland Italy Netherlands Portugal United Kingdom 5 -> 7 3 2+autonomous 5 6 6 7 6 no no yes no yes no no no no no yes yes yes yes no yes no yes no yes no yes p:\c3l\rapports\ctrl\annexe2\en A ns Table 3 Inspections carried out annually by Member States Country Onshore Offshore Fleet size Fleet size inspections inspections ('000 kW) ('000 GT) Belgium Denmark Germany Spain France Ireland Holland Portugal United Kingdom 208 4573 (+5174) 10539 No Info 10500 26342 12434 (+64044) 68 616 4488 8728 884 8330 • 69 416 166 1823 1011 191 509 426 4509 1137 Source: Member States' reports and Eurostat 24 97 78 579 183 52 170 140 203 Fleet size (approx. number) 170 4300 1600 20100 6800 1400 1000 12900 10300 p :\c3 l\rapports\ctrl\annexe2\en TU RESULTS OF INSPECTIONS OF FISHING ACTIVITIES CARRIED OUT BY THE AUTHORITIES OF THE MEMBER STATES IN 1994 TABLE 3a Belgium Denmark -J Germany Greece (T) (A) (S) (R) (T) (A) (S) (R) (T) (A) (S) (R) Total of B D DK E FIN F IRL NL P UK S Others Country in which vessels are registered 1 73 2 60 2 70 58 4 4 8 8 Country in which vessels are registered Total of B D DK E FIN F IRL NL P UK S Others 466 65 70 331 1 1 1 1 457 64 69 324 2 1 1 2 2 1 1 2 2 Total of B D DK E FIN F IRL NL P UK S Others Country in which vessels are registered 2 1 • 1 366 232 235 57 337 218 220 57 111 7 4 15 6 9 1 1 T = TOTAL A = OFFICIAL WRITTEN WARNINGS S - ADMINISTRATIVE PENALTIES R - INFRINGEMENTS BROUGHT TO COURT p\c3l\rapporls\ctrl\anncxc2\cn Spain Country in which vessels are registered Total of B D DK E FIN F IRL NL P UK S Others 11. 812 not available not available not available 11. 762 5 3 2 27 5 8 Total of B D DK E FIN F IRL NL P UK S Others Country in which vessels are registered 2. 021 6 352 135 1. 113 3 169 33 1. 832 352 135 1. 077 Country in which vessels are registered 14 Total of B D DK E FIN F IRL NL P UK S Others 1 1 342 234 2 67 1 1 2. 1 41 12 1 29 15 15 220 167 2 12 62 38 24 (T) (A) (S) (R) (T) (A) (S) (R) (T) (A) (S) (R) France Data not completed Ireland Italy Luxembourg T = TOTAL p:\c3l\rapports\ctrl\annexc2\en A = OFFICIAL WRITTEN WARNINGS S = ADMINISTRATIVE PENALTIES R = INFRINGEMENTS BROUGHT TO COURT Netherlands Country in which vessels are registered Total of B D DK E FIN F IRL NL P UK S Others (T) (A) (S) (R) 379 114 24 12 10 4 23 -5 265 12 6 18 2 2 298 88 210 18 3 15 4 2 2 Austria Portugal Not received (T) (A) (S) (R) (T) (A) (S) (R) (T) (A) (S) (R) Finland Not applicable in 1994 Sweden Not applicable in 1994 Total of B D DK E FIN ' F IRL NL P UK S Others Country in which vessels are registered 795 21 132 642 33 5 28 762 21 127 614 Total of B D DK E FIN F IRL NL P UK S Others Country in which vessels are registered Total of D DK E FIN F IRL NL P UK S Others Country in which vessels are registered , T = TOTAL A = OFFICIAL WRITTEN WARNINGS S = ADMINISTRATIVE PENALTIES R = INFRINGEMENTS BROUGHT TO COURT p:\c3l\rapports\ctrl\annexc2\cn United Kingdom EC (T) (A) (S) (R) (T) (A) (S) (R) Country in which vessels are registered Total of D DK E FIN F IRL NL P UK S Others 1. 140 968 25 17 162 8 1 1 18 12 14 4 6 10 41 36 5 6 5 1 10 8 1. 017 880 2 127 8 6 2 Country in which vessels are registered Total of 17. 394 1. 988 B 119 33 574 • 1 2. 707 82 D DK E FIN F IRL NL P 350 222 221 65 512 12. 019 89 73 349 16 5 100 2 1 1. 899 403 135 1 1. 088 237 172 2 21 327 102 9 214 789 21 127 614 UK 1. 104 921 1 167 S Others 36 8 6 6 T = TOTAL A = OFFICIAL WRITTEN WARNINGS S = ADMINISTRATIVE PENALTIES R = INFRINGEMENTS BROUGHT TO COURT p:\c3l\rapports\ctrl\annexe2\en Table 4 Completion of basic administrative documents Country Percentage of Percentage of Percentage of Comments logbooks landing decls. sales notes returned returned returned Belgium -95% As for sales notes -95% Denmark As for sales notes 95% within 48 Intensive follow- hours for TAC up of missing Germany >95% >95% species >95% Spain France logbook data No information in the report No information in the report Ireland Almost 100% Almost 100% As for landing The sale of certain decl. species is inspected 100% Netherlands 100% 100% 100% Portugal Approx. 80% (by As for landing Emphasis put on Docapesca) decl. NAFO and Morocco fisheries, and in-shore shellfish trawl fleet United Kingdom >99% for TAC As for landing species decl. Source : Member States' reports p:\c31\rapports\ctrl\annexe2\en 'Ul Estimated catches of vessels not required to keep logbooks or return landing declarations Table 5 Belgium Belgium has no vessels under 10 m and landings outside auctions are very small (16 coastal vessels in Ostende). Denmark Fishing vessels without a logbook are licensed for a specific area and their catch is recorded using sales notes. There is no mention of catches outside auctions in the report. Germany Catches taken by vessels under 10 m are recorded by the Federal Fisheries inspectors. Vessels have to report their total catches for each species and area monthly. Spain France Ireland Catches taken by 1 218 vessels under 10 m at 13 ports are sampled No information in the report. The quantities caught by vessels under 10 m are not registered. The report says that there is access to dealers' records but it does not say how (and if) the information is used. Netherlands There is no professional fishery with vessels under 10 m. Sporting vessels are not authorized to fish for TAC species. Portugal There is no specific mention of non-logbook vessels in the report. It merely says that all landings should be reported at auctions. United Kingdom No information in the report. Source : Member States' reports p:\c31\rapports\ctrl\annexe2\en ^z z. Table 6 Validation of catch data in the Member States Belgium Cross-checks are made between logbook data and landing declaration/sales note for approx. 75% of all landings. The position information in the logbook is, furthermore, verified against aerial position information received from Netherlands, UK and Belgium. Denmark The system matches logbook information with landing declarations. Missing information is automatically identified in this process and a follow-up procedure is started. Germany Cross-checks between logbooks, landing declarations, and sales notes are made for approx. 95% of all landings by vessels more than 10 m long. Spain France Ireland There is no information in the report. There is no information in the report. It is difficult to say from the report if there is any detection of missing data. Some cross-checking is done but not systematically. Netherlands 100% cross-checking of logbook, landing declaration and sales note data. Portugal There are no cross-checks in general but for specific fisheries such as NAFO and Morocco all documents are cross-checked, and for the in-shore shellfish trawl fleet approx. 60% are cross-checked. UK The report does not state explicitly whether missing data are detected or if there is cross-validation of data. Source : Member States' reports p:\c3I\rapports\ctrI\annexe2\en 12 Overall increases in discard and wrongful catch rates according to Biais (1995) Table 7 Pelagic Discard rate Rate of declaration of wrongful catches Demersal North Sea (related sectors)1 Discard rate Rate of declaration of wrongful catches Demersal North Atlantic2 Discard rate Rate of declaration of wrongful catches Demersal South Atlantic3 Discard rate Rate of declaration of wrongful catches 1984 1988 1994 0,6% 7,6% 12,0% 8,0% 13,0% 3,0% 1,5% 7,5% 1,2% 21,0% 11,0% 20,5% 7. 0% 5,4% 2,0% 6,0% 2. 2% 17,0%o 13,0% 11,5%. 0,0% 11,0% 3,0% 0,5% 1 2 3 ICES I, II, III, IV, Vlld ICES VI and Vila ICES VII excluding Vila and Vlld, VIII, IX p:\c3I\rapports\ctrl\annexe2\en «u V A N N EX I II - SATELLITE MONITORING p:\c31\rapports\ctrl\annexe3\en 41$ In June 1993, the Fisheries Council has adopted the new fisheries control regime, later enacted as Council Regulation 2847/93. New technologies were introduced as a tool for improved fisheries control. Art. 3 of Regulation 2847/93 provides for the carrying out by Member States of pilot projects on continuous position monitoring. The implementation rules for the pilot projects are laid down in Commission Regulation 897/94 of 22 April 1994. The operational phase of the pilot projects covers the period from October 1994 to December 1995. The Commission should soon afterwards submit a proposal for a Council Regulation on satellite monitoring, on the basis of the experience gained, in order to allow the Council to take a decision in the matter. The pilot projects are fully or partly operational in nine Member states (BELGIUM, DENMARK, GERMANY, GREECE, SPAIN, FRANCE, IRELAND, the NETHERLANDS and the UNITED KINGDOM). More than 200 fishing vessels have been equipped with a "blue box" (not taking into account the situation in Portugal where MONICAP is operational with 92 trawlers). Three different satellite systems are being tested: CLS-ARGOS, EUTELTRACS and GPS/INMARSAT. More than ten months after the starting date, the project of one Member state (ITALY) is still not operational. Following the enlargement of the Community, DENMARK, FINLAND and SWEDEN carry out a joint pilot project. During the trials, the Flag state has to inform the Coastal state at regular intervals of the position of the vessels participating in its pilot project. The basic underlying principle is the transmission of the position from the fishing vessel through the flag state to the coastal state. Member states so far failed to exchange position reports among themselves on a regular basis, although there is a growing support for the use of a data exchange format proposed by Denmark as well as for the use of X. 25 as data exchange protocol. The data exchange is a very important part of the pilot projects. A failure to exchange data between flag states and coastal states in a satisfactory way would undermine the credibility of the decentralised system architecture preferred by most Member states. p:\c3l\rapports\ctrl\annexe3\en Al G As from 1996, FIDES, the Fisheries Data Exchange System designed for electronic data exchange between the Member states and the Commission, might provide a more general solution for data communication problems. During 1995, validation projects in several areas (catch reporting, licences, fleet register and electronic mail) will attempt to proof the feasibility of the FIDES concept. From the continuous monitoring of a fishing vessel's position, speed and course, certain conclusions can be drawn on the location and duration of its fishing activities. An obligation to report catches on board on entry and exit of the fishing zone, as well in certain intervals when being in that zone, would complete the information gained from such system. Fishing activities in prohibited or temporarily closed areas would immediately become apparent. Inspection vessels could operate in a much more focussed way. "Black" landings at night or in remote ports without inspection presence would be more easily detected. p:\c3l\rapports\ctrl\annexe3\en ^ 3. ISSN 0254-1475 COM(96) 100 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-108-EN-C ISBN 92-78-01391-9 Office for Official Publications of the European Communities L-2985 Luxembourg

REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE on the operation of Council Directive 90/377/EEC concerning a Community procedure to improve the transparency of gas and electricity prices charged to industrial end-users

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 15. 03. 1996 COM(96) 92 final REPORT FROM THE COMMISSION TO THE COUNCIL. THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE on the operation of Council Directive 90/377/EEC concerning a Community procedure to improve the transparency of gas and electricity prices charged to industrial end-users (submitted by the Commission pursuant to Article 8 of Council Directive 90/377/EEC of 29 June 1990) Summary and general approach CONTENTS PART ONE : IMPLEMENTATION OF THE DIRECTIVE 1. 2. Content of the Directive Legal aspects 2. 1 Implementation 2. 2 Amendments to the Directive 3. Extension to new countries 3. 1 3. 2 3. 3 The new Member States European Economic Area Central and Eastern European countries 4. Operation of the Directive 4. 1 Price data 4. 1. 1 Evaluation of the situation 4. 1. 2 Marker prices 4. 1. 3 Application of the rules on confidentiality 4. 1. 4 Breakdown of consumers and the corresponding volumes 4. 1. 5 Verification of the data 4. 1. 6 Definition of the locations The price systems 4. 2 Publication of results 5. PART TWO : ANALYSIS OF RESULTS Price situation and trends 6. Method employed 6. 1 6. 2 6. 3 Choice of measurement units Choice of sample Incidence of indirect taxation 7. Analysis of electricity prices to industrial users in the Community 7. 1 Electricity price situation and trends by location in national currency on 1 January 1985, 1990 and 1995 (a) (b) Productivity Degressivity 7. 2 Price situation and trends by location in PPS 7. 2. 1 Ranki ng of 1 ocati on s 7. 2. 2. Changes in ranking between 1990 and 1995 7. 2. 3 Electricity prices in ECU 7. 2. 4 Convergence 8. Analysis of gas prices to industrial users in the Community 8. 1 8. 2 Gas price situation and trends by location in national currency on 1 January 1985, 1990 and 1995 Price situation and trends by location in PPS 8. 2. 1 Ranking of locations on 1 January 1995 8. 2. 2 Gas prices in ECU 8. 2. 3 Convergence ANNEXES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Council Directive 90/377/EEC of 29 June 1990 : incorporation into national legislation (a) (b) Standard industrial electricity consumers Standard industrial gas consumers Yearbooks and "Statistics in focus" published to date Electricity prices (net of taxes) to industrial users in Germany Electricity price situation and trends by location in national currency on 1 January 1985, 1990 and 1995 EUR 12: Electricity prices (net of taxes) to industrial users in PPS/10 MWh on 1 January 1995 EUR 12: Electricity prices (net of taxes) to industrial users in PPS/10 MWh on 1 January 1990 Ranking of locations in increasing order of price on 1 January 1995 Ranking of locations in increasing order of price on 1 January 1990 Electricity prices in ECU per 10 MWh per year on 1 January 1985, 1990 and 1995 Gas prices (net of tax) to industrial users by location in national currency : situation and trends on 1 January 1985, 1990 and 1995 12. 13. 14. EUR 12: Gas prices (net of tax) to industrial users in PPS/100 GJ on 1 January 1995 EUR 12: Gas prices (net of tax) to industrial users in PPS/100 GJ on 1 January 1990 Gas prices (net of tax) to industrial users in Germany on 1 January 1990 and 1 January 1995 15. Ranking of locations in increasing order of price on 1 January 1995 16. Ranking of locations in increasing order of price on 1 January 1990 17. Gas prices in ECU in 1985, 1990 and 1995 GRAPHS I. II. Electricity prices 1985, 1990 and 1995 : comparison between the PPS and ECU values at a sample of 14 locations Gas prices 1985, 1990 and 1995 : comparison between the PPS and ECU values at a sample of 12 locations SUMMARY AND GENERAL APPROACH This summary report on one hand the operation of the Price Transparency Directive is the second of its kindr). It analyses implementation of Council Directive 90/377/EEC of It was written to 29 June 1990 and on the other hand it compares price evolution. comply with Article 8 of the Directive. Part One of this report, concerning implementation of the Directive, describes the difficulties encountered by the Commission with its application. The Member States will be asked individually to improve the conditions for collecting the data to ensure full compliance with the submission dates. The increasing number of countries participating in the survey makes it less and less acceptable for negligence or tardiness on the part of a single Member State to block publication of the results. The Commission will examine, with the experts on the Working Party on Energy Prices, the improvements to be made to operation of the Directive based, in particular, on the lessons learned from the price comparison. The accent will be placed on obtaining more reliable and more representative prices. In response to the difficulties encountered with obtaining the breakdown referred to in point 3 of Article 1 of the Directive, the report contains new proposals to redefine the limits for application of the consumer categories. A particular effort will also have to be made to define the content of the notifications on the price systems, as provided for in point 2 of the same Article. As regards the marker prices, the Commission draws the Member States' attention to the urgent need to reach agreement within the group of experts on the definition of the demand characteristics of the notional consumer to which the marker price applies, in accordance with the second paragraph of point 15 of the Annex on electricity, and to meet the obligations imposed by points 16 to 21 of the same Annex concerning notification of the representative special factors and price reductions, of the number of consumers and of total consumption by category. Without these details, the marker prices will not reflect the prices actually charged to the relevant consumers and will be unusable for analysis purposes. As in the past, the SOEC will continue to play its information role for the Directive. It will study means of checking the reliability of the data obtained from the communications provided for by the Directive and, where necessary, conduct direct surveys of certain consumers. The geographical coverage of the Directive has improved, particularly in Germany and with the extension to the new Member States, although gaps remain in other cases. Electricity prices are transparent enough, but gas prices to the biggest consumers, by contrast, have become less transparent. The Commission will ask the experts to study the causes in order to remedy this deterioration. ( +) See COM(93)666 final of 16 December 1993. in price notifications from The Commission is also concerned-about the drift towards making the exemption on the In grounds of commercial confidentiality the rule, to the detriment of information. particular, there has been a fall the locations where liberalization has produced a proliferation of suppliers and the ensuing fragmentation of the market. More and more often no single supplier musters the three consumers required in a given category in order to lift the exemption on confidentiality grounds and publish the corresponding price. It should be made clear that the three consumers rule applies, of course, to the location, not supplier. The Commission warns against this drift since transparency remains essential, whatever the regulatory framework or howsoever the market is organized. * * * Part Two of the report analyses the price data collected by the SOEC under the Directive. It is restricted exclusively to the gas and electricity prices submitted under Article 8 of the Directive. In the context of the negotiations in progress on the internal gas and electricity market, the political importance of this analysis lies in the fact that it answers many questions arising, particularly on electricity and gas price trends and any possible convergence. In this respect, although no significant price changes have been recorded since the last report, sharp currency fluctuation has brought far-reaching changes to the relative prices between the Member States. This part of the report examines the price movements in each Member State in national currency first, in order to establish the trend, and then makes comparisons in terms of purchasing power standard (PPS), which provides a means of removing the distortion caused by fluctuations in currency parities. The trends observed from the PPS comparisons closely match the comparisons of the ECU prices. Tables setting out the ECU prices are annexed. Throughout the Community electricity prices fell slightly, in real terms, between January 1985 and January 1995. Gas prices, by contrast, fell considerably, following the world price trend for energy in general and for oil products in particular. The falling electricity prices reflect the productivity gains obtained from industrial restructuring, the introduction of new generating technologies, such as combined heat and power production, and other new marketing and management methods (demand side management and integrated resources planning). With the exception of Germany, a marked convergence of gas prices was observed in all Member States. By contrast, the spread of electricity prices has widened, which could indicate greater inertia in the electricity industry than in the gas sector in response to competition. However, in several Member States the biggest typical consumers qualify for low electricity prices which are relatively similar. These prices are closer together in central, frontier regions of the Union, where the tariffs and price structures seem to be designed to offer competitive prices to big consumers. Beyond doubt, this must be seen as one result of the pressure exerted on electricity generators' pricing by the opening-up of the internal market in industrial products. In some cases, this has been done without taking account of the generator's real cost structure and, hence, to the detriment of small consumers, as indicated by the widening gap between the maximum and minimum prices in the sample. This cross-subsidization is even more marked in the gas industiy, where the gaps between the maximum and minimum prices in the sample are wider than for electricity. They would have been wider still had data been available for the largest consumer in the sample. At Community level, the interval between the maximum and minimum prices for the entire sample of industrial users gave a factor of 5 for electricity and of 6. 5 for gas in January 1995. This is bigger than can be reasonably explained by economic causes and can only stem from national and even regional fragmentation of the markets. This phenomenon is particularly marked in Germany, where the price spread is even wider than in the Community as a whole in the case of gas and covers the whole of the top half of the Community sample in the case of electricity. In some cases, this situation is also a sign of uneconomic investments or deficient industrial structures. The publication of prices provided for by the Directive possibly prompted adjustments of prices too far from the norm. It does not seem capable, on its own, of bringing about any significant convergence of prices until the grid-based energy markets are opened up to competition. These conclusions illustrate the role which price transparency can play in detecting anomalies likely to hamper achievement of the energy policy objectives and completion of the internal energy market or to damage consumers' interests. The Commission will continue its efforts within the group of experts to improve price transparency and obtain the exhaustive breakdown of consumers by categories in every Member State and full submission of the data concerning the marker prices, with a view to making the tariff systems, the supply conditions and the format of the price data more homogeneous to allow optimum comparability. This approach is in line with the conclusions reached in the first report on operation of the Directive, which still apply (cf. p. 6 of document COM(93)666 final of 16 December 1993). It will also examine the need to amend the Directive in order to clarify the concepts of "consumer categories" and "location" and the geographical coverage of the Directive. improve PART ONE IMPLEMENTATION OF THE DIRECTIVE Content of the Directive Council Directive 90/377/EEC of 29 June 1990 established a procedure requiring the Member States to communicate to the Statistical Office of the European( Communities (SOEC) the prices of gas and electricity to industrial users, the price systems in use, the breakdown of consumers and the corresponding volumes. The data on prices, price systems and tariffs are assembled on 1 January and 1 July each year and sent to the SOEC for publication in May and November respectively. These data have been collected following the procedure laid down in the Directive since 1 July 1991. The breakdown of industrial consumers and the corresponding volumes are submitted every two years. These data are covered by the rules on commercial confidentiality and may not be published directly. They enable the SOEC to calculate the weighted average prices ai<d the national and Community price indices, which may be published. 2. Legal aspects 2. 1 Implementation Every Member State has incorporated the Directive into its national law, except Spain, against which an infringement procedure has been initiated for this reason. Nevertheless, this gap in the legislation has not prevented regular submission of full data by the Spanish administration. Details of the national measures adopted to implement the Directive are set out in Annex 1. 2. 2 Amendments to the Directive The Commission has started the procedure to amend the Annexes to the Directive to transfer Berlin from the North/Central Zone to the Eastern Zone. In practice, the notifications for Berlin have taken this into account since 1 July 1993. The amendment is about to be published in the Official Journal. 3. Extension to new countries 3. 1 The new Member States The accession of three new countries to the European Union has prompted the addition of new locations to the Annexes to the Directive. This automatic technical adjustment was contained in the Act of Accession. The locations are Vienna, Upper Austria and Tyrol in Austria and the country as a whole (national price) in the case of Finland and Sweden. It is fair to ask how representative these national prices are for these two competitive markets. The first notifications were submitted to the SOEC by the dates stipulated. 3. 2 European Economic Area The Treaty on the European Economic Area likewise provides for submission of the data provided for by the Directive to the SOEC. In practice, only Norway is under this obligation, as both Iceland and Liechtenstein are exempted. Norway has started to transmit data to the SOEC already. The data for the enlarged Community plus Norway will be given in forthcoming SOEC publications. 3. 3 Central and Eastern European countries The Commission's White Paper on approximation of the legislation of the countries of Central and Eastern Europe provides for applying the most important Community legislation on energy to these countries. The Directive on the transparency of gas and electricity prices is one of the key measures mentioned. 4. Operation of the Directive Collaboration between the SOEC and the national bodies responsible for collecting the data in the Member States has been satisfactory. The national experts have been tackling the practical problems created by the technical and commercially sensitive nature of the work with a will to succeed, although this does not necessarily mean that the solutions offered have always been the fastest or most satisfactory. 4. 1 Price data 4. 1. 1 Evaluation of the situation All the data on electricity prices have been received and published, except in the case of the United Kingdom, where full data are available for London only. In the case of gas, it is becoming increasingly difficult to obtain data on the biggest typical consumers. The SOEC had received only two figures for the entire European Union in January 1995. Also, the submission dates set in the Directive are not always observed, leading to delays in publication of "Statistics in focus" (formerly "Rapid reports"). 4. 1. 2 Marker prices The marker prices required by Part II of the electricity annex to the Directive apply to consumers with maximum demand above the volume set for typical reference consumers (i. e. above 10 MW). They apply to three categories of industrial consumer with maximum demand in the region of: 25 MW, covering consumers with maximum net demand of between 17. 5 and 37. 5 MW, 50 MW (maximum net demand of between 37. 5 and 62. 5 MW), and 75 MW (maximum net demand of between 62. 5 and 75. 0 MW). These marker prices are available from nine Member States but not from Denmark, Ireland and Luxembourg, which have fewer than the three consumers in each category provided for in the Directive. Member States' attention is drawn to the fact that once the number of consumers in any category reaches three (the point at which the confidentiality clause ceases to apply), submission of the data becomes compulsory with effect from the next submission date, without any need for a reminder from the SOEC. Some Member States have yet to define the supply characteristics which apply to the marker price (load factor, distribution between peak and off-peak periods, etc. ). Without these details, the SOEC is unable to guarantee that the data are homogeneous. The same applies to the special factors specified in paragraph 17 of the electricity annex which may be applied to reduce prices and of which notification must be given as provided for in paragraph 18 of the Annex. The Commission departments concerned will examine, with each Member State concerned, the obstacles to regular submission of this information and ways of improving the quality of the information published. 4. 1. 3 Application of the rules on confidentiality The growing difficulties encountered in certain Member States with collection of the prices stem largely from misapplication of the rules on confidentiality in paragraph 20 of the Annex on gas and paragraph 19 of the Annex on electricity. In practice, the immediate consequence of liberalization of a national electricity or gas industry is to increase the number of transactions with different suppliers in a given region, thus making it increasingly difficult to find three consumers supplied by the same distributor. It must be remembered that the Directive stipulates that there must be at least three consumers per category in the Member State or region concerned, but makes no mention of extending this clause to distributors. Were this rule applied, no prices could be communicated from regions where there are several distributors each with fewer than three clients in any one category. By way of example, of the four locations selected in the United Kingdom, only London provided a full set of electricity prices in January 1995. Real price trends (in purchasing power standard (PSS)) in London show a general reduction from la to Ig1 between 1990 and 1995 (Ih and Ii were not submitted for January 1990). This ranges from a maximum reduction of 20. 8% in the case of Ic to 12. 1% for Ig, 8%> for la and lb, and around 4% for Id and If. However, comparison with the few comparable data available for the other locations reveals different trends: Leeds reported increases of 6. 2% for la and 9% for lb and a reduction of just 1. 8% for Id and of 9. 5% for Ig. In Birmingham prices generally increased, except for a 17. 3%) reduction for Ig. In Glasgow there was an 11% increase for la and lb, the only consumers for which prices have been submitted since July 1994. A particular effort will have to be made at these locations to meet the requirements of the Directive. In the Member States with a competitive market on which prices are fixed freely, a national average price fails to reflect the diversity of the prices or to attain the principal objective declared in the first recital of the Directive, which states that "transparency, to the extent that it reinforces the conditions ensuring that competition is not distorted in the common market, is essential to the achievement and smooth functioning of the internal energy market. " This implies that a sufficient number of price surveys are needed to make it possible to check that these conditions have indeed been met. The Working Party on Energy Prices will examine, in concertation with the Commission, means of supplementing the price data without endangering the undertakings' trade secrets. 4. 1. 4 Breakdown of consumers and the corresponding volumes Cf. Annex 2, page 28. The breakdown of consumers and the corresponding volumes provided for in point 3 of Article 1 of the Directive creates problems because in some Member States the structure of the undertakings' customer files allows no such breakdown. to in the survey participants As the Directive provides no definition of the categories of consumption, the SOEC attempted to align them on the typical consumers (see the note from the SOEC of Directive 90/377/EEC). However, it must be emphasized that Article 1 gives no definition of the categories and does not preclude setting other limits for the categories covered by the breakdowns. As experience has shown that it is extremely difficult to make the categories coincide with the typical consumers, there is nothing to prevent the Commission from proposing re-examining this point within the working party in order to find a formula for obtaining satisfactory information without impairing transparency. concerning application In practice, although point 3 in Article 1 clearly defines the consumers as those defined in the annexes, it does not say what is meant by breakdown of consumers or what the limits are for the individual categories. Consequently, the Commission considers that the data provided for in point 3 of Article 1 could equally well apply not to the typical consumers (who, by definition, cannot be taken as the limits for the categories) but to other types of sale (for example, to small, medium-sized and big industrial undertakings), which would enable the SOEC to calculate the average selling prices. This assumes submission of the volumes marketed in each category and of the corresponding revenue. The Commission will put this interpretation to the Member States within the Working Party on Energy Prices in order to ensure the earliest possible introduction of these notifications, which are essential for calculation of the weighted prices and of the national and Community price indices. 4. 1. 5 Verification of the data One loophole often pointed out is the lack of means for the SOEC to check the accuracy of the information received. As part of its task of observing the energy market, the Commission could consider the possibility of enlisting specialists to conduct random surveys of consumers in order to check the accuracy of the prices collected. 4. 1. 6 Definition of the locations In order to reflect consumers' real position as accurately as possible, the prices are recorded at a single location wherever possible rather than giving the average prices per country. These locations can be a city, conurbation or distribution network, as appropriate. The choice of location is based on how representative it is, in terms of population, economic importance, even geographical coverage of the country, different tariff districts and harmonization with the locations used for the prices of other energy sources to allow comparisons. Consideration could be given to including this definition in the annexes to the Directive, where appropriate. 4. 2 The price systems 11 Although the notifications of the price systems are regular enough, the transparency of the price systems, on the other hand, should be improved. In particular, analysis has shown that the standards of information are not the same in every Member State. The SOEC has published guidelines on ways of making the data supplied more consistent, with the cooperation of the experts on the working party. The tariff and price-setting arrangements vary widely from one location to another. Sometimes the prices are based on tariffs, sometimes on standard contracts containing terms allowing a degree of flexibility. 5. Publication of results The information collected by the SOEC under the Directive is published in the "Rapid reports: Energy and industry" series and, since 1995, in the "Statistics in focus" series. Five yearbooks on energy prices have also been published in series 4C (energy and industry) since the Directive entered into force. See Annex 3 for a list of publications. The energy prices yearbooks cover a wider field than the Directive. They provide long time series placing the electricity and gas prices to domestic and industrial users in their historical context, together with series covering all fuels, particularly coal, heating gas oil and residual fuel oil, with which electricity and gas compete. They also contain abundant information on the methods and units used and on the incidence of taxation on these products. Finally, they provide useful information on consumer price index and GDP trends in the Member States. 12 PART TWO ANALYSIS OF RESULTS Price situation and trends 6. Method employed 6. 1. Choice of measurement units Two reference units can be used for price comparisons between Member States: the ECU or the PPS (purchasing power standard). Each has its own merits, depending on the objective of the comparison. The PPS is a reference unit based on the purchasing power parities between the different national currencies, irrespective of variations in currency parity. The purchasing power parities are obtained from the average price ratios between the different countries for the same basket of goods and services. These parities are scaled to keep the value of the Community's GDP the same in PPS as in ECU. Comparison of the ECU and PPS prices between Member States shows that no currency corresponds exactly to the purchasing power attributed thereto. This phenomenon reflects the overvaluation or undervaluation of every national currency. The PPS/ECU ratios in Table 1 indicate the order of magnitude of this relative overvaluation or undervaluation of each national currency. If the ratio is over 100, the currency is strong and general price levels high. If it is under 100, the currency is weak and price levels low, as confirmed by the differences in GDP values between Member States, expressed in ECU. When the prices are expressed in ECU, the countries with an overvalued currency are at a disadvantage as their prices appear higher than they really are, whereas the opposite applies to countries with a weak national currency. These distortions can be corrected by expressing the prices in PPS which removes the currency overvaluation or undervaluation element inherent in the ECU prices. PPS and ECU values in national currency on 1 January 1990 and 1 January 1995 Table 1 Jan-90 B PPS ECU 42. 41 42. 61 DK 10. 1 7. 88 D 2. 25 2. 04 GR 151 190 E F IRL 117. 7 132 7. 1 6. 9 0. 74 0. 77 IT 1514 1514 L 42. 69 42. 62 NL 2. 33 2. 29 PPS/ECU 99. 53 128. 17 110. 29 79. 47 89. 16 102. 89 96. 10 100 100. 16 101. 74 P 111. 5 179 2 62. 22 UK 0. 656 0. 728 90. 10 13 Jan-95 B DK D GR E IPS ECU 40. 28 39. 16 9. 43 2. 28 7. 49 1. 90 PPS/ECU 102. 9 125. 9 120. 0 231. 6 295. 7 78. 3 130. 37 164. 52 79. 2 107. 3 F 7. 05 6. 57 IRL 0. 71 0. 8 88. 8 IT 1693. 38 1999. 01 84. 7 L 43. 11 39. lo 110. 0 NL 2. 29 2. 13 107. 5 P UK 133. 25 196. 13 67. 9 0. 69 0 79 87. 3 A second problem is that the differences in general price levels between countries at a given time cannot reflect the differences between the prices for each individual product as there is only a cingle exchange rate. It therefore follows that the prices converted into nominal values at the market exchange rates are distorted because, the currencies are under the influence of factors independent of national price movements. Calculation of the purchasing power parities provides a means of re-establishing the real prices. Use of PPS is all the more important in comparisons of electricity and gas prices, where the consumer markets for the products are closed. Owners of plants in different Member States who wish to compare the consolidated cost of supplies to the different plants in the group will express the prices in ECU or in any national currency. However, the ECU and national currencies fluctuate constantly, under the impact of variations in the currency parities. Consequently, owners will prefer to use the PPS to compare the economic value of supplies of goods and services to each of their plants, since this provides a means of obtaining comparable values cleared of all factors associated with currency fluctuations. 6. 2. Choice of sample A choice had to be made from the 33 locations covered by the electricity survey (excluding the new Member States) to keep the report reasonably readable. Consequently, 14 locations were selected as suitably representative and offering complete price series. One location per Member State was chosen from Italy, Ireland, Belgium, Luxembourg and Greece, all of which apply a standard nationwide tariff, and where, therefore, the choice of locations poses no problem. In France, Paris was considered representative of the French market, where there are only minimal differences between locations. In the case of the United Kingdom, only London was selected as no other location had provided full series of data. Only Lisbon was chosen in Portugal for the same reasons. Of course these choices dictated by purely methodological considerations in no way prejudice the importance, stressed throughout this report, of keeping as many locations as possible in the survey. In Germany and the Netherlands no single location could reflect the diversity of electricity prices. The locations which most frequently recorded the lowest and highest prices in the sample and, hence, embrace all the others were therefore chosen. In the Netherlands, this choice was dictated by the price gap between Rotterdam and North Brabant, while in Germany the main reason was the large number of locations (11) and the price scatter. 14 Annex 4 shows electricity prices in Germany in 1995 and 1990 expressed in national currency (DM/10 MWh). The progress on transparency can be seen from the increased number of locations covered and from the fact that the 1995 table is complete, whereas over half the data were missing in January 1990. The intervals between the maximum and minimum prices at each location vary between a factor of 2. 3 and 3, slightly above the Community average (2) except in Dusseldorf, where it is 3. 95 because of the abnormally high price to the smallest consumer, 67% higher than the price to consumer lb. The extremely complex price structures at the German locations make it difficult to sum up the situation as regards electricity prices to industrial users. Prices in Hamburg are amongst the highest in the Community, behind only Portugal and Spain (from le upwards). By contrast, prices are close to the Community average in the Western Zone and in the Southern Zone, particularly for categories le, Id and If. Compared with other locations in the Community, prices in Germany range between the Community average and the highest prices. One point to note is that all the prices in the new Lander lie between the maximum and minimum prices in the old Lander, a sign of satisfactory integration of the tariffs. In Leipzig and Rostock, for example, prices to categories Ig, Ih and Ii are amongst the most moderate. 6. 3. Incidence of indirect taxation Since in most cases indirect taxes are deductible by industry, their impact was considered negligible and the study was restricted solely to the prices net of all taxes based on application of the tariffs and contracts. 7. Analysis of electricity prices to industrial users in the Community The tables in Annex 5 show the price trends for the 14 locations in the sample. As no comparison is made, the prices could be expressed in national currency. The objective is to compare the situation before and after the Directive. The dates of 1 January 1985, i990 and 1995 were chosen, as ten years was considered long enough to show the long-term trend. The tables also include the consumer price indices (CPI) and GDP index. The consumer price indices are the monthly values on 1 January each year. The GDP index is an annual value, calculated on the basis that 1985=100. Comparison of the price trends with the consumer price index gives an indication of the productivity gains or losses in the electricity industry. The ratio between the maximum and minimum prices at each location in turn allows assessment of how the tariff burden is spread between consumers. 7. 1. ' Electricity price situation and trends bv location in national currency on 1 January 1985. 1990 and 1995 As a result of the Directive, progress has been made with improving the transparency of electricity prices, since the number of locations has increased and, for the first time, full data are available for at least one location in each Member In contrast to gas, the falling world market prices for primary energy State. 15 sources have exerted no downward pressure on electricity prices. This is one factor which must be borne in mind when assessing productivity trends. (a) Productivity A rough estimate of the productivity improvements in the electricity sector can be obtained by comparing electricity price and CPI trends. If prices are rising slower than the CPI it can be assumed that progress has been made. In practice, a general improvement can be observed, except in Hamburg and Spain where the relative deterioration in prices could be due to a deterioration in the cost structure and in Italy where, by contrast, the price increases reflect a drive towards truer pricing with a view to privatization. In Portugal, Greece and, to a lesser extent, the United Kingdom, where inflation was high, the price increases were well below the increase in the CPI. At the low-inflation locations, the biggest productivity improvements were in Denmark, Ireland, the Netherlands and Luxembourg. Moderate progress was made in Belgium, the Western Zone of Germany and France. This progress stems partly from passing on the reductions in the cost of primary energy supplies in the tariffs and partly from the introduction of new generation technologies (gas/steam turbines) or of improved business management techniques (integrated resources management). Finally, some of the national electricity industries have been liberalized and had to be restructured to make them more competitive. (b) Degressivity The interval between Ii and la (the minimum and maximum prices at each location in the sample) provides a measure of degressivity. If the factor is very high, the tariff is highly degressive and it can be assumed that the costs are not shared evenly between consumer categories but to the advantage of big consumers. On 1 January 1995 this was the case in Italy (coefficient of 3. 36), Belgium (3. 25), Luxembourg (3. 21) and Ireland (2. 77). Conversely, a coefficient below the average for the sample is a sign of a tariff particularly favourable to small consumers, as in London (1. 88) and Rotterdam (1. 90). At all the other locations, this coefficient is slightly over 2: Spain (2. 12), Greece (2. 14), Portugal (2. 18), Paris (2. 22), Hamburg (2. 27) and Western Zone of Germany (2. 46). Prices in Denmark, with a coefficient of 1. 26, stand out amongst all the others, not only because they are the lowest but also because of the gentle price curve which, in turn, suggests that the position is very different from at the other locations. Whether upward or downward, the price movements between 1985 and 1995 favoured the biggest consumers, above all in Belgium, Ireland, Luxembourg and, even more so, Italy. By contrast, the increases were shared more evenly between all consumers in Hamburg, the Western Zone of Germany, Greece, Spain and Portugal and tended to favour small industrial consumers in Denmark and France. In the Netherlands, restructuring hit small consumers during the first period, but this was corrected during the second. In London, restructuring of the tariff put an end to one anomaly in the degressive scale and restored the differentials between la, lb and Ic to normal proportions. 16 7. 2. Price situation and trends bv location in PPS Annexes 6 and 7 provide an overview of electricity prices (net of all taxes) to industrial users in the Community on 1 January 1995 and 1 January 1990, expressed in PPS. These tables allow comparisons between different locations. In both 1995 and 1990 Danish consumers paid the lowest PPS prices in the sample and Portuguese consumers the highest. These countries clearly mark the two opposite ends of the scale, with all the other prices therefore between the two. The first conclusion is that price trends between 1990 and 1995 differed far more in terms of purchasing power than of monetary parity, although they remained within moderate limits, with one or two exceptions. These were in North Brabant (with an increase of 30. 7% for Ic and a reduction of 19. 4% for la), followed by Rotterdam (25% reduction for lb) and Italy (19. 0% increase for la). All the other price movements observed were smaller. The analysis ends at Ig since no data were available for Ih and Ii in January 1990. Compared with 1 January 1990, on 1 January 1995 moderate increases or reductions were observed at every location, with the average trend for the entire sample downward, matching the trend in national currency. Increases of around 10% or lower were recorded in Belgium, France, Ireland, Italy, Portugal and Hamburg. Reductions on the same scale were observed in the Western Zone of Germany, Greece, Luxembourg and London (the data for the other locations in the United Kingdom were incomplete). There were ups and downs in Denmark, with the prices falling up to Id and increasing from le on. In Spain, the opposite was observed, with increases for la and lb and small reductions for the others. Finally, in the Netherlands restructuring of the tariffs brought big reductions or increases for all consumers as costs were transferred from one category to another. At every location the PPS prices followed the same curve as the prices in national currency, except in Denmark, where they showed transfers of costs between consumers, in Greece, where they reflected a relative fall in the PPS prices and Ireland where prices held steady in national currency but rose in PPS, showing that they had become higher in terms of purchasing power. Price rises over the report period generally remained below inflation, with numerous examples of restructuring of the tariffs reflecting the concern to adjust prices to the demand profile. At many locations, electricity prices were widely scattered in the case of small consumers but converged towards the same low-price range as consumption increased. This could suggest that producers set their tariffs to keep prices to big consumers close to the prices charged by their immediate neighbours. 7. 2. 1. Ranking of locations In Annexes 8 and 9 the horizontal line cutting the table in two represents the median, the theoretical value above and below which an equal number of observations fall. This provides a means of measuring any convergence of prices, by calculating the gap between the prices at each location and the median. These tables display the relative position of each location in increasing order of price on 17 1 January 1990 and 1 January 1995. They also reveal far-reaching differences in price structures from one location to another in the sample. Ranking the locations by frequency of appearance in each position, Denmark, North Brabant, France and Rotterdam, in that order, can be considered the cheapest locations in the sample, followed by Greece, the Western Zone of Germany and the United Kingdom (for small industrial consumers), Ireland (for moderate consumers) and Belgium and Luxembourg (for the biggest consumers). The most costly locations for all consumers are Hamburg and Portugal, joined, for moderate and big industrial consumers, by Spain. 7. 2. 2. Changes in ranking between 1990 and 1995 Comparison of Annexes 8 and 9 shows the changes in ranking of the individual locations on the relevant dates. Denmark (ranked first) and Portugal (last) still hold the same position for all their typical consumers. Amongst the low-cost locations, France, Rotterdam and North Brabant all showed minor changes. Luxembourg and the Western Zone of Germany fell significantly. Luxembourg has even become the location with the lowest prices, after Denmark, for big consumers. The United Kingdom (London) and Greece have both improved their relative positions. As for the high-cost locations (i. e. the locations above the median), Belgium's position deteriorated in the case of small and moderate consumers. Spain and Italy's position deteriorated for all consumers, except category Ic in Spain. In Ireland, no significant changes were reported. Finally, prices in Hamburg drew closer to those charged in Spain. 7. 2. 3. Electricity prices in ECU The ECU tables in Annex 10 are for information only. They made it possible to plot the price difference graphs for the various units on pp. 45 and 46. 7. 2. 4. Convergence To determine whether prices converged between 1990 and 1995, the number of observations within an interval of 10% and 25% on either side of the median for the sample was determined in January 1990 and January 1995, i. e. before and after the Directive entered into force. TABLE II OBSERVATIONS within intervals of 10% and 25% on either side of the median (January 1995/January 1990) Over the report period, the scatter increased only for small consumers (up to If) and the trend reversed from Ig on. This is confirmed by the variations in Pearson's coefficient of variability (standard deviation x 100 divided by the arithmetic mean) which rose from 25. 87% in 1990 to 27. 76% in 1995 for If (wider scatter) but, conversely, fell from 28. 26%» to 25. 59% for Ig (narrower scatter) over the same period. This is confirmed by the variations in the standard deviation (square root of the variance = s), which rose from 179 for If in 1990 to 191. 5 in 1995 but, conversely, fell from 167 in 1990 to 151 in 1995 in the case of Ig. It is impossible to compare these coefficients for the largest consumers in the sample since no figures are available for Ih and Ii in 1990. However, these figures are known for 1995, when the standard deviation and coefficient of variability were 147 and 25. 48% respectively for Ih and 132 and 25. 68% for Ii. These percentages are of the same order as for Ig. There are therefore strong reasons to presume that the findings for Ig also apply to Ih and Ii and that prices have converged for all big consumers. 8. Analysis of gas prices to industrial users in the Community The same method will be used to analyse gas prices. As in the case of electricity, the prices are based on direct application of the tariffs and contracts. Fourteen of the 34 locations covered by the survey were selected, based on similar criteria to ensure a representative subsample. It must be made clear from the outset that gas prices are noticeably less transparent than electricity prices, particularly in the case of the biggest consumers. 8. 1 Gas price situation and trends by location in national currency on 1 January 1985. 1990 and 1995 The tables in Annex 11 show the sharp deterioration in the transparency of gas prices to industrial users in January 1995 (except in the case of Weser-Ems and the Netherlands). In contrast to electricity prices, there are numerous blanks amongst the prices charged to the biggest consumers, either because no consumers were surveyed in these categories or because there were fewer than three. Nevertheless, there has been a marked deterioration in transparency, since seven prices were reported in January 1990 for 15 but just two in January 1995, despite the greater penetration by gas over this period. Geographically, price transparency is improving in Germany. As regards price trends, the repercussions of falling world gas prices on prices to end-users vary from one location to another. Finally, at many locations the price scale has become more degressive, to the benefit of large-scale industry. Over the first period (from January 1985 to January 1990) there was generally a big reduction, both in the gas-producing and gas-importing Member States. From 1990 to 1995 the situation was more varied. The reductions continued at many locations, albeit at a slower rate, but a few increases were observed, principally for the smallest standard industrial consumers whose prices seem to be directly influenced by the increase in the CPI. The situation over the entire period was marked by a general consolidation of the reductions. At most locations, the price scale became markedly more degressive between January 1990 and 1995 in favour of the biggest standard consumers in the sample, often by substantial proportions, with the notable exception of London. There has been extensive restructuring of the tariffs at the expense of small and medium-sized industrial undertakings, which indicates strong pressure exerted by competition on the internal market on the biggest consumers, who demand and obtain the most competitive gas prices. Competition from other energy sources plays an extremely important role for large offtakes in the gas sector but virtually no role at all for small and medium-sized industrial users who bear the full burden of the tariff restructuring in response to falling oil and oil-product prices. 8. 2 Price situation and trends by location in PPS Annexes 12 and 13 show the situation as regards PPS gas prices, net of all taxes, to industrial users on 1 January 1995 and 1 January 1990 respectively, based on direct application of the tariffs and terms of sale. The unit used in the case of gas is 100 GJ. Prices are lowest in Denmark and the Western Zone of Germany up to standard consumer 13-1 and in France from 13-2 on (15 not communicated). Prices are highest in Spain up to 13-2 and in Berlin from 13-1 to 14-2 (15 not communicated). Prices in the Netherlands lie in between. Only two (identical) prices are available for 15, from the Netherlands and Weser-Ems, both gas-producing regions. These prices are extremely favourable, compared with the 11 submitted for 14-2. As regards the tariff structure, at every location the switch from 12 to 13-1 (identical offtake but better load factor) attracts a significant price reduction, except in Berlin and Luxembourg, where there is no significant difference. By contrast, the improvement in consumption conditions between 13-1 and 13-2 or between 14-1 and 14-2 (same offtake but better load factor) attracts only a small price cut or no change at all at most locations, except in Belgium, France, Italy and the United Kingdom. Compared with January 1990, the 1995 PPS prices were slightly lower in the United Kingdom, Luxembourg, Strasbourg and in Belgium but higher in Ireland and Turin. Changes to the tariff base in favour of big industry were observed in Weser-Ems, Paris, Spain and the Netherlands. In Naples, similar changes were made in favour of small industrial consumers. No comparison was possible for Denmark, Berlin, Hanover and Birmingham for lack of data. In some cases, this was because no correlation with the past was established, in others because the Directive is not fully applied. Compared with the Community sample as a whole, Germany is at both ends of the scale, with Weser-Ems sharing the lowest prices with Denmark and Paris, but the Berlin sample sharing the highest prices with Spain. Consequently, the price 20 scatter in Germany is wider for gas than for electricity, with the locations with the lowest gas prices comparable to the cheapest locations in the European Union. Still in Germany, the interval between the highest price (DM 1306 in Diisseldorf) and the lowest (DM 584 in Weser-Ems) was slightly over 2 in 1990 but rose to 3. 46 in 1995 between Berlin (on DM 1497) and Dortmund/Dusseldorf (DM 433). The tables in Annex 14 compare DM gas prices at 10 locations in Germany on 1 January 1990 and 1 January 1995. 8. 2. 1 Ranking of locations on 1 January 1995 Without exception, and irrespective of the fact that the locations chosen are not always the same for the two sources, the relative ranking of the locations is not the same for both gas and electricity prices. Locations with high gas prices sometimes have low electricity prices and vice-versa (see Annexes 15 and 16), which suggests that the two sources are not in competition. Comparison of the tables in Annexes 15 and 16 shows the changes in the ranking of the sample between 1990 and 1995. The following countries, in order, had prices below the median everywhere in 1995: Denmark (no data in 1990), Weser-Ems (no significant change in comparison with 1990), Birmingham (no data in 1990), Paris and the Netherlands (which lost ground in categories II and 12 but consolidated their strong position from 13-1 on). The following were above the median everywhere: Spain, Naples and Berlin (except in the case of 12), Turin (except from 14-1 on) and Ireland (except for 13-1). Luxembourg and London maintained the same pattern in 1995, amongst the lowest gas prices for II and 12 but well above the median from 13-1 on. Belgium aligned its prices on the median, clearly in 1990, but far less so in 1995. Transparency has deteriorated since 1990. It is inadequate for the biggest gas consumers, as can be seen from the lack of data from many locations. This limits the scope for comparisons. The most striking features are as follows: Denmark, the Weser-Ems region and the Netherlands are the leading contenders for the lowest prices for all consumers combined. They are joined by London and Birmingham in the case of small industrial consumers. Both these locations are close to the production sites, which is an indication that the comparative advantages have been passed on satisfactorily in the price of the end-product. Ireland, however, is an exception and has veiy high prices despite having its own resources. France (Paris) is close to the median for II and 12 and the cheapest location in the sample in 1995 from 13-2 on, despite the fact that it has no substantial resources of its own and is a leading importer. Strasbourg, with its autonomous arrangements, is far worse placed than the rest of the country. Of the other importing locations, Belgium and Luxembourg are clearly below the median for II and 12, are amongst the most expensive locations in the sample for 13-1 but return close to the median again for large offtakes. Berlin is close to the median for II and 12 but then becomes the most expensive location in the entire sample from 13-1 on. Spain has the highest It is also prices for II and 12, followed by Ireland and the Italian locations. amongst the most expensive locations from 13-1 on. 8. 2. 2 Gas prices in ECU 21 As in the case of electricity, the ECU gas prices in Annex 17 made it possible to plot the graphs comparing ECU and PPS prices (see pp. 47 and 48) and to show the differences between the two modes used. 8. 2. 3 Convergence The number of observations within intervals of 10% and 25% on either side of the median was higher everywhere in January 1995 than in January 1990 except in the case of II, where the scatter widened in response to the numerous price increases in this category. The increase in the number of observations indicates a clear convergence of gas prices in the Community. TABLE III OBSERVATIONS within intervals of 10% and 25% on either side of the median (January 1995/January 1990) 11 12 13-1 13-2 14-1 14-2 15 Comparison of the coefficients of variability (see definition on p. 19) between 1990 and 1995 for the standard consumers for which full series are available confirms this. Although the variability rose from 32. 8% to 42% for II, it fell considerably for the following three standard consumers: - from 27. 5% to 17. 5% for 12, - from 22% to 12. 6% for 13-1, - from 24. 3% to 13% for 13-2. Beyond 13-2, the data are incomplete, which makes measurements of this type impossible. The perfect symmetry from II to 13-1 between the concentration of the observations around the median on the one hand combined with the reduction in the coefficients of variability on the other suggest that the same symmetry should extend to the consumer categories above 13-1 and tends to confirm that the average reduction in gas prices in the European Union has been accompanied by greater convergence. This is possible, even though gas is a closed market protected against gas-gas competition by exclusive rights, since this market is nevertheless open to "oblique" competition from neighbouring markets. 22 ANNEX 1 COUNCIL DIRECTIVE 90/377/EEC OF 29 JUNE 1990 INCORPORATION INTO NATIONAL LEGISLATION Member State Type of Act Date of adoption Date of publication Date of notifcation Date of entry into force A B D DK E1 FIN F G2 IRL3 I LUX' NL P S5 UK Federal law - 04-12-92 04-03-94 01-01-95 Ministerial Decree published in Moniteur Belge 18-05-92 18-05-92 28-09-92 18-05-92 Agreement signed. Details published in the Bundesanzeiger 08-07-93 30-07-93 17-09-93 08-07-93 Decree issued by Energy Ministry 16-03-92 16-03-92 01-04-92 16-03-93 Not yet fully incorporated Agreement reached between the INS and the parties concerned - - 09-02-94 01-01-95 Law published in the Journal Officiel de la République 19-07-93 20-07-93 05-10-94 Law published in Efimeris tes Guverneseus 25-07-91 25-07-91 09-08-91 (Existing provisions) - - - 20-07-93 25-07-91 01-07-91 Law published in the Gazetta Ufficiale 20-02-92 20-02-92 26-03-92 20-02-92 (Existing provisions) Agreement signed between Ministry of Economic Affairs and relevant parties - - - - - 25-05-92 01-07-91 01-01-92 Ministerial Decree published in Diario da Republica 30-05-92 30-05-92 10-06-92 30-05-92 ? Energy Act of 1976 ? - ? - ? - ? 01-07-91 see footnotes on next page. 23 1. 2. 3. 4. 5. In Spain an Order published in the Boletin Oficial del Estado on 31 May 1995 implemented the part of the Directive concerning electricity prices, but the Commission has yet to be notified of the general regulation on the transparency of gas prices. This gap in the legislation has not prevented regular submission of full data by the Spanish administration. Greece has implemented only the part of the Directive relating to electricity. Greece is exempted from the provisions on natural gas which is not yet available nationwide. In line with paragraph 2 of Article 9 and with Annex 1 to the Directive, Only administrative measures were deemed necessary in view of the laws and other provisions already adopted. The Commission accepted this solution in an exchange of letters. The provisions of the existing Act were deemed sufficient to implement the Directive, i. e. to incorporate it into national law. Contacts have been established with the Swedish administration to verify whether the Directive has been incorporated and why the Commission has not been notified. 24 Reference consumer Annual consumption (in kWh) Maximum demand (in kWh) Annual utilisation (in hours) ANNEX 2 Typical industrial electricity consumers: 30 000 50 000 160 000 1 250 000 2 000 000 10 000 000 24 000 000 50 000 000 70 000 000 30 50 100 500 500 2 500 4 000 10 000 10 000 1 000 1 000 1 600 2 500 4 000 4 000 6 000 5 000 7 000 Reference consumer Annual consumption (in GJ) Load factor Typical industrial gas consumers: la lb Ic Id le If ig Ih ii 11 12 13-1 13-2 14-1 14-2 15 'If necessary 115 - 200 days 418. 60 (or 116 300 KWh) No load factor laid down* 4 186. 00 (or 1 163 000 KWh) 200 days 41 860. 00 (or 11. 63 GWh) 200 days 1 600 hours 41 860. 00 (or 11. 63 GWh) 250 days 4 000 hours 418 600. 00 (or 116. 3 GWh) 250 days 4 000 hours 418 600. 00 (or 116. 3 GWh) 330 days 8 000 hours 4 186 000. 00 (or 1 163 GWh) 330 days 8 000 hours 25 ANNEX 3 ISSUES OF "STATISTICS IN FOCUS" PUBLISHED TO DATE 1993 No 19 Electricity prices (domestic) - 1 January 1993 No 20 Gas prices (domestic) - 1 January 1993 1994 1995 No 1 No 2 No 3 No 4 No 13 No 14 No 19 No 20 No 21 No 22 No 33 No 35 No 8 No 9 No 13 No 14 Electricity prices (industry) - 1 July 1993 Gas prices (industry) - 1 July 1993 Electricity prices (domestic) - 1 July 1993 Gas prices (domestic) - 1 July 1993 Pricing systems (electricity) Pricing systems (gas) Gas prices (domestic) - 1 January 1994 Electricity prices (domestic) - 1 January 1994 Electricity prices (industry) - 1 January 1994 Gas prices (industry) - 1 January 1994 Electricity prices for industry in the EU - 1 July 1994 Gas prices for industry in the EU -1 July 1994 Electricity prices for industry - 1 January 1995 Gas prices for industry in the EU - 1 January 1995 Gas prices (domestic) - 1 January 1995 Electricity prices (domestic) - 1 January 1995 YEARBOOKS ON ENERGY PRICES Gaspreise - Gas prices - Prix du gaz 1990 - 1994 Elektrizitàtspreise - Electricity prices - Prix de l'électricité 1985 - 1993 Gaspreise - Gas prices - Prix du gaz 1985 - 1993 Elektrizitàtspreise - Electricity prices - Prix de l'électricité 1990 - 1994 Gaspreise - Gas prices - Prix du gaz 1990 - 1994 Energiepreise - Energy prices - Prix de l'énergie 1973 - 1993 Energiepreise - Energy prices - Prix de l'énergie 1973 - 1994 Elektrizâtspreise - Electricity prices - Prix de l'électricité 1990 - 1995 Gaspreise - Gas prices - Prix du gaz 1990- 1995 ' 26 01/01/95 DM/10 MWh/Year Dusseldorf Hamburg Hannover W. Gebiet Frankfurt Stuttgart Munchen S. Gebiet Erfurt Leipzig Rostock 01/01/90 DM/10 MWh/Year DUsseldorf Hamburg Hannover W. Gebiet Frankfurt Stuttgart Munchen S. Gebiet Erfurt Leipzig Rostock ANNEX 4 ELECTRICITY PRICES 5NET OF TAX) TO INDUSTRIAL USERS IN GERMANY (in DM/100 MWh/year) ELECTRICITY PRICES (NET OF TAX) TO INDUSTRIAL USERS IN GERMANY la 5036 3548 3364 2768 4198 3726 3891 3442 3597 2939 3700 lb 3020 3548 3316 2768 4169 3632 3846 3400 3565 2884 3700 Ic 2681 3020 2602 2436 2831 2798 2509 2957 2767 2702 3348 Id 2144 2423 2159 2012 2200 2253 2008 1932 2064 2187 2174 le 1895 1943 1824 1777 1799 1861 1645 1625 1748 1845 1770 ELECTRICITY PRICES (NET OF TAX) TO INDUSTRIAL USERS IN GERMANY Ic la lb Id le NA NA NA 2975 NA 3474 3235 NA NA NA NA NA NA NA 2882 NA 3474 3235 NA NA NA NA 2066 2326 2013 2086 1996 2247 2004 1924 NA NA NA 1837 1858 1700 1863 1632 1857 1643 1620 NA NA NA 2582 2833 2412 2594 2525 2749 2477 2406 NA NA NA 27 If 1760 1943 1806 1627 1718 1780 1613 1579 1745 1693 1770 If 1701 1858 1686 1713 1561 1779 1613 1577 NA NA NA /& 1402 1627 1517 1259 1481 1481 1416 1384 1501 1364 1503 '9 1358 1550 1417 1334 1349 1480 1416 1383 NA NA NA lh 1535 1755 1588 1366 1560 1534 1478 1418 1596 1456 1431 lh NA NA * NA NA NA NA NA NA NA NA NA li 1276 1522 1408 1123 1401 1334 1364 1304 1425 1243 1234 U NA NA NA NA NA NA NA NA NA NA NA ELECTRICITY PRICE SITUATION AND TRENDS BY LOCATION IN NATIONAL CURRENCY ON 1 JANUARY 1985,1990 and 1995 ANNEX 5 Electricity prices net of tax to industrial users Belgium (B) Year I. P. O. P. I. B. la lb Ic Id le If 1985 1990 1995 97. 7 (100) 109. 2 116. 6 124 (131) 504 550 581 502 542 575 457 452 476 368 346 359 328 296 304 307 283 288 Denmark (DK) in BFR/100 KWh/Yea ig 264 245 236 Ih NA NA Ii NA NA 209 179 in DKR/100 KWh/Year Year I. P. O. P. I. B. la lb Ic Id le If ig Ih Ii 1985 1990 1995 98 (100) 4249 4196 4007 3842 3330 3527 3094 3272 2935 119. 5 121- 4720 4662 4452 4273 3743 3720 3445 3561 3316 132 (131) 3656 3597 3496 3264 3240 3169 3029 2962 2907 Hamburg (D) Year I. P. O. P. I. B. 99. 3 (100) 105. 8 112. 7 1985 1990 1995 la NA NA lb NA NA Ic Id le If 3187 2242 1800 1800 ig NA 2833 2326 1858 1858 1550 Ih NA NA Ii NA NA in DM/100 KWh/Year 125 (132) 3548 3548 3020 2423 1943 1943 1627 1755 1522 28 Western Zone (D) Year I. P. C P. I. B. la Ib le Id le If 1985 99. 3 (100) 2748 2658 2379 * 1887 1674 1530 1990 105. 8 112. 7 2975 2882 2594 2086 1863 1713 in DM/100 KWh/Year "g 1193 1334 Ih NA NA li NA NA 1995 125. (132) 2768 2768 2436 2012 1777 1627 1259 1365 1123 Athens(GR) in DR/100 KWh/Year Year I. P. C. P. I. B. la Ib le Id le If 1985 1990 1995 92. 5 (100) 1088 1084 1002 832 775 775 201. 3 211 1740 1735 1603 1330 1239 1239 1049 410 (359) 2467 2467 2278 1813 1678 1678 1426 1307 1155 ig 657 Ih NA NA li NA NA Madrid (E) Year I. P. C. P. I. B. la Ib le Id le If 1985 97 (100) 1143 1002 941 869 781 741 1990 133. 2 142. 8 1588 1588 1339 1229 1094 1026 in PTA/100 KWh/Yea ig 669 934 Ih NA NA li NA NA 1995 172 (178) 1934 1934 1465 1347 1203 1127 1014 1016 911 Paris (F) in FF/100 KWh/Year Year I. P. C P. I. B. la Ib le Id le If ig Ih li 1985 1990 1995 97. 4 (100) 7807 7089 4708 4708 3860 3860 3210 114. 7 119. 4 6465 6465 5930 4947 4033 4033 3436 NA NA NA NA 128 (134) 6673 6673 6156 5089 4275 4275 3688 3345 3001 29 Dublin (IRL) in IRL/100 KWh/Year Year I. P. C. P. I. B. la Ib le Id 1985 98. 3 (100) 1063 1063 1990 116. 7 114. 8 1015 1001 1995 130 (126) 1015 1001 879 804 804 693 614 614 le 610 501 501 If 593 469 469 ig 536 403 403 Ih NA NA li NA NA 404 367 Italy (I) in LIT/100 KWh/Year Year I. P. C P. I. B. la Ib le Id le If ig 96. 1 (100) 23073 21054 16891 14417 12356 12410 9168 128. 2 139 20873 19049 14886 12412 11166 10893 8029 1985 1990 1995 Ih NA NA li NA NA 163 (171) 27320 21980 17192 15442 12671 12671 10323 9694 8134 30 Luxemburg (L) Year I. P. C. P. I. B. la Ib Ic Id le If 1985 1990 1995 97. 8 (100) 108 124 117 (132) 545 582 556 542 583 563 422 450 433 346 368 353 296 313 300 275 242 230 Rotterdam (NL) in LFR/100 KWh/Year ig 225 206 189 Ih NA NA li NA NA 196 173 in HFL/100 KWh/Year Year I. P. C. P. I. B. la Ib Ic Id le If ig Ih NA NA li NA NA 991 Ih NA NA li NA NA 1985 1990 1995 1985 1990 1995 98. 6 (100) 3125 3003 2536 2361 2187 2025 1720 102. 5 104 NA 2950 2168 1815 1521 1411 1122 119 (117) 2177 2182 2401 1874 1491 1294 1053 1118 Lisbon (P) in ESC/100 KWh/Year Year I. P. C. P. I. B. la Ib Ic Id le If ig 93. 9 (100) 1511 1373 1156 1017 925 925 856 160. 7 192 1943 1948 1613 1398 1253 1255 1149 237 (288) 2408 2499 2057 1764 1568 1568 1284 1197 1105 London (UK) Year I. P. C. P. I. B. la Ib Ic Id le If 1985 1990 1995 96. 4 (100) 126. 3 131. 1 154 (157) 631 650 753 623 637 735 580 701 615 454 529 534 396 462 473 395 460 449 in UKL/100 KWh/Year ig NA 413 414 Ih NA NA li NA NA 428 401 31 ANNEX 6 EUR12: ELECTRICITY PRICES (NET OF TAXES) TO INDUSTRIAL USERS (in PPS/10 MWh on 1/01/1995) Electricity prices net of tax to industrial users on 1/1/1995 Belgium(B) la 1443 lb 1428 Ic 1182 Denmark(DK) 441 435 424 Id 891 399 881 1212 1553 1212 1067 1553 1322 1061 1069 1065 984 783 1483 1483 1124 1033 947 947 873 1422 1403 1126 1613 1298 1015 1289 1306 1005 949 772 951 793 1047 919 722 860 912 819 817 587 Western Zone(D) Hamburg(D) Athens(GR) Madrid(E) Paris(F) Dublhi(IRL) Italy(I) Luxembourg(L) Rotter dam(NL) North Brabant(NL) Lisbon(P) London(UK) le 755 397 778 851 725 923 607 702 748 625 650 495 If 715 Ig 586 Ih 519 Ii 444 389 374 367 361 712 551 598 492 851 712 768 666 725 616 564 499 864 778 779 699 607 523 475 426 657 565 566 514 748 610 572 480 533 439 455 402 564 549 488 432 493 441 455 433 EUR 12 in PPS/10 MWh/yr Ia/Ii 3. 25 1. 22 2. 46 2. 33 2. 14 2. 12 2. 22 2. 77 3. 36 3. 21 2. 20 1. 78 2. 18 1. 88 1807 1875 1544 1324 1177 1177 964 898 829 1090 1064 890 773 ' 685 650 529 620 580 32 Electricity prices net of tax to 'industrial users on 1/1/1990 EUR 12 in PPS/10 MWh/yr ANNEX 7 EUR12: ELECTRICITY PRICES (NET OF TAXES) TO INDUSTRIAL USERS (in PPS/10 mWh on 1/01/1990) Bclgium(B) Denmark(DK) Western Zone(D) Hamburg(D) Athens(GR) Madrid(E) Paris(F) Dublin (IRL) Italy(I) Luxemburg(L) Rotterdam(NL) North Brabant(NL) Lisbon (P) London(UK) Glasgow(UK) la 1296 463 1321 N. A. 1148 1350 905 1366 1357 1363 N. A. 958 1741 990 1189 Ib 1277 457 1280 N. A. 1145 1350 905 1348 1238 1364 1266 921 1746 969 1156 Ic 1065 436 1152 1258 1058 1138 830 1082 968 1053 930 703 1445 1067 1124 Id 815 419 926 1033 878 1045 693 827 807 861 779 575 1253 805 878 33 le 697 367 827 825 818 930 565 675 726 732 653 488 1123 703 744 If 667 365 761 825 818 872 565 631 708 567 605 486 1124 700 682 577 338 592 688 692 794 481 543 522 482 481 427 030 628 602 Ih N. A. 349 N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. Ia/Ii 2. 25 1. 33 2. 23 1. 83 1. 66 1. 70 1. 88 2. 52 2. 60 2. 83 2. 63 2. 24 1. 69 1. 58 1. 98 ANNEX 8 RANKING OF LOCATIONS IN INCREASING ORDER OF PRICE ON 1 JANUARY 1995 RANKING OF LOCATIONS IN INCREASING ORDER OF PRICE 1/1/1995 la lb Ic Id le If ig Ih li 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Denmark (DK) North Brabant (NL) Paris (F) Rotterdam (NL) Athens (GR) London (UK) Western Zone (D) Denmark (DK) North Brabant (NL) Paris (F) Rotterdam (NL) London (UK) Athens (GR) Western Zone (D) Denmark (DK) Paris (F) London (UK) North Brabant (NL) Athens (GR) Luxembourg (L) Italy (1) Luxemburg (L) Dublin (IRL) Belgium (B) Madrid (E) Hamburg (D) Italy (1) Lisbon (P) Italy (1) Luxembourg (L) Dublin (IRL) Belgium (B) Madrid (E) Hamburg (D) Lisbon (P) Rotterdam (NL) Western Zone (D) Madrid (E) Dublin (IRL) Belgium (B) Hamburg (D) Lisbon (P) Denmark (DK) North Brabant (NL) Paris (F) London (UK) Athens (GR) Rotterdam (NL) Luxembourg (L) Dublin (IRL) Western Zone (D) Belgium (B) Italy (1) Madrid (E) Hamburg (D) Lisbon (P) Denmark (DK) North Brabant (NL) Paris (F) Luxembourg (L) Rotterdam (NL) London (UK) Dublin (IRL) Athens (GR) Italy (1) Belgium (B) Western Zone (D) Hamburg (D) Madrid (E) Lisbon (P) Denmark (DK) North Brabant (NL) Luxemburg (L) Rotterdam (NL) Paris (F) London (UK) Dublin (IRL) Western Zone (D) Belgium (B) Athens (GR) Italy (1) Hamburg (D) Madrid (E) Lisbon (P) Denmark (DK) Luxemburg (L) North Brabant (NL) Paris (F) Rotterdam (NL) Western Zone (D) Dublin (IRL) Denmark (DK) Luxembourg (L) North Brabant (NL) Paris (F) Rotterdam (NL) Belgium (B) Athens (GR) Denmark (DK) Luxembourg (L) Paris (F) Rotterdam (NL) North Brabant (NL) Belgium (B) Italy (I) Belgium (B) London (UK) Italy (1) Athens (GR) Hamburg (D) Madrid (E) Lisbon (P) Dublin (IRL) Italy (1) Western Zone (D) London (UK) Hamburg (D) Madrid (E) Lisbon (P) Western Zone (D) Athens (GR) Dublin (IRL) London (UK) Hamburg (D) Madrid (E) Lisbon (P) 34 ANNEX 9 RANKING OF LOCATIONS IN INCREASING ORDER OF PRICE ON 1 JANUARY 1990 RANKING OF LOCATIONS IN INCREASING ORDER OF PRICE 1/1/1990 la Ib Ic Id le If ig Ih li Denmark (DK) Paris (F) North Brabant (NL) London (UK) Athens (GR) Glasgow (UK) Belgium (B) Western Zone (D) Madrid (E) Italy (1) Luxembourg (L) Dublin (IRL) Lisbon (P) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Denmark (DK) Paris (F) North Brabant (NL) London (UK) Athens (GR) Glasgow (UK) Italy (1) Denmark (DK) North Brabant (NL) Paris (F) Rotterdam (NL) Italy (1) Luxembourg (L) Athens (GR) Rolterdam (NL) Belgium (B) Western Zone (D) Dublin (IRL) Madrid (E) Luxembourg (L) Lisbon (P) Belgium (B) London (UK) Dublin (IRL) Glasgow (UK) Madrid (E) Western Zone (D) Hamburg (D) Lisbon (P) Denmark (DK) North Brabant (NL) Paris (F) Rotterdam (NL) London (UK) Italy (1) Belgium (B) Dublin (IRL) Luxembourg (L) Athens (GR) Glasgow (UK) Western Zone (D) Hamburg (D) Madrid (E) Lisbon (P) Denmark (DK) North Brabant (NL) Paris (F) Rotterdam (NL) Dublin (IRL) Belgium (B) London (UK) •• Italy (1) Luxembourg (L) Glasgow (UK) Athens (GR) Hamburg (D) Western Zone (D) Madrid (E) Lisbon (P) Denmark (DK) North Brabant (NL) Paris (F) Luxembourg (L) Rotterdam (NL) Dublin (IRL) Belgium (B) Glasgow (UK) London (UK) Italy (1) Western Zone (D) Athens (GR) Hamburg (D) Madrid (E) Lisbon (P) Denmark (DK) North Brabant (NL) Paris (F) Rolterdam (NL) Luxembourg (L) Italy (1) Dublin (IRL) Belgium (B) Western Zone (D) Glasgow (UK) London (UK) Hamburg (D) Athens (GR) Madrid (E) Lisbon (P) Denmark (DK) 35 ANNEX 10 ELECTRICITY PRICES IN ECU PER 10 MWh PER YEAR (1 January 1985,1990 and 1995) Electricity prices in ECU per 10 M Wh per year Electricity prices in ECU per 10 M Wh per year la Jan-85 , Jan-90 Jan-95 Ib Jan-85 Jan-90 Jan-95 Belgium (B) Denmark (DK) Western Zone (D) Hamburg (D) Athens (GR) Madrid (E) Paris (F) Dublin (IRL) Italy (I) Luxemburg (L) Rotterdam (NL) North Brabant (NL) Lisbon (P) London (UK) 1132 5 35 1237 0 1200 929 1148 1489 1684 1224 1244 778 1251 1015 1290 599 1464 0 915 1484 Belgium (B) 488 Denmark (DK) 1456 Western Zone (D) 1866 Hamburg (D) 837 Athens (GR) 1204 , 1176 Madrid (E) 931 1320 1378 1366 0 974 1084 893 1015 Paris (F) 1274 Dublin (IRL) 1367 Italy (I) 1419 Luxemburg (L) 1021 Rotterdam (NL) 830 North Brabant ( N L) 1228 Lisbon (F) 955 London (UK) 1127 5 29 1196 0 1196 815 1042 1489 1537 1217 1195 743 1137 1002 1272 592 1418 0 913 1204 931 1302 1257 1367 1286 936 1087 874 1468 480 1456 1866 834 1176 1015 1257 1100 1438 1024 853 1274 932 Electricity prices in ECU per 10 M Wh per year Electricity prices in ECU per 10 M Wh per year Ic Jan-85 Jan-90 Jan-95 Id Jan-85 Jan-90 Jan-95 Belgium (B) Denmark (DK) Western Zone(D) Hamourg (D) Athens (GR) Madrid (E) Paris (F) Dublin(IRL) Italy (I) Luxemburg (L) Rotterdam (NL) North Brabant(NL) Lisbon (P) London (UK) 1026 505 1071 1434 1105 765 692 1231 1233 948 1009 1102 957 9 33 1060 565 1276 1394 843 1015 8 54 1045 982 1056 945 715 900 962 1215 Belgium (B) 467l Denmark (DK) 1281 Western Zone(D) 1588 Hamburg (D) 770 Athens (GR) 890 Madrid (E) 937 Paris (F) 1008 Dublin (IRL) 860 Italy (I) 1107 Luxemburg (L) 1127 Rotterdam (NL) 989 North Brabant (NL) 1049 Lisbon (P) 780 London (UK) 36 827 484 849 1009 918 706 692 971 1052 777 940 613 842 731 812 543 1026 1144 700 932 712 798 819 863 791 584 780 726 917 436 1058 1274 613 819 774 771 772 902 879 632 899 677 ANNEX 10 Electricity prices in ECU per 10 MWh per year Electricity prices in ECU per 10 MWh per year le Jan-85 Jan-90 Jan-95 If Jan-85 Jan-90 Jan-95 Belgium (B) Denmark (DK) Western Zone (D) Hamburg (D) Athens (GR) Madrid (E) Paris (F) Dublin (IRL) Italy (I) Luxemburg (L) Rotterdam (NL) North Brabant (NL) Lisbon (P) London (UK) 737 420 753 S10 855 635 567 854 902 665 870 558 765 636 694 475 917 914 652 829 581 652 737 733 663 496 699 634 776 Belgium (B) 433 Denmark (DK) 935 Western Zone (D) 1022 Hamburg (D) 567 Athens (GR) 731 Madrid (E) 650 Paris (F) 629 Dublin (IRL) 634 Italy (I) 765 Luxemburg (L) 700 Rotterdam (NL) 533 North Brabant (NL) 799 Lisbon (P) 600 London (UK) 690 444 689 810 855 602 567 830 906 618 806 556 766 635 664 472 843 914 652 778 581 609 719 569 615 494 700 631 735 423 856 1022 567 685 550 588 634 587 607 531 799 570 Electricity prices in ECU per 10 MWh per year Ig Jan-85 Jan-90 Jan-95 Belgium (B) Denmark (DK) Western Zone (D) Hamburg (D) Athen (GR) Madrid (E) Paris (F) Dublin (IRL) Italy (I) Luxemburg (L) Rotterdam (NL) North Brabant (NL) Lisbon (P) London (UK) 593 390 537 0 725 544 472 750 669 505 685 675 709 0 575 438 656 763 552 709 495 524 530 483 989 434 641 567 603 404 662 856 482 616 561 506 516 483 494 474 655 525 37 ANNEX 11 Gas prices (net of tax) to industrial users by location in national currency: situation and trends on 1 January 1985,1990 and 1995 Gas prices (net of tax) to industrial users Belgium (B) in BFR/100 GJ/Year I. P. C. P. I. B. 11 12 13-1 13-2 14-1 I4-2 15 97. 7 100 36840 36840 36840 36840 36840 36840 36840 109,2 116. 6 24620 24620 24620 24620 24620 24620 24620 124 (131) 23700 23700 23700 23700 23700 23700 23700 Year 1985 1990 1995 Denmark (DK) in DKR/100 GJ/Year Year I. P. C. P. I. B. 11 12 13-1 13-2 14-1 14-2 15 1985 1990 1995 Year 1985 1990 1995 98 119,5 100 121 NA NA NA NA NA NA NA NA NA NA NA NA 132 (131) 3870 3650 2710 2710 2370 2370 NA NA N A' Weser-Ems (D) in DM/100 GJ/Year I. P. C. P. I. B. 11 12 13-1 I3-2 14-1 I4-2 15 99,3 100 1438 1394 1292 1292 1279 1237 1228 105,8 112,7 125 (132) 838 978 794 875 665 678 665 678 609 569 609 569 584 517 Berlin (D) in DM/100 GJ/Year Year I. P. C. P. I. B. 11 12 13-1 I3-2 j 14-1 14-2 15 1985 1990 1995 99,3 100 105,8 112,7 NA NA NA NA NA NA NA NA 125 (132) 1497 1072 1050 1050 NA NA 900 NA NA 872 NA NA NA Madrid (E) in PTA/100 GJ/Year Year I. P. C. P. I. B. 11 12 13-1 I3-2 14-1 I4-2 15 1985 1990 1995 Year 1985 1990 1995 97 100 160400 153600 152700 152700 142,8 118400 78500 73800 73800 NA NA NA NA MA NA NA (178) 190010 83020 52170 50250 46110 46110 in FF/100 GJ/Year 133,2 172 Paris (F) I. P. C. P. I B. 11 12 13-1 13-2 14-1 I4-2 15 97,4 100 114,7 119,4 128 (134) 5352 3796 3960 4647 3157 3337 4222 2298 2132 4129 2242 1945 3850 1975 1691 3780 1925 1640 3753 1901 NA 38 Dublin (IRL) in IRU100 GJ/Year Year 1985 1990 1995 I. P. C. Pl. B. 11 12 13-1 98,3 116,7 130 100 114,8 (126) 630 380 549 559 380 446 NA 340 254 I3-2 NA 340 254 14-1 NA 175 NA I4-2 NA 175 NA 15 NA 175 NA Milano (1) in LIT/• 00 GJ/Year Year I. P. C. P. I. B. 11 12 13-1 I3-2 14-1 I4-2 15 1985 1990 1995 96,1 100 1118900 1084500 1008300 9C4900 937000 914400 862400 128,2 139,4 1163600 1122400 529500 496600 468200 434800 408500 163 (171) 1456300 1011900 655100 6265CJ 575900 543800 NA Luxemburg (L) in LUF/100 GJ/Year Year I. P. C. P. I. B. 11 12 i3-1 I3-2 14-1 I4-2 15 1985 1990 1995 97,8 108 124 100 32880 32160 30800 28750 NA NA 116,6 20003 17691 16991 16767 16603 16603 (132) 19451 17610 17237 15149 15086 15086 NA NA NA Rotterdam (NL) in HFU100 GJ/Year Year I. P. C. P. I. B. 11 12 13-1 I3-2 14-1 14-2 15 1985 1990 1995 98,6 102,5 119 100 104,4 (117) 1594 1140 1184 1582 1125 1162 1492 1492 1410 1410 1328 762 742 762 742 645 593 645 593 London (UK) in UKL/100 GJ/Year Year I. P. C. P. I. B. 11 12 13-1 I3-2 1985 1990 1995 96,4 126. 3 154 100 131. 1 (157) 343 386 333 325 303 298 308 290 262 308 286 258 14-1 308 246 256 I4-2 308 242 227 39 NA 518 15 271 156 NA ANNEX 12 EUR12: GAS PRICES (NET OF TAX) TO INDUSTRIAL USERS IN PPS/100 GJ on 01/01/1995 Gas prices (net of tax) to industrial users on 1/1/1995 BELGIUM (B) DENMARK(DK) WESER-EMS(D) BERLIN(D) MADRID(E) PARIS(F) STRASBURG(I0 DUBLIN(IRL) TURIN(I) NAPLES(I) LUXEMBURG(L) ROTTERDAM(NL) LONDON(UK) BIKMINGIIAM(UK) 11 588 411 428 655 1454 562 650 769 753s 1099 451 516 481 497 *or last known consumer where no 15. 12 13-1 13-2 14-1 14-2 15 11/15 342 251 249 394 354 240 N. A. N. A. 340 340 350 259 371 334 316 251 249 382 354 233 N. A. N. A. 321 321 350 259 328 N. A. N. A. N. A. 226 N. A. N. A. N. A. N. A. ' N. A. N. A. N. A. N. A. 226 N. A. N. A. 1. 90 1. 60 1. 90 1. 70 4. 10 2. 40 1. 90 2. 10 2. 30 3. 42 1. 30 1. 20 1. 50 1. 50 461 387 383 469 637 473 571 625 598 598 408 507 432 428 342 288 297 460 385 276 334 356 370 370 351 324 373 351 418 288 297 460 400 303 353 356 387 387 400 324 379 975 40 ANNEX 13 EUR12: GAS PRICES (NET OF TAX) TO INDUSTRIAL USERS IN PPS/100 GJ on 01/01/1990 Gas prices (net of tax) to industrial users on 1/1/1990 Belgium(B) 11 12 580 469 13-1 421 13-2 352 14-1 352 14-2 329 15 11/15 321 1. 80 Hanover(D) 672 569 • 497 492 470 272 272 2. 50 Weser-Ems(D) 372 353 296 296 271 271 260 1. 40 Madrid(E) Paris(F) 1006 667 627 627 N. A N. A ' N. A 1. 60 533 443 323 315 277 270 N. A 2. 00 Stras bo urg(F) 700 579 N. A 346 N. A N. A N. A 2. 00 Dublin(IRL) 511 511 458 458 236 236 236 2. 10 Turin(l) Naples(l) 699 651 344 323 304 283 266 2. 60 1130 944 344 323 304 283 266 4. 20 Luxembourg(L) 468 414 398 393 389 389 N. A 1. 20 Rotterdam(NL) 489 483 327 327 277 277 N. A 1. 80 London(UK) 588 461 441 435 374 368 237 2. 50 41 ANNEX 14 GAS PRICES (NET OF TAX) TO INDUSTRIAL USERS IN GERMANY on 1 January 1990 and 1995 Gas prices (net of tax) to industrial users on 1/1/95 Dusseldorf Hamburg Hanover Dortmund Frankfurt Stuttgart Munich Weser-Ems Dresden Berlin 11 1350 1022 1289 1003 1069 1231 1161 978 1233 1497 12 983 1014 972 850 983 1097 1094 875 994 1072 Gas prices (net of tax) to industrial users on 1/1/90 Dusseldorf Hamburg Hanover Dortmund Frankfurt Stuttgart Munich Weser-Ems Dresden Berlin 11 1306 1103 1512 1028 992 1075 1482 838 NA NA 12 982 1103 1280 834 939 1103 1002 794 NA NA 13-1 967 861 844 822 847 1058 1028 678 892 1050 13-1 967 928 1119 806 718 1181 1114 665 NA NA 13-2 919 786 836 789 817 944 836 678 836 1050 13-2 924 853 1108 773 718 923 1032 665 NA NA 42 14-1 14-2 Germany 15 803 708 792 733 781 875 797 569 667 900 14-1 914 834 1058 684 714 923 864 609 NA NA 756 NA NA 703 753 750 742 569 NA 872 14-2 772 612 612 684 714 834 751 609 NA NA 433 NA NA 433 NA NA 456 517 NA NA Germany 15 635 612 612 621 714 834 609 584 NA NA ANNEX 15 Ranking of locations in increasing order of price on 1 January 1995 Ranking of locations in increasing order of price 01/01/1995 11 12 13-1 Denmark(DK) Weser-Ems(D) Denmark(DK) I3-2 Paris(F) 14-1 Paris(F) 14-2 Paris(F) 15 Weser-Ems(D) Weser-Ems(D) Denmark(DK) Weser-Ems(D) Denmark(DK) Weser-Ems(D) Weser-Ems(D) Rotterdam(NL) Luxembourg(L) Luxembourg(L) Paris(F) Weser-Ems(D) Denmark(DK) Denmark(DK) London (UK) Birmingham(UK) Rotterdam(NL) Rollerdam(NL) Rotterdam(NL) Rotterdam(NL) Birmingham(UK) London(UK) Strasbourg(F) Strasbourg(F) Birmingham(UK) Belgium(B) Rotterdam(NL) Belgium(B) Dublin(IRL) Belgium(B) Turin (I) Turin (I) Paris(F) Behin(D) Birmingham(UK) Birmingham(UK) Belgium(B) Paris(F) London(UK) Luxembourg(L) Strasbourg(F) Rotterdam(NL) Turin (I) Dublin(IRL) Berlin (D) Strasbourg(F) Naples(l) Turin (I) Naples(l) Naples(l) Belgium(B) London(UK) Luxembourg(L) Luxembourg(L) Madrid(E) Madrid(E) Tu fin (I) Turin (I) Luxembourg(L) Naples(l) London(UK) Berlin(D) Dublin (IRL) Naples(l) Madrid(E) London(UK) Beriin(D) Naples(l) Dublin (IRL) Belgium(B) Madrid(E) M ad rid (E) Madrid(E) Berlin(D) Beriin(D) 43 ANNEX 16 RANKING OF LOCATIONS IN INCREASING ORDER OF PRICE on 1 January 1990 Ranking of locations in increasing order of price GazOl/01/90 II 12 13-1 13-2 14-1 14-2 15 Weser-Ems(D) Weser-Ems(D) Weser-Ems(D) Weser-Ems(D) Dublin(IRL) Dub lin (IRL) Dublin(IRL) Luxembourg(L) Luxembourg(L) Paris(F) Paris(F) Weser-Ems(D) Paris(F) London(UK) Rotterdam(NL) Paris(F) Rotterdam(NL) Turin(I) Paris(F) % Weser-Ems(D) Weser-Ems(D) Dublin(IRL) London(UK) Turin(I) Naples(I) Rotterdam(NL) Hanover(D) Turin(I) Paris(F) Belgium(B) Naples(I) Rotterdam(NL) Turin (I) Rotter dam(NL) Naples(I) Belgium(B) Rotterdam(NL) Luxembourg(L) Strasbourg(F) Naples(I) Turin(I) Hanover(D) London(UK) Dublin(IRL) Belgium(B) Belgium(B) Belgium(B) Naples(I) Belgium(B) Hanover(D) Hanover(D) London(UK) Luxembourg(L) London(UK) Belgium(B) Turin(I) Strasbourg(F) Dublin(IRL) London(UK) Luxembourg(L) London(UK) Strasbourg(F) Turin(I) Hanover(D) Dublin(IRL) Honover(D) Luxembourg(L) Madrid(E) : Madrid(E) Madhd(E) Hanover(D) Naples(l) Naples(I) Madhd(E) 44 ANNEX 17 GAS PRICES IN ECU IN 1985 - 1990 - 1995 Gas prices in ECU/100 GJ/Year Gas prices in ECU/100 GJ/Year 11 Jan-85 Jan-90 Jan-95 12 Jan-85 Jan-90 Jan-95 Belgium(B) Denmark(DK) Weser-Ems(D) Madrid(E) Paris(F) Strasbourg(F) Dublin(IRL) Turin(l) Naples(l) Luxembourg(L) Rotterdam(NL) London(UK) 827 NA 647 1304 786 937 882 877 NA 738 634 551 578 NA 412 897 548 720 494 710 605 Belgium(B) 517 Denmark(DK) 514 Weser-Ems(D) 1155 Madrid(E) 602 Paris(F) 697 Strasbourg(F) 689 Oublin(IRL) 638 Turin(l) 1148 931 Naples(l) 469 497 530 497 Luxembourg(L) 556 Rotterdam(NL) 422 London(UK) 758 NA 627 1249 683 779 783 827 NA 722 630 523 467 NA 390 595 456 595 494 661 958 415 490 416 Gas prices in ECU/100 GJ/Year Gas prices in ECU/100 GJ/Year 13-1 Jan-85 Jan-90 Jan-95 I3-2 Jan-85 Jan-90 Jan-95 Belgium(B) Denmark(DK) Weser-Ems(D) Madrid(E) Paris(F) Strasbourg(F) Dublin(IRL) Turin(l) Naples(l) Luxembourg(L) Rotterdam (NL) London(UK) 692 NA 581 1241 620 NA NA 736 736 692 594 495 419 NA 327 559 332 NA 442 349 349 399 332 398 408 Belgium(B) 362 Denmark(DK) 357 Weser-Ems(D) 317 Madrid(E) 324 Paris(F) 378 Strasbourg(F) 319 Dublin(IRL) 328 Turin(l) 328 Naples(l) 440 Luxembourg(L) 348 Rotterdam(NL) 332 London(UK) 632 NA 581 1241 606 639 NA 719 719 646 594 495 350 NA 327 559 324 356 442 328 328 393 332 393 474 487 460 505 508 612 560 506 506 450 454 378 329 362 357 305 296 358 319 313 313 387 348 327 45 Gas prices in ECU/100 GJ/Year Gas prices in ECU/100 GJ/Year 14-1 Jan-85 Jan-90 Jan-95 14-2 Jan-85 Jan-90 Jan-95 611 NA 556 NA 555 NA NA 668 668 NA 561 495 327 NA 299 NA 278 NA 227 287 287 390 281 332 303 316 299 280 249 NA NA 272 272 385 278 287 Belgium(B) Dcnmark(DK) Weser-Ems(D) Madrid(E) Paris(F) Strasbourg(F) Dublin(IRL) Turin(I) NapIes(I) Luxembourg(L) Rotterdam(NL) London(UK) 632 NA 575 NA 565 NA NA 684 684 NA 561 495 350 NA 299 NA 285 NA 227 309 309 390 281 338 329 Belgium(B) 316 Denmark(DK) 299 Weser-Ems(D) 280 Madrid(E) 257 Paris(F) NA Strasbourg(F) NA Dublin(IRL) 288 Turin(T) 288 NaplesfT) 385 Luxembourg(L) 278 Rotterdam(NL) 325 London(UK) Gas p r i c es in ECU/100 G J / Y e ar 15-1 Jan-85 Jan-90 Jan-95 Belgium(B) Denmark(DK) Weser-Ems(D) Mad rid (E) ParisfF) Strasbourg(F) Dublin(IRL) Turin(l) Naples(l) L u x e m b o u r g ( L) Rotterdam(NL) L o n d o n ( U K) 605 NA 552 NA 551 NA NA 630 630 NA 529 436 320 NA 287 NA 275 NA 227 270 270 NA NA 214 NA NA 272 NA NA NA NA NA NA NA 243 NA 46 2 5 00 2 0 00 1S00 1 0 00 -1 5 00 0 •> 2 0 00 1 5 00 1 0 00 5 0 0 -1 20O0 1 5 00 lOOO -V 5 00 A G R A P HS ELECTRICITY PRICES 1985. 1990, 1995 i/'A l. i ECU la SPA Ib 2500 1S00 1000 5 00 20O0 1500 1000 5Mli-fe ECU3b SPA Ic ECU Ic 1500 4— \*0%?0txi Jan-90 P7' Li J. -. n 9' Noies: 1- Bclgium(B)4- Hamburg(D)7- Paris(F)10- Luxembourg(L)l3 - L. isbon(P) 2- Dcnmark(DK)5- Alhens(G)8- Dublin(lRL)l 1- Rottcrdani(NL)l4- London(UK) 3- Western Zonc(D)6- Madnd(E)9- Italy(I)12- North Brabanl 47 GRAPHS ELECTRICITY PRICES 1985, 1990. 1395 Notes: 1- Belgium(B)4- Hamburg(D)7-Paris(F)10- Luxembourg(L)13- Lisbon(P) 2- Denmark(DK)5-Athens(G)8-Dublin(IRL)11-Rotterdam(NL)14- London(UK) 3- Western Zone(D)6- Madrid(E)9- ltaly(l)12- North Brabant 48 GRAPHS N A T U R AL GAS PRICES IN 1985. 1990 and 1995 •f= Notes: 1- Belgium(B)4- Hamburg(D)7- Dublin(IRL)10- Luxembourg(L) 2- Denmark(DK)5- Paris (F)8-Turin(I)l 1- Rotterdani(NL)) 3- Wcser-Ems(D)6- Strasbourg (F)0-Naples(l)l 2- London (UK) 49 GRAFMS NATURAL GAS PRICES IN 1985. 1990 and 1995 Notes 1- Belgium(B)4-Hamburg(D)7-Dublin(IRL)10-Luxembourg(L) 2- Denmark(DK)5- Paris (F)8-Turin(l)11 - Rotterdam(NL)) 3- Weser-Ems(D)6- Strasbourg (F)9-Naples(l)1 2- London (UK) r^0 ISSN 0254-1475 COM(96) 92 final DOCUMENTS EN 10 12 Catalogue number : CB-CO-96-097-EN-C ISBN 92-78-01237-8 Office for Official Publications of the European Communities L-2985 Luxembourg 5i

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - Small-Scale coastal fishing (Budget heading B2-521)

http://publications.europa.eu/resource/cellar/f08fb666-0175-46d6-8198-47b5a674cc4d

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 15. 03. 1996 COM(96)102 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT SMALL-SCALE COASTAL FISHING (BUDGET HEADING B2-521) SMALL-SCALE COASTAL FISHING (BUDGET HEADING B2-521) (Commission Communication to the Council and Parliament) 1. INTRODUCTION The purpose of this Commission communication is to inform the Council and Parliament about the initiatives taken by the Council in 1995 to. implement budget heading B2-521. It follows on from the undertaking made by the Commission on 10 July 1995 with regard to "small-scale coastal fishing". The new budget heading B2-521, introduced by Parliament, allocated ECU 3 million in commitment appropriations in 1995 for "small-scale coastal fishing", "the economic and social importance" of which ". justifies the creation of this line in the context of structural operations for this sector under the common fisheries policy. ". The remarks contained in the budget referred to a Parliament Resolution0'. The "non-significant" nature of the operation - within the meaning of the second paragraph of Article 22(1) of the Financial Regulation - means that there is no need for the prior adoption of a basic instrument, and hence it is up to the Commission to lay down itself the rules governing the use of the available appropriations, subject to Parliament's resolution of 20 January 1989 referred to above. 2. METHODOLOGY Actions plans The Commission rejected from the first the part-financing of individual products, the management of which would have been inefficient and over-rigid. After fixing a level for the Community contribution (see below), it was decided to ask the Member States to submit whole programmes of a limited scope, known as "action plans for small-scale coastal fishing", drawn up in accordance with simple rules, with stress on subsidiarity. After examination, each plan would be approved by a Commission decision and allocated a single commitment paid in two instalments (an advance on approval of the plan with the balance being paid after completion following submission of a report to the Commission and verification of expenditure). Resolution of the European Parliament of 20. 1. 1989 on small-scale fisheries (Doc. A2-271/88, OJ C 47, 27. 2. 1989, p. 173) 1 Scope Neither the budget heading or the accompanying remarks provide a definition of "small-scale coastal fishing'. The following definition was adopted: " 'small-scale coastal fishing' means fishing by professional fishing vessels of an overall length of less than 9 metres, or 12 metres for vessels equipped for trawling". The potential beneficiaries of the plans are owners, skippers and crew of small-scale coastal fishing vessels. Aims of the plans - type of interventions In order to remain faithful to Parliament's intentions as expressed in the remarks in the budget, a measure will have to focus on the modernisation of small-scale coastal fishing. Some Community fleets are made up of a very small, undecked boats, lacking safety equipment and mechanisation, which are underpowered and without equipment on board for the conservation of catches. Care had nevertheless to be taken to avoid interfering with the multiannual guidance programmes for fishing fleets (MGPs)(2) and, in particular, to provide for very strict guidelines on aid towards new engines for vessels, which could increase fishing effort. A measure has to be distinguishable, however, from the traditional structural operations undertaken with FIFG assistance^. In view of the modest level of resources available, a measure of such limited scope would be politically meaningful and visible only if it is innovative and quality-enhancing for the fishery and can trigger a multiplier effect by being exemplary and serving as a model, conditions requiring more than the simple grant of aid for investments in vessels. It has therefore been decided to give priority to projects which combine such investments with training courses for users of the modernised vessels that are directly related to the investment. (2> (S) According to Article 5(1) of Council Regulation (EC) No 3699/93 of 21 December 1993 laying down the criteria and arrangements regarding Community structural assistance in the fisheries and aquaculture sector and the processing and marketing of its products (OJ L 346, 31. 12. 1993, p. 1), a MGP is "a series of objectives accompanied by a set of measures for their realisation, allowing for management of fishing effort on a consistent, longer-term basis" The conditions governing FIFG assistance are laid down by Regulation (EC) No 3699/93, referred to above. 2 Rate of financing The following rates of financing have been set (as a percentage of eligible expenditure): Type of expenditure Community aid Member State's public contribution (national, regional, etc. ) Beneficiaries' contribution Investment on board vessels £ 75% £5% > 20% Training £ 75% ;> 25% Duration of plans The measures are to be completed at the latest twelve months after the Commission has taken the decision approving a plan. 3. IMPLEMENTATION A letter was sent to the Member States on 8 August 1995 inviting them to submit an action plan for small-scale coastal fishing by 1 October 1995. The Commission's invitation was taken up by seven Member States (Greece, Spain, Finland, Ireland, Italy, Portugal and Sweden). During finalisation of the programming document, the Commission took care to ensure that all the plans actually combined investments for the modernisation of small-scale coastal fishing vessels and training courses for the fishermen concerned. The available appropriations were allocated according to the importance of small-scale coastal fishing in the Member States concerned in terms of both the number of vessels and tonnage. The final allocations were as follows: Member State Total budget National contribution GR E FIN IRL I P S 1. 124. 000 1. 174. 276 193. 333 133. 333 536. 000 689. 000 228. 000 Public 101. 160 183. 179 13. 182 20. 000 54. 000 58. 000 22. 800 TOTAUX 4. 077. 942 452. 321 Private 179. 840 169. 097 35. 151 13. 333 80. 000 114. 000 34. 200 625. 621 (ecu) Community assistance 843. 000 822. 000 145. 000 100. 000 402. 000 517. 000 171. 000 3. 000. 000 The programmes, which were approved by Commission decision of 18 December 1995, will run until the end of 1996 and implementation reports will be submitted during the first half of 1997. Annex : descriptif summary of "small-scale coastal fishing" programs GREECE The small scale coastal fishing fleet in Greece concerns some 16 000 boats and it is considered that it occupies some 21000 fishermen. This fleet presents problems which in particular become more important for the fleets of remote regions characterized by geographical, economic and social isolation. Some of these islands (Tilos, Agathonissi, Lipsi, Anafi, etc. ) live from fishing only which is of particular local importance. The fishing activities are limited both by the age of the boats and by the open seas which encircle these islands, and they do not enable the fishermen to have a sufficient income to modernize their boats. Moreover, the specific training activities relating to environmental protection, to coastal resource management, to product quality, to on board safety and to navigation have until now not sufficiently covered if at all, the fishermen of these insular and remote regions as well as of other regions located in the Aegean and Ionian seas. The action plan for small scale coastal fishing in Greece aims to have two kinds of interventions: The modernization of the boats mainly for the islands Tilos / Agathonissi / Lipsi / Anafi, etc by: the replacement of existing engines by new ones having the same power the supply of pots ensuring the conservation and the quality of the fish the supply of equipment aiming at safety on board Training by seminars in the regions of the Aegean and Ionian seas on the : management of coastal resources awareness of marine environmental protection quality of the products / hygiene rules safety rules on board and navigation requirements It is envisaged that these actions, focused on small scale coastal fishing, will improve the life of the fishermen of these insular and most remote regions. SPAIN The significance of small-scale coastal fishing in Spain should be appreciated from the point of view of its impact on regions rather than its specific importance to the fisheries sector as a whole. Moreover, despite its minor importance in terms of added value it is a significant creator of jobs and income in the national economy. The Spanish fishing fleet currently comprises some 19 000 vessels, 13 000 of which are part of the small-scale coastal sub-sector. The action plan is targeted at that part of the fleet segment which is based in a small number of ports (28) which have a significant number of those vessels (at least 1 350) and which are generally located in coastal areas highly dependent on the fisheries sector. They cover all parts of the Spanish coastline and the Balearic Islands. The action plan proposes a series of measures grouped in two fields of assistance: Investments in fishing vessels Installation of facilities to improve safety on board. Design of a highly standardised refrigerator model for fishery products and of small containers to facilitate product handling and transport and to contribute to improving fishery product hygiene and quality. Technical studies aimed at identifying the best type of engine for the fishery zones normally used by the vessels concerned by the plan and at improving maintenance. It is envisaged that a total of 472 vessels of the small-scale coastal fishing fleet will be eligible for aid. Training for fishermen Organisation of training days covering safety standards on board and ways of avoiding hazard situations in coastal navigation. Organisation of courses on survival at sea. Organisation of courses on selective fishing methods and on improving work hygiene on board. In all, 28 training courses will be organised on site and beneficiaries of the aids mentioned in point 1 will have priority. The innovatory aspect of the assistance, in a fleet segment often overlooked but having a rate of accidents at sea higher than other segments, forms the basis for the plan. The proposed measures take account both of increased safety on board and of an increase in the effectiveness of the emergency services created for fishermen by the local authorities. Administration of the plan is decentralised and the various regional authorities competent for the envisaged measures will be responsible for their implementation. However, Spain's central government will coordinate the plan. IRELAND The plan submitted by Ireland concentrates primarily in the training of owners, skippers and crewmen of small fishing vessels. Provision has also been made for assisting owners to invest in safety equipment. The Irish fishing fleet is predominantly made up of smaller vessels. There are 907 vessels under 12 metres in registered length, representing 65 % of all vessels in the fleet. Of the 907 vessels under 12 metres, 433 are under nine metres in length (approx. 31 % of the total number of vessels in the fleet). Ireland has long recognised the contribution which these small fishing vessels make to many remote coastal communities where few alternative employment opportunities exist. The major problems facing the small-scale coastal fishery in Ireland are: a lack of awareness of correct safety procedures and of the limitations of small open boats particularly in terms of stability and the attendant danger of overloaded vessels capsizing; the effects of prolonged periods of rough weather, especially on the South, West and North-West coasts which are exposed to Atlantic storms; overdependance in some areas on a limited range of target species. A training programme aimed exclusively at the owners/crew of small vessels will be undertaken at fishing ports around the coast. The programme will include seminars, workshops and demonstration focusing on the following areas: safety; maintenance and equipment; fish quality; resource conservation; alternative resources; book-keeping and financial control. The training programme will be supplemented by a series of educational posters and leaflets. One of the problems with small fishing vessels is that they are often poorly maintained and lack even the basic life saving and firefighting equipment. The plan provides assistance for this type of equipment. ITALY The Italian fleet concerned is composed as follows : 7398 vessels under 9 metres overall lenght, 1271 vessels (trawlers) under 12 metres overall lenght. Problems concerning this segment of the Italian fleet : general obsolescence of the vessels; growing conflict with other segments of the fleet in the exploitation of coastal resources. Italian Authorities have identified 20 ports and 330 vessels that will benefit from this action. Total EU contribution will be divided equally between each of the two measures. Type of intervention envisaged On board investment Safety on board : it is envisaged that all vessels will be fitted with a navigation device (GPS type), to establish the location of vessels in case of necessity, since vessels now tend to fish farther from the coast. Vessel Efficiency : vessels will be supplied with a net-winding winch for use in deeper waters. Quality preservation of the fish : the installation of fibreglass containers to improve quality is envisaged. Vocational training : the vocational training courses envisaged are related to the actions considered under the investments on board, in order to provide the technical knowledge for using this new equipment (navigation device, net-winding winch, fish handling techniques on board). Linkage of the two types of investment and role of the Producer Associations : vocational training courses will be directed only at those who have participated in the investment on board. These training courses will be organised only when the first phase of the investment on board has been carried out. Italian Authorities have assured the Commission that training courses will be available to each investor and that a promotion campaign for this initiative will be launched. The Italian Authorities have nominated the Producer Organisations as the responsible bodies for the execution of the plan. They will be invited to introduce detailed operational programmes and to assume the direct responsibility for their execution. PORTUGAL On board investment Improve on board safety - to meet the needs of the sector (the means of rescue and of safety are often insufficient since the sheltered areas and the harbours in the North of Portugal are dangerous). Quality improvement of fish products. Use or even the existence of means for preserving fish products is not widespread Training Promotion of fishermen's training by raising the awareness about the means of rescue and improvement of the product quality. Scope: Coastal fishing vessels of length overall less than 9 or 12 metres for the trawlers located on North and the Centre of Portugal. Objectives of the plan - type of intervention. The acquisition of rescue and safety equipment envisaged in the Portuguese action plan (signals and buoys, life-jackets, rafts, extinguishers) is in line with the type of eligible actions envisaged in the action plan established by DG XIV. FINLAND Each year, there are about 100-150 fishermen in the Finnish archipelago who use "fyke" nets to catch herring and to a lesser extent perch, pike-perch and pike. A fyke net is a net which is fixed in shallow water with poles and has a cone shaped end to catch the fish. The fishermen operate from small vessels around the many islands and small inlets. Catching herring and other species with fyke nets is a traditional but laborious way of fishing in these remote areas where there are few harbours and landing facilities. In the south west coast of Finland, the fishermen's Association is proposing that the Association, the national authorities and the Commission together jointly finance two measures as follows: To finance the construction of a new and specialised fishing boat which would serve the fyke net fishermen and be equipped with a pumping system to extract fish from the fyke nets. The equipment would include a sorting machine and machinery for boxing and chilling fish. This would be a pilot type project which, if successful, would enable the development of the fyke netting of perch and other species. To finance the training of fishermen to operate this proposed new boat and equipment. The potential benefits of this investment are; it will help reduce the decline in this traditional fishery, if very successful other fishermen will use the same technique, it will enable the development of fyke fishing for other species, maintain the quality of the fish. SWEDEN The Swedish plan, submitted on 29. 09. 95, includes the following 4 measures: Investments on board vessels: this measure concerns the introduction and development of more selective gear in coastal fisheries, i. e. purchase and installation of exit windows/square meshes in Norway lobster trawlers, selective prawn and vendace trawls, and finally development and introduction of more selective fyke nets in the eel fisheries and in creels for shellfish fisheries. Compensation for loss of income during trial periods is envisaged (max. 10 % of public expenditures). Improvement of safety and working conditions on board small scale fishing vessels i. e. development, purchase and installation of safety equipment, investments aimed at noise reduction and facilities for safer handling of gear and catches. Improvement of product quality and refrigeration/chilling/catch handling. Training in theory and practice in using selective gear, safety training (4-day course offered to 500 fishermen), training in procedures for hygiene conditions and quality control. in equipment investments freshness, i. e. for The innovative character of the measures is stressed in the sense that the investments in new gear will be tested in actual professional fisheries. The training will ensure the efficient use of new gear, equipment and methods. The National Board of Fisheries (Fiskeriverket) will be responsible for the execution of the programme. Investments on board fishing vessels and training account for resp. 80% and 20% of the envisaged total costs of the plan. During bilateral consultations, in particular on the budgetary aspects, the Swedish authorities have expressed a preference forthe first two measures concerning selective fishing methods and improvement of safety and working conditions. Considering the allocation of the funds available for the interested Member States and the Swedish preference for the first two measures, it is proposed that only these measures and training shall be eligible for Community assistance under the action plan for small-scale coastal fishing in Sweden. The allocation between the eligible measures of the funds available for Sweden will be as follows: - selective fishing gear - safety and working conditions - training 50% 30% 20% 10 ISSN 0254-1475 COM(96) 102 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-110-EN-C ISBN 92-78-01413-3 Office for Official Publications of the European Communities L-2985 Luxembourg ^AA

Proposal for a COUNCIL REGULATION (EC) imposing definitive anti-dumping duties on imports of bicycles originating in Indonesia, Malaysia and Thailand and collecting definitively the provisional duties imposed

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels,14. 03. 1996 COM(%) 112 final Proposal for a COUNCIL REGULATION (EC) imposing definitive anti-dumping duties on imports of bicycles originating in Indonesia, Malaysia and Thailand and collecting definitively the provisional duties imposed (presented by the Commission) EXPLANATORY MEMORANDUM 1. By Regulation (EC) No 2414/95C), the Commission imposed provisional anti-dumping duties on imports into the Community of bicycles originating in Indonesia, Malaysia and Thailand, falling within CN code 8712 00. By Regulation (EC) No 245/96Q, the Council extended the validity of 2. these duties for a period of two months until 14 April 1996. Subsequent to the imposition of provisional anti-dumping duties, certain 3. parties requested and were granted hearings, and presented written comments which were taken into account where appropriate. 4. The definitive determination confirmed the existence of dumping. Changes in the individual dumping margins compared to the provisional findings are due to the reassessment of certain adjustments. 5. The conclusion that the Community industry suffered material injury is also confirmed. For the purpose of the determination of material injury, the imports from the countries concerned were analyzed cumulatively because it was found that the import volumes for each country were not negligible and the imported products competed with each other and with the like Community products. From 1990 to 1993, total imports from Indonesia, Malaysia and Thailand 6. increased by 190. 6%. Market share held by these countries increased by 4. 4 percentage points, reaching a market share of 6. 8% in 1993. Imports from these countries undercut prices of the Community industry by 18. 2% to 41. 4%. While it cannot be excluded that other factors may have contributed to the difficult state of the Community industry, the considerable increase of the dumped (1)OJNoL248, 14. 10. 95, p. 12 (2)OJNoL32, 10. 02. 96, p;l Z imports and their significantly low prices which led to the conclusion that these imports caused the material injury suffered by the Community industry. 7. Given the need to eliminate the trade-distorting effects of injurious dumping and to restore effective competition, the fact that a continuation of low priced imports would jeopardize the adjustment efforts of the Community industry, and would have a negative effect on the level of employment in the Community industry, with additional repercussions in the European bicycle parts industry, and in view of the limited effect for consumers, it is considered in the Community interest that definitive duties should be imposed. 8. In accordance with the 'lesser duty rule', the level at which the definitive duties should be set was determined by the dumping margins found which were lower than the injury elimination margins. The dumping margins ranged from 21. 9% to 28. 4% for exports from Indonesia, from 23. 1% to 37. 3% for those from Malaysia, and from 13. 0% to 38. 9% for those from Thailand, which are the levels at which it is proposed to set the duty rates. 9. Malaysian companies indicated their readiness to discuss the terms of undertakings, but made a specific offer only for a quantitative undertaking. The Commission considered that it would be impractical and unrealistic to accept price undertakings in the present case because of the enormous number of different bicycle models and the frequent changes of specifications which would render monitoring such undertaking impossible. With regard to quantitative undertakings, irrespective of concerns which could arise as regards their effects on competition between exporting countries, the Commission considers that, in the present case, such undertakings would be difficult to monitor because bicycles do not normally bear a mark of origin. 10. It is therefore proposed that the Council adopts the draft Regulation annexed imposing definitive anti-dumping duties on imports of bicycles originating in Indonesia, Malaysia and Thailand and collecting definitively the amounts secured by way of the provisional duties. COUNCIL REGULATION (EC) No. /96 imposing definitive anti-dumping duties on imports of bicycles originating in Indonesia, Malaysia and Thailand and collecting definitively the provisional duties imposed THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 3283/94 of 22 December 1994 on protection against dumped imports from countries not members of the European Community (l% as last amended by Regulation (EC) No 1251/95 of 1995 (2), and in particular Article 23 thereof, Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community (3), as last amended by Regulation (EC) No 522/94 (4), and in particular Article 12 thereof, Having regard to the proposal submitted by the Commission after consulting the Advisory Committee, WHEREAS: ('jOJ No L 349, 31. 12. 94, p. l (2)OJNoL 122, 2. 6. 95, p. 1 (3) OJ No L 209, 2. 8. 1988, p. 2. (4)OJNoL66, 10. 3. 1994, p. 10 4 A. PROVISIONAL MEASURES (1) The Commission, by Regulation (EC) No 2414/95(5), hereinafter referred to as 'the provisional duty Regulation', imposed provisional anti-dumping duties on imports into the Community of bicycles originating in Indonesia, Malaysia and Thailand. By Council Regulation (EC) No 245/96(6), the validity of these duties were extended by a period not exceeding two months expiring not later than 14 April 1996. B. SUBSEQUENT PROCEDURE (2) Immediately after the imposition of provisional measures, the interested parties were informed of the essential facts and considerations on the basis of which provisional measures had been adopted. (3) Most of the Malaysian and Thai exporters had requested that they be informed of the essential facts and considerations resulting from the investigation before the imposition of provisional measures. The Malaysian exporters claimed that such prior disclosure was necessary in order to allow them to exercise their fundamental right to be heard. However, Regulation (EEC) No 2423/88, the applicable Regulation in this proceeding, (hereinafter referred to as 'the basic Regulation') already reflects and transposes into the field of anti-dumping the general principle of law of a right to a fair hearing as defined by th^ jurisprudence of the Court of Justice of the European Communities, and does not require that disclosure take place before the imposition of provisional measures but before definitive measures. Accordingly, the Commission did not disclose the essential facts and considerations before the imposition of provisional measures. (5)OJNoL248, 14. 10. 95, p. 12 (6)OJNoL32, 10. 02. 96, p. 1 (4) Comments in writing were received from the following interested parties within the time limit set: 1. Producers and producer's association in Indonesia PT Jawa Perdana Bicycle Industry PT Wijaya Indonesia Makmur Bicycle Industries The Association of Indonesian Bicycle Industry 2. 3. Producers in Malaysia Akoko Sdn. Bhd. Berjaya Cycles Sdn Bhd Greenworld Systems Sdn Bhd Lerun Group Industries Berhad Rolls Rally Sdn Bhd Producers in Thailand Bangkok Cycle Industrial Co. Ltd Siam Cycles MFG. Co. Ltd Thai Bicycle Industry Co. Ltd Victory Cycle Co. Ltd 4. Importers Universal Cycles pic. (5) (6) Parties who so requested were granted an opportunity to be heard by the Commission. Parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of a definitive anti-dumping duty and the definitive collection of amounts secured by way of a provisional duty. They were also granted a period within which to make representations subsequent to the disclosure. (7) The parties' oral and written comments were considered, and where appropriate the conclusions were modified to take account of them. (8) (9) Owing to the complexity of the case, in particular the number of exporting countries and parties involved, and the variety of technical specifications, the proceeding overran the normal duration of one year as provided for in Article 7 (9) of the basic Regulation. After imposition of provisional duties, the Association of Indonesian Bicycle Industry (hereinafter 'the AIPI') claimed that the proceeding was discriminatory insofar as other exporting countries, such as India and Vietnam, were not included. At the time of initiation of the current proceeding in early 1994, there were no allegations or indications that imports from India or Vietnam were also dumped. The proceeding was initiated on the basis of a complaint concerning imports of bicycles originating in Indonesia, Malaysia and Thailand, which contained sufficient evidence of dumping and of material injury resulting therefrom (recitals 1 and 2 of the provisional duty Regulation). At later stages of the investigation, when the actual development of imports from these countries starting in 1993 became apparent, no additional complaint was received from the Community industry. In the absence of such a complaint and of any prima facie evidence of injurious dumping from the countries concerned, the Commission had no reason to extend the proceeding to these other countries. C. LIKE PRODUCT (10) It was concluded at the provisional stage (recitals 13 and 14 of the provisional duty Regulation) that all types of bicycles originating in Indonesia, Malaysia and Thailand and sold in the Community form one single product and that bicycles produced by the Community industry and sold on the Community market, as well as bicycles produced in Indonesia, Malaysia and Thailand and sold on those markets, are a like product within the meaning of Article 2 (12) of the basic Regulation. (11) After imposition of the provisional duty, two Malaysian companies argued that bicycles produced and sold on the Malaysian domestic market are not a like product to the bicycles produced and sold for export to the Community. They did not substantiate, however, why those bicycles would not be alike in all respects to bicycles exported to the Community. (12) The investigation has established that bicycles produced and sold in Malaysia cover a similar model range and their basic technical and physical characteristics are identical to those of bicycles exported to the Community. No valid comments which would affect these conclusions have been raised. The mere fact that the only co-operating Malaysian company selling bicycles on the domestic market manufactures them in a factory which is separate from that in which export models are produced does not in itself support the claim that products are different within the meaning of Article 2 (12) of the basic Regulation. Therefore, the findings and conclusions set out in recital 14 of the provisional duty Regulation are confirmed. D. DUMPING 1. Normal Value a) Indonesia (13) For two Indonesian companies the provisional dumping findings were based on the facts available in accordance with Article 7(7)(b) of the basic Regulation because it was not possible to obtain or verify the necessary information requested in the questionnaire (recital 28 of the provisional duty Regulation). For the other three Indonesian companies, in those cases where normal value had to be constructed, it was determined by adding to the manufacturing costs of the exported models reasonable SG&A and profit margins which were based on actual figures for the companies concerned (recitals 25 and 27 of the provisional duty Regulation). (14) One Indonesian company purchased some bicycle parts for its production through a related trading company which charged a commission on such purchases. The company requested that such commission should not be included in the cost of manufacturing, as was done for the provisional determinations. However, it appeared that the commission was actually incurred by the B Indonesian company for the purchase of parts and that it would hear similar costs if it directly purchased those parts from unrelated suppliers. Therefore, the commission charged had to be considered as an integral part of the cost of the materials in question. (15) One company argued that interest expenses, which in the provisional determinations were included in the selling, general and administrative expenses (SG&A), should be deducted as public accounting principles in Indonesia exclude interests from operating expenses which are not directly related to the production and sales of the goods concerned. The investigation showed that the only activity of the company concerned was production and sale of bicycles and bicycle parts. Therefore, these interest expenses have to be included in the SG&A because they were incurred by this company as a result of the actual finance structure necessary for running its bicycle and bicycle parts operations. (16) Two Indonesian exporters and the AIPI claimed that the allocation of SG&A expenses should have been made on the basis of quantities sold. One Indonesian producer raised the same argument with regard to the allocation of SG&A expenses between export and domestic sales, and, in particular, the allocation of financing costs. However, neither of these companies normally allocated SG&A expenses to single bicycle models for their internal reporting purposes. It cannot be claimed, therefore, that an allocation key based on quantities sold, as was proposed by these companies, was historically utilized. Consequently, there is no reason to deviate from the principle in Article 2 (11) of the basic Regulation that the allocation of such costs is normally done in proportion to the turnover. (17) The profit ratio applied in constructing normal value was based on the domestic sales of each company where these sales were made in the ordinary course of trade (recital 26 of the provisional duty Regulation). Two companies argued that the resulting profit margins were too high. However, since these companies did not substantiate their claims, the methodology which was applied in the provisional determinations for the purpose of calculating a reliable profit margin in accordance with Article 2 (3) (b) (ii) of the basic Regulation is confirmed. (18) The Indonesian exporters made additional claims (concerning namely the determination of the domestic sales turnover, the allocation of manufacturing costs, details of individual sales transactions, the application of the SG&A ratio to the manufacturing costs, and the exchange rates applied) which could not be taken into account, because they could not be verified at the late stage of the procedure when they were made, are not supported by direct evidence or, after double checking, turned out to be factually unfounded. (19) Consequently, the determination of normal value for Indonesian producers as set out in recitals 15 to 27 of the provisional duty Regulation is confirmed. (20) In the case of one Indonesian company, the AIPI argued that this company faced more rigid deadlines for submitting the response to the questionnaire than those given to Community producers. In fact, the same deadline of 37 days was set for all interested parties for responding to the questionnaires. Extensions to this deadline were granted to Community and non-Community companies based on the merits of each application. No extension was ever requested by the company concerned. The AIPI's claim that Community producers received a more favourable treatment appears to be based on a misunderstanding. The questionnaires to Community producers could only be sent after the sample had been selected (recital 73 of the provisional duty Regulation and recital 56 of this Regulation). This explains why in spite of the fact that the deadlines were the same as for Indonesian producers, the responses of the Community industry arrived later. The findings set out in recital 28 of the provisional duty Regulation are therefore confirmed. b) Malaysia (21) In the provisional duty Regulation, two Malaysian companies belonging to the same group of companies were considered as one single company. One of them exported bicycles to the Community during the investigation period but did not sell any on the domestic market. The other, on the contrary sold substantial quantities on the domestic market but had no export sales to the Community. 7o (22) These two companies requested not to be treated as a single producing exporter and to be assigned individual dumping margins. However, it has been the consistent practice of the Community Institutions to establish one single dumping margin for related companies. The different approach followed exceptionally in the Photocopiers case (Regulation (EC) No 2380/95(7)) which was invoked by the Malaysian companies to support their request was due to the very specific circumstances found in that investigation which are not present in this case. Consequently, the approach followed in recital 29 of the provisional duty Regulation is confirmed. In the provisional determinations, it was found that only one co-operating Malaysian exporter had representative domestic sales of the like product during the investigation period, i. e. the domestic sales volume was higher than 5% of total export sales (recitals 19 and 30 of the provisional duty Regulation). Since bicycle models sold by this company domestically did not permit a proper comparison or were not made in the ordinary course of trade (they were technically too different, not sold in sufficient quantities, or sold at a loss), for models sold by this company the normal value had to be calculated in accordance with Article 2(3)(b)(ii) of the basic Regulation, on the basis of a constructed value which was established by adding to the manufacturing costs the company's domestic SG&A and profit margins. The other Malaysian exporters had no domestic sales and therefore a constructed normal value also had to be established in accordance with Article 2(3)(b)(ii) of the basic Regulation. The SG&A incurred and profit realised by the only producer with representative domestic sales were the only data available in Malaysia for this purpose. These figures were considered reliable, and therefore the constructed value of all models sold for export to the Community by Malaysian companies was established by adding to the manufacturing costs of the exported models the (7) OJ No L 244, 12. 10. 95, p. 1, recitals 53, 54 11 SG&A and profit figures of the only producing exporter with domestic sales (recitals 30-35 of the provisional duty Regulation). (23) At the provisional stage, the Commission found that the primary material costs of one Malaysian exporter were substantially understated and accordingly adjusted these costs upwards. The company concerned later argued that the Commission's findings and conclusions were based on inaccurate assumptions and consequently objected to the adjustment. It was found that while the cost to turnover ratios for all other cost items (such as direct labour, factory overhead and SG&A) were stable, the ratio for primary material costs differed significantly in the investigation period (the calendar year 1993) as compared to the financial years 1993 and 1992. A similar disproportion was found in the profitability for the investigation period as compared to the financial year 1993, even though the investigation period and the financial year 1993 overlapped by 8 month. The determination of the cost of manufacturing for this company is therefore confirmed, including the adjustment above. (24) Some Malaysian companies questioned whether packing costs (inclusive of packaging labour expenses) have not been double counted by treating them as an element of cost of manufacturing for each individual exporter while at the same time considering them as part of the SG&A costs of the domestic producer used for the construction of normal values. For all Malaysian producers, packing costs have been considered solely as part of the manufacturing costs, and have not been included in the SG&A expenses incurred for the domestic sales made by the domestic producer. Packing costs were therefore not double counted. (25) For the determination of the SG&A and profit ratio for the only co-operating producing exporter with representative domestic sales, the Commission excluded inter-company sales. The company concerned argued that such an approach is inconsistent with the fact that the Commission included inter-company costs such as financing costs. It argued, therefore, that inter-company sales should also i-c have been included in the company's domestic sales turnover for the determination of the SG&A and profit ratios. In addition, it alleged that the financing costs concerned had no link with the production or sale of bicycles and therefore should have been excluded from the SG&A. As far as the determination of the SG&A and profit margins are concerned it should be noted that the company in question did not report that some sales were inter-company sales, a fact which only came to light during the verification. As the prices reported are transfer prices, these sales could not be considered as made in the ordinary course of trade (Article 2 (7) of the basic Regulation) and the transactions concerned had to be disregarded for the purpose of calculating the domestic profit margin. Concerning the calculation of the SG&A ratio, it was considered in the provisional findings that for sales to related companies, none or only marginal SG&A costs are incurred and, consequently, SG&A expenses need not be allocated to turnover to related companies. After the provisional determination, the situation was re-examined and it was found that the allocation of SG&A expenses to turnover to unrelated companies should be limited only in respect of selling costs which are not incurred for sales to related companies. By contrast, the ratios for financing and administration costs which can also be incurred for inter-company sales are now based on the total turnover including sales to related parties. The calculations have been revised accordingly. As regards interest paid to a related company, excluding these costs would ignore the fact that they were incurred by the company concerned as a result of its actual finance structure required for running its operations. It is irrelevant who actually provides the necessary resources as long as the terms of the loan are in the ordinary course of trade (Article 2 (3) (b) (ii) of the basic Regulation). Claims that the loan was intended for purposes other than the company's activities were not substantiated. Therefore, in accordance with Article 2 (3) (b) (ii) of the basic Regulation, these interest expenses have to be included in the SG&A. H these sales were (26) The SG&A margin of the only co-operating producing exporter with domestic sufficiently sales was considered reliable because representative, i. e. the domestic sales volume represented more than 5% of the export sales volume. The profit margin was considered reliable because this company had a sufficient number of profitable domestic sales (recital 33, 34 of the provisional duty Regulation). The Malaysian exporters argued that the SG&A and profit margins of that company are too high and cannot be considered reliable because it had no export sales and should have been treated distinctly from its related company specializing in export and because it had a monopoly position on the domestic market which renders its data unreliable. It is the opinion of the Council, that there are no reasons for treating the only co operating company with domestic sales separately from its related exporter (recital 21 of this Regulation). Even if such request for separate treatment were to be followed, the information obtained from the only co-operating company selling on the domestic market would still constitute the basis for the SG&A and profit margins to be applied for the other Malaysian exporters in accordance with Article 2 (3) (b) (ii) of the basic Regulation. With regard to the alleged monopolistic position of the only co-operating producer/exporter, it was found that there was at least one more Malaysian company which had substantial domestic sales. No evidence was provided showing that sales in Malaysia did not permit a proper comparison. Data on domestic sales in Malaysia were therefore considered to be reliable and the selling prices and cost data were based on the actual conditions prevailing on the market of the country concerned, i. e. conditions which are generally available to all actual and potential customers or suppliers. Consequently the Council confirms the calculation of normal values as based on the SG&A and profit ratios found for the only Malaysian co-operating company with domestic sales. (27) The Malaysian exporters made additional claims (concerning namely the calculation of the cost of manufacturing, the classification of SG&A expenses, the treatment of discounts, the comparability of bicycle models, the calculation of manufacturing overheads,) which could not be taken into account, because 'W they could not be verified, were not supported by direct evidence, were contradicted by the companies own information, or, after double checking, turned out to be factually unfounded. c) Thailand (28) Four Thai companies co-operated in the proceeding. For the majority of bicycle models exported by three of these Thai companies, normal value was constructed (recitals 36, 38, 39 of the provisional duty Regulation). For the fourth company, normal value could be based on actual domestic prices (recital 37 of the provisional duty Regulation). In those cases where normal value had to be constructed, it was determined by adding to the manufacturing costs of the exported models reasonable SG&A and profit margins (recitals 40 - 42 of the provisional duty Regulation). For the company which had no domestic sales, normal value was constructed by adding to the cost of manufacture the weighted average SG&A figure of the three other companies and the weighted average profit margin of the two companies with reliable profit figures. For another company, its own SG&A margin and the weighted average profit margins of the two companies with reliable profit margins were added to the manufacturing costs. For the third company, its actual figures were used. (29) For one Thai company, the verification of the manufacturing costs allocated to similar bicycle models revealed substantial discrepancies in the value of certain materials used which the company was unable to explain. Since the company's accounting system did not provide a breakdown of material costs for specific bicycle models, it was decided at the stage of provisional findings to allocate manufacturing costs in proportion to the turnover in accordance with Article 2 (11) of the basic Regulation. The company claimed that applying a turnover allocation key is unfair because exports of comparable models to third countries were made at half of the average unit price charged for exports to the Community. 1f The accounting system of the company concerned does not distinguish between manufacturing costs incurred for export to the Community and for export to other third countries, thus, not permitting a global adjustment for the alleged differences. Thus the provisional findings and the use of the turnover as basis for the allocation of the manufacturing costs is confirmed. (30) Another Thai company had fully allocated a major SG&A item to export sales. The company failed satisfactorily to explain the nature of the expenses in question, despite the fact that detailed explanations had been requested both prior to and during the verification. Consequently, for the purpose of provisional determinations, the expenses in question were allocated to export and domestic sales on a turnover basis in accordance with Article 2 (11) of the basic Regulation. The company claimed that explanations were provided and that the appropriateness of the allocation could have been verified. In the view of the Council, the company did not provide a proper explanation. On the basis of available verified information, it is impossible to clarify the correctness or otherwise of the explanations given. Consequently, the allocation of the expenses in question on the basis of the turnover to export and domestic sales is confirmed. (31) For the provisional determination, domestic profits were considered reliable when the number of bicycles sold at a price above the calculated cost of production constituted more than 10% of total domestic sales. This was not the case for one of the Thai companies with representative domestic sales, i. e. with a domestic sales volume which was higher than 5% of total export sales. Whenever normal values had to be constructed for this company, the weighted average profit margin of the two other Thai companies with domestic sales was consequently applied. This company claimed that the methodology applied here is not in line with the basic Regulation. Pursuant to Article 2 (3) (b) (ii) of the basic Regulation, the profit margin used for constructing normal value should be based on the profit realized on the profitable domestic sales, if such data is inter alia reliable. After having excluded domestic sales which did not permit a proper comparison or which 1£ were not made in the ordinary course of trade (recitals 38 and 22 of the provisional duty Regulation), the remaining profitable sales might be so few that the profits realized on these sales might not constitute a reliable basis to calculate a profit margin for use in the constructed normal value. This is why the Commission also verified that the remaining profitable sales were sufficient to constitute a reliable basis for the determination of the profit margin. This was considered to be the case if the remaining profitable domestic sales represented not less than 10 % of the domestic sales volume which could be used as a basis for the profitability test, whereby the proportion of profitable sales was determined by comparing net sales prices to the calculated cost of production (recitals 21, 22 and 31 of the provisional duty Regulation). The ratio is the same as was applied to determine whether sales of particular bicycle models were made in the ordinary course of trade (recital 22 of the provisional duty Regulation). Since the profits realized on the domestic market depend on the prices charged for domestic sales, it is appropriate and consistent to apply the same threshold used to determine whether such prices constitute an appropriate basis for the normal value. A similar approach was adopted by the Community institutions in earlier cases. Consequently, the Council confirms that the profit margin of the company concerned was not reliable and that constructed normal value had to be calculated by applying the weighted average profit margin of the two other Thai producers for which a reliable profit realized on profitable domestic sales was found. (32) Finally, one Thai exporter made an additional claim (concerning namely the calculation of manufacturing overheads) which could not be taken into account, because it could not be verified, and was not supported by direct evidence. "n 2. Export price a) Indonesia (33) One Indonesian exporter made comments concerning adjustments to the export price which cannot be taken into account, because they are not supported by direct evidence. The determination of export price for Indonesia (recital 43 of the provisional duty Regulation) is therefore confirmed. b) Malaysia (34) It was found during the verification visit to one Malaysian company that part of the export sales which had been reported by this company as direct sales to independent importers in the Community were in fact sales to a related company in Taiwan which subsequently re-sold the products to the importers concerned. Since, this company had clearly supplied misleading information in respect of these transactions -which, in addition, happened to reflect a transfer between related companies- the prices reported for such transactions were disregarded and the highest dumping margin found for a model sold by this company to unrelated customers was attributed to those sales in accordance with Article 7(7)(b) of the basic Regulation (recitals 46, 47 of the provisional duty Regulation). This company argued that the actual link with the Taiwanese company had no impact on prices, and that it was treated in a discriminatory manner vis-à-vis the two Indonesian exporters to which Article 7 (7) (b) of the basic Regulation was also applied. In addition it claimed that the sales in question were made directly to the customers in the Community and provided copies of invoices as new evidence. It was only after publication of the provisional duty Regulation that the company concerned claimed that the sales in question were actually made directly to customers in the Community. This claim contradicts the findings of the verification which were not disputed by the company at the time. Any differing n presentation cannot be verified at this stage of the proceeding and therefore cannot be taken into account. The relationship with the Taiwanese company was first denied by the Malaysian company and was only established during the verification on the basis of direct and conclusive evidence. This clearly impeded the factual investigation by the Commission. In view of this dissimulation of information by the Malaysian company, it is unlikely that the relationship had no impact on prices; anyway, at this stage of the procedure, the question could not be further investigated and applying article 7 (7) (b) in the above described manner is fully justified. As regards the comparison with the two Indonesian companies to which Article 7 (7) (b) of the basic Regulation was also applied (recitals 28, 68 of the provisional duty Regulation), there is no serious ground to complain of discriminatory treatment. The application of Article 7 (7) (b) of the basic Regulation was based on the merits of each case, thereby reflecting the degree of co-operation and the degree to which necessary information was not provided or could not be verified or the extent to which misleading information was submitted. (35) One Malaysian company argued that for establishing the free-at-Community- frontier price for its export sales to the Community, the Commission should have included a mark-up added by its sales agent. That company never substantiated its claim. However, the agent for the company concerned already received a commission fee which was taken into consideration and it remained unclear which transactions were made via the agent, since sales were also directly invoiced to customers in the Community. Therefore, the calculation of the free-at-Community-frontier price for the exports of the company concerned is confirmed. (36) The Malaysian exporters made additional claims (concerning namely the nature of certain deductions, the treatment of certain bank charges and letters of credit charges) which could not be taken into account, because they and were not supported by direct evidence. 19 c) Thailand (37) In its questionnaire response one Thai company stated that it was not providing any guarantee/warranty to its customers in the Community. It was discovered during the verification that it agreed with one of its customers that spare parts equivalent to 1% of the invoice value were shipped with each order free of charge. It was also found that a significant number of major customers also received spare parts free of charge. Such discounts were given in lieu of a guarantee. Since such sales conditions are a determining factor for the export prices, [the actual value of the spare parts shipped is irrelevant. Having received misleading information, the Commission had to determine the deduction for agreed discounts on the basis of the facts available. The most tangible and reasonable basis being the agreed terms identified above, a 1% adjustment for agreed discounts was deducted from the export price. The company argued that this adjustment was made without any apparent justification, since the Commission received a summary listing of all cases where spare parts were given free of charge to customers in the Community, on the basis of which a negligible adjustment would have been required. Although a listing of customers and corresponding 'warranty' amounts was provided by the company, this was done only towards the end of the verification when a satisfactory clarification of the complete situation was no longer possible. Since no other direct evidence supports the company's claim, it is confirmed that, having received misleading information, the deduction for agreed discounts was correctly determined on the basis of the facts available (Article 7 (7) (b) of the basic Regulation). Any lower deduction would constitute a premium for non co-operation. The adjustment made for agreed discounts is therefore confirmed. (38) Some Thai exporters made claims (concerning namely the allocation of transportation costs, the calculation of packing costs, ) which either could not be taken into account, because they could not be verified and were not supported by zo direct evidence, or which are contradicted by direct evidence provided by the company concerned. 3. Comparison a) Indonesia (39) One Indonesian company sold bicycles for export to the Community through a related trading company located in Japan. In the provisional determinations, export prices for that exporter were established by reference to the prices actually paid or payable to the related trading company in Japan, while the Community investigating authorities indicated their intention to review the appropriateness of that approach (recital 44 of the provisional duty Regulation). (40) It has been determined that because of the relationship between the two companies, the prices charged by the producing company to the trading company are not reliable. To establish a reliable export price to the Community from Indonesia, the price charged from Japan to the Community was adjusted to an ex-Indonesia level. As the related trader's functions can be considered similar to those of a trader acting on a commission basis, an adjustment of 6%, based on the companies own SG&A rate and a reasonable amount for profits, was deducted from the prices charged by the related company to independent customers in the Community. This figure was considered reasonable given the degree of the related trader's involvement of the selling activities of the exporter. No information was provided which would indicate that this figure is inappropriate. Thus, for the purpose of definitive determinations, the export prices were adjusted accordingly. (41) In the provisional determinations (recital 56 of the provisional duty Regulation), some adjustments were disregarded in view of their insignificant character. Upon request of the companies concerned, the Commission reconsidered its appreciation. It appeared that in some cases, the insignificant character of the respective adjustments had been determined in relation to the export price or the normal value separately. However, in accordance with previous practice, it appears to be more appropriate to consider adjustments to be de minimis only if f) the difference between the percentages to be deducted from the export price and the normal value respectively is less than 0. 5 %. On this basis, certain adjustments which were considered as insignificant at the provisional stage were now taken into account. The calculations were revised accordingly. (42) In its provisional determinations (recital 53 of the provisional duty Regulation), the Commission rejected requests for adjustments for credit costs on the grounds that no evidence was provided that the credit granted was part of the sales terms agreed with the buyers of the goods at the date of sale and therefore could have affected the price paid or payable on the domestic market. Two Indonesian companies and the AIPI reiterated their request for such an adjustment and stated that credit terms of 90 to 120 days are commonly accepted business conditions in Indonesia which therefore do not need to be explicitly included in the terms of sale. However, the only evidence presented to support this claim was a reference to the accounts receivable of the companies concerned which did not show such a clear pattern. Thus, it is not proven that prices were set on the basis of such alleged commonly accepted business conditions. Consequently, it is confirmed by the Council that an adjustment for credit costs is not warranted. (43) In the provisional duty Regulation (recital 55) requests for adjustments for advertising and promotion expenses were rejected because such promotion and advertising costs belong to the category of overheads and general expenses, for which allowances are not generally made. Two companies reiterated their request for an adjustment for advertising and promotion expenses. They claimed that these cost differences between export and domestic sales are effectively allowable as OEM or level of trade adjustments. As regards an adjustment for sales made on an OEM basis, such claim was not explicitly made in the responses to the questionnaire submitted by the companies concerned, nor was it substantiated despite specific instructions in the questionnaire to claim and substantiate any request for deductions if applicable. Furthermore, the substantive requirements for such an adjustment are not met: ze none of the export sales of the Indonesian exporters concerned were made at a level which would constitute an OEM sale, i. e. normally a level between manufacture and distribution. These sales were made at a level on the Community market the function of which is, in substance, only that of distribution. Thus, no appropriate (OEM) adjustment is required in this respect. In examining this OEM claim, it was found that the substantive requirements for a level of trade adjustment were not met, as sales appeared to be made to a similar mix of customers on both the export and the domestic market. In any event, the Indonesian exporters concerned did not make any distinction between sales at different levels of trade. In fact, no significant differences appeared during the investigation in the levels of trade at which export and domestic sales were made. Therefore, no level of trade adjustment is necessary on the basis of the information available. (44) The Indonesian exporters made some additional claims (concerning namely allowances made to account for differences in physical characteristics, the rate applied for an allowance for duty draw back and the deduction of an amount for duty draw back in the case of constructed normal value) which could not be taken into account, because they could not be verified, were not supported by direct evidence, or, after double checking, turned out to be unsubstantiated. b) Malaysia (45) In the provisional determination it was found that the domestic SG&A figure used for the construction of normal value included direct selling expenses for which adjustments had to be made. However, no such deduction was sufficiently substantiated (recital 57 of the provisional duty Regulation) and, therefore, claims for adjustment to the normal value for direct selling expenses were rejected. However, adjustments to the export price were made, where necessary, for one or several of the following selling expenses: transport, insurance, handling, loading and ancillary costs, credit costs and bank charges, guarantees, commissions paid to agents and salaries paid to salesmen. zi> (46) The other Malaysian exporters considered that the comparison was unfair since they were deprived of otherwise justifiable adjustments (such as for direct selling expenses) because the only co-operating Malaysian producer with domestic sales was not sufficiently motivated to provide a proper reply to the questionnaire and to ensure the necessary co-operation during the verification. The Malaysian producer in question actually replied to the questionnaire, agreed to and was subject to a verification. Being directly related to an exporter of bicycles to the Community, it had a clear incentive to co-operate properly with the verification. However, this company failed to provide supporting evidence for its claims or gave contradictory explanations. In addition, some information which was not reported in the response to the questionnaire was discovered only during the verification. The Council nevertheless recognises that given the very special circumstances of this case, it is appropriate to deduct a reasonable amount from the constructed normal values of those three Malaysian exporters who are not related to the domestic producer/seller in question. The calculations have been revised accordingly. As regards the related export and domestic producers, it was the responsibility of these two companies to provide the necessary and verifiable information and supporting evidence which they failed to do. Therefore, no such additional adjustment can be made to the constructed normal value of the related exporter. (47) In the provisional determination, no adjustment was made to normal value to account for credit costs (recital 57 of the provisional duty Regulation). Malaysian exporters requested such adjustment on similar grounds as those invoked in relation to the adjustment for direct selling expenses. However, there is no evidence that, apart from a discount scheme which was taken into account, additional credit was granted as part of the sales terms agreed with the buyers of the goods at the date of sale. Therefore there is no valid ground for an adjustment to normal value for credit costs. (48) In the provisional determination, no adjustment was made to the normal value to account for differences in the level of trade. In their comments at disclosure after 2V the provisional duty Regulation was published, the Malaysian exporters requested to be granted an 'OEM-adjustment' in the form of a reduced profit margin for the calculation of the constructed normal value. Such claim was not made in the response to the questionnaire nor was it substantiated despite specific instructions in the questionnaire to claim and substantiate any request for deductions if applicable. Furthermore, the substantive requirements for such an adjustment are not met: the majority of the export sales of the Malaysian exporters were not made at a level which would constitue an OEM sale, i. e. normally a level between manufacture and distribution. These sales were made to a level on the Community market the function of which is, in substance, only that of distribution. From the information available, no clear and distinct pricing pattern existed for export transactions to the manufacturer concerned as compared with sales to distributors in the Community. Thus, no appropriate (OEM) adjustment is required in this respect. In examining this OEM claim, it was it was found that the substantive requirements for a level of trade adjustment were not met as sales appeared to be made to a similar mix of customers in both the export and the domestic market. In any event, the Malaysian domestic seller did not make any distinction between sales to wholesalers and retailers. Furthermore, no significant differences appeared during the investigation in the levels of trade to which export and domestic sales were made. Therefore no level of trade adjustment is necessary on the basis of the information available. (49) The Malaysian exporters made additional claims (concerning namely the nature of 'technical assistance' fees, the treatment of certain commission interests, double counting of certain commissions, adjustment for forwarding costs, a rounding difference, the allocation of packaging costs) which either could not be taken into account, because they could not be verified, were not supported by direct evidence, or, after double checking, were taken into account. The calculations were revised accordingly. àS c) Thailand (50) In the provisional determination, no adjustment was made to the normal value to account for differences in the level of trade. In their comments at disclosure after the provisional duty Regulation was published, Thai exporters requested to be granted an 'OEM-adjustment' and claimed that they had requested such adjustment from the beginning of the proceeding. In a covering letter which accompanied the questionnaire responses of three Thai companies, these producers requested in imprecise terms an OEM adjustment. Such claim was not explicitly made in the response to the questionnaire nor was it substantiated despite specific instructions in the questionnaire to claim and substantiate any request for deductions if applicable. Furthermore, the substantive requirements for such an adjustment are not met: the majority of the export sales of the Thai exporters were not made at a level which would constitute an OEM sale, i. e. normally a level between manufacture and distribution. These sales were made to a level on the Community market the function of which is, in substance, only that of distribution. From the information available to the Commission, it appears that no clear and distinct pricing pattern existed between exports to the manufacturer concerned as compared with sales to distributors in the Community. Thus, no appropriate (OEM) adjustment is required in this respect. In examining the OEM claim, it was it was found that the substantive requirements for a level of trade adjustment are not met as sales appeared to be made to a similar mix of customers on both the export and the domestic market. In any event, the Thai exporters concerned did not make any distinction between levels of trade. Furthermore, no significant differences sales to different appeared during the investigation in the levels of trade, namely distributors and retailers, to which export and domestic sales were made. Where domestic sales were made directly to end-users this had no apparent effect on prices. Therefore, no level of trade adjustment is necessary on the basis of the information available to the Commission. z& (51) For the provisional determinations, the Commission partially rejected a request by one Thai company for an adjustment to the normal value for the salaries paid to its salesmen because of misleading information and lack of supporting evidence. The company reiterated its request for the full adjustment and gave new explanations. (52) However, the company did not submit supporting evidence for its new explanations. Since there was no direct evidence available to support the company's claim either, the partial rejection of its request is confirmed by the Council. In the provisional duty Regulation (recital 65) it was stated that a number of claims for adjustments of various types were disregarded in view of their insignificant character (namely adjustments with an ad valorem effect of less than 0. 5%). Some Thai companies claimed that, in fact, not all insignificant adjustments were to be disregarded. The Commission re-examined the situation and found that, in this particular case, export prices are compared with constructed normal values which include weighted average SG&A and profit margins. When calculating these SG&A and profit ratios it had to be taken into account that adjustments for the same cost items were sometimes either insignificant or significant depending on the respective company. In this particular case, it was found administratively more practicable to deduct all justified adjustments whether significant or not. The calculations were accordingly re-examined and where necessary revised. The global value of these adjustments was between 0. 37% and 4. 45%% according to the company concerned. (53) The Thai exporters made additional claims (concerning e. g. adjustments for credit costs, deduction of certain export expenses, calculation of an adjustment for salesmen's salaries,) which either could not be taken into account, because they could not be verified and were not supported by direct evidence, or, after double checking, were taken into account. Insofar as these claims could be taken into account, the calculations were accordingly revised. 2} 4. Dumping margin (54) Like the weighted average dumping margins which were provisionally established (recital 66), definitive dumping margins for each producer were expressed as a percentage of the free-at-Community-frontier price. (55) Applying the same methodology as explained in the provisional duty Regulation (recital 66 of the said Regulation) and after having made the necessary revisions to the dumping calculations, the weighted average dumping margins for the fully co-operating producers are: a) b) Indonesia PT Insera Sena PT Jawa Perdana Bicycle Industry PT Wijaya Indonesia Makmur Bicycle Industries Malaysia Akoko Sdn. Bhd. Berjaya Cycles Sdn Bhd Greenworld Systems Sdn Bhd Lerun Group Industries Berhad Rolls Rally Sdn Bhd c) -. Thailand Bangkok Cycle Industrial Co. Ltd Siam Cycles MFG. Co. Ltd Thai Bicycle Industry Co. Ltd Victory Cycle Co. Ltd 0. 4% 27. 7% 21. 9% 23. 1% 37. 3% 27. 7% 37. 3% 25. 3% 17. 7% 38. 9% 13. 0% 13. 3% (56) For the two Indonesian companies which did not sufficiently co-operate with the investigation, the methodology applied in the provisional duty Regulation (recital 68) is confirmed: the dumping margin for the two companies concerned is based on the arithmetical average between the highest margin found for a fully co-operating Indonesian producer and the residual duty. The resulting dumping margins are: 2% PT Federal Cycle Mustika PT Toyo Asahi Bicycle Industries 28. 4 % 28. 4 % E. COMMUNITY INDUSTRY (57) The AIPI and Thai producers questioned the correctness of the level of support calculated by the Commission. The Council notes that those producers which expressly supported the complaint account for 55. 3% of the Community production of bicycles, and therefore represent a major proportion of the Community industry within the meaning of Article 4 (5) of the basic Regulation (recital 72 of the provisional duty • Regulation). Those producers which were selected for a sample which was necessary in view of the large number of producers and which fully co-operated represented 36. 5% of the'Community's bicycles production. The AIPI also argued that companies which, in their opinion, did not suffer injury should not be considered as complainants. In response to this argument, it has been noted that the question of whether individual Community producers have been injured is irrelevant when examining whether such producers qualify as part of the Community industry within the meaning of Article 4 (5) of the basic Regulation. Furthermore, it should be recalled that injury has to be determined on a global basis, i. e. for the Community industry as a whole or a major proportion thereof and not for individual Community producers. (58) The AIPI questioned both the legality of the use of a sampling technique and the actual selection of the sample. In particular, it has been claimed that the use of production and sales data led to a flawed sample because sales and production trends are also the basis for the injury determination (recitals 88 - 90 of the provisional duty Regulation). The Council notes that the basic Regulation does not explicitly provide for the use of sampling techniques for the purpose of injury determinations. However, it does not require the Commission to investigate each complaining Community producer either (Article 4). In accordance with previous practice and for the 23 reasons already indicated, it was decided to select a sample of Community producers on which injury determinations were based. The Council notes that the sample was selected exclusively according to the size and geographic location of the companies concerned. The number of companies selected from each of the Member States thus reflects the size of bicycle production in that Member State. No trends or financial data were taken into consideration in the selection which was exclusively based on the volume of production of the companies concerned during the investigation period. Therefore, it is concluded that the Commission was entitled to use a sampling technique, which yielded a representative selection of Community producers. The findings and conclusions set out in recitals 72 to 74 of the provisional duty Regulation are therefore confirmed. F. INJURY 1. Cumulation (59) As no comments were received concerning cumulation, the findings and conclusions set out in recitals 75 to 79 of the provisional duty Regulation are confirmed. 2. Prices of dumped imports (60) The AIPI claimed that Indonesian bicycles were not undercutting prices of Community industry bicycles. These claims are contradicted by the detailed price comparisons made by the Commission (recitals 82 - 86 of the provisional duty Regulation) in respect of which the following comments were made after the imposition of provisional measures: (61) One Indonesian producer argued that model comparisons should have been based on the full set of specifications. However, it did not indicate in which respect the methodology applied by the Commission yielded unreliable results nor why a different approach would have been more reliable. 5 0 (62) One Malaysian company argued that the methodology applied was unreliable because the value of the parts used for comparing different bicycle models account for only 10-20% of the total value of the bicycle and it leads to significant fluctuations in the undercutting margins found for two comparable bicycle groups. However, it has not been demonstrated that bicycle models classified in the respective groups were actually not comparable and that a different methodology would yield significantly different results. Fluctuations in undercutting margins as such may simply indicate variable pricing patterns and therefore do not prove that the comparison and grouping of certain bicycles was not justified. (63) As a result of the foregoing, the methodology set out in the provisional duty Regulation (recitals 82-86) is confirmed. (64) Some technical adjustments were made to the undercutting calculation upon the request of another Malaysian company and proprio motu by the Commission. (65) The resulting individual undercutting margins for the fully co-operating producing exporters expressed as a percentage of the Community producers prices, undelivered to distributors, vary from 18. 2% to 41. 4% for producing exporters in Indonesia, from 29. 7% to 38. 4% for those in Malaysia, and from 15. 3% to 30. 7% for those in Thailand. G. SITUATION OF THE COMMUNITY INDUSTRY (66) No further comments were received concerning the injury sustained by the Community industry. The findings and conclusions set out in the provisional duty Regulation (recitals 87-96) that the Community industry has been suffering material injury within the meaning of Article 4 of the basic Regulation, are therefore confirmed. H. CAUSATION (67) Thai exporters claimed that the precarious profitability situation of the Community industry cannot be related to dumped imports but was caused by 51 high investments by the Community industry made during the investigation period (recital 94 of the provisional duty Regulation). The increase of investments by 125% in the investigation period as compared to 1992 can, to a large extent, be attributed to two Community producers which either built new production facilities or improved existing ones. Even if these two producers were excluded from the profitability determination, the average profitability figure for the investigation period would only change marginally. (68) As indicated in the provisional duty Regulation (recital 101), it was found that bicycle imports reported in EUROSTAT as coming from Vietnam are actually other imports originating in the People's Republic of China. Indonesian exporters claimed that this fact did not preclude such imports from having had an injurious effect. Imports of bicycles declared as originating in Vietnam had a smaller total volume in 1993 than the imports under consideration. Furthermore, no indication was found that these bicycles were sold at prices as low as those for bicycles from the countries under investigation. Price information available in EUROSTAT cannot be referred to since the statistics only distinguishes two subheadings which do not reflect the variety and heterogeneity of bicycle specifications and accordingly prices. In these circumstances, no clear assessment of a possible injurious impact of the imports allegedly coming from Vietnam can be made. Although these imports could have contributed to the difficult state of the Community industry, this does not affect the conclusion made in the provisional duty Regulation that imports of bicycles originating in Indonesia, Malaysia and Thailand caused material injury to the Community industry. (69) Since no other new arguments were submitted in this respect, on the basis of the findings made and conclusions reached in recitals 97 to 109 of the provisional duty Regulation it is definitively concluded that the aggregate dumped imports from the three countries in question, given the substantial increase in import volumes and considerable degree of price undercutting, taken in isolation, have caused material injury to the Community industry. 3 c I. COMMUNITY INTEREST (70) Neither new evidence nor new arguments were submitted as to whether the Community interest call for intervention. In this respect the Council notes that without measures against the dumped imports and the resulting unfair competition on the Community market, there is an imminent danger that even more Community producer will face the prospect of closure. Consumers will therefore without measures have at least in the medium term less sources of supply. Although consumer prices of the imported products will increase, the global effects on the consumer will be limited since there is still a variety of suppliers who are not subject to any anti-dumping measures. In this respect it should be noted that no comments or submissions were received from consumer organizations. In view of these considerations and for the reasons mentioned in recitals 110 to 117 of the provisional duty Regulation, no compelling aspects concerning the Community interest were found on the basis of which the Council could clearly conclude that it is not in the Community interest to apply measures. J. DUTY CALCULATION (71) The AIPI claimed that individual duty rates should have been established for different types of bicycles. It argued that the application of weighted average rates as established in the provisional duty Regulation (recitals 66 and 119) has the effect of setting the duty rates at a level above the dumping or injury margins for some bicycle models in breach of Article 13 (3) of the basic Regulation. It is the normal practice of the Community institutions, in accordance with the basic Regulation, to establish a single duty rate for the like product concerned. It has not been disputed in the present case that all types of bicycles originating in Indonesia, Malaysia and Thailand and sold in the Community do form one single like product (recital 12). There is therefore no reason to deviate from the approach followed at the provisional stage. The ad valorem duty rates are thus based on a weighted average of the dumping margins established for the bicycle 33 models sold for export to the Community and expressed as a percentage of the free-at-Community-frontier price. The duty amount collected for a particular bicycle model may be higher or lower than the dumping margin, but on an overall basis, the duty rates reflect exactly the dumping margins found for the like product in strict accordance with Article 13 (3) of the basic Regulation. In addition, given the uncertainties for clearly defining types or categories of bicycles (recital 12 of the provisional duty Regulation), setting separate duty rates for types or categories would render the enforcement of the measures administratively impossible. (72) For the purpose of establishing the level of definitive duty, and in applying the same methodology already applied at the provisional stage, account was taken of the dumping margins found and the level of duty necessary to eliminate the injury sustained by the Community industry. (73^ It was confirmed at the definitive stage that for all companies the undercutting margin was higher than the dumping margin found, both being expressed as a percentage of the CIF Community frontier price, and that given the precarious financial situation of the Community industry, even higher rates of duty would be required to fully eliminate injury (recital 119 of the provisional duty Regulation). Consequently, in accordance with Article 13 (3) of the basic Regulation, the level of the duty rates should be based on the level of the dumping margins. (74) With regard to one Indonesian company, it is confirmed that the dumping margin established is de minimis and this company should consequently be excluded from the scope of the duty imposed on imports originating in Indonesia. (75) It is also confirmed that for producers in the three countries concerned who neither replied to the Commission's questionnaire nor otherwise made themselves known, it is appropriate, for the reasons outlined in recitals (69) to (71) of the provisional duty Regulation to establish the level of definitive duty at the weighted average of the highest dumping margins found for bicycle models exported to the Community in representative quantities. *[ K. DEVELOPMENTS AFTER THE INVESTIGATION PERIOD (76) from In the provisional duty Regulation (recitals 122-125), the Commission rejected from requests the representatives of investigation period should be taken into account. Indonesian, Malaysian and Thai companies and import developments after these countries, that All Malaysian and Thai producers reiterated their claim that up-to-date trends of import volumes after the investigation period should have been taken into account. They contend that the basic Regulation does not prevent the Community Institutions from doing so, and that such extended assessment is necessary to show the actual and persisting causation of injury through dumped imports. In addition, Thai exporters claimed that in past investigations the Community institutions have accepted to take into consideration developments after the investigation period. It is the Community institutions' constant practice, as now laid down in Article 6 (1) of Regulation (EC) No 3283/94, to limit findings to the investigation period unless the effects of new circumstances are manifest, undisputed, lasting, and not open to manipulation or do not stem from deliberate action of interested parties. Concerning the alleged decrease of import volumes after the investigation period, this may stem from deliberate strategies of the economic operators in the exporting countries and in the Community In addition, there is no assurance that imports volumes will remain at such levels. Reference was also made to a change in the GSP preferential duty rate applying to the imports in question which occurred in 1995. However, the possible effects which the changes in the GSP system may have on prices in the Community is completely unknown. For these reasons it is confirmed that in the present case the definitive the investigation determination should be based on the findings relating to period. 3J" L. GATT REQUIREMENTS CONCERNING DEVELOPING COUNTRIES AND UNDERTAKINGS (77) Malaysian exporters claim that a more lenient treatment in the application of anti-dumping rules should have been granted to them because they are located in a developing country. In this connection, the Malaysian and Thai companies refer to Article 15 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ('1994 AD-Agreement': 'It is recognized that special regard must be given by developed country Members to the special situation of developing country Members when considering the application of anti-dumping measures under this Agreement. Possibilities of constructive remedies provided for by this Agreement shall be explored before applying anti-dumping duties where they would affect the essential interests of developing country Members. ') and complain that this Article was not respected. The Malaysian exporters referred in this respect to a Report of the GATT Working Party on 'Acceptance of the Anti-dumping Code' (Report adopted on 31 November 1975, 22S/27, 28, para 4) and to a Decision adopted by the GATT Committee on Anti-dumping Practices (ADP/2, Decision of 5 May 1980, 27S/16, 17). It follows from Article 18. 3 of the 1994 AD-Agreement that Article 15 of the 1994 AD-Agreement is not applicable to the present proceeding. In any event, Article 15 by no means entails an obligation for the Community to change calculation methods as was confirmed in the recent Cotton Yarn Panel for the former Article 13 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1979 (1979 AD-Code) which is similarly worded as Article 15 of the 1994 AD-Agreement. As also confirmed in the Cotton Yarn Panel, the said Decision of the GATT Committee on Anti-dumping Practices cannot change the content of Article 13 of the 1979 AD-Code. The report mentioned by the Malaysian exporters is a preparatory document which has no intrinsic legal value and thus does not provide any guidance in the present case. 3£ According to Article 15 of the 1994 AD-Agreement, constructive remedies are those provided for 'by this Agreement' which, in practice, are undertakings. Actually no undertakings were offered by Indonesian or Thai companies. Malaysian companies indicated their readyness to discuss the terms of undertakings, but made a specific offer only for a quantitative undertaking. As regards price undertakings, it would be impractical and unrealistic to accept these undertakings in the present case because of the enormous number of different bicycle models and the frequent changes of specifications which would render monitoring undertakings impossible. As to quantitative undertakings, it was examined in the present case whether the quantitative undertaking offered could remedy the injurious effect of dumping and could be satisfactorily monitored. The co-operating Malaysian exporters argued that a non injurious volume could be determined by reference to the criteria contained in Article 5. 8 of the 1994 AD-Agreement, namely the 3% threshold as in relation to the total imports into the Community of the like product, an offer which, it is claimed, would reduce imports from Malaysia to a negligible volume. However, this approach ignores tha fact that the injurious effect of dumped bicycle imports from Indonesia, Malaysia and Thailand was assessed cumulatively. Furthermore, the undertaking was offered on behalf of Malaysian exporters which do not account for the totality of Malaysian bicycle exports to the Community. In these circumstances, it is impossible to determine which import volume to be allocated to the exporters in question could effectively remedy the injurious effects of dumping and it is doubtful whether such undertaking could be satisfactorily monitored. Therefore, the Commission considers neither price nor quantitative undertakings acceptable in this case. Finally, it should be recalled that the Community would not be obliged under Article 15 to pursue this option in the circumstances of the present case, since it was not demonstrated that applying anti-dumping duties would affect the essential interests of the exporting countries. 34 M. COLLECTION OF THE PROVISIONAL DUTY (78) In the light of the seriousness of the injury, and in view of the high level of dumping, the Council considers that the provisional duty should be definitively collected at the level of the definitive duties. HAS ADOPTED THIS REGULATION: Article J A definitive anti-dumping duty is hereby imposed on imports of bicycles falling 1. within CN code 8712 00 and originating in Indonesia, Malaysia and Thailand. The rates of anti-dumping duty applicable to the net-free-at-Community-frontier 2. price, before duty, shall be as follows: 2£ Country Products manufactured by Rate of duty Taric additional code Indonesia: - P. T. Federal Cycle Mustika - P. T. Jawa Perdana Bicycle Industry, Tangerang - P. T. Toyo Asahi Bicycle Industries, Jakarta - P. T. Wijaya Indonesia Makmur Bicycle 28. 4% 27. 7% 28. 4% 21. 9% Malaysia: Thailand: Industries, Surabaya - other companies - Akoko Sdn Bhd, Klang - Berjaya Cycles Sdn Bhd, Kulim - Greenworld Systems Sdn Bhd, Kuala Lumpur (previously Fairly Toraya Sdn Bhd) - Lerun Group Industries Berhad, Petaling Jaya - Rolls Rally Sdn Bhd, Pelabuhan Kelang - other companies - Bangkok Cycle Industrial Co. Ltd. , Bangkok - Siam Cycle MFG. Co. Ltd. , Samuthprakarn - Thai Bicycle Industry Co. Ltd. , Samuthprakarn - Victory Cycle Co. Ltd. , Samuthprakarn - other companies 29. 1% 23. 1% 37. 3% 27. 7% 37. 3% 25. 3% 39. 4% 17. 7% 38. 9% 13. 0% 13. 2% 39. 2% 8859 8861 8859 8862 8863 8864 8865 8866 8865 8867 8868 8869 8870 8871 8883 8872 The duties shall not apply to imports of the product specified in paragraph 1, 3. manufactured by P. T. Insera Sena, Sidoarjo, (Taric additional code 8860) 4. Unless otherwise specified, the provisions in force concerning customs duties shall apply. Article 2 The amounts secured by way of provisional anti-dumping duty under Regulation (EC) No 2414/95 shall be definitively collected at the duty rate definitively imposed. Amounts secured in excess of the definitive rate of anti-dumping duty shall be released. ^ Article 3 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, M-° ISSN 0254-1475 - COM(96) 112 final DOCUMENTS EN 02 ii Catalogue number : CB-CO-96-122-EN-C ISBN 92-78-01732-9 Office for Official Publications of the European Communities L-2985 Luxembourg V-7

REPORT FROM THE COMMISSION under Council Decision 93/389/EEC - Second evaluation of national programmes under the monitoring mechanism of community CO2 and other greenhouse gas emissions - Progress Towards the Community CO2 Stabilisation Target

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 14. 03. 1996 COM(96) 91 final REPORT FROM THE COMMISSION under Council Decision 93/389/EEC SECOND EVALUATION OF NATIONAL PROGRAMMES UNDER THE MONITORING MECHANISM OF COMMUNITY C02 AND OTHER GREENHOUSE GAS EMISSIONS Progress Towards the Community C02 Stabilisation Target CONTENTS 1 INTRODUCTION 1. 1 THE MONITORING MECHA NISM A ND THE SECOND EVA L VA TION REPOR T 1. 2 THE COMMUNITY TARGET 2 GREENHOUSE GAS INVENTORIES 2. 1 2. 2 COMMUNITY INVENTORIES REMOVAL BY SINKS 2. 3 CONCLUSIONS 3 EVALUA TION OF PROGRESS TOWARDS THE TARGET 3. 1 3. 2 CONTENT OF NATIONAL PROGRAMMES CO2 LIMITATION STRATEGIES IN THE COMMUNITY 3. 3 TRAJECTORIES AND EFFECTS OF MEASURES 4 CONCLUSIONS ANNEX A TABLES SHOWING C02 INVENTORIES, TRAJECTORIES AND ANNEX B EFFECTS OF MEASURES SUMMARIES COUNTRY FOR THE 15 MEMBER STATES \ 1 2 4 4 8 8 9 9 10 12 20 INTRODUCTION 1. 1 THE MONITORING MECHANISM AND THE SECOND EVALUA TION REPORT In the Monitoring Mechanism decision (1), the Commission is requested to report on an annual basis to the Council and the European Parliament, on whether progress in the Community as a whole is sufficient to ensure stabilisation of C 02 emissions by 2000 at 1990 levels. This objective was agreed at the joint Energy/Environment Council of 29 October, 1990. The first evaluation was carried out on the basis of national programmes received by the Commission in in the level of detail and treatment of issues in these 1993. Due to major differences programmes, the initial evaluation was limited in scope. This report is the result of the second evaluation process which has been undertaken on the basis of National Communications/Programmes (2) which have been submitted under the Framework Convention on Climate Change and under the Monitoring Mechanism (apart from the Belgian programme which was submitted directly to the Monitoring Mechanism), and updates which have been officially communicated to the Commission before 1 July, 1995. The report is a first attempt to use the methodology for the evaluation of progress and content of national the Monitoring Mechanism programmes, which has been developed and adopted by Committee (3). This second evaluation report is therefore based on considerably improved information compared to the first evaluation report which was based on the existing national programmes which, at that time, were not complete, comparable or transparent due to the lack of detailed specification of common contents and structure (4). Following the Council Decision, six Committee Meetings under the Monitoring Mechanism have taken place. The summary records of these meetings include some updated information communicated by the Member States and this information has also been taken into account in the evaluation. The remainder of this project is set out in the following subsections. Section 2 reports on the C 02 and other greenhouse gas emissions inventories and removals by sinks for EU-15. The 1990 inventory is presented and historical trends, especially in energy related C 02 emissions, are discussed. The greenhouse gas emissions inventory is only provisional at this point since the Member States have not yet provided their final emissions inventories. Section 3 provides It reviews the content of the an evaluation of progress towards the C 02 stabilisation target. It focuses on the impact on national programmes, the trajectories and the effect of measures. C 02 the National Communications/Programmes, rather than assessing the real effectiveness of these measures in reaching the Member States targets and objectives. Further details of the individual Member It compares the Member States own States' national programmes are given in the Annex. trajectories for the year 2000 with alternative trajectories prepared by the Commission services. Section 4 draws conclusions on the content and structure of the national programmes, the uncertainty in projections and the likely range of C 02 emissions for the year 2000. national measures, described emission levels as of in ID (2) Council Decision 93/389/EEC In order to ensure consistency between the reporting requirements under the Framework convention on Climate Change (FCCC) and the EC Monitoring Mechanism, Member States may submit their National communications under the FCCC also to the Monitoring Mechanism as their National Programmes. (3) Fifth meeting of the Monitoring Mechanism committee, 18 May, 1995. C0M(94) 67 final, page 2. 1 C^ 1. 2 THE COMMUNITY TARGET In 1993, the Council Decision for a monitoring mechanism of Community C 02 and other greenhouse gas emissions was adopted 'in the framework of a Community strategy to limit C 02 emissions and to improve energy efficiency', to ensure that the Community is on course to fulfil both the stabilisation of C 02 emissions in the Community as a whole by the year 2000 at 1990 levels, and the commitments under the UN Framework Convention on Climate Change (5). Most, but not all, Member States have set national or EU C 02 limitation targets or objectives which give an indication of the contribution they expect to be making to meeting the Community target. Greece, Ireland and Portugal have not adopted an official C 02 target. Instead they have set out objectives in their National Communications/Programmes to limit the increase in C 02 emissions to 15% (+/- 3%), 20% and 40% respectively. Finland has no base year for its target to 'stop the growth in energy related C 02 emissions by the end of the 1990s', thus making the target unclear in numerical terms. Germany only has a target for 2005, a 25% reduction in emissions compared to 1990 levels. emissions of the per-capita France and Spain have targets that allow some increase over current levels of emissions but which restrict the extent of that increase. France's position concerning the general commitment carbon under 2 tonnes (which is of maintaining equivalent to a 13% increase in emissions by 2000 over 1990 levels) is maintained (6) but it should not be considered as a specific target for the year 2000; instead, the preference is for commitments on policies and measures rather than to any quantified emissions limitations. According to new calculations which of increase has been revised downwards to + 7%. the operational optimization plants generating electricity, this first hypothesis of emissions take into consideration the nuclear power fossil Denmark has a national target of a 20% reduction of its CO? emissions from energy and transport by the year 2005 compared to 1988. This target is formulated in terms of emissions corrected for net electricity trade, in both the base and the target year. Electricity trade fluctuates with water availability in the other Scandinavia countries, with exports in some years and imports in others. In 1990, with relatively large electricity imports emissions were at 10 % below the corrected emissions. Apart from its national C 02 reduction target, Denmark has committed itself to achieve a 5% reductions in 2000 compared to 1990 as a contribution to the EU stabilization target. This commitment is also based on the corrected 1990 C 02 emissions figures. The official Dutch target is a reduction of 3% in C 02 emissions in 2000 compared with the 1989/1990 levels. The Netherlands consider that teperature corrections is relevant for the development of adequate climate and energy policies. To enable policy development and , the Netherlands takes temperature variations into account by adjusting C 02 evaluation emissions. Therefore its 1990 base years has also been corrected for the weather conditions prevalent in 1990. The Netherlands strategy to reduce its C 02 emissions by 3% therefore is built around this 1990 adjusted figure. Taking account of these targets and objectives, there is only a negligible gap between emissions targeted by the aggregate of Member State targets and the Community target. However, the assumptions made for the three countries that have neither a numerical target or an objective for the year 2000 (Finland, France and Germany) are critical for this outcome; their emissions represented 4 3% of total Community emissions in 1990. (5) Council Decision 93/389/EEC. (6) COM (94) 67 final Of 10. 3. 1994 p. 20 2/3 GREENHOUSE GAS INVENTORIES 2. 1 COMMUNLTY INVENTORIES Member State Austria Belgium Denmark Finland France co2 59200 114500 52100 53900 366500 Germany 1013000 Greece Ireland Italy 86100 30720 CIL N ,0 NO, CO i NMVOC C 02 Removals 603 359 406 252 2896 6218 936 796 4 22 11 22 176 223 24 42 222 338 270 295 1692 1219 770 487 445 361 165 219 1722 10947 2424 2944 10768 2978 543 114 1143 429 325 197 NE NE 2600 <31000 32200 20000 NE NE 436300 3889 116 2034 9258 240] 36700 Luxembourg 13300 24 Netherlands 151800 1067 Portugal Spain Sweden 42500 227 227300 2151 61300 329 1 59 11 94 15 23 171 575 1029 214 1083 19 459 199 NE 100 NE 1189 4725 1120 23200 373 1612 540 34300 UK | 577000 I 4531 108 j 2740 j 6682 • 2540 6100 EU-15 \ 3285620 I 24671 928 ! 13546 ! 52006 ! 14397 Table 1 Emission Inventories for EU-15 for C02 and Other Greenhouse Gases 1990 (Gg) - P r o v i s i o n al E s t i m a t e s: Estimates of Community greenhouse gas emissions are based on estimates of emissions submitted by the Member States. National estimates will be checked/confirmed with each country prior to finalising the totals for the EU. - The C02 removals are from Land use and Forestry. - Emissions from Final Non Energy Consumption (including feedstocks) have not been included in total emissions. Therefore, total emissions are underestimated in comparison with the IPCC methodology. Emissions from Final Non Energy Consumption (FNEC) are based on the total carbon contained in the products. The addition of total emissions and emissions from FNEC would therefore produce an overestimation compared to the IPCC methodology. - The UK and the Spanish emissions are based on recently updated national estimates adjusted to be in line with the IPCC guidelines. - The Spanish C02 emissions of 18700 G from agriculture and 2200 Gg from Waste are not included in the total national emissions since Spain has indicated that it considers all such emissions are of organic origin. - DK: Denmark has corrected its fuel combustion emissions for electricity imports/exports in 1990. This correction (6300Gg of C02) has been excluded from the estimates presented in this report for reasons of consistency, no other Member States having made such a correction. - FR: C02 emissions of 8000 Gg from Waste are not included in the total national emissions since France has indicated that it considers all waste emissions are of organic origin. - IRL: In its national communication Ireland provided an estimate of NMVOC emissions from land use change and forestry of 17 Gg and was the only Member State to provide such an estimate. At the request of Ireland, this estimate has been included in the estimates presented in this report. - NL: In its National Communication the Netherlands provided estimates of C02 for actual emissions from feedstock (14800 Gg) and statistical differences (1000 Gg) which have not been included in the results presented in this report for reasons of consistency. Also it applied a correction for temperature influences which was not applied by other Member States and hence has also been ignored for reasons of consistency. Source: European Environmental Agency (EEA), June 1995. The most detailed and accurate emissions data are available for 1990 because it is the base year for the setting of policy targets within the EU and internationally. The Table below shows the emission inventories for the EU-15 for C 02 and other greenhouse gases as also included in the EU Communication under the UN Framework Convention on Climate Change (7). The compilation of Community greenhouse gas inventories for 1990 provides a baseline against which the evolution of emissions can be measured. The Community inventory is based on the Member States' inventories which are submitted to the Commission under the Decision for a monitoring mechanism, using the same format as that required for reporting under the UN Framework Convention on Climate Change (FCCC). In the fifth Monitoring Committee meeting the Member States agreed to a systematic process of reviewing the data submitted to the Commission, described in the document 'Proposal for the Methodology for the Evaluation of Progress and for the Contents of National Programmes' (8). The change in emissions over time can then be measured by comparing the equivalent inventories for subsequent years with the 1990 baseline inventory. As the procedures for reviewing the data submitted by Member States have not yet been formalised, the inventories shown in the Table I are only provisional. This inventory data for 1990 is the most up to date and consistent Community data; it may differ from the 1990 data reported in some National Communications/Programmes, either because it is more recently estimated or because it has been produced using a different methodology. it provides a consistent basis for Member State inventories, it will be used as the baseline throughout the report. Complete inventories for other greenhouse gases were submitted for the year 1990 only. Since The EC greenhouse inventories are subject to review in the light of new scientific knowledge. The CO, inventory does not include sinks. (8) Fifth meeting of the Monitoring Mechanism Committee, 18 May, 1995. According to the Monitoring Mechanism methodology, the Member States should submit in July every year, provisional C02 inventories for the previous year and final inventories for the year previous to that. Community inventories are then compiled on the basis of the received data. The Member States are also encouraged to submit inventories of other greenhouse gases with their C02 inventories. In all Member States, C02 is the most important contributor to total anthropogenic greenhouse gas emissions. Data on the three main gases, C02, CH4 and N20, aggregated to show the climate change effect using IPCC direct global warming potentials (GWPs) (9), indicate that the contribution of C02 in the Community is approximately 79%. Since the stabilisation target relates only to C02, the evaluation of progress in this report concentrates on that gas and not on other greenhouse gases. Total anthropogenic C02 emissions in the Community amounted to an estimated 3,329,750 Gg in 1990 which is approximately 13% of total global anthropogenic emissions (10). Since there is no agreed C02 inventory for the EU-15 for 1993, it is not possible to make a comparison of review year data (1993) with base year data (1990), as is required by the Monitoring Mechanism methodology. 2. 1. 1 Historical Trends in Energy Related C02 Emissions Within the Community C02 emissions arise largely (95%) from the combustion of fossil fuels used as energy sources for power generation, industry, transport and households. Since the contribution of energy related C02 emissions to total C02 emissions is so significant, it is possible to get an indication of the historical C02 emission trends by studying energy related emissions only. Between 1990 and 19. 93 (the review year in the second evaluation process) energy related C02 emissions in the Community as a whole fell by 2. 2% (11) and C02 intensity both on a per capita and per GDP basis has fallen (12). It is important to note, however, that, as opposed to Member State emission inventories and the Community C02 inventory, the C02 estimates on which these figures are based have been calculated using harmonised emission factors (13). The absolute emission figures by country will therefore not correspond to the EU inventory figures. However, the 2. 2% reduction is indicative of the evolution of C02 emissions over the review period. Energy related C02 emissions have fallen only in three out of the fifteen Member States (Austria, Germany, and the UK). Developments in Germany are of particular importance to changes in emission levels in the Community, contributing 30% of (9) Radiative Forcing of Climate Change: the 1994 Report of the Scientific Assessment Working croup of IPCC. Global Warming Potentials (CWPs) of 24. 5 and 320 tonnes of CO, equivalent for CH4 and N20 respectively, based on IPCC Direct GWPs on a 100 year time horizon. (10) Radiative Forcing of Climate Change: the 1994 Report of the Scientific Assessment Working Group of IPCC. in) (12) (13) Eurostat, May 1995. Energy related emission data, based on harmonised emission factors. GDP and population figures from Eurostat, June 1995. The use of emission factors may vary between countries simply because the chemical composition of the fuels actually are different in different countries. However, differences may also arise because the underlying assumptions about the conversion of carbon to co2 differ, i. e. assumptions regarding complete and incomplete combustion. Some international organisations use harmonised emission factors for all countries, a method which inevitably will mask differences in chemical fuel composition which often actually exist across the Member States. Community emissions in 1990. As a result of reunification in 1990 there has been considerable economic restructuring in the former GDR and a significant switch in fuel use away from brown coal. In the new Lander, C02 emissions decreased by 50% between 1987 and 1993 while emissions increased in former West Germany by 2% over the same period. It is doubtful if the total fall in emissions in the former GDR can be sustained once the economy is consolidated in that region. Emissions are likely to grow with development and economic growth although ongoing investments in very energy efficient technologies can maintain some of the emission reduction which has been realised between 1990 and 1994. While the period between 1990 and 1993 was characterised by low economic growth in the Community (annual percentage change of 0. 7% (14)), 1994 was a year of recovery which is expected to be consolidated over the next few years. Projections indicate that annual economic growth between 1995 and 2000 could be 3. 3% (15). Part of the émission decrease over the review period must be attributed to low economic growth in the Community. Apart from economic growth projections, other factors indicate that the C02 trend is likely to turn upwards between 1995 and 2000 and continue to rise thereafter. Forecasts from the International Energy Agency (IEA) which are based on country energy forecasts for EU-15, show an increase in energy related C02 emissions between 1990 and 2000 of 6%, and for the eight EU countries that have submitted forecasts post-2000, a 7% increase by 2010 (16). Whereas energy related emissions in most sectors have levelled off during the review period, or substantially fallen, as is the case in industry largely due to reduced production levels, they are still rising in the transport sector (7% increase 1990-1993). Transport demand and traffic in the Community are expected to increase significantly in the future, especially following the completion of the internal market. Since 1970 annual growth in inland transport has averaged 3. 1% for passengers and 2. 3% for goods (17). Emissions from this growth in traffic volume will only be partially offset by improvements in efficiency but emission levels overall are projected to increase. Both in 1990 and in 1993, eight of the Member States generated more than 20% of their electricity from carbon-free sources, nuclear or hydro. However, in three of the eight countries that have nuclear power plants, the contribution (% of total) of nuclear in power generation has decreased as has the contribution (% of total) of hydro power in eight of the Member States. (14) European Commission, Medium Term Projections 1995-2000, June 1995. European Commission, Medium Term Projections 1995-2000, June 1995. The OECD Economic Outlook (57), June 1995 also projects a consolidation of the economic recovery in Europe over the next few years. (16) (17) IEA, projections based on country energy forecasts, 1994. Commission of the European communities (1993). Towards Sustainability. A European community programme of policy and action in relation to the environment and sustainable development. 2. 2 REMOVAL BY SINKS Greenhouse gas sequestration is an option applicable mainly for C02 since it is the only greenhouse gas which has large natural sinks, in the oceans and in biomass. Other greenhouse gases are mostly broken down in the atmosphere so the absorption option is not relevant to them. The removal of C02 by sinks can make an additional contribution to the overall reduction of C02 in the atmosphere, particularly in those Member States that have a significant potential to increase forest areas. The national programmes contain only very limited information on the actual removal of C02 by sinks and the policies and measures which Member States have taken to increase the sequestration of C02 emissions. 2. 3 CONCLUSIONS Based on Member States' own targets and objectives, five countries expect to reduce C02 emissions by the year 2000, while four countries aim at stabilising emissions and six countries plan to increase C02 emissions by the year 2000. The 1990 inventory of C02 and other greenhouse gas emissions has been prepared, based on the national inventories and other up-to-date information supplied by the Member States to the Commission. Since this information is more recent than that used in some Member States national programmes, and also that some differences in inventory methodologies exist, the EU inventory differs from some of the Member States national programmes. The 1990 EU inventory forms the baseline for evaluating progress towards the C02 stabilisation target. The compilation of an EU inventory for subsequent years, especially the 1993 review year, has not been possible due to the inadequate information submitted by Member States. EVALUATION OF PROGRESS TOWARDS THE TARGET 3. 1 CONTENT OF NA TIONAL PROGRAMMES This report takes into account Member States' National Communications/Programmes and their updates received officially by the Commission by 30 June 1995. In accordance with the Council Decision for the Monitoring Mechanism for C02 and other greenhouse gases, all Member States have submitted national programmes (for all countries but Belgium, the national programme is the Communication under the Framework Convention for Climate Change (18) ), to the Commission, containing 1990 emission inventories, details of national policies and measures, measures for the implementation of Community legislation and policies, and trajectories of future emissions. Considerable progress has been made since the submission of the first, very heterogeneous national programmes (19) in 1993. Nevertheless, the second evaluation of progress towards the C02 stabilisation target is complex due to the fact that the information contained in the National Communications/Programmes still is either not comparable between the Member States or incomplete, even though Member States have made considerable efforts to satisfy the requested reporting requirements. The main factors that make an evaluation problematic are: • The EU inventory is based on the latest information, and not all Member States have provided updates to their national programmes to recalculate the measurement and targets in relation to this inventory. Therefore there is some inconsistency between the inventories in the. Member States national programmes and the EU inventory. • Insufficient information about measures, to give an accurate picture of the state of implementation, progress and availability of funding for these measures, make it difficult to evaluate the effect that the measures will have on C02 emissions before 2000. • Not all countries adequately distinguish between policies and measures put in place prior to the base year of their climate policy and measures which are formally part of their programme. • C02 trajectories for the year 2000, developed through different models and based on different assumptions, make it difficult to compile a Community trajectory for 2000 based on the sum total of the Member State trajectories. The total lack of trajectories, either with or without measures or both, for certain Member States further complicate the process. (18) For 1995 it was agreed by the Monitoring Mechanism committee that the EC would accept the National communications as the national programmes. All Member states have ratified the convention except Belgium, which is in the process of doing so. For the next evaluation, updates to the national programmes are expected. (19) The agreed format for content and structure of national programmes, and the reporting guidelines under the Framework Convention, were not available early enough to ensure consistency for the first evaluation. 3. 2 CO2 LIMITA TION STRA TEGIES IN THE COMMUNITY C 02 emission strategies exist at both the Community and the Member State level. The Community strategy was adopted by the Council in 1991 (20). It includes: non-fiscal measures ALTENER, JOULE, THERMIE); in the framework of Community programmes (SAVE, • a proposal for a combined C02/energy tax (now a revised proposal for common guidelines for a combined C02/energy tax); a Monitoring Mechanism. The Community strategy will only be effective to the extent that the measures which have been adopted at the Community level, actually are implemented in the Member States. Most Member States have included the Community measures in their national C 02 strategies. In particular, energy efficiency labelling is considered to have great potential, and five countries have indicated that a carbon/energy tax at Community level is necessary to achieve their national targets (Belgium, Denmark, Germany, Italy, Netherlands). Only Denmark, Finland, the Netherlands and Sweden have introduced C 02 taxes to date but most countries apply VAT on energy at various rates and many countries have introduced taxes on fuels. The Nordic countries which have C 02 taxes in place would like to increase these taxes further to fully exploit the potential of the measure, but they are reluctant to do so for reasons of competitiveness, unless a similar tax is introduced at the Community level. France has indicated that a C 02 taxation at the EU level is necessary in order to limit its C 02 emissions at their level indicated in their National Communication. Belgium and the Netherlands have declared that unless there is progress on the EU C02/energy tax proposal, they will introduce a tax unilaterally in 1995. Similarly, the new government in Austria says that it is considering introducing a C 02 tax in 1996 or at the latest in 1998 (21). If the revised Commission proposal for guidelines for the introduction of a combined C02/energy is adopted by the Council, the introduction of a tax would be done within a common framework by the Member States. At the national level, all Member States have developed and adopted C 02 limitation strategies which are described in the National Communications/Programmes. In general, there are three main approaches to the limitation of C 02 emissions: (examples of these approaches in various Member States may be seen in the Annex). • Efficiency improvements which result in a reduction in the level of inputs to achieve a given level of output. Generally for C 02 emissions we are concerned with levels (20) ( 2 1) SECOD1744 final, October 1991. Fifth meeting of the Monitoring Mechanism Committee, 18 May 1995. 10 of energy efficiency. Energy efficiencies can be brought about through technological advances or improved management practices, or changes at the energy system level (eg reducing the total emissions from power and heat production through combined production of heat and power). • Consumption changes including conservation measures which result in an overall reduction in consumption, for example through cutting out unnecessary uses of energy and modal shifts especially in transport involving changes from one energy intensive form (eg private motor cars) to a less energy intensive mode (public transport). • Fuel switching from fuels with high to those with low or zero carbon coefficients, for example shifting from coal to gas for power generation, or to renewables. An additional measure is the sequestration Sequestration of C02 by soils and vegetation which similarly reduces the level of C02 in the atmosphere and, which has a similar effect to reducing emissions. There are a range of different measures that are used in the Member States to implement C02 limitation strategies to achieve the effects described above: • Economic instruments such as C02 or energy taxes are used in order to provide incentives to improve efficiency in the use of energy, changes in consumption or to encourage switching to less carbon intensive fuels - they are also used to encourage expansion of forested areas and thus increases in rates of C02 sequestration, eg via planting subsidies. • Regulations introducing energy efficiency standards or restricting uses of particular fuels encourage energy efficiency improvements or fuel switching. • Information & education programmes are used to encourage energy efficiency improvements in industry and energy conservation by firms and householders - these schemes include energy labelling and advertising campaigns. • Government direct action is significant where it is a major user of energy - this might include improvements in energy efficiency in buildings, investment in new electricity generation capacity or increased afforestation of state-owned land. Government action to de-regulate energy markets may create incentives for improvement in the thermal efficiency of generating plants, reduced electrical losses from transmission and distribution systems and can result in switching towards fuels with lower carbon content. • Research & development mostly has long term impacts, eg through encouraging the development of energy efficient and renewable energy technologies or on methods for C02 disposal. 11 3. 3 TRAJECTORIES AND EFFECTS OF MEASURES 3. 3. 1 The Effect of Policy Measures The Member States have introduced or are in the process of implementing a broad range of policy measures in order to tackle C02 emissions. The most wide spread measures are aimed at energy conservation and energy efficiency measures in end-use. A number of countries have programmes to encourage fuel switching, particularly via government action in the energy sector. The national C02 strategies are summarised in the country summary pages in the Annex. Member States have the option of introducing different types of measures, the choice of which has a significant influence on the degree of uncertainty related to the effectiveness of the measures. The following aspects influence the effect of measures: Compulsory versus voluntary measures Compulsory measures or 'hard measures', such as taxes, regulations and standards that must be complied with, and which have a fixed date of implementation, tend to generate more secure results than voluntary measures or other 'soft measures' such as information and education. Compulsory measures are mostly introduced in the household and commercial sectors in the form of efficiency standards and regulations. These measures can be very effective even in a reasonably short period of time. For the four countries that have introduced C02 taxes, carbon and energy taxation are a fundamental part of these countries' C02 strategies. These taxes tend to be cross- sectoral. For reasons of competitivity, the C02 tax on industry is lower than for other sectors in Denmark and Sweden (where power generation is totally exempt from the tax). In Denmark and Finland, rates for all sectors are significantly lower than they would be had the tax been introduced in all Member States. In an indirect way the C02 tax is an important part of the C02 strategies of Belgium, Germany, Italy and the Netherlands since all of these countries have stated that the tax is necessary for them to reach their respective targets. France is also convinced that the C02 taxation is an important part of its C02 strategy and in terms of excise taxes it has increased the latter on diesel fuel by 20% in real terms between 1990 and 1995. Voluntary measures in some form are included in the C02 strategy of several Member States, and mainly introduced in the industry sector with the aim of promoting energy conservation. Voluntary agreements, supported by a system of environmental permits, are at the core of the Dutch C02 strategy. The efficiency of such measures depend on the size and structure of the industrial sector, the efficiency of monitoring and enforcement and on the system of cooperation between the social partners. The results, which can be very efficient, will therefore vary from country to country. Other 'soft measures' include information and training but in most strategies this is viewed as a support measure for the enhancement of energy conservation in particular, rather than a core measure. Funding Status 12 Measures that have secure funding, for example through the fixed allocation of tax revenues or EU grants, will be more secure than measures that depend on annual decisions regarding continued funding, as do for example subsidies and investments, both public and private. Subsidies are included in most C 02 strategies and are often given for the promotion of renewable energy sources, for the promotion of public transport and for demand-side-management (DSM). Funding is an important factor influencing the outcome of all C 02 strategies, particularly in times of recession and unemployment. The UK expects emissions reductions as a result of the establishment of an Energy Saving Trust. Due to changes in the anticipated levels of funding the contribution is now expected to be lower (at a minimum of 0. 3 MtC) than originally estimated - although further schemes are being developed by the Trust which will contribute further savings. • Long term measures Long term measures, such as R&D measures or major investments in infrastructure, are uncertain by nature, since they span over a longer time frame. Funding, political backing or other important determinants for the implementation of these measures could change with, for example, fluctuations in economic growth. The measures in the French national C 02 strategy are mostly expected to have a long term impact, beyond the year 2000. The measures included in the strategies of the southern Member States tend to focus on infrastructure investments which are also for the longer term. Often the measures in the transport sector are for the longer term; eg the development of public transport or energy efficient vehicles and modal shift, are medium to long term measures. The likelihood of achieving the Community stabilisation target for C 02 emissions is dependent on a number of factors, but the effect of policy measures is of key importance, illustrated by the magnitude of difference between the with and without measures scenarios (see A nnex A, Table A 2). Due to the uncertainty related to the implementation and actual effect of measures, the with measure scenario could be viewed as an estimated reduction potential, although the real outcome in 2000 could be It is therefore very important to be able to estimate the effect of very different. the National very measures, but Communications/Programmes since the information provided in them is generally inadequate. As a rule, the National Communications/Programmes are unclear regarding the following points. the basis difficult so on do of to • The status of policy measures, whether adopted, in the process of adoption or merely options being considered. Even where this is indicated it is difficult to discern whether implementation has begun, the level of effort related to the implementation of the measure, and whether funding is secured for the future. • Whether or not the measure is introduced as part of the national climate change policy or for some other policy reason. • The effects of a measure on levels of emissions measured in C 02 emission reduction, consistent with the difference between the with and without measures scenarios. 13 is provided it would be useful Even where this information to have progress indicators for the implementation of the measures so as to be able to evaluate the likelihood that the full effect of the measure will be realised by the year 2000. The effects of measures are only partially comparable across countries since they have been estimated using different models and assumptions. • The trajectories do not give projected C 02 emissions with and without measures for every year between 1990 and 2000, against which the effect of measures to date could be evaluated. 3. 3. 2 The Effect of Removal by Sinks The enhancement of removal of C 02 by sinks, generally through the encouragement of forestry, is not counted as part of achieving the Community C 02 target, which is currently based only on emissions. One problem with including the removal by sinks in the achievement of targets is that trees can remove carbon from the atmosphere for long periods, particularly if the wood is harvested and used for construction materials or other long term purposes, but not permanently. Afforestation does not halt the gross growth in emissions or affect the main cause of rising C 02 emissions, namely the combustion of fossil fuels. This may be an issue particularly for countries where the increase in sinks would otherwise mask an increase in emission levels over time. It is estimated that, within the Community, there may be a total of 350,000 ha of new planting over the period 1990-2000 including 100,000 ha on former agricultural land as a result of reforms to the Common Agricultural Policy (CAP) and 250,000 ha in response to Member State policies and commercial incentives (22). Member States have, in most cases, included measures for sink enhancement in the national C 02 strategies. Four countries have no measures for the enhancement of sinks and one country's measures are only in the conceptual phase. The measures which are being implemented are very similar in all the countries, including for the most part afforestation, forest maintenance and forest management and promotion of long-lived wood products. 3. 3. 3 Member State Trajectories for the Year 2000 target, Table AI In order to provide an up to date picture of the likely achievement of the Community (in the Annex) provides an aggregation of country stabilisation trajectories of emissions for 2000. These trajectories are based on Member State submissions in National Communications/Programmes, and updates which have been officially communicated the assumption that there is no Community C02/energy tax in the countries that have not yet introduced such a tax. The trajectories are based on to the Commission. (22) Environmental Resources Management (1994) Forests as C02 sinks Final Report to the European Commission DCXI/B/4. 14 The trajectories and projections for 2000 have been adjusted to be consistent with the same 1990 baseline, the EU C02 inventory for 1990 (see section 2. 1). Where the Member States have provided both a with and without measure scenario, the effect of measures has been calculated as the difference between the two. In the cases where only one projection has been given by the Member States (generally with measures), the other scenario is derived on the basis of information in the National Communication on the effects of measures, and using a consistent set of assumptions regarding economic growth rates and fuel prices. However, Table Al does not show the 'without measures' trajectories since they were not submitted by all countries. By adding up the individual Member State trajectories and projections, we can estimate Community C02 emissions in 2000. It should be noted, however, that this method of compiling a Community trajectory only can give indicative results, since the broad range of models and assumptions that have been used by the Member States introduces a certain amount of inconsistency between their trajectories. In addition, some Member States have made trajectories of projections for all C02 emissions whereas others only for energy related emissions. The figures in the table do not take account of these differences. Finally, in virtually all cases, the base year data which have been used in the trajectories and projections do not correspond with the EU C02 inventory. By using the magnitudes of change rather than absolute levels, a link can be established between the trajectories and the EU inventory, but this method further results in the trajectories in Table 3 differing from those reported by the Member States. Bearing the above limitations in mind, this analysis indicates that the Community may stabilise emissions at 1990 levels by the year 2000 if the Member States achieve their trajectories. Germany continues to be a main contributor to C02 emissions, but its share would fall from 30% in 1990 to 24% in 2000. Due to the exceptional situation in Germany as a result of unification in 1990, Germany will likely make a significant contribution to Community C02 emission reductions. However, it is doubtful whether this reduction is permanent if economic growth in the new Lander is faster than it has been since 1990. In 1994, GDP expansion was estimated to be 9% in the Eastern Lander, and it is expected that the former GDR will continue to be the fastest growing region in Europe over the next couple of years (23). Projections for Germany will therefore be particularly sensitive to assumptions about GDP growth; the assumption underlying the minus 13% scenario is not specified. The trajectories and projections are in general sensitive to assumptions both about GDP growth and about international fuel prices. A major source of uncertainty pertaining to the results described in the table above, therefore, relates to the fact that not all countries have specified the assumptions that they have used. Where assumptions are transparent, they tend to differ from country to country (eg Italy assumed that oil prices in 2000 will be $15/bbl while Sweden assumed that the same international prices will be $28/bbl). Some such differences may reflect real differences in costs of delivered fuel, but as regards, for example, international fuel prices, assumptions across Member States should have an underlying consistency. (23) OECD Economic Outlook (57), June 1995. 15 Another source of uncertainty is the estimated implementation of measures, both as regards the technical calculation of the effect of measures, and the level of actual implementation. In the table above the effect of measures has been assumed to be the difference between the with and the without measures scenario. Not all Member States have provided a without measures scenario, but even where it has been submitted, it has a different meaning for different Member States. Most countries have, in some way or other, included measures in the without measures scenario, although some leave them undefined, for example only describing them as 'optimising the use of energy' as in the case of Austria, while others explicitly state that the measures implemented up until a specific date have been included in the without measures scenario, as in the case of the Netherlands. If the with and without measures scenarios have been generated at different times, their underlying external assumptions may differ. Such differences will then be masked as being part of the effect of the measures, particularly when the underlying assumptions are not transparent. In the with measures scenario, Member States have used widely different models and methods of estimating the impact that measures would have. Regardless of method used, the estimation is complicated by the fact that, for example, some measures may only have an effect if implemented jointly while the effect of other measures may not be fully additive because their reduction potential may overlap. The way in which countries incorporate, into their macro-economic models, the effect of measures which have been calculated at the micro level, also varies greatly across Member States. Only four Member States have clearly quantified each measure which is included in the with measures scenario (Belgium, Greece, Sweden and UK). In other cases, where the sum of the quantified measures exceeds the difference between the with and without scenarios, the assumption has been made that the sum of quantified measures constitutes a potential rather than an actually achievable impact (eg for Finland 16000-18000 GgC02 is assumed to be the potential but only 9000 GgC02 is taken to be achievable effect of the measures, since this is the difference between the two scenarios). Germany has listed 109 measures but none of them has been quantified. The German estimate is further complicated by the fact that no projections have been provided at all for 2000. The 13% reduction figure is a rough estimate which has been communicated to the Commission (24) but none of the underlying assumptions or measures which are taken account of are known (an emission reduction range of 13%-16% was communicated to the Commission; the lower estimate has been assumed in Table 3). Related to the calculation of the effect of measures is the uncertainty regarding the implementation of measures discussed in the section above. All countries have measures that remain to be implemented and for some Member States such measures constitute the major part of the C02 strategy (eg Belgium). If implementation is not started soon, the measures cannot be expected to have an effect by 2000. (24) Oral communication, Monitoring Mechanism Committee meeting, February 14,1995. 16 Given that four countries, namely France, Germany, Italy and the UK accounted for 72% of Community C02 emissions in 1990, minimising uncertainties associated with the implementation of their respective measures is of particular importance. The French measures are mainly for the long term beyond 2000 (25). According to the German Communication, 88 measures are under implementation but there is very little indication of what that means in terms of level of effort, duration, political commitment, availability of funding etc and as noted above, the impact of the measures has not been quantified. The Italian plan shows an unusually large effect of measures although it is not indicated where this reduction would come from. The stage of implementation of the measures is very unclear and none of the measures have been separately quantified. In the UK, following changes in the anticipated level of funding, the contribution of the Energy Saving Trust is now expected to be lower than originally estimated. Greece, Ireland, Portugal and Spain all have 'objectives' that take account of their expected higher economic growth. These objectives correspond to their respective projections. Greece revised its 'realistic objective' downwards from a 25% increase to 15% +/- 3% increase (26). This is more related to revised expectations about economic growth than to a higher than expected effect of measures. Emissions in these countries are likely to be more linked to economic growth in the years up to 2000 than to the implementation of the measures in their national C02 strategies. It is therefore likely that if economic growth proceeds as forecasted in these countries, emissions will follow. The measures in these plans are not fully elaborated (with the exception of Greece), highly dependent on the availability of funding and therefore unlikely to counteract the increase in emissions. Several of the countries that use nuclear power are finding it increasingly difficult to acquire the public's consent to build new power plants (eg in Finland Parliament rejected the application to build a fifth nuclear power plant. In France four 1450 MW PWR units are now under construction and expected to be commissionned before the year 2000. Having regard to current forecasts of electricity consumption, the improved availability of French nuclear plants and the expected extent of its exports, it is not expected that further nuclear reactors will be ordered before the year 2000. However, if the level of 70 ECU a tonne of carbon not emitted were to be regarded as necessary to stabilise emissions from the European Union, the French nuclear investment policy would be revised. Sweden has made its projection on the assumption that the planned phase-out of nuclear power is not initiated before 2000. Even if that is the case, new energy demand must be met with power generation from fossil fuels, especially since there is, in principle, a ban on expanding hydro power. Once the phase-out is begun emissions from the power generation sector are likely to increase significantly. (25) summary record of the Committee meeting of the Monitoring Mechanism, 19 October, 1994. (26' Summary record of the Committee Meeting of the Monitoring Mechanism, February 14,1995. 17 3. 3. 4 Alternative Trajectories for 2000 Since there is considerable uncertainty related to the trajectories and projections discussed above, it is useful to compare them to alternative projections; a modified projection based on the Member State trajectories but using a few common assumptions, especially a sensitivity analysis on growth rates, and a further Commission projection based on new energy scenarios. In the 'modified projection', country GDP growth rates (in place of those given by the Member States) have been used that are consistent with the projected Community growth rate and fuel import prices, (particularly for crude oil) pertaining to the EU (27). For the years 1990-1993, estimated actual C02 emission growth from energy only has been used (28). Thereafter, emissions are estimated forecasted based on OECD GDP projections for 1993-1995, and Commission Services' projections for 1995-2000 (29). The 'Commission projection' is based on a provisional result from a recently updated energy scenario using the Commission's energy models (Conventional Wisdom scenario 2020). It shows an increase in emissions from energy consumption of approximately 5%. The Member States are committed to their trajectories shown in Table A 2 (in the A nnex) column (a). However, the alternative scenarios shown in columns (b) and (c) highlight the uncertainty present in any future projections. As all projections, the two alternatives which are presented in Table A 2 have shortcomings. The different results in these trajectories show the importance of the underlying assumptions. In the Member State trajectories the assumptions about GDP tend to be lower and assumptions about fuel prices higher than the ones used in the modified trajectory. This partially explains why the Member State trajectory for EU-15 shows an emission decrease while the other two projections show an increase. Another reason may be that the Member State trajectories may assume successful implementation of all measures while the alternative trajectories may allow for some slippage in implementation. As regards these underlying assumptions, it is likely that the modified and the Commission projections are more consistent since they are based on common external assumptions. The methodological problems discussed in the section above are identical for the Member State and the modified trajectories as is the uncertainty pertaining to the implementation of measures. The 'bottom-up' approach used in the Member State trajectories may be contrasted with the Commission trajectory which is based on 'top down' analysis. Based on the projections above and the uncertainty related to the implementation of measures, the most likely development is an increase by the year 2000 in the range of 0-5%. This range also takes account of uncertainty in fuel prices and GDP growth rates. (27) Assumptions regarding GDP growth from Commission Services (DCll), 'Medium Term Projections 1995-2000", June 1995. GDP figures 1992-1995 from OECD Economic outlook (57), June 1995. Import prices for oil taken from OECD Green model (June 1995), which projects a change of S4979-S4052 per terrajoule from 1985-2000 for the EU. Energy price assumptions have also been taken from "A View to the Future', September 1992. (28) Eurostat, June 1995. Harmonised emission factors. (29) The 2000 emission data have been projected using a "change index" constructed on the basis of the OECD/Commission GDP growth rates and fuel prices taken from the OECD Green model, the GDP growth rates included in the National Communications, and assumptions about income and price elasticities. 18 ( vc\ CONCLUSIONS There has been considerable improvement in the quality of reporting in the National Communications/Programmes since the first National Programmes were submitted for evaluation in 1993. However, the information provided in them is still insufficient, in terms of specific details, to evaluate progress towards the Community stabilisation target in a satisfactory way. Overall there is still considerable uncertainty regarding the expected outcome in the year 2000. Due to lack of key information, it has not been possible to fully apply the methodology adopted by the Monitoring Mechanism Committee (30). Notably, the following important compromises have been made for lack of information and lead to additional uncertainty about the expected outcome for 2000: • Since there is no Community C02 inventory available for the review year 1993, it has not been possible to review the trend in emissions between the base year 1990 and the review year. • The compilation of a Community trajectory for 2000, which should be based on the trajectories supplied by Member States, was not possible due to difference in methodology and assumptions used by the Member States. Two alternative trajectories have therefore been presented. One is a modified trajectory with consistent growth and fuel price assumptions, the other is based on the Commission's energy scenarios for 2020. Both of these alternative scenarios estimate higher C02 emission for 2000 than the Member States' own trajectories. • There is insufficient information about the implementation of measures. This is a crucial element in the assessment of progress. The reliability of the trajectory results are particularly hampered by the fact that the reporting of implementation of measures in four of the largest contributors to C02 emissions, Germany, France, Italy and the UK (representing 72% of emissions in 1990), is insufficient. In general, it is impossible to make an assessment about the effectiveness of implementation of measures based on the national programmes since adequate information is not provided. These are shortcomings in this evaluation report that should be addressed in the third evaluation due to take place in 1996. More consistent and transparent data are required the documents (31) to allow better presentation and evaluation in subsequent reports; agreed at the Fifth meeting of Monitoring Mechanism Committee on 18 May, will help provide such data. Furthermore, amongst other possibilities, it has been suggested that a workshop might be arranged in which the development of trajectories could be discussed. The Monitoring Mechanism Committee also foresees a working group to assist in the process. (50) (31) Fifth Monitoring Committee meeting, May 18,1995. Fifth Monitoring Committee meeting, May 18,1995: "Proposal for the Contents and Format of Annual Inventories' and •Proposal for the Methodology for the Evaluation of Progress and for the contents of National Programmes". 20 According to the results of this evaluation process, it cannot be excluded that Community emissions will increase within the range of 0-5% by 2000 over 1990 levels. The lower end of this range is based on the assumption that the maximum potential of the estimated effect of measures as reported in the 'with measures trajectories' of the Member States, is actually realised. Since current emissions are below 1990 levels, even stabilisation by 2000 implies that emissions will be growing between now and then. If energy prices remain low and GDP growth is faster than expected the increase could be at or above the top of the range. Such an increase of 5 % or more would be a serious departure from the agreed stabilisation commitment. As mentioned above there is also uncertainty linked to the implementation of measures and many will only have an impact after 2000. Five countries have said that they can only meet their targets if a C02/energy tax is implemented at the Community level. If the full potential is not realised, C02 emissions could increase more, unless additional measures are implemented. This evaluation takes account of the emissions and national programmes of 15 Member States, and the picture has therefore changed since the previous evaluation which only included 12. Subsequent evaluations are expected to be based on improved information by including recent updates by Member States of their national programmes and a reporting format more closely aligned to the adopted methodology. It appears therefore that, at this stage, the Commission is not in a position to claim that the adopted policies will be sufficient to meet the agreed targets and certainly not to ensure reductions in C02 emissions after the year 2000. The Council of 22/23 June 1995 invited the Commission to modify the Monitoring Mechanism decision of 1993 to extend the monitoring of greenhouse gases beyond the year 2000. This is important since it is likely that the Community emissions will be increasing after 2000 event though measures implemented will have a continuing effect. IEA energy projections, recalculated as C02 projections, show that for the eight EU countries that have submitted post-2000 projections, energy related emissions in 2010 could be 7% higher than in 1990 (32). Taking a post-2000 perspective therefore also becomes increasingly important for subsequent evaluations. (32) IEA Energy related C02 projections, June 1995. The eight countries are: Belgium, Finland, France, Germany, Ireland, tuxembourg, Netherlands and the UK. 21 Annex A Tables Showing C02 Inventories, Trajectories and Effects of Measures for the 15 Member States 22- Table A1 Member State Trajectories and Projections and Effect of Measures (S> 1990-2000(CgCO2)-Adjusted on a Common 1990 baseline (GgC02) Member State (a) C 02 Inventory 1990( 1) j I (b) Change 1990/2000 (c) % change 1990/2000 (d) Trajectory 2000 (With Measures) ° (e) Effect of Measures Comments'3 I Austria 59200 ! 380 0. 6 59580 5520 j STAB scenario is 'with measure' scenario. STAB aims at stabilising i emissions at 1990 levels by 2005 (reduction of 8800 G g C 02 over 1ER ! reference scenario for 2005). Effect of measures interpolated for 2000. Belgium 114500 •1300 -1. 1 113200 13630 Projection is temperature corrected. Bureau de Plan scenario without a C O, tax is 'with measure' scenario. Denmark Finland France 52100 53900 -6200 -11. 9 16000 29. 7 366500 31840 45900 69900 398340 13500 | Energy 2000 follow-up trajectory 1990/2000 is 'with measure' scenario. | Aim is to achieve 20% reduction by 2005 compared to 1988 levels. 9000 j Energy related emissions only. Assumption that all imported electricity | produced domestically in future (see country summary). 73200 | Scenario 1 from note to Monitoring Mechanism Committee is 'with ; measure' scenario, including sinks. Germany 1013000 -131560 -13. 0 881440 144330 Greece LP Ireland 86100 30720 12320 14. 3 6300 20. 5 98420 37020 9590 1390 Italy 436300 12630 2. 9 448930 54370 Luxembourg 13300 -3200 -24. 1 10100 7820 'Without measure' scenario is derived based on assumptions of consistent j j set of fuel prices and GDP growth rate. 'With measure' scenario for I 2000 is 13% reduction over 1990 levels, as communicated to I Commission in Monitoring Mechanism Committee meeting in February ! 1995. 'With measure' scenario is 'most realistic objective' of 15% increase by 2000 over 1990 levels. ! 'Without measure'scenario is derived based on assumptions of j consistent set of fuel prices and GDP growth rate. 'With measure' j scenario 20% increase by 2000 over 1990 levels. ! quantification of measures. Insufficient 'With measure' scenario 1-5% (average 3%) increase by 2000 over 1990 levels, as communicated to Commission in Monitoring Mechanism Insufficient quantification of j j | Committee meeting in February 1995. I measures. 'Without measures' scenario derived based on assumptions of consistent ! j set of fuel prices and GDP growth rate. Insufficient quantification of i measures. (,) C 02 inventory 1990, June 1995. (2) Absolute change 1990/2000 based on Member State trajectories. (3) 'With measures' scenario, based on C 02 inventory for EU-15 1990. These trajectories and projections have been adjusted to be consistent with the same 1990 C 02 baseline inventory for 1990. <4> Difference between 'with' and 'without' measures scenarios, Member State trajectories. tS) Some of the measures are understood in a very broad sense The trajectories and projections for 2000 have been adjusted to be consistent with the same 1990 baseline, the Corinair inventory 1990 shown in column (a). For ail but five countries, the Corinair inventory figure is higher than the 1990 trajectory baselines used by the Member States. For France, Ireland and Sweden the 1990 trajectory baseline corresponds with the Corinair emission figure for 1990, while for the Netherlands and the UK the Corinair figure is lower. Member State (a) C 02 Inventory 1990 (,) (b) Change 1990/2000 ,a j ! I (c) % change 199f>/?nnn (d) Trajectory 2000 AVfth MPiKifrpO (3) (e) Effect of Measures ; Netherlands 151800 -600 | -0. 4 151200 10500 i Portugal 42500 15300 j 36 57000 7030 j Spain 227300 54100 j 23. 8 281400 594 70 ; Sweden 61300 2 700 j 4. 4 64000 10200 Comments'5* 'With measures' and 'without measures' scenarios from Energy Policy Scenario. Sectoral quantification of measures. 'Without measures' scenario derived based on assumptions of consistent set of fuel prices and GDP growth rate. 'With measures' scenario is 40% increase in emissions by 2000 over 1990 levels. No quantified measures. 'Without measures' scenario is derived based on assumptions of consistent set of fuel prices and GDP growth rate. 'With measures' scenario is 25% increase by 2000 over 1990 levels. No clear quantification of measures. 'With measure' scenario is 4% increase by 2000 over 1990 levels, not temperature corrected, and stabilisation if temperature corrected. All measures included in the scenario are quantified. -F j UK j EU-15 j i 579800 | -35140 j -6. 1 3,285,620 j -26430 j -0. 8 j j 544660 71740 'With measures'scenario from EP-65, central GDP growth, high fuel j j '; prices , reduction of 6% by 2000 compared to 1990 levels. All measures ; j j in scenario quantified. 3,260,900 491,290 I ; IJ' 'With measures' scenario, based on C 02 inventory for EU-15 1990. |4) Difference between 'with' and 'without' measures scenarios, Member State trajectories. | '" C O} inventory 1990, June 1995. { (}) Absolute change 1990/2000 based on Member State ! j I 1SI Some of the measures are understood in a very broad sense. I The trajectories and projections for 2000 have been adjusted to be consistent with the same 1990 basel ! inventory figure is higher than the 1990 trajectory baselines used by the Member Slates. For France, Irelan ; 1990, while for the Netherlands and the UK the Corinair figure is lower. trajectories. ine, the Corinair inventory 1990 shown in column (a). For all but five countries, the Corinair d and Sweden the 1990 trajectory baseline corresponds with the Corinair emission figure for j j Table A 2 Alternative Trajectories for the Year 2000 (percentage change 1990/2000) Member State (a) Member State Trajectories/ Projections (1) j 00 Modified Trajectories/ Projections m (c) Commission Projection (J) Notes Austria ! Belgium ! Denmark • Finland : Fiance • Germany • Greece : Ireland ft j Italy j Luxembourg ! Netneriands j Portugal j Spain j Sweden j UK I EU-15 1 : -1 : •12 30 -13 j 14 20 I 3 ! -24 0 • 36 21 = 4 j -6 j -1 ! j Growth rates differ marginally but fuel prices assumed in (a) are very high compared to I (b) which explains low emission growth in (a). I Due to lack of information about GDP growth rate, the assumed growth rate is 0. 7% j lower than in modified trajectory. GDP growth assumptions differ marginally between the (a) and (b) but fuel prices are very high in (a) and price elasticity is very high, leading to fall in emissions in (a). j Lower GDP growth rate and higher fuel prices in (a) than in (b) but the income effect j is higher leading to higher emissions in (b). ! GDP growth rate lower and fuel prices higher in (a) than in (b), leading to lower j emissions in (b)(a) j Due to lack of information about growth rate, it is assumed to be 0. 7% lower than in j modified trajectory. { Due to lack of information about growth rate, it is assumed to be 0. 7% lower than in j modified trajectory. j Due to lack of information about growth rate, it is assumed to be 0. 7% lower than in j modified trajectory. | Much higher GDP growth rate in (b) than in (a) and higher fuel price increase. Income I effect outweighs price effect leading to higher emissions in (b). ! Growth rate in (a) lower than in (b). Fuel prices are the same. Emission reduction j greater in (a). j Higher GDP growth rate in (b) than (a) and high income elasticity explains higher j growth in emissions. Fuel prices higher in (a) than in (b). Due to lack of information about growth rate, it is assumed to be 0. 7% lower than in modified trajectory. i Lower growth rate and higher fuel prices in (a) than in (b), explains higher emissions ! in(b). j Lower growth rate and higher fuel prices in (a) than in (b). Price effect dominates | leading to lower rise in emissions in (a). j Higher GDP growth rate in (b) leading to higher emissions than in (a). 5. 4 I Aggregate figure for EU-total. 3 ! 33 j 13 • •10 : 19 : 25 6 : -20 10 : 36 23 6 : -2 j 3 j j (1) Trajectory j (2> Trajectory : (3) Trajectory tammmsmam 1990/2000, based on Corinair COz inventory (column (c) in Table Al). 1990/2000, based on modified common assumptions for GDP and fuel prices. 1990/2000 from Commission Services (DGXVII), Conventional Wisdom scenario 2020. HHSHHBHHH^MHHaMHBBnBnBHnBHiHBBKEHHKHHHaaHaHMH Annex B Country Summaries x> AUSTRIA Member State Trajectory (1) Modified Trajectory j j | j 1990 Emissions (GgC02) ! Trajectory 1990/2000 on C 02 j inventory baseline (%) j Effect of Measures (GgC02) I 59200 \ I 0. 6 8 j I 5520 Target/Objective and Comments: - Stabilization scenario (by 2000) - Reduction target committed to : 20% by 2005 based on emission in 1988 (Toronto target) Summary of measures: Most measures focus on reducing end use energy consumption rather than on fuel switching. The quantified measures are geared towards the promotion of renewables for heating purposes, through subsidies and tariff restructuring. The same instruments are used to promote district heating. Attention is also given to reducing energy consumption in the transport sector, for example a vehicle tax which reflects fuel consumption. Measures geared towards industry are largely voluntary. Measures to enhance sinks include afforestation, forest management, increase in long-lived wood products. Quantified measures j Use energy of surplus straw (agricultural, district heating and j building subsidies; regulations on supply of electricity to public ! grid j 0. 60 M t C 02 ; j Use of biogas as fuel and raw material (district heating and building subsidies; regulation on supply of electricity to public grid j 2. 90 M t C 02 j j ! Use of solar energy especially for water heating; use of solar j collectors; passive solar energy use (subsidies, building j regulations) ! 0. 60-1. 30 M t C 02 j j TOTAL 4. 10-4. 80 MtCO, Categorisation of measures: The measures are divided into measures under implementation, measures which are planned to be undertaken under the next legislative period (1994-1998) and measures at the conceptual stage. The quantified measures are all under implementation. Projected C02 emissions in 2000 relative to target(2): In the with measure scenario (3), Austria expects to stabilise C02 emissions by 2000. It is not clear which measures are included in the projection. The assumption made is that energy savings and structural changes will reduce emissions, but only a third of the potential is realised. Energy and carbon intensity are assumed to fall by 2. 1% and 0. 5% respectively per year to 2005. If the measures which are planned for the legislative period 1994-1998 are required for stabilisation, the outcome will only be secured if implementation is begun immediately. Measures in the conceptual phase are not likely to have an impact before the year 2000. This projection can also be put in question by the fact that very high fuel prices have been assumed for 2000. The new government has expressed a political will to introduce a C02 tax by 1996. Depending on the timing and the rate at which the tax is introduced, it could make a substantial contribution to meeting the stabilisation target. (1> Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the EU-15. <2) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above (3) Stabilisation scenario (STAB). 2} BELGIUM 1990 Emissions (GgC02) j Trajectory 1990/2000 on C 02 j inventory baseline (%) j Effect of Measures (GgC02) I Member State Trajectory (1) Modified Trajectory j j 114500 I | -1. 1 3 j j 13630 Target/Objective and Comments: 5% reduction by 2000 compared to 1990 level. Temperature corrected target. Summary of measures: Greatest impact expected from increased efficiency in electricity generation and shift to electric steel industry. Substantial impact also expected in the residential sector through a broad range of measures of different types and effects including: promotion of cogeneration (combined heat & power); promotion of energy efficiency household appliances and discouragement of electric heating; fiscal instruments include changes to tax benefits and parking fees in the transport sector, and grants to encourage energy conservation in public buildings. No measures to enhance sinks. Quantified measures j Improvement of insulation in new buildings in the residential j and commercial sectors j 0. 40 M t C 02 j j Increased use of natural gas, improved performance of heating | installations and hot water boilers j 1. 90 M t C 02 j I Promotion of energy efficiency household appliances and j 0. 75 M t C 02 1 1. ! ! 2. j j 3. ; I lighting ; 4. j Discouraging of use of electric heating j Subtotal for residential/commercial sector j 5. ; Transport plans for company employees ! 6. j ! 7. • 8. 9. j Reduced access by passenger and transport vehicles to city j centres I Other measures for the promotion of public transport in urban : areas ! Reduced road transport ; Fiscal policy in transport 10. ; Increased enforcement of speed limits j Subtotal for transport j j 0. 10 M t C 02 j 3. 15 MtC02 j 0. 125 M t C 02 j 0. 12 M t C 02 I j 0. 10 M t C 02 j j 0. 05 MtC02 j 0. 75 M t C 02 j 0. 60 M t C 02 j 1. 75 MfC02 j j j j j j j ! : j ! 11. 12. 13. 14. 15. ! Measures in the industrial sector: energy audits for suppliers j 0. 64 M t C 02 j Promotion of renewable energy j Promotion of cogeneration : Subtotal of all additional measures j 0. 20 M t C 02 j 2. 00 M t C 02 j 7. 74 MtC02 j Shift towards electric steel production (implemented) : 2. 00 M t C 02 ! Increased efficiency in electricity production ; 4. 00 M t C 02 TOTAL 13. 74 MtCO, Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the EU-15. Categorisation of measures: The measures have been divided into those which are currently being implemented (adopted before 1994), complementary measures which are the focus of the plan (to be implemented after 1994), and other associated measures which are for the longer term. The two most important measures under implementation are the technical improvements to the nuclear plants and the installation of electric steel works. The quantified measures fall into the complementary measures category. They have, however, been subject to a ministerial decision. Projected C02 emissions in 2000 relative to target(1): Belgium has clearly stated that in the absence of a C02 tax, the target will not be reached, it will just do a little better than stabilisation (2). With a C02 tax, however, the 5% reduction target for 2000 could be reached. The tax is expected to reduce emissions by 7%-10%. Belgium is considering implementing a C02 tax in 1995. implementation of some of the quantified measures is uncertain and sometimes for the longer term, e. g. voluntary measures in industry and measures in the transport sector which are dependent on the development of public transport. If the measures are to have an impact before 2000, implementation must be initiated immediately. (,) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. (2) Two projections presented. Bureau de Plan and Centre d'étude économiques de la KUL, and although they provide a range, they show largely the same result DENMARK 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 j Effect of Measures (GgC02) ! inventory baseline (%) j Member State Trajectory (1) Modified Trajectory j j 52100 j j -11. 9 7 ! j 13500 Target/Objective and Comments: Target for C02 emissions adjusted for imports of electricity in base year, i. e. C02 emissions are calculated on the assumption that all electricity was generated in Denmark in base year. Using unmodified data, the target is equivalent to a rise of 6. 4% over 1990 levels. Denmark imports electricity from Norway and Sweden but the quantity varies over time depending on water availability and therefore the level of production from hydro sources in the two exporting countries. Denmark has a largely fossil fuel based energy supply system whereas Norway and Sweden have high contributions from hydro and nuclear (Sweden only). In 1990 Denmark imported significant quantities of electricity. Therefore its C02 emission levels were lower than might be expected in a typical year, and 10. 7% lower than if all electricity had been generated in Denmark. Summary of measures: Efficiency improvements in end use through the implementation of efficiency standards for electrical appliances and other equipment are expected to make a large contribution to C02 reductions. Also important is promotion of CHP through subsidies. New generating capacity will come from construction of gas-fired plants after 2000. Denmark has a C02 tax in place and it was recently increased. Then intention is to introduce more green taxes in all the sectors of the economy. In the transport sector emphasis is on promoting public transport, e. g. investment support for purchase of clean vehicles. Other measures include promotion of energy efficient driving through information and training and promotion of rail transport. No measures to enhance sinks. Quantified measures: (a more detailed breakdown is only available for the year 2005) : 1. ! Oil & gas (refineries, North Sea) : 2. j Transport i 3. | Energy Sector j TOTAL 13. 5MtC02 ; 0 j 0 j j \. J }. : ? } $ £ 2 l\ j Categorisation of measures: The measures are included in a set of plans which have been adopted by government: the 1990 action plans for energy and transport respectively, the 1992 action plan on waste and recycling, the 1993 follow up on the 1990 energy action plan, and the 1993 white paper on transport. The quantified energy measures are all included in the 1993 follow up energy plan. No measures for the transport sector have been quantified. In a separate communication to the Commission it has been announced that a set of green taxes will be introduced. Projected C02 emissions in 2000 relative to target(2): Based on the 'with measures scenario' (3), Denmark will reach the* 5% reduction target (corrected for electricity imports) if all the measures included in the 1993 follow up action plan are implemented. The reduction will come from the energy sector. The effect of measures in the transport sector is assumed to be nil and emissions are expected to increase in this sector between 1990 and 2000. In an official note to the Commission, Denmark announces that it has problems implementing two important measures: the introduction of efficiency standards and appliances due to delays relating to the EU directive on efficiency standards; and the conversion of electrically heated buildings to central heating by gas or district heating since a voluntary agreement with the power industry has not yet been reached. (" Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the 1£U-I 5. (2) The discussion is based on M e m b er State trajectories, not applied to the. inventory for the EU-15. Therefore there may be small discrepancies between the figi mentioned in the text and the figures provided in the box under Member State Trajectory above 0) Revised estimate, June 1995, showing total domestic energy emissions 1990-2000, including flaring. S* Regarding standards for household appliances, the proposed EU Directive on refrigerators is less ambitious than foreseen Danish standards, both as regards the stringency of the standards and the timing (it would enter into force after 2000). This measure may therefore be lost to the Danish national plan. The two measures were together expected to contribute 3% of the C02 reduction planned for 2005. In the note to the Commission, Denmark also presented a set of new green taxes which have been adopted by Parliament and will enter into force in 1996: an S02 tax (1. 5 ECU/kg S02); a C02 tax on natural gas; an increased C02 tax on energy for industrial processes and commercial energy use (including electricity), with one rate for light processes (13ECU/t C02) and a virtually vanishing rate (0. 5ECU/t) for energy intensive processes. The low rate will be conditioned on the implementation of an energy audit and voluntary agreements on energy savings. Without such an agreement, the default tax is 3. 5 ECU/t C02. The rather elaborate system of exemptions and recycling is necessary to avoid losing competitiveness vis a vis other European countries that have not introduced a similar tax. Until this problem is overcome, Denmark cannot exploit the full potential of the C02 tax instrument. The trajectory can be questioned by the fact that the assumed fuel prices and price elasticity very high, both factors contributing to a large estimated C02 emission reduction. ^\ FINLAND 1990 Emissions (GgC02) j Trajectory 1990/2000 on C 02 | inventory baseline (%) j Effect of Measures (GgC02) j Member State Trajectory (1) Modified Trajectory j ! 53900 \ I 29. 7 33 j ! 9000 Target/Objective and Comments: The Finnish target is to 'stop growth in energy related C02 emissions by the end of the century'. Finland has no base year for its target which makes it unclear in numerical terms. Summary of measures: The national communication is based on Government programmes approved in the 1990s that relate to climate change policy. Some programmes were approved specifically to implement climate change policies but some were adopted for other reasons. A main focus of the C02 strategy is energy conservation in end-use, to be achieved to a large extent through economic instruments. Finland has C02 tax (since 1990) and energy taxes in place, encouraging fuel switching, energy conservation, use of renewables, and changes in production and consumption patterns. Other measures to encourage energy conservation include voluntary agreements with industry and information and education. Promotion of biofuels is important (aim to increase consumption by 25% by 2005 over 1994 levels). Measures used in the transport sector have mostly been fiscal and economic instruments aimed at reducing fuel consumption and encouraging modal shift. A new action programme for transport has been adopted aiming at restraining growth in traffic; a mam tool is economic instruments. Measures to enhance sinks are important and focus on forest management and commercialisation of wood products. Quantified measures I Increased C02/energy tax (to FIM 38. 30/tonne C 02 and FIM j 3. 50/MWh. j 2000 Gg C 02 j | Energy conservation programme, including a gradually ; increasing energy tax. [ 6000-8000 Gg C 02 j | Promotion of biofuels (25% increased consumption by 2005 j over 1994 levels). j 3000 Gg C 02 j I Energy technology development programmes (1993-1998) to j develop technology for renewable energy sources through ; financing of demonstration projects and R&D. j 1000-5000 Gg C 02 j j TOTAL 12000-18000 Gg C 02 Categorisation of measures: The majority of the Finnish measures in the national communication have been approved by Parliament and are under implementation (e. g. efficiency improvements in energy production and end-use and energy and carbon taxes). All of the quantified measures are under implementation. A second category of measures, mainly aimed at the transport sector, have also been adopted by Parliament, but the stage of implementation is unclear. Projected C02 emissions in 2000 relative to target<2): Based on the 'with measure scenario' (3), Finland will increase emissions by 16% in 2000 over 1990 levels. This takes account of effects of energy taxation, energy conservation (some overlap in the figures noted above), increased use of bio-energy and the adoption of new technologies (some overlap in the figures noted above). ' Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the EU-15. 1 The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures lentioned in the text and the figures provided in the box under Member State Trajectory above. ' 16% is the median of a range given as the 'with measures scenario' (10-22% increase). 32- The electricity import situation and the structure of the electricity production capacity is currently being reviewed. Finland has consistently imported a large share of its electricity from neighbouring countries but there are major uncertainties and conditions attached to continuing doing so. In the next few years Finland will have to decide how it is going to produce the base load capacity needed. The expected increase in emissions in Finland is largely due to the assumption that electricity imports are replaced with domestic production capacity. Depending on the choices that are made regarding domestic base load capacity, the increase in emissions could range from 10-22% (16% mentioned above is the median). Recent estimations show, however, that the total increase in domestic electricity production capacity in 2000 would not likely be met by coal fired power plants. The additional reduction would largely come from restructuring the electricity market. The effect of measures are also influenced by the fact that Parliament has decided against the construction of a fifth nuclear power plant. No additional nuclear power plants are likely to be constructed in Finland in the near future. The impact of the C02 tax is reduced by the lack of action at the international level; for reasons of competitiveness the tax remains too low to fully exploit the potential of the measure. The effect of energy taxation is also hampered by the lack of international coordination. The trajectory assumes rather low GDP growth and high fuel prices, but the assumed income elasticity is on the high side. The effect on estimated emissions might cancel out. A3> FRANCE 1990 Emissions (GgC02) ! Trajectory 1990/2000 on C02 j Effect of Measures (GgCOj) I inventory baseline (%) ! Member State Trajectory (I) Modified Trajectory j | 366500 j 8. 5 13 I | 73200 EU target and comments: The initial target was stabilisation at less than 2 tC (7. 3 tC02) per capita per year by 2000. This is equivalent to a 13% increase relative to 1990 levels, i. e. projected 59. 29 million population in 20Ô0. Although this general commitment is still valid, the French have declared that it should no longer be considered as a specific target for the year 2000. Instead there is a commitment to the introduction of measures which should be coordinated and designed relative to a common reference of marginal cost of emission abatement. France suggests that this approach should be taken within the EU as a whole in order to "share" the current stabilisation target, and at the international level in the context of the Berlin Mandate. This target is difficult to express in numerical terms. Summary of measures: The French Communication recalls that energy policy in France since the first oil shock has already made it possible to significantly reduce C02 emissions (more on a per capita basis between 1980-1990 than most other EU countries). Bearing this in mind, the French communication underlines the importance of achieving comparable cost of measures (per tonne of carbon emissions avoided) across the Member States. Emphasis on energy conservation and fuel switching. Measures include: demand-side management to reduce peak demand generally met by fossil-fuel generation; tax benefits for industry energy efficiency improvements; road tariff increases; subsidies for rail transport. Measures to enhance sinks include afforestation, land-use change (CAP reform) and promotion of wood in construction. Quantified measures: No link between quantification of measures and projection. The information given in the National Communication is not sufficient to derive a quantitative estimation of the global effect of the set of measures. Categorisation of measures: The state of implementation of measures remains an uncertainty as the effort made by France is linked to the marginal effort (expressed in ECU/t of equivalent carbon) accepted by other Member States. It would seem that the expected impact is largely expected after 2000. Projected C02 emissions in 2000 relative to target<2): According to the 'with measures scenario', emissions are expected to increase by 7% in 2000 over 1990 levels. It is very hard to assess the uncertainty pertaining to this projection since it is not clear which measures should contribute to the expected emission reductions. The assumption made is that voluntary energy saving measures such as those described in the communication, are undertaken. The uncertainty is increased by the fact that the assumptions made in the trajectory about GDP growth rates seem low while the assumptions about fuel prices seem high, thus yielding lower emission projections for 2000 (see comparison with modified trajectory in Table A2 or the box above). "' Adjusted to be consistent with the same 1990 baseline, the C02 inventory for the EU-15. (2) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. 3>T GERMANY 1990 Emissions (6gC02) 1013000 Member State Trajectory( 1) Modified Trajectory j Trajectory 1990/2000 on I C02 inventory baseline (%) j j Effect of Measures (GgC02) \ -13 -10 144330 Target/Objective and Comments: 25% reduction compared to 1990 levels by 2005. Germany has yet to set a target for the year 2000. The measures described in the German Communication are intended to have an impact by 2005. However, they can be expected to have an effect on emissions already by the year 2000 (possibly contributing to a C02 emission reduction in order of magnitude of 13-15% as was mentioned by the German delegate at the fifth Monitoring Committee meeting on 18 May, 1995 and reported in the August 1995 update report to the Commission), although the full effect of measures tend to be achieved in the final implementation stages rather than pro rata throughout the implementation period. Summary of Measures: A very broad range of measures targeting all sectors. Some of the main measures implemented now are : - Federal government / lander district heating modernisation programme for the new Bundeslânder - Act on the sale of electricity to the GRID - Support for local and regional climate protection concepts - Funding for the use of renewable energies - Tax breaks for cogeneration under the mineral-oil tax act - Increase of the mineral-oil tax - Emissions-oriented motor-vehicle : tax - Federal traffic infrastructure plan - Railway structural reform Measures to enhance sinks include afforestation and forest conservation. Quantified measures: No measures have been quantified. Categorisation of Measures: 115 measures listed, 92 of which have been or are under implementation. 21 measures are planned and await adoption. Projected C02 emissions in 2000 relative to target(2): Given that Germany has not provided a trajectory or a quantification of measures, it is difficult to assess where emissions could be in 2000. In the Monitoring Mechanism Committee Germany announced it expected to reduce emissions by 13-15% by 2000 compared to 1990 levels (3). It is not clear which measures need to be implemented to achieve this emission reduction or what the current level and effort of implementation is. Given that Germany is a key contributor to C02 emissions in the Community, this uncertainty regarding the effect of measures and the level of emissions in 2000, has a significant influence on the level of uncertainty of the assessment of progress towards the Community C02 target. Germany has stated that it will have difficulties reaching the national target (-25% by 2005 compared to 1990 levels) unless a C02/energy tax is introduced at the Community level. In this report the assumption has been made that the 13% reduction does not take account of a C02/energy tax. m Adjusted to be consistent with the same 1990 basel i ne, the C02 inventory for the EU-15. <2) The discussion is based on Member State trajectories, not appl ied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. (3> Monitoring Mechanism Committee meeting, May 1995. GREECE 1990 Emissions (GgC02) j Trajectory 1990/2000 on C 02 j inventory baseline (%) I Effect of Measures (GgC02) j ! j Member State Trajectory (I) Modified Trajectory j j 86100 j j 14. 3 19 ! I 9590 Target/Objective and Comments: Greece has no official target. In the national communication it has set the 'realistic objective' to restrict the total increase in C02 emissions between 1990 and 2000 to 15% (with a margin of error of +/-3%). Summary of measures: The C02 strategy is mainly composed of an energy conservation policy covering all sectors and promotion of natural gas and renewable energy sources. In the domestic sector energy conservation measures include energy efficient building/equipment design, new lighting technologies and boiler maintenance. In industry the conservation measures include improvement in auxiliary operations and production modernisation. Measures in the transport sector include promotion of alternative fuels, improved vehicle maintenance, traffic management and development of public transport. No measures regarding the enhancement of sinks (only in conceptual phase). Quantified Measures: ! Introduction of natural gas in electricity generation. j Introduction of natural gas in industry. [ 4. 2 Mt COz j 0. 7 Mt C 02 j Introduction of natural gas in residential-commercial-service j l. l M t C 02 l l. j 2. j 3. j j sector. ! 4. j Promotion of CHP. j 5. j 6. ; Improvement in lignite-fired power stations. ! Promotion of wind farms. ! 7. I Promotion of solar energy applications. j 8. j 9. j Promotion of biomass utilisation. ; Promotion of small hydroelectric works. j 10. j Promotion of geothermal energy utilisation. ! 11. ! Renewable energy pilot projects. I j 0. 2 Mt C O, j 0. 3 Mt C 02 j 1. 0 M t C O2 j 1. 0 Mt C 02 j 0. 9 Mt C 02 j 0. 2 Mt C 02 j 0. 06 Mt C 02 j 0. 1 M t C O2 j 12. j Energy efficient building/equipment design for household and j 0. 0 Mt C 02 j j tertiary sector. I ! 13. I New lighting technologies for household and tertiary sector. j 0. 7 Mt C 02 ! 14. | Boiler maintenance in household and tertiary sector. ! 15. I Improvement in auxiliary operations in industry. j 16. I Production modernisation in industry. i 17. I Promotion of alternative fuels in transport. \ 0. 4 Mt C 02 ; 0. 5 Mt C 02 j 0. 8 Mt C 02 j 0. 05 Mt C 02 j 18. j Improved maintenance of vehicles and use of more energy j 0. 3 Mt COz | ! efficient vehicles. ! 19. | Rational management of transport system. | 20. | TOTAL 13. 4 Mt COz j Up-grading and modernisation of public transport. ! j 0. 45 Mt C 02 j 0. 4 Mt C 02 ( ,) Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the EU-15. j ; I j j j j j j j j ! j j j j j j j j J j Categorisation of Measures: The plan focuses on measures which have already been adopted by the Government. Projected C02 Emissions in 2000 Relative to Target/Objective1: In the most realistic scenario, Greece estimates that it will increase its emissions by 15 % ,+/- 3% by the year 2000 compared to 1990 levels if the measures quantified above are introduced. The underlying assumption is that the measures in the power generation sector has a 100% impact but that the penetration of natural gas and other measures only have a 75% and 67% impact respectively. In a worst case scenario, emissions could increase by 18% in 2000 compared to 1990 levels. This could happen if there is a major failure on the part of administration particularly regarding the funding of the implementation of measures, if the funds have not been distributed as they should or if they have been misused. Other problems that could arise are delays in the construction of natural gas power plants or drastic changes in the demand for energy e. g. through the spreading of air-conditioning to the whole domestic sector. In a best case scenario, the increase in emissions could be limited to 12%. This could happen if the power generation sector accelerates the introduction of new technologies in the lignite- fuelled stations, if the penetration of natural gas was 100% successful by 2000, if gas-fired stations are used to meet base load, if a target is set to achieve maximum possible substitution to natural gas in the household and tertiary sector, if availability of private funding for the promotion of renewables is larger than expected, if the energy efficient technology available on the market penetrated the household and tertiary sector, if energy efficiency standards and labelling are introduced, and if public funding is made available for investment in core infrastructure. While models show that the effect of a C02 tax of between $3-$10/bbl, would have a limited effect on the level of C02 emissions, such a tax could increase the availability of public funding for the financing of technological interventions. That would secure the outcome of the most likely scenario, namely a 15% emission increase, and improve the chances of achieving the best case scenario, an increase of only 12%. 1 The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. i~\ IRELAND 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 ! Effect of Measures (GgC02) j inventory baseline (%) j Member State Trajectory (1) Modified Trajectory | j 30720 j I 20. 5 25 j j 1390 Target/Objective and Comments: Ireland has no official target but an objective of limiting the increase in emissions to 20% above 1990 levels by 2000. Summary of measures: Emphasis on energy conservation plus government action on fuel switching. Measures include combined heat and power projects, promotion of alternative energy sources, construction of efficient peat-fired power plant, establishment of an energy centre to coordinate the energy conservation programme, information campaigns for energy conservation, improved insulation in buildings, development of public transport in urban centres. Industry will contribute to reducing C02 emissions through voluntary agreements. Measures aimed at enhancing sinks include afforestation and reafforestation. Quantified Measures: \ Demand-side management in domestic, tertiary and industrial I sector. j 0. 27 Mt C02 j ! TOTAL 0. 27 Mt CO, Categorisation of Measures: Most measures described in the plan are under implementation, including those aimed at enhancing sinks. Projected C02 Emissions in 2000 Relative to Target/Objective (2>: Ireland estimates that by implementing the measures described in the plan, it can limit the increase in C02 emissions to 20% over 1990 levels. This assessment does not take account of the potential introduction of a combined C02/energy tax. Ireland was the fastest growing economy in the OECD area in 1994 (3) and the ability to meet the 20% objective and maintain emissions at that level is more linked to the future level of economic growth than to the implementation of the measures in the C02 strategy. (,) Adjusted to be consistent with the same 1990 baseline, the C02 inventory for the EU-15. <2) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. m OECD Economic Outlook (57), June 1995. ITALY ; j | Member State Trajectory (1) I Modified Trajectory ! j j j 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 j Effect of Measures (GgCOj) j 436300 } I j inventory baseline (%) 2. 9 6 j ] j 54370 ! j ! Target/Objective and Comments: Stabilisation at 1990 levels by 2000. Summary of measures: Broad range of measures including decommissioning of oil-fired electricity plant and establishment of gas-fired generation; new investment in renewables; traffic limitation measures; encouragement of public transport; new energy efficiency standards for the household sector; voluntary agreements with industry for environmental quality improvements. The measures aimed at enhancing sinks focus on reforestation, forest management and promotion of forest and brushwood products. Quantified measures: No quantified measures. Categorisation of measures: Measures divided into those which are already adopted and additional initiatives to limit C02 emissions. The former category includes measures for the power generation sector (NEP 1988) and measures for co-generation and auto-production, which were adopted independently of the C02 limitation strategy. The latter category includes measures for the residential/commercial and transport sector and for industry. Projected C02 emissions in 2000 relative to target(2>: Italy does not expect to stabilise emissions in 2000 (overshoot of 1-5%). It is not clear which measures are in included in this trajectory or what the stage of implementation is of the measures described in the C02 strategy. In spite of this uncertainty, the calculated effect of measures is very high. Based on the imprecise information in the national communication, it is difficult to understand how Italy plans to achieve even its projected emission level. Italy has stated that stabilisation can only be achieved if a C02/energy tax is introduced at Community level. Considering that Italy is one of the main contributors to Community C02 emissions, this uncertainty regarding its emissions in 2000 has an important influence on the assessment of progress towards the Community target. ' Adjusted to be consistent with the same 1990 baseline, the C02 inventory for the EU-15. » The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures lentioned in the text and the figures provided in the box under Member State Trajectory above. 2°l LUXEMBOURG 1990 Emissions (GgC02) Trajectory 1990/2000 on C02 inventory baseline (%) Effect of Measures (GgC02) I Member State Trajectory (1) 13300 Modified Trajectory -24. 1 -20 7820 Target/Objective and Comments: Stabilisation by the year 2000 at 1990 levels. Summary of measures: The plan focuses on the power generation sector and the transport sector. Some measures include feasibility studies on the use of gas vapour turbines, pilot project with gas turbine and hydro power, introduction of cogeneration in buildings and investigation of other uses of cogeneration, investigation of potential for renewable energy sources, promotion of public transport, development of intermodal freight transport, promotion of rail transport and internal waterways, investigation of vehicle tax based on energy consumption. Luxembourg is also considering to introduce a C02 tax. No measures to enhance sinks. Quantified Measures: None. Categorisation of Measures: Measures which fall in the category under implementation include for the most part the legislative framework for environmental policy and certain subsidies for energy efficiency measures in the domestic sector. The majority of the measures are planned, including measures for the power generation sector and the transport sector. Some are even on a conceptual stage. The most important 'measure' is the restructuring of the steel industry which will make the principal contribution to reducing C02 emissions but which is being undertaken for other policy reasons than climate change. Projected C02 Emissions in 2000 Relative to Target/Objective <2): Luxembourg expects C02 emissions to fall by 33% by 2000 compared to 1990 levels. The bulk of the reduction comes from the restructuring of the steel industry, where electric steel works will replace old steel works. This restructuring has already been initiated and is well under way. The construction of a gas-vapour turbine for residential heating is planned. There is no reason to believe that the 33% reduction will not be achieved in 2000. (1) Adjusted to be consistent with the same 1990 baseline, the C02 inventory for the EU-15. (2) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. NETHERLANDS 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 j Effect of Measures (GgC02) ! inventory baseline (%) j Member State Trajectory (1) Modified Trajectory ] J 151800 j j -0. 4 10 j j 9900 Target/Objective and Comments: Temperature corrected target is reduction of 3%. 1990 was an unusually warm year so emissions from space heating were lower than in a normal year. The Dutch inventory for 1990 on which the target is based has been adjusted using degree-day statistics to produce a 1990 total which is 3. 8%' higher than actual emissions. This means that the Dutch target, a 3% reduction from 1990 temperature corrected levels, is equivalent to a 0. 7% increase over unadjusted emissions. Since the Community inventory for 1990 is not temperature corrected, it is more appropriate to refer to the non-temperature corrected target which is generally accepted to be a "return to target". Summary of measures: Focus on energy conservation and energy efficiency improvements using voluntary agreements in the industrial, agricultural and public sectors. The plan includes the following measures: investment in cogeneration and subsidies for renewable energy; voluntary agreements for energy conservation in industry, public and agricultural sectors; energy conservation programme for SMEs; energy efficiency standards and regulations for households and buildings; demand-side management based on subsidies and information. Fuel taxes have been introduced and the rate is determined on the basis for energy and carbon content. A legislative proposal is being considered to increase the C02 rate for small consumers, but it is considered that unless there is progress on an EU tax, the rate for large consumers must remain unchanged. Measures in transport sector taken for other reasons than climate change but include vehicle related measures to improve energy efficiency, limiting growth of mobility by using economic instruments, encouraging modal shift through a comprehensive investment programme in infrastructure, promotion of intermodal freight transport. Measures to enhance sinks include afforestation and land-use change under CAP. Quantified Measures: ! TOTAL 9900 Gg j Categorisation of Measures: The measures described above have been approved by Parliament and necessary funds for the implementation of the measures have been set aside in the annual budget. Some important measures are already under implementation, primarily the voluntary agreements for industry and agriculture. In industry 20 agreements and 9 declarations of intent are in place, covering 75% of industrial energy use. In agriculture, the agreement with glasshouse horticulture covers 85% of agricultural energy use. However, the measures in the transport sector have been implemented for other reasons than climate change. Although there is a commitment to implement the transport measures before 2000, there is no defined time frame for the implementation. Measures under consideration include the introduction of a regulatory tax on energy. Other measures under consideration include efficiency requirements for electric appliances and efficiency requirements for passenger cars, both at Community level. Projected C02 Emissions in 2000 Relative to Target/Objective (2): If the above mentioned measures are implemented, then the Netherlands could stabilise emissions at 1990 levels by 2000, based on unadjusted figures which is the equivalent of just over a 3% reduction in emissions using temperature adjusted figures. The contribution of the transport sector to this reduction is assumed to be zero, so the uncertainty related to the implementation of the measures in that sector does not influence projected emission levels in 2000. (1) Adjusted to be consistent with the same 1990 baseline, the C02 inventory for the EU-15. m The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. PORTUGAL 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 j Effect of Measures (GgC02) ! inventory baseline (%) ! Member State Trajectory (l) Modified Trajectory j j 42500 j j 36 36 | [ 7030 Target/Objective and Comments: Portugal has no official target but an 'objective' to limit the increase in C02 emissions to 40% over 1990 levels. Summary of measures: The plan presents a broad range of measures, for all sectors. The measures include the introduction of natural gas, CHP, improved efficiency in power generation, energy conservation in end- use, subsidies and information campaigns for energy efficiency improvements in industry, promotion of rail transport, modernisation of road infrastructure, traffic management. Measures to enhance sinks include forest maintenance, afforestation, forest protection. Quantified Measures: None. Categorisation of Measures: Measures under implementation include those for the energy, industrial and residential sectors which are linked to programmes (often EU programmes) that have been in place for some time. The stage of implementation of the measures in the transport sector is unclear, but it would seem that they are only in the conceptual or at best in the planned phase. Projected C02 Emissions in 2000 Relative to Target/Objective (2}: Assuming that all of the measures included in the plan are implemented, Portuguese C02 emissions are expected to increase by 40%. However, it would seem that the implementation of the measures in the transport sector is uncertain. Since it is not clear to what extent the transport sector is expected to contribute to limiting the increase in C02, it is difficult to assess the impact of this uncertainty on the expected emission level in 2000. However, as in the other cohesion countries, emission levels are more linked to economic growth than to the implementation of the measures included in the C02 strategy. The actual increase in emissions between 1990 and 1993, years of low economic growth, indicates that a lower increase than 40% could be achieved in 2000. > Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the EU-15. 1 The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures îentioned in the text and the figures provided in the box under Member State Trajectory above. H-2- SPAIN 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 ! inventory baseline (%) Effect of Measures (GgC02) Member State Trajectory (I) Modified Trajectory j j 227300 ! j 20. 8 23 59470 Target/Objective and Comments: Spain had initially forecasted a limited increase in emissions of 25% over 1990 levels by 2000. This limited increase has been revised downwards to a band of 11-13% (2) Summary of measures: Measures focus on energy conservation and fuel switching. The conservation measures are mainly geared towards industry (burners, furnaces, more efficient technology), transport (technical and management measures), and residential/commercial sector (technical regulations, user awareness). Fuel switching measures include promotion of natural gas in industry (e. g. in cement and steel production as well as in combustion equipment), and in the residential sector (for space heating), as well as promotion of renewable energy (e. g. hydro and wind power) and CHP. Other measures include subsidisation of public transport, investment in rail infrastructure, and tax exemptions for gas oil used in rail transport. Measures to enhance sinks include afforestation, forest management, protection against forest fires, damage monitoring. Quantified Measures: None. Categorisation of Measures: The energy related measures are included in the Spanish National Energy Plan which runs from 1991-2000. Implementation of those measures has thus begun. The measures specified in the transport sector have been implemented. The measures to enhance sinks are under implementation. Projected C02 Emissions in 2000 Relative to Target/Objective (3): It is estimated that Spain will meet its objective for 2000, 25% increase over 1990 levels (4). As in the other cohesion countries, emission levels are more linked to economic growth than to the implementation of measures in the plan. Considering the low economic growth between 1990 and 1993 and depending on the level of economic growth in the coming years, it may even do somewhat better than limiting the emission increase to 25%. > Adjusted to be consistent with the same 1990 baseline, the C 02 inventory for the EU-15. ' Monitoring Mechanism Committee meeting, May 18, 1995. ' The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures îentioned in the text and the figures provided in the box under Member State Trajectory above. > This objective has subsequently been revised downwards to a band of 11-13%. However, in the trajectories on this report, the figure 2 5% has been used. M3 SWEDEN 1990 Emissions (GgC02) j Trajectory 1990/2000 on C02 j Effect of Measures (GgC02) j inventory baseline (%) j Member State Trajectory (,) Modified Trajectory j j 61300 j j 4. 4 6 ] j 10200 Target/Objective and Comments: Stabilisation at 1990 levels by 2000. Summary of measures: The focus of the C02 strategy is to switch from fossil fuels to renewable energy sources, improving energy management and more efficient use of energy. Measures to improve energy efficiency include technology procurement and demonstration of electricity efficient products, processes and systems in homes, non-housing premises and industry. Economic instruments play an important role in the strategy, e. g. C02 and energy taxes which have a cross-sectoral effect. Fuel taxation and R&D (alternative fuels and energy efficient vehicles) are the only measures that have been taken in the transport sector. In the forestry sector, measures include forest maintenance/management, and promotion of long-lived wood products. Quantified Measures: i l. j 2. j 3. j 4. j Carbon taxes - energy sector. j Gasoline tax and carbon tax - transport sector. ; Efficiency programme. j Investment programme - biofuels. | 5. | Others. Ï TOTAL 10. 4 MtCO, j 5. 3 MtCOz I 2. 2 MtC02 j 2. 1 MtC02 j 0. 6 MtC02 j j j i L. ? ; iM£ ° iI Categorisation of Measures: Majority of measures are under implementation. Projected C02 Emissions in 2000 Relative to Target/Objective (2): With present measures to combat climate change, total emissions of carbon dioxide are projected to increase slightly (eg 4 per cent) above 1990 levels in the year 2000. This projection is based on unadjusted data (non temperature corrected). If temperature adjustment is made for emissions in 1990 (3%) then stabilisation is achieved in 2000. This projection does not take account of energy and carbon tax increases which occurred in 1994. Considering that the majority of measures are in place, including a C02/energy tax, there is no reason to believe that Sweden cannot meet this projection. However, the forecast assumes that the phase-out of nuclear power is not initiated before 2000. Even if it is not begun immediately, it will be difficult to avoid meeting the increasing eneergy demand with fossil fuels. However, there is a large potential to increase biofuels in Sweden, especially in combined heat and power stations and for heating purposes (3). Once the nuclear phase-out is begun, CO, emissions from power generation will increase substantially. A final decision on the nuclear phase out has yet to be taken. "> This objective has subsequently been revised downwards to a band of 11-13%. However, in the trajectories of this report, the figure 25% has been used <2) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. 1,1 According to the Act on Management on Natural Resources the remaining major rivers are protected to hydro power exploitation UNITED KINGDOM 1990 Emissions (GgC02) j Trajectory 1990/2000 on C 02 j inventory baseline (%) j Effect of Measures (GgC02) j Member State Trajectory (1) Modified Trajectory j j 577000 j j -6. 1 -2 j I 71740 Target/Objective and Comments: Stabilisation at 1990 levels in 2000. Summary of measures: Fuel switching and energy efficiency using economic instruments, regulations and information/education including: increased electricity generation from gas, CHP and renewables; establishment of the Energy Savings Trust to promote energy efficiency and conservation; increase in road fuel duties; introduction of VAT on domestic fuel and power; eco-labelling and energy labelling; revision of building standards. Quantified Measures (2). j 1. j ; I I 2. j j j j I 3. j I 4. ! j Energy conservation in the home (VAT on domestic fuel use, | new Energy Saving Trust, energy efficiency advice/information, j eco-labelling, EC SAVE programme, revision of Building j Regulations to strengthen energy efficiency requirements). ; 14664 G g C 02 j j j j Energy consumption by business (energy efficiency j advice/information, Energy Saving Trust schemes for small j businesses, Energy Design Advice Scheme, EC SAVE j programme, revision of Building Regulations to strengthen j energy efficiency requirements). ; 9165 G g C 02 j j j j j Energy consumption in public sector (targets for central and i local government and public sector bodies). j 3666 G g C 02 I j Transport (increases in road fuel duties and commitment to real I increases of at least 5% on average in future budgets). j 9165 G g C 02 j j j j j j ; ; j j j j j ! | TOTAL 36,660 GgCO? Categorisation of Measures: Most of the measures in place. However, many measures are voluntary or dependent on uncertain funding. Projected C02 Emissions in 2000 Relative to Target/Objective (3): The UK expects emission reductions as a result of the establishmentof an Energy Saving Trust. Due to changes in the anticipated level of funding, the contribution is now expected to be lower (at a minimum of 0. 3 MtC, aquivalent to 1. 1 MtC02) than originally estimated - although further schemes are being developed by the Trust which will contribute further savings. However, even taking into account the reduced contribution from the Energy Saving Trust, UK C02 emissions are now expected to be below 1990 levels, more as a result of fuel switching than of energy conservation. 0> Adjusted to be consistent with the same 1990 baseline, the COz inventory for the EU-15. (2) The re-assessment of the contribution to be made by the Energy Saving Trust is not reflected in the table which is taken from the National Programme. (3) The discussion is based on Member State trajectories, not applied to the inventory for the EU-15. Therefore there may be small discrepancies between the figures mentioned in the text and the figures provided in the box under Member State Trajectory above. 4-£ ISSN 0254-1475 C0M(96) 91 final DOCUMENTS EN 14 Catalogue number : CB-CO-96-096-EN-C ISBN 92-78-01226-2 Office for Official Publications of the European Communities L-2985 Luxembourg

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - Shaping Europe' s Maritime Future - A Contribution to the Competitiveness of Maritime Industries

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>;*k1&f& COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 13. 03. 1996 COM(96)84 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS S H A P I NG E U R O P E ' S M A M Ï B Œ F U T Ù ME A CONTRIBUTION TO THE COI^ETITIVENESS OF MARITIME ïï^usraîES TABLE OF CONTENTS I. INTRODUCTION II. THE VITAL ROLE OF THE MARITIME INDUSTRIES FOR THE EUROPEAN UNION 1. Shipbuilding 2. Shiprepair 3. Maritime Transport 4. Ports 5. Marine Resources, Fishing and Energy a) Energy b) Fisheries and Aquaculture c) Deep Sea Operations and Other Marine Resources III. FIELDS OF ACTION 1. Promotion of Intangible Investment Information and Telecommunication Technology a) b) Co-ordination of Research and Development c) Vocational Training 2. Development of Industrial Co-operation a) Co-operation with Third Countries' Industries Industrial Co-operation within the Union b) 3. Ensuring Fair Competition a) Reducing State Aid for Shipbuilding b) Financial Promotion of Maritime Projects c) Uniform Application of International Rules and Standards 4. Modernising the Role of Public Authorities Integrated Management of the Coastal 7x>nes a) Development of Infrastructure b) c) Market Liberalisation and Reduction of Administrative Burdens d) Co-operation between Industry and Commission e) Co-operation between EU and Central and Eastern European Countries and Mediterranean Countries IV. CONCLUDING REMARKS Annex: Statistical Data / -, I. INTRODUCTION The Commission, in its Communication "An Industrial Competitiveness Policy for the European Union" (COM (94) 319) of September 1994, identified priorities for the Union's industrial policy, which are based on a close monitoring of the evolution of industrial competitiveness and on the implementation of an efficient partnership between industry and public authorities. The Commission stressed the importance of making use of instruments and policies of a horizontal nature which promote the right business environment, as opposed to sectorally defensive instruments. This approach to industrial policy has been approved by the Council and acknowledged by the Parliament. Improving the competitiveness of its industry to raise employment is at the core of the Union's economic policy. This was set out by the Commission in its White Paper "Growth, Competitiveness, Employment" of 1993 and endorsed by the European Council in Essen in December 1994. The Commission was asked to regularly report on its efforts to improve competitiveness. It has set up a consultative group which reports twice a year on different aspects of European competitiveness ("Ciampi-Group"). The present Communication contributes to this ongoing rigorous appraisal in assessing how the Union's industrial policy can contribute to the competitiveness of maritime industries. Not long ago this sector was considered as an "old" industry. Shipbuilding in particular was threatened with extinction in the face of global competition, which for a large part was distorted by state aid. The Commission emphasised the importance of maritime issues for the first time in its Communication "New Challenges for Maritime Industries" of September 1991 (*). In this document the Commission defined the framework in which a coherent approach to the maritime industries should be implemented. In 1992 the Maritime Industries Forum was created. It brings together all maritime industries (shipping, shipbuilding, marine equipment, ports, fisheries and related industries and services) and representatives of public authorities. It maintains an ongoing dialogue among all participants and develops, at its annual plenary sessions, a set of recommendations concerning priorities in the relevant policies. The G7 States acknowledged the importance of maritime industries by including a project on the maritime information society (MARIS) in the 11 pilot projects chosen for the promotion of the information society, adopted at their meeting in Brussels in February 1995. This reflects the new dimension of industrial policy in the interest of maritime industries. Maritime industry has, by its nature, a link to coastal regions which often are in the periphery of the Union. The foundation of the Alliance of Maritime Regional Interests in (') COM (91) 335 final, 20. 09. 91 Europe (AMRIE), on the initiative of the European Parliament, focuses on this specific regional impact. The Commission, by setting up the task force "Maritime Systems of the Future", identified maritime industries as a priority area for research and development promotion particularly in fields that have to be addressed at European level and are likely to have a real impact on competitiveness. The Commission recognises the recommendations of the plenary sessions of the Maritime Industries Forum at Rotterdam (June 1994) and Bremen (June 1995). This development clearly demontstrates that the less favourable picture the industry seemed to give in 1991 has changed remarkably. In issuing this Communication, the Commission intends to demonstrate its conviction that the maritime industries are essentially an industrial sector with a high potential for growth, development and technological improvement. Exploiting this potential will contribute to job creation across the Union. With the present Communication, the Commission investigates the structure and situation of the European maritime industries and outlines which policy elements and initiatives it considers suitable to contribute to their industrial competitiveness. It forms a coherent picture, showing how different policies and policy tools have an effect on the wide range of economic activities in the maritime world, in order to contribute to a consistent approach of the different parties concerned. Formulating a strategy specifically concerning the Union's future shipping policy is the subject of the Commission's Communication "Maritime Strategy" (2). II. THE VITAL ROLE OF MARITIME INDUSTRIES FOR THE EUROPEAN UNION Maritime industries must not be defined in a narrow sense, reducing it to production of ships and other marine equipment. Instead, the industry mirrors the growing importance of the service sector in Europe's economic performance. It embraces, in addition to shipbuilding, a wide range of production and services like shipping, port services, including multimodal transport operators, and the marine resources industry, including fishing, throughout Europe, with a large number of small and medium enterprises. Notably the ship repair, marine and offshore equipment sectors and the fishery industry consist of a large variety of mostly medium sized companies, which contribute to the local economies all over Europe. The maritime industry sectors are interdependent. Safe, efficient and environmentally friendly maritime transport can only be achieved if all sectors contribute equally to these (2) COM (96) 81 final goals. It is implicit that not only the construction and maintenance of a ship are to the highest standards but also the on-board equipment and operation. Furthermore, high quality ships need high quality ports and intermodal infrastructure to enhance and augment superior maritime transport. Today, maritime industries across Europe employ over 2,5 million people making it a significant industrial sector. Over 90 % of Europe's external trade and nearly 30 % of its internal trade is carried by sea. Europe is genuinely maritime. Thirteen of its Member States have direct access to the sea, the others, Austria and Luxembourg, are linked to the sea by inland waterways. The unique port structure along the European coast-line directly interlinks a considerable part of the European territory. With the accession of Finland and Sweden, the role of transport by sea has grown in importance. Further prospects offer the Euro-Mediterranean co-operation and the association and prospective accession of Poland and the Baltic States. A considerable number of maritime regions are located in the less prosperous Member States. It is therefore essential to ensure that these regions fully benefit from the efforts which are undertaken to improve the competitiveness of maritime industries. Where appropriate, the Structural Funds may contribute to achieve this goal. the fact Given the growing congestion of land based transport modes, maritime industries, therefore, are essentially industries of the future. Their ever growing importance is, in addition, strengthened by the most economic and environmentally friendly transport mode. If pricing for transport should reflect the real costs, i. e. including those of the society, as it is discussed in the Green Paper of the Commission "Towards Fair and Efficient Pricing in Transport" of December 1995 (3), then sea transport clearly could profit. It is, of course, necessary that safety standards are maintained, since accidents involving carriers of hazardous goods can be extremely serious (4). that shipping is 1. Shipbuilding technology is a high Shipbuilding industry, which has undergone a dramatic transformation in recent years. Including shiprepair and the offshore production, it employed, in 1994, more than 120. 000 people (1985: 219. 000; 1989: 144. 000) (5). Together with the equipment supply industry it covers the entire Union and, to a large extent, includes small and medium enterprises. Shipbuilding is a global business. The European Union has, in this field, strong and weak points. Industry is facing the challenge of considerable competition from countries like (3) (4) (5) COM (95) 691 final, 20. 12. 95 The Communication "Maritime Strategy", COM (96) 81 final, discusses the challenge of eliminating dangerous shipping AWES Countries, i. e. EU - Member States and Norway 3- Japan and South Korea, and, in the near future, possibly from new competitors like Central and Eastern European Countries, China and the United States. One of the major competitive disadvantages for European shipbuilders are production costs. This situation is aggravated by distortions of competition due to unfair practices in some third countries. European shipbuilders therefore need not only to further improve their productivity but also to focus on their competitive strengths, i. e. highly skilled labour and value added products like the safe, efficient and technologically complex ships. In these areas, European shipbuilders are still leading. Thereby they could manage to keep their share of the world market during the last ten years at about 20 %. Europe's equipment supply industry was, also, successful in maintaining a highly competitive position in the world market. Marine equipment is, to some extent, composed of high technology products, e. g. for navigation and ship automation. Equipment makes up to 60/70 % of the total value of a vessel. It contributes to transport safety at sea. This is underlined by the Commission's proposal for a Council Directive establishing high safety standards for approval of Marine Equipment on which the Council has recently reached a common position (6). The challenge for Industry, Member States and the European Union is to maintain, and improve, this performance. Efforts must be concentrated on human resources, research and development and the exploitation of information technology, in order to retain technological leadership and fully utilise productivity improvement potentials. The latest data available to the Commission's services show some signs of improvement in the overall market situation. There are encouraging signs of a market upturn being maintained with the prospect of a continuing need for replacement vessels due to the aging world fleet, stricter safety and environmental protection requirements and the expected boost to world trade deriving from the Uruguay Round. European demand for new ships is likely to increase with growing transport volume in the Baltic and the Mediterranean seas. There is, however, the adverse effect of substantial capacity increase in South Korea. Further capacity increases are to be expected from China and from the conversion of naval shipyards in Central and Eastern European countries and the United States. Furthermore, European yards should consider development into new activities. Of the several hundred offshore platforms currently in use in the North Sea, a large proportion are due to be decommissioned during the next few years. Disposal of these platforms will create a major market for yards with dismantling facilities. Apart from traditional shipbuilders, everywhere in Europe several small shipyards deserve a particular attention as potentially capable to generate new opportunities for employment. They are very active particularly in design and production of fishing and leisure boats which are directed toward very demanding potential customers, especially as far as the aspects of performance, comfort and onboard equipment are concerned. This requires continuous efforts in the acquisition and management of new design and production technologies, including the use of advanced materials. Involvement of this (6) COM (95) 269 final, 21. 6. 1995, O. J. 1995 C 218 sector, characterised by small and medium enterprises, in RTD actions either at national or at European level represents the unique opportunity to reinforce their presence on the market, enhance their competitiveness worldwide and create opportunity for new jobs. 2. Ship Repair The basic activities of a ship repair yard comprise steel work, machinery and electrical work, pipe fitting, painting. Regular and statutory maintenance account for about 75 % of the total turnover of the sector, while other activities like repair of accident damage and major conversion or reconstruction share the remainder. Conversion is more often carried out by shipyards that also have a significant new building activity, which facilitates the construction of larger sections. Employment in the ship repair industry of the AWES-countries decreased from 42. 000 persons in 1985 to 24. 000 persons in 1994, down more than 40 %. The competitive position of many EU-yards is weak due to the high overall costs. Exchange rates also constitute a competitive disadvantage. A few yards have recently been able to improve this position by changing working procedures and introducing new technologies. Application of information technology, especially of telematics, promoted by the European Union, considerably contributed to this effort. Increased competition is expected from yards in Central and Eastern Europe. The EU-Mediterranean yards will be in competition with yards in the Black Sea countries and Turkey. In particular larger yards within the EU will be forced to increase their productivity. 3. Maritime Transport Maritime transport is essentially an international industry resulting in mobility of labour and capital and to which there are relatively few entry barriers as compared to other service sectors. As the globalisation of industry spreads, it is to be expected that the volume of shipping will grow still further. Seaborne trade has been on the increase since 1985. The importance of maritime transport is likely to further increase with intensified relations with Baltic and Mediterranean States. Over the last year, the Commission has undertaken a review of Community shipping policy, addressing in particular aspects of external relations, maritime safety and support measures for EC shipping (7). This will be followed by a Communication specifically concerning external relations in the field of maritime transport. In this regard, the Commission considers that it is appropriate to formulate explicitly a coherent set of objectives to be pursued and to guide the coherent development of the external action. (7) Communication "Maritime Strategy", COM (96) 81 final -5 Unlike the other transport modes in Europe, the sea still has a considerable potential for growth. At the same time, it is the least burdensome on the environment, given the use of land and the consumption of energy. Thereby it can substantially contribute to the growing transport needs of the internal market. New types of unconventional and fast ships will improve the efficiency of this transport mode. Efficiency can be further enhanced by both increased interconnection with the other transport modes and the increased use of telematics. New shipping trade routes will also be created. Short sea shipping, in particular, offers a development potential to navigation, shipbuilding and regional ports. In July 1995, the Commission issued a Communication on the subject (8). There appears to be considerable scope for shifting cargo from congested land modes of transport to short sea shipping. Studies undertaken so far show that the potential for increased traffic justifies action to promote short sea shipping and new investment in this mode of transport. The Communication includes an action programme and lays down recommendations addressed at Member States, their regional and local authorities, and the maritime industries themselves. The document focuses on three main areas: the quality and efficiency of short sea shipping services, port infrastructure and efficiency, and preparing short sea shipping for a wider Europe. In adopting the Communication the Commission intended to stimulate a general political debate on the various ideas raised. It also intends to continue consultation with the industries and maintain their involvement in this process, in particular through the Maritime Industries Forum. It will launch further initiatives if this discussion shows that they are necessary. With regard to Maritime Safety, a Communication was adopted on "The Common Policy on Safe Seas" (9). The action programme of the Communication and the safety directives and regulations already adopted, in particular those aimed at enhancing Port State Control and the performance of surveys organisations (classification societies), are likely to have a considerable impact on the aging world fleet (,0), in particular on the crucial sector of bulk carriers and oil and chemical tankers, an aging fleet often operated with very low maintenance. If effectively applied these measures should lead several owners to adopt a different approach possibly having to choose between scrapping the vessels or carrying out if safety and extensive modifications. This effect could be environmental legislation adopted internationally would be applied also to the existing fleet on the basis, of course, of a pragmatic and realistic phasing in timetable. The Communication on a "Maritime Strategy" fully develops these and other policy issues related to shipping. further enhanced (8) The Development of Short Sea Shipping in Europe: Prospects and Challenges, COM (95) 317 final, 05. 07. 1995 C9) COM (93) 66 final, 24. 2. 1993 (50) Average ship age in 1994: 17 years -6 4. Ports Ports constitute the interface between land and maritime transport. Their efficiency has direct implication to the transport chain as a whole by providing access to land networks. This efficiency can be improved through developing infrastructure, superstructure and management techniques. The Trans-European Network provides for the identification of infrastructure projects in ports and in relation to ports. The projects should provide smooth and efficient transition between maritime transport and the land transport modes. They are more relevant than seeking to identify ports of common interest which could distort competition between ports. Another challenge in the port sector is to improve measures in the administrative port procedure, technical equipment or information infrastructure. While the Commission's objective is to improve port efficiency with a view to guarantee a level playing field in the port sector, it is important to ensure free and fair competition between ports. The task of the Commission is to supervise that the competition rules are respected in the port sector. These rules do not only apply to competition between different ports in the Community, but also to competition between different port operators within a port. In this context, various complaints are being examined. 5. Marine Resources. Fishing and Energy The oceans of the world are a major resource for food, energy and minerals and, with its extensive coastal and offshore waters, Europe is richly endowed. However, without proper care and environmental management, any exploitation of the resources can seriously damage the marine environment to the detriment of present and future generations. This challenge offers an opportunity to the European maritime industry for technological and market leadership. a) Energy total energy consumption was approximately In 1995, the European Union's 1. 370 millions toe (tonnes of oil equivalent). Oil and gas demand is estimated at 61 % of energy needs. The North Sea is one of the most important oil and gas production areas in the world, but still indigenous oil and gas production covers only 35 % of the European Union oil and gas demand. Gross inland consumption is increasing by about 1 % yearly. It is therefore very important to maximise exploitation of indigenous oil and gas reserves. The present trend in Europe is towards exploitation of marginal fields and production from deep waters. The move to production in deeper waters is setting new technical challenges for the offshore industry in the development of robotics and automated production systems. The preferred option for production in such deep waters seems to be the floating production storage and offshore loading. b) Fisheries and Aquaculture Fishing is an important sector in Europe with an employment of 290. 000 fishermen in 1991 but is currently suffering from the worldwide overexploitation of most important fish stocks and a fishing fleet overcapacity. Fish consumption in Europe, notably in Northern Europe, has grown steadily. Consumers expect to have fish available. On the other hand, the stocks have to be preserved. Stock management and the balance between fishing capacities and available resources have to be improved. International guidelines on fisheries practices as well as fisheries agreements established in the mutual interest of the Union and its partners play an important role in this context. The development of new techniques which facilitate selective and responsible fishing is a challenge for the maritime industries. Furthermore, the growing demand requires a greater contribution from acquaculture which is set to be an area of significant development in the future. c) Deep Sea Operations and Other Marine Resources The move by the offshore industry to deeper waters is leading to a greater understanding of the technology required for deep sea intervention in the future, such as for seabed exploration and mineral extraction. In addition, better management of Europe's coastal waters is an important aspect of the marine resources programme. III. FIELDS OF ACTION The Commission, in its 1994 Communication on industrial competitiveness policy, has identified four areas which should be addressed: promotion of intangible investment, development of industrial co-operation, ensuring fair competition and modernising the role of public authorities. The present Communication assesses how action in these areas can specifically contribute to the improvement of the maritime industries' economic performance. Furthermore, recognising the important role that small and medium enterprises are likely to play in economic growth and the creation of jobs within the European Union, the Commission is preparing the Third Multiannual Programme for Enterprises for 1997 to 2000. The programme will focus on the improvement of the competitiveness of small and medium enterprises and intends to support and encourage their Europeanisation and internationalisation. It will be addressed to all enterprises whatever sector and thereby also promote the large number of small and medium enterprises in the maritime sector. 1. Promotion of Intangible Investment Continuous effort in research and development (R&D) is a key survival element in a competitive environment. The Commission's industrial competitiveness policy therefore is committed to the promotion of industrial R&D. So far, the support of projects related to maritime industries has proved to be successful. As specific examples show, projects under the ESPRIT-programme helped to considerably improve the productivity of shipyards, thereby preventing them from leaving the market. These projects addressed computer aided design and production robotics. Further efforts should focus on maritime industries being a system industry. This requires efficient communication within the network of shipbuilders, suppliers, shipowners, shippers and ports. It is an ideal field for the application of information technology. There is great potential for improving efficiency which can be exploited by making use of the possibilities offered by this technology. The Commission recognises that research on telematics in maritime transport, building upon technological advances through practical applications, has an overall positive impact on maritime transport. The RACE 1062 MARIN ABC project demonstrated for the first time the opportunities offered by advanced telecommunications in the support of multi-media teleconferencing for remote technical assistance to ocean-going ships. It is, furthermore, evident that the subject of human resources is central to the maritime industries. This is true whether the issue is safety, where an estimated 60/80 % of accidents are due to the human factor, or competitiveness, where, unless there is a skilled workforce in Europe with the necessary maritime know-how, the various maritime industries cannot expect to survive in the intensely competitive world market where they largely operate. In its Green Paper on innovation of December 1995 the Commission stresses the importance of the promotion of innovation and vocational training. The question of a skilled workforce is further developed in the Communication "Maritime Strategy". a) Information and Telecommunication Technology For the implementation of information technology, the Commission is supporting concrete projects within the Framework Programme specifically designed for maritime industries. This includes 15 ESPRIT-projects, like MUSYK to provide support for ship production planning and control and early project planning for one-of-a-kind production, and MARITIME for the concurrent development and reuse of design data during development and subsequent life cycle of a ship. As a next step it should be analysed, to what extent these projects really contributed to the improvement of the economic performance of the sector. The Commission is preparing a communication which will describe the impact of the information society on individual industrial sectors. The Telematics Applications Programme supports projects concerning vessel traffic management and information systems, automatic identification and integration into port information systems, computer supported co-operative resource management, open communication between all kinds of systems to establish a common control of the transport flow, telematics for managing, storing and transmitting navigational electronic charts and updates. This will help improve multimodal freight operations and promote efficient and safe vessel operation. - 9- The MARIS (Maritime Information Society) initiative is an important tool to promote the application of information technologies throughout the maritime sector. The Commission was successful in having this initiative included in the 11 pilot projects the G7 States identified at their meeting on information technology in Brussels in February 1995. It is the only industry related project and it is a framework under which 4 sub-projects demonstrate benefits of the information technologies and telematics applications for a broad range of maritime activities. The aim of MARTRANS is to set up a Port Logistics Information Network for providing real-time information on the movement of cargoes and vessels and the development of tracing and tracking services for cargoes and vessels. The provision of real-time information will result in a more efficient management of the logistic chain. SAFEMAR will promote the development of a ship reporting system based on electronic data interchange (EDI) for vessels carrying dangerous or polluting goods to support the implementation of the various international conventions and resolutions. This project could result in the creation of an European integrated Vessel Traffic Management and Information System, which could also functionalities. SAFEMAR will allow the monitoring of compliance of ships with international regulations. include electronic chart MARSOURCE will contribute to the creation of a fishery and ocean information network linking existing databases containing information on oceanography, fisheries and scientific research with the view to improving transparency in the fisheries sector, the preservation of fish stocks, more efficient marketing and enhanced availability of aquaculture products. Information For highly distributive manufacturing processes improvement by concurrent and Technologies allow considerable productivity intelligent simultaneous engineering. MARVEL manufacturing of ships, interlinking shipyards and their suppliers in a common global network. It will make trans-national and intercontinental connection easier in an environment where there is increased out-sourcing of manufacturing processes, work sharing between different producers and reliance on worldwide equipment supply. is a user oriented project for like shipbuilding MARIS is an open framework and relies on the active participation of industry, regions and public authorities. In 1995, first pilot applications have been encouraged. In 1996 prospects for further international co-operation will be developed. On the occasion of EXPO '98 in Lisbon first concrete results are expected to be presented. b) Co-ordination of Research and Development Technological research and development of new technologies will lead to the modernisation of shipbuilding, equipment and maritime transport, as well as the optimal exploitation of marine resources and thus improving competitiveness, safety and environmental protection. This will create the business environment to protect existing employment and to support new highly skilled labour in the maritime regions. The task force "Maritime Systems of the Future" was created in 1995 in order to promote this 10 development. Within the Maritime Forum industry has set up a R&D co-ordination group to provide a single interface for R&D programmes. The task force ensures the full exploitation of the Fourth Framework Programme, the co-ordination of European and national R&D programmes in the maritime sector and eliminates overlapping between them. Thereby it will contribute to maximise the overall effectiveness of the projects selected. It evaluates and focuses on industry's needs and priorities and ensures the co-ordination of the MARIS initiative at European as well as G7 level. The task force has already become a "one stop shop" for the maritime industry, forging links between the relevant RTD programmes and maritime companies and research centres across Europe. Together with industry the task force has already identified first industrial priorities which offer European added value. Examples are industrial and material technologies, electronic data interchange, integrated transport chains and marine resources. By bringing together all the actors in the field the Task Force will also make an important contribution to the Fifth Framework Programme. A general progress report will be published in 1996. Six projects of the Industrial and Material Technologies Programme (IMT) of the Commission relate to maritime industries, supporting new ship concepts within the framework of short sea shipping. This will contribute to the development of economically attractive means of transport. There are, in addition, many other projects concerning formal safety assessment, adaptative control in ship manoeuvring and design and manufacturing, e. g. welding and robotics, which may have implications for the maritime industry. Several projects of the programme "Marine Science and Technologies" as well may also have a positive impact on maritime industries. They are destined to improve the construction and operation of submarine vehicles and research platforms. Others concern the submarine telecommunications and acoustics and the development of new tools for the study of the marine environment and pollution. remote control technology of in a marine environment, Twenty projects contributing to the enhancement of efficiency, safety and the protection of the environment in maritime transport are, in addition, supported by the R&D programme Transport. The research actions support the development of both, new logistic concepts (e. g. for short sea shipping and ports) and technological tools (e. g. Fast Waterborne Transport Systems, Vessel Traffic Management and Information Systems and Integrated Ship Control). Research is also addressing specific human element related issues, such as improved simulation procedures for training, European requirements for the implementation of the International Safety Management Code and of the Standards on Training on Certification and Watchkeeping, as well as communication in a multi cultural environment. c) Vocational Training The Commission's White Paper on "Growth, Competitiveness and Employment" and its document on a "Common Policy on Safe Seas" emphasised the importance of vocational -11 - training as a key factor in combating unemployment and strengthening competitiveness. In its Green Paper on innovation the Commission identified the reinforcement of human resources as a fundamental objective for the promotion of innovation. This implies in particular the development of both formal and vocational training, ongoing training in companies, especially in small and medium enterprises, and closer links between education institutions and businesses. The importance of human resources for the maritime sector was fully recognised by the Maritime Industries Forum. Trade Unions participated actively in the work of the Forum from the beginning. In consequence, an Inter Panel Working Group on Human Resources was set up in 1994. The group has identified priority areas, namely: the promotion of training, reconversion of skills, upgrading of skills of investment employees; the role of the human factor in maritime safety and the role and possibilities for the promotion of human resources in the Fourth Framework R&D Programme. in vocational The LEONARDO programme of the Commission is an action programme for the implementation of a European Community vocational training policy. Its objective is to promote projects to improve quality and innovation in vocational training in Europe by trans-national pilot projects, trans-national placement and exchange programmes, and the development of knowledge and skills in the area of vocational training through surveys and analyses. The Inter Panel Working Group on Human Resources has pinpointed the LEONARDO programme as being of particular relevance for maritime industries. Industry is invited to take this opportunity and to submit proposals. Unfortunately, very few of the promoters of the sector took the opportunity to answer the 1995 call for proposals. Within the Structural Funds which provide financial assistance for the adaptation of workers to industrial changes, the ADAPT Community initiative can provide useful support with regard to the changes that involves the maritime sector. 2. Development of Industrial Co-operation Industrial co-operation schemes are, above all, the responsibility of industry itself. However, it is necessary for public authorities to develop a dynamic approach in this area in order to establish a framework conducive to taking account of mutual interest and developing forums bringing together all concerned. Within the Union, this will contribute to the strengthening of competitiveness, outside the Union, to export promotion. a) Co-operation with Third Countries' Industries As far as co-operation with the industry of third countries is concerned, industrial round tables are an important tool. The Commission has set up round tables with Japan and the Baltic States which also cover maritime aspects. The Commission undertakes to organise a forum with European and Chinese industrialists in April 1996. One of the three main subjects of lue Forum will be the maritime sector. These events enable industrialists from inside arid outside Europe to identify their mutual interests and to encourage the development of private initiatives. - 1 2- Industrial co-operation with EU companies can contribute to industrial restructuring and modernisation in countries with economies in transition. The European Bank for Reconstruction and Development (EBRD) can play an important role to stimulate this process by providing the start-up capital to launch such co-operation in cases which promise to be economically viable but where project participants have difficulties in mobilising commercial bank support. The Commission, however, will assess on a case- by-case basis where EBRD projects are consistent with EU policy. With respect to Russia, Ukraine, the Baltic States and Poland, the Commission is closely observing the development of capacity and especially the conversion of naval shipyards and the pricing policy of the yards. b) Industrial Co-operation within the Union With respect to industrial co-operation within the Union, a sector specific round table is the Maritime Industries Forum. Since its establishment in 1992, the industry has proceeded considerably in its ongoing restructuring process. Five major companies have combined their efforts on Union level and created Euroyards. Together they develop European products, like "Eurofast", a ship designed for short sea shipping relations. "Eurocorvette", a European military vessel constructed by different European yards, is another example. Another common effort of European shipbuilders is the E3 tanker (Ecological, Economical, European), a project to remerge into the VLCC construction market. Industrial co-operation has, of course, to respect the limits set by European competition law. The Council , recognising the importance of co-ordination of sea transport services, has granted generous group exemptions for conference agreements (n). The Commission recently adopted a group exemption for certain types of consortium arrangements 12). It will take all necessary steps to ensure compliance with the competition rules in this sector. "The Oceans, a Heritage of the Future" is the focus of EXPO '98 in Lisbon. The Commission will help to organise a showcase "European Maritime Industries" in which maritime industries will play a major role. Industry is asked to contribute to this opportunity to demonstrate the importance of this sector for the European economy. 3. Ensuring Fair Competition Distortions of competition by state aid and barriers to market access in third countries arc to the detriment of the competitive position of-European maritime industries. The Commission in consultation with third countries seeks to eliminate such constrictions. (1 ») Regulation (EEC) n° 4056/86 of 22 December 1986, O. J. 1986 L 378/4 (12) Commission Regulation (EC) n° 870/95 of 20 April 1995 on the application of Article 85 (3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia) pursuant to Council regulation (EEC) n° 479/92, O. J. 1995 L 89/7 - 1 3- a) Reconsidering State Aid for Shipbuilding within the EU and Third Countries * The Seventh Directive The Community's current policy towards aid to shipbuilding as laid down in the Seventh Directive (90/684/EEC) was introduced to respond to the fundamental structural crisis which the sector had to face in the mid eighties. The policy was based on a defensive instrument against unfair practices, mainly below cost prices fixed by the Far Eastern market leaders. It allows restructuring aids linked to reduction of capacities in order to restore a balance between supply and demand. * The OECD Agreement The OECD Agreement Respecting Normal Competitive Conditions the Commercial Shipbuilding and Repair Industry of 21 December 1994 will establish a level playing field for the main shipbuilding countries enabling Community shipyards to compete under fair trading conditions. The agreement has been ratified by all parties except Japan and the United States, which committed to do so by 15 June 1996 to enable the entry into force of the agreement by 15 July 1996. South Korea also ratified the agreement, and in addition its authorities have made it public that they will not bail out their shipyards if they run into difficulties due to capacity expansion. in Under the agreement all measures of support specifically provided, directly or indirectly, to commercial shipbuilding are prohibited except those expressly allowed under certain limited circumstances: - aid for research and development: fundamental research, basic industrial research (50 % of eligible costs), applied research (35 %), development (25 %); - social aid related to closures; - export credits for ships in accordance with the revised OECD Understanding on Export Credits for Ships; - domestic credits under equivalent terms and conditions. Aid for restructuring is generally not allowed except for South Korea, Belgium, Portugal and Spain (under the "grand-father clause" and with an extreme payment deadline fixed at 31 December 1998). The Agreement can be revised after three years. The abolition of state aid on a global level appears to be justified, as in the light of the previous experience state aid did not contribute to increase the competitiveness of European shipbuilders. The agreement provides for an injurious pricing instrument which is specifically designated to counter price dumping which might be practised by producers of certain countries. These countries are in the process of enlarging their shipbuilding capacity. The Commission will closely monitor the competitive behaviour of third countries' industries and advocate strict application of this instrument, which will enter into force at the same time as the agreement. - 14 * The New Community Regulation The new regulation on aid to shipbuilding (,3), implementing the OECD Agreement, is intended to replace the Seventh Directive and to give effect to the above- mentioned provisions. These provisions will come into force upon the entry into force of the OECD Agreement with the relevant provisions of the Seventh Directive continuing to apply ad interim and until 1 October 1996 at the latest. The regulation provides, like the Seventh Directive, for notification and monitoring arrangements so that the Commission can effectively ensure compliance with the rules and fulfil the reporting requirements under the agreement. It will be reviewed three years after the entry into force of the OECD Agreement. At the Industry Council of 6-7 November 1995 the Council and the Commission jointly declared that, if the OECD Agreement should not come into force by 1 June 1996, the Commission will put forward appropriate proposals so that the Council could decide before 1 October 1996 on future Community rules. The new regulation on the injurious pricing instrument (I4) implements into Community law the part of the OECD Agreement on unfair practices in the shipbuilding sector. This new anti-dumping instrument can be used against shipyards established in one of the signatories of the OECD Agreement or in a non- WTO member state. It will apply from the date of entry into force of the OECD Agreement. b) Financial Promotion of Maritime Projects With the implementation of the OECD Agreement and the phasing out of direct state aid to shipbuilding, the Commission is advocating the development of a new financing scheme for maritime projects in accordance with the new OECD regime. The Commission invites the EIB to create and support such an instrument. c) Uniform Application of International Rules and Standards The Commission, within the framework of its common policy on safe seas, has set up the basis for a European legal system designed to ensure the uniform application of international rules and standards not only for ships operating under EC flag, but also for all other ships trading to EC ports. These measures include standards on marine equipment, a sector where EC producers are facing market access problems in Japan due to the application of Japanese requirements in addition to the international standards of the International Maritime Organisation (IMO) which have been recognised by Japan. This hampers the ability of European (13) Council Regulation (EC) on Aid to Shipbuilding, n° 3094/95, O. J. 1995 L 332/1 (14) Council Regulation (EC) n° 385/96 of 29 January 1996 on protection against injurious pricing of vessels, O. J. L 56 of 6 March 1996, p. 21 15 marine equipment manufacturers to export their products to Japan and other countries selling ships to Japan. Manufacturers of recreational craft have a similar problem. The standards used in Japan for the inspection of pleasure boats are not compatible with the internationally recognised standards of the International Organisation for Standardisation (ISO), also subscribed to by Japan. In the course of its ongoing negotiations with Japan on deregulation and market access problems the Commission will continue to challenge these trade barriers. 4. Modernising the Role of Public Authorities a) Development of Infrastructure Infrastructure related to maritime transport should be given more importance in the granting of financial assistance. In its programme to create a Trans-European Network, the Commission therefore intends to support the improvement of port and port-related infrastructure. This would make a significant contribution to promoting multimodality and to containing the negative environmental effects of the overall transport system. In addition, this programme embraces vessel traffic management and information systems to improve efficiency and safety in sea transport. The European Council of Essen in December 1994 acknowledged the importance of maritime transport and approved these projects as part of the TEN programme. b) Integrated Management of the Coastal Zones Coastal zones continue to undergo environmental degradation in many parts of Europe due to the interaction of human activities with the coastal environment. Whilst existing legislation and instruments in the field of coastal protection are relatively complete, it appears that they are not as effective as they could be due to the lack of co-ordination the development of the coast. As a between consequence, the Commission prepares the launch of a demonstration programme for the integrated management of the coastal zones which will be used to test co-operation instruments and mechanisms (l5). The lessons learnt and the response will make it possible to identify possible complementary measures to be carried out at European and other levels of decision-making. the numerous actions influencing c) Market Liberalisation and Reduction of Administrative Burdens From 1 January 1993 the Union has applied the principle of free sea cabotage (16), giving more room for free competition in sea transport within the European Union. Cabotage (15) COM ( 9 5) 511 of 29. 11. 1995 (16) Regulation (EEC) 3577/92, O. J. 1992 L 364/7 - 16 allows ship owners more flexibility in their capacities and thereby contributes to the competitiveness of short sea shipping. Within the Uruguay Round negotiations the Commission endeavours to open up the international markets of maritime transport. Since May 1994 this negotiation is conducted in Geneva. d) Co-operation between Industry and Commission Commission and industry have established intense co-operation within the Maritime Industries Forum. Launched in 1992, the Maritime Industries Forum has now achieved 5 years intensive, constructive and valuable dialogue between all parties concerned. The Forum brings together all maritime industries (shipping, shipbuilding, marine equipment, ports, fisheries and related industries and services), trade unions, research institutes, Member States, the Economic and Social the European Parliament, Committee, representatives of Member States, Norway and the European Commission. The work of the Forum is organised and financed by industry. The Commission only provides the secretariat of the yearly plenary session. The Forum maintains an ongoing dialogue with the Commission to exchange information and enables its members to mutually agree on priorities for industrial policy and research and development. The Forum identified such priorities as short sea shipping, marine resources, ship financing, electronic data interchange and human resources. With respect to the social impact of maritime industrial policy, the Joint Committee oh Maritime Transport, established in 1987, is assisting the Commission in the formulation and implementation of Community policy to improve and harmonise working conditions in maritime transport. Regular direct bilateral contacts between the leading trading groups (European Shippers Council, Oil companies, chemical industries, organisations such as Intertanko, ports organisations, seafarers unions and the competent Commission's services have contributed to the setting up of a more co-operative environment, seeking to promote a quality and safety culture. e) Co-operation between the European Union and Central and Eastern European Countries and Mediterranean Countries. The international character of shipping calls for, as far as possible and where appropriate, co-operation between the EU and third countries in adjoining regions with the aim of enhancing the potential of waterborne transport. The most important of these regions in terms of shipping are the Baltic, the Black and the Mediterranean Sea areas. Partnership with the Mediterranean countries was initiated with the Euro-Mediterranean Conference in November 1995 in Barcelona. The action plan agreed at the conference includes co-operation in maritime transport. 1 7- Conferences on waterborne transport for each of the above mentioned areas have been organised by the Commission, or with Commission's support, respectively in Denmark in May 1995, in Romania in October 1993 and in Spain in April 1995. The conferences have established working groups on waterborne transport to identify areas for further co-operation in shipping and to address matters of common interest in the context of multi-annual work programmes. As far as the Baltic Sea is concerned, the working group on waterborne transport for this region will, in the near future, adopt its work programme which will be submitted to the Conference of Baltic Sea Transport Ministers for political endorsement. The Black Sea working party for waterborne transport adopted a three-year work programme, in September 1994, which aims at: - developing the potential for waterborne transport, mainly short sea shipping; - mapping out a way of integrating Black Sea ports into the European transport system and the Trans-European transport network; - encouraging action to raise efficiency of Black Sea ports; - developing logistical systems and improving procedures; - developing EDI systems. The working group for the Mediterranean had its first meeting on 21/25 September 1995, at which it approved a work programme identifying areas for co-operation in the fields of the development of waterborne transport potentials, facilitation of maritime trade, development of ports, maritime safety and pollution prevention, and logistics. The work programmes will provide a context for the examination of proposals for Community assistance to maritime transport, under the relevant Community programmes. A first project, supported by the LIFE programme, has already started with the aim of setting up a Port State Control system for the non EU Mediterranean countries. This should complement the European effort against substandard shipping. IV. CONCLUDING REMARKS European maritime industries are a "high-tech" industry with strong economic potential, operating on a global market. It is a "system industry". Ships and offshore devices are combining different like materials, propulsion systems, electronics, navigation and information technologies, which have to be integrated into a system in close co-operation with supply industry. The maritime sector thereby affects producers all over the Union. technologies, Shipbuilding succeeded in keeping a relatively stable and not insignificant share of the world market in recent years. The vital role of maritime transportation is exemplified by the 90 % of external and 30 % of intra-Union trade that is carried by sea. The intra-Union trade by sea is set to expand with the promotion of short sea shipping. Environmental considerations and the increasing congestion of terrestrial transport corridors cannot fail but to advocate greater utilisation of sea trade. European maritime industries are able to - 1 8- meet the challenges of today. It is vital to ensure that they retain the ability to meet those of tomorrow. It will, however, not be possible to consolidate the market position of European maritime industries unless they strive for competitiveness, efficiency and innovation. Efficient shipbuilding and sea transport particularly require the application of information technology, which offers a high potential for improved productivity. Although it is primarily up to business to ensure that it is competitive, public authorities in turn must ensure the consistency of all the measures which could enhance industrial efficiency. The actions discussed in the present Communication will strengthen the competitive position of maritime industries. They will support most notably coastal regions, relieve other transport modes from congestion and contribute to the improvement of the environmental situation and to sustainable exploitation of resources. 19 ANNEXES to TABLE 1 - WORLD SEABORNE TRADE AND CARGO FLEET | OIL AND OIL PRODUCTS OTHER CARGO Seaborne trade Fleet (*) Seaborn e trade Fleet (*) Seaborn e trade TOTAL Flee tn index 73=100 million DWT index 73=100 100 104 95 109 112 103 103 90 80 61 54 55 50 58 59 64 71 77 81 84 90 91 234,3 275,4 313,0 343,9 356,1 353,0 350,9 348,4 342,9 322,5 301,4 285,1 257,1 249,7 245,8 248,8 255,6 262,2 270,9 276,1 280,0 275,8 100 118 134 147 152 151 150 149 146 138 129 122 110 107 105 106 109 112 116 118 120 118 '000 million tonne-miles 5187 5766 5666 5929 6086 6407 7058 7415 7523 7269 7078 7836 7929 7951 8284 8789 9109 9300 9586 9638 9828 10222 index 73=100 million DWT index 73=100 100 111 109 114 117 124 136 143 145 140 136 151 153 153 160 169 • 176 179 185 186 189 197 205,6 218,5 230,7 247,4 268,5 279,7 287,0 292,9 305,8 320,5 331,0 341,1 348,2 345,5 342,2 345,0 353,6 364,5 372,0 376,3 383,0 • 394,5 100 106 112 120 131 136 140 142 149 156 161 166 169 168 166 168 172 177 181 183 186 192 '000 million tonne-miles 15404 16387 15396 17078 17489 16953 17555 16654 15716 13551 12636 13484 13086 13856 14300 15299 16385 17121 17873 18235 18994 19532 index 73=100 million DWT index 73=100 100 106 100 111 114 11. 0 114 108 102 88 82 88 85 90 93 99 106 111 116 118 123 127 439,9 493,9 543,7 591,3 624,6 632,7 637,9 641,3 648,7 643,0 632,4 626,2 605,3 595,2 588,0 593,8 609,2 626,7. 642,9 652,4 663,0 670,3 100 112 124 134 142 144 145 146 147 146 144 142 138 135 134 135 138 142 146 148 151 152 '000 million tonne-miles 10217 10621 9730 11149 11403 10546 10497 9239 8193 6282 5558 5648 5157 5905 6016 6510 7276 7821 8287 8597 9166 9310 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 Est. Est. : Estimates (*) As at the end of the year Source : Fearnleys Review TABLE 2 - TONNAGE WITHDRAWN as at mid December 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 TONNAGE LAID UP number of ships million GT million DWT 237 297 1247 1409 1060 884 633 390 276 200 164 191 273 227 157 5,1 11,3 38,8 40,9 31,9 25,9 12,2 8,5 4,5 2,6 2,4 2,7 5,3 3,6 2,4 8,9 20,9 73,8 77,6 59,6 48,6 21,5 14,6 7,0 4,0 3,9 4,3 9,4 5,8 3,7 during 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992. 1993 1994 TONNAGE BROKEN UP million number GT of ships million DWT 887 824 1081 1323 1500 1722 1576 1094 812 512 479 445 603 547 603 9,2 9,8 18,1 20,3 19,7 26,3 20,9 12,9 6,1 4,0 3,3 5,0 10,7 10,2 13,1 15,9 17,5 32,2 36,9 34,8 47,8 36,2 22,0 9,9 6,6 5,3 8,4 19,8 19,3 24,6 Sources : Institute of Shipping Economics • Bremen; Feamleys Review - Oslo r3 million DWT TONNAGE FOR STORAGE as at the end of December 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 12,9 20,8 13,1 10,6 10,5 9,6 14,6 11,9 10,4 7,9 12,4 6,1 4,6 5,3 3,7 TABLE 3 - WORLD AND COMMUNITY FLEETS MEMBER STATES' FLEETS BY FLAG 1000 GT Existing fleet B E L G I UM DENMARK FRANCE GERMANY GREECE IRELAND ITALY LUXEMBOURG NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM TOTAL EC AUSTRIA FINLAND SWEDEN WORLD FLEET % EC / World 1980 1981 1982 1983 1984 1810 5390 11925 8356 39472 209 11096 1917 5048 11455 7708 42005 268 10641 2271 5214 10771 7707 40035 239 10375 2274 5115 9888 6897 37478 223 10015 5724 1356 8112 27135 120585 5468 1377 8134 25419 119440 5393 1402 8131 22505 114043 4940 1338 7505 19122 104795 2407 5211 8945 6242 35059 221 9158 4586 1571 7005 15874 96279 As at the 1 July 1985 1986 2400 4942 8237 6177 31032 194 8843 4301 1437 6256 14344 88163 2420 4651 5936 5565 28391 149 7897 4324 1114 5422 11567 77436 - 1987 1988 1989 1990 1991 As at the 31 December 1993 1994 1992 2268 4873 5371 4318 23560 154 7817 3908 1048 4949 8505 66771 2118 4502 4506 3917 21979 173 7794 2 3726 989 4415 8260 62381 2044 4963 4413 3967 21324 167 7009 4 3655 726 3962 7646 59880 1955 5188 3832 4301 20522 181 7991 3 3785 854 3807 6716 59135 314 5871 3988 5971 22753 195 8122 1703 3872 891 3617 6611 63908 241 5436 4022 5360 25739 199 7513 1656 4187 975 2643 5712 63683 218 5392 4332 4979 29134 185 7030 1327 4124 1004 1752 5683 65160 233 5799 4348 5696 30162 190 6818 1143 4396 884 1560 6526 67755 140 1197 2884 160 1354 2439 134 1404 2797 4199111 420835| 424742 | 422590 1 418682 1 416269 | 404910 | 403498 | 403406 | 410481 I 423627 | 436027 j| 445168 | 457915 |. 475859" 28,7%l 28,4%l 26,8%l 24,8%[ 23,0%) 21,2%) 19,1%| 16,5%| 15,5%j 14,6%[ 14,0%| 14,7%H 14,3%) 14,2%) 14,2% Source : Lloyd's Register of Shipping laflwE 4 A ^ £ S g r ^ Ç T I PN - S H I PS Ç O M P L E T EP 1976 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 FIGURES AT THE END OF THE YEAR 1000 CGT EU BELGIUM DENMARK FRANCE GERMANY (1) GREECE IRELAND ITALY NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM 139,8 560,6 672,4 1468,0 N/A 20,3 353,9 940,0 53,0 734,0 985,1 129,6 382,4 267,8 672,8 12,8 3,0 345,5 249,5 35,3 441,4 458,6 95,5 343,8 443,3 1270,3 5,2 17,0 359,2 341,6 6,4 556,8 243,2 83,0 329,2 353,3 1181,5 61,8 0,0 156,2 390,0 31,2 587,4 394,0 173,2 338,5 356,8 1267,8 35,7 19,2 217,0 415,8 124,7 488,7 319,3 102,3 355,4 357,2 164,7 39,8 0,0 182,3 259,3 18,5 345,9 305,3 124,4 444,0 164,1 1143,2 43,8 0,0 123,8 310,2 40,3 400,3 164,4 45,0 350,7 145,0 1067,0 24,7 0,0 60,9 262,8 61,0 229,8 141,5 25,9 194,4 207,9 764,7 6,6 0,0 224,8 146,2 2 63 328,4 162,3 46,8 277,2 63,2 885,0 12,3 0,0 119,9 153,1 23,0 326,4 113,2 35,5 287,0 198,8 846,5 12,5 0,0 284,5 171,9 46,3 306,0 157,3 71,7 305,5 114,0 1001,6 45,5 0,0 327,6 263,5 64,6 364,8 144,6 21,8 350,9 171,1 810,1 6,3 0,0 423,9 357,0 38,5 301,2 170,5 97,6 414,5 182,4 958,3 0,0 0,0 289,2 270,9 64,4 428,3 139,5 5,0 354,3 65,0 853,0 6,6 0,0 496,3 236,0 62,3 364,7 148,4 66,0 307,4 103,1 960,6 0,0 0,0 439,5 319,0 16,5 233,3 139,1 TOTAL EU 5927,1 2998,7 3682,3 3567,6 3756,7 3130,7 2958,5 - 2388,4 2087,5 2020,1 2346,3 2703,4 2651,3 2845,1 2591,6 2584,5 OTHER AWES FINLAND NORWAY SWEDEN N/A N/A N/A 371,9 323,7 334,5 407,5 342,1 421,0 440,6 447,8 253,2 503,3 278,3 293,8 419,1 175,9 179,8 282,9 222,1 127,4 260,4 162,8 115,5 145,3 181,3 123,0 262,7 155,2 72,1 321,2 79,4 34,4 379,0 157,9 45,1 211,6 248,6 46,3 210,2 311,4 32,4 191,0 203,4 24,3 122,9 194,5 0,0 TOTAL AWES 8285,8 4028,8 4852,9 4709,2 4832,1 3905,5 3590,9 2927,1 2537,1 2510,1 2781,3 3285,4 3157,8 3399,1 3010,3 2901,9 JAPAN KOREA CHINA POUND ROMANIA BULGARIA USSR RUSSIA UKRAINE YUGOSLAVIA CROATIA 8348,8 5207,2 5580,9 5811,1 4908,2 6951,1 6498,4 5085,4 3795,3 2952,7 3664,1 4456,0 4417,4 4379,3 4853,8 5176,9 349,4 445,7 512,2 880,3 985,5 1014,9 1633,3 1971,4 1193,5 1504,7 1389,2 1564,2 1729,5 1995,0 1835,3 2104,2 N/A N/A N/A N/A N/A N/A 497,7 N/A N/A 424,8 27,9 346,4 N/A N/A 599,9 104,5 369,5 N/A N/A 504,2 170,4 '277,1 N/A N/A 475,3 297,8 382,4 N/A N/A 689,5 172,4 357,5 N/A N/A 274,2 214,6 340,0 N/A N/A 170,4 207,3 300,0 N/A N/A 44,3 253,1 344,0 N/A N/A 56,0 230,0 237,9 N/A N/A 226,7 303,5 176,6 N/A N/A 481,9 255,4 223,0 126,4 71,0 365,0 N/A 170,6 224,8 220,5 217,0 237,2 281,4 188,4 3,0 230,5 327,7 293,4 239,7 282,1 305,8 146,6 61,6 21,9 118,6 20,7 238,1 445,9 263,5 72,1 70,6 156,0 153,0 480,5 402,4 21,9 78,6 96,5 209,6 104,0 165,2 REST OF WORLD 5094,2 1860,4 1696,0 1988,5 1686,7 1519,7 1360,5 1241,8 1164,5 747,3 1024,2 1095,3 940,9 1149,6 1415,2 998,3 TOTAL WORLD 22078,2 12635,2 13841,0 14587,8 13552,3 14998,1 14168,6 12139,1 9245,0 8508,4 9881,1 11656,3 11526,1 12118,4 12379,7 12636,0 (1) r ' om 1980 on data includes production from Ex-GDR yards Source : "World Shipbuilding Databank" based on data supplied by Llloyd's Maritime Information Services TABLE 4B COMPLETED 1976 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 FIGURES AT THE END OF THE YEAR MARKET SHARES EU BELGIUM DENMARK FRANCE GERMANY (1) GREECE IRELAND ITALY NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM 0,6% 2,5% 3,0% 6,6% N/A 0,1% 1,6% 4,3% 0,2% 3,3% 4,5% 1,0% 3,0% 2,1% 5,3% 0,1% 0,0% 2,7% 2,0% 0,3% 3,5% 3,6% 0,7% 2,5% 3,2% 9,2% 0,0% 0,1% 2,6% 2,5% 0,0% 4,0% 1,8% 0,6% 2,3% 2,4% 8,1% 0,4% 0,0% 1,1% 2,7% 0,2% 4,0% 2,7% 1,3% 2,5% 2,6% 9,4% 0,3% 0,1% 1,6% 3,1% 0,9% 3,6% 2,4% 0,7% 2,4% 2,4% 7,8% 0,3% 0,0% 1,2% 1,7% 0,1% 2,3% 2,0% 0,9% 3,1% 1,2% 8,1% 0,3% 0,0% 0,9% 2,2% 0,3% 2,8% 1,2% 0,4% 2,9% 1,2% 8,8% 0,2% 0,0% 0,5% 2,2% 0,5% 1,9% 1,2% 0,3% 2,1% 2,2% 8,3% 0,1% 0,0% 2,4% 1,6% 0,3% 3,6% 1,8% 0,5% 3,2% 0,7% 10,3% 0,1% 0,0% 1,4% 1,8% 0,3% 3,8% 1,3% 0,4% 2,9% 2,0% 8,6% 0,1% 0,0% 2,9% 1,7% 0,5% 3,1% 1,6% 0,6% 2,6% 1,0% 8,6% 0,4% 0,0% 2,8% 2,3% 0,6% 3,1% 1,2% 0,2% 3,0% 1,5% 7,0% 0,1% 0,0%- 3,7% 3,1% 0,3% 2,6% 1,5% 0,8% 3,4% 1,5% 7,9% 0,0% 0,0% 2,4% 2,2% 0,5% 3,5% 0,0% 2,9% 0,5% 6,9% 0,1% 0,0% 4,0% 1,9% 0,5% 2,9% 1,2% 1,2% 0,5% 2,4% 0,8% 7,6% 0,0% 0,0% 3,5% 2,5% 0,1% 1,8% 1,1% TOTAL EU 26,8% 23,7% 26,6% 24,5% 27,7% 20,9% 20,9% 19,7% 22,6% 23,5% 23,7% 23,2% 23,0% 23,5% 20,9% 20,5% OTHER AWES FINLAND NORWAY SWEDEN N/A N/A N/A 2,9% 2,6% 2,6% 2,9% 2,5% 3,0% 3,0% 3,1% 1,7% 3,7% 2,1% 2,2% 2,8% 1,2% 1,2% 2,0% 1,6% 0,9% 2,1% 1,3% 1,0% 1,6% 2,0% 1,3% 3,1% 1,8% 0,8% 3,3% 0,8% 0,3% 3,3% 1,4% 0,4% 1,8% 2,2% 0,4% 1,7% 2,6% 0,3% 1,5% 1,6% 0,2% 1,0% 1,5% 0,0% TOTAL AWES 37,5% 31,9% 35,1% 32,3% 35,7% 26,0% 25,3% 24,1% 27,4% 29,2% 28,1% 28,2% 27,4% 28,0% 24,3% 23,0% JAPAN KOREA CHINA POLAND ROMANIA BULGARIA USSR RUSSIA UKRAINE YUGOSLAVIA CROATIA 37,8% 41,2% 40,3% 39,8% 36,2% 46,3% 45,9% 41,9% 41,1% 34,3% 37,1% 38,2% 38,3% 36,1% 39,2% 41,0% 1,6% 3,5% 3,7% 6,0% 7,3% 6,8% 11,5% 16,2% 12,9% 17,5% 14,1% 13,4% 15,0% 16,5% 14,8% 16,7% N/A N/A N/A N/A N/A N/A 3,9% N/A N/A 3,4% 0,2% 2,5% N/A N/A 4,3% 0,7% 2,5% N/A N/A 3,5% 1,3% 2,0% N/A N/A 3,5% 2,0% 2,5% N/A N/A 4,6% 1,2% 2,5% N/A N/A 1,9% 1,8% 2,8% N/A N/A 1,4% 2,2% 3,2% N/A N/A 0,5% 2,9% 4,0% N/A N/A 0,7% 2,3% 2,4% N/A N/A 2,3% 2,6% 1,5% N/A N/A 4,1% 2,2% 1,9% 1,1% 0,6% 3,2% N/A 1,4% 1,6% 1,5% 1,6% 1,6% 2,0% 1,6% 0,0% 2,7% 3,3% 2,5% 2,1% 2,3% 2,5% 1,2% 0,5% 0,2% 1,0% 0,2% 2,0% 3,6% 2,1% 0,6% 0,6% 3,8% 3,2% 0,2% 0,6% 1,3% 1,2% 0,8% 1,7% 0,8% 1,3% REST OF WORLD 23,1% 14,7% 12,3% 13,6% 12,4% 10,1% 9,6% 10,2% 12,6% 8,7% 10,4% 9,4% 8,2% 9,5% 11,4% 7,9% TOTAL WORLD 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100. 0% 100,0% 100,0% 100,0% 100,0% (1) From 1980 on data includes production from Ex-GDR yards Source : "World Shipbuilding Databank" based on data supplied by Lloyd's Maritime Information Services O I&Big §A - NSW QRPERS FIGURES AT THE END OF THE YEAR 1Q00 CGT 1976 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 EU BELGIUM DENMARK FRANCE GERMANY (1) GREECE IRELAND ITALY NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM 75,0 317,1 63,6 726,1 N/A 19,2 301,5 626,4 73,0 297,0 627,6 53,8 284,6 556,4 613,0 82,4 1,3 231,2 373,3 30,7 737,5 350,2 81,4 296,6 333,0 1249,9 4,5 18,2 144,7 365,2 55,5 675,2 410,8 43,3 250,6 175,9 1239,9 10,3 1,3 243,2 309,0 27,8 323,9 301,5 58,7 428,9 136,4 1236,9 4,6 0,0 57,1 237,3 36,0 222,1 150,4 69,5 405,2 106,5 1072,9 7,4 0,0 68,2 248,4 30,6 92,2 107,6 26,8 86,0 262,5 1228,2 29,4 0,0 257,4 269,8 1. 2 197,6 224,4 43,2 305,9 132,4 1297,1 5,1 0,0 229,0 137,0 29,5 258,5 112,0 34,0 219,2 60,5 872,4 6,5 0,0 408,7 91,9 78,1 421,7 116,5 52,0 205,3 204,6 877,6 6,1 0,0 172,3 356,2 33,1 453,8 124,2 101,7 192,4 165,9 1400,6 5,0 0,0 564,8 236,3 69,6 274,1 209,2 71,4 596,4 136,2 875,6 0,8 0,0 413,1 277,1 79,6 487,8 205,1 75,1 265,9 327,9 559,1 8,9 0,0 380,5 296,7 8,3 74,8 172,6 14,0 246,6 35,0 858,9 8,7 0,0 134,9 211,0 1,5 127,5 119,8 18,4 390,4 226,6 1029,0 7,2 0,0 511,2 305,2 5,7 359,9 65,5 53,8 381,9 240,0 1034,1 0,0 0,0 344,6 342,9 43,6 404,0 38,8 TOTAL EU 3126,5 3314,4 3635,0 2926,7 2568,4 2208,5 2583,3 2549,7 2309,5 2485,2 3219,6 3143,1 2169,8 1757,9 2919,1 2883,7 OTHER AWES FINLAND NORWAY SWEDEN N/A N/A N/A 523,9 381,6 205,4 502,5 408,7 359,3 221,1 156,4 184,5 135,4 108,8 278,4 389,5 208,2 34,0 158,0 129,9 16,1 202,2 136,4 59,2 637,7 139,2 71,4 108,0 112,1 13,2 63,0 398,8 110,1 256,7 190,9 3,8 139,4 118,1 4,3 178,7 165,0 23,5 515,1 251,8 1,0 276,7 262,9 0,0 TOTAL AWES 4659,5 4425,3 4905,5 3488,7 3091,0 2840,2 2887,3 2947,5 3157,8 2718,5 3791,5 3594,5 2431,6 2125,1 3687,0 3423,3 JAPAN KOREA CHINA POLAND ROMANIA BULGARIA USSR RUSSIA UKRAINE YUGOSLAVIA CROATIA 7337,5 6708,3 5823,1 4859,4 7389,1 6040,0 4440,0 3431,6 3120,5 3360,7 5879,7 6116,4 4433,0 3268,3 4681,4 6688,4 325,4 939,3 893,3 1001,5 2147,1 1180,9 806,5 1352,4 1942,6 1203,0 1671,4 2169,2 2278,1 1085,3 3672,6 3088,0 N/A N/A N/A N/A N/A N/A 208,4 N/A N/A 12,1 233,0 146,0 N/A N/A 24,0 119,6. 133,3 N/A N/A 68,4 285,9 489,8 N/A N/A N/A 179,9 417,1 N/A N/A 2,9 204,0 270,3 N/A N/A N/A 321,5 321,4 N/A N/A N/A 263,8 302,6 N/A N/A N/A 330,6 218,4 N/A N/A 92,6 258,5 209,5 N/A N/A 214,1 387,4 218,4 N/A N/A 209,1 429,7 295,9 550,4 109,9 83,6 N/A 242,3 76,8 320,0 123,8 75,0 329,6 447,3 130,8 306 f9 478,5 322,6 127,4 585,0 434,5 57,0 45,8 254,6 105,9 436,5 191,2 149,6 41,5 358,3 290,5 547,4 678,9 140,2 63,9 170,2 396,7 129,0 153,4 270,4 REST OF WORLD 3659,9 1822,0 1951,4 1542,3 1323,4 1041,7 1383,7 660,4 822,0 895,2 1061,1 1285,9 1175,4 729,6 864,0 1285,9 •TOTAL WORLD 15982,3 14357,7 14053,1 11533,2 14850,1 11777,7 10321,4 9482,1 9740,1 9125,9 13564,3 14303,5 11915,0 8820,1 4526,0 16753,3 (1) From 1980 on data includes new orders from Ex-GDR yards Source : "World Shipbuilding Databank" based on data supplied by Lloyd's Maritime Information Services TABLE 5B • NEW ORDERS 1976 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 FIGURES AT THE END OF THE YEAR MARKET SHARES EU BELGIUM DENMARK FRANCE GERMANY (1) GREECE IRELAND ITALY NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM 0,5% 2,0% 0,4% 4,5% N/A 0,1% 1,9% 3,9% 0,5% 1,9% 3,9% 0,4% 2,0% 3,9% 4,3% 0,6% 0,0% 1,6% 2,6% 0,2% 5,1% 2,4% 0,6% 2,1% 2,4% 8,9% 0,0% 0,1% 1,0% 2,6% 0,4% 4,8% 2,9% 0,4% 2,2% 1,5% 10,8% 0,1% 0,0% 2,1% 2,7% 0,2% 2,8% 2,6% 0,4% 2,9% 0,9% 8,3% 0,0% 0,0% 0,4% 1,6% 0,2% 1,5% 1,0% 0,6% 3,4% 0,9% 9,1% 0,1% 0,0% 0,6% 2,1% 0,3% 0,8% 0,9% 0,3% 0,8% 2,5% 11,9% 0,3% 0,0% 2,5% 2,6% 0,0% 1,9% 2,2% 0,5% 3,2% 1,4% 13,7% 0,1% 0,0% 2,4% 1,4% 0,3% 2,7% 1,2% 0,3% 2,3% 0,6% 9,0% 0,1% 0,0% 4,2% 0,9% 0,8% 4,3% 1,2% 0,6% 2,2% 2,2% 9,6% 0,1% 0,0% 1,9% 3,9% 0,4% 5,0% 1,4% 0,7% 1,4% 1,2% 10,3% 0,0% 0,0% 4,2% 1,7% 0,5% 2,0% 1,5% 0,5% 4,2% 1,0% 6,1% 0,0% 0,0% 2,9% 1,9% 0,6% 3,4% 1,4% 0,6% 2,2% 2,8% 4,7% 0,1% 0,0% 3,2% 2,5% 0,1% 0,6% 1,4% 0,2% 2,8% 0,4% 9,7% 0,1% 0,0% 1,5% 2,4% 0,0% 1,4% 1,4% 0,1% 2,7% 1,6% 7,1% 0,0% 0,0% 3,5% 2,1% 0,0% 2,5% 0,5% 0,3% 2,3% 1,4% 6,2% 0,0% 0,0% 2,1% 2,0% 0,3% 2,4% 0,2% TOTAL EU 19,6% 23,1% 25,9% 25,4% 17,3% 18,8% 25,0% 26,9% 23,7% 27,2% 23,7% 22,0% 18,2% 19,9% 20,1% 17,2% OTHER AWES FINLAND NORWAY SWEDEN N/A N/A N/A 3,6% 2,7% 1,4% 3,6% 2,9% 2,6% 1,9% 1,4% 1,6% 0,9% 0,7% 1,9% 3,3% 1,8% 0,3% 1,5% 1,3% 0,2% 2,1% 1,4% 0,6% 6,5% 1,4% 0,7% 1,2% 1,2% 0,1% 0,5% 2,9% 0,8% 1,8% 1,3% 0,0% 1,2% 1,0% 0,0% 2,0% 1,9% 0,3% 3,5% 1,7% 0,0% 1,7% 1,6% 0,0% TOTAL AWES 29,2% 30,8% 34,9% 30,2% 20,8% 24,1% 28,0% 31,1% 32,4% 29,8% 28,0% 25,1% 20,4% 24,1% 25,4% 20,4% JAPAN KOREA CHINA POLAND ROMANIA BULGARIA USSR RUSSIA UKRAINE YUGOSLAVIA CROATIA 45,9% 46,7% 41,4% 42,1% 49,8% 51,3% 43,0% 36,2% 32,0% 36,8% 43,3% 42,8% 37,2% 37,1% 32,2% 39,9% 2,0% 6,5% 6,4% 8,7% 14,5% 10,0% 7,8% 14,3% 19,9% 13,2% 12,3% 15,2% 19,1% 12,3% 25,3% 18,4% N/A N/A N/A N/A N/A N/A 1,5% N/A N/A 0,1% 1,7% 1,0% N/A N/A 0,2% 1,0% 1,2% N/A N/A 0,6% 1,9% 3,3% N/A N/A N/A 1,5% 3,5% N/A N/A 0,0% 2,0% 2,6% N/A N/A N/A 3,4% 3,4% N/A N/A N/A 2,7% 3,1% N/A N/A N/A 3,6% 2,4% N/A N/A 1,0% 1,9% 1,5% N/A N/A 1,6% 2,7% 1,5% N/A N/A 1,5% 3,6% 2,5% 4,6% 0,9% 0,7% N/A 1,7% 0,5% 2,8% 0,8% 0,6% 3,2% 4,7% 1,3% 3,4% 3,5% 2,3% 1,1% 6,6% 4,9% 0,6% 0,5% 2,9% 1,2% 3,0% 1,3% 1,0% 0,3% 2,5% 2,0% 3,3% 4,1% 0,8% 0,4% 1,0% 2,4% 1,5% 1,1% 1,6% REST OF WORLD 22,9% 12,7% 13,9% 13,4% 8,9% 8,8% 13,4% 7,0% 8,4% 9,8% 7,8% 9,0% 9,9% 8,3% 5,9% 7,7%; TOTAL WORLD 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% (1) From 1980 on data includes new orders from Ex-GDR yards Source : "World Shipbuilding Databank" based on data supplied by Lloyd's Maritime Information Services TABLE 6 - TREND OF NEW ORDERS BY TYPE OF VESSEL OIL TANKERS 1000 CGT % BULK CARRIERS % j 1000 CGT CARGO SHIPS 1000 CGT % NON CARGO VESSELS 1000 CGT % TOTAL 1000 CGT % 1977 WORLD EU 1978 WORLD EU 1979 WORLD EU 1980 WORLD EU 1981 WORLD EU 1982 WORLD EU 1983 WORLD EU 1984 WORLD EU 1985 WORLD EU 1985 WORLD EU L 1986 WORLD EU 1987 WORLD EU 1988 WORLD EU 1989 WORLD EU 1990 WORLD EU 1991 WORLD EU 1992 WORLD EU 1993 WORLD EU 1994 WORLD EU 790,6 30,9 1185,4 56,2 3364,8 168,1 2960,2 273,7 1166,7 75,1 662,6 70,3 1682,1 92,3 1176,2 179,3 470,1 15,3 575,4 18,0 1199,7 0,0 1404,6 107,5 781,8 116,7 1943,6 219,9 4127,9 542,6 1917,9 215,3 1209,4 236,0 1600,6 112,5 1475,6 76,3 3,9 4,7 5,0 9,2 6,4 10,6 5,5 15,2 3,3 3,1 0,0 7,7 14,9 11. 3 13,1 11,2 19,5 7,0 5,2 1783,2 75,1 534,6 23,6 2744,9 466,5 4325,3 425,9 4934,9 487,9 2335,3 197,5 5370,3 110,7 3890,6 165,6 3918,4 152,8 2454,5 154,9 1296,0 108,0 1033,2 45,3 2164,5 0,0 2483,1 70,8 1639,0 207,0 2218,0 207,5 1761,3 0,0 3859,6 232,7 5599,7 178,5 4,2 4,4 17,0 9,8 9,9 8,5 2,1 4,3 3,9 6,3 8,3 4,4 0,0 2,9 12,6 9,4 0,0 6,0 3,2 8497,3 1764,4 6163,8 1341,3 5148,4 1172,6 4780,1 1023,4 4967,9 1342,7 5679,9 1093,2 5910,8 1039,9 4742,2 944,2 5299,9 1029,7 5138,8 1033,5 4208,4 768,6 4899,7 1128,1 3985,6 1095,5 6798,4 1454,3 6530,2 1541,0 6507,9 1387,4 4313,9 923,0 7022,9 1534,1 7559,6 1501,5 20,8 21,8 22,8 21,4 27,0 19,2 17,6 19,9 19,4 20,1 18,3 23,0 27,5 21,4 23,6 21,3 21,4 21,8 19,9 2969,8 670,5 1912,7 591,5 2949,8 747,6 2291,9 740,8 2433,0 606,4 2135,4 628,0 1886,9 380,9 1956,8 448,8 2089,2 459,3 2152,4 769,6 2778,0 704,7 2402,7 690,1 2194,0 1048,1 2339,3 1008,8 2006,5 852,0 1271,3 359,8 1535,7 599,1 2043,1 1039,9 2118,6 1127,6 22,6 30,9 25,3 32,3 24,9 29,4 20,2 22,9 22,0 35,8 25. 4 28,7 47,8 43,1 42,5 28,3 39,0 50,9 53,2 14040,9 2540,9 9796,5 2012,6 14207,9 2554,8 14357,5 2463,8 13502,5 2512,1 10813,2 1989,0 14850,1 1623,8 11765,8 1737,9 11777,6 1657,1 10321,1 1976,0 9482,1 1581,3 9740,2 1971,0 9125,9 2260,3 13564,4 2753,8 14303,6 3142,6 11915,0 2169,9 8820,3 1758,1. 14526,2 2919,2 16753,5 2883,9 18,1 20,5 18,0 17,2 18,6 18,4 10,9 14,8 14,1 19,1 16,7 20,2 24,8 20,3 22,0 18,2 19,9 20,1 17,2 Remarks : From 1986 EU including Spain and Portugal; from 1990 EU including Ex-GDR Source : World Shipbuilding Databank based on data supplied by Lloyd's Maritime Information Services ©4 FIGURES AT THE END OF THE YEAR 1'QOOOEm 1976 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 I EU BELGIUM DENMARK FRANCE GERMANY (1) GREECE IRELAND ITALY NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM 277,0 923,5 1770,4 2113,3 N/A 43,9 1036,2 917,1 N/A N/A 1989,4 331,7 652,4 1193,7 950,9 240,6 17,8 639,8 493,7 191,2 1769,5 615,0 311,5 618,9 1138,2 1082,0 245,4 19,3 427,3 551,7 240,4 1754,0 768,9 261,1 603,9 978,5 1177,7 191,4 20,0 480,4 498,8 258,4 1325,3 714,1 143,7 707,7 598,6 1178,1 146,1 2,1 356,3 308,8 124,1 967,4 506,1 136,1 692,2 263,3 959,4 137,4 0,0 195,5 331,6 138,3 690,5 292,3 62,1 442,1 382,7 1118,9 119,9 0,0 345,5 300,3 94,0 491,5 352,5 60,0 429,8 371,2 1281,7 102,8 0,0 465. 8 195,6 67,0 527,7 325,4 75,0 473,9 234,5 1426,3 121. 5 0,0 864,8 141,8 108,3 635,6 369,7 82,0 459,6 379,9 1429,2 116,8 0,0 904. 2 365,1 114,0 837,7 317,1 147,7 589,7 361,9 1974,0 113,6 0,0 1188,6 414,5 155,7 853,7 376,5 154,4 927,7 397,2 1955. 0 69,1 0,0 1298,4 443,4 181,6 1004,1 418,9 213,4 876,6 556,8 1529. 9 73. 0 0. 0 1190,9 387,5 153,1 757,2 413,6 116. 8 674,3 410,8 1471,4 42,3 0. G 1036,4 321,5 96. 5 476,4 411. 5 133,8 698,4 568,7 1600,3 *3,7 0,0 1033,8 386,1 45,6 475. 2 321,4 IT7T7J 595,71 677,5 | 1591. 0! 103,7 I 0,0 I 1028. 7 i 441,81 75,91 668,1 I 212. 4 1 TOTAL EU 9070,8 7096,3 7157,6 6509,6 5039,0 3836,6 3709,5 3827. 0 4451,4 5005. 6 6175,9 6849,8 6152,0 5057. 9 5313,0 " ~ 5 5 1 2 j| OTHER AWES FINLAND NORWAY SWEDEN N/A N/A N/A 1144,3 589,3 703,8 1139,5 670,3 646,3 1023,8 371,9 494,9 710,3 185,6 494,5 642,2 229,8 267,8 544,4 148,1 181,7 483,9 146,8 137,5 991,0 136,9 93,8 962,9 114,3 39. 0 652,1 422,8 115,3 589,4 463,6 64,3 494,3 381,8 23,9 467,1 284,3 23,7 791,2 370,6 0,4 960,81 411,4 I 0,4 1 TOTAL AWES 15839,2 9533,7 9613,7 8400,2 6429,4 4976,4 4583,7 4595,2 5673,1 6121,8 7366,1 7967,1 7052,0 5833,0 6475,2 6885,1 I JAPAN KOREA CHINA POLAND ROMANIA BULGAFO USSR RUSSIA UKRAINE YUGOSLAVIA CROATIA 12093,8 7297,8 7457,7 6640,2 8477,9 8221,5 5915,2 3915,9 2918,5 3473,9 5696,5 7494,7 7621,8 6482,7 6255,6 8000,0 7943,2 1320,3 1711,1 1854,9 2898,4 3223,1 2578,7 1909,2 2639,1 2342,7 2813,1 3500,7 3922,7 3012,2 4792,5 5867,1 N/A N/A N/A N/A N/A N/A 1634,6 N/A N/A N/A 260,9 1459,0 N/A N/A 128,9 298,3 1174,6 N/A N/A 92,7 493,5 1143,1 N/A N/A 53,9 433,2 1272,1 N/A N/A 42,8 486,5 1018,1 N/A N/A N/A 547,0 1041,6 N/A N/A N/A 647,3 1251,6 N/A N/A N/A 809,8 1131,3 N/A N/A 74,1 681,0 1080,1 N/A N/A 248,5 813,6 1136,6 N/A N/A 343,1 942,0 999,7 912,6 237,0 360,4 N/A 760,7 626,7 699,9 492. 6 455,4 545,9 840,0 751,4 861,9 1011,4 1046,9 886,3 1235,7 1124,6 766,0 224,0 465,4 237,9 133,3 532,2 1257,4 1013,7 860,5 142,2 778,9 426,0 N/A 510,7 1261,6 998,5 943,7 148,6 887,0 701,6 N/A I 466,01 REST OF WORLD 3693,0 5045,1 5105,6 4570,7 4129,7 3448,0 3435,8 2796,8 2675,0 2857,9 3071,2 3343,5 3003,2 2601,8 2279,7 2797,4 1 TOTAL WORLD 39569,2 25592,2 26363,6 23731,5 24118,5 22072,5 18563,9 15645,7 16556,0 17673,4 21967,9 25646,2 25937,7 22648,8 24792,4 2895€MfJ (1) From 1980 on data includes order book from Ex-GDR yards Source : "World Shipbuilding Databank" based on data supplied by Lloyd's Maritime Information Services TABLE 7 B - O R D ER BOOK 1976 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 FIGURES AT THE END OF THE YEAR MARKET SHARES EU BELGIUM DENMARK FRANCE GERMANY (1) GREECE IRELAND ITALY NETHERLANDS PORTUGAL SPAIN UNITED KINGDOM 0,7% 2,3% 4,5% 5,3% N/A 0,1% 2,6% 2,3% N/A N/A 5,0% 1,3% 2,5% 4,7% 3,7% 0,9% 0,1% 2,5% 1,9% 0,7% 6,9% 2,4% 1,2% 2,3% 4,3% 4,1% 0,9% 0,1% 1,6% 2,1% 0,9% 6,7% 2,9% 1,1% 2,5% 4,1% 5,0% 0,8% 0,1% 2,0% 2,1% 1,1% 5,6% 3,0% 0,6% 2,9% 2,5% 4,9% 0,6% 0,0% 1,5% 1,3% 0,5% 4,0% 2 , 1% 0,6% 3,1% 1,2% 4,3% 0,6% 0,0% 0,9% 1,5% 0,6% 3,1% 1,3% 0,3% 2,4% 2,1% 6,0% 0,6% 0,0% 1,9% 1,6% 0,5% 2,6% 1,9% 0,4% 2,7% 2,4% 8,2% 0,7% 0,0% 3,0% 1,3% 0,4% 3,4% 2,1% 0,5% 2,9% 1,4% 8,6% 0,7% 0,0% 5,2% 0,9% 0,7% 3,8% 2,2% 0,5% 2,6% 2,1% 8,1% 0,7% 0,0% 5,1% 2,1% 0,6% 4,7% 1,8% 0,7% 2,7% 1,6% 9,0% 0,5% 0,0% 5,4% 1,9% 0,7% 3,9% 1,7% 0,6% 3,6% 1,5% 7,6% 0,3% 0,0% 5,1% 1,7% 0,7% 3,9% 1,6% 0,8% 3,4% 2,1% 5,9% 0,3% 0,0% 4,6% 1,5% 0,6% 2,9% 1,6% 0,5% 3,0% 1,8% 6,5% 0,2% 0,0% 4,6% 1,4% 0,4% 2,1% 1,8% 0,5% 2,8% 2,3% 6,5% 0,2% 0,0% 4,2% 1,6% 0,2% 1,9% 1,3% 0,4°/c 2,1% 2,3% 5,5% 0,4% 0,0% 3,6% 1,5% 0,3% 2,3% 0,7% TOTAL EU 22,9% 27,7% 27,1% 27,4% 20,9% 17,4% 20,0% 24,5% 26,9% 28,3% 28,1% 26,7% 23,7% 22,3% 21,4% 19,0% OTHER AWES FINLAND NORWAY SWEDEN N/A N/A N/A 4,5% 2,3% 2,8% 4,3% 2,5% 2,5% 4,3% 1,6% 2,1% 2,9% 0,8% 2,1% 2,9% 1,0% 1,2% 2,9% 0,8% 1,0% 3,1% 0,9% 0,9% 6,0% 0,8% 0,6% 5,4% 0,6% 0,2% 3,0% 1,9% 0,5% 2,3% 1,8% 0,3% 1,9% 1,5% 0,1% 2,1% 1,3% 0,1% 3,2% 1,5% 0,0% 3,3% 1,4% 0,0% TOTAL AWES 40,0% 37,3% 36,5% 35,4% 26,7% 22,5% 24,7% 29,4% 34,3% 34,6% 33,5% 31,1% 27,2% 25,8% 26,1% 23,8% JAPAN KOREA CHINA POLAND ROMANIA BULGARIA USSR RUSSIA UKRAINE YUGOSLAVIA CROATIA REST OF WORLD 30,6% 28,5% 28,3% 28,0% 35,2% 37,2% 31,9% 25,0% 17,6% 19,7% 25,9% 29,2% 29,4% 28,6% 25,2% 27,6% 20,1% 5,2% 6,5% 7,8% 12,0% 14,6% 13,9% 12,2% 15,9% 13,3% 12,8% 13,6% 15,1% 13,3% 19,3% 20,3% N/A N/A N/A N/A N/A N/A 6,4% N/A N/A N/A 1,0% 5,5% N/A N/A 0,5% 1,3% 4,9% N/A N/A 0,4% 2,0% 4,7% N/A N/A 0,2% 2,0% 5,8% N/A N/A 0,2% 2,6% 5,5% N/A N/A N/A 3,5% 6,7% N/A N/A N/A 3,9% 7,6% N/A N/A N/A 4,6% 6,4% N/A N/A 0,4% 3,1% 4,9% N/A N/A 1,1% 3,2% 4,4% N/A N/A 1,3% 3,6% 3,9% 3,5% 0,9% 1,4% N/A 3,0% 2,4% 2,9% 2,0% 2,1% 2,9% 5,4% 4,5% 4,9% 4,6% 4,1% 3,4% 5,5% 5,0% 3,4% 1,0% 2,1% 1,1% 0,6% 2,3% 5,1% 4,1% 3,5% 0,6% 3,1% 1,7% N/A 2,1% 4,4% 3,4% 3,3% 0,5% 3,1% 2,4% N/A| 1,6% 9,3% 19,7% 19,4% 19,3% 17,1% 15,6% 18,5% 17,9% 16,2% 16,2% 14,0% 13,0% 11,6% 11,5% 9,2% 9,7% TOTAL WORLD 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% (1) From 1980 on data includes order book from Ex-GDR yards Source : "World Shipbuilding Databank" based on data supplied by Lloyd's Maritime Information Services i TABLE 8 - EMPLOYMENT IN THF CONSTRUCTION OF NEW VESSELS IN THE EUROPEAN UNION 1975 1978 Î979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 BELGIUM DENMARK FRANCE GERMANY GREECE IRELAND ITALY (1) NETHERLANDS (2) PORTUGAL SPAIN UNITED KINGDOM 7467 16630 32500 46839 2316 869 25000 22662 N/A N/A 54550 6614 12000 25300 31113 N/A 840 20000 17540 N/A N/A 41050 6258 9000 23000 27369 N/A 750 19000 14540 N/A N/A 31200 6523 11400 22200 24784 2672 750 18000 13100 N/A N/A 24800 6347 11350 22200 26521 3393 762 16500 13100 N/A N/A 25345 4680 11800 21600 27600 2900 882 13750 12800 N/A N/A 25000 4104 11200 21000 25966 2812 550 12800 11250 N/A N/A 20486 4060 10300 16940 22183 2000 0 12800 10330 N/A N/A 14655 3923 10200 15053 22260 2000 0 12000 6236 5370 18000 14200 2995 7000 13700 18184 1709 0 11570 5400 5087 18000 12500 2548 7000 8940 12875 1621 0 9500(3) 3600 5020 17300 11500 2270 7300 6850 14845 1855 0 8428 (3) 3500 4412 14000 9000 2307 7900 6800 14732 1535 (4) 0 9675 (3) 3500 4245 12550 6494 2377 8400 6600 15297 (5) 550 0 9840(6) 3900 3845 11940 6126 (7) 2418 8600 6100 27763 (8) 0 0 8299(9) 4000 3820 11440 5984 2391 8300 6040 28146 (8) 0 0 8200 (10] 4000 3520 10735 5820 1665 7300 5880 24143 (8) 0 0 7100(11 4000 3150 10065 4665 1665 9000 5910 22894 0 C 8273 4000 1632 9400 4173 ffOTAL EU 208833 154457 131117 124229 125518 121012 110168 93268 109242 96145 79904 72460 69738 68875 From 1986 on the figure covers jobs in new shipbuilding and naval and para-naval building (convertion, naval vessels and off-shore). Figures for the preceding years using the same method are: 1975 - 32500, 1980 - 23700, 1985 -17700. From 1975 to 1984 including naval dockyards estimated to be: 1975 -1800, 1978 and 1979 -3200, 1980 - 3400,1981 and 1982 - 3200, 1983 and 1984 - 2800 2780 unemployed should be added to 1987's figure, 2850 to 1988's figure and 2581 to 1989's figure. Of these 2000 represent a structural over capacity for whom no new jobs can be found Includes nava' building Excluding j^bs in Ex-GDR's yp/ds Oi wnich 1838 currently inactive Revised figure including 11700 jobs in Ex-GDR's yards in 1991, 12441 jobs in 1992 and 9000 in 1993 1321 unemployed should be added to this figure, representing a structural over capacity, whose elimination is foreseen during 1992 700 unemployed should be added to this figure, representing a structural over capacity, for whom re employment is not foreseen 116C currently inactive should be added to this figure (2) (3) (4) (5) (3) (7) (8) (S) M0) Table compiled from national sources ISSN 0254-1475 COM(96) 84 final DOCUMENTS EN 07 10 08 Catalogue number : CB-CO-96-123-EN-C ISBN 92-78-01743-4 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on the resale right for the benefit of the author of an original work of art

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 13. 03. 1996 COM(96) 97 final 96/085 (COD) Proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on the resale right for the benefit of the author of an original work of art (presented by the Commission) EXPLANATORY MEMORANDUM I. Introduction 1. This Directive seeks to introduce harmonized legal arrangements for the artist's resale right (often referred to as "droit de suite"). The artist's resale right can be defined as the right for the author, or after his death for his heirs or other beneficiaries, to receive a percentage of the price of a work - being usually a work in the field of the graphic and plastic arts - when it is resold by public auction or through an agent. 2. The artist's resale right seems to have been adopted originally for reasons of equity, to prevent a situation from arising in which a struggling young artist sells his works cheaply and does not share, once he has become famous, in the - sometimes substantial - profits earned by art dealers. 3. This social justification may seem out of date in some Member States of the European Union given the level of prices, subsidies and social security benefits there. Nevertheless, the artist's resale right retains its full legitimacy where it has the effect of redressing the balance between the economic situation of the authors of graphic and plastic works and that of other creators who benefit from successive exploitations of their works. In the musical and literary fields, authors are involved in the multiple exploitations of their works through reproduction, performance, adaptation, etc. The authors of original graphic and plastic works, on the other hand, have more limited opportunities for exploiting them than do authors of other types of work. In the fine arts field, a work is exploited essentially by being sold and is no longer under the artist's control once the transaction is completed. 4. Accordingly, some legislators have felt that, in order to strike a balance between the various categories of creator, the authors of graphic and plastic works must be allowed to receive a share of the sale price each time the work changes hands. The artist's resale right is therefore a right to remuneration, that is to say an exclusive right in diluted form. 5. The artist's resale right is designed so that the author shares in the profits to be earned from his creation alone - hence its being a right to remuneration. Besides being classed as a type of copyright, the right does not fall within the domain of taxation as it does not give rise to the collection of any dues for the benefit of the exchequer. 6. Eleven of the 15 Member States recognize the artist's resale right in principle, and eight already apply it in practice. In each of these jurisdictions, the artist's resale right is included in the legislation on copyright and is classed as a property right. It is of limited duration. 7. An analysis of Member States' laws providing for the artist's resale right reveals substantial differences as regards the works covered by the right, the holders of the right, the transactions giving rise to payment of a royalty, and other details of payment. 8. The divergences between Member States' laws on the artist's resale right do nothing to ensure a harmonious legal environment promoting the smooth functioning of the market in works of contemporary and modern art in the European Union. Consequently, following the publication in January 1991 of its working programme in the field of copyright and neighbouring rights entitled "Follow-up to the Green Paper"(1), in which the question of the advisability of a Community initiative on the resale right was raised in Chapter 8. 5, the Commission carried out a number of consultation exercises based on questionnaires and public hearings in July and November 1991, August 1994 and February 1995. In addition, it conducted studies into the economic and legal aspects of the matter, taking as a basis a survey of the features of the art market. The key findings of these studies are reproduced below. H. Analysis of the relevant market 1. First of all, it should be pointed out that, owing to the limited duration of protection, the art market affected by the artist's resale right is, generally speaking, the market in contemporary art. Exceptionally, the artist's resale right may also affect works of modern art owing to the longevity of their authors. 2. It is important to bear in mind the various players on the market inasmuch as different people operate on the art market and exert, one after the other and in various capacities, an influence on prices. They are: art dealers, art galleries, auction houses, major collectors and the State. A distinction must also be drawn between the primary market and the secondary market. The primary market is that in which original works are sold for the first time. The secondary market is that in which works are resold, and it is this market alone that is affected by the artist's resale right. 3. The Community art market is strongly influenced by the world market. Artistic works in the upper price range attract an international clientele. This constitutes a floating mass in search of places offering the best return, the clients (buyers and sellers) being internationally mobile. At the international level, the leading centres for the sale of works of art are New York and London, followed by Paris. Frequently, neither the seller nor the buyer is resident in the countries in which these centres are located. The flow of imports and exports of works of art is therefore substantial. Being very fluid, the market can move easily from one country to another. ( i) COM(90) 584 final, 17. 1. 1991. It is very difficult to gauge precisely the scale of the world art market in view of the almost total lack of statistics on transactions, save in the case of auction sales and external trade. Consequently, the market can be evaluated only on the basis of estimates of the total number of transactions worldwide. These estimates, which are arrived at by applying a coefficient to the price of works sold by auction, lay in 1989, according to the various coefficients used, somewhere in the ECU 25-60 billion range(2). That same year, the origin of the chief buyers on the world market could be broken down as follows: United States: 50% Japan: 25% Europe: 20%. It is apparent from OECD statistics on data concerning imports/exports of paintings, drawings, engravings and sculptures for 1992 that works of art originating in the Belgian, the French, German and Spanish markets are sold mainly United Kingdom and the United States(3) (Table 1). in Switzerland, Table 1: Volume of t r a de in paintings, drawings, engravings and sculptures ($ '000) (main markets in O E CD Member States) E F 14. 915 42. 494 7. 061 / 3. 116 8. 443 20. 065 11. 120 CH 186. 600 126. 203 15. 323 11. 652 B/L 16. 507 15. 876 1. 941 20. 294 UK 97. 019 53. 134 4. 296 37. 345 D / 23. 211 11. 572 12. 839 I 10. 628 6. 282 / 1. 519 6. 136 8. 773 3. 505 105. 068 105. 565 18. 017 206. 781 13. 247 136. 222 59. 074 781 35. 035 197 11. 827 13. 299 / 29. 813 785 6. 539 8. 620 79. 707 / 14. 821 125. 942 126. 851 3. 085 64. 406 / 26. 495 24. 007 16. 098 407. 439 8. 206 / 161. 779 NL 23. 351 4. 780 1. 002 / 14. 698 151. 321 2. 559 27. 238 28. 727 US 72. 307 104. 445 11. 424 19. 164 8. 229 585. 567 3. 896 252. 359 / D F I NL B/L UK E CH US 6. Public auction sales of works of art reached their height worldwide in 1989/90. The economic recession, which hit modern and contemporary paintings hardest, brought them down to a much lower level in 1991/92. Since then, there has been a recovery in both economic activity and art sales (Table 2). (2) Observatoire des mouvements internationaux d'oeuvres d'art, Paris, 1993. (3) Study entitled "Le droit de suite dans l'Union européenne, Analyse juridique, Elements économiques", Brussels 1995, p. 112 (Study carried out by the Commission). 4 Table 2: Fluctuations in the world market for works of art (public sales)(4) on the basis of turnover in £ 1990/91 - 1989/90 69. 8 % 1991/92 - 1990/91 21. 3 % 1989/90 - 1988/89 + 57. 5 % 1992/93 - 1991/92 + 23. 4 % Years Annual variations At the international level, public sales are dominated by the leading auction houses, such as Sotheby's and Christie's. A breakdown by country reveals the preponderance of the United States and the United Kingdom. 7. Of public sales by Sotheby's in 1994, 50% took place in North America, 32% in the United Kingdom and 14% in continental Europe. Of this volume of sales, 6% concerned works by contemporary artists and 14% impressionist works and works of modern art (Table 3)(5). Table 3: Public sales by Sotheby's in 1994 Geographical breakdown Continental Europe ($177. 9 million) 14% Asia ($55,4 million) 4% United Kingdom ($430. 4 million) 32% North America ($666. 3 million) 50% (4) Source: Art Sales Index; study by the ifo Institut fur Wirtschaftsforschung, Das Folgerecht der bildenden Kiinstler, 1994, p. 79. (5) Source: Sotheby's, 1995. Breakdown by category other pictures and works art 26% impressionists modern art 14% contemporary art 6% books, etc 6% other decorative arts 24% jewellery 14% furnitures 10% 8. As can be seen below (Table 4)(6), Christie's turnover breaks down in the same way as Sotheby's. It is clear from the statistical data that the combined share of the United Kingdom and the United States alone accounts for more than 80% of the firm's public sales. Table 4: Geographical breakdown of Christie's turnover - (public sales) United Kingdom United States Switzerland Netherlands Hong-Kong Italy Monaco Australia Others 1992 % for each country 37. 8 44. 7 6. 9 2. 3 2. 3 1. 5 2 2 - 100 £ million 240. 2 284. 3 44. 1 15. 2 15. 2 10. 8 13 13 - 635. 6 1993 % for each country 37. 5 42. 7 8. 3 2. 2 2. 7 0. 8 3. 7 3. 7 0. 8 100 £ million 273. 4 311. 6 61. 3 19,9 19. 9 6. 6 27. 7 27. 7 6. 4 728. 3 Between 1989 and 1993, contemporary art accounted for between 5. 6% and 9% of Christie's total turnover. In 1989 and 1990, a record-breaking period, the share accounted for by impressionist works and works of modern art came to 39. 4 and 35. 3% respectively, whereas in subsequent years it fell back to between 13% and 19%(7). (6) (7) Source: Christie's, 1994; study carried out for the Commission, 1995. Ibid. 9. The constraints that have had an impact on the financial conditions obtaining on the art market include - besides the artist's resale right - social security contributions for artists (which exist only in some Member States), sales commission, the tax on the increase in value as part of income tax, and VAT. III. The legal position A. The Berne Convention The wide legislative diversity that reigns in the field of the artist's resale right is due among other things to the flexibility of the provisions of the Berne Convention for the Protection of Literary and Artistic Works (as revised by the 1971 Paris Act), pursuant to which countries of the Berne Union are free to decide whether or not to introduce the right into their domestic law. Article 14ter of the Convention provides as follows: "1. The author, or after his death the persons or institutions authorized by national legislation, shall, with respect to original works of art and original manuscripts of writers and composers, enjoy the inalienable right to an interest in any sale of the work subsequent to the first transfer by the author of the work. 2. The protection provided by the preceding paragraph may be claimed in a country of the Union only if legislation in the country to which the author belongs so permits, and to the extent permitted by the country where this protection is claimed. 3. The procedure for collection and the amounts shall be matters for determination by national legislation. " B. Application of the artist's resale right in the Member States As indicated above, there are numerous differences between the domestic laws of the Member States of the European Union, and some countries have not made use of their discretionary power to introduce the artist's resale right into their national legal system. Some laws have remained a dead letter, whereas others are highly detailed. Broadly speaking, the position is this: 1. France The artist's resale right was recognized for the first time in France by an Act of 1920, supplemented by a decree and various orders. But it was not until a 1957 Act that the right was enshrined in the law on copyright. The Act currently in force (1992 codification) no longer limits the artist's resale right to auctions, but instead extends it to include private sales through a dealer. The extension has, however, remained without practical effect owing to the absence of an administrative implementing regulation. Such a regulation is also lacking in the case of sales by public auction, but the right is nevertheless exercised in accordance with established practice. 2. Belgium In Belgium the artist's resale right was adopted, almost at the same time as it was enshrined in law in France, by a 1921 Act introducing a right to remuneration in respect of public sales of works of art. Unlike the French law, the text was not inserted in the old Belgian Copyright Act of 1886. Notwithstanding this, the artist's resale right has been effectively enforced ever since it was legally recognized. In 1994 the Belgian Parliament adopted a new Act on copyright and related rights. The Act contains fresh provisions on the artist's resale right. It repeals the 1921 Act but makes this repeal subject to the application of certain articles the entry into force of which is in turn dependent on the - still awaited - adoption of a royal decree. 3. Italy The existence of the artist's resale right was also confirmed in Italy. However, the 1941 Act lays down such complex and sophisticated rules that the right has never been enforced. It is interesting to note that the rules also cover private sales and that the amount payable is based on the increase in value. The amendments made by a 1979 decree have done little if anything to improve matters. The legal provisions therefore have a purely formal value. 4. Germany Although it was not until 1965, when it adopted the Act on copyright and related rights, that the German Parliament introduced the artist's resale right, the system that has been set up is highly effective. Following a reform dating from 1972, the statutory rate of remuneration, which is applied to a maximum number of transactions with the exception of those between individuals, has been increased considerably. To a large extent, the artist's resale right is managed in accordance with a 1980 inter-branch agreement between the relevant collecting society and the association of art-market professionals. right and as a contribution Members of the "Ausgleichsvereinigung Kunst" pay a standard royalty by virtue of the artist's resale scheme towards (Kiinstlersozialabgabe). Outside the framework of the inter-branch agreement, non-members of the Ausgleichsvereinigung are liable to make payment as provided for by law. the artists' social security 5. Portugal In Portugal the artist's resale right was introduced by a 1966 Act. The new Copyright Act of 1985 bolstered it by extending the categories of objects covered to include manuscripts. 6. Luxembourg A 1972 Act provides that a resale royalty is payable on sales by public auction or through dealers. However, the necessary implementing regulation has not been adopted, so the artist's resale right has never been of any practical effectiveness in this Member State. 7. Spain In Spain the artist's resale right was recognized for the first time by an Act adopted in 1987. The domestic rules cover any resale by public auction, through art galleries or privately through a dealer. Works of applied art are excluded. Under a 1992 Act, heirs may receive royalties. 8. Denmark In Denmark, a reform of the Copyright Act in 1989 made possible the introduction of the artist's resale right as from 1990. Royalties are collected by the "Billedkunst" section of the "Copy-Dan" collecting society. 9. Greece The 1993 Greek Copyright Act establishes an artist's resale right that is applicable to sales by public auction and to any resale. Following the Act's amendment later that year, the person liable for payment of a royalty may instead make a donation. Under this rule, the provisions on collection of the royalty do not apply where those liable for its payment "make a donation of an amount at least equal to that part of their remuneration which comes from the reseller on condition that: (a) the legislation in force provides in respect of the donation for exemption from the tax on donations; (b) the sum involved is deposited in an account opened specially for that purpose by the donor with the Deposits and Loans Office or with a bank operating lawfully in Greece; and (c) the document evidencing the deposit contains (aa) data concerning the donor and donee, (bb) the amount of the donation, (cc) the date of the deposit, and (dd) the signature of the donor or of his legal representative". 10. Finland In Finland the artist's resale right was introduced as part of a law reform exercise in 1995. Under the Finnish rules, a royalty is payable in respect of any professional or public resale of a work of art with the exception of architectural and photographic works, handicraft products and products mass-produced to an industrial design. The right is managed by the Kuvasto collecting society. The provisions on the artist's resale right apply uniformly to any national or any resident of another Member State or of a Contracting Party to the Agreement on the European Economic Area. 11. Sweden In Sweden an Act of 7 December 1995 introduced, with effect from 1 January 1996, arrangements for the establishment of the artist's resale right. The provisions in question are similar to the rules in force in the other Nordic Member States. This holds true, in particular, for the categories of work and the transactions concerned, the rate, and the manner in which the right is administered. 12. Overview The legislative disparities that exist in relation to the artist's resale right within the Community, to the extent that the right is recognized, are described synoptically below (Tables 5 and 6). Table 5: Legal provisions applicable; categories of works and transactions covered by the artist's resale right Categories of works Transactions Works of the graphic and plastic arts Works of the plastic arts Public sales or sales by a dealer' Sales by public auction Member State France Belgium Acts 1920, 1957, 1992 1921, 1994 Italy 1941 Entry into force 1920 (1921) 1996?2 3 Germany 1965, 1972 1965 Portugal 1966, 1985 1966 Luxembourg 1972 2. 3. Spain 1987, 1992 1987 Pictures, paintings, sculptures, drawings, engravings and manuscripts Works of the plastic arts1* Original works of art, manuscripts Works of the graphic and plastic arts Works of the plastic arts5 Public and private sales' Sales by public auction or through a dealer Any resale Public sales and sales by a dealer Public sales and sales via a commercial establishment or through a dealer or commercial agent Any commercial resale (auctions, by shops, or any other way) Sales by public auction and any resale through a dealer Public and professional sales Denmark 1989 1990 Originals and copies of works of art, works of applied art6 Greece Finland Sweden 1993 1995 1995 19937 1995 1996 Original works Works of the fine art* Works of the fine arts9 Any commercial resale In practice, no amount is collected on sales by a dealer. The implementing order has not yet been adopted. Not applicable in practice. Subsequent to the first sale. With the exception of works of applied art and architectural works. Excluding mass production. Not applicable in the event of a donation. With the exception of architectural and photographic works, works of applied art and products produced in series to industrial designs. With the exception of architectural works and works of applied art produced in series. 10 Table 6: Rates, application thresholds and collection of royalties Member State France Statutory rate 3% Application threshold > FF 1001 Collection By collecting society or individually Belgium 4% BFR 50 000 i Italy Germany Portugal Luxembourg First public sale: 1-5% of the sale price; successive sales: 2-10% of the increase in value; private sales: 5-10% of the increase in value 5% of the sale priceJ 6% of the remuneration for the transaction5 Maximum rate: 3% Public sales: >/= LIT 1 000/5 000/10 000 according to category of work; non-public sales: >/=LIT 4 000/30 000 /40 000 according to category of work2 DM 100 Recourse to collecting society compulsory Recourse to collecting society not compulsory4 Spain 3% >/=PTA 300 000 Denmark 5% of the sale price0 >/=DKR 2 000 Greece Finland 5% of the sale price 5% of the sale price" F1M 100 Sweden 5% of the sale price6 l/20th of the basic amount provided for by the General Insurance Act Recourse to collecting society compulsory Recourse to collecting society not compulsory Recourse to collecting society compulsory Recourse to collecting society compulsory For want of an implementing order, the earlier legislation is still applied in practice. Provided the sale price exceeds the price of the first sales operation multiplied by five. Cf. inter-branch agreement. The right to information about transactions giving rise to payment of the amount in question may he exercised only by the competent collecting society. Taking the inflation index mto account. Including commission but excluding VAT. Not provided for by law. fixed by the competent collecting society. 11 C. The situation in the other Member States In the other Member States - Austria, Ireland, the Netherlands and the United Kingdom - the artist's resale right is currently not recognized. In Austria, Parliament has provisionally rejected proposals - based on the German rules - aimed at recognizing the right's existence, in the light of the judgment of the Court of Justice of 20 October 1993 in the Phil Collins case(8). The Court held here that requirements of reciprocity cannot be upheld in the Community context. Consequently, authors who are nationals of Member States which do not recognize the artist's resale right qualify, under Article 6 of the Treaty, for national treatment and may invoke the right when their works are resold in the territory of a Member State which does recognize it. The Austrian legislator considered, when the 1994 Copyright Act was being reformed(9), that it was unacceptable that the artist's resale right should be conferred on nationals of Member States, e. g. the United Kingdom, which did not apply the right, and preferred to postpone its introduction until such time as it was harmonized within the European Union. In the United Kingdom, political and legal objections have stood in the way of the artist's resale right being inserted in the UK Copyright Act 1988. The Whitford Committee, which was set up by Parliament to consider this matter among others, had refused to endorse it in its 1977 report. It was stated in this connection that the effectiveness of the artist's resale right depended first and foremost on the inalienable nature of the right, but that the concept of inalienability was contrary to British practice in the copyright field Moreover, the so-called impossibility of monitoring private sales, coupled with the desire not to discriminate against public sales, was a further obstacle to introducing the right. Lastly, the Committee considered that the practical effect of the artist's resale right was minimal compared with the - sometimes exorbitant - costs of collection and management. It accordingly came to the conclusion that the artist's resale right was neither equitable, logical nor practicable. Ireland, which also adheres to the copyright tradition, has adopted a somewhat hesitant stance regarding the possible incorporation of an artist's resale right in its domestic law. D. The situation in certain third countries 1. Western Europe outside the Community During the 1993 law reform drive in Switzerland, the National Council voted by a narrow majority against introducing the artist's resale right. The decision was based inter alia on economic considerations, including the wish to prompte Switzerland as a place for selling works of modern and contemporary art. (8) (9) Joined Cases C-92/92 and C-326/92. 1563 of the Annexes to the shorthand minutes of the National Council, 15. 4. 1994, pp. 9-10. 12 In Norway, a 1948 Act, which was reformed in 1989, provides for a system whereby every commercial sale of a work of art gives rise to payment of an amount equal to 3% of the sale price into a solidarity fund for the benefit of those working in the plastic arts. Iceland has had a similar set of rules since 1987. 2. Central and eastern Europe Since they reformed their copyright laws in 1993 and 1994, most countries of central and eastern Europe now recognize the artist's resale right. Currently, Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland and Slovenia recognize the right. Romania, where a bill has been presented to Parliament on the subject, is contemplating introducing it. 3. The United States In the United States, public hearings were held in 1992 to consider whether the artist's resale right should be introduced at federal level in accordance with the Visual Artists Rights Act, 1990. The exercise was based among other things on the experience of California, which has had rules on the subject since 1977, and on that of France, Germany and Belgium in relation to the practical effect of collecting royalties. The Copyright Office produced a report in which it concluded that, at that stage, there were insufficient economic and political grounds for establishing the artist's resale right in the USA. However, still according to the report, Congress might have to reconsider introducing the resale right in the event of harmonization within the European Community(10). To cater for that eventuality, the Copyright Office has prepared a model designed to facilitate implementation of a set of arrangements making it possible to attain the objective of helping artists more, without significantly harming the interests of the art market. 4. Rest of the world As far as the rest of the world is concerned, Algeria, Brazil, Burkina Faso, Ivory Coast, Chile, Congo, Costa Rica, Equador, the Russian Federation, Guinea, Madagascar, Morocco, Peru, the Philippines, Senegal, Tunisia, Turkey and Uruguay recognize the artist's resale right in principle. * In the vast majority of cases, royalties are not actually collected, either because of the weakness of the markets or because of the inefficiency of the collection arrangements. IV. The need for action In order to determine whether it is appropriate to harmonize the artist's resale right at European Union level, an analysis of the economic impact of the legislative disparities relating to the right is indispensable. What is more, the importance of the subsidiarity principle must be taken into account and the appropriate legal basis must be chosen. (10) Droit de suite: The Artist's Resale Royalty, a report of the Register of Copyrights, December 1992, pp. 149 et seq. 13 A. The economic impact of the disparities, distortion of competition 1. First of all, the Commission is bound, in the exercise of its power of initiative in the copyright field, to safeguard the objectives set out in Article 7a of the Treaty, namely the functioning of the internal market. The second paragraph of Article 7a of the Treaty defines the internal market as "an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty". 2. In relation to the free movement of goods and distortions of competition, it is clear that the substantial differences between the various laws of the Member States and the uncertainty about the application of the artist's resale right in the various provisions of the Member States may have a harmful effect on the functioning of the internal market in works of art. 3. Contemporary or modern works of art in the upper price range tend to be resold in countries where transaction fees are on the whole lower. Clearly, the non-collection of a royalty which in some cases may be as high as 5-6% of the sale price favours places where the artist's resale right is not recognized. At Community level, there is a noticeable shifting of sales of works of art towards countries where no royalties are collected or where taxes are lower. 4. The data on public sales reveal that sales of high-priced works by contemporary artists with a worldwide reputation take place more often than not in London or New York. "Minor" works by the same artists sold in their country of origin usually fetch only small amounts. 5. The attractiveness of low-tax countries where the artist's resale right is not applied is understandable in the case of such valuable works. A substantial saving can be made in this way. 6. As can readily be seen, the turnover of the leading auction houses is divided between those countries where the artist's resale right is non-existent and those where royalties, though provided for by law, are not collected (see II. , points 6, 8 and 9). The available data show that works of art coming from the Belgian, French, German and Spanish markets are sold primarily in the United Kingdom, the United States and Switzerland. 7. The non-existence of the artist's resale right in some Member States is, of course, not the only factor influencing the choice of place of sale. However, the disparities in the collection of royalties induce operators to seek ways of circumventing the payment rules. Thus, for example, three works by the contemporary German artist Joseph Beuys were sold by auction in London in 1988 for £462 000 (DM 1 418 340). The seller and the buyer were both German collectors. Owing to the territoriality of the artist's resale right and the resulting impossibility of collecting the royalties abroad, the saving made was oftheorderofDM71 000°1}. (ID BGH, judgment of 16 June 1991 -1 ZR 24/92, GRUR 1994, p. 798. 14 8. Although they are present in all the Member States, the leading auction houses do most of their selling in three countries where the artist's resale right is not recognized. It would appear that they gather together works of art whose resale in the territory of the country of origin would give rise to payment of a royalty with a view to selling them in London or New York. 9. According to some art dealers, the act of introducing the artist's resale right in those Member States which currently do not recognize it would affect the competitive position of the domestic art market, in particular vis-à-vis the United States and Switzerland, the reason being that the countries concerned compete more with third countries which do not recognize the right than with other Member States. This is borne out by the fact that, in the import and export statistics of the said Member States (see Table 1), the United States is the main trading partner, followed by Switzerland. 10. The same interests maintain that, since the artist's resale right creates distortions of competition, its harmonization within the European Union would cause a contraction of the art market in those countries which do not recognize the right. The supply of modern and contemporary art would switch from the markets of those Member States where the right did not previously exist, more to the United States and Switzerland. 11. In advancing such an argument, however, these interests are implicitly acknowledging the real - though admittedly not exclusive - impact of the artist's resale right on the art market. 12. As to the actual risk of sellers switching to the markets of certain third countries, account must be taken of a number of factors which have the effect of increasing the costs borne by the vendor in the event of a work being exported from the Community. It would appear, therefore, that the problem boils down in reality to what the detailed rules of application are, and in particular the level at which royalties are set. 15 13. The costs incurred in the event of a work originating in France being exported to and auctioned in Switzerland are as follows (Table 7): Table 7: Auction in Switzerland of a modern painting measuring 150 x 100 cm not subject to a cultural object certificate (being less than 50 years old) Price of the work FF 500 000 FF 1 000 000 FF 1 500 000 Costs borne by seller1 Costs borne by buyer' Private seller VAT-registered seller Increase in value Sale costs Miscellaneous3 Transport Insurance Total Increase in value Sale costs Miscellaneous3 Transport Insurance Total Increase in value Sale costs Miscellaneous3 Transport Insurance Total 7. 00% 10. 00% 5. 00% 2. 00% 0. 30% 24. 30% 7. 00% 10. 00% 5. 00% 1. 00% 0. 30% 23. 30% 7. 00% 10. 00% 5. 00% 0. 65% 0. 30% 22. 95% Sale costs Miscellaneous3 Transport Insurance Total Sale costs Miscellaneous3 Transport Insurance Total 10. 00% 5. 00% 2. 00% 0. 30% 17. 30% 10. 00% 5. 00% 1. 00% 0. 30% 16. 3% Buyer's costs Swiss VAT/total sale price Total Buyer's costs Swiss VAT/total sale price Total 10. 00% 7. 15% 17. 15% 10. 00% 7. 15% 17. 15% Sale costs Miscellaneous3 Transport Insurance Total 10. 00% 5. 00% 0. 65% 0. 30% 15. 95% — r~ Buyer's costs Swiss VAT/total sale price 10. 00% 7. 15% Total 17. 15% Source: Chambre nationale des commissaires-priseurs, 1995. 1 2 3 French seller supposed to bear the cost of transport (approximately FF 10 000). Swiss buyer pays Swiss VAT at a rate of 6. 5% (unless exempted). Assuming that the miscellaneous sale costs (advertising, catalogue, carriage, etc. ) come to approximately 5%. 16 14. The costs relating to the auctioning in France of an identical work are as follows (Table 8): Table 8: Auction in France of a modern painting measuring 150 x 100 cm not subject to a cultural object certificate (being less than 50 years old) Price of the work FF 500 000 FF 1 000 000 FF 1 500 000 Costs borne by seller1 Costs borne by buyer1 Private seller VAT-registered seller4 Increase in value Sale costs Miscellaneous3 4. 50% 11. 86% 5. 93% Total Increase in value Sale costs Miscellaneous3 Total Increase in value Sale costs Miscellaneous3 22. 29% 4. 50% 11. 86% 5. 93% 22. 29% 4. 50% 11. 86% 5. 93% Sale costs Miscellaneous3 11. 86% 5. 93% Total 17. 79% Sale costs Miscellaneous3 11. 86% 5. 93% Total5 17. 79% Sale costs Miscellaneous3 11. 86% 5. 93% Total 22. 29% Total5 17. 79% Legal expenses net of tax VAT on legal expenses4 Total Legal expenses net of tax VAT on legal expenses4 Total Legal expenses net of tax VAT on legal expenses4 Total 9. 00% 1. 85% 10. 85% 9. 00% 1. 85% 10. 85% 9. 00% 1. 85% 10. 85% Source: Chambre nationale des commissaires-priseurs, 1995. 1 2 3 4 5 French seller supposed to bear transport costs (approximately FF 10 000) Swiss buyer pays Swiss VAT at a rate of 6. 5% (unless exempted). Assuming that the miscellaneous sale costs (advertising, catalogue, transport, etc. ) come to approximately 5%. Assuming that the sale is taxed on the margin at a rate of 18. 6% (excluding the case of taxation of the total sale price). The VAT-registered seller will have to repay the VAT on the sale. 17 15. It is clear from this comparison that auctions in Switzerland are not always financially more favourable than in France. This is borne out by comparable figures for sending a work originating in Germany to Switzerland or the United States with a view to its being auctioned in Basel, Geneva or New York (Tables 9 and 10). Table 9: Auction of a modern painting measuring 100 x 120 cm, value DM 100 000 Transport from Cologne to Basel or Geneva (temporary importation) Cost of collection: Cost of wrapping: German customs: Cost of transport to Basel: Cost of transport to Geneva: Fixed costs DE*: Swiss customs. Commission: Fixed costs CH**: ** Documents, telecommunications costs Guarantees, handling DM165 DM 42 DM 195 DM 480 DM 680 DM 35 SF 175 38 SF 1. 95%o Table 10: Auction of a modern painting measuring 100 x 120 cm, value DM 100 000 Transport by air from Cologne to New York Cost of collection : Cost of wrapping: German customs: Container 120 x 20 x 140 cm: Transport to the airport: Handling: Cost of air transport 56 kg: AWB costs: Commission transfer charge: Fixed costs DE* Administration: US customs**: Custom bond: Custom user fee: DM 165. 00 DM 42. 00 DM 195. 00 DM 340. 00 DM 115. 00 DM 78. 00 DM 271. 04 DM 45. 50 DM 75. 00 DM 38. 50 DM 65. 00 480. 00 $ 263. 25 $ 170. 10 $ ** Documents, telecommunications costs Including reception and unpacking Source: Arbeitskreis deutscher Kunsthandelsverbànde, 1995. 18 16. To conclude, the artist's resale right has an impact on competition both at Community level and internationally. Like any fiscal or parafiscal charge, it is one of the factors to be taken into account by a person wishing to sell a work of art. In a number of cases, it is most certainly one of the factors contributing to a distortion of competition and a shifting of sales within the European Union. 17. It is interesting to note that recently the Council, taking the view that the disparities between the tax arrangements applicable inter alia in the art field cause distortions of competition adopted trade Directive 94/5/EC(12) supplementing the common system of value added tax and amending Directive 77/388/EEC. The Council has thus decided to put an end to these divergences while enabling legislation to be gradually adapted. between Member States, deflections and of 18. From the point of view of establishing an internal market, measures confined to the tax field are insufficient for the purpose of guaranteeing free movement of artistic works in Europe. Once the tax obstacles have been removed, the major distortion of competition that remains is that caused by the lack of harmonization of the artist's resale right. The disparities between national copyright laws will continue to distort competition in the art market. Consequently, the objective of the harmonious functioning of the internal market in works of art cannot be attained without simultaneously harmonizing the artist's resale right. The need for this is even greater since the Phil Collins judgment. B. Subsidiarity and political desirability 1. There is reason to believe that the Phil Collins judgment, with its application of the principle of non-discrimination on grounds of nationality, has a significant impact in the European Union when coupled with the prohibition on applying the principle of reciprocity. 2. Henceforth, private or public art dealers will have to pay royalties on works by nationals of certain Member States even if the countries concerned do not recognize the artist's resale right. laws their introducing 3. Member States can eliminate this inequality at national level only if they are prepared to repeal the hearing on 24 February 1995 a majority of Member States were far from ready to contemplate this, being. of the opinion that a generalized application of the artist's resale right would put an end to the inequality of treatment of contemporary artists in the various Member States while promoting a harmonious development of the art market. Most Member States therefore came out in favour of a Commission initiative aimed at harmonizing the right. the artist's resale right. At (12) OJN0L6O, 3. 3. 1994, p. 16. 19 C. The appropriate legal basis 1. At a hearing of non-governmental international organizations devoted to harmonization of the artist's resale right in the 1980s, and in certain programmes and memoranda, the Commission indicated that, when the time was ripe, a proposal for a Directive approximating Member States' laws on the artist's resale right might be envisaged in accordance with Article 100 of the EEC Treaty. 2. At that time, the Economic and Social Committee and the European Parliament were also concerned about the problem and supported an initiative based on this Treaty provision enabling the approximation of Member States' laws and regulations having a direct impact on the establishment and functioning of the common market. 3. The rules on the establishment of the common market are laid down in Article 7 of the EC Treaty. The common market was to have been established by the end of the third stage of the transitional period, i. e. in 1969. Its establishment is, therefore, no longer a present-day issue. 4. Since then, the 1987 Single European Act and the 1992 Treaty on European Union have changed the primary legislation by inserting a number of new legal bases both in the Treaty chapter on approximation of laws and elsewhere. Article 100a(l) of the Treaty as amended by the Treaty on European Union stipulates that: "By way of derogation from Article J 00 and save where otherwise provided in this Treaty, the following provisions shall apply for the achievement of the objectives set out in Article 7a. The Council shall, acting in accordance with the procedure referred to in Article 189b and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market". 5. However, some interests concerned have consistently proposed, at recent hearings on the subject of the artist's resale right, that it would be appropriate, in the event of a legislative initiative by the Commission, to base the proposal on Article 100 of the Treaty. This provision requires the Council to act unanimously on the proposal. 6. The authorities of one Member State suggested, during the most recent round of consultations, that Article 128 of the Treaty, as inserted by the Treaty on European Union in the Title on culture, is the appropriate legal basis. Whilst it is true that the Community is required to take cultural aspects into account in its action under other provisions of the Treaty (Article 128(4)), any harmonization of the laws and regulations of the Member States is expressly excluded (first indent of Article 128(5)). 20 7. Owing to the differences between the legal arrangements applicable to the artist's resale right, and bearing in mind the unequal conditions of protection and the resulting impact on competitive conditions within the art market, the Commission is of the opinion that this situation may have an adverse effect on the functioning of the internal market. It follows that Article 100a is the appropriate legal basis for the present proposal. Attention may be drawn in this respect to the judgment of the Court of Justice of 13 July 1995 in Case C-350/92, Spain v Council, in which the Court expressly confirms that Article 100a is the correct legal basis for a harmonization measure in the field of intellectual property rights pursuing in Article 7a of the EC Treaty. the objectives set forth V. Particular provisions 1. The purpose of the proposal for a Directive is to harmonize the artist's resale right. On the basis of Article 14ter of the Berne Convention for the Protection of Literary and Artistic Works (as revised by the 1971 Paris Act), the Directive determines the subject-matter of the right. In this respect, provision is made for excluding private transactions between private individuals from the scope so as to avoid the practical problems stemming from the difficulty of monitoring such operations. 2. The decisive factor when it comes to enforcing the artist's resale right is the type of exploitation to which works are subject, namely resale by public officers, auction houses or other commercial agents. In principle, royalties are payable on any transaction involving the ownership of works apart from the first sale. 3. The effectiveness of the artist's resale right is necessarily conditional on the right's inalienability and the impossibility of waiving it. 4. At the hearings, the vast majority of participants considered that public auctions should not be the only operations subject to the artist's resale right, but that sales and exchanges effected through dealers or commercial agents should also be covered. The fact that, basically, the same types of work change hands in galleries and at public sales suggests that they should be placed on an equal footing. 5. The works subject to the artist's resale right must be specified if the right is to be applied uniformly. The concept of original work must therefore be defined more closely. A unique copy of a work is without a doubt embraced by the concept. Certain categories of work made in a limited number of copies must be able to confer entitlement to payment of royalties on condition that they are copies considered to be such according to professional usage. 6. Royalties should be payable on the sale price. Any attempt to limit the assessment basis to the increase in value compared with the purchase price would encounter considerable regulatory difficulties. Artists' resale royalties, like any other royalty, must be payable by reason of the exploitation of the work, irrespective of the success it achieves. 7. The amount on which the royalty is based must not be too high lest the right become the preserve of the best-known artists. A threshold of ECU 1 000 is an average amount compared with the various national thresholds currently laid down. 21 8. The Commission considers it appropriate that Member States should be given the option of applying the artist's resale right from a threshold lower than the Community threshold, despite the fact that this derogation is not a unifying factor. If a Member State avails itself of this opportunity, the artist's resale right will apply also to a category of works with a low market value. Any disparity created is not likely to affect trade to an appreciable extent within the internal market. The introduction of a lower national threshold may be justified on manifest social grounds. 9. The rate of the royalty should not be too high. Being the average of the rates adopted by the various Member States, a basic rate of 4% seems reasonable. 10. Harmonization of the artist's resale right should not have the effect of encouraging sales of works of contemporary art outside the Community. 11. Some interests concerned have accordingly proposed that royalties be imposed on exports to non-Community countries to prevent people from evading payment when a work is sold. Apart from the practical problems involved in policing exports, such an approach conflicts with the principle of the territoriality of the artist's resale right. Royalties cannot therefore be charged on sales in third countries. 12. The Commission considers it would be preferable to provide for a tapering scale of rates of royalty based on three price bands. The rate proposed for amounts in excess of ECU 250 000, i. e. 2% of the sale price net of tax, approximates to the additional expenses incurred in the event of a work being exported with a view to evading royalties. 13. As to those entitled to receive royalties, it was suggested at the hearings on the subject that the number of persons eligible after the author's death be limited. However, in the light of the subsidiarity principle, any initiative affecting Member States' laws of succession should be avoided, all the more so since the matter is not such as to affect the functioning of the internal market. 14. The rules on managing the artist's resale right should be flexible. A number of Member States require that the right be managed by a national performing right society. In principle, it can be managed by a public authority, by collecting societies or by the owner of the right himself, in which case he must be free to decide how to exercise it. The proposal confines itself to providing for the possibility of Member States' making recourse to a collecting society mandatory. In that event, the necessary conclusions must be drawn from the Phil Collins judgment with collecting societies being obliged to treat authors from other Member States equally. 15. Enjoyment of the artist's resale right must be restricted to nationals of Member States of the European Union and foreign authors whose countries afford such protection to Community authors. 22 16. The duration of the artist's resale right should be up to 70 years after the author's death, as provided for in Directive 93/98/EEC on the term of protection for copyright. At this stage, it is not appropriate to introduce, as was proposed by some interests concerned, a rule whereby a work becomes public property provided a given royalty is paid to the author when it is resold {domaine public payant). 17. Lastly, in the interests of effective application of the artist's resale right, suitable procedures are laid down for monitoring transactions, including the introduction of a right for the author or his authorized representative to obtain information from the person liable for payment of a royalty. Any monitoring procedures must apply without prejudice to provisions designed to safeguard privacy. 23 Proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on the resale right for the benefit of the author of an original work of art THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 100a thereof, Having regard to the proposal from the Commission(I), Having regard to the opinion of the Economic and Social Committee(2), Acting in accordance with the procedure laid down in Article 189b of the Treaty(3), 1. Whereas, in the field of copyright, the artist's resale right is an inalienable right enjoyed by the author of an original work of art or original manuscript to an interest in any sale of the work subsequent to the first transfer by the author; 2. Whereas the artist's resale right is intended to ensure that authors share in the economic success of their works; whereas it helps to redress the balance between the economic situation of authors and that of other creators who benefit from successive exploitations of their works; 3. Whereas the artist's resale right forms an integral part of copyright and is an essential prerogative for authors; whereas the imposition of such a right in all Member States meets the need for providing creators with an adequate and standard level of protection; 4. Whereas under Article 128(4) of the Treaty the Community is to take cultural aspects into account in its action under other provisions of the Treaty; 5. Whereas the Berne Convention for the Protection of Literary and Artistic Works provides that the artist's resale right is available only if legislation in the country to which the author belongs so permits; whereas the right is therefore optional and subject to the rule of reciprocity; whereas it follows from the case-law of the Court of Justice of the European Communities on the application of the principle of non-discrimination laid down in Article 6 of the Treaty, as shown in the judgment of 20 October 1993 in Joined Cases C-92/92 and C-326/92, Phil Collins and Others(4). that domestic provisions (1) OJ No C (2) OJ No C (3) (4) Opinion of the European Parliament of [1993] ECR 1-5145. 24 containing reciprocity clauses cannot be relied upon in order to deny nationals of other Member States rights conferred on national authors; whereas the application of such clauses in the Community context runs counter to the principle of equal treatment resulting from the prohibition of any discrimination on grounds of nationality; 6. Whereas the artist's resale right is currently provided for by the domestic legislation of a majority of Member States; whereas such laws, where they exist, display certain differences, notably as regards the works covered, those entitled to receive royalties, the rate applied, the sales subject to payment of a royalty, and the basis of assessment thereof; whereas the application or non-application of such a right has a significant impact on the competitive environment within the internal market; whereas as with any other parafiscal charge it is an element which must be taken into account by each individual wishing to sell a work of art; whereas this right is therefore a factor which contributes to the creation of distortions of competition as well as displacements of sales within the Community; 7. Whereas such disparities in the application of the artist's resale right by the Member States have a direct negative impact on the proper functioning of the internal market in works of art as provided for by Article 7a of the Treaty; whereas in such a situation Article 100a of the Treaty constitutes the appropriate legal basis; 8. Whereas the objectives of the Community as set out in the Treaty include laying the foundations of an ever closer union among the peoples of Europe, promoting closer relations between the Member States belonging to the Community, and ensuring their economic and social progress by common action to eliminate the barriers which divide Europe; whereas to that end the Treaty provides for the establishment of an internal market which presupposes the abolition of obstacles to the free movement of goods, freedom to provide services and freedom of establishment, and by the introduction of a system ensuring that competition in the common market is not distorted; whereas harmonization of Member States' laws on the artist's resale right contributes to the attainment of these objectives; 9. Whereas Council Directive 77/388/EEC(5), as amended by Directive 94/5/EC(6), amending supplementing the Directive 77/388/EEC progressively introduces a Community system of taxation applicable inter alia to works of art; whereas measures confined to the tax field are not sufficient to guarantee the harmonious functioning of the art market; whereas this objective cannot be attained without harmonization in the field of the artist's resale right; system of value common added and tax 10. Whereas existing differences between laws should be eliminated where they have a distorting effect on the functioning of the internal market, and the emergence of any new differences of that kind should be prevented; whereas there is no need to eliminate or prevent the emergence of differences which cannot be expected to affect the functioning of the internal market; (5) OJNo L 145, 13. 6. 1977, p. 1. (6) OJN0L6O, 3. 3. 1994, p. 16. 25 11. Whereas it is not necessary to harmonize every provision of Member States' laws on the artist's resale right; whereas it will be sufficient to limit the harmonization exercise to those domestic provisions which have the most direct impact on the functioning of the internal market; whereas, however, the objectives of this limited harmonization exercise cannot be sufficiently achieved by the Member States acting alone; whereas, in accordance with the third paragraph of Article 3b of the Treaty, the proposed course of action does not go beyond what is necessary to achieve the abovementioned objectives; whereas this Directive is therefore, in its entirety, consistent with the requirements of the principles of subsidiarity and proportionality; 12. Whereas, pursuant to Council Directive 93/98/EC(7), the term of copyright runs for 70 years after the author's death; whereas the same period should be laid down for the artist's resale right; whereas, consequently, only the originals of works of contemporary or modern art may fall within the scope of the artist's resale right; whereas, in general, works of contemporary or modern art occupy a relatively modest place among sales by public auction; 13. Whereas the scope of the artist's resale right should be extended to any resale, with the exception of transactions between private individuals, of the work subsequent to the first sale by the author; whereas the artist's resale right therefore applies to transactions effected by all professional sellers, such as salerooms, art galleries and, in general, any dealer in works of art; 14. Whereas effective rules should be laid down based on experience already gained at national level with the artist's resale right; whereas it is appropriate to calculate the royalty as a percentage of the sale price and not of the increase in value of works whose original value has increased; 15. Whereas the categories of works of art subject to the artist's resale right should be harmonized; whereas works of applied art should be excluded; 16. Whereas the fixing of a Community minimum threshold for the application of the artist's resale right takes account of the requirements of the internal market; whereas, however, Member States should be given the opportunity to fix national thresholds which are lower than the Community threshold so as to further the interests of young artists; 17. Whereas the non-application of the artist's resale right below the minimum threshold makes it possible to avoid disproportionately high collection and administration costs; 18. Whereas the rates set by the different Member States for the application of the artist's resale right vary considerably at present; whereas the effective functioning of the internal market in works of contemporary or modern art requires the fixing of uniform rates; 19. Whereas a system consisting of a tapering scale of rates for several price bands may help to prevent the Community rules on the artist's resale right from being circumvented; whereas the rates must reflect the interests both of artistic circles and of the art market; (7) O J N o L 2 9 0, 24. 11. 1993, p. 9. 26 20. Whereas the person liable for payment of the royalty is the seller; whereas the latter is the person or undertaking on whose behalf the sale is concluded; 21. Whereas provision should be made for the possibility of periodic adjustment of the threshold and rates; whereas, to this end, it is appropriate to entrust to the Commission the task of drawing up periodic reports on the practical effect of the application of the artist's resale right and, where appropriate, of making proposals for amendment of the threshold and rates; 22. Whereas the persons entitled to receive royalties must be specified, due regard being had to the principle of subsidiarity; whereas it is not appropriate to take action through this Directive in relation to Member States' laws of succession; whereas, however, those entitled under the author must be able to benefit fully from the resale right after his death; 23. Whereas Member States should be free to determine the procedures for collecting and managing the amounts paid over by virtue of the artist's resale right; whereas in this respect management by a collecting society is one possibility; whereas, however, Member States must ensure that amounts intended for authors who are nationals of other Member States are in fact collected and distributed; 24. Whereas enjoyment of the artist's resale right must be restricted to nationals of the Member States and foreign authors whose countries afford such protection to authors who are nationals of Member States; 25. Whereas appropriate procedures for monitoring transactions should be introduced so as to ensure by practical means that the artist's resale right is effectively applied by Member States; whereas this implies a right on the part of the author or his authorized representative to obtain any necessary information from the person liable for payment of royalties, HAVE ADOPTED THIS DIRECTIVE: CHAPTER I Scope Article 1 Subject-matter of the artist's resale right Member States shall provide, for the benefit of the author of an original work of art, an artist's resale right, to be defined as an inalienable right to receive a percentage of the sale price obtained from any resale of the work, with the exception of transactions effected by individuals acting in their private capacity, subsequent to the first transfer of the work by the author. 27 Article 2 Works of art to which the artist's resale right relates For the purposes of this Directive, "original work" means manuscripts and works of plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics and photographs, provided they are made by the artist himself or are copies considered to be original works of art according to professional usage in the Community. CHAPTER n Particular provisions Article 3 Threshold 1. Royalties collected pursuant to Article 1 shall be payable when the sale price is equal to or higher than ECU 1 000. 2. Member States may fix a national threshold which is lower than the threshold laid down in paragraph 1. Article 4 Rates and collection The royalty collected pursuant to Article 1 shall be set at the following rates: (a) 4% of the sale price between ECU 1 000 and ECU 50 000; (b) 3% of the sale price between ECU 50 000 and ECU 250 000; (c) 2% of the sale price above ECU 250 000. The royalty shall be payable by the seller. Article 5 Calculation basis The sale prices referred to in Articles 3 and 4 are net of tax. Article 6 Persons entitled to receive royalties 1. The royalty collected under Article 1 shall be payable to the author of the work and, after his death, to those entitled under him. 2. Member States may provide for the collective management of sums paid over by virtue of the artist's resale right. They shall determine the arrangements for collecting and distributing royalties where the author is a national of another Member State. 28 Article 7 Third-country nationals entitled to receive royalties Member States shall provide that authors who are nationals of third countries shall enjoy the artist's resale right in accordance with this Directive, provided that authors from the Member States enjoy reciprocal treatment in the third countries concerned. Article 8 Duration of the artist's resale right The artist's resale right shall last for the period laid down in Article 1 of Directive 93/98/EEC. Article 9 Right to obtain information The author or his authorized representative may require any dealer, sales director or organizer of public sales to furnish any information that may be necessary in order to secure payment of sums payable under the artist's resale right during the previous year of original works of art. CHAPTER III Final provisions Article 10 Revision clause The Commission shall present to the European Parliament, the Council and the Economic and Social Committee not later than 1 January 2004 and every five years thereafter a report on the implementation of this Directive and shall, where appropriate, put forward proposals for adjusting the minimum threshold and the rates of the royalties to take account of changes in the sector. Article 11 Implementation 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1999. When Member States adopt these provisions, these shall contain a reference to this Directive or shall be accompanied by such reference at the time of their official publication. The procedure for such reference shall be adopted by Member States. 2. Member States shall communicate to the Commission the provisions of national law which they adopt in the field covered by this Directive. 29 Article 12 Entry into force This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. This Directive is addressed to the Member States. Article 13 Done at Brussels, For the European Parliament The President For the Council The President 30 ISSN 0254-1475 COM(96) 97 final DOCUMENTS EN 06 Catalogue number : CB-CO-96-125-EN-C ISBN 92-78-01765-5 Office for Official Publications of the European Communities L-2985 Luxembourg 31

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - Universal service for telecommunications in the perspective of a fully liberalised environment - An Essential Element of the Information Society

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 13. 03. 1996 COM(96) 73 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS U N I V E R S AL S E R V I CE F OR T E L E C O M M U N I C A T I O NS IN T HE P E R S P E C T I VE OF A F U L LY L I B E R A L I S ED E N V I R O N M E NT AN E S S E N T I AL E L E M E NT OF T HE I N F O R M A T I ON S O C I E TY TABLE OF CONTENTS I INTRODUCTION II THE CURRENT CONCEPT OF UNIVERSAL SERVICE IN TELECOMMUNICATIONS IN THE EUROPEAN COMMUNITY 3 4 III ISSUES FOR THE EVOLUTION OF UNIVERSAL SERVICE IN THE SHORT TERM 8 IV THE EVOLUTION OF UNIVERSAL SERVICE FOR TELECOMMUNICATIONS AND ACCESS TO ADVANCED SERVICES IN 17 THE CONTEXT OF THE INFORMATION SOCIETY V CONCLUSIONS 21 ANNEX 1 TIMETABLE FOR ACTION IN THE SHORT TERM (1996-1998) ANNEX 2 UNIVERSAL SERVICE FOR TELECOMMUNICATIONS IN THE EUROPEAN COMMUNITY TODAY QUESTIONNAIRE SENT TO MEMBER STATES ANNEX 3 LIST OF ORGANISATIONS PROVIDING WRITTEN RESPONSES TO THE THEME PAPER ON UNIVERSAL SERVICE ANNEX 4 SUMMARY OF THE MAIN ISSUES RAISED IN THE PUBLIC CONSULTATION ON THE UNIVERSAL SERVICE THEME PAPER INTRODUCTION In the emerging information society more and more people - m private life and at work - depend on modern communications. To be atole to communicate and interact whether by telephone, fax, e-mail or electronic media is a crucial and decisive factor for every citizen and business. The policy of the European Commission towards the information society has from the beginning taken into account the need to avoid a "two-tier-society", divided between those who have access to the new possibilities and are comfortable using them and those who are excluded from fully enjoying their benefits. Universal service is a dynamic and evolving concept, it is one of the essential elements of this information society and the priority attached to it must be considered fully opening the Community's policy of telecommunications markets to competition from 1 January 1998'. the context of in The telecommunications sector is an area of startling innovation and rapid technological evolution. It is critical for the overall competitiveness of Europe's economy. 1998 is a central gateway to the information society as effective competition ensures that both business and residential users have the benefits in terms of choice, quality and the best possible prices. Within this framework, the current concept of universal service, found in the Voice Telephony Directive*, corresponds to the obligation to provide access to the public telephone network and to deliver an affordable telephone service to all users reasonably requesting it. This concept is improving the level of service currently found in the Community and operates as a guarantee that these advantages are widely spread and that the interests of consumers are actively promoted. In the light of the political agreements of 1993 and 1994 resulting from the Commission's 1992 Telecommunications Review3 in favour of the full liberalisation in the sector, the Council , the European Parliament , the Economic and Social Committee and the Committee of the Regions have all, recognised that liberalisation goes hand in hand with parallel action to create a regulatory framework which secures the delivery of universal service. The European Parliament emphasised: "the central importance of universal service principles, in order to ensure the complementarity between economic and social goals. and the balance between liberalisation and the need to maintain basic, affordable services for all consumers", whilst Council identified universal service as permitting "access to a defined minimum service of specified quality to all users everywhere and, in the light of specific national conditions, at an affordable price". To respond to these positions, the regulatory framework for universal service at a Community level which has been put in place identifies the scope of such service; addresses the notion of affordabiiity and is in the process of establishing rules for financing that service in a liberalised environment. that is against this background It this Communication. It has done so in the light of the results of a survey of the level and quality of service found in the Member States and of a public consultation on universal service issues during Autumn 19958. (The detailed results are set out in the annexes two to four of the Communication). The aims of the Communication are threefold: the Commission has prepared to describe Firstly, in teJecommunications, both in terms of the regulatory framework and in terms of the current level of universal service provision in the Member States; concept of universal service current the Secondly, to address practical issues and propose solutions and action for the future development of universal service; and Thirdly, to place universal service for telecommunications context of the information society. in the broader THE TELECOMMUNICATIONS «SI THE EUROPEAN COMMUNITY UNIVERSAL CURRENT CONCEPT OF SERVICE ÏN The need for a concept of universal service at a European level In the past there was no harmonisation at a European level of universal service in the telecommunications sector. Priorities were set at a national level and in the absence of competitive forces in most Member States this produced mixed results; positive developments such as full network digitalisation in France or the very high levels of service penetration in Scandinavian Member States, but also worrying failures in certain countries in terms of poor service, long waiting lists to get a phone or long delays in repairing faults". Were such a pattern of very different levels of development, which characterised the monopoly environment, it would substantially undermine the goal of strengthening economic and social cohesion set out in the Treaty. The same concern to achieve balanced development within the different parts of the Community must also apply in a liberalised environment. to continue unchecked, In addition, the existence of a certain minimum set of services is essential for the development of the internal market. Different levels of service obligations in the Member States would hamper the take-off of Europe-wide telecommunication services. The absence of coherent national approaches to universal service could also create new barriers to effective competition. A further political impetus has been given with the entry into force of the introducing the obligation to maintain a high standard of Maastricht Treaty consumer protection within the Community's policies In this regard, the competitive forces which liberalisation will unleash will be major factor in improving consumer choice and service quality. What is the universal service obligation being put in place Community today? in the European With the adoption by the European Parliament and the Council of the Voice Telephony Directive in December 1995 the Community has now for the first time identified the common scope of universal service obligations in the EC. In doing this it has chosen to create obligations which will guarantee a defined level of service in a liberalised environment and which will improve the current level of service in many parts of the Community. This detailed description of universal service found in the Voice Telephony Directive is completed by the package of measures, (which address the practical arrangements for universal service), which have been tabled as part of the preparation for a liberalised environment11. The final element in the current concept will be provided by guidelines which the Commission w'li use in assessing the way Member States propose to finance universal service. These will be published in September 1996. The definition of universal service which emerges from the framework outlined above sets the maximum scope of services which can be included in any calculation of the cost of the universal service. Only those costs may be shared amongst other market players. telecommunications-related At the same time, Member States in line with subsidiarity remain free to set additional particular technologies or facilities (such as digital mobile networks or ISDN services) and/or to set service and coverage targets at a national level, providing these are proportional, non-discriminatory, imposed in a transparent manner and consistent with the competition rules. Any additional financial burden associated with meeting such obligations must not funded out the mechanism established for funding universal service. to provide obligations a. Scope The obligations set out in the Voice Telephony Directive comprise the provision of voice telephony service via a fixed connection which will also allow a fax and a modem to operate12, as well as the provision of operator assistance, emergency and directory enquiry services (including the provision of subscriber directories) and the provision of public payphones. Users should also have access to published information about the cost and prices of services, about their quality and whether targets for quality are being met13. By including network access within the scope of universal service, users are given the possibility of accessing not only the defined voice telephony today's service but all services telecommunications networks (i. e. every citizen will be able to access inter active and on-line information services including the Internet, provided they have a computer and a subscription with an Internet service provider14). Nevertheless, the quality and speed of the connection will influence the ease with which these services can be used. that can be provided over This scope meets the concerns of the European Parliament that users should have an efficient, reliable and affordable service, with defined (and monitored) levels of service in respect of the time taken to get a telephone connection installed; the quality of transmission and reception of calls and the time taken to repair faults. The Directive in promoting new services also meets the Parliament's call for highly specific service elements, such as the availability of itemised billing, calling line identification, touch-tone dialling and number portability15. b. Affordabiiity Whilst a political consensus has emerged on affordabiiity as a key element in any concept of universal service, this is not yet an explicit requirement of the Voice Telephony Directive. Affordabiiity is a matter to be determined at a national level because it is so closely linked to specific national circumstances and national policy objectives (such as regional development policy). The current concept of universal service simply allows national regulatory authorities to impose controls on pricing linked to universal service and regional development policies. Such an approach is consistent with the principle of subsidiarity. In contrast to areas such as technical performance or quality of service, where objective standards may be defined, it does not appear appropriate to establish a maximum or minimum level for affordabiiity (implying price regulation at a European level) which should apply to all Member States. Nevertheless, of telecommunications service to every citizen and progress made in Member States will be closely monitored (see Section III below). affordabiiity extension crucial the to is c. Financing of universal service The shift from a monopoly environment to competition means that rules are needed to determine the extent to which any financial burden associated with providing universal service is shared out amongst market players. Common rules across the Community are also needed to calculate how much providing universal service costs. identifying The measures therefore accompanied by principles for its costing and funding through the proposed framework the Commission to verify whether national schemes for universal service are in interconnection16, as well as a mechanism allowing the scope of universal service for is line with the Community framework 17. framework envisages payments being made either This into an independent universal service fund at a national level which would make payments to operators providing universal service or (ii) directly to operators providing universal service as an additional payment to the commercial charges for interconnecting with their network. (i) These rules will be complemented later this year by the guidelines on costing and funding identified above. The regulatory certainty which the current framework is establishing has been essential to allow Member States to prepare their national regulatory environment in time for the 1998 deadline. Where this Communication refers to the Community framework it is therefore referring to this whole package of measures preparing the environment for full liberalisation, unless otherwise specified. The improvement of service levels between 1990 and 1995 The level and range of telecommunications services offered in the European Union has improved over the last five years (See Tables in Annex 2). Users are seeing this in very practical ways. Choice is no longer limited to the colour of the telephone set. Waiting lists for a telephone line have been substantially reduced in almost every Member State. Faults occur less frequently and are repaired more quickly. In many countries customers are compensated if appointments are missed or the line is out of action for too long. In Denmark, France, The Netherlands, Finland, Sweden and the UK more than 9 out of every ten homes have a telephone (see Table A1 in Annex 2), whilst in Germany the figure in very close to nine out of ten, even taking account of reunification. Improvements have also be seen in some of the less favoured regions of the Union, for example, the national phone network in Ireland and Portugal have been substantially extended with the percentage of homes with a telephone growing from 66% and 47% respectively in 1990 to 80 and 75% today, partly reflecting the investment provided through the Community's Special Telecommunications Action for Regional development (STAR) programme. In relation to the prices of telecommunications services, the general trend since 1990 has been for fixed elements, (connection charges and rentals) to increase, as well as increases in peak rate local calling. At the same time, important reductions have been seen in international and long-distance prices and many Member States have extended the availability of cheap rate local calling to compensate for the increases in peak rate charges. From the questionnaire completed by the Member States, seven out of eight Member States who were able to provide an average figure for price changes showed that overall prices had decreased \n real terms by between 5 and 43%. User demands are becoming much more sophisticated. A rapidly increasing proportion of citizens are using a mobile telephone. In Scandinavian Member States the figure is close to one in four. At home the telephone line is no longer just connected to a telephone or an answering machine, it may be shared with a fax or a modem. There are a wide range of freephone and value-added services available and even in the basic telephony service many users are offered new advanced telephone facilities, such as the possibility of forwarding their calls to another telephone number or being informed that there is another call on the line. Whilst the overall trend is one of improvements in the level and quality of service, continued pressure through competitive forces and through regulation is required to ensure that this process continues and accelerates as competition takes hold. What are the reasons for this steady improvement in telephone services? Improvements in quality and choice are a direct response to the falling costs and greater reliability of new services and equipment. Competition too in terminals, value-added service and mobile communications have stimulated innovation, lower prices and better customer service. The separation of the operator and the regulator of telecommunications services, a requirement of Community law since 1990, has led to more effective regulation as the State has sought to impose clear targets, often in the form of licence conditions or negotiated contracts, with its incumbent operator. Ill ISSUES FOR THE EVOLUTION OF UNIVERSAL SERVICE IN THE SHORT TERM It is clear from the public consultation that a range of concerns remain about both the current level of service and the impact of a liberalised environment. Concerns remain despite the overall improvements in service. Why does the Community at present not take a broader definition of universal service? How will the affordabiiity of universal service be maintained in a liberalised environment? - What will happen to uniform national prices in a fully liberalised environment? - How can universal service be improved in the less favoured and less populated regions and areas of the Community? - Is adequate service provided to users with disabilities or special needs? - Are quality of service standards being effectively monitored and enforced in the Member States and what will be the European Community's role in setting those standards? - How can users compare service levels, prices and even affordabiiity in different Member States more effectively and how can users have a stronger role in setting quality of service standards and the level of affordabiiity? Why does the Community at present not take a broader definition of universal service? Defining the scope of the universal service obligation represents a delicate balance. Too narrow an vision of universal service arid citizens may be kept out of full participation in society. Too broad a vision and the competitive forces which are the principal driver of better services, lower prices and greater innovation will be held back as new players in the market will be deterred from entering the market, it is in striking that balance that the interests of every citizen can be best secured. The universal service obligation does not include at this stage a requirement to provide leased lines18 or ISDN1". These are services whose provision on the basis of cost-oriented tariffs is, however, already either required or recommended throughout the European Union. Any broad extension of universal service obligations is felt to be premature at this stage, particularly because : - - it could end up making users and households pay for services they neither need nor use; the costs involved (where these have to be shared with the other players in the market, e. g. through a universal service fund) might actually deter market entry by those companies, delaying the arrival of the benefits which competition will offer to all users; and - it risks providing or even subsidising services which users may be able to pay for on a normal commercial basis. The provision of an affordable voice telephony service will already mean that households and businesses in any part-of the Community can talk to each other, send faxes and electronic mail, hook up computers to "surf" the Internet and other on-line services. This is the same telephone line over which services such as telephone banking, tele-shopping and on-line information services are already being consulted and down which even video-on-demand services could be sent. At the same time, the current failure in some parts of the Community (as shown by the results of the survey of Member States) to guarantee even this basic level of service would, if not corrected by a regulatory framework allowing new investment to proceed and a strong and active national regulatory authority, have risked increasing regional disparities and the creation of the two tier society identified above A first priority must therefore be the delivery of genuine universal service throughout the Community, and, in particular, throughout the Community's less favoured regions. respond All the same there is broad recognition that universal service is a dynamic and evolving concept and must in the needs and expectations of Europe's citizens. This implies that the scope of universal service must be reviewed as a basis for more concrete policy action, where appropriate. Nevertheless those subject to universal service obligations require a degree of certainty against which investment decisions can be made. The speed of evolution of the concept has therefore to be balanced against the need for predictability for investment decisions. to changes The Commission will therefore report by 1 January 1998 and, at regular intervals thereafter, on the scope, quality, level and affordabiiity of the universal service in the European Community and consider the need, in the light of the prevailing circumstances for adaptation of the scope of universal service at a European level, bearing in mind the need to ensure a predictable regulatory environment. The main issues to be addressed in that Report as well as the criteria for this evolution are returned to in Section IV below. How will the affordabiiity of universal service be maintained in a liberalised environment? Whilst costs have fallen dramatically for operators, these have not often been passed on in the form of lower prices for users. Price levels vary considerably between Member States (See Table A7 in Annex 2 for a comparison of 1995 price levels in ECU). Now, as competition approaches, operators are attempting to adjust their prices. This reflects both existing requirements of the Community framework for prices in a monopoly environment to be cost-oriented20, and the threat of competitors charging lower prices for the most profitable services (i. e. business, long-distance and international communications). fundemental element of This process of tariff rebalancing, resulting from the political decisions in favour of the liberalisation of the sector, means that for some users, particularly in the short- term before real competition bites, telephone bills could rise21. This process remains a liberalised environment22. At the same time, it is essential to ensure that further progressive and necessary rebalancing does not adversely affect users, particularly residential consumers who make few long-distance and international calls and so cannot benefit from the lower rates in those areas. This fundamental concern was well reflected in the public consultation which raised the fact that the impose current framework, whilst promoting affordabiiity, does not yet explicit obligations for services to be provided at an affordable price the preparation for a fully In the short term it is very important to protect the most vulnerable groups of users, and residential users in general, from the effects of the rebalancing process. Member States should ensure that National Regulators adopt, where necessary, special tariff packages23, price caps24 and other mechanisms in order to moderate the effects of the rebalancing process on connection charges, monthly rental and tariffs. This is particularly important in the run up to a liberalised environment and for users in the Community's less favoured and less populated regions. Such targeted and special tariff schemes are already in place to varying degrees in all Member States and are listed in Table A10 of Annex 2 Potential burdens associated with their provision may be financed out of the funding mechanism for universal service. As mentioned above, the Monitoring Report before 1 January 1998 will also assess developments in the pricing of different telecommunications services and consider the need for further action at a Community level to ensure affordable ' access for every citizen. Even so, the issue is affordabiiity rather than stopping any adjustment of pricing structures. The affordabiiity of the overall service for all users, and, especially for particularly vulnerable groups, such as the disabled, or those on low incomes must be maintained. Assessment of affordabiiity is principally an issue to be decided at the a national framework provided by Community legislation, taking account of the specific national situation and the views of user and consumer organisations. Consumer organisations have also suggested the need for comparison at a European level of the relative affordabiiity of services. level by the appropriate national regulatory authority within Affordabiiity is not only a matter of overall price, for many users it is also a question of managing weekly and monthly expenditure and being able to predict what the telephone will cost. As soon as competition is effectively established a much wider range of payment packages are likely to be offered, for example, spreading the installation charge over a series of quarterly payments or paying a higher monthly rental, but with free or cheaper local or national calling. Such flexibility would allow users, particularly those on low incomes, much better predictability over what the telephone would cost them each month. At the same time, many users also want more information from their bills about what they spend. Finally, users also want greater control over what they spend, for example, the possibility of barring calls to particular numbers, such as "premium" rate services or international calls. What will happen environment? to uniform national prices in a fully liberalised In a fully liberalised environment the way services are packaged and priced is likely to be much more innovative, offering real choice and potential savings to most users. fundamental responsibility for national regulatory authorities will be to ensure that universal service is affordable for all groups of users, whether as a response to competition or as a result of regulatory intervention. time, as highlighted above, a the same At This involves an assessment by the regulator of what in light of specific national circumstances can be considered as a "reasonable" price for users in particular regions. Member States currently require at least the incumbent operator to provide a standard nation-wide package of prices (effectively, a set of geographically averaged tariffs) for most, if not all telecommunications services (including basic voice telephony services). The result is that the same tariff bands are offered throughout the country, even if the cost of providing a connection and services in one region may be higher than in another. In the past this helped to ensure that services remained affordable for citizens in every part of a country. In a monopoly environment such geographic price averaging does not automatically mean that operators are making a loss in providing every service in 10 those high cost areas, because in the absence of competition they can charge prices for services which are not part of universal service, such as leased lines, which ensure a profit even in high cost areas. In a liberalised environment, any approach to uniform pricing must guarantee and improve affordabiiity. However, the situation is altogether more complex than before. As competition establishes itself, particularly in cities and other areas which can be served relatively cheaply, new players may concentrate on customers there and offer lower prices than the incumbent. Strictly maintaining uniform national prices would (i) if prices were maintained at current levels, risk the incumbent operator losing substantial parts of its market share in the cities and low cost regions; (ii) if prices were lowered nationally to meet lower prices offered by competitors in certain areas, raise the amount of funding required from other market players to cover the gap left by the potentially lower revenues in high cost areas from which universal service had be funded. Competitive pressures are likely to encourage over time a progressive move away from strict geographic averaging towards considerably more flexible tariff structures, This is likely to mean that different tariffs are offered for the same services in different areas within a Member State. Greater flexibility must be conditional upon the regulatory framework (i) including adequate measures to ensure affordabiiity (such as those outlined above); (ii) ensuring that price increases for users in remote and rural areas, other than adjustments to achieve cost-orientation, are not used to compensate operators for losses in revenue resulting from price decreases elsewhere and (iii) ensuring that any differences in pricing between high cost areas and low cost areas do not endanger the affordabiiity of universal service. How can universal service be improved in the less favoured and less populated regions and areas of the Community? Whilst the current regulatory framework, (and in particular, the obligations in respect of the voice telephony service, interconnection and the minimum set of leased lines), has been designed to guarantee the provision of universal service throughout the Community, the Commission and Member States remain aware of the particular pressures faced in the less favoured and less populated regions. The issues of scope and affordabiiity of universal service, and of telecommunications services in general, are of critical importance to the Community's less favoured regions. This reflects the traditionally lower level of development, demand and incomes in such regions and the sometimes higher costs of installing, operating and maintaining facilities due to the location or climate. These concerns, highlighted by a number of operators, regulators and user associations located in these regions, become all the more critical in the context of the information society. The Commission will continue to work to ensure that a combination of liberalisation and new technologies reduces rather than widens existing regional differences within the European Community. Given that fuir liberalisation has not yet touched many of the Community's less favoured regions, it is difficult to assess its real impact and the positive effects which may be brought in terms of improvements in service quality, choice and 11 prices, as well as increasing private investment. Additionally, the costs of providing service in remote and rural areas are continuing to fall as a result of new technologies (such as mobile or wireless solutions) and may fall further, where telephony services can be offered in combination with other new services (including audio-visual services and information services). Experience in liberalised markets, such as the United Kingdom, Finland and Sweden, or in the rapid growth of digital mobile communications under a duopoly environment are however, encouraging, though some caution must be exercised in directly extending the experience of more developed countries in the Community with relatively higher standards of living to other regions in the Community, particularly given the higher relative current costs associated within providing universal service in less favoured regions27. On the other hand, there are important concerns about the more marked impact of price changes on both residential and business users in these regions and the speed with which they will enjoy benefits associated with competition compared with developed areas within the EC. Additionally, the process of liberalisation in releasing private investment may favour investment in services and infrastructure in areas of high demand and relatively low cost. The Commission must be vigilant against the danger that the different speeds at which territories of the Community equip themselves with the infrastructures, services and skills needed for the emerging information society may contribute to sustaining a "time gap" and to further widening of social and economic disparities. These issues must obviously be taken into account within the Community's cohesion policy. In relation to the twin concerns of encouraging network investment and the provision of services throughout each Member State and avoiding a significant time gap in development in different Member States, priority must continue to be attached at a national and Community level to the development and extension of existing networks. In addition to the framework provided by universal service, the Community Structural Funds, as well as other initiatives at Community and national level, will continue to contribute as a complement to private financing - to the task of upgrading and developing the telecommunications infrastructure in less favoured regions within the Community, as has been successfully achieved in many parts of Ireland. In particular, the completion of the programmes of network digitalisation, especially in Greece, Portugal, Spain and Southern Italy, should be an important priority. Account is also taken of the need for relevant training initiatives and for pilot projects aimed at stimulating awareness and demand. For all these reasons, there is a particular need for close monitoring of developments in these regions in order to take appropriate action to strengthen economic and social cohesion. Detailed aspects of this monitoring, particularly with regard to the evolution of prices and the collection of data allowing a comparison of the relative affordabiiity of services are set out below. In the light of such monitoring, the Commission will determine periodically whether the definition and scope of universal service has to be revised, or new or existing mechanisms (for example, regional development policies) used to take account of specific effects of liberalisation in these regions. 12 Is adequate service provided to users with disabilities or special needs? Certain groups of customers have special needs, which universal service today either does not always meet, or does not do so at an affordable price. This concern has been highlighted by the European Parliament. Telecommunications offers such users a real lifeline with the rest of their community and the concept of universal service should ensure that such users benefit from an equivalent level of service at an affordable price to that offered to users without disabilities, taking into account the state of network development and market demand. Examples cited in the consultation included both the provision of services in the It could home (such as video- or textphones for the deaf) and in public places. also include, where necessary, the provision of special services (such as relay services allowing textphone users to communicate with users without textphones), or specially adapted equipment. A second element in extending the current coverage of service to specific users might include the offer of special and innovative services (such as voice mail boxes in the public network) for users who cannot easily receive calls because they do not have access to their own telephone. Those benefiting from such a service, which is being trialed in a number of Member States, might include groups such as the homeless, thereby recognising the role of telecommunications in fighting social exclusion. It would be a matter of national social policy, rather than universal service funding mechanisms as to whether specific financial support was made available to ensure the affordabiiity of such services for particular groups of users. Are quality of service standards being effectively monitored and enforced in the Member States and what will be the European Community's role in setting those standards? The Voice Telephony Directive already requires Member States to set quality of service indicators for a range of different things, such as how long it takes to get a telephone, how long it takes a call to connect and what proportion of public payphones are in working order. This simply builds on current practice in most Member States. Results must be published of the performance of the operators required to meet these targets. Whilst this provides greater transparency, it will only be fully effective if supported by active monitoring, and where appropriate, enforcement of such standards (with an appropriate range of sanctions up to the possible withdrawal of licences, where there is a consistent failure to meet service targets) by the telecommunications regulator in the Member State. Furthermore, there should be clear and straight forward procedures allowing users to initiate complaints against the operator. Looking beyond the current framework, it is important that the different levels of service quality, as well as differing targets set at a national level, do not create barriers to the development of the internal market and distort competition within the Community. Equally, it is essential that in setting service levels Member States maintain a high standard of consumer protection. In this context and subject to the principle of subsidiarity, minimum quality of service targets should be defined at a European Community level as a reference within which detailed national targets (taking account of the specific situation of each Member State) would be set. 13 How can users compare service levels, prices and even affordabiiity in different Member States more effectively and how can users have a stronger role in setting quality of service standards and the level of affordabiiity? It is clear that despite overall improvements, there remains considerable variation in the quality and level of service in the Member States and in the degree to which sanctions exist and are used , where targets are not met by operators. This concern is compounded by the difficulties faced by some national regulatory authorities in obtaining basic indicators of universal service, such as the number of households with a telephone, and by the lack of comparability of certain of data between Member States. The obligations in the Voice Telephony Directive should help by imposing obligations to set and publish quality of service indicators at a national level. However, users seek more than this and the varying levels of service in the Member States impacts the provision of pan-European networks and services. More generally consumer involvement at both a national and European level in the setting of quality of service targets, and more generally, in decisions as to the future evolution of universal service, should be strengthened. MONITORING THE EVOLUTION OF PRICES AND THE RELATIVE AFFORDABILITY OF TELECOMMUNICATIONS SERVICES IN THE EUROPEAN COMMUNITY AND ADAPTING EUROPE'S TELECOMMUNICATIONS FRAMEWORK IN THE SHORT TERM IN RESPONSE TO THE CONCERNS OUTLINED ABOVE I. MONITORING THE EVOLUTION OF PRICES AND RELATIVE AFFFORDABILITY OF SERVICES In line with the overall proposal to review by 1 January 1998 the scope, level, quality and affordabiiity of universal service the Commission intends, in close co-operation with the Member States and building on on-going work at a national level, to : the Community, in V define a "basket of services" in order to provide comparable information about the relative affordabiiity of services within the Community and between different regions within the Member States; V identify the structure of spending on universal service in the Community (i. e. what proportion (at both a national and regional level) of average residential and business bills relate to rental; local, long-distance and international calls; and calls to value-added ("premium-rate" services), and V identify where the major costs of universal service are incurred (i. e. within urban or rural areas; on targeting subsidies to specific groups of customers or to particular high cost areas), within the Member States. The results collected will allow the Community and Member States to better target support and identify best practice. II ADAPTATION OF THE EUROPEAN TELECOMMUNICATIONS FRAMEWORK IN THE SHORT TERM The Commission intends to address the following issues, in particular through an amendment to the Voice Telephony Directive28: These steps will: 14 V Develop further the definition of universal service to provide a clear obligation for Member States to ensure its affordable provision29; to ensure that an equivalent level of service is offered to users with disabilities at an affordable price; to provide users with more information about and more control over they are spending30, and to ensure users can access and use inter what active services (such as tele-banking or automated switchboards)31. V Require Member States to remove restrictions which currently limit the offer of targeted or flexible tariff schemes; and to ensure that they take appropriate measures (e. g. targeted tariff schemes and price caps) necessary to maintain the affordabiiity of services for all users, as well as for particularly vulnerable groups, such as the elderly, those with disabilities, those who do not use the telephone very much or those on low incomes. These measures are particularly important in the run up to full liberalisation. V Taking account of the obligation progressively to adjust tariffs towards costs, require Member States to ensure: - - that price increases in remote and rural areas are not used to compensate losses in revenue resulting from price decreases elsewhere; and that differences between prices in high cost areas and low cost areas do not endanger the affordabiiity of universal service. V Ensure more information on the scope, level, affordabiiity and quality of service in the EC is collected". This is essential if universal service is to be kept under effective review and appropriate targets are to be set for service quality within the existing Community framework. V Define minimum quality of service targets at a European level as a basis upon which detailed national targets (taking account of the specific situation of those countries) would be set. Furthermore the Commission will V Encourage Member State and Community action to allow all users to have improved access to computer networks, such as the Internet", (in terms of faster network access speeds). V Report by 1 January 1998 and, at regular intervals thereafter, on the quality, level and scope of the universal service in the European Community. This Monitoring Report will look in particular at developments in relation to residential users and in the less favoured regions, including the progress made in rebalancing tariffs,. (Other issues to be addressed in that Report are set out in Section IV below). As mentioned above, the report will consider the need, in the light of the prevailing circumstances for adaptation of the scope of universal service at a European level, bearing in mind the need for predictably for investment decisions. 15 V Promote the greater involvement of consumer representatives in the decisions on the current and future scope of universal service (and in particular, in relation to establishing and monitoring of the quality of service and the the adequate availability of affordabiiity of service). information on the scope, level, quality and affordabiiity of universal in the EC in order involvement of residential users. Consideration will be given to a possible monitoring committee at a European level to represent consumer interests. transparancy and effective to ensure greater This will rely on A Timetable reflecting these measures is set out in Annex 1. IV THE EVOLUTION OF UNIVERSAL SERVICE FOR TELECOMMUNICATIONS AND ACCESS TO ADVANCED SERVICES IN THE CONTEXT OF THE INFORMATION SOCIETY Universal service is recognised as an essential element of the global information society. This was acknowledged at the special G7 Summit on the information society in Brussels in February 1995. The participating ministers identified "ensuring universal provision of and access to services" as one of the eight core principles behind the realisation of their common vision of the information society. The Community is supporting through the regulatory framework the delivery and development of universal service, whilst at the same it is looking beyond the current concept of universal service for telecommunications to promote actively, through a diverse range of initiatives the use of advanced telecommunications services in fields, such as education and healthcare, in the context of the through pilot and stimulation projects, information society, awareness building and development of public-private partnerships). (for example, The recent reform of telecommunications in the United States also looks beyond the current concept of universal service for telecommunications, which in their legislation consists, for example, in promoting widespread access to quality services at reasonable rates and ensuring that rural and high cost areas have access to telecommunications and information services at prices reasonably comparable with those offered in urban areas34. looks beyond legislation, however, The US telecommunications their basic definition of universal service to tackle within a regulatory framework the same priorities which are now on the Community's agenda. The US legislation identifies the provision of access to advanced telecommunications services for schools, healthcare and libraries as one of the principles for the "advancement of universal service" in the future. In contrast, to the approach in the Community, the United States appears to mix a policy on universal service for telecommunications with objectives linked to education, healthcare or information policies at a national level. the to universal the Community, for regulatory approach In telecommunications is carefully circumscribed by the application of the principal of subsidiarity. This has limited action at a Community level to what is necessary for the internal market for telecommunications services and for the maintenance of a high standard of consumer protection. In any event, the evolution of the definition of universal service for telecommunications is only one of a number of factors which is influencing the roll out of advanced telecommunications services in the Community. service 16 Criteria in the information Society for the evolution of universal service for telecommunications for the the basis future evolution of universal service Determining raises fundamental issues. Should universal service for telecommunications continue to be subsidised only by undertakings in the sector or should other means of funding (e. g. greater direct funding by the State / stimulation of public-private partnerships) be envisaged? Should the framework being put in place at a Community level simply provide a response to the risk of that market forces alone will not provide an adequate guarantee of affordable service for every citizen or should it be something more - seeking to steer and develop the evolution of markets and/or technologies? A simple answer cannot be given at this stage. In reality the challenges of the information society will be met by both an evolving concept of universal service and by a range of other public and private sector initiatives to stimulate demand for and supply of information society services. User demand and technological evolution must be the principal determinants of the future evolution of universal service35. Any extension is therefore likely. to combine a market-based analysis of the demand for, and widespread availability of, a particular service, and a political assessment of its social and economic desirability. Only when these two criteria are satisfied would it be justifiable to impose a legal obligation to guarantee that the service is universally available at an affordable price. This Communication does not attempt at this stage to identify telecommunications services which should be considered in the future for inclusion in universal service, but rather it points to the general areas where work is already underway in the context of preparing the information society. At the same time, the existing framework already requires Member States to set targets for the Community-wide introduction of certain advanced telephone facilities36 (which are not currently part of universal service) and this will remain an important element in the Community approach. As mentioned in Section II above, the Commission will carry out a comprehensive review by 1 January 1998 of the scope, level, quality and affordabiiity of universal service in the European Community and consider the need for adaptation of the scope of universal service at a European level, in the light of the prevailing conditions and taking account of the criteria outlined above. Examples of the issues linked to the future evolution of universal service obligations which will be considered in the First Monitoring Report In addition to assessing issues linked to the level and quality of the current universal service obligation, the Report will examine: (i) technical indicators of service levels (and whether cost burdens were associated with their provision), (ii) evidence of particular social or economic need, (iii) evolution of prices and relative affordabiiity of services and (iv) developments in other parts of the World. In relation to the first two issues, the report would consider, inter alia: Technical indicators would include for each Member State: - Level of household personal computer penetration and households with access to on-line services 17 '"*vmi - - - Level of network digitalisation Level of business, residential and local community ISDN penetration Level of penetration of tele-working - Percentage of schools, hospitals, libraries with access to on-line information services Issues of particular social or economic need would include: - - Issues associated with educational and healthcare establishments Issues associated with less favoured and less populated regions - Specific social needs of particular groups of users (such as users with disabilities) Promoting the information society In addition to the maintenance and development of universal service, public- private initiatives will play a major role in promoting the availability of new telecommunications services in the information society. In the context of the information society, new inter-active services should be accessible to every citizen in the Community, so that the benefits of new technologies and services are felt in areas, such as education and training, healthcare and access to public information. This should in turn benefit the overall economic for telecommunications is to act as the highway over which many of these new services can be offered and competitive forces are stimulating the price reductions and innovation which are at the heart of the current revolution. effectiveness principal society. The role of There was a widespread consensus within the public consultation that whilst universal service for telecommunications cannot be divorced from this broader political vision of the information society, that neither access to such services nor the services themselves should be included at this stage in the current concept of universal service. Nevertheless the Commission has stressed the importance of education and training in the Information Society, notably in relation to equipping the workforce with appropriate skills for the information age with a view to fostering employment possibilities and overall competitiveness. therefore committed itself to promoting access to and use of advanced communications and information services within the educational field. The provision of advanced telecommunications services, as well as improvements in service quality, prices and the speed of the network are all likely to result from a fully liberalised environment. The Commission has At the same time, consideration should be given to the extent to which these developments can be further promoted by regulatory or other action. One specific issue may be whether schools, colleges and universities should be offered reduced prices for high speeds of network access or for the use of current or the advanced telecommunications services. That relationship between universal service for telecommunications and broader policy objectives in the educational area, and of how such discounted tariffs might be funded, where they represent a financial burden for the operator providing them. in turns raises issues of 18 (For example, should they be funded directly by the State as part of its education budget; for telecommunications; or through other mechanisms?). funding universal service the mechanism set up through for Such issues will be further considered in the forthcoming Communication on the Citizen and the Information Society, and also more broadly in the light of the comprehensive review of universal service for telecommunications in 1998. Generally, however, new and advanced telecommunications and information services are appearing primarily in response to market forces and user demand. The role of the Community, public authorities and other public institutions is, on the one hand, that of catalyst, and, on the other, to ensure a regulatory climate which is favourable to innovation. Action flowing from the recent legislation in the United States has been highlighted above. In Europe, a range of initiatives are underway, aimed at stimulating public- private partnerships and strengthening awareness and demand. This reflects priorities established in the Communication "Towards the Information Society", COM(95) 24437. the Community which either cater That Communication emphasised that the Community's role focused on (i) stimulation of projects (through provision of information and increasing awareness of information society initiatives; through brokering partnerships between actors in different sectors and between public and private sector organisations, and providing guidance on available finance) and (ii) the provision of financial support for certain projects by relevant infrastructure and the development of awareness, skills or services (through funding via the trans-European networks framework; the Community structural and cohesion funds; the European Investment Bank and the European Investment Fund and through Community programmes dedicated to education and training, such as the SOCRATES and LEONARDO programmes), or which stimulate the necessary to new concepts, prototypes or services which are key to the advancement of the Information Society (through the RTD Framework Programme, and, in particular through the Advanced Communication Technologies (ACTS) programme). research and development activities, leading the for Public access to information society services The Commission through these measures is supporting the extension of "public access" to the information society. This involves the connection of schools, colleges, hospitals, oublie offices, libraries and other public access points into the information society. The Commission will explore ways of better co-ordinating the various on-going initiatives at a national in to enhance Communication on the Information Society and the Citizen mentioned above. impact on everyday level the life risk of delay there may be a Public and "community" access may be of particular importance in less favoured regions, where in accessing advanced telecommunications services if left to market forces alone. The Commission, in the framewoik of the Monitoring Report before 1 January 1998, will closely monitor developments, as public access may be a means, within a reasonable time scale, of overcoming the difficulties in providing access to many advanced services and sources of information for individuals and for the non-profit and voluntary sectors. These are groups which may otherwise be excluded because of the high-cost initial investments required in terminals, computers and network connections). 19 The Commission will keep the actual progress made in extending public access under review, both in the less favoured regions and in the Community as whole, in order to assess periodically the need for additional action or for any reshaping of the concept of universal service at a European level. Issues for further consideration A range of factors must be taken into account in the developing framework for the information society. - Low tariffs for use of the network are essential to the widespread take up of on-line information and services. - Many information society services will be provided without regulatory intervention. - Action may be needed to ensure that public institutions can access these new services. - Initiatives, in particular, stimulating public-private partnership, should continue to promote the availability and take up of new information society services, especially, with regard to their development and broader take up amongst residential users. - "Public access" should go beyond promoting physical connections to include adequate training, support and investment in equipment. Some of these issues such as the needs for low tariffs, are closely linked to the current far beyond telecommunications to touch on policies for education, healthcare and training. for universal service; others, extend framework The integration of a policy on universal service into the broader development of the information society is a matter for further consideration. This process will be helped by the Review announced in this Communication for 1998 of the scope, level and quality of universal service in the Community. In this respect, a Council Resolution is being examined on the use of multimedia technologies and services for educational purposes. The definition of future policy on universal service will also take account of the outcome of on-going and future debates, in particular, in relation to the White Paper on "Teaching and Learning : towards the learning society" in the context of the European Year of Lifelong Learning 1996, and the forthcoming Green Paper on the Social Aspects of the Information Society. V CONCLUSIONS This Communication has identified universal service as an essential element of the information society, but it is only one of several factors which are allowing Europe's citizens to enter into a new and exciting age of information. In order to accelerate and support the process of transformation, three sets of conclusions can be drawn: 1 The current concept of Universal Service forms a firm anchor for the regulatory reforms underway at a national level to achieve the full liberalisation of the telecommunications sector in Europe. 20 - The current concept of universal service corresponds to the obligation to provide access to the public telephone network and to deliver and affordable telephone service to all users reasonably requesting it. The detailed elements comprising that service are defined in the Voice Telephony Directive and are sufficient for the drafting of national schemes for universal service according to the Full Competition Directive. - A framework for the costing and funding of universal service is found in the Interconnection Directive and the 'Full Competition Directive. Common principles are proposed to identify how much universal service obligations cost. These costs may be shared with other market players either (i) via a universal service fund at a national level or (ii) by direct payments to those providing universal service. Guidelines to be used in assessing national approaches to costing and funding are in preparation. - Where additional telecommunications-related obligations outside the scope of universal service are imposed by Member States, any additional financial burden associated meeting such obligations must not funded out the mechanism established for funding universal service. Universal service in the Community can and should be strengthened In the short term: - Affordabiiity is at the heart of the framework for universal service for telecommunications. The requirement for affordabiiity must be made clearer. At the same time, Member States should ensure that appropriate measures are taken, (e. g. price caps, targeted tariff schemes) necessary to maintain the affordabiiity of services for all users, particularly in the run up to full competition. The Monitoring Report include an assessment of announced of pricing developments telecommunications services within the Community. for 1 January 1998 will affordabiiity relative and the in - For users in the rural or remote areas, price increases, other than adjustments to achieve cost-orientation, must not be used to compensate in revenue resulting from price decreases elsewhere. Furthermore, any differences in pricing between high cost areas and low cost areas must not endanger the affordabiiity of universal service. losses - The definition of universal service will ensure that an equivalent level of service is offered to users with disabilities at an affordable price and Member States are encouraged to provide citizens with improved access to computer networks and on-line services (in terms of faster network access speeds); - The Commission will place greater emphasis on quality of service and the level of affordabiiity at both a European and national level, (including on monitoring, enforcement and compensation when targets are not met); as well as providing a stronger role for the consumer voice, particularly, in defining standards, the level of affordabiiity and the future scope of universal service. 21 - The Commission will encourage action in the less favoured regions to accelerate the process of network digitalisation there. Developments will be carefully monitored to ensure that citizens in such regions benefit the Commission will continue to from the arrival of competition and work liberalisation and new technologies reduces rather than widens existing regional differences within the European Community. that a combination of to ensure 3. Universal service is an evolving and dynamic concept and will play an important role in the meeting the challenges of the information society: The Commission will report by 1 January 1998 on the scope, level, quality and affordabiiity of universal service in the Community and consider the need, in the light of the prevailing circumstances, for adaptation of the scope of universal service at a European for predicatability for investment decisions. level, bearing the need in mind - Any extension of the current concept of universal service must combine a market-based analysis of demand for and availability of the service with a political assessment of its social and economic desirability. initiatives will play a major role Public-private in promoting the availability of new telecommunications services in the information society, particularly in the less favoured regions of the Community. - Public access is an important means of bringing the information society to every citizen. Progress in extending such access will be kept undei review to assess periodically the need for additional action or for any reshaping of the concept of universal service. The information society raises issues far beyond universal service for telecommunications. An overall Community policy for the information society must integrate aspects of education, healthcare and social policy. ENDNOTES 1 2 3 4 5 6 7 8 See Commission Directive [. /. /EC] amending Commission Directive 90/388/EEC regarding the implementation of full competition in telecommunications markets ("the Full Competition Directive"). Directive 95/62/EC on the application of Open network provision (ONP) to voice telephony ("the Voice Telephony Directive"), OJ L321, 30. 12. 95 Commission Communication on the consultation on the Review of the situation in the Telecommunications Services Sector, COM(93) 159 Council Resolution 94/C48 of 8 February 1994 on Universal Service principles in the telecommunications sector, OJ C48, 16. 2. 1994 and Council Resolution 95/C258 of 18 September 1995 on the implementation of the future regulatory framework for telecommunications, OJ C258, 3. 10. 95 European Parliament Resolution of 19 May 1995 on the Green Paper on the liberalisation of telecommunications infrastructure and cable television netwoiks - P. nt II A4-0111/95; OJ C151, 19. 6 95 Opinion of the Economic and Soci. il Committee ol 13 September 1995 on the Green Paper on the liberalisation of telecommunications infrastructure and cable television networks - Part II, OJ C301, 13. 11. 95 Opinion of the Committee of the Regions on the Commission Communication: Europe's way to the information society. An action plan (COM((94) 347 final). CdR 21/95 ESP/ET/AG/ym and CdR 21/95 Appendix D/BAN/JKB/NF/as. A detailed questionnaire was completed by Member States on the level and quality of telephone services in their territory. The results of the Member State questionnaire are set out in Annex 2. More than 100 organisations attended a public hearing in October in Brussels and more than 60 written comments were received in response to a Theme Paper sent out to more than 400 organisations. A list of participants and a summary of the main issues raised is set out in Annexes 3 and 4. 9 See the detailed description on the current level of service in Member States in Annex 2 22 10 11 Article 129a EC Treaty See Proposal for a European Parliament and Council Directive on interconnection in telecommunications ensuring universal service and interoperability through the application of the principles of open network provision (ONP), COM(95) 379, 19. 7 95 ("the Interconnection Oiieclive") and the Full Competition Directive These set out in particular the principles to be used in working out the cost ol providing universal service and the systems (either a universal service fund or a system of supplementary charges) which can be used to share out any costs involved 12 The Interconnection Directive sets out a technical description of the type of connection over which services are provided. It specifies that only the provision of the public fixed telecommunications network is part of universal service. Universal service does not mean that users have a right to a mobile telephone, although wireless technology represents an important way of delivering universal service in remote regions (for example by using a radio-link to connect a fixed telephone in a remote home or farm, instead of having to provide a fixed telephone line. 13 Member States are required to implement the obligations set out in the Voice Telephony Directive by 13 December 1996. 14 Monthly subscriptions with on-line service providers are generally in the region of 4 - 15 ECU. The trend towards telecommunications organisations offering cheap Internet access to subscribers is likely to develop in Europe, lowering further the cost of accessing certain inter-active services. 15 The Interconnection Directive requires Member States to introduce number portability in all major population centres by 2003 at the latest. For a description of these other services see the glossary with Table A6 in Annex 2. 16 17 See the Interconnection Directive and the Full Competition Directive According to the Full Competition Directive these schemes must be sent to the Commission by 1 January 1997 and will be assessed to ensure, in particular, that the obligations proposed are non-discriminatory; proportional, transparent (i. e. clearly formulated so that applicants know the extent of their obligations in advance); based on objective criteria (allowing judicial review in the case of conflict) and imposed only on those undertakings foreseen by the Community framework. 18 Council Directive 92/44/EEC of 5 June 1992 on the application of open network provision to leased lines, OJ L165, 19. 6. 92 19 Council Recommendation 92/383/EEC of 5 June 1992 on the provision of harmonised integrated services digital network (ISDN) access arrangements and a minimum set of ISDN offerings in accordance with open network provision (ONP) principles, OJ L200, 18. 7. 92 20 See the Voice Telephony and Leased Lines Directives. In a monopoly environment operators enjoyed considerable freedom in setting their prices which tended to lead to substantial profits being made on international and long distance calls. Prices were not constrained by competitors who could otherwise have charged their customers lower prices, hi the absence of competition, the regulatory framework in the Community has obliged certain tariffs to be cost-oriented in the run up to effective competition 21 22 indications of the level of rebalancing between 1090 and 1995 are set out in Tables A8 and A9 in Annex 2 The requirement for cost-orientation is a central element in the principles governing tariffs for telecommunications services in the European Community (see the 1990 Open Network Provision Framework Directive (90/387/EEC) and the subsequent ONP directives on Leased Lines and Voice Telephony). The Full Competition Directive in Recital 17 calls for Member States to "phase out as rapidly as possible all unjustified restrictions on tariff rebalancing by telecommunications organisations and in particular those preventing the adaptation of rates which are not in line with costs and which increase the burden of universal service provision". Article 4C of the Full Competition Directive provides that where such rebalancing cannot be completed before 1 January 1998 the Member States concerned shall report to the Commission on the future phasing out of the remaining tariff imbalances and that such a report shall include a detailed timetable. 23 Targeted tariffs schemes designed, for example for low users, the elderly, or those on low incomes, can combine a low initial connection charge, low monthly rental and a limited number of free or cheap call units each month. 24 Price caps operate by pegging annual price rises either for the whole telephone service or for specific components, (such as rental for residential users) at or below the rate of inflation. This can lead to real reductions in prices for users, whilst encouraging the operator to improve its efficiency. 25 in reality, lower prices in a competitive environment are likely to stimulate telecommunications traffic lessening the overall impact of price competition on the total revenue of such operators. 26 See Commission Communication on the consultation of the Green Paper on the liberalisation of telecommunications infrastructure and cable television networks, COM(95) 158, 3. 5. 95 and Council Resolution 95/C258 of 18 September on the implementation of the future regulatory framework for telecommunications, OJ C258, 3. 110. 95 27 Estimates of the cost of universal service prepared for the Infrastructure Green Paper suggested a cost associated with universal service of between 1 to 2% of total turnover for most of the 12 Member States at that time. The figures for Ireland and Italy were around 3%, Spain around 6%, Portugal 7% and Greece 15%. It should be emphasised that these figures were estimates prepared without full details of the underlying cost structures. More comprehensive 23 studies are currently underway in almost every Member State. Initial indications point to figures well within the ranges suggested in the Infrastructure Green Paper 28 Article 32 of that Directive already requires the Commission to propose a revision of the directive in good time to allow the European parliament to decide on it by 1 January 1998 29 Affordabiiity will be assisted by the provision of free itemised billing on request and availability of selective call barring. Users should also be able to spread the costs of initial connection and operators should replace disproportionate or discriminatory deposit schemes with more proportionate means of credit control (such as pre-agreed credit limits). Examples of action to achieve this are itemised billing and giving all customer the possibility of call-barring. This requires completion by Member States of the on-going deployment of "touchtone" dialling in their networks An important element of quality of service at a national level is enforcement of quality of service targets and the 30 31 32 existence of rights of redress for users and appropriate compensation mechanisms. 33 This requires the provision of networks with the necessary transmission quality to allow users to access data communications services at commonly available speeds. 34 The approach in the US envisages , in particular, a compensation mechanism to meet burdens associated with the provision of preferential tariffs offered to schools and libraries, though much of the detail still has to be worked out. A private foundation, The National Education Technology Funding Corporation aimed at promoting the financing and development of additional services is also being set up to attract private funding into the sector. 35 In the United States four criteria have been identified against which possible candidates for universal service would be assessed: "(A) essential to education, public health or public safety, (B) have, through the operation of market choices by customers, been subscnbed to by a substantial majonty of residential customers; (C) are being deployed in public telecommunications networks by telecommunications carriers; and (D) are consistent with the public interest, convenience and necessity". These criteria highlight the mixture of universal service objectives and broader policy objectives linked to education or healthcare found in the draft legislation. 36 The Voice Telephony Directive lists of these services. Table A6 in Annex 2 shows the extent to which some of these are already available in the EC. 37 Communication of 31 May 1995 on a methodology for the implementation of information society applications and proposal for a European Parliament and Council Decision on a series of guidelines for trans-European telecommunications networks, COM(95) 224. The Communication identified a diverse range of projects related to applications, generic services and basic networks. 38 The issue of public access has been addressed in "Building the European Information Society for us all" Interim Report of the High Level Expert Group on social and societal aspects of the information society. It is also being tackled in the on-going work of the Information Society Forum. The goal of connecting schools, hospitals and libraries is already being explored in some Member States and underpins the developing approach in the United States. 24 Annex 1 : Timetable for Action ANNEX 1 : TIMETABLE FOR ACTION IN THE SHORT TERM (1996-1998) PIH Before 30 June 1996 Proposal for a European Parliament and Council Directive amending the Voice Telephony Directive. Action Member States commence drafting authorisation schemes for voice telephony and public network providers as provided by the Full Competition Directive Member States concerned apply for derogations to the 1998 deadline and provide all necessary economic data necessary for the assessment of the justification of such derogation as provided by the Full Competition Directive Common Position on the ONP Interconnection Directive (including principles for the costing and funding of universal service). Common Position on the proposed European Parliament and Council directive on a common for general authorisations and the European Community. framework individual licenses in Before 30 September 1996 Communication on the Commission criteria for costing and funding of the universal telephone service in the EC Before 31 December 1996 Common position on the proposal for a Council and European Parliament Directive amending the Voice Telephony Directive. Adoption of the ONP Interconnection Directive. Adoption of the Licensing Directive. the Member States of authorisation Communication by schemes telephony and provision of public telecommunications networks including obligations related to universal service for voice Before 30 June 1997 Decisions of the Commission on the authorisation schemes submitted. Publication in the Member States of information required by the Full Competition Directive with regard to licensing procedures and terms and conditions for interconnection. Adoption of Parliament Directive amending the Voice Telephony Directive. for a Council and European the proposal Before 1 January 1998 Ifoeralisation of Full telecommunications services and networks, subject to possible transitional arrangements for certain Member States, where justified and subject to scrutiny. First Commission Report on the monitoring of the scope, level, quality and affordabiiity of the universal telephone service in the Community. 25 Annex 2 : The Universal Telephone Service in the European Union Today ANNEX 2: UNIVERSAL SERVICE FOR TELECOMMUNICATIONS EUROPEAN COMMUNITY TODAY IN THE This Annex presents the results of survey of the level of service currently found in the European Community. It addresses five areas : (I) General developments in the provision of telecommunications services; (II) Quantitative indications service penetration; (III) Qualitative indications of service quality (fV) the availability of advanced telephone services and (V) the level of tariff changes and the existence of special or targeted tariff schemes. The information is based primarily on the responses of the Member States to a questionnaire sent out by the Commission in Summer 1995. A copy of that questionnaire is provided at the end of this Annex. I GENERAL DEVELOPMENTS IN THE PROVISION OF TELECOMMUNICATIONS SERVICE In the last decade, a number of technical and service developments have had a considerable impact on the nature of the basic telephone service. 1. The development of relatively inexpensive fax machines and modems means that ordinary telephone lines are being used to an ever increasing extent to communie ate data and images as well as voice, although at a relatively slow speed. 2. The digitisation of the telephone network combined with improved signalling means that a range of supplementary telephone services are being offered on the basic telephone line. These services include call-forwarding, call transfer and call-waiting, voice-mail and services which allow the identification of the calling-party ("calling line identification"). These add-on services have the potential to generate significant revenues for telecommunications operators. In addition, it is now far easier to provide more sophisticated billing details to customers including itemised billing. 3. Although many of the above-mentioned services are not yet extensively provided or marketed by all telecommunications operators, particularly to residential customers, most operators offer ISDN (integrated services digital network) service and some are planning to offer an ISDN connection at the same price as an analogue link in certain areas. ISDN is beginning to be used for applications where users require additional functionality. Examples include desk-top video-conferencing or data transfer, as an alternative to or back-up for leased lines, and for Group 4 or higher speed fax. 4. There has been a dramatic growth in wireless telephony and in particular mobile cellular networks and subscribers. 5 per cent of telephone subscribers in the European Community are currently based on mobile networks1. Wireless-based telecommunications now demonstrates some significant operational and cost advantages over wire-based telecommunications for In particular, providing a wireless connection to certain types of usage. 26 Annex 2 : The Universal Telephone Service in the European Union Today customers in remote or scarcely populated areas is considerably cheaper than the installation of a fixed line. Wireless applications in the local loop are also being seen, particularly in central and eastern Europe, as one means of rapidly upgrading the network and meeting unsatisfied demand for telephone service or for introducing competition into the local loop. Examples include the use of wireless telephony solutions to deliver rural service in Spain2 and Germany, whilst Digital European Cordless Telephone (DECT) technology is being used for local loop competition in Finland). 5. Satellite communications have not yet fulfilled their earlier promise in relation to the delivery of a universal telephone service, as until recently regulatory and technical constraints existed which combined to inhibit growth. However, the new regulatory environment, together with the emergence of satellite personal communications services may develop further the role of satellite based communications in connecting the remoter regions within the Community and in order to support this the Commission has proposed a framework for the co ordinated selection and licensing of satellite-based personal communications systems3. There is also scope for making temporary use of VSATs4 to serve isolated areas pending roll-out of a more permanent terrestrial infrastructure. 6. The process of deregulation is increasingly allowing full advantage to be taken of developments in hybrid fixed networks (using fibre and then coaxial cable and/or copper for part of the local network) which support the joint provision of telephone service with cable television service, where new franchises have been awarded and the regulatory situation has permitted. The use of such technologies, combined with the advent of ISDN / broadband networks and digital compression technologies, has the potential to rewrite the economics of delivering universal service, whilst the falling cost of transmission should lead to tariff structures which are less dependent on distance and on the duration of In such an environment, the combined offering of telephone, the call. information and entertainment services once effective competition is established, may allow operators to price the telephony elements at a lower level reflecting the more efficient use of their networks and the dual source of revenue. 27 Arme* 2 : The Universal Telephone Service in the European Union Today H. QUANTITATIVE INDICATORS OF THE LEVEL OF TELECOMMUNICATIONS SERVICES The quality and teve* of telecommunications services in the European Union has shown a steady and significant improvement over the last five years. This is reflected in the detailed responses to the questionnaire completed by Member States and in many of the comments made in response to the Theme Paper. A number of features of the current environment should be highlighted. 1. Overall, there have been important improvements in the Community in the number of households with a telephone (see Table A1). Whilst household penetration in France, the Netherlands and Scandinavia was already weH above 90% in 1990 and has improved since then, even more impressive growth has been seen elsewhere. In 1990 only 66% homes in Ireland, whilst today its 80% and for Portugal the level has risen in the same period from 47. 1% to 74. 8%. However, it is notable that at least five national regulatory authorities even today do not have publicly available data on this basic measure of universal service. Furthermore, where data has been provided, it is not directly comparable between Member States. 2. The average number for the EC of residential main lines per hundred homes (see Table A1), has also seen a substantial rise from 87 to 96 lines per household. These figures provide a more comparable measure of the situation between Member States, do not distinguish between those homes/individuals with more than one telephone line (e. g. business and/or fax line and residential line) and those with no telephone. This results in Denmark, France, Luxembourg, Finland and Sweden ail have a residential main line penetration in excess of 100%. 28 Annex 2 : lb* UniversalTelephone Sendee In the European Union Today Tabte A1 Telephone penetration rates within the European Community Country Percentage of households with A telephone1 Residential Main Lines per 100 Households2 V. B DKa °4 EL E F IRL 1 L NL AUT po FIN SWEO' UK EC Average 1Ô90 n/a 94. 3 80 n/a n/a 94 §& n/a n/a 93 n/a 47. 1 95e 98. 7 88 - 1994 n/a n/a 89 n/a n/a 96. 4 80 n/a n/a 96. 5 n/a 74. 8 97e 98. 7 91. 1° - 1990 81 103 81 80 80 104 60 90 88 96 n/a 43 103 121 89 87 1994 92 106 93 96 89 111 75 99 105 96 n/a 64 104 121 99 96 Source: National Regulatory Authorities (1995). n/a indicates that the NRA does not have this data available. EC average excludes Austria. Notes 1. All data provided in this section of the table relates to the most recent period for which information is available (normally 1994). Where available, additional data is given in these notes. 2. This indicator of residential telephone penetration is imperfect as it is not the same as the number of households which have a telephone; the latter indicator would have an upper value of 100. 3. Source: Tele Danmark. 4. Figure includes the new Bundeslânder. 5. Figures refers to penetration rate for Portuguese mainland (excluding Madeira and the Azores). The household penetration figure in 1994 including those islands was 74. 8%. 6. Estimated figures for 1990 and 1995 7. % relates to 1989 which was the last year for which figures were calculated, given the very high level of penetration achieved 8. Data relates to March 1995 (Source: UK Family expenditure survey). 29 Annex 2 : The Universal Telephone Service in the European Union Today 3. The general growth in service penetration extends to most other areas : total main lines (business and residential); mobile subscribers. and in the provision of public payphones. (see Table A2) For public payphones, the EC average has increased from 2. 9 to 3. 1 per 1000 population, with the percentage at a national level either staying the same or increasing, with the sole exception of Italy (where penetration was already the highest within the EC). Table A2 - Penetration of fixed and cellular telephones per 100 population and payphones per 1000 population in the EC Main Lines Country per 100 Cellular subscribers per 100 Payphones perl 000 B DK D EL E F IRL I L NL AUT P FIN SWED UK EC Average 1990 39 57 40 39 32 50 28 39 48 46 42 24 54 68 45 43 1994 45 60 48 48 38 55 35 43 55 51 47 35 55 68 49 49 1990 0 2. 9 0. 4 0 0. 1 0. 5 0. 4 0. 5 0. 2 0. 5 0. 5 0. 1 5. 2 5. 6 2. 1 0. 9 1994 0. 7 9. 7 3. 0 1. 4 1. 0 1. 4 1. 7 3. 9 3. 2 2. 0 3. 5 1. 8 13. 3 16. 0 6. 1 3. 6 1990 1. 3 1. 3 1. 7 2. 1 1. 1 3. 2 1. 5 7. 7 0. 8 0. 5 4. 3 2. 6 4. 1 4. 3 1. 6 2. 9 1994 1. 5 1. 6 2. 1 3. 5 1. 4 3. 5 1. 8 6. 8 0. 9 0. 7 4. 3 3. 3 4. 6 3. 7 2. 1 3. 1 Source: National Regulatory Authorities; (1995) 30 Annex 2 : The Universal Telephone Service in the European Union Today III QUALITATIVE INDICATORS OF THE LEVEL OF TELECOMMUNICATIONS SERVICES 1. Alongside improvements in overall numbers, almost every Member State now sets, monitors and publishes results in relation to quality of service targets. This practice has now been reinforced by the requirements of the Voice Telephony Directive (see below). These indicators, which are generally, set in a manner to require annual improvements in the level of service, provide users with information about what they are entitled to expect and as such they are a crucial element of universal service. At the same time, the results of the questionnaire have indicated the considerable divergence between the standards set and/or achieved in different parts of the Community, and show the difficulty in comparing the position in each Member State. The results are summarised below: 2. Length of time for installation of a telephone (see Table A3). Targets are set in almost all Member States for installation times with most of them also publishing some information on the supply times achieved. The average length of time to obtain a telephone in 1995 in the Member States varied from 1 day in Sweden to 45 days in Austria and 220 days in Greece. Operators in most Member States complete a high proportion (60-80%) of installations within 5 to 20 days. 31 Annex 2 : The Universal Telephone Service in the European Union Today Table A. 3 Target periods for network connection and supply times achieved in the EC1 Information Published Target Actual supply time B DK Yes Yes D Yes 90% within 20 working days* 95% on installation date agreed upon with customer. Remaining 5% within 10 days. 80% within 20 working days n/a No' Yes Occasionally10 80% of new connections within 30 days5 n/a Within 5 working days0 n/a EL E F IRL 1 L NL AUT n/a n/a n/a n/a P Yes FIN SWED UK Yes n/a Statistics published regularly by BT and Mercury only For new connections: 60 days For take-overs: 30 days n/a 1 month n/a Target: 2 months (95)/1. 5 m(96)/1 m(97)12 Minimum level : 2. 8/2. 4/2 months n/a Within 5 days14 87": For residential customers: within 8 working days. For business customers: within 6 working days Mercury. Access for indirectly connected customers: within 2 days of order16 90. 9% within 20 working days 61. 3% within 5 working days3 98% within target 87. 1% within 20 working days in Western Lander 42. 3% within 20 working days in Eastern Lander 98. 3% of lines provided on date agreed with user4 220 days on average0 5 working days on average 8 days on averagey 11 working days on average 75% of customer orders completed within 2 weeks11 97. 8% of connections within targets 60% within 30 days 89% within 3 months 11% over 3 months 96% within target 45 days on average 0. 4 months average (Sept 95) 5. 4 days on average13 Less than 1 day on average BT: For residential 85. 3% satisfied target For business customers 76. 4% satisfied target15 Mercury. 72. 8% of connections on date agreed17 n/a=data not available Source: National Regulatory Authorities (1995). NOTES 1 All data provided in the table relates to the most recent period for which information is available (normally 1994). Where available, additional data is given in these notes. 2 Target set in Belgacom's Management Contract. The target set for 1995 is 80% of connections within 5 working days. 3 In 1993:26. 6% within 5 working days and 83. 9% within 20 working days. 4 These figures relate to the second half of 1994. In first half of 1994 83% of lines provided within 20 days in Western Lânder. 5 Target set for 1995 6 Data relates to 31. 12. 94 7 Information provided to the Spanish Advisory Telecommunications Council. Public can obtain information given to that body. 8 Target set in France Telecom's contract with the Direction Générale de Postes et Télécommunications (DGPT Annual Report (1994)). 9 Figure as at 31 December 1993 (Source: DGPT Annual Report (1994)). 10 The last set of information was published on 21 March 1994. 11 In 1993:19 days on average. 12 Target and minimum acceptable level set in contract between ICP and Portugal Telecom and covers period 1995/1996/1997 32 Annex 2 : The Universal Telephone Service in the European Union Today 13 In 1993:5. 3 days on average; in 1992:5. 5 days on average 14 Target forms part of Telia's service warranty. 15 In addition to requesting a direct connection to the Mercury Network, users can access Mercury's long distance/international network indirectly via BT or other local connection. Access is obtained by dialling a specific preface (132) after subscribing to Mercury. 16 Figures relate to October 1994 to March 1995. For April 1995 to September 1995, corresponding figures are 86. 9% and 78%. 17 Mercury completed on average 82. 5% of connections on date agreed with the customer in 1993. 33 Annex 2 : The Universal Telephone Service in the European Union Today 3 Fault repair time (see Table A4) Targets are used in all Member States, and are generally set for % of repairs within one working day and achievement of targets generally in the range of 85-95%. Additionally, operators in twelve Member States currently offer compensation to customers, where certain repair targets are not met. Table A4 : Target periods for fault repairs, repair times achieved and compensation schemes available in the EC1 Country Fault repair times Compensation Target2 Actual repair time Schemes B DK 71% before end of next working day3 100% within 12 working hours 91% within target. 81. 3% of repairs within targets n/a If Tele Danmark defaults on the time of execution concerning the change of an existing connection to the public telecommunications network, or if faults occur in the telecommunications network leading to interruptions of the connection, Tele Danmark shall make a proportional reduction in the subscription charge for the period in question, provided that the amount exceeds DKK 25. The amount shall be deducted on the subsequent invoice for subscription charges. Graduated system of discounts (up to a full 100% discount) for network connection delays and compensation schemes for network connection and fault repair delays depending on nature of service and length of delay4 Basic charge reimbursed if repair time target not satisfied Reimbursement of a proportionate part of the monthly line rental for repairs exceeding repair time target n/a n/a Rental charge reimbursed if repair time target not fulfilled Twice the monthly rental will be reimbursed if repair targets not met Reimbursement of 1/30 of monthly line rental for every day of delay to line repair in excess of repair time target Reimbursement of the monthly subscription corresponding to the number of days for which service was interrupted 34 D 80% within 3 working days 82. 5% of repairs within target EL E F IRL 1 L NL AUT p10 60% within 24 hours1* 57% within target Within 6 days0 98. 4% of faults attended to within 24 hours 92% before end of next working day7 n/a n/a Within 5 days0 67. 3% same day 97. 1% within 2 days 86. 2% same day 100% within 10 days Within 12 working hours 98% of repairs within target Within 1 day6 93% within 24 hours Objective : within 2 working days 83%(95)/ 85%(96)/ 90%(97) Minimum level: 75%/80%/85% 92% within 2 working days(September 1995) 86. 3% of repairs within target0 90% within 2 daysy No schemes in operation Annex 2 : The URfcefeal Telephone Service In the European Union Today fm n/a 66. 4% within 24 hours1' SWED Within 1 working day12 93% of repairs within target UK BT. by end of next working day0 Special services guaranteeing a quick response are offered at an extra fee 98. 9% of business customer faults 95. 2% of residential customer faults repaired within 2 working days13 Mercury. For 2100 service, within 24 hours; for indirect service, 90% of faults within 24 hours 68. 3% within 4 hours 94. 1% within 48 hours n/a: data not available Source: National Regulatory Authorities (1995) There is a reimbursement of a monthly basic fee if the line is out of order for more than 48 hours within one month. Discount of quarterly fee if new connection not within 5 days or if fault not repaired within repair time target Compensation available for various service failings either on the basis of a daily rate or actual financial loss, up to maximum of £100014 Compensation available for late delivery of service depending on nature of service and length of delay, up to maximum of £5000. NOTES 1 All data provided in this table relates to the most recent period for which information is available (normally 1994). Where available, additional data is given in these notes. 2 Where possible and where no specific target has been provided repair time targets have been adduced from time limits used in the corresponding compensation scheme for the purposes of determining entitlement to compensation. See footnote 6 below. 3 Target set for 1994 by management contract between Belgacom and the Belgian Government. The target has been set at 4 76% for 1995. For example, a network connection delay of up to 10 working days will entitle the subscriber to a discount of up to 30% on the connection fee and a delay of over 2 working days in repairs to basic telephone services entitles the subscriber to 50DM. 5 The Special Circular of 24 July 1995 amending the Greek Telephone Regulation imposed a target of 5 working days for 6 1995 and of 3 working days for 1996. Target adduced from time limits adopted in compensation scheme for purposes of determining entitlement to compensation. 7 Target set in France Telecom's general contract with the Direction Générale de Postes et Télécommunications (Source: DGPT Annual Report (1994)). Figure as at 31 December 1993 (Source: DGPT Annual Report (1994)). 8 9 This figure relates to customer reported faults. With regard to line faults 88% are repaired within 2 days. 10 Target and minimum acceptable level set in contract between ICP and Portugal Telecom and covers period 1995/199671997. Compensation available after 3 days without if fault is operators responsibility and after 10 days without service if force majeure. In 1993,73. 5% of faults were repaired within 24 hours. 11 12 Target forms part of Telia's service warranty. 13 Figures relate to period April to September 1994. In the same period, 87. 6% of business and 75. 5% of residential faults were repaired within 5 working hours or 9 working hours respectively or on a date agreed with the customer. 14 On the daily rate basis, the customer is entitled to claim one month's rental for each day of delay. 35 Annex 2 : The Universal Telephone Service in the European Union Today 4 Percentage of public payphones in working order (see Table A5) Payphones have a particular role in compensating for the lack of telephone penetration, especially in rural areas. For those Member States where data is available, a very high proportion of those payphones were in working order (between 92 and 96%). Nevertheless, National Regulatory Authorities in 6 Member States were unable to provide data on the percentage of public payphones in working order. Table A5 Average percentage of public payphones in working order in Member States in 19941 B n/a OK D EL E F IRL \ I n/a 95 92^ 973 n/a 4 n/a 5 Over 93 n/a Over 97 NL 95 AUT P FIN SWED 97 99. 9 n/a +/-9B UK 94. 6e n/a: data not available Source: National Regulatory Authorities (1995). NQTES 1 AM date provided in the table relates to the most recent period for which information is available (normally 1994). Where available, additional data is given in these notes. 2 Com operated payphones. 3 Card operated payphones. 4 The average repair time in public telephones of aH types (that is in public and private places) is 2. 8 hours; for public telephone boxes it is 10. 6 hours. 5 France Telecom's general contract with the Direction Générale de Postes et Télécommunications stipulates that only 5% of public payphones should remain out of order for more than 24 hours. As at 31 December 1993 4. 8% remained out of order for a longer period (Source: DGPT Annual Report (1994)). 6 This figure relates to BT public payphones for the period October 1994 to March 1995. For the preceding 6 month period the figure was 95. 9%. 5. Supply time and quality of service indicators required by Annex II of the ONP Voice Telephony Directive According to the Voice Telephony Directive5, Member States will be required from the end of 1996 to set and publish targets for supply times and quality of service indicators for those operators covered by the Directive, in respect of: Supply time for initial network connection Fault rate per connection, fault repair time and call failure rate Dial tone delay and call set up delay, transmission quality statistics, Response times for operator services The proportion of coin and card-operated public pay-telephones in working order Billing accuracy Results must be published annually and the Commission will publish in the Official Journal, where that information can be found at a national level. The choice of indicators in part reflects the work already undertaken within the OECD, ITU and ETSI6. 36 Annex 2 : Trie Unr^rsaJ Telephor» Swvtae in the Eurorjean Union Today IV AMAtU^BJIJW OTAF^^ 1. An increasing rangelof advanced telephone features (see Table A6) are now currently commercially available or on trial throughout the Community, though the level of deployment is often linked to the extent of digrtaltsation of national networks. • Touchtone (DTMF) dialling is available in aJl Member States (though sometimes confined to subscribers connected to a digital exchange). • Call waiting and call forwarding services are also fairly widely available, whilst calling line identification is offered in 5 Member States, with operators in a further three Member States including in an ISDN offering, and plans for it to be offered or piloted in three more Member States in 1996. • Call barring facilities are available in twelve Member States, (although in Austria, Belgium, Denmark, and Finland) this possibility is currently limited to certain value-added services). • Voice mail services are available in 7 Member States, with trials underway in a further three Member States, and the facility being a common feature within the GSM network. 2. Three of these facilities (i. e. Touchtone Dialling / Call Forwarding / Calling Line Identification at a national level) are identified in the Voice Telephony Directive as elements of the telephone service which should be introduced according to nationally set dates. They are increasingly available in substantial parts of the network. Call Waiting is a service which permits a subscriber to be notified (by a specific tone) of an incoming call while engaged in another call. The user then has the choice of accepting, rejecting or ignoring the waiting call. Call Forwarding is a service which permits a served user to have the network send to another number all incoming calls for the served user's number. (This service should be distinguished from call forwarding when busy and call forwarding when no reply). Call Transfer is a service which enables a user to transfer an established call to a third party. For the original call, the served user may have been either the calling or called party. Calling Line Identification is a service which provides the calling party's number to the called party prior to the call being established. It may be possible that the calling party restricts the presentation of the calling party's number to the called party. Dial-Tone Multi-Frequency (DTMF) operation / Touchtone Dialling means the facility offering users Touchtone dialling, which is essential for the use of many new interactive telephone services. This is defined in the ONP Voice Telephony Directive i. e. the fixed public telephone network supports the use of DTMF telephones for signalling to the exchange, using tones as defined in ITU-T Recommendation Q. 23, and supports the same tones for end to end signalling through tne network, both within a Member State and between Member States. Integrated Service* Digital Network (ISDN) is a network wfuch attows, via a stngte access, using the existing subscriber line, the transmission of voice telephony, text, data and Image®. 37 Annex 2 : The Universal Telephone Service in the European Union Today Table A6 : Availability of Advanced Telephone Facilities in the EC Country B DK D EL E F IRL 1 L NL AUT P FIN SWED UK NOTES Dual-tone Multi- Frequency (DTMF) Dialling Yes' Yes * Yes Yes5 Yes Yes Yes5 Yes5 Yes Yes Yes Yes10 Yes Yes Yes Call Waiting Call Forward Voice-mail in the public network Calling Une Identification Call Barring Facilities Yes^ Yes5 Yes Yes5 Yesy Yes Yes5 Yes Yes No14 Yes Y e slb Yes Yes Yes Yes^ Yes5 No0 Yes5 Yesa Yes Yes5 Yes Yes Yes Yes Yesi tJ Yes Yes Yes Yes Yes5 Yes No No Yes Yes5 No1"1 No No11 Yes1° Yes,D Yes Yes No11 YesJ NoD Yes No N o '" Yes No Yes** No No15 YesJ Yes Yes Yes Yes Yes« Yes' Yes No No Yes No Yes1^ Yes1J Yes Yes1' Yes'l u4 Y e siy Yes Yes Source: National Regulatory Authorities (1995). 1 For 93. 5% of PSTN lines. 2 For 60% of PSTN lines. 3 Available on ISDN 4 Call barring available to block access to kiosk services. 5 Commercially availability linked to whether subscriber is connected to a digital exchange (percentage of subscribers for those States indicated in brackets) : DK (55%), EL (3%), IRL (75%) and Italy (67%) 6 Gradual introduction from February 1996. 7 Commercially available blocking access to specific value-added services; per line or per call barring of call facilities (such as call identification) will be introduced in December 1995. 8 Technical possibility on ISDN but this is not commercially available for the moment. 9 47. 8% of the subscribers have the possibility to access this service. 10 There is a plan to offer such a service in 1996 for subscribers connected to digital switches. 11 Voice-mail was on trial in 1995. 12 Call barring facilities for trunk traffic and kiosk billing services. 13 Customers have the possibility of per line barring of call facilities. 14 Pilot in 1995 and introduction in 1996. 15 Pilot in 1995. 16 Available for mobile telephone (GSM). 17 Barring access available only to specific value-added services (not per line or call blocking facilities) 18 Available whenever it is technically feasible and for CLI, available on ISDN whenever it is technically feasible. 19 Customers are offered the possibility of per line barring of call facilities and barring access to specific value-added services. 38 Annex 2 : The Universal Telephone Service in the European Union Today V T HE AFFORDABILITY OF TELECOMMUNICATIONS SERVICES IN THE EUROPEAN COMMUNITY TODAY As indicated in the Communication, for the majority of users, it is the overall affordabiiity of the telephone service which is important. It was also stressed in many of the comments received that users needed to be better informed about what they are spending and to be given more control over that expenditure. This is all the more important in an environment in which the general volume of telephone usage is increasing and in which there are an increasing number of new audiotex services, providing information or entertainment, often priced at a premium above the normal cost of universal service. Price levels within the Community are already quite varied. - Indications of these absolute levels are provided in Table A7. 39 Annex 2 : The Universal Telephone Service in the European Union Today Table A7 : T e l e p h o ne C h a r g e s1 for Residenial Users in the EC Member States (by fourth quarter 1995) Installation Charges2 (New Connection) 90 212 46 160 13^3 39 148 99 64 93 90 77 169 79 1J7 117 I B DK D GR ES F IRL \ L NL A P SF S UK(BT) UK (MCI)4 | Rental Charges3 (Bi-monthly) • 23 27 23 V\ 16 12 25 12 V\ 22 24 19 20 20 17 25 3-minute Local Call 3-minute Trunk Call Peak period Cheap period5 Peak period Cheap period6 B DK D GR E F IRL 1 L NL AU P SF S UK (BT) UK (MCI)7 0. 10 0. 13 0. 11 0. 10 0. 07 0. 09 0. 12 0. 13 0. 08 0. 08 0. 15 0. 06 0. 12 0. 08 0. 12 n/a 0. 03 0. 07 0. 04 0. 10 0. 07 0. 03 0. 02 0. 09 0. 04 0. 04 0. 15 0. 02 0. 12 0. 05 0. 05 n/a 0. 58 0. 29 0. 87 0. 98 1. 00 0. 81 0. 67 0. 92 0. 08 0. 25 1. 21 1. 17 0. 28 0. 24 0. 30 0. 23 0. 23 0. 14 0. 40 0. 65 0. 42 0. 28 0. 46 0. 34 0. 04 0. 13 0. 90 0. 59 0. 17 0. 14 0. 18 0. 15 Notes 1. All charges in the tables are in ECU and include value added tax. 2. Charges are minimum charges excluding time and material charges which are levied in some Member States. 3. Rental charges reflect the price for a single line in the capital city. Germany includes free call minutes equal to ECU 2. 42. 4 Mercury rental charge comprises the BT rental plus the charge for the authorization code. 5. The cheapest off-peak rates have been taken into consideration 6. Refer to note 5. 7. Mercury does not offer local calls for residential users. 40 Annex 2 : The Universal Telephone Service in the European Union Today Progress made in adjusting tariff structures with the Community and its impact on the overall affordabiiity of universal service 1. Table A8 indicates the overall percentage change in the general level of the prices of telecommunications services in the Member States of the European Community between 1990 and 1995. (A detailed breakdown of the different elements within the overall change is provided in Table A8). The information set out is based on the data provided by national regulatory authorities and is It is not therefore possible to calculated according to national practice. compare price changes directly between different Member States, making it difficult to compare price changes in different parts of the Community. Additionally, Tables A7 and A8 show percentage changes and do not indicate the prices actually charged. It is not therefore possible to draw conclusions concerning the effects of these rises on the overall affordabiiity of the services concerned. Nevertheless, the data shows that important changes in tariff structures are underway and, in particular, the general trend of increases in fixed elements in the tariffs for universal service (connection and rental), as well as higher charges for local calls at peak hours and, in most Member States, corresponding reductions in regional, long-distance and international calls. 2. information on the current availability of targeted or special tariff schemes is set out in Table A-9. 41 Annex 2 : The Universal Telephone Service in the European Union Today Table A8: Average Overall Tariff Adjustments - (NRA E s t i m a t e s) 1990 - 1995 Tariff changes indicated are change in real terms, with nominal changes, where available, shown in brackets Detailed data on the changes for installation / rental / local / regional / national and international tariffs are set out in Table A8 I _________ Overall % Change in tariffs (1990-1995). DK EL2 J_* F3 J JRL J_ NL4 AUT1 J_ FIN SWED5 UK6 I -_§ j-0_5 n/a - 43. 2 (-7. 2 nominal change) n/a - 14 (- 3. 4 nominal change) rj/a - 42 (- 25 nominal change) n/a + 3. 7 (Mandatory services) + 6. 6(Small user tariff) n/a - 10. 2 (+ 27. 6 nominal change) _5 , 8 (+ 8 nominal change) -23. 7 (-10. 2 nominal change) n/a : Data not available. Source: National Regulatory Authorities (1995) Notes on Table A8 1. Data provided for changes in individual tariff elements, but no overall figure available. 2. Average overall tariff change for call charges only 3. Period 1990-1994 4. Data provided indicates price change of an unspecified basket of services in relation to consumer price index. 5. Calculated on the basis of Telia's index of its tariff basket. 6. The global figures for the overall percentage change in BT's tariffs between 1990/91- 1994/95 and relates to an overall weighted average of all the services in the price control basket, not just the ones listed in the table. Information and telecommunications control over what customers spend on 3. Above indications were given about the increasing availability of call-barring facilities for residential users which can offer a degree of control, by allowing them to block calls to selected services (e. g. premium priced services), or potentially to long-distance and /or international calling. 4. Additionally, the Voice Telephony Directive requires from the end of 1996 Member States to set targets for the availability of itemised telephone bills - a service which is in any event increasingly common throughout the EC. This is an important means of providing users with sufficient information over what they have spent on the telephone. At the same time, a number of comments stressed that current long-billing periods made it difficult for some users to 42 Annex 2 : The Universal Telephone Service in the European Union Today control expenditure and that therefore warning should be given of excessive or unusual use of a particular telephone connection. The use of special and targeted tariff schemes in the EC As part of a general aim of ensuring affordabiiity for telecommunications services, special and targeted tariff schemes are provided in all Member States (see Table A8 for full details) to improve the overall affordabiiity of universal service for certain users, or for certain groups of users with specific needs or specific calling patterns. Low user schemes are available in France, Ireland, Sweden and the United Kingdom. Such schemes are particularly important in the context of tariff rebalancing as it is generally those users who make few calls, or few long-distance and international calls, who may be disadvantaged by the price changes resulting from rebalancing. In addition, social schemes for those on low incomes are available in Belgium, Germany, France, and Austria. All Member States, with the exception of Luxembourg, the Netherlands and Finland, also offer some form of special tariff packages for elderly users and for users with disabilities. A number of organisations, particularly those representing the interests of users with disabilities, stressed in this context the need for such schemes to be available automatically to such users or, at least, that the administrative formalities connected with benefiting from such schemes should be reduced, (for example, to avoid the requirement to register separately for each scheme). 43 Annex 2 : The Universal Telephone Service in the European Union Today Table A9 : Tariff Changes within the EC between 1990 and 1995 Generally real % change is indicated (nominal change in brackets) : * indicates that figure is real change where no nominal figure is given Overall Change n/a Bl Installation Connection/ set up + 39% Existing line - 37% Rental + 35% large areas +50% med. areas + 70% small areas +0. 5% n/a + 8. 3% + 3. 5% -15. 4%* -15. 4%* + 105. 2%* + 68. 1%* -43. 2% (-7. 2 in nominal terms) n/a Local + 7. 6% + 8. 5% -15. 4%* + 89. 1%* Regional +5. 8% (interzonal traffic conti guous zones) National -5. 8% (interzonal traffic non-contiguous zones) No change - 20. 6% n/a - 55. 4%* (>100km) + 68. 6%* + 2. 38% + 24. 2% + 192. 3% - 23. 5% + 10. 6% -14% (- 3. 4% nominal change) n/a + 30%7 (+16%) n/a Residential: + 42% Bus: No change + 25% (+11. 5%) Peak : + 4 1% Bus: +12% - 29. 5%8 (-37%) -19% (> 100km) (-27. 5%) -42% (-25% nominal change) n/a No change No change +10% No change No change See national See national DK D3 EL^ £5 F6 1 IRL L*1 Peak: Business - 6% - 1 1% -4. 61» Peak : -6% Other: -13. 4% international Examples: France -22. 2%; - 33. 3%; Italy - 28. 6%; Spain - 40%; USA - 55%; Japan - 5 %2 Examples: - 68. 9%* USA Norway - 33. 9%* -1. 6%* Examples EC Calls - 23% - 6 1% USA -18. 7% (-27. 5%)9 Examples: -20%; UK Peak Cheap - 20% USA Peak-43% - 48% Cheap - 4. 7% UK: - 4. 7% Other: 1995 -13 to 50% 44 Annex 2 : The Universal Telephone Service in the European Union Today NL<* AUT P Overall Change Mandatory services + 3. 7%* Small user tariff + 6. 6%* n/a -10. 2% (+27. 6% nominal change) FIN -5%™ SWE1B UK18 -8% (+8% nominal change) -23. 7% (-10. 2% nominal change)19 Installation No change Rental 16. 7% * Local Av: + 22% Peak + 2 6% Cheap + 1 8% +33% - 0. 6% (+41. 2% nominal change) No change - 5. 9% (+33. 7% nominal change) No change +11. 9% (+58. 9% nominal change) Regional Av: + 22% Peak: + 26% Chp: + 1 8% -40% + 27. 1%- (+80. 6% nominal change) -11% -13. 7% (+22. 6% nominal change) National International -21. 3% n/a n/a n/a +14. 2%14 + 2. 4 (%)* n/a Peak:-61. 2% + 15to20%17 + 60%17 n/a n/a Europe: - 32. 2% (-3. 6% nominal change) Other:-44. 5% (-21. 2% nominal change) Examples11): Sweden Germany USA n/a - 47. 4% -19. 2% -16. 8% Residential: -0. 7% Business: -33. 1% Resid'l exclusive: +37. 5% Bus. exclusive: +37. 7 Wholesale: +54. 4% -13% -19. 8% B1-rate:-19. 5% B-rate: -35. 5% -22. 3% n/a Data showing % changes in specific tariff from 1990-1995 not provided by the NRA. Source: National Regulatory Authorities (1995) Notes on Table 1. 2. 3. 4. 5. 6. 7. 8. 9. Belgacom is paying back the guarantee previously required from customers. Period : 1994-1995. Since July 1995. calls from Denmark to other EC countries, Norway and Switzerland have been reduced by 20% (off peak). A similar 20% reduction to USA and Canada occurred in January 1995. Period 1990-1994. Inflation indicator for the period indicated an increase in prices of + 15. 4% Average overall tariff change for call charges only Tariff changes refer to 1994 only Period 1990-1994 Percentage change represents both connection and rental charge Decrease attributable to creation of enlarged local calling areas Data provided for a range of tariffs varying from intra-EC /cross-border -19% (-27. 5%) to North American routes - 32% (- 29%) 45 Annex 2 : The Universal Telephone Service in the European Union Today Includes calls to Northern Ireland 10. 11. Since 1 July 1993 the duration of one tariff unit has been 4 minutes (peak rate) and 8 minutes (off peak). Since 1 May 1995 a monthly minimum of 20 units is charged per subscriber line. 12. Data provided indicates price change of an unspecified basket of services in relation to consumer price index. 13. The global figure has been calculated for residential users who mainly use local telephone services. The figure would be different for business users because they use more long distance and international telecommunications and in these services the prices have dropped considerably. 14. Data provided indicates price change of a specified basket of local services in relation to consumer price index. The basket consists in 8% of connection fee; annual subscription fee and 750 local daytime 4 minute telephone calls. 15. Cheapest rate and cheapest operator (1990) Telecom Finland and (1995) Telivo. 16. Period 1993-1995. 17. Calculated on the basis of Telia's index of its tariff basket. 18. Price changes are for BT. 19. The global figures for the overall percentage change in BT's tariffs between 1990/91-1994/95 and relates to an overall weighted average of all the services in the price control basket, not just the ones listed in the table. 46 Annex 2 : The Universal Telephone Service in the European Union Today Table A10 - Special tariff schemes for targeted user groups in the EC Country Description of scheme BE DK EL The contract between the Belgian State and Belgacom imposes certain tariff reductions for social or humanitarian reasons. 0 social groups: Around 370. 000 people are benefiting from the social telephone rate (8. 1% of the total number of connections). The following tariff reductions are applied: 70% reduction of connection charges, 50% reduction of rental fee, and 50 free units of traffic for 2 months. ii) Elderly and handicapped: Reduced tariffs for elderly (over 65) and handicapped. Specific text-telephone service under operation for hearing impaired users, including provision of different types of terminal equipment. The service is provided on a non-commercial basis. Reduced tariffs for visually impaired and blind users when using Directory Services. Reduced tariff scheme for elderly, disabled, and low income croups. These special groups receive a 5 DM reduction on rental charges and 30 units free of charge per month. There will be a tariff re-balancing in 1996 which will make larger discounts. There is no low usage tariff scheme and there is none foreseen. i) Disabled: Special reduced rates have been introduced for blind subscribers. Blind subscribers are allowed 150 units a month free of charge on the first main telephone line subscribed in their name. Additionally, specially designed public card phones have been installed at airports, railway and bus stations and hospitals. There is no special policy on low user schemes within the context of universal service. ft Elderly and handicapped: Special "social subscription" that consists of a 95% discount on the monthly fee and a 70% discount on the initial connection fee for those citizens over 64 and handicapped (only when they do not receive a certain level of income). i) Handicapped, elderly and social groups: Reduced tariffs for special and social groups, such as handicapped, aged over 65 living alone or with their partner and war veterans. These reductions include a 50% reduction on subscription fee, 40 units free of charge per month (domestic calls), and free access to information services. ii) The low user scheme gives a reduction for those who use less than 26 units per month. 47 Annex 2 : The Universal Telephone Service in the European Union Today Country Description of s c h e me IRL NL AUT FIN SWED Free rental and subsidised usage scheme provided to specific user groups such as the deaf, the aged and the disabled. i) Disabled: The deaf customers can use special text terminals (Minicom) to communicate with non-deaf customers. Due to the fact that this method is slower than normal speech, the operator has a refund scheme under which deaf customers are entitled to reclaim up to 70% of the cost of their calls subject to an annual maximum. Additionally, the State may refund the VAT element of the purchase price of the Minicom equipment for the deaf. ii) The company also provides financial assistance to other voluntary charitable groups, such as Samaritans, Irish Cancer Society, Rape Crisis Centre, etc. which allows the organisation to be contacted by users of their services either by freephone or at a reduced rate. iii) Low user scheme: there is a low user scheme on its analogue mobile service which provides service with connection charges as little as 41% of normal charges, rental charges as little over 103% of normal charges but which includes a credit per month on national calls. iv) Aged and disabled: The Department of Social Welfare provides state aid for the aged and disabled, i. e. , free telephone rental for certain aged and disabled people living alone or with other excepted persons. Since January 1995, there is a special scheme for low consumption users upon request (it includes a low rental fee and low tariffs for low consumption per month, i. e. , up to 40 units/month: 50 lira). P&T Luxembourg has no plans to introduce specific schemes targeted towards particular social groups as the basic telephone tariffs are very low. There is no special scheme targeted to a specific group of customers. Certain social groups, including the blind, handicapped, pensioners, low income people, students, are exempted from paying the following fees: basic monthly connection fee and one free hour of telephone use per month. There are special tariff reductions for retirees and pensioners with a monthly salary less than the national minimum. The reductions are the following: a 60% reduction of subscription fees and at least 25 units free of charge per month. The operators are equally obliged to concede the following facilities for population with special needs: micro telephones with amplifier, a call warning, etc. There are no special schemes regarding telecommunications charges. The state budget finances special services targeted to some special groups, which operators are not willing to provide (i. e. special services for disabled). There is an agreement between the State and Telia, where the latter has committed itself to provide the low consumption subscription (Telia Mini). The quarterly fee must not exceed 70% of the regular quarterly fee and at least 10% of household customers should benefit from to this type of subscription. ___________ ^ _^ 43 Annex 2 : The Universal Telephone Service in the European Union Today UK ; BT provides the following schemes: \ Spread connection fee - which divides the initial connection charge into 5 quarterly payments (plus an administration charge) Deposits - in 1996 BT plans to introduce Usage Limits, whereby new customers agree a financial ceiling on call expenditure. This should largely eliminate the need for deposits. Low User Scheme - BT provides this under its licence, the guidelines for which are negotiated with the regulator. Elderly gnd Disabled - new customers over 65 will not be asked for a deposit unless they owe BT money or are bankrupt (Kingston has a similar policy) Protected Service Scheme - enabling elderly and disabled customers to nominate a third party to deal with bill payment. Free Priority Fault Repair Service - for customers whose telephones are vital lifeline - scheme is designed to ensure priority treatment in the event of a fauit. Visually impaired and blind customers - are offered large print/Braillertalking" bills and free Directory Enquiries (all companies offer the latter in order to meet a licence requirement). Free Directory Enquiries is offered to visually impaired customers and others who are physically unable to use the printed phone book. Deaf users - have access to Type talk, a national telephone relay service, which BT is obliged under its licence to provide and fund. A Text User's Rebate is available to acknowledge that calls made on by text phones take longer than the voice telephony equivalent. Some cable companies >ffer disabled customers personal visits to collect their bill payments. Source: National Regulatory Authorities (1995) Annex 2 : Questionnaire QUESTIONNAIRE SENT TO MEMBER STATES I - THE CURRENT SITUATION WITH RESPECT TO UNIVERSAL SERVICE. Questions concerning the general level of telephone penetration. 1. What was the total number of business telephone lines and residential telephone lines at the end of 1990 and at the end of 1994? Please give more recent figures if they are available? 2. What was the ratio of residential lines to number of households at the end of 1990 and at the end of 1994? 3. What was the total number of public payphones at the end of 1990 and at the end of 1994? 4. What was the total number of mobile cellular telephone subscribers at the end of 1990 and at the end of 1994? Please give more recent figures if they are available Question concerning basic aspects of service quality 5. Please give details of the main indicators of telephone service quality that are currently published. Please give details where they are available for supply time for network connection, fault repair times and compensation schemes and proportion of public payphones in working order. Question concerning the basic telephone service features that are offered. 6. Please give details of the main service features that are offered by the fixed telephone service operators ? Please indicate whether any of the following service features are commercially available or the date planned for their introduction : DTMF dialling, call intenrupt/waiting, call forwarding or call transfer, voice-mail, calling-line identification. Please also specify whether customers are offered the possibility of per line or per call blocking of call facilities, (such as calling identification), or the possibility of blocking access to specific value-added services (such as premium-rate or "kiosk" services)? 50 Annex 2 : Questionnaire II - THE ADJUSTMENT OF PRICING STRUCTURES, AFFORDABILITY AND SPECIAL MEASURES. In most Member States, tariffs structures are changing in line with the process of rebalancing to reflect modern cost structures, competitive pressures and to encourage more efficient use of telecommunications networks. Questions concerning major pricing adjustments, whether there is a measure of decline in prices overall, if price-cap schemes are being used to control pricing adjustment, the affordabiiity of telephone service and whether special tariff schemes are available. 1. What are the major tariff reforms that have been undertaken or are being planned? 2. Is it possible to give a measure of the average change in tariff levels since 1990? (Please specify in relation to connection charges, rental/fixed charges, local, long distance and international call charges) 3. What are the particular target levels, if any, for the adjustment of tariff structures? 4. What price-cap schemes, if any, in operation? What are the plans, if any, to introduce price-cap schemes or modify existing schemes? 5. Please give the latest information concerning specific schemes (either voluntary or as a result of regulation) which are being used or planned in order to provide service to a specific group of customers. This includes schemes targeted towards particular social purposes (schemes for customers with disabilities / the elderly/ those on low incomes, etc. ), schemes to offset the adverse impact on certain customers of re-balanced tariffs? Additionally, what low user schemes (either voluntary or as a result of regulation) are available or being planned? 51 Annex 3 : List of participants ANNEX 3 : LIST OF ORGANISATIONS PROVIDING WRITTEN RESPONSES TO THE THEME PAPER ON UNIVERSAL SERVICE ANGA Antelope Consulting APEC - Association of Private European Cable Operators ARD - Radio + TV ASIMILEC A T &T ATC Finland Austrian Ministry of economy and transport Belgacom BellSouth British Telecom Bureau Européen des Unions des Consumateurs Conseil National du Patronat Français Compagnie General des Eaux COST 219 - National Research & Development Centre for Welfare & Health COST 219 The Mike Martin Consultancy CRID CURDS - University of Newcastle Dansk Industri (Dl) Department of Trade and Industry (UK) Deutsche Postgewerkschaft Deutsche Telekom Direction Générale des Postes et Télécommunications (FR) ETNO EU Committee of the American chamber of Commerce in Belgium European Conference of Data Protection Commissioners Forschungsinstitut fur anwendungsorientierte Wissensverarbeitung France Telecom Fundesco GEF - Global Electronic Finance Management INESC Ingeneria y Gestion de Redes INTEL International Council of Aircraft Owner and Pilot Associations IPTT Kooperativa Institutet Erika Mann M. E. P. Mercury Communications Ltd MFS Communications Ministerie Van Verkeer en Waterstaat (NL) Ministry of Transport & Communications (FIN) Ministry of Transport & Communications (SWED) Omnitel Pronto Italia Portugal Telecom PTT Force Ouvrière PTT Telecom STET TAG - Telecommunications Action Group 52 Annex 3 : List of participants TELECEL S. A. Telecom Eireann Telefonica de Espana Telenor TELIA AB The Finnish Consumers Association Thyssen Telecom A. G. The Telecommunications Managers Association United States Council for International Business Universidad de Valencia Universitât Potsdam VEBACOM v 53 Annex 4 : Summary of the main issues raised in the public consultation on the universal service theme paper ANNEX 4: SUMMARY OF THE MAIN CONSULTATION ON THE UNIVERSAL SERVICE THEME PAPER ISSUES RAISED IN THE PUBLIC A broad range of comments where made during the public consultation. appropriate to highlight five main issues raised: It is 1. Scope of the universal telephone service There is recognition of a continuing improvement in the level and quality of service within the European Community. Few comments favoured a radical reshaping of the current concept of the universal telephone service, which should remain narrowly defined, but open to future evolution in the light of changes in customer and market demand. Nevertheless, some organisations, particularly, user organisations and operators from the less favoured regions suggested that the current concept of universal service could be more ambitious and should include both leased lines and ISDN. At the same time, there was support for measures at a European level to strengthen the current concept in order to overcome important gaps at present with regard to the scope of services within the universal telephone service and the need for an explicit obligation of affordabiiity. Emphasis was placed on ensuring users had adequate information and control over what they spend (e. g. itemised billing, flexible ways of paying, such as spreading connection charges over a series of installments or allowing users to block calls to particular numbers). 2. Quality of service and comparability of service at a European level A particular concern resulting from the consultation was on the considerable variation in the quality of service targets currently established at a national level, as well as national enforcement of targets and the availability and nature of compensation schemes where targets were not met. This concern from users was compounded by the difficulties faced by some national regulatory authorities in obtaining basic indicators of the universal telephone service, such as the number of households with a telephone, and by the lack of comparability of certain of data between Member States. The situation is partly remedied by the Voice Telephony Directive, which provides for the setting and publication of national quality of service indicators. However, the consultation indicates that users seek more than this and that varying levels of service in the Member States impacts the provision of pan-European networks and services and, if not corrected could lead to widening the gap between the Community's developed areas and its less favoured regions, undemining the objective of economic and social cohesion. A further concern raised by consumer organisations was also whether adequate sanctions exist at a national level to allow quality of service to be enforced. More generally such organisations raised the issue of consumer involvement at both a national and European level in the setting of quality of service targets and measures of affordabiiity, and more generally, in decisions as to the future evolution of universal telephone service and of the information society. 54 Annex 4 :Summary of the main issues raised in the public consultation on the universal service theme paper 3. Costing and funding of the universal telephone service The most recent consultation exercise did not invite detailed comment on the costing and funding of the universal telephone given their detailed discussion in the context of the infrastructure Green Paper (see COM(95) 158). These principles are reflected in the proposed Interconnection Directive and the Full Competition Directive. Nevertheless, where comments were made they tended to address practical issues associated with costing (for example, the calculation of the value to existing operators providing the universal telephone service) or with funding (the requirements of a universal service fund, the feasibility of "pay or play" mechanisms). Additional guidance on these practical issues at a European level was felt to be useful, even though the main regulatory principles were found in the proposed legislation. 4. Tariff rebalancing There was general support for the process of tariff rebalancing to which the European Community is committed, with many of those comments stressing the need for completion of the process by the date set for full liberalisation. Many pointed to the benefits which overall lower tariffs would offer many users. At the same time, there was recognition of the need to protect particular groups of users from the effects of unconstrained rebalancing in order to ensure that customers are not forced to leave the network because of the costs involved. Consumer organisations stressed in this context the role to be played both by price cap mechanisms and specially targeted tariff schemes. 5. Public access to the information society The fundamental importance of the information society was widely recognised, but the emerging services were not considered part of the universal telephone service today. At the same time, the idea of market-led "public access" (to connect schools, hospitals, libraries, etc. ) was supported, though it was not considered necessary to define precise targets at this stage. At the same time, there was recognition of the need to put in place appropriate mechanisms to monitor the demand for, and take up of, new services at both a national and European level in order to keep the scope of the universal telephone service under review, and in particular to measure the extent to which "public access" was being developed, particularly in the less favoured regions in the Union. Stress was also placed by consumer organisations of the importance of their voice being heard in this monitoring process. ENDNOTES 1 2 3 4 5 6 In Sweden, for example, new subscriptions to mobile services have for the first time exceeded subscriptions to the fixed network In Spain, for example, more than 180,000 subscribers benefit from wireless local loop services and there are more than 700 wireless public call boxes. Proposal for a European Parliament and Council Decision on an action at a Union level in the field of satellite personal communications services in the European Union, COM(95) 529, 8. 11. 95 VSATs - Very Small Aperture Satellite Terminals. Article 5 and Annex III Sec "Performance Indicators for Public Telecommunications Operators", Information Computer and Communications Policy series, No. 22, OECD, Paris 1990 and ETS1 Technical Report "Quality of service indicators lor Open Network Provision (ONP) of voice telephony and Integrated Services Digital Network (ISDN)" ETR 138, July 1994 55 ISSN 0254-1475 COM(96) 73 final DOCUMENTS EN 15 08 10 Catalogue number : CB-CO-96-118-EN-C ISBN 92-78-01688-8 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) providing for an extension of the duration of a Community plant variety right in respect of potatoes

http://publications.europa.eu/resource/cellar/b27fd840-69aa-459b-987b-52686aa2a244

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 13. 03. 1996 COM(96) 95 final Proposal for a COUNCIL REGULATION (EC) providing for an extension of the duration of a Cononunity plant variety right in respect of potatoes (presented by the Commission) EXPLANATORY MEMORANDUM Council Regulation (EC) No 2100/94 on Community plant variety rights1 has established a new Community regime which provides for the grant, at Community level, of plant variety rights, a specific form of industrial property rights system for new plant varieties. These rights will have a direct and uniform effect throughout the Community. For the purpose of the implementation of a Regulation, a Community Plant Variety Office, hereinafter referred to as "the Office", has legally been established on 01. 09. 1994, the date of entry into force of the Regulation. If granted by the Office, the term of a Community plant variety right shall, in principle, run until the end of the 25th calendar year or, in the case of varieties of vine and tree species, until the end of the 30th calendar year, following the year of grant. The Regulation provides for the possibility of extending these terms up to a further five years. To this end, an implementing regulation may be adopted by the Council, acting by qualified majority on proposal from the Commission. The attached Commission proposal aims at providing for an extension in the case of plant varieties of potatoes. The need for such proposal at this moment results from the following: 1. It is a recognised principle that breeding of new potato varieties entails specific technical difficulties and promises equitable benefit at a fairly late stage. Both, the research expenses and the successful establishment of even the best potato varieties on the market can hence not be compared with other agricultural crops. This recognised principle is reflected in the national legislation of most of the Member States of the European Union being also Member of the International Union for the Protection of New Varieties of Plants (UPOV), which provide for an extension of the duration of a national property right in the case of potatoes by a further 5 years in comparison with the other agricultural species. As the European Community also envisages accession to UPOV by ratifying the convention of 1991, it is appropriate to align the policy on the duration of protection for potato varieties. 0J No L 227, 1. 9. 1994, p. 1, as last amended by Council Regulation (EC) No 2506/95 of 25. 10. 1995, 0J No L 258, 28. 10. 1995, p. 3 I - 2 - 2. The Office has been operational since 1995 and has received more than 3200 applications for Community plant variety rights amongst which about 200 applications relate to potato varieties (state as at 1. 2. 1996). It is probable that the first Community plant variety rights will be granted in 1996 by the Office. In consequence, expectations of potato breeders the legitimacy of which is explained above will soon have found shape in Community plant variety rights. Immediate action by the European Community is hence required in order to allow an appropriate planning for potato breeders in future. Subsidiarity a) What are the objectives of the measure in relation to obligations with which the Community is charged? The measure pursues the same objective as the Regulation No 2100/94, i. e. to ensure compatibility with the requirements of the single market concept; the proposal does not affect the co-existence of national regimes with the Community system. b) Does the measure arise from an area where there is exclusive Community competence or where competence is shared with Member States? Exclusive Community competence in respect of the Community systems of industrial property rights. c) What forms of actions are at the disposal of the Community? Legislation implementing an already adopted regulation, exclusively. d) Is uniform regulation necessary or would a directive imposing general objectives suffice, leaving execution to be carried out at Member State's level? Uniform regulation is necessary. The proposal would have no impact on small or medium-sized enterprises and no financial implications for the budget for the European Union. 3 COUNCIL REGULATION (EC) providing for an extension of the terms of a Community plant variety right in respect of potatoes PROPOSAL FOR THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing Che European Community, Having regard to Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights1, as amended by Regulation (EC) No 2506/95 of 25 October 19952, and in particular Article 19 (2) thereof, Having regard to the proposal from the Commission, Whereas it is recognised that technical difficulties in potato breeding require expenditure of research activities for a long period in comparison with the overwhelming majority of all the other agricultural crops; whereas, in addition, experience on the market has shown that a new potato variety reveals its commercial value only in long terms in comparison with those agricultural species requiring also long term research activities; whereas, for these reasons, an equitable refunding of the research activities is only possible at a fairly late stage of the protection in comparison with the other agricultural crops; Whereas in order to establish a legal environment conducive to achieve such equitable refunding, an extension of the initial duration of a Community plant variety right by further five years in the case of potatoes is the most appropriate measure; Whereas such extension should apply to all valid Community plant variety rights which were granted prior to the entry into force of this Regulation or which will be granted in future unless such a right is duly surrendered by the holder or terminated by a decision of the Community Plant Variety Office; OJ No L 227, 1. 9. 1994, p. l OJ No L 258, 28. 10. 1995, p. 3 k - 2 - Whereas the period of extension should be reduced if a national property right or rights in respect of the same variety have been effective in a Member State prior to the grant of a Community plant variety right and accordingly, would have allowed a breeder to take already advantages of his variety; whereas a comparable principle was already laid down, under the transitional regime of Article 116 of the Basic Regulation; HAS ADOPTED THIS REGULATION: Article 1 1. The duration of a Community plant variety right in respect of varieties of potatoes shall be extended until the end of the 5th calendar year, following the last calendar year Of the duration provided for in Article 19(1) of the Basic Regulation. 2. In the case of varieties to which Article 116(4) 4th indent of the Basic Regulation does not apply, the extension referred to in paragraph 1 shall be reduced by the longest period in full years during which any national property right or rights have been effective in a Member State in respect of the same variety prior to the grant of the Community plant variety right. Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. ISSN 0254-1475 COM(96) 95 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-099-EN-C ISBN 92-78-01302-1 Office for Official Publications of the European Communities L-2985 Luxembourg c

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - TOWARDS E NEW MARITIME STRATEGY

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 13. 03. 1996 COM(96) 81 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS TOWARDS A NEW MARITIME STRATEGY TOWARDS A NEW MARITIME STRATEGY Contents EXECUTIVE SUMMARY A. EC SHIPPING AND POLICY I. II. III. IV. V. V I. EC Shipping in a Global Market Need for EC Shipping Developments in EC Ownership, Flag and Employment Some Further Trends in Global Shipping The EC Policy so far; Efforts and Successes Results B. A POLICY FOR THE FUTURE I. " The Approach: Applying Global Standards and Enhancing the Competitiveness of the EC Shipping Sector 1. 2. The response of the EC to globalisation of shipping Policy choices for a future shipping policy II. III. IV. Safety and Fair Competition 1. 2. Defining and enforcing Member States registers Off shore Member States registers Safety: an integral part of fair competition Registers: a crucial tool to ensure safe and fair competition a. b. c. Eliminating dangerous shipping Fostering a spirit of quality in shipping Higher EC standards in certain circumstances flag State obligations 3. 4. 5. Maintaining Open Markets 1. 2. 3. Basic approach Regulation 4 0 5 8 / 86 Competition rules a. b. c. Unfair market behaviour 4. Acting against market access barriers International Application of competition competition standards rules in EC trades A Policy for Competitiveness 1. 2. 3. Training and employment Research and development State aid to shipping a. b. c. d. to State aid Approaches Action on employment and corproate costs Aid within general frameworks The criterion of measurable benefit V. Measures for Related Sectors CONCLUSION I C\ 1 5 5 6 6 7 8 11 11 11 11 12 13 13. 14 14 15 18 18 19 19 20 20 21 21 21 22 22 23 24 24 26 28 29 31 32 32 33 34 Annex A: EC SHIPPING IN A GLOBAL MARKETPLACE I. II. III. The Shipping Market and Environment Bulk and liner shipping 1. Registers 2. Global competition and mobility of assets 3. Need for EC Shipping 1. 2. 3. Economic independence Military needs Contribution to broader economy Developments in EC Ownership, Flag and Employment 1. 2. 3. The facts Policy conclusions Evolution of EC Ownership a. b. Flagging out a. b. Recent labour supply developments a. The facts Policy conclusions in assessing impact of Difficulties trend employment Shortage of qualified seafarers b. IV. Some Further Trends in Global Shipping 1. 2. 3. 4. Further globalisation Investment patterns The problem of ageing ships Enlargement of the Community V. Opportunities for EC Shipping Annex A - 1: Cost comparison EC registers/other registers Annex A-2: Controlling interests of Member States in world fleet Annex A-3: Flagging out trends from Member States flags Annex A - 4: Employment trends under EC flags Annex B: EFFORTS AND SUCCESSES SO FAR I. II. Analysis of EC Policy So Far 1. to keep ships under EC flags and the single market Community maritime policy a. b. The 1986 package Proposals to create The common policy on safe seas External relations Relations with IMO and ILO Short sea shipping rules Competition c. d. e. f. g. The Member States 2. Results ) b 1 1 1 2 3 3 4 4 5 5 5 5 6 6 8 10 10 10 11 11 12 12 13 13 14 16 18 19 1 1 1 2 3 5 5 6 7 8 9 Executive Summary This document introduces a new approach of the Commission to maritime strategy. It has been prepared to re-assess Community maritime policy and to set further goals towards establishing a common maritime purpose. Not all aspects of maritime policy will be examined in the same detail. The maritime safety policy of the Community is already established. The external maritime relations policy of the Community is also well on its w a y. Of course, more remains to be done in both areas. But a common answer to the problems of the competitiveness of EC shipping has not yet been found. Therefore, the document will focus on this question. The document will not cover port and shipbuilding matters. A general overview and policy approach concerning the status and future of all the maritime industries of Europe is found in the parallel Commission Communication "Shaping Europe's Maritime Future - A Contribution to the Competitiveness of Europe's Maritime Industries"1. Since the first Commission Communication "Progress towards a common transport policy - Maritime transport" of 1 9 8 5, new shipping industries have developed quickly in many countries, particularly in East Asia. Many of the traditional shipping nations have seen their shipowners take advantage of the international capital and labour markets, as well as the increasing variety of ship registers now in place. In a highly competitive market, shipping under EC flags and seafaring employment have been constantly shrinking. While this trend predates the mid-eighties, its effects on the EC maritime industry have been a cause of common concern only since that time. The Commission is aware of the need to make the Community fit for global competition and has proposed an approach, principally in its Communications on Industrial Policy of 1 9 90 and 1 9 94 and the White Paper on Growth, Competitiveness and Employment of 1 9 9 3. The Essen Council of December 1 9 94 also stressed the need to promote vocational training. It furthermore pointed to the impact of tax and social security rules on the maintenance and creation of employment opportunities. In parallel to these developments, the Maritime Industries Forum (MIF) was created in 1992 on the initiative of the Commission. This forum brings together parties from all segments of maritime industry and administrations to discuss common problems and approaches in the closely interconnected European maritime industries. Much useful work has been done ideas and initiatives. The Commission Communication on Short Sea Shipping of July 1995 made use of valuable input from the MIF. in fostering synergies and launching new Given these developments and, at the same time, continuing concern about the continuing decline of EC shipping, it is time to re-assess the common shipping policy of the Community. This re-assessment should concern both possible new policy initiatives to be pursued the Commission of powers falling within its sphere of competence. This Communication should serve this purpose. the Community's the exercise by institutions and legislative through 1 Com (96) 84, 13 March 1996. European Commission - Towards a New Maritime Strategy CL - 2 - request the Group is available upon The Commission has been assisted in formulating this Document by a Core Group of 1 2 individuals w i th wide ranging experience of the world of shipping. A Report of Proceedings this of Communication outlines the global shipping environment and the future of EC shipping in it, w i th more detailed information given in Annex A. Part A continues w i th a brief review of policy responses by Member States and the Community to the problems facing EC shipping, and their results, with further details the Communication, Part B, is devoted to proposing an outline for a future maritime policy for the EC, w i th the emphasis on measures to enhance the competitiveness of the EC fleet and the maintenance and creation of high quality maritime employment. the Commission. 2 Part A of in Annex B. The main part of from In summary, to implement the future maritime strategy: 1. On safety, the Commission proposes: to pursue a policy based upon a convergent application of internationally agreed rules. To the largest extent possible, this policy should be applied to all flags. This is the case, for instance, of those non-binding resolutions of IMO which will be made compulsory through EC legislation. These binding requirements should be enforced also on ships flying the flag of non-EC States when trading to or from EC ports. These ships should not receive a more favourable treatment than EC-flagged ships. a joint effort by Community and Member States in the IMO to agree on a worldwide basis on certain conditions for flag administrations and their ship registers; a Community legal instrument, most likely a directive, laying d o wn certain principles for Member States shipping registers; such an instrument should the Treaty, particularly on freedom of also ensure establishment and competition, are respected; accordingly, ownership and, possibly, manning conditions will have to be scrutinized; the rules of that to strengthen port State control through operational links w i th other third countries; to promote self-regulatory codes of behaviour in shipping; to encourage operators incentives, differential port charges); to achieve high quality standards (eg. fiscal to consider legislative action on financial sanctions for cargo owners w ho knowingly or negligently use sub-standard shipping; to examine the question of mandatory third party shipping as a condition for entry into EC ports; liability coverage in 2 European Commission, DG VII/D/2, rue de la Loi 200, B-1049 Brussels. European C o m m i s s i on - T o w a r ds a N ew Maritime Strategy -3 - to consider legislative action to support any agreement made between carriers and unions on terms and conditions of work on-board ferries providing regular services to and from EC ports; 2. On maintaining open markets, the Commission proposes: to continue to secure free access and fair competitive conditions throughout the global shipping marketjpreferably through a multilateral approach; to forge international agreement on the application of competition principles in maritime transport; to review the maritime trade defence instruments of the Community; These and other measures will be considered in more detail in a forthcoming Communication on external maritime relations. 3. On securing the competitiveness of the EC shipping sector, the Commission proposes: c o m m on action of Community and Member States to promote maritime training programmes and to attract young people to the profession, to safeguard maritime expertise in the Community, and to promote high quality EC employment in line w i th the requirements of the new STCW convention to meet current an<$ future EC and worldwide demand for qualified seafarers; the improved monitoring of compliance w i th ILO requirements by all flags through port State control; to foster maritime R&D within the current and future Community Framework Programmes, both targetted at high technology in safety and environmental protection and at human resources; 4. On State aid, the Commission continues to monitor aid to the maritime sector in accordance w i th the Treaty and relevant aid frameworks; will issue revised State aid guidelines on shipping which may include a revision of the cost gap method and a new approach towards an aid practice benefitting Community shipowners; has started a research project on the economic impact of shipping in various Member States and will discuss the use of these and other economic methods in evaluating support schemes w i th all interested parties. European Commission - Towards a New Maritime Strategy After formally informing the Parliament and the Council, the Commission will w i t h d r a w: the Proposal Register (Euros) of 1 9 8 9 / 1 9 9 1; for a Council Regulation establishing a Community Ship the Proposal for a Regulation on a common definition of a Community shipowner of 1 9 8 9 / 1 9 9 1. However, appropriate definitions in individual instruments, for example when considering the beneficiaries of Regulation 4 0 5 7 / 8 6, the Regulation concerning unfair pricing in maritime transport, and in the determination of beneficiaries of State aid, should be provided. European Commission - T o w a r ds a N ew Maritime Strategy A. EC SHIPPING AND POLICY I. EC Shipping in a Global Market The international character of the shipping industry Maritime transport is an international industry to which there are relatively f ew entry barriers. In principle, any operator can, regardless of its nationality and the location of its company seat, provide international shipping services. The provision of services between t wo destinations neither of which is the country of registration of the ship (cross-trading) is common. More than other transport modes, shipping has, therefore, tended to be subject international and universal, rather international safety and labour rules. than unilateral, regulation, especially on to liability, shipping Bulk and liner Shipping falls into t wo main categories: bulk and liner shipping. The balance of Member States' interests between the t wo differs and there are important differences in their cost structures. Relatively, liner shipping bears high network costs and, therefore, tends to be more capital intensive while bulk shipping is more labour intensive and, therefore, sensitive to labour costs. Registers Ships are bound to a national jurisdiction by the flag which is given to a ship entered in a register. The same national administrative, civil and criminal law provisions, including fiscal and labour requirements, thus generally apply to a ship entered in a traditional register as apply to on-shore industries. National registers have traditionally required the crew or an important part of it to be EC nationals. Progressively, EC Member States have, variously, relaxed requirements, devised alternative registers or supported their registers w i th State aid, while shipowners have sought less onerous registers if they considered their competitiveness threatened. registers Open Some states have set out to attract international shipping to their registers. Liberia, Panama, Cyprus, the Bahamas and Malta are the most important examples of this. A growing number of countries offer these "open" registers and registrations in them continue to increase. Open registers normally accept owners of any nationality and imply low corporate tax liabilities and f ew requirements with respect to nationality of the crew. If a state w i th an open register can also offer a good maritime service infrastructure (ie. good communications, ancillary service industry such as insurance, legal services, finance and credit facilities, s w i ft diplomatic protection and an independent judiciary), shipping companies may consider not only registering their ships there, but also transferring some of their shipping activities and even their headquarters. important consequences for economic activity and employment also on shore. This will have European Commission - Towards a New Maritime Strategy - 6 - Flagging out The extent to w h i ch a change of flag may also lead to relocation of a whole company depends greatly on the amount of on-shore investment already made by the shipping company. The less the investment, the easier it will be for a company to relocate. This makes bulk shipping more likely to relocate than liner shipping. For EC shipowners and operators, moving a vessel to an open register can be a significant factor in terms of international competitiveness, with possible labour and fiscal cost savings often exceeding US$1 million per annum. II. Need for EC Shipping Conventionally, the need for EC shipping is affirmed by pointing to economic and military independence. The EC, it is said, should not depend too heavily on maritime services provided by its actual or potential competitors as these may, in specific circumstances, act in support of important consideration is the contribution that shipping makes to the broader economy through its relationship w i th a wide range of maritime industries. long-term commercial or strategic interests. A their third III. Developments in EC Ownership, Flag and Employment EC ownership In 1 9 9 4, the fleet owned or controlled by EC interests, including vessels flying a foreign flag, was 3 4% (in dwt) of the world fleet, down from 3 8% in 1 9 8 5. There has been no reduction in the EC share in global ownership since 1990. In assessing the importance of the ownership trends improvements in ship productivity, new worldwide trade patterns and the emergence of new shipping nations in the Far East should be taken into account. There does not seem to be a strong need for a policy fostering EC ownership. shipping EC-flagged In 1 9 7 0, 3 2% of the world tonnage remained under the flags of EC Member States. In 1 9 9 4, this figure has decreased to 1 4 %. Shipowners cite cost savings as a main reason for flagging out. The trend of flagging out indicates a growing loss of competitiveness under EC flags. Indeed, EC owners have a high percentage share of ships in open registers. conclusions Policy While flagging out does not always lead to a loss of seaboard employment, on-shore activities and relocation of a company, it may be very difficult to re-attract maritime business once the infrastructure and the human resources have been lost entirely. Having ships under EC flags contributes to ensuring that safety standards can be closely monitored through flag State control. Flagging out therefore lessens the flag State control power of EC Member States. Flagging out from EC flags has contributed to job losses of EC seafarers ( 5 1% of job losses); fleet reduction (27%) and reductions in the number of crew per vessel (22%) have also played a significant role in this process. European C o m m i s s i on - T o w a r ds a New Maritime Strategy - 7 - developments Recent labour supply While it is difficult at this stage to assess the problems related to the general employment of EC seafarers, a more specific problem has arisen in recent years: the shortage of better qualified seafarers worldwide. Already today, certain EC Member States signal that the number of new recruits to the seafaring profession covers only about 2 5% of the estimated replacement need. The new STCW (Standards of Training, Certification and Watchkeeping for Seafarers) requirements could accentuate the worldwide shortage. Policy must find a response to this predicted shortage to: ensure safe navigation of ships; preserve maritime know-how for industry; enforce safety policy by maritime administrations; continue education of young seafarers. IV. Some Further Trends in Global Shipping Recent years have brought, through the liberalisation of world trade and decentralised production methods, a continuous increase in global trade and, w i th it, growing demand for shipping services. Liner growth Liner shipping has grown on average at a rate of 6. 5% per annum in the last 10 years, and it is projected that it will continue to grow at the same rate for the next decade. The globalisation of production is leading to demand for global transport services. To respond to this demand, trade alliances between shipping companies are being created. This trend is also leading to increasing concentration in the market. Bulk prospects For bulk shipping, trade g r o w th is always difficult to predict, because demand depends on volatile factors such as seasonality of trade, yield of food crops, etc. It is estimated that the main features of this sector, namely its cyclical nature and its unpredictability, will not change fundamentally in the longer term. services Specialised European operators offer experience and sophistication of many years' standing in liner and cruise shipping, off shore supply, heavy load and other specialized shipping. This may be linked w i th sophisticated shipbuilding and new trade opportunities (including, for example, routes permitted since the opening up of the former USSR, which may require ships w i th special hull construction because of icy conditions). patterns Investment The openness of European markets has attracted foreign investment. Today, some efficient short sea and feeder operators in intra-European trades are non-European-owned. At the same time, it is recognised that many European operators possess useful experience in short sea shipping, which is an important potential growth area for shipping services. European shipowners are also taking advantage of the opportunities in cross-trading and investment are beginning to set up transport networks in other continents. However, opportunities for EC shipping companies are limited where the provision of domestic European Commission - Towards a New Maritime Strategy - 8 - services is not open to foreign operators or there is discrimination in ports vis-a-vis non- national operators. Problem of ageing ships Heavy worldwide subsidization of shipbuilding has contributed to oversupply in ships and the resulting overcapacity in bulk shipping markets, w i th consequently depressed freight rates. Shipping is thus producing relatively low returns on equity and investment, w h i ch has led to extending the useful life of ships and, in general, an ageing of the fleets and sometimes reduced maintenance efforts with related safety problems. While older ships can be maintained to high standards, statistics show that overall casualty risks rise w i th the age of the ship. Enlargement of the Community Recent accessions have brought a substantial addition of tonnage under the control of EC owners. The future may bring further tonnage to the Community, as Cyprus and Malta are envisaging accession. Given the strong maritime interests involved, it is important at this juncture to develop a coherent policy for the future. V. The EC Policy so far: Efforts and Successes General approach The Commission has to date,applied a Community maritime policy consisting of action on external relations, maritime safety and the competitiveness of EC shipping. While this has succeeded in opening up markets, particularly in Europe, and giving the consumer a wide choice of competitive shipping services, it has not led to the creation of employment for EC seafarers. The 1986 package legislation on shipping was based on an open market, non- The 1986 package of protectionist philosophy to foster a competitive EC fleet and to further employment; at the same time, it provided measures to counter unfair competition. 3 Overall, the Community decided that all intra-European trades except cabotage within Member States should be open and that there should be no further requirement than establishment or registration in the Community to benefit from shipping opportunities within the EC. This policy w as not conditioned on any similar commitment to open markets from the Community's main trading partners. 3 The 1986 package, O. J. No. L 378, 31 December 1986, consists of four regulations: Reg. 4055/86 applying the principle of freedom to provide maritime transport between Member States and between Member States and third countries; Reg. 4056/86 laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport; Reg. 4057/86 on unfair pricing practices in maritime transport; Reg. 4058/86 concerning coordinated action to safeguard free access to cargoes in ocean trades. European Commission - T o w a r ds a New Maritime Strategy 9 - relations the Community's external relations policy External the In terms of Commission has sought to secure free access and fair competitive conditions throughout the global market, including further liberalisation and rolling back existing restrictions. The Community is also striving within the GATS framework for multilateral liberalisation of maritime transport services. However, some important restrictions remain and the danger of new restrictions is still present. in maritime transport, The common policy on safe seas The Communication on a Common Policy on Safe Seas was adopted by the Commission in February 1 9 9 3. 4 This policy has been fully endorsed by the Council and by the European Parliament. In less than three years, several implementing measures have been finally adopted and bind Member States administrations as well as the private sector to effective compliance from 1996 on. the single market to keep ships under EC flags and create Proposals The Commission has proposed a number of measures w i th the aim of enhancing the competitiveness of EC fleets. In 1 9 8 9, this included5 a dual-purpose measure to alleviate the financial burden of flying an EC flag and at the same time safeguard EC employment: the Euros Register. However, the proposal did not find the necessary support in Council and has not, therefore, been adopted. The package also included a proposal to liberalise domestic trades, adopted as Regulation 3 5 7 7 / 9 2 ,6 and a proposed definition of the notion of Community shipowner. The latter has not been adopted, and the Edinburgh Council of 1992 asked the Commission to review it. Also in 1 9 8 9, the Commission issued guidelines for the assessment of State aid to the shipping sector. 7 The Community's common interest was defined in terms of maintaining ships under Community flags, modernisation of fleets and. maintaining employment for EC seafarers. Consequently, the Commission decided that it could authorise State aid to bridge the cost gap between operating under an EC flag and under a flag of convenience, provided it w as also in line w i th the Commission's general State aid principles. 4 5 6 7 A Common Policy on Safe Seas, C 0 M ( 9 3 ) 66 final, 24 February 1993. A Future Conditions of Community Shipping, COM (89) 266 final, 3 August 1989. the Community Shipping Industry: Measures to for Improve the Operating Council Regulation (EEC) No. 3 5 7 7 / 92 of 7 December 1992 applying the principle of freedom (maritime cabotage), O. J. L No. 3 6 4, 12 December 1 9 9 2, p. 7. transport within Member States to provide services to maritime SEC (89) 9 21 final. European Commission - Towards a New Maritime Strategy 10 Short sea shipping The Commission has recently adopted a Communication on short sea shipping8, including an action. programme w i th proposals for initiatives which can most appropriately be undertaken at Community level as well as recommendations addressed to Member States, their regional and local authorities, ports and the maritime industries themselves. rules Competition The Commission has also pursued an active policy to enforce competition in the liner trades to and from the Community. The Member States - State aid As the competition from non-EC flags became keener, many Member States offered various kinds of aid to shipping. Different Member States adopted different strategies and provided different budgets for their support measures. This in part reflected their general attitude towards State aid or their assessment of the relative importance of the shipping sector for their economy and society. Consequently, some concentrated on incentives to investment in modern ships, others on encouraging employment of EC seafarers, some on tax reliefs or on capital injections to support restructuring. None of these individual approaches has comprehensively solved the competitiveness problem of EC shipping. - registers The Member States As flagging out and loss of employment continued despite State aid, some Member States decided to create specific registers for ships flying their flag in international trade to alleviate competitive disadvantages. Irrespective of their denomination, these registers were created to exclude ships flying the flag of the Member State from certain costs inherent in the fiscal and labour regime of the first register. In many Member States w i th such registers, the majority of ships in international trade are registered in the alternative register: for example, in Denmark, 9 2% of the total tonnage operating in international trades is registered in the Danish International Ship Register ('DIS'); the figure for the German International Ship Register ('ISR') is 7 6 %; in Finland, 5 0% of the fleet is on the List of Merchant Vessels in International Trade. The first international register often has thus become of secondary regulatory importance for shipping and the alternative regime becomes the real standard. The success of Member States' combinations of alternative registers and aid schemes has been mixed. Some Member States' registers have been successful in reversing or at least slowing the flagging out trend. In certain Member States, national government action has not stemmed the overall decline of the flag fleet. 8 "The Development of Short Sea Shipping in Europe: Prospects and Challenges", COM (95) 3 17 final, 5 July 1 9 9 5. European Commission - Towards a New Maritime Strategy - 11 - VI. Results The maritime policy thus far has succeeded in opening up markets, particularly in Europe, and giving the consumer a wide choice of shipping services. The application of EC competition rules to all market participants regardless of flag has furthered consumer interests and ensures fair treatment of all liner shipping companies. The newly introduced safety policy will enable the Community to ensure that safety and environmental standards are effectively applied, thereby also ensuring fairer conditions for competition. The liberalised international shipping environment has, however, not led to the creation of more employment for EC seafarers. The measures taken by the EC and the Member States to increase the competitiveness of EC flags have thus far not been able to reverse the flagging out and loss of employment in most cases, although some alternative registers seem to show promising features. B. A POLICY FOR THE FUTURE I. The Approach: Applying Global Standards and Enhancing the Competitiveness of the EC Shipping Sector 1. The response of the EC to globalisation of shipping Three conclusions can be drawn from the analysis of the development of shipping and policy responses of the Community and Member States. Firstj both in terms of quantity and quality, the EC shipping industry is one of the most important shipping sectors worldwide. EC Member States' shipping companies control a third of the world fleet and about 4 0% of the EC's trade is carried on ships owned or controlled by EC interests. This is evidence that European maritime k n o w - h ow is very competitive in itself. However, it seems that the regulatory framework has not yet been developed everywhere in the Community to foster this competitiveness. Second, shipping capital and shipping labour have become so internationally mobile that national policies can no longer alone deal adequately with regulatory problems. Third, policy responses within the EC which are out of touch w i th current worldwide trends and standards will lead to further exits of capital and labour from European flags. is a central problem of policy making Globalisation the competitiveness of EC industry. The White Paper of the Commission on G r o w t h, Competitiveness and Employment of 1993 and the Communication on the Competitiveness of Europe of 1 9 9 49 also focus on this issue. to maintain or improve 9 European Commission, An Industrial Competitiveness Policy for the European Union, Bulletin of the European Union, Supplement 3/94. European Commission - Towards a New Maritime Strategy - 12 - In line w i th these policies, the Commission proposes to improve the competitiveness of the EC shipping sector through a global open market policy, w i th particular emphasis on multilateralism and worldwide competition rules. Further, measures to foster high quality employment and high technology in the sector are being presented. They are backed up by considering some the Commission. Not directly targetted at improving competitiveness, but much more at preserving human life and the environment are the new policies on safety proposed in this paper. However, it is the conviction of the Commission that the strict enforcement of a safety policy based on internationally agreed standards will lead to a marked improvement of the competitive situation of ships under EC registers with stringent safety enforcement. It will also contribute to new job opportunities for qualified EC personnel. Thus, the effect of a stringent safety policy on competitiveness is of great importance. further steps w i th regards the State aid practice of to 2. Policy choices for a future shipping policy In considering the optimum maritime policy for the future, the Commission has analysed the likely outcome of applying different strategies. Sectoral measures to encourage employment in shipping, which lead to an increase in costs without a corresponding increase in productivity, will inevitably fail, leading to further flagging out. Measures w h i ch restrict inward investment into EC shipping and related industries may limit the ability of EC industry to stay competitive. Taking the draw-backs and advantages of the various approaches into account, Commission considers a two-fold strategy: the action to ensure safety and fair competition in international open markets (sections II and III below); a Community framework for enhancing the competitiveness of the shipping sector (section IV below). For this Community shipping policy to be successful, the various interests at play must be reconciled. Four main participants are involved, to a varying degree, in any decision-making process concerning shipping policy: the Member States, shipowners and their financial backers, labour, and users. As stated above, Member States have different maritime traditions. Some have a tradition of State-owned fleets or strong links between industry and Government, others have adopted an essentially laissez-faire approach to shipping. Member States also have varying interests in types of transport, depending on geography, trade ties and historical development. For some States, the development of short sea shipping is a priority; others may focus on fostering their deep sea shipping, where their shipping companies are heavily involved in cross-trading. A Community policy must be aware of these different priorities and take them into account. Shipowners will in the first place look at their own balance sheets and prospects. They will not keep a flag for reasons of national security, pride, or for job creation if this damages their commercial position. A policy to keep shipping under EC flags must therefore be economically viable. It must create conditions to keep or attract shipowners to EC flags. European C o m m i s s i on - T o w a r ds a N ew Maritime Strategy - 13 - EC labour will w a nt to maintain living standards while having job security and a safe working environment. Investment in human skills and resources such as continuing training and education is also being demanded by employees to secure their future. EC labour is not likely to accept a lowering of wages and social standards in order to increase the competitiveness of EC shipping. Competitiveness is not an end in itself. It should lead to a better life for citizens of the Union. Users are primarily interested in efficient and reliable transport systems rather than maritime strategy, job creation and competitiveness. The market price they pay should reflect the full costs of maritime transport, regardless of the flag of the ship they are using. Safety and quality of ships should be viewed as essential elements in the negotiation and conclusion of contracts between users and providers in maritime transport. In addition, ancillary industries which depend on shipping activities for their o wn survival and g r o w th will want to ensure that shipping flourishes. They will have a preference for ships which require and use their products or services. II. Safety and Fair Competition The Commission proposes to develop and enforce international rules on safety and environmental protection, both through flag State quality and control and through port State action. 1. Safety: an integral part of fair competition the including their vessels' operating policy, to Shipping is a largely free market, allowing considerable scope for ship operators determine level of expenditure on safety/pollution prevention, related maintenance costs and the degree of compliance w i th internationally agreed rules. This is possible because the-diligence of the different bodies in charge of ensuring or monitoring compliance (flag State and port State authorities, classification societies, charterers and marine insurers, maritime labour unions) varies greatly. The net effect is that not only safety and environmental protection standards, but also operating costs vary considerably, from "blue chip" shipowners w i th a long-term to strategic view unscrupulous owners w ho disregard even the basic requirements of safe and pollution-free vessel operation. Surveys carried out by the OECD show compliance w i th international standards leads to 10 - 5 0% higher costs than a substandard operation. Good practice turns out to be 80 - 1 0 0% more expensive than substandard maintenance. Finally, maintaining a ship at maximum safety levels will require 3 0 0% more expenditure at maximum. 10 technical management of the crewing and towards fleet, their The European shipping policy response to this should aim at eradicating these unfair competitive conditions, at least in all types of trade to or from the ports of the EC, 10 Thus, while a substandard owner would spend, according to the OECD model calculation, about US-$ 3 , 1 00 per day for maintenance for a five year old product tanker of 4 0 , 0 00 d w t, "good practice" would require US-$ 4,850/day, and "excellent practice" US-$ 9,500/day. Thus, annual cost savings from substandard operations could amount to US-$1 million or more per ship. European Commission - T o w a r ds a N ew Maritime Strategy - 14 - independently of the flag of the ship, and also, to the extent possible, in all other trades. 2. Registers: a crucial tool to ensure safe and fair competition to put this policy into practice is the regime governing for entry to a ship register and the administration of the register the The crucial instrument conditions itself. Consequently, criteria for effective and sound registers must be developed. General flag State obligations must be adopted and enforced at world level. For this to be effective, it is imperative to ensure that a flag State is able to respond to its international obligations. In parallel, the Community should ensure the quality and effectiveness of its registers. Such action should not only be related to Member State shipping registers within the Community. The problem of off shore registers must be scrutinized, too. a. Defining and enforcing flag State obligations at world level There is broad consensus within IMO, ILO and the EC that there is a compelling case for all flag States to demonstrate that they can carry out and indeed that they are carrying out their supervisory responsibility effectively. Non-compliance leads not only to unsafe shipping but also to unfair and thus unacceptable competition. Therefore flag States have to live up to their obligations and make transparent the work of their administrations w i th regard to how they implement and comply with IMO and ILO conventions and rules. Today, some flag States are happy to compete for shipping and collect the registration fees, but they fail to enforce safety and environmental standards under their flags. Such States should not be in the business of offering ship register services. If States are not prepared to apply IMO/ILO rules, they should be discouraged from competing w i th those who are. To translate this statement into effective action, the European Community and its Member States should pursue their policy based upon a convergent application of internationally agreed rules. To the largest extent possible, this policy should be applied to all flags. This includes, resolutions which should be made compulsory through EC legislation. These binding requirements should be enforced also on ships flying the flag of non-EC States when trading to or from EC ports. These ships should not receive a more favourable treatment than EC-flagged ships. those non-binding instance, IMO for In this context, Member States would have to apply relevant EC legislation to companies or organisations operating in or with the Member State or to all ships trading from and to EC ports irrespective of their It is worth considering the option of having a multinational team of EC experts to assist Member States w i th this task. This may contribute to ensuring that EC legislation is implemented in a fair and uniform w a y. flag. Further, the EC and its Member States should strive, with the support of other committed nations, for the adoption of criteria for the establishment and operation of flag State administrations and registers. Criteria for operating registers should include the following: entry of a ship on to a register should require a full ship inspection to ensure compliance w i th all standards (except where the vessel is transferred from another register and there is a formal agreement of mutual recognition w i th the former flag State); the flag State should possess the necessary machinery to ensure that seafarers employed on vessels flying its flag have appropriate and valid European Commission - T o w a r ds a New Maritime Strategy - 15 - certificates of competence; the register should always be administered by sufficient numbers of well- trained personnel, including surveyors, able in practice to monitor effectively all the ships in the register; non-State organizations entrusted w i th flag State control responsibilities should have appropriate qualifications; the flag State should possess fully independent audit and quality assurance systems to monitor the services of the recognized organisations; the enforcement of standards; a duty to conduct a transparent investigation of all major incidents involving ships flying the flag of the State. fee structure should provide sufficient to ensure proper income These criteria should be incorporated into binding international instruments. Different legal options are available. The Community and the Member States should take the initiative and consider the following options in the appropriate IMO bodies: revision of Part 1 of SOLAS (Safety of Life at Sea Convention); adoption of an IMO Assembly Resolution providing detailed interpretations of SOLAS Part 1, Regulations 1 - 2 0, possibly in the form of a mandatory Code for flag States; use of UNCLOS (United Nations Convention on the Law of the Sea) to improve flag State compliance. The Commission considers that the combination of the second and third points could be effective both in terms of legally binding content and timeliness. The EC could complement this policy initiative by contributing actively to assisting (financially and technically) countries outside the EC to upgrade their flag administrations in cases where a clear policy commitment is made by the government to strive for the above described objectives. In the multinational team of EC experts this respect, mentioned above11 could assess the work of non-EC flag State administrations, so that such financial and technical assistance, as appropriate, could be used to improve their performance. it is worth considering whether b. Member States registers The Commission considers that in parallel w i th the efforts made in international fora at adopting register conditions, the Community should consider defining common criteria for registers and lay these d o wn in a Community legal instrument. These conditions should ensure safety, environmental protection and good working conditions on ships under EC flags. They should, however, also be conducive to eliminating distortions of competition which can result from varying registration conditions and flag State enforcement. 11 See above, p. 14. European Commission - Towards a New Maritime Strategy - 16 - Such a proposal will not introduce an EC ship register modelled on Euros. While Euros w as supposed to be a voluntary parallel register, this exercise would strive to set basic conditions for all Member States registers, irrespective of their denomination as second, alternative or first register. Further, mandatory levels of State aid would not be stipulated. Since the Commission does not expect the proposal for an EC ship register to be adopted under the present circumstances, it will, after informing the Council and the Parliament accordingly, w i t h d r aw the proposal. the Effective government monitoring: Community should be effective Government monitoring. Member States should comply w i th the criteria concerning flag state control agreed on IMO/ILO level. 12 All Member States Governments must be able to fulfil the obligations flowing from internationally and European agreed standards on safety, environment, working, and living conditions. first condition for shipping registers The in liability requirements for owners and managers: Transparent To facilitate effective flag State monitoring and to avoid unfair competition, all Member States registers should provide for mechanisms to ensure the financial, administrative, civil and criminal liability of owners and managers of ships. Managers and owners of vessels should not be allowed to avoid full disclosure of their corporate or personal identity and to escape from their obligations and responsibilities incurred by shipping operations, for instance by avoiding liability through complex corporate structures. requirements: Crew nationality The 1986 UN Ship Registration Convention foresees as one of t wo alternative registration requirements the "satisfactory" manning by nationals of the flag State,13 or by persons domiciled or resident in the State. 14 Further, Member States view minimum nationality requirements register, especially in the case of the captain and officers, as necessary for military, civil and administrative reasons. Nationality requirements may seem positive for EC employment. On the other hand, if this guarantee threaten competitiveness, shipping companies will opt for a flag which leaves complete freedom of manning. leads to costs that for ships entered for employment into their At this stage, and taking into account the results of the discussions on the Euros proposal, the Commission considers that employment of EC seafarers should be stimulated primarily through framework measures improving the employment opportunities of these seafarers, both through training and education and certain fiscal and social security alleviations. There is an overall advantage in terms of the safe and efficient operation of ships in employing See above, p. 14 et seq. 13 The other being ownership, see below. Art. 7 of the Convention states that the minimum registration conditions are met if a State complies either with ownership or with manning requirements. It may, however, comply with both. 14 This Convention is not yet in force and has not been ratified by any Member State. In September 1986, the Comission proposed a Council decision concerning the ratification of this Convention (Com (86) 523 final, 25 September 1986). However, due to subsequent international developments, the Council has not dealt further with this matter. European C o m m i s s i on - T o w a r ds a N ew Maritime Strategy - 17 - EC seafarers even if they are more expensive. There is an overall advantage, too, for the EC as a whole in maintaining the maximum number of EC seafarers both for EC shipping and for related industries. However, a fixed regulatory minimum on EC level may not be an optimal solution for safeguarding employment and, as the discussions on Euros showed, does not appear to be an achievable solution in the present circumstances. If a fixed regulatory EC employment level is to be considered at all, it should be discussed not for shipping in general, but for different shipping sub-sectors. or worldwide access: The question also arises of whether a "Community shipowners" minimum control or ownership criterion should also be part of an exercise to align registration conditions within the Community. The 1 986 UN Ship Registration Convention states that States should, inter alia, provide for ownership requirements for ships flying their flag. These requirements must be sufficient to permit the flag State to exercise effectively its jurisdiction and control over ships flying its flag. The 1989/1 9 91 Community Shipowner Regulation proposal of the Commission foresaw, broadly speaking, a 5 0% requirement in shares or board representation by EC nationals for a company to be considered a Community shipowner. In answering the question, there are both legal and economic considerations to be borne in mind. registration If such a requirement were to be introduced as a condition for throughout the Community, one should take into account that once a company fulfils the establishment criteria of a given Member State and becomes a company in that State, it has the right under the EC Treaty to establishment in any other Member State. It thus normally has access to that Member State's register. This principle has been explicitly recognized in the Factortame judgment of the European Court of Justice. 15 Shipping is becoming increasingly capital intensive, and the need to attract non-EC capital into the EC may therefore grow. Rules limiting foreign control of EC shipping companies, such as minimum EC capital or board majority requirements, may stifle inward investment. States may therefore want to waive any such requirement concerning companies owning or operating the ships registered. This possibility already exists and is considered by some as a useful response to the increasing mobility of capital, labour and investment. However, some see dangers in policies not based on adequate standards and their enforcement by the State concerned or resulting in registration of vessels wholly owned or manned by third country nationals. In effect, such an open register could become a flag of convenience and yet benefit from all the rights conferred by the EC Treaty and legislation. Once adequate Community rules are in place to ensure that all EC registers meet certain criteria concerning obligations imposed on shipowners and their enforcement, the question of granting access to those registers and flying the flag of a Member State could be 15 77?e Queen v. Secretary of State for Transport, ex parte: Factortame Ltd. et al, 1 991 (ECR) 3 9 0 5. European Commission - T o w a r ds a N ew Maritime Strategy - 18 - approached in a different light. 'Open' Community registers would seek to attract good tonnage to EC flags by fostering high quality shipping and through providing a sufficiently supportive package; they would not, however, give sub-standard operators the opportunity to gain unfair advantages from Community status: flag State control would be rigorously enforced and State support schemes would be linked to specific criteria. In this context, it seems that flag State control can be exercised by appropriate provisions on the restricting identification and registration to nationals. liability of owners and managers, without necessarily To sum up: in defining common critieria for ship registration within the Community, the objective should be to ensure that the EC flags are as attractive as possible w i t h o ut compromising standards or Government monitoring. Wider use of EC registers w o u l d, by attracting vessels, capital and economic activity, create jobs for Community citizens as seafarers and in ancillary industries. The Community would further increase its flag State control and also its influence in world maritime matters. Based on these considerations, the Commission will, after informing the Council and Parliament accordingly, withdraw its 1989 proposal for a Council regulation defining the notion of Community shipowner. However, appropriate definitions of the notion of Community shipowner will be provided in individual instruments, for example w h en considering the beneficiaries of Regulation 4 0 5 7 / 8 6, the Regulation concerning unfair pricing in maritime transport, and in the determination of beneficiaries of State aid. c. Off shore Member States registers Shipping registers have also been established on territories of Member States outside the Community. Such registers are not conducive to improving maritime safety if there is no appropriate means to apply in such international and EC safety registers. It is important that flag State responsibilities of Member States include ensuring compliance w i th all EC safety legislation for all ships under the flag, regardless of whether the register is established within or outside the territory of the Community. legislation to ships 3. Eliminating dangerous shipping Enforcement action is necessary to improve safety and fair competition in maritime transport. As regards trade to or from EC ports, several fundamental measures have already been adopted, including those on port State control, classification societies and seafarers' qualifications and on-board communication. Specific attention should be paid to the targeting criteria in these pieces of legislation, which require focusing on black-listed flags or certain types of ships. Qualified and well trained inspectors are essential for a coherent and effective implementation of EC port State control. The Commission is therefore developing in co-operation w i th the Member States appropriate initiatives to improve the training and the efficiency of the inspectors. This aims to ensure that the international conventions related to safety, pollution prevention and working conditions on board of vessels are effectively applied on all ships sailing to EC ports. Strict application of these provisions is fundamental to avoid penalising highly professional shipowners. Enforcement of compliance cannot always be limited to delay or detention of ships. Financial sanctions, adequate to be an effective deterrent, should be an integral part of the national implementing legislation. A close monitoring of the implementation of the EC port State control instrument remains a priority for the Community, so that the effectiveness of the instrument can be constantly improved. European Commission - T o w a r ds a N ew Maritime Strategy - 19 - To extend the benefits of this strategy, direct operational links should be established between the EC and other countries actually committed to similar policies, in particular Australia, Canada, and the United States. Technical assistance to other administrations, for example, in the Mediterranean basin and in Latin America, should be made more systematic to help them move rapidly towards the same level of efficiency. 4. Fostering a spirit of quality in shipping Policy should not only strive to eradicate environmentally dangerous and unfairly competing shipping by prohibitive action. Mechanisms must be developped to foster shipping w h i ch not only meets the minimum standards imposed by IMO/ILO, but which aims to supply a high quality transport product and reward such a product in the market place. the industry to ensure Daily behaviour and commitment of shipowners is crucial for the effective achievement of "safe and clean seas" policies. Voluntary industrial codes of behaviour - above the standards of the International Safe Management (ISM) Code and adequately monitored - should be promoted within the responsibility of operating only safe, environmentally-friendly and high quality ships. In certain types of trades the cargo owners and chartering industries have already expressed a firm c o m m i t m e nt implement such policy. Vetting programmes of the oil and chemical industry, though yet in their infancy, should be seen by the shipping w o r ld not just as a desirable point of arrival, but rather the basis for a more far reaching safety policy which is based on a safe ship as the a-priori of any chartering / shipping Port State control administrations, classification societies and participants of vetting systems should cooperate to make class, statutory and port State control information accessible to each other and to market participants. regulatory code of behaviour). full compliance w i th to establish and to cooperate transaction (a self the The Commission will also consider what action might be taken to encourage ship operators to respect standards that are above the minima fixed at world or Community level. Fiscal and financial benefits granted by Member States for operators striving to achieve high quality standards may be considered along with differential port charges based on objective environmental and safety standards observed in practice by different operators. In addition, the Commission will investigate to what extent cargo owners should be subject to financial and economic sanctions when they knowingly or negligently charter or use unseaworthy or uninsured or under-insured ships. Uninsured or under-insured shipping not only encourages sub-standard operators, to unfair competition. Furthermore, for many shipping services, third party liability is not internationally regulated. The Commission believes that the question of mandatory coverage of third party liability, such-as that provided by P&l Clubs, with a high ceiling as condition to port entry, should be fully examined. it also contributes 5. Higher EC standards in certain circumstances In certain specific and justified cases (eg. for the protection of EC citizens and the environment), the EC could set its o wn intra-European safety and working standards for geographically limited operations, such as ferry services operating to or from a European port, whatever their flag, as a condition to providing such services. European C o m m i s s i on - T o w a r ds a N ew Maritime Strategy - 2 0- This approach has already been adopted in the regulation on the ISM Code for ferry services. It could be followed up whenever appropriate, for example, if, in spite of technical evidence, IMO failed to adopt safety measures to the high level appropriate or desirable for operation of these vessels from or to EC ports. The Community should consider legislative action to support any agreement made between the major operators and labour organisations on terms and conditions of work on-board ferries providing regular services to and from EC ports. This might set standards on working hours, rest periods, technical standards, operational conditions, crew nationality or wages. The same considerations could be applied to other vessels providing sensitive services on specific routes to and from Community ports. III. Maintaining Open Markets 1. Basic approach The Commission will present a Communication on external relations in maritime transport, detailing its policy and proposals for action. The following is a broad outline of the Commission's basic approach in this area. In pursuit of the objective of securing free access and fair competitive conditions throughout the global shipping market, the Community generally favours a multilateral approach. At the conclusion of the General Agreement on Trades in Services (GATS), a Negotiating Group on Maritime Transport Services (NGMTS) has been created to achieve multilateral agreement on the liberalisation of maritime transport services and the removal of trade barriers, which had not been agreed upon in GATS. The deadline of negotiations is fixed for mid-1 9 9 6. The negotiations cover international shipping, auxiliary services and access t o, and use of, port facilities. National treatment16 in these areas should be granted. Binding commitments should be made by as many countries as possible. The Most Favoured Nation (MFN)17 principle should be applied to its fullest extent. Specific derogations from the MFN principle should be phased out. Whilst it has not yet been possible to reach a multilateral agreement liberalising the provision of maritime transport services, the Commission is of the opinion that a failure to achieve a positive outcome in these negotiations would risk legitimising unacceptable restrictions on maritime transport. The Commission proposes to ensure that the EC uses its full political and economic weight to further fairer and more open markets through adopting a coordinated approach and stance, using, as appropriate, its trading and political, as well as shipping, power. This is w hy the Commission will propose to the Council to grant it a mandate to engage in shipping negotiations w i th certain third countries. Another main target for a future external relations policy is ensuring coherence of action of the Community and of the Member States in their relations with third countries and the 16 National treatment: treatment shall be no less favourable than the one accorded by a country to its own like services and service suppliers. 17 Treatment of other NGMTS members shall be no less favourable than the treatment a country accords to like services and service suppliers of any other country. European Commission - T o w a r ds a N ew Maritime Strategy - 21 - harmonious achievement of Community objectives international organizations. in discussions or negotiations in for State aid schemes is important. Within the Community, In the context of creating open markets and fair competition, the Commission considers that transparency the Commission can enforce the principles of fair competition through its powers granted by the Treaty. An attempt to achieve more transparency of subsidies worldwide is certainly to be welcomed; however, such a worldwide stock-taking may be more difficult to execute. One possibility to develop greater transparency may, as a first step, be to build on the initiative taken within OECD to draw up a full inventory of State aid given by its member countries. Moreover, the GATS also includes a general provision on subsidies, w h i ch is applicable to maritime transport, and which foresees the development of subsidies' disciplines in further negotiations to be engaged soon. 2. Regulation 4058/86 cargoes in ocean trades on coordinated action to safeguard free access to While the Commission proposes a negotiated approach to a further liberalisation of world shipping markets, it will also make use, when appropriate, of Regulation 4 0 5 8 / 8 6. Regulation 4 0 5 8 / 86 provides initially for a diplomatic approach to opening markets to EC shipping companies, where access is restricted by Government measures. It does not provide the Commission w i th the authority to initiate procedures. It permits the Member States separately, or as a group, to take measures. The Regulation has only been invoked once, in relation to the West-African trades. However, the possibility provided by the Regulation to take counter-measures has been of particular value to the Commission in its discussions w i th a number of countries when seeking to secure market access and non discriminatory treatment for Community shipowners. There is a widespread view that Regulation 4 0 5 8 / 86 needs reviewing in the light of developments and experience gained since 1986. 3. Competition Rules Safeguarding free and fair competition both in liner and bulk shipping is an essential requirement of EC transport policy. Shipping is a service industry, implying that it should always provide lowest price to shippers and passengers. Competition rules have a crucial part to play in maintaining free and fair competition in shipping markets. The Commission applies them in order to ensure the existence of effective competition in the liner shipping trades serving the Union and the provision of high quality, low-cost services to shippers. the best services at the a. Acting against market access barriers through agreements Distortion in competitive conditions results not only from Government measures, which should be addressed within the context of external relations, but also from anti-competitive practices between private enterprises. Governments may abandon certain trade restrictions vis-a-vis to anti-competitive agreements between enterprises to foreclose markets or discriminate against non-nationals. If the parties to such agreements cover an important segment of the market, the result of such practices is the same as Government measures in place to third country enterprises. They may turn a blind eye then, however, European Commission - T o w a r ds a New Maritime Strategy - 22 - industries against foreign competition. 18 Undertakings w h i ch are protect national individually or collectively in a dominant position (as is the case w i th many liner shipping conferences) may abuse that dominant position by taking measures to foreclose the market or eliminate competition. 19 It has thus rightly been stated that the only w ay to open markets definitively is the worldwide agreement to apply general competition law principles to market behaviour by public and private companies. b. International competition standards As shipping is an intrinsically international industry, it is important to have by and large similar rules b e t w e en countries governing competitive behaviour in these markets. Agreement on a set of international competition standards, as recently proposed in a study on behalf of the European Commission,20 should therefore play a central role in order to keep and maintain open markets and fair competition. Abuses of dominant positions are forbidden under the EC Treaty and should not be allowed internationally. Neither the maritime transport nor the port service sector should be exceptions. Agreements which restrict competition in the maritime transport sector should be seen in principle as being unlawful and be prohibited unless shippers obtain a fair share of the benefits and the restrictions of competition are indispensable to achieve those benefits. A prime example this of a type of agreement which, in the view of the Commission, does not meet standard, is capacity non-utilisation. 21 International competition standards should also deal w i th the impact of growing oligopolisation in liner shipping on the competitive environment in this market. The Commission encourages other nations to cooperate in the development of international standards of fair competition, outlawed practices and forbidden abuses for maritime and port services. Such an exercise could rely on the World Trade Organisation, w h i ch is already working in this field, or bilateral agreements between the EC and third countries as the appropriate framework. c. Application of competition rules in EC trades The Commission believes that applying EC competition rules to shipping, and at the same time respecting the specifics of the maritime sector, has already enhanced the productivity of operators. Enhanced productivity and a customer-oriented approach to the provision of maritime services should further increase opportunities for operators to provide shippers w i th high quality services at low prices. This may lead to improved freight rates for certain advanced services, reflecting a normal commercial pricing strategy. Such a development is to be welcomed also from a transport policy point of view. Higher returns can lead to better safety management and replacement or scrapping of ships than is currently the case. 18 19 20 See, for maritime transport, the Commission decision Shipowners' Committees, O. J. 1 992 No. L 134/1. Commission decision CEWAL, O. J. 1993 No. L 34/20. Immenga/Jenny/Petersmann, International Cooperation and Rules', COM (95) 359 fin. , 12 July 1995. 'Competition Policy in the New Trade Order: Strengthening 21 See Commission Decision TAA, O. J. 1994 No. L 376/1; Art. 4 of Commission Regulation 870/95. European C o m m i s s i on - T o w a r ds a New Maritime Strategy - 23 - The maritime activities of traditional liner conferences are authorised under EC competition rules because, in general, they are believed to bring an appropriate degree of stability to maritime transport. However, inefficiencies may have been engendered by conferences w i th all operators charging the price determined by the conference, sometimes at the expense of the more innovative operator who could not charge the premium price for a premium service. Conversely, in conferences, the more cost-efficient operator is not allowed to charge a lower price to its customer, as it is bound by the common tariff. Furthermore, it is possible that trade-lane based conference rules hinder the provision of global services by consortia. Application of competition rules is also important in light of the cyclical overcapacity which appears to be a recurrent feature of liner shipping markets. Especially w i th regard to liner shipping, the possibility of increasing freight rates or managing capacity in times of low capacity utilization may tend to foster uneconomic investment decisions, the consequences of which would ultimately be borne by the transport user. 4. Unfair market behaviour Last, a framework to maintain fair competition in international markets should also rely on instruments directed against unfair behaviour of single market participants. Regulation 4 0 5 7 / 86 is an instrument to combat unfair pricing practices in liner shipping. It has only been used formally once,22 but there is every reason to think that it has proved useful by acting as a deterrent for contemplated unfair behaviour in other cases. However, it is widely felt that the Regulation has a number of deficiencies. Firstly, it can also protect shipping companies which the Community has no interest in protecting. This is because the Regulation defines a Community shipowner as a company established in the It does not, therefore, require any substantial link w i th or economic involvement in EC. Community industry, such as EC employment, investment, or flag. From this, it follows that attempts may be made to circumvent the Regulation by establishing a company in a Member State. Secondly, in the context of globalisation and the increasing sophistication and capital intensity of liner shipping, it is questionable whether a liner shipping operator, even if government-sponsored, would now risk an aggressive entry into one trade by heavy underbidding. The pattern of entry into markets observed in the last few years is one of cooperation through vessel sharing or slot charter agreements. One could therefore argue that Regulation 4 0 5 7 / 86 in its present concept is outdated, at least for the larger liner trades. these reasons, the Commission considers For that Regulation 4 0 5 7 / 86 should be thoroughly reviewed. This review should also take into account progress in the on-going negotiations of liberalisation of trade in services. In the meantime, the Commission will apply the law as it stands, notwithstanding the above-mentioned difficulties. 22 Hyundai Merchant Marine, Council Regulation (EEC) No. 1 5 / 8 9, O. J. No. L 4, 6 January 1 9 8 9, p. 1. European Commission - T o w a r ds a N ew Maritime Strategy 24 IV. A Policy for Competitiveness This section introduces measures to further training and employment, launch Research and Development (R&D) initiatives for the shipping sector and, finally, a possible revision concerning the policy on State aid. 1. Training and employment It has been mentioned above why it is crucial for the EC to maintain and enhance the supply of EC seafarers. Accordingly, the Commission proposes the following policy lines. According to the BIMCO/ISF study of 1 995,23 there is a problem concerning the supply of officers and specialist ratings which is likely to worsen in the future. Parallel to this, the increasing average age of the European seafaring workforce has raised concern as has the relatively high wastage rate. For some EC countries, the number of cadets is only one quarter of the recruits demanded to ensure a sufficient future supply for the maritime industries. A possible shortage has implications not only for the safe operation of ships but for the whole range of associated industries. The liner shipping industry is increasingly transport developing employees' expertise for use in different parts of the intermodal chain. For example, the liner shipping career may thus now involve employment for several years on a ship, before work in logistics, then in marketing. Fostering training and employment will therefore be of benefit to seaboard and on-shore activities. The Commission is concerned about the impact of the current trend on the maritime education infrastructure in the EC. If there is a lack of students, training facilities may have to close d o w n. The consequences are not only further job losses for teachers and personnel, but also the loss of knowledge and research capability which these institutes provide. training and The Commission has commissioned a study dealing w i th employment in Member States, covering worldwide trends in seaborne employment and steps taken by Member States for promoting maritime training programmes and sea careers and possible measures to attract young people to the profession. The study will analyse, in particular: issues of market developments (new trades and shipping routes at both international and intra-Community levels), the environmental and regulatory climate and market opportunities, including the use of new technologies; legislation and control measures (impact of STCW 1 9 9 5, implementation of Port State Control); quality and mobility of manpower (transferability of manpower eg. from tankers and bulk carriers to ro-ro vessels) and manning policies (in different countries, company policies, etc). The Commission has set up a steering committee to oversee the study w h i ch includes the trade union and employer representatives. The Commission to present intends 23 BIMCO International Maritime CouncilJ/ASF (International Shipping Federation): 1 995 Manpower Update, The World-wide Demand for and Supply of Seafarers. (The Baltic and European Commission - T o w a r ds a New Maritime Strategy - 25 - recommendations of the study, which is expected to be finalised by May 1 9 9 6, to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions. It will also discuss the recommendations w i th the Joint Committee on Maritime Transport. 24 The Commission w i ll examine the degree to which Member States have taken advantage of EC funds for education, training and retraining. This will concern, in particular, the European Social Fund which provides various options for EC financial support for maritime training. It also underpins key EC programmes such as 'LEONARDO' w h i ch places particular emphasis on training in connection w i th new industrial changes and innovations 'LEONARDO' provides financial support for three requring trans-national co-operation. types of measures: transnational pilot projects; transnational placement and exchange programmes; and the development of knowledge in the area of vocational training through surveys and analyses. In line w i th the relevant Treaty provisions and, where appropriate, w i th existing financial instruments, to employment by Member States, in particular the following: the Commission will encourage training schemes and incentives the absorption of training costs within national education and training systems; direct assistance to seafarers during training, in particular, grants to pursuing higher or additional qualifications, also in view of related on-shore activities; financial support by Member States for shipping companies which provide on board training facilities for cadets. the Revised adoption of a modular International Convention on Training (STCW 1995), whereby each module represents the standard of competence required to perform a specific function on board a ship; framework of certification line w i th in facilitating and increasing access to maritime employment by citizens of Member increasing awareness and understanding of national education and States by training systems; this should promote effective implementation of Directives 89/48/EC and 9 2 / 51 /EC on the general system for the recognition of diplomas and certificates (Maritime in the EC; the ongoing concerted action on METHAR Education and Training Harmonization) under the 4th R&D Framework Programme will play an important role in this context; 24 The Joint Committee on Maritime Transport was created by the Commission in July 1987 to assist it in the formulation and implementation of EC policy to improve and harmonize living and working conditions, and to improve the Community's economic and competitive position, in this sector. The members of the Joint Committee, who are appointed from the European Community Shipowners' Associations (ECSA) and the European Committee of Transport Workers' Unions (CTWUEC), fulfil this role by issuing opinions on EC policy and preparing studies and other joint initiatives. European Commission - T o w a r ds a N ew Maritime Strategy 2 6- information and coordinate action to enhance promoting exchange and the setting up of education networks and ventures between European maritime training institutes; this should encourage the exchange of the efficiency of maritime education and training and bring it in line w i th the new requirements set up by new international conventions and codes such as STCW and ISM. In this context, the is examining the creation of a network of EC training maritime Commission institutes. This question has been considered under the 4th Framework R&D Programme in order to encourage the exchange of information and coordinate action w i th a view to rationalising maritime education and making it more efficient. The recently set up NEPTUNE network should contribute to this exchange. The Commission is also considering further actions, such as organising a conference on the future of seafaring in the European Union, at which, among other things, the possibility of a European-wide maritime approach for the future of the training requirements and employment perspectives would be discussed. Concerning legislative action, the Commission is preparing proposals for Council Directives on the adaptation of Directive 9 4 / 58 on the minimum level of training of seafarers in the light of the recently adopted revised STCW 1995 convention and to introduce common criteria for the recognition of certificates by the EC issued by third countries based on the IMO standards. The Commission attaches great importance to improving and upgrading, at world level, the quality and qualifications of seafarers. It has the intention to contribute to the IMO efforts to ensure the proper implementation of internationally agreed training standards. The Commission has agreed to assist IMO in organising a series of regional seminars to explain the requirements of the revised STCW 1995 and highlight the obligations to be fulfilled by contracting parties under the new regime. Further, the Commission will, in conformity with STCW requirements on recognition of certificates, undertake a study of the maritime education and training systems of a number of major labour supplying countries and make appropriate recommendations. Regarding long term actions to safeguard the existing maritime expertise in the EC and the competitiveness of EC maritime industries, extensive research and development efforts are necessary, w i th a focus on quality, productivity, safety and environment protection. Under the on-going 4 th Framework R&D Programme, a number of projects are being financed, such as enhancing simulation techniques to improve human performance as well as improving and co-ordinating maritime education and training systems in Europe (METHAR). The Commission will examine this question further with Member States in preparing the 5th Framework Programme. 2. Research and development The contribution that the Fourth EC Research and Development Framework Programme (1 9 94 - 1 998) can make to the competitiveness of EC shipping is important. The transport part of the Programme dedicates 1 9% or some 50 million ECU of its resources to R&D in transport. This budget covers R&D aiming at the competitiveness and waterborne efficiency of the shipping sector, the improvement of maritime safety and the protection of the environment as well as addressing the impact of human factors on the safety and efficiency of the maritime transport system. European Commission - T o w a r ds a N ew Maritime Strategy - 27 - In particular, the research actions support the development of new logistical concepts (e. g. in relation to short sea shipping and ports) and technological tools (e. g. fast waterborne transport systems, vessel traffic management and information systems and integrated ship control systems). Research is also addressing specific human element-related issues such as the implementation of ISM (International Safety Management Code) and STCW as well as communication in a multi-cultural environment. improved simulation procedures training, European requirements for for To co-ordinate these projects and those developed in the Member States, five concerted actions ~ (1) short sea shipping, (2) vessel traffic management and information systems, (3) maritime education and training, (4) casualty investigation and (5) inland navigation — were taken, involving over 150 experts from Member States and European industries. A common European state of the art and a common view on further research requirements were achieved. Several other R&D programmes of the Fourth Framework Programme contribute to more efficient and safer shipping: in the Marine Science and Technology (MAST) Programme, R&D is undertaken to predict sea states, currents, ice thickness and ice motion, etc. in view of operational forecasting. In the Environment and Climate Programme, research activities include remote sensing from space for the detection of oil pollution and mapping of sea ice. It is expected that the R&D actions currently being developed under the 4 th Framework Programme and those under consideration for the future 5th Framework Programme will favour a better integration of maritime transport into the transport chain. Activities include: integrated waterborne logistics (eg. short sea shipping and port information networks) the implementation of "quality operations" w i th a view to enhanced safety in coastal waters, electronic (eg. safety and environmental-friendliness charts display and information systems, integrated ship control); an improved role for the human resources both in terms of waterborne operations and of job satisfaction and opportunities. A Commission Task Force "Maritime Systems of the Future" has been given the role of promoting the co-ordination of all Community research programmes that relate to the maritime sector. The Task Force brings together representatives from all European It has the key Community research programmes relevant to the maritime objective of ensuring the most cost effective exploitation of research and development programmes. The Task Force will also encourage the co-ordination of national research programmes in Member States in order to improve the competitiveness of the European maritime sector. It is already co-ordinating the exploitation of resources in the 4 th R&D Framework Programme and will make recommendations for the 5th R&D Framework Programme; it is further monitoring the MARIS G-7 initiative. 25 industry. 25 For a full description of the brief of the Task Force see Commission, Green Paper on Innovation, COM 95(688) final, 20 December 1995. European Commission - T o w a r ds a N ew Maritime Strategy 28 - MARIS is a framework concerning the potential benefits of the information technologies for a broad range of maritime activities. It has been inaugurated by the G-7 Conference on the Information Society in February 1995 and has now been extended to non-G-7 EC Member States. This project is promoting interconnectivity and interoperability, and all maritime industries around the world are invited to take part in this initiative. Summing up, the R&D support of the Community is expected to generate a favourable environment for an increased competitiveness of maritime transport. It also contributes to safer and more efficient equipments and newbuildings and a better use of human resources at sea. 3. State Aid to Shipping The Commission believes that the approach outlined above for safety, international open markets and fair competition will help reduce distortion of competition. Efforts in training and employment policy and in research and development will enhance the competitiveness of the EC shipping sector. However, support measures may nevertheless be required for the present to maintain and develop the Community's shipping industries26. In principle, of course, state aid as defined in Article 92(1) of the Treaty is incompatible w i th the common market. However the Commission continues to believe that the importance of maintaining and developing the shipping sector for economic and employment reasons as well as the particular nature of the international competition which it faces can justify the application of the derogation provided in Article 92(3)(c). In 1989 the Commission established guidelines27 defining the conditions under w h i ch state aids to shipping may be considered compatible w i th The Commission believes that it is important to maintain guidelines for this sector but has concluded that the current guidelines need to be revised. This revision will take into account developments in the international competition which EC operators face as well as the global trend towards liberalisation of trade in goods and services. the common market. Community shipowners can face a significant operating cost handicap compared w i th competing non-Community operators, sometimes as a result of non-commercial advantages enjoyed by the latter. Unlike in most other sectors and to a much greater extent even than for most other modes of transport, this is true even in trades within the Community. The cost gap is the result of employment-related charges and fiscal costs under EC flags, which may be significantly higher than those achievable by operation under other registers. Support measures should aim primarily at reducing such fiscal and other costs and burdens the borne by vessels under EC development of the sector and employment) rather than at providing general financial (under conditions which directly stimulate flags The section is not concerned with aid to shipbuilding, which is governed by a different set of Community and international rules, nor with aid to fishing vessels, to which special rules also apply. 27 SEC (89) 921 final. European Commission - T o w a r ds a N ew Maritime Strategy - 2 9- assistance. They should also cover support to training and employment as well as R&D incentives. The Commission has sole competence to monitor State aid and to enforce the Treaty rules in this sector. Nevertheless, in the interest of transparency, it proposes to sound out the views of all parties concerned on the issues raised. The Commission will then draft revised guidelines. This will take into account reactions to this paper, the jurisprudence of the Court of Justice28 and the results of the exercise under way to draw up an inventory of all State aid in favour of shipping currently in force in the Community. a. Approaches to State aid Different national priorities: EC Governments have different national priorities and perceptions of the need and best means to support their shipping industry. Some have vigorously sought to maintain their flag fleets, some have preferred a more laissez-faire approach. Some have strong interest in deep-sea shipping, others have fleets more specialised in short sea services. Some other Member States have emphasised other transport or industrial priorities. These different priorities have determined the structure of support measures given by national governments. They include special fiscal regimes (tonnage tax, exemption or reductions in corporate and seafarers' income taxes, social security liabilities and other charges), generous accounting provisions to reduce taxation (roll-over relief, special depreciation schemes), aid to bridge the cost gap (allowing ships to be brought under EC flags), capital injections linked with restructuring, and special ship registers. to support measures: Community approach Because of these differences in national priorities, harmonisation through a Community instrument, even to the limited degree proposed in Euros, has not proved acceptable. This calls into question whether a single legislative act is indeed the solution. The alternative is an approach to State aid that accommodates certain differences in the priorities and approaches of the Member States while ensuring that competitive distortions are kept to a minimum. Policy could foster the conditions for competitive EC maritime industries to thrive, fully recognising the strengths and weaknesses of the different components and so ensure that the Community remains a strong player in global maritime affairs. The Commission's role is to set the parameters with which State aid can be approved. As noted earlier, the Commission plans to revise the 1989 guidelines regarding aid to companies operating ships registered in the Community and it sets out below a number of issues and options to be considered. Guiding the Commission's approach will be a number of basic principles: aid measures should serve the common interest, they should be transparent, and they should not introduce unacceptable distortions of competition. The EC Treaty provides that State aid can only be accepted under particular conditions. The Commission will therefore see to it that any aid measure for the maritime sector fits within the general industrial and aid policy of the Community as well as w i th its transport 28 E. g. Siemens v. Commission, Case T-459/93, 8 June 1995. European Commission - T o w a r ds a N ew Maritime Strategy - 3 0- policy. The Commission must always consider the common interest of the Community in assessing proposals to grant aid. Aid schemes should not be at the expense of other Member States' economies and must be shown not to risk unacceptable distortion of competition between Member States or between modes of transport. 29 They must be s h o w n, too, to be capable of promoting the development of the sector. State aid must be restricted to w h at is necessary to achieve its purpose. State aid must also be granted in a transparent manner and generally be applied degressively. The Community's approach could be based on the principles of non-discrimination and economic link. link: and economic The Commission seeks to ensure that nationals Non-discrimination and companies of all Member States have full access to the facilities, products and services found in one Member State without discrimination. In the case of establishment Factortame by entry judgment of the Court of Justice in 1 9 9 13 0. In addition, State aid may not discriminate on grounds of nationality between companies established in a Member State. in shipping registers, this principle has been applied since the to Member States should ensure that aid is focused on entities which contribute sustainable economic activity in the Community. Traditionally, State aid has been linked first and foremost w i th flag. But, flying the flag may not, by itself, ensure this result (eg. if no ownership or manning requirements are attached). Other factors may ensure that beneficial shipping activity continues in the EC even if ships flying the flags of third countries are involved. for taxation in the Community, that One option might be to subject the acceptability of State aid to the condition In addition to being beneficiaries show genuine involvement in the Community economy. liable this might be done, for example, by having substantial management and operational functions there, employing at least a minimum number of EC seafarers, investing and employing EC personnel on-shore or being established in the Community. Control as such of a shipping company may not be enough on its o wn to show the genuine involvement, but may be important in conjunction w i th other elements. Such companies could be defined as Community for the purposes of support schemes and a suitable definition incorporated in revised State aid guidelines. shipowners Some argue that the criterion of an economic link is more relevant than the flag link and should replace it; others believe that the t wo criteria should be cumulative. If the first option were to be followed, measures would be needed to ensure that there was no resultant distortion of competition between EC and non-EC flagged vessels. 29 On competition between modes see Commission, Fair and Efficient Pricing in Transport, Com (95) 691 final, 20 December 1995; on the competition between shipping and other modes of transport see Commission, The development of short sea shipping in Europe. 30 The Queen v. Secretary of State for Transport, ex parte: Factortame Ltd. eta/, 1991 (ECR) 3905. European Commission - T o w a r ds a N ew Maritime Strategy 31 b. Action on employment and corporate costs In the 1989 guidelines, the Commission accepted that Member States' flag fleets faced a difficult competitive position because of advantages available to operators flying flags of third countries, including flags of convenience. These lead to differences in operating costs. A method was devised to ensure that the global impact of state aids would not exceed a ceiling to be defined on the basis of the cost handicap w h i ch ships operated under the flag of low-salary Member States meet on world markets. The calculation w as based on the hypothetical operating cost of vessels under Portuguese and Cypriot flags, as nominally the cheapest EC flag and a flag of convenience. Once weighted to reflect the composition of the national flag fleet in terms of vessel types, this resulted in a single national ceiling for annual operating aid, applicable to all types of vessel. The national ceilings of the different Member States were, however, not identical. This method, however, is now being reviewed. The cost gap, which is principally the result of crew-related costs and company fiscal treatment, differs greatly in the world market according to the type and size of vessel, the technology available on-board and efficiency. Most importantly, w i th many EC registers offering certain flexibility in choice of manning nationality, it does not take into account the actual EC component of a crew and its cost. For these reasons, an alternative method could consist in allowing Member States to base aid proposals on real costs for a real vessel, operated by a shipowner established there: that is to say, the actual additional cost incurred by a shipowner as a result of his decision to use high quality EC seafarers in his crew and/or to continue to manage shipping activities from the EC. A new method, based on extensive research of crewing practice for typical vessels operated by EC owners and the resultant costs, as well as the corporate tax regime which applies, is being considered to allow the vessel-related operating cost gap to be calculated for each particular vessel or shipping operator reflecting the actual number of EC seafarers and officers employed on board and the flag of the vessel. This may involve alleviation of fiscal burdens, w i t h o ut removing the interest of the shipowner to negotiate an appropriate salary package w i th potential crew members and their labour representatives. This approach should allow Member States to bring employment-related costs to levels in line w i th world norms which often mean exemption from tax and social security liabilities for seafarers. However, this approach should not contradict the objective of cohesion: wages will not be affected so that seafarers requiring a lower level of remuneration will still be in a competitively advantageous position (the cost reduction will apply only to related liabilities, normally paid to the State); in terms of company tax, it would have to be shown that differences in company tax regimes between Member States would not have diversionary effects. In the future, the Commission intends progressively to reduce the level of aid which it will approve, when the world economic and political situation allow. European Commission - Towards a New Maritime Strategy - 32 - As to corporate costs, it has been explained above that progressive délocalisation can be a problem. Policy might, therefore, be targeted not only on the ship and its various cost factors, but on the conditions of doing shipping business in the EC and the fiscal environment. Keeping and attracting strategic management of shipping in the EC is essential to securing a strong European flag fleet. State aid in the form of tax breaks, capable of achieving the objectives of keeping EC seafarers employed and securing necessary investment in the sector, might be considered to ensure that EC operators are not disadvantaged to the extent that they find themselves under commercial pressure to move out of the EC, provided they do not unacceptably distort competition within the EC. On the other hand, shipping companies which, although controlled by European interests, do not employ EC seafarers on board, do not show any commercial investment in Europe nor pay corporation, tonnage or registration taxes to EC countries, do not face cost gaps because of the EC fiscal and social systems and should not, therefore, benefit from State aid. c. Aid within general frameworks In line w i th the relevant provisions of the Treaty, the Commission could give a derogation from the general prohibition of State aids for training aid schemes and incentives to further EC employment by Member States, as described above, as well as those already contained in the 1989 guidelines. The Commission is ready to consider whether there are other types of aid linked to the recruitment, training and retention of seafarers which ought to be permitted under any revised guidelines. Schemes which go beyond general measures, but which do constitute State aid within the meaning of the Treaty, such as financial support to shipping companies which provide on board facilities for cadets could be acceptable according to the State aid rules of the Treaty. 31 In order to safeguard the existing maritime expertise in the EC and the competitive edge of the EC maritime industries, further extensive research and development efforts are necessary, w i th a focus on quality, productivity, safety and environmental protection. For such projects, State support may also be authorised within the limits set by the Treaty. 32 d. 777e criterion of measurable benefit Recently, it has been argued that support bringing benefit to Community shipping and more broadly to the Community's maritime industries might be measured in terms of higher added value and sustainable employment. Various economic models to measure the impact of support schemes exist. One such the research method, importance of a sector to a national economy. It operates on the following premises: impact study, has been developed the economic to assess 31 Commission, Framework for Employment Aid, O. J. 1995 No. C 334/14. 32 Commission, Framework for Aid to Research and Development, O. J. 1996 No. C 4 5 / 5; see also Framework for Environment Aid, O. J. 1994 No. C 7 2 / 3. European Commission - T o w a r ds a N ew Maritime Strategy - 3 3- it accepts that considerable value is added on shore (eg. by processing, warehousing, distribution, international services), not only in shipping3 3; to measure this impact, it assesses the direct and indirect effects of a specified approach through an input/output analysis. This analysis presents linkages between a particular sector and the rest of the economy. an economic impact analysis can also forecast possible effects on State revenue flows and on economic activity and employment in shipping and related sectors, if a given support policy is followed. However, an input/output analysis cannot provide all the factors to assess the merits of support schemes. It provides some insights into the importance of the shipping sector. But it can neither assess the impact of such a scheme on the size of the EC fleet nor does it take into account that the money for the support scheme needs to be transfered from other possible usage. These opportunity costs, including their indirect effects, need to be subtracted from the benefits. Therefore, additional analysis is needed both to assess the degree to w h i ch a support scheme is likely to change the location pattern of shipping and to quantify the opportunity costs of the support scheme. So far, the economic impact study method has only been applied, as regards shipping, by one Member State. In order to obtain a clearer picture of its value for the Community, the Commission has engaged in a research project to quantify the economic impact of the maritime sector in some representative Member States and to calculate the relation between added value, employment and Government revenue f l o w s. Although these studies will not be completed until 1998, the Commission intends to initiate discussions in the coming months w i th Member States' experts and other interested parties on the methodology and on the implications of this approach for the European Union as a whole. V. Measures for Related Sectors industries, and the Communication of It has been emphasised throughout this document that shipping is closely linked w i th other the Commission "Shaping Europe's maritime Maritime Future - A Contribution to the Competitiveness of Europe's Maritime Industries" underscores this argument. This fact, among others, adds to the importance for the EC to keep its fleets. Since shipping is one link in both the maritime industries cluster and the overall transport chain, measures to keep the Community attractive for maritime industries must not relate to shipping alone, nor must measures supporting shipping be purely sectoral and at the expense of other sectors. Detailed consideration of related maritime sectors is beyond the scope of this document. The Maritime Industries Forum has done extensive and valuable work on the interrelation of the maritime industries, and the Commission fully subscribes to its efforts. In addition, the Commission would stress the need for improvements in port efficiency, the accelerated 33 For example, applied in the Netherlands, this method assessed value added at 7 0% land- based to 3 0% sea-going. European Commission - Towards a New Maritime Strategy integration of shipping into the Trans-European Networks and the intermodal transport chain34 and the maintenance of a strong and competitive European shipbuilding industry. - 3 4- CONCLUSION The Commission considers that the combination of legisative, administrative and political initiatives deatiled in this Communication will ensure that EC interests in high quality and fairly priced shipping services are supported. The Commission would value the views of the other European institutions, the Member States and other interested parties on its proposals, in particular those concerning employment, shipping registers and the policy for competitiveness. On other aspects of the policy, such as R&D, safety measures and the development of short sea shipping, the Commission's policy but further input is welcomed. On the question of State aid, the Commission has sole competence to determine whether a specific national measure is in the common law. Nevertheless, the Commission would encourage interested parties to comment on the various possible approaches outlined; this might help the Commission to draft revised in GATS), general guidelines which Commission policy (limiting State aid as far as possible and progresively phasing it out) and Court jurisprudence. On external relations policy, a detailed Communication will follow, but the views of the Institutions, the Member States and other interested parties on the outline approach proposed might be useful. the Community and, therefore, compatible w i th EC Institutions have already endorsed the world situation (eg. developments interest of reflect the To structure the debate on the new approach to maritime strategy, the Commission would welcome views and comments, preferably by September 1 9 9 6. 34 See the Communication on Short Sea Shipping in Europe. European Commission - Towards a New Maritime Strategy EC SHIPPING IN A GLOBAL MARKET PLACE ANNEX A I. The Shipping Market and Environment Maritime transport is an international industry to which there are relatively f ew regulatory barriers to entry. As the globalisation of industry spreads, it is to be expected that the volume of shipping will grow still further. New markets will create new trade f l o ws w h i ch will require transport facilities. Given the proportion of trade carried by sea, this will encourage further interest in the shipping market. 1. Bulk and liner shipping When considering the key features of the industry, cargo shipping can usefully De divided into t wo main categories: bulk and liner shipping. Besides these, passenger shipping, which consists today of cruise and passenger ferries services, is also important. Bulk transport countries still have important cargo reservation schemes. extensive inland and logistics investment. is generally organised in a free market environment, although some It does not, as a rule, require Liner shipping is traditionally organised in maritime conferences, which adopt common or there are also liner shipping uniform tariffs and conditions of carriage. However, companies w h i ch are not part of these arrangements and set prices independently, or by reference to the tariff of the conference w i th which they compete. Bulk and liner have important differences in their cost structures. Liner shipping bears higher infrastructure and network costs and has a higher proportion of costs on land; it thus tends to be more capital intensive than bulk shipping. Thus, bulk shipping is more sensitive to relative seaboard labour costs than liner shipping. Both types of cargo shipping are intrinsically international in nature. More than other transport modes, shipping has, therefore, tended to be subject to international and universal, rather than unilateral, regulation, especially on liability, international safety and labour rules. Further, both bulk and liner services can be divided according to their trade areas: short sea and deep sea. Short sea services include ferry and feeder services as links in the intermodal chain. Within the short sea trades of the Community, bulk shipping is also of importance. 2. Registers Ships are bound to a national jurisdiction by the flag which is given to a ship entered in a register. A State's administrative, civil and criminal law provisions will thus apply to the ship. The same fiscal and labour requirements apply to shipping under traditional registers as apply to on-shore industries, so that shipping companies pay taxes and make social security contributions on the same basis as other industries. National EC first registers have traditionally required the crew or an important part of it to be EC nationals. Some registers allow exemptions or reductions concerning income tax and social security or alleviation in respect of crew nationality requirements. 3^ Direct taxes in the Community have not been harmonised and tax rates differ widely. The scope of application of taxes also differs w i th respect to shipping, w i th alleviation given by some Member States in different instances. Consequently, the corporate tax effectively paid by shipping companies in different Member States varies considerably. In some instances, States have set out to attract international shipping to their registers. Liberia, Panama, Cyprus, the Bahamas and Malta are the most important examples of this. These "open" registers accept any nationality of owner and will in general have f ew requirements w i th respect to nationality of the labour force. 1 Shipowners, therefore, have unrestricted access to the international labour market. Offering open register facilities is source of revenue for countries. The largest open registers, Panama, Liberia, and Cyprus, apply corporate tax rates of zero and are estimated to produce annual incomes of US$ 1 0- 20 million. They are run as commercial undertakings. For EC shipowners and operators, the cost savings that can be achieved by changing to an open register can be significant: eg. for a 2,700 TEU containership, crew costs may be US$ 1 , 1 4 4 , 0 00 per year more under the German flag than under Panama registration. Similarly, the owner of a Suezmax 1 4 0 , 0 00 d wt tanker might save US$ 9 5 8 , 0 00 tax per year if he flags his ship out from Italy to Panama. A more extensive cost comparison is found in Annex A - 1. It is clear from these data that EC shipping companies may suffer an important disadvantage because they face higher labour and fiscal costs than some of their international competitors. If a country w i th an open register also possesses a good maritime service infrastructure, ie. good communications, ancillary service industry such as insurance, legal services, finance and credit facilities, swift diplomatic protection and an independent judiciary, shipping companies may consider not only registering there, but also transferring some of their activities and even the headquarters. The extent to which a change of flag may also lead to a relocation of a whole company, w i th consequences for economic activrty and employment also on shore, depends greatly on the amount of on shore investment. The less there is fixed on-shore investment, the easier it will be for a company to relocate. This makes bulk shipping a more plausible target for total relocation than liner shipping. their ships The decision whether to relocate is influenced not only by operational costs, but also by the effect of corporate tax on profits in a given country. 3. Global competition and mobility of assets Compared w i th other modes of transport, shipping is generally free of regulatory market access barriers. In principle, any operator can, regardless of its nationality and the location of its company seat, provide international shipping services. In practice, though, important restrictions remain and the danger of new restrictions is still present. The provision of services between t wo destinations neither of which is the country of registration of the ship (cross-trading) is common. According to estimates from the European Community Shipowners' Associations (ECSA), Denmark, the Netherlands, and the UK have important cross-trading interests in liner Thus, Cyprus requires that 15% of the crew of a vessel registered in Cyprus must be Cypriots; however, this requirement is subject to waiver. 1<* - 3 - shipping, while Greece, Belgium and Germany are heavily involved in world-wide bulk cross-trading. immediately highlights any competitive disadvantage, whether Global competition business-related or regulatory in nature. A shipping company may therefore seek to overcome costly or burdensome regulatory disadvantages by flagging out. This w i l l, in principle, not entail any retaliatory regulatory disadvantages for it, as international trades are to a large extent free of any access barriers relating to nationality. II. Need for EC Shipping Conventionally, the need for EC shipping is affirmed by pointing to economic and military independence. The EC, it is said, should not depend too heavily on maritime services provided by its economic competitors as these may, in specific circumstances, act in support of their long-term commercial interests. 2 This might have a detrimental influence on EC trade. In times of military crisis, the EC Member States should be able to rely on a merchant fleet reserve for defence needs. A third important consideration is the contribution that shipping makes to the broader economy through its relationship w i th a wide range of maritime industries. ' 1. Economic independence The prime need of European trade is for efficient and safe maritime transport. This is provided by EC and non-EC shipping companies. A wide range of cost-effective services is essential to maintain the competitiveness of European industries and Europe's economic independence as a whole. The maintenance of open, competitive shipping markets and the vigorous application of flag-blind competition rules are the best way of securing this result. Indeed, aggressive pursuit of the objective of maintaining shipping independence at the expense of non-Community operators could rebound if it were to lead to protection for inefficient European operators. It could also encourage imitation by other countries w h i ch risks damaging cross-trading, in which several EC Member States have important interests. fleet follows the argument that a Community for economic If one independence, this may be guaranteed by EC control of shipping. As it does not necessarily require EC flagged vessels, the goal of economic independence would not in itself call for measures supporting EC flag shipping and EC employment. Nevertheless, the issue of economic independence merits continuous vigilance as to the genuine openness of world shipping markets. It may be prejudiced, as may shipper choice, if markets are through unfair pricing, long-term arrangements w i t h in closely closed, vertically integrated organisations or cargo restrictions, formal or informal. for example, is necessary See European Commission, Maritime Transport Report, Sec (94) 9 33 final, 8 June 1 9 9 4. 3? 2. Military needs In case of military need, Member States may w a nt to ensure readily available naval capacity. For this, it will not only need the appropriate ships, but also qualified national seafaring personnel w ho are available for military activities. However, a strategic ship reserve will depend on the military priorities of a given country, its geographic location and its geopolitical commitments and may relate to specific ship types. Questions of naval defence cooperation are for the time being addressed in NATO, and the WEU is following these developments closely. Although defence considerations clearly underlie the concern in a number of Member States about the decline in EC flagged vessels and in the availability of EC seafarers, it seems that the question of a naval ship reserve is outside the direct scope of Community industrial and maritime policy. 3 3. to broader Contribution economy An important argument for maintaining an EC flag fleet in the first place, and an EC- controlled fleet in the second place, is the contribution EC shipping makes to the overall health of the EC economy. Thus, for example, it has been calculated that for every 100 ECU of added value created in the shipping sector itself, 35 ECU of value is added in the supplying industries in the Netherlands. About 4 4% of this added value flows back to the public authorities, in form of taxes and social security contributions. Investment on-shore is an important aspect of maritime activity. By providing high quality and cost effective products and services, related sectors contribute substantially to the long term prospects of the EC shipping sector. The specific shipping-related activities ashore which generate added value vary in importance from Member State to Member State and include port handling, stevedoring, logistics, ship inspection and classification, ship management and broking, international banking and financial services, underwriting and insurance business, consultancy and professional services. EC shipowners currently order approximately 5 0% of their newbuildings in EC shipyards. Thus, while foreign shipowners also contribute to the EC shipbuilding order book, a steady source of orders from EC-based shipping allows these industries to plan ahead. EC shipping personnel provide vital know-how not only for the safe operation of ships, but also to related sectors. Many maritime industries have traditionally relied on seafaring skills and experience. The jobs they provide outnumber the jobs on sea. For example, in Germany, at the end of 1993, there were 1 6 , 0 00 jobs on board, 44,000" in shipbuilding and 7 0 , 0 00 in ship supply industries. For the UK, it is estimated that maritime related industries provide 4 1 6 , 5 00 jobs, of which 8 0 , 0 00 are directly related to merchant shipping. Seafarers, after some years at sea, will often use their experience and knowledge in subsequent employment on-shore. For example, officers and able seamen may be employed after their seafaring life in a wide range of related occupations such as logistics services, marketing, managing fleet operations, and in related business and administration. In relation to industrial policy, the Commission has adopted a Communication "The Challenges facing the European Defense Related Industry, a contribution for action at European level" (Com (96) 10 final, 24 January 1996). 18 They can also contribute to continuing maritime education in the EC4 as well as to the enforcement of national and international standards. -5 III. Developments in EC Ownership, Flag, and Employment 1. Evolution of EC ownership a. The facts In 1 9 9 4, EC interests retained a total of 3 4% (in dwt) of the world fleet. This is d o wn from 3 8% in 1 9 8 5. However, between 1985 and 1 9 9 4, the aggregate EC controlled fleet grew in total terms (dwt) by 1 2 %. There has been no reduction in the EC share in global ownership since 1 9 9 0. Greece is the largest shipowning nation in the world in total terms, controlling 1 8% of the world fleet. In container shipping, German ownership is world leader w i th 1 3% control in this sector. 5 b. Policy conclusions In assessing the relative decline in ownership, the following factors should be taken into account: generally speaking, productivity of ships has been improving". Thus, the same or even more cargo can be carried today w i th less tonnage than in the past; the loss of control since the early 1 960s, when the EC controlled half of the world fleet, is largely based on a readjustment to the post-colonial era and the emergence of new shipping nations in the Far East, which have built up fleets along w i th their trade. Indeed, world trade patterns have changed considerably: it is estimated that in the year 2 0 0 0, intra-Asian trade will account for 4 8% of all cargo carried on the main shipping routes, up from 3 6% in 1987. Conversely, the traditionally dominant trade between the US, Europe and Japan has diminished in relative terms. It may be considered natural that a large proportion of the vessels carrying the Pacific rim trade is o w n ed by Asian interests. The EC controlled fleet deploys more capacity in the home trades of the EC than the controlled fleet of other major trading nations in their respective home trades. According to NUMAST, the following professions rely on seafaring expertise: harbour administration and control/port operations, marine pilotage, marine engineering, ship inspection and surveying, coastguards, marine equipment law and insurance, nautical colleges, ship management, shipbrokers. industry, marine Further information on the controlling interest of Member States in the world fleet can be found in Annex A - 2. Ie! - 6- Owned/Controlled Fleet as Percentage of Total Supply Serving Home Trade (1993) Controlled Vessels Controlled DWT 4 0% 3 0% 2 0% 10% #$! 0% -^ mi > bJ ** Soupce: LMIS 50% 40% 30% 20% 10% 4 0% - UJ V) < z NIE's: Newly Industrialised Economies (Hong Kong, South Korea, Taiwan) The loss of control in total terms over the past decades seems thus to follow a normal path in the light of worldwide trade patterns and division of labour, and there does not seem to be a strong need for a specific policy fostering EC ownership. 2. Flagging out a. The facts The main reason for flagging out is overall cost savings, w i th crew costs, tax and fiscal costs being cited most often. The extent of this trend can be seen from the following figures: Percentage of World Tonnage (DWT) under EC Flags 3 2% 29% 4 0% 3 0% 2 0% 1 0% 0% 1970 1980 1985 1994 Source: LMIS (1995); DG VII Id Today, 5 6% of the EC tonnage is flagged out. Further factual information concerning the flagging out trend from EC flags can be found in Annex A-3. It is noticeable that the extent of flagging out is related to the type of shipping operation. Flagging O ut of EC Fleets 0% 10% 20% 30% 4 0% 50% 6 0% 70% 80% Percentage of EC owned Vessels Flagged Out Source: LMIS (1995) Flagging out indicates a growing loss of competitiveness under EC flags. Indeed, EC owners have a high percentage share of ships in open registers. EC Owned DWT in Open Registries 120000000 100000000 80000000 60000000 40000000 20000000 <0 '= S -J O 5 >- O S o u r c e: LMIS • non-EU o w n ed D WT • EU O w n ed DWT in Register - + - • — , — , _ j — , — 1. 1 — i — )_ 1 J (0 (O E — S c « «5 > S < < HI However, similar problems appear to confront major Asian carriers as they have also flagged out: e. g. , 6 5% of Japan's NYK vessels fly a foreign flag. Further, in assessing the gravity of flagging out, one should bear in mind that the EC flag fleet still deploys more capacity in the EC's home trade than the flag fleet of other major trading nations in their respective home trades. Own Flag Fleet as Percentage of Total Supply Serving Home Trade (1993) Own Flag Vessels Own Flag DWT 20% 15% 10% 5% 0% ''~Ë-t , r a. w$ 'iSs •'*' o " < £ z < < < S o •„ UJ z Source: LMIS 20% 15% 10% 5% j 0% 2 a o < a. -» * NIE's: Newly Industrialised Economies (Hong Kong, South Korea, Taiwan) b. Policy conclusions Nevertheless, there are several reasons w hy the EC should be concerned about flagging out. low Flagging out ships may often constitute a means of avoiding a regime which is seen as too burdensome by economic operators. To secure, for example, the reduction in corporate tax offered by tax non-EC countries, a company must often establish effective management of its flagged-out ships outside the Community. Once it has done so, the delocalised management develops its o wn momentum and the "raison d'être" of the European management starts to erode. Over time, the whole management may move off shore giving further impetus to the use of non-EC flags and indeed whatever facilities are on offer in the global market place. Flagging out does not always lead to loss of seaboard employment, on-shore activities or relocation of a company, but it may be very difficult to re-attract maritime business once the infrastructure and the human resources begin to move away. As explained further below, having ships under EC flags contributes to ensuring that safety standards can be closely monitored through flag State control. It has been shown that, in some instances, the safety record of ships flagged out from EC registers is worse than for ships in those registers. If all relevant EC legislation is properly enforced, flying an EC flag should be synonymous w i th operating a safe ship. Flagging out lessens the control power of EC Member States over standards. Flagging out from EC flags has also contributed to job losses for EC seafarers. m Loss of Employment for EC seafarers 400000 Source: DG VII; LMIS; European Shipowners' Associations (ECSA) 1994 Not all of the job losses, however, are the result of flagging out: reduction in the number of vessels, coupled w i th the development of larger vessels, and rationalisation have also played their part. Main Reasons for EC Crew Losses Fleet reduction 2 7% Flagging out 5 1% Source: Mercer/LMIS (1995) Reduced number of crew/vessel 2 2% V3 3. Recent labour supply developments - 1 0- a. Difficulties in assessing impact of gross employment trend As stated above, flagging out is responsible for roughly half of the job losses in the last decade to EC seafarers. But before drawing any policy conclusions from this fact, the following has to be taken into account. The figures may overestimate the actual employment loss for EC nationals, as they do not provide any information on the employment of EC nationals on ships under a foreign flag. Additionally, they do not provide any information on the rank of seafarers. The loss is likely to be less pronounced for officers than for ratings, as evidence suggests that on a flagged out ship the owners will retain at least officers of their o wn nationality. In some instances, the flagging out does not affect the crew nationality at all. 6 However, even if EC seafarers are retained on board flagged out vessels, working conditions, pay and benefits, such as sickness and accident insurance, are often worsened. EC seafarers w ho keep their jobs when vessels are flagged out may, therefore, experience these negative consequences and some loss of morale. Conversely, operators may seek to reduce costs on EC flagged vessels by employing non- nationals. Estimates from national shipowners' associations suggest that while, in 1 9 8 3, 1 4% of seafarers on EC flagged vessels were non-nationals, the proportion had risen to 3 5% in 1 9 94 while total employment fell nearly a third. Information is not readily available on how many of these non-nationals came from outside the EC, nor on the rank or position there were appointed to. In this connection, it should be noted that job losses due to manning of ships w i th low- cost labour may lead to cost savings in the transport business. When this leads to lower freight rates, it makes traded products cheaper and therefore increases g r o w th and employment in the economy as a whole. b. Shortage of qualified seafarers While it is thus difficult at this stage to assess the problems in terms of the gross employment of EC seafarers, a more specific problem has arisen in recent years, to w h i ch a policy response is urgently needed: the shortage of better qualified seafarers worldwide. As stated above, the number of seafarers from EC countries has consistently fallen during the last t wo decades. While this tendency has in the past been qualified as a problem affecting OECD countries only, a worldwide shortage of officers and specialist ratings is now envisaged. Already today, certain EC Member States signal that the number of new recruits to the seafaring profession only covers about 2 5% of the estimated replacement needs. Even for these recruits, it is suggested that there are not sufficient places on board EC flag vessels for them to gain the requisite experience. 6 Further information on employment trends under EC Member States flags can be found in Annex A-4. T o w a r ds a N ew M a r i t i me Strategy Annex A HH - 11 - The new STCW (Standards of Training, Certification and Watchkeeping for Seafarers) requirements, while the leading to higher worldwide shortage of skilled seafarers. levels of competence, could accentuate The reasons w hy policy must find a response to this predicted shortage, are four-fold. First, to ensure safe navigation of ships. Second, ancillary industry. to preserve the maritime know-how in the Community which is needed in for the enforcement of the safety policy of the Community, by maritime Third, administration; Fourth, for continuing education of young seafarers. In this context, the loss of qualified employment in shipping is assuming a new dimension; it cannot be judged only numerically and should not therefore be considered of minor importance by comparison w i th even larger job losses in other European sectors as a consequence of increased international competition. Lack of availability of highly trained and well qualified EC seafarers may jeopardize the effectiveness of the ambitious Community efforts to implement and enhance maritime safety and pollution prevention and may gravely affect the European maritime industries as a whole. But this problem may turn out to be a great opportunity for the EC to become a supplier of high quality personnel to shipping w o r l d w i d e. IV. Some Further Trends in Global Shipping 1. globalisation Further Recent years have brought, through the liberalisation of world trade and decentralised production methods, a continual increase in global trade and w i th it growing demand for shipping services. In line w i th this development, the globalisation of the shipping industry has continued unabated. Registration in open registers continues to increase, and there is a growing number of countries offering these registers. Liner shipping has grown on average at a rate of 6. 5% per annum in the last 10 years, and it is projected that it will continue to grow at the same rate for the next decade. The globalisation of production is leading to demand for global transport services. To respond to this demand, trade alliances between shipping companies are being created. These alliances or consortia can meet customer demand for global transport coverage, while the traditional conference system, based on geographically restricted trade routes, cannot. This trend is also leading to increasing concentration of market power in the hands of a small number of operators and the emergence of very large maritime logistics companies. W i th globalisation of industry, door-to-door transport networks will tend to become more and more important for manufacturers and shippers. There is therefore a tendency towards developing increasingly customised services which encourage individual client-provider relationships. All these developments are tending to replace the traditional self-regulation between groups of users, the shippers' councils, and groups of providers, the conferences. Towards a New Maritime Strategy Annex A ^ - 12 - For bulk shipping, trade growth is always difficult to predict, because demand depends on volatile factors such as seasonality of trade, yield of food crops, etc. It is estimated that the main features of this sector, namely its cyclical nature and its unpredictability, will not change fundamentally in the longer term. 2. Investment patterns The openness of European markets has attracted foreign investment. Today, some efficient short sea and feeder operators in intra-European trades are non-European-owned. For example, the US company Sea-Land is heavily involved in European short sea traffic. The Japanese shipping company NYK is said to have invested US-$ 3 50 million into its EC transport n e t w o r k. Other Japanese shipping companies have bought EC shipping companies or have created shipping joint ventures w i th EC companies intra-EC services. At the same time, European shipowners are taking advantage of the opportunities in cross trading and are beginning to set up transport networks in other continents. However, investment opportunities for EC shipping companies are limited where the provision of domestic services is not open to foreign operators or there is discrimination in ports vis-a-vis non-national operators. for 3. The problem of ageing ships Heavy worldwide subsidization of shipbuilding has contributed to oversupply in ships and the resulting structural overcapacity in bulk shipping markets, w i th consequently depressed freight rates. This cause of oversupply should, however, diminish, provided the major OECD shipbuilding nations, accounting for about 8 0% of world shipbuilding, abolish subsidies to shipbuilding from 15 July 1 9 9 6, as agreed. The conclusion of the OECD Shipbuilding Agreement banning all forms of competitive distortion will broaden the scope of shipowners choice regardless of non market criteria. The depressed rates and the increasing competitive pressure has contributed to lower returns for many shipowners. Shipping has thus been lagging behind other industries in terms of return on equity and investment. This has led to extending the useful life of ships and, in general, an ageing of the fleets and sometimes reduced maintenance efforts w i th consequent safety problems. Average ship age7 EC-flagged World 1985 1 6 years 14 years 1 9 94 21 years 17 years While older ships can be maintained to high standards, statistics show that overall casualty risks rise w i th age of ship. For example, studies of tankers and bulkers show that the risk for 20 year old ships is more than twice the risk for 10 year old ships. Statistics refer to vessels over 100 GRT in respect of liquid bulk, dry bulk, general cargo, container, Ro/Ro, and other dry cargo categories. Towards a New Maritime Strategy Annex A HCf - 1 3- 4. Enlargement of the Community Recent accessions have brought a substantial addition of tonnage under the control of EC owners. Sweden ranks 14th as a shipowning nation, Finland 3 4 t h, and Austria 6 8 t h. The future may bring further tonnage to the Community, as Cyprus and Malta are envisaging accession. Accession could thus boost the maritime importance of the Community and considerably increase its flag State control and its say in world maritime matters. To framework, especially anticipate this trend and develop a coherent maritime policy concerning registers and maritime safety, which takes account of these possible future accessions, is thus gaining in urgency. Opportunities for EC Shipping V. As already noted, EC shipping faces many challenges, but it is still well placed to take advantage of the opportunities arising both from the general increase in demand for shipping services and from increasing specialisation. EC liner companies are in aggregate as profitable as non-EC liner shipping companies. Globalisation of trade and production will demand an increasingly individualised transport product, w h i ch in turn will require qualified expertise and specialized personnel. An EC approach fostering training and development of skills can contribute to meeting these demands. There is recent evidence that owners are seeking EC seafarers as specialized professional expertise is required to maintain expensive assets and performance according to stringent safety regulation and increasing important possible g r o w th area is short sea shipping. 8 customer demands. Another Traditionally, many European operators possess experience in this field which can be used both in Europe and outside. Further, in cruise shipping, off shore supply, heavy load and other specialized shipping, European operators offer experience and sophistication of many years' standing. Sophisticated shipbuilding can help F_C shipping explore the new trade opportunities (including, for example, routes permitted since the opening up of the former USSR, which may require ships w i th special hull construction because of icy conditions). The need for new types of vessel should create export potential for specialised ships and systems and also provide new employment opportunities for trained personnel on-board. See European Commission, The Development of Short Sea Shipping in Europe: Prospects and Challenges, COM (95) 317 final. Towards a New Maritime Strategy Annex A ^> Corporate Tax Gap for Ten Vessel Types EU Flags mi Lower cost Open Registry (non ITF) Tankers Suezmax(140 000dwt) Product tanker (40 000 dwt) Italy Italy Greece Greece Cape Size (150 000 dwt) Panamax (65 000 dwt) Handy-size (28 000 dwt)) Italy Italy UK Greece Greece Greece Container Large (4 000 TEU) Line-Haul (2 700 TEU) Deepsea Feeder (1 500 TEU) Neth. Germany Germany Denmark France Greece General Cargo Breakbulk(15 000dwt) Ro-Ro (6 000 dwt) Germany Italy Greece Greece Against lower-cost Open Registry Panama Panama Panama Cyprus Panama Panama Panama Panama Cyprus Panama Annual Cost Difference (in 'Û00 $)1 B 107. 1 38. 8 119. 5 58. 8 27. 2 752. 8 460. 6 29. 3 958. 2 494. 4 709. 1 439. 3 202. 8 782. 1 372 253. 3 168. 1 308. 9 16. 3 4. 6 Source: Mercer Management Consulting/LMIS m x Crew Cost Differences for Ten Vessel Types Tankers Suezmax(140 000dwt) Product tanker (40 000 dwt) Bulkôrs Cape Size (150 000 dwt) Panamax (65 000 dwt) Handy-size (28 000 dwt)) EU Flags m Italy Italy Italy Italy UK m Greece Greece Greece Greece Greece Container Large (4 000 TEU) Line - Haul (2 700 TEU) Deepsea Feeder (1 500 TEU) Neth. Germany Germany Denmark France Greece General Cargo Breakbulk(15 000dwt) Ro-Ro (6 000 dwt) Germany Italy Greece Greece Against lower-cost Open Registry Lower cost Open Registry (non ITF) Panama Panama Panama Cyprus Panama Panama Panama Panama Cyprus Panama Source: Mercer/LMIS (1995) Annual Cost Difference (in '000 $) Cpstlndex^ B 185 179 155 149 144 380 1124 91 368% 370% 313% 304% 227% 279% 433% 433% m 140% 141% 138% 137% 139% 208% 427% 126% 88 82 383% 265% 122% 123% 1228 1192 865 794 472 630 1144 1144 1221 587 I m x - 16 - Controlling Interest of Certain Member States in Specific Ship Types as Percentage of World Fleet ANNEX 2 (in DWT, 1994) Dry bulk m ua Denmark , ! Germany Italy UK Greece Ro-Ro o o Container H ' •-••••• 1 • 1 • ' 1 ' * 1— Italy Netherlands France Greece Denmark UK Germany Source: LMIS n> 25% T 20% 15% 10% 5% 0% 7% 6% 5% 4% 3% 2% 1% 0% 14% 12% 10% 8% 6% 4% 2% 0% - 17 - Controlling. Interest of Certain Member States in Specific Ship Types as Percentage of W o r ld Fleet (in DWT, 1994) ANNEX 2 Specialised Dry1 14% T 12% 10% 8% 6% 4% 2% 0% o Lrfestock, barge, heavy cargo, nuclear fuel O General Cargo 10% T 9% 8% 7% 6% 5% 4 4% 3% 2% 1% 0% 18% -, 16% -- 14% 12% 4 10% 8% 6% 4% Denmark Netherlands Germany UK Greece Total 2% 0% mR France _, 1-, i H Italy Sweden Denmark Germany UK Greece Source: LMIS n I CO I 3> Z m x Source: LMIS Vessel Database (1995) - 19 - ANNEX A Nationals on board EC Flag vessels U. K. Sweden Spain Portugal Data for 1994 hot available Netherlands •. jitJitUuiMi^lilMlrl^J Italy Ireland Greece Germany France fe ^^WM^M^^T" Finland i Denmark \^>»^^^^>^^^^^^^>^ Belgium p ^] mm D1983 H1992 D1994 5000 10000 15000 20000 25000 30000 35000 40000 Non-national seafarers on board EC Flagged vessels 1 U. K. % '. ,,M •. "' "' 'I 1 Sweden n o ne Spain no data a v ai able Portugal no data a v ai able Netherlands none Italy Ireland l23 1 J 1 Greece V. M M M M ^ ^^ i. i ,. 1 •> 1 1 1 1 1 1 ^ Germany France n o ne. ,. -. , ,. ,. •. •. , ,. , Finland F^ Denmark i <mxnmxxnxmùxxiz\i. Belgium ^W : - : : • : : •: • : • : • :! 1 1 i | 1 1 D1983 E3 1992 D1994 1000 2000 3000 4000 5000 6000 7000 8000 9000 Source: ECSA 0 EFFORTS AND SUCCESSES SO FAR ANNEX B I. Analysis of EC Policy so Far The Commission has, for some years, applied a Community maritime policy consisting of a combination of actions concerning external relations, competitiveness of EC shipping and maritime safety. Progress in opening markets and eliminating substandard shipping through stringent application of safety regulations should lead to a better competitive position for EC flagged shipping. It does not, however, mean that temporary support measures for the EC flag fleet become immediately unnecessary. While the impact of these policies was felt more strongly in deep-sea shipping, the Commission has recently proposed action to develop short sea shipping. Further, since 1 9 8 7, the Commission has conducted an active competition policy w i th regard to liner shipping. 1. Community maritime policy The European Court of Justice gave t wo judgments which provided the impetus to develop a Community maritime policy. First, in 1 9 7 4, it stated that the general rules of the Treaty applied to maritime and air transport on the same basis as the other modes of transport. 1 Then, in 1 9 8 5, it ruled that the Council had failed to fulfil its obligations because it had not enacted legislation for the freedom to provide services in the transport sector pursuant to Art. 75 of the Treaty. 2 In the same year, the Commission proposed a common maritime policy. 3 a. The 1986 package The ensuing 1 9 86 package was based on an open market, non-protectionist philosophy to foster a competitive EC fleet and to further employment; at the same time, it provided measures to counter unfair competition. 4 Overall, the Community decided that all intra- European trades except cabotage should be open and that there should be no further requirement than establishment in the Community to benefit from shipping opportunities within the EC. This policy was not conditioned upon any similar commitment to open markets from the Community's main trading partners. 1 2 3 4 French Seamen's Case, 1 9 74 (ECR) 3 5 9. Parliament v. Council, 1985 (ECR) 1 5 1 3. 'Progress towards a common transport policy - maritime transport', Bulletin of the European Communities, supplement 5/85. The 1 9 86 package, O. J. No. L 3 7 8, 31 December 1986, consists of four regulations: Reg. 4 0 5 5 / 86 applying the principle of freedom to provide maritime between Member States and between Member States and third countries; Reg. 4 0 5 6 / 86 laying d o wn detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport; Reg. 4 0 5 7 / 86 on unfair pricing practices in maritime transport; Reg. 4 0 5 8 / 86 concerning coordinated action to safeguard free access to cargoes in ocean trades. transport European Commission - T o w a r ds a N ew Maritime Strategy - Annex B (ft - 2 - b. Proposals to keep ships under EC flags and create the single market In 1 9 8 9, the Commission proposed further measures to develop the common shipping policy. 5 As in 1 9 8 5, it pointed to further loss of employment and competitiveness of the EC fleet and specifically identified high labour and fiscal costs under EC flags as a main reason for flagging out. Consequently, the Commission proposed a dual-purpose measure to alleviate the financial burden of flying an EC flag and at the same time safeguard EC employment: the Euros Register. The amended proposal of 1 9 9 1, based on one of the proposals of the European Parliament, foresaw that all Community shipowners w i th ships registered in Euros and meeting the mandatory minimum of EC seafarers would be entitled to reimbursement of seafarers' income tax. The proposal thus specified a form of State aid as compatible w i th the common market. Member States shrank away from the mandatory nature of this Community measure. The issue of mandatory crewing requirements also remained a large stumbling block throughout the discussion. The Council has therefore not been able to accept this proposal, although the Commission has tried different formulae to forge agreement. The package of 1 9 89 also included a proposal to liberalise domestic trades, adopted as Regulation 3 5 7 7 / 9 2 ,6 and a proposed definition of the notion of Community shipowner. This developed criteria based on majority ownership and majority voting rights by EC interests w h i ch were deemed necessary for a shipping company to be considered a Community shipowner for the purposes of all relevant Community instruments (e. g. cabotage, registration in Euros, carriage of food aid). 7 The proposal has not yet been adopted, and the Edinburgh Council of 1992 asked the Commission to review it. Also in 1 9 8 9, the Commission issued guidelines for the assessment of State aid to the shipping sector. 8 The Commission decided that it could authorise, as in the Community interest, State aid measures to maintain ships under Community flags, modernise fleets and maintain employment of EC seafarers. State aid could bridge the cost gap between operating under an EC flag and under a flag of convenience, but it also had to fulfil certain other conditions to be allowed: 5 6 7 8 future improve 'A conditions of Community shipping', COM (89) 266 final, 3 August 1989. the Community shipping industry: measures for to the operating Council Regulation (EEC)No. 3 5 7 7 / 92 of 7 December 1992 applying the principle of (maritime freedom cabotage), O. J. L No. 3 6 4, 12 December 1992, p. 7. transport within Member States to provide services to maritime See COM 8 9 ( 2 6 6) final; COM 91(54) final. SEC (89) 9 21 final. -European C o m m i s s i on - T o w a r ds a N ew Maritime Strategy - Annex B ff 3- it should be in line w i th the Commission's general State aid principles; it should not lead to maintenance or increase of capacity in sectors w i th overcapacity. In 1 9 9 1, the Commission issued a Communication on the challenges to the maritime industries9. This Communication was based on the application of the new industrial policy approach of. 1 9 90 and put shipping, shipbuilding, supply industries, fisheries, etc, in their industrial context. Again, this Communication pointed to the loss of ships and employment in EC fleets. This Communication led to the formation of the Maritime Industries Forum and is followed-up by a new Communication entitled "Shaping Europe's Maritime Future". c. 777e common policy on safe seas The Communication on a Common Policy on Safe Seas was adopted by the Commission in February 1 9 9 3. 10 This policy has been fully endorsed by the Council and by the European Parliament. It is based on: securing the convergent application of international safety standards in European waters; strengthening the role of the port State in inspecting ships of all flags; fostering an adequate and infrastructure; supporting international organisations in their primary role in international standard-setting; technologically advanced maritime safety In less than three years several implementing measures have been finally adopted, and bind Member States administrations as well as the private to effective compliance from 1996 on. They establish a set of basic rules to be respected by all suppliers of maritime transport services. In essence, their aim is to prevent market participants from reducing safety of operations to improve their competitive position. Provided they are uniformly and rigorously applied and enforced in all Member States, the adopted measures could lead to a marked improvement in the safety and environmental operation of seagoing vessels. The Commission intends to monitor this implementation process and to act promptly to remedy non-compliance as an essential element of its future policy in this sector. As of January 1 9 9 6, the main measures are as follows: The responsibilities of the flag state administrations and of the organisations acting on their behalf (Directive on Classification Societies Only those organisations meeting high quality criteria are recognized by the European Community and are allowed to carry out safety and environmental inspections on behalf of the national administrations. From 1 January 1996 ships certified by non-European 94/57) 9 'New challenges for maritime industries', Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee; COM (91) 335 final, 20 September 1991. 10 A Common Policy on Safe Seas, COM(93)66 final, 24 February 1993. European Commission - T o w a r ds a N ew Maritime Strategy - Annex B 5l* recognised organisations shall be targeted, whatever their flag, for priority inspections by the authority of the State of the port. 11 777e training and qualifications of seafarers employed on sea-going ships flying a Member State (Directive Based on the STCW Convention, this directive imposes also effective communication requirements on board all vessels entering an EC-port, whatever their flag. In particular on oil, chemical and gas tankers one common working language is required for both on board and ship-shore communications. 12 94/58) the flag of 95/21) (Directive Port State Control The effective and uniform control of ships entering EC ports, whatever their flag, is the corner stone of a policy aimed at drastically reducing substandard shipping from operating in European waters. The Directive requires, as of 1 July 1996, the targeting of blacklisted flags as well as certain types of potentially dangerous ships, such as ageing bulk carriers or oil tankers. Ships w i th important deficiencies shall be detained until all defects have been remedied. 13 93/75) (Directive obligations Notification Since September 1 9 9 5, shippers and shipowners involved in the carriage of dangerous or polluting cargo are subject to notification obligations specified in Directive 9 3 / 7 5. This should permit more effective remedial action in case of accidents. To this end Member States have to ensure an effective structure to provide at once relevant information if requested by another Member State. 14 tanks (Regulation Segregated ballast 2978/94) From 1 January 1996 port entities and pilotage services are obliged to charge lower fees to tankers w i th segregated ballast tanks or double hull lower than the ones for tankers w i t h o ut segregated ballast of the same gross tonnage. This Regulation is designed to give an incentive and to reward shipping companies to use more environmentally friendly ships. 15 (Regulation ISM Code Regulation As of 1 July 1 9 9 6, companies operating Ro-Ro passenger ferries to or from a port of the Community are subject their Quality and Safety to auditing and certification of Management System covering both their shore based and on board activities. 16 3051/95) n 12 13 O. J. No. L 319, 12 December 1994, p. 20. O. J. No. L 319, 12 December 1994, p. 28. O. J. No. L 157, 7 July 1995, p. 1. 14 O. J. No. L 247, 5 October 1993, p. 19. 15 O. J. No. L 319, 12 December 1994, p. 1. 16 O. J. No. L 320, 30 December 1995, p. 14. European C o m m i s s i on - T o w a r ds a New Maritime Strategy - Annex B 57 5- d. Ex te ma I re la tions transport has been to secure Since the adoption of the 1986 package, the Community's external relations policy in maritime free access and fair competitive conditions throughout the global market. In the pursuance of this policy, the Community has pressed for further liberalisation as well as rolling back existing restrictions. Thus, the Lomé Conventions w i th the African, Caribbean and Pacific (ACP) countries and the Europe Agreements w i th several East and Central European countries contain provisions securing free access to maritime markets. Clauses relating to liberalising shipping markets are also included in the Partnership and Cooperation Agreements w i th a number of former USSR countries and Association Agreements w i th countries from the Mediterranean. The 1 9 92 Agreement on the European Economic Area (EEA) provides for the general application of the Treaty freedoms to this area. Within this framework, EC maritime legislation is largely applicable to the the contracting EFTA States, including Norway. Finally, the Community also strives for multilateral liberalisation of maritime transport services within the GATS framework. Besides such action, the Commission has also enforced the freedom to provide services in trades to and from the Community. It has taken action against unilateral cargo reservation of Member States and bilateral agreements between Member States and third countries w h i ch restrict this freedom. Relations with I MO/ILO is convinced of the necessity e. International Maritime The Commission Organisation (IMO) and the International Labour Organisation (ILO) in their task to set international standards for safety and labour roules. The Commission is recommending a strong stand by the EC w i th regard to improving working conditions, safety and training standards in IMO and ILO. to assist the The Commission co-ordinated IMO Conferences on the Revision of STCW and SOLAS. This contributed to the successful outcome of the Conferences. the positions of Member States at the recent Regarding ILO, the Commission is of the opinion that the separate maritime structure of the Organisation put in place from the very beginning of its creation should be preserved. The specific characteristics of the maritime industry is recognised worldwide, Over 30 Conventions and Recommendations dealing with the employment conditions of seafarers have been adopted. the globalisation of ILO activities devoted to seafarers' problems are becoming increasingly important in the light of the market, seafarers' health and safety and higher requirements on safety at sea and prevention of maritime pollution. Maritime expertise will continue to be needed in the ILO for adopting efficient instruments and upgrading existing international maritime labour standards. 5? -6 The Commission as well as trade union and shipowner organisations expressed concern w h e n, for financial reasons, the ILO Governing Body postponed the Maritime Conference which was due to be held at the beginning of 1996. The conference will now be held in October 1 9 96 and its agenda will include the revision of Convention No. 109. 17 The Commission attaches great importance to the successful revision of this Convention and its prompt entry into force. It will have a direct impact on the discussion between the EC social partners, represented in the Joint Committee on Maritime Transport, on working time in this sector. This subject was excluded from the Directive 9 3 / 1 04 on working time. the The Commission encouraged Commission on h ow best to ensure that this sector is appropriately covered w i th regard to the protection of health and safety. The Commission will examine w i th Member States the possibility of convincing the Conference to decide on the enforcement of Convention No. 109 through port State control. to make recommendations the social partners to f. Short sea shipping As mentioned above, the Commission recently adopted a Communication on short sea shipping. 18 It includes an action programme w i th proposals for initiatives which can most appropriately be undertaken at Community level as well as recommendations addressed to Member States, their regional and local authorities, to ports and the maritime industries themselves. The Communication focuses on three areas: of the quality and efficiency of short sea shipping The improvement It emphasises the importance of R&D activities under the C o m m u n i t y 's 4th Framework Programme. Measures such as support for short sea pilot-schemes, the implementation and monitoring of the G-7 MARIS project and the promotion of more widespread use of Electronic Data Interchange are considered necessary for a better integration of short sea shipping into intermodal transport chains. services of port infrastructure 77ïe improvement The development of short sea shipping will be one of the main objectives of port and port-related projects supported under the trans-European network plan. There is also need for transparency in port tariffs and in State aid to ports. Application of the competition and State aid rules of the Treaty should lead to improvements in efficiency and to the provision of customer-oriented services. efficiency and port The preparation of short sea shipping This policy derives from the new economic and political framework of relations between the Community and States in adjoining regions, such as the Baltic Sea, the Black Sea and the Mediterranean Sea areas. For each of these regions, Waterborne Transport Working Groups have already been created on the initiative of the for a wider Europe Wages, Hours of Work and Manning (Sea) Convention (1958). 18 "The development of short sea shipping in Europe: prospects and challenges", COM (95) 317 final. European Commission - T o w a r ds a N ew Maritime Strategy - Annex B f^ - 7- Commission. The objective is that each of the groups establishes a multi-annual w o rk programme. This will provide a context for examination of proposals for assistance under the relevant Community programmes. The European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions have already reacted positively to the action proposed in the Short Sea Communication. g. Competition rules Council Regulation 4 0 5 6 / 86 lays d o wn detailed rules for the application by the Commission of Articles 85 and 86 of the Treaty to maritime transport services to or from one or more Community ports. It grants a block exemption from the cartel prohibition contained in Article 85(1 ) to conferences for their traditional liner shipping activities, including the fixing of a common or uniform tariff for the provision of maritime transport services. A number to the group exemption w h i ch may be of conditions and obligations are attached w i t h d r a wn in the absence of effective competition on the trade in question. The scope of the group exemption does not extend to collective inland price fixing by liner shipping companies nor does it permit capacity non-utilisation agreements. On 8 June 1 9 9 4, the Commission adopted a Report on the application of EC competition rules to liner maritime transport. 19 In its Report, the Commission explained that the current practice of conferences of fixing common prices for the inland leg of a multimodal transport operation was in breach of the EC's competition rules and, in its current f o r m, could not benefit from group or individual exemption. At the same time as condemning current conference practices of joint inland rate fixing, the Commission indicated in its Report a new approach which could pave the w ay for shipping companies to obtain individual exemption for inland cooperation and inland price fixing. In the same w ay as they cooperate on the maritime leg, they should cooperate on the land transport in such a way that significant benefits are brought to shippers. They should demonstrate that inland price fixing is indispensable to that cooperation and to attain the benefits resulting from that cooperation. In July 1 9 9 5, a Committee of Wise Men under the name "Multimodal Group" was given the task of examining how the Commission's policy on multimodal transport price fixing could best be implemented in order to achieve the objective set out in the Commission's Report of 8 June 1 9 9 4. The Multimodal Group has presented its preliminary views and recommendations to the Commission in the form of an Interim Report and will present a Final Report during the course of 1996. Moreover, in April 1 9 9 5, the Commission adopted a second group exemption regulation for the liner shipping sector. 20 The regulation concerns agreements between liner shipping companies to bring about cooperation in the joint operation of a maritime transport operation (liner consortia). 19 See Maritime Transport Report, Sec(94) 933 final, 8 June 1994. 20 Commission Regulation No. 870/95 of 20 April 1995, O. J. No. L 89, 21 April 1995, p. 7. European Commission - T o w a r ds a New Maritime Strategy - Annex B Uo - 8- 2. 777e Member States As the competition from non-EC flags became keener, many Member States offered various kinds of aid to shipping. Different Member States adopted different strategies and provided different budgets for their support measures. This in part reflected their general attitude towards State aid or their assessment of the relative importance of the shipping sector for their economy and society. Many Member States have long traditions as maritime nations w h i ch influence their attitudes towards shipping. Further, since the Member States have not to date been able to agree on a Community approach, they have sought national answers to the problems of their flag fleet. As flagging out and loss of employment continued in the late 1 980s despite State aid, some Member States decided to create specific registers for ships flying their flag in international their to alleviate competitive disadvantages. denomination, these registers were created to exclude ships flying the flag of the Member State from certain costs inherent in the fiscal and labour regime of the first register. Irrespective of trade Currently, the following Member States provide specific registers for their fleets: Denmark (the DIS); France (especially the Kerguelen Register);21. Finland (the List of Merchant Vessels in International Trade); Portugal (the MAR); Spain (the Canary Island Register); Germany's shipping register includes an international section (ISR), and shipowners of ships listed in this section may conclude deals w i th foreign seafarers at home country wages, which leads to considerable reduction in labour costs. Dutch owners tend to use the Netherlands Antilles register to improve their competitive position. The register is administered autonomously and should therefore not be regarded as a second or alternative register of the Netherlands. The United Kingdom does not possess an alternative register. British and other shipping interests can use the registers of various Crown and dependent territories to have access to local tax regimes, while still enjoying, through flying the Red Ensign, diplomatic protection by the United Kingdom. Austria, Belgium, Greece, Ireland, Italy, Luxembourg and Sweden do not for the time being have second registers, although Italy is reported to be considering one. In many Member States w i th alternative registers, the majority of ships in international trade are registered in the alternative register: for example, in Denmark, 9 2% of the total tonnage operating in international trades is registered in the DIS; the figure for the German ISR is 7 6 %; in Finland, 5 0% of the fleet is on the List of Merchant Vessels in International Trade. The first register often has thus become of secondary regulatory importance for international shipping and the alternative regime becomes the real standard. 21 The current Kerguelen register has been declared unlawful by the Conseil d'Etat on constitutional grounds in 1 9 9 5. European Commission - T o w a r ds a New Maritime Strategy - Annex B (ûf II. Results 9- The maritime policy thus far has succeeded in opening up markets, particularly in Europe, and giving the consumer a wide choice of shipping services. The application of EC competition rules to all market participants regardless of flag has furthered consumer interests and ensures fair treatment of all liner shipping companies. The newly introduced safety policy will enable the Community to ensure that safety and environmental standards for competition. The are effectively applied, thereby also ensuring fairer conditions liberalised led to creation of employment for EC seafarers. On the contrary, employment on-board has dropped. While the liberalisation measures taken may have resulted in enhanced productivity of the EC o w n ed fleet, they have not diminished the pressure to flag out from the more onerous EC shipping registers, as the figures mentioned in part A clearly show. international shipping environment has, however, not The success of Member States' alternative registers and aid schemes has been mixed. The Danish International Register (DIS) stipulates a nationality requirement only for the captain; it has nevertheless, mainly through the exemption from income tax of seafarers' income, attracted 8 0% EC employment on ships listed in this register. Some other Member States' registers have been successful in reversing or at least slowing the flagging out trend. Thus, since the introduction of the Finnish Alternative Register in 1992, tonnage under Finnish flag has risen by 5 0 %. Interestingly, Finland has been able to re-attract bulk tonnage, w h i ch is a prime target for flagging out. Through the introduction of the ISR in 1 9 8 9, Germany has been able to stabilize tonnage under its flag, as has Sweden through the introduction of tax rebates and reduced employers' social security charges. In certain Member States, national government action has not stemmed the overall decline of the flag fleet. In summary, the measures taken by the EC and the Member States to increase the competitiveness of EC flags have thus far not been able to reverse the flagging out and loss of employment, although some alternative registers seem to show promising features. European Commission - T o w a r ds a N ew Maritime Strategy - Annex B Q"L ISSN 0254-1475 COM(96) 81 final DOCUMENTS EN 07 Catalogue number : CB-CO-96-119-EN-C ISBN 92-78-01699-3 Office for Official Publications of the European Communities L-2985 Luxembourg (s3

Proposal for a COUNCIL DECISION Concerning the conclusion of the results of consultations with Thailand under GATT Article XXIII

http://publications.europa.eu/resource/cellar/dbc70e8b-efff-4b91-97d5-a7c41e550c84

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 13. 03. 1996 COM(96) 107 final 96/ 0081 (ACC) Proposal for a COUNCIL DECISION Concerning the conclusion of the results of consultations with Thailand under- GATT Article XXIII (presented by the Commission) EXPLANATORY MEMORANDUM The Commission has now concluded the current consultations with Thailand, under GATT Article XXIII, concerning the EC's import regime for rice. The results of the consultations are contained in an agreement in the form of an exchange of letters between the European Community and Thailand. The agreement may be summarized as follows : - The EC and Thailand agree to suspend the current consultations under Article XXIII of the GATT. The EC would open an additional autonomous annual TRQ of 10. 500 t of manioc starch, of which 10. 000 t would be allocated to Thailand. The in- quota rate would be the prevailing MFN rate reduced by 100 Ecu t. The same in-quota rate would apply to the existing TRQ's for manioc starch. The end- use requirements would be waived. - The EC would open a TRQ of 80. 000 t of broken rice, of which 41. 600 t will be allocated to Thailand. The in-quota rate would be the prevailing MFN rate reduced by 28 Ecu t. - In addition, the agreement also foresees the possibility for the partners to review jointly the functioning of the representative price system. However, both parties consider that such a review should not be necessary before 1998. Both parties would not exercise their WTO rights so long as the annual tariff quotas are open and remain effective for the year concerned. However, by a two-month notice prior to the end of the quota year each party may resume the consultations or revoke the tariff concessions. i Proposal for a Council Decision Concerning the conclusion of the results of consultations with Thailand under GATT Article XXIII The Council of the European Union, having regard to the Treaty establishing the European Community, and in particular Article 113, in conjunction with Article 228 (2), first sentence thereof, having regard to the proposal from the Commission, whereas the Community has entered into consultations under GATT Article XXIII with Thailand on the Community's import regime for rice, whereas the result of these consultations are contained in an agreement in the form of an exchange of letters, whereas it is in the interest of the Community to approve this agreement, has decided as follows : Article 1 1. The agreement in the form of an exchange of letters between Thailand and the European Community on rice and manioc starch is hereby approved on behalf of the Community: 2. The text of the agreement referred to in this Article is attached to this Decision. 3. The President of the Council is hereby authorised to designate the person empowered to sign the agreement in order to bind the Community. Article 2 The Commission shall adopt the detailed rules as regards the tariff rate quotas for broken rice and manioc starch in accordance with the procedure laid down in Article 23 of Council Regulation (EEC) No. 1766/92 of 30 June 1992 on the common organization of the market in cereals. Done at Brussels, For the Council The President 3 Exchange of letters on Consultation under Article XXIII on Rice Excellency, I have the honour to confirm the understanding reached between the Kingdom of Thailand and the European Community on the European Community's tariff quotas on broken rice and manioc starch to be effective from 1 April 1996 as appeared in the note annexed to this Exchange of Letters. In addition to the above understanding, the two parties further agree that they shall review jointly, at the request of either party, the functioning of the "representative price" system for rice. If it appears to either party that the functioning of the system is materially impeding trade flows between the parties, the Commission of the European Communities in consultation with the Government of the Kingdom of Thailand shall examine significant problems identified with a view to implementing appropriate solutions. It is the expectation of the two parties that such a review should not be necessary before the year 1998. On the basis of the above understanding and agreement, the two parties agree to suspend the current consultations under Article XXIII of the GATT 1994. The aforementioned suspension agreement and the annex appertaining thereto shall be without prejudice to the rights and obligations of either party under the World Trade Organization (WTO). However, both parties will not exercise their rights so long as the annual tariff quotas are opened and remain effective for the year concerned; the party exercising the right will give a two-month notice prior to the end of the relevant quota year. This letter and Your Excellency's identical letter shall constitute the agreement between the two parties on the suspension of the current consultations under Article XXIII of the GATT 1994. Accept, Excellency, the assurances of my highest consideration. Note on Tariff Quotas Excellency, Following the discussions to further the common interest of the European Community and the Kingdom of Thailand, the following understanding between the European Community and the Kingdom of Thailand has been reached, effective from 1 April 1996 : 1. Manioc Starch (a) An additional autonomous annual TRQ of 10,500 t. will be opened by the European Community of which 10,000 t. will be allocated to Thailand. (b) The in-quota rate for this additional autonomous annual TRQ will be the prevailing MFN rate reduced by 100 Ecu/t. (c) The in-quota rate for the two TRQs for manioc starch included in the schedule of the European Community, to be applied on an autonomous basis, will be the prevailing MFN rate reduced by 100 Ecu/t. (d) The European Community will, on an autonomous basis, waive the end- use requirements for these three TRQs. 2. Broken Rice (a) A new annual TRQ of 80,000 t. will be opened by the European Community of which 41,600t. will be allocated to Thailand. (b) The in-quota rate will be the prevailing MFN rate reduced by 28 ECU/t. To the extent that the TRQs are allocated to Thailand, the European Community import licenses will be issued automatically within the agreed limits on the basis of export certificates issued by the Government of Thailand. ç FINANCIAL STATEMENT Section 1. Financial Implications 1. 2. 3. 4. 5. 6. Proposal for a Council Decision concerning the conclusion of the results of consultations with Thailand under GATT Article XXIII. Budget heading: (loss of revenue: not known) Legal basis: Article 113 Description: Opening of tariff rate quotas for manioc starch and broken rice. Type of revenue: Loss of revenue for duties paid on third country imports. Change in level of revenue: The maximum loss of revenue will be in the order of 3,5 MECU per year. Q ISSN 0254-1475 COM(96) 107 final DOCUMENTS EN 11 Catalogue number : CB-C0-96-115-EN-C ISBN 92-78-01633-0 Office for Official Publications of the European Communities L-2985 Luxembourg

Amended proposal for a COUNCIL DIRECTIVE ON ACCESS TO THE GROUNDHANDLING MARKET AT COMMUNITY AIRPORTS

http://publications.europa.eu/resource/cellar/efcbcaaa-7503-4a91-8c3e-f48bb6be3343

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 12. 03. 1996 COM(96) 75 final 94/0325 (SYN) Amended proposal for a COUNCIL DIRECTIVE ON ACCESS TO THE GROUNDHANDLING MARKET AT COMMUNITY AIRPORTS (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) *mm )\ " • *• I V 11 M '# \ï i •£# ,«rff " \ A* I ft à /' -, """ t" ,,. '"'it *, f ti AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE ON ACCESS TO THE Groundhandling MARKET AT COMMUNITY AIRPORTS Explanatory memorandum During its plenary session on 16 November 1995 the European Parliament approved the proposal for a Council Directive presented by the Commission on access to the groundhandling market at Community airports. It also adopted a certain number of amendments to the text put forward. The Commission accepted the amendments concerning recitals 1 and 21a since they bolster the social aspects of the directive, and recital 22 since it enables better account to be taken of the security problems that are inherent in airports. It also accepted the amendment concerning Article 7. 2 which permits better understanding of the scope for limitation concerning the number of users who can practice air-side self handling. Likewise it adopts the amendment concerning Article 19 in order better to adapt the date of entry into force of the provisions of the directive at national level to the progress made in the work before the Council. The Commission also partially accepted the amendments concerning: • • • • • • Article 5. 1 which clarifies the process for setting up the users' committee. Article 6. 2 which includes aircraft cleaning, and air-side passenger, baggage and freight transport services among the categories whose number may be subject to limits. Article 8 in that it extends to the operational management of the centralized infrastructures the right of a Member State to confer the management of those structures solely on the airport or on another entity. Article 9. Id which enables air side self handling to be banned under the exemptions, and Article 9. 2a which improves the text. Article 12. 2 which allows the management body to be informed of the decision taken by the Member State in respect of approval Article 13. 1 c(c) c(d) which strengthens the obligation to obey the national safety and labour-law rules. Finally, the Commission accepted to set out Parliament's ideas as regards the following in another paper: • • • Recitals 2 and 8b, and Articles 20a and 20b since these references strengthen the obligation to comply with existing social regulations at both national and Community level. Recital 19 and Article 4. 2 which extend the principle of transparency to all involved in providing assistance to third parties. Articles 1. 6, 3, 4. 3, 11 and 14. 3 which they help to made the wording easier to understand. However, the Commission was unable to accept the amendments concerning: Recitals 2a, 8a and 21b since their content does not meet the aim of the directive. Articles 4a and 10. 1a since these provisions are already covered by the directive on acquired rights. Recitals 9, 10, II, 13 and 16 which conflict with the aim of opening up the market Articles 10, 15a, 15b, 17 and 21a which restrict access to the market in such a way that they form a barrier to the liberalization of the sector. Recital 23 which would deny the Commission any rights as regards reciprocity with non-Community carriers and service providers. AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE ON ACCESS TO THE Groundhandling MARKET AT COMMUNITY AIRPORTS the Community has gradually Whereas introduced a common air transport policy with the aim of completing the Internal Market in accordance with Article 7a of the Treaty, Whereas the Internal Market comprises an area free of internal frontiers in which the free movement of goods, persons, services and capital is assured, indicated the Commission Whereas in its Communication of June 1994 "The Way Forward for Civil Aviation in its Europe" intention to take an initiative before the end of 1994 in order to achieve market access for groundhandling services at Community airports and whereas the Council in its Resolution of 24 October 1994 has confirmed the need to take account of the imperatives linked to the situation of airports when effecting the opening of the market, the Community is gradually Whereas introducing a common air transport policy with the aim of completing the internal market in accordance with Article 7a of the to promote enduring Treaty economic and social progress; in order Whereas the internal market comprises an area free of internal frontiers in which the free movement of goods, persons, services and capitals must be assured; whereas convergence towards social progress should be ensured; in its in Europe" communication Whereas of 1 June 1994 "The Way Forward for Civil the Commission Aviation indicated its intention to take an initiative before the end of 1994 in order to achieve market access for groundhandling services at the Community airports, and whereas Council, of 24 October 1994, has confirmed the need to take account of the imperatives linked to the situation of airports when effecting that opening of the market; its Resolution in in of its Resolution Whereas 14 February 1995 on civil aviation in Europe, Parliament restated its concern to take account of the impact of access to the groundhandling market on employment and safety considerations at Community airports; Whereas the same transparency requirements must apply to users and in particular users who have attained a significant volume of traffic at an airport and wish to provide groundhandling services to third parties, Whereas the same transparency requirements must apply to users who have attained a significant volume of traffic at an airport and wish to provide groundhandling services to third parties, and to providers of services; Whereas for the same reasons Member States must retain the power to lay down and apply the necessary rules for the proper functioning of infrastructure; the airport whereas these rules must, however, comply objectivity, principles with transparency and non-discrimination, the of Wliereas access to airport installations must to be guaranteed to suppliers wishing provide groundhandling services and to carriers wishing to self-handle to the extent necessary for them to exercise their rights, Whereas, for the same reasons, Member States must retain the power to lay down and apply the necessary rules for the proper functioning of the airport infrastructures; whereas these rules must, however, comply objectivity principles with transparency and non-discrimination the of Whereas, in order to avoid the risk of social dumping Member States should guarantee an adequate level of social protection for the staff providing groundhandling services; companies those of Whereas access to airport installations must be guaranteed to those suppliers who art- provide authorized groundhandling those carriers who are services and authorized self-handle to the extend needed for them to exercise their rights; to to Article 1 Definitions For the purposes of this Directive: For the purposes of this directive: 6) "managing body of the airport" means body which by national law or regulation has as its objective the management of the airport infrastructures, the coordination and control of the activities of the different operators present in the airport or airport system concerned; 6) "managing body of the airport" means public or private legal body, which by national law or regulation is responsible lor managing one or several airports and for coordinating and monitoring the activities of the various operators at those airports. that or Article 3 Managing body of the airport 1. Where an airport or airport system is managed and operated not by a single body but by several separate bodies, each of these shall be considered part of the managing body for the purposes of this Directive. 1. Where, at an airport or in an airport system, several bodies are responsible for managing and performing airport activities or services, each of these shall comply with this directive. Article 4 Unbundling Where the managing body of an airport provides groundhandling services the management and accounts of its groundhandling activities from its other activities. it must unbundle 1. Where the managing body of an airport, a user or provider of services provide groundhandling services, |n accordance with the commercial practices applying, unbundle the management and accounts from their other activities. they must Deleted in the Similarly, a user who previous year has carried in excess of 25% of the freight or passengers recorded at an airport may not provide groundhandling services to third parties at that airport without unbundling the management and accounts of the transport activity from the supply of groundhandling services to third parties. An independent examiner must check that the unbundling is carried out as required under points 1 and 2 of this Article. 2. an independent examiner appointed by the Member State, must check that the unbundling is carried out as required under paragraph 1. He shall in particular check the absence of any financial flow from other of activities groundhandling. those to He shall, in particular, check the absence of any financial flow from other activities to those of groundhandling. He shall have at all times access to the accounts of the undertaking. He shall report to the Commission at least once a year and each time he ascertains a failure to maintain the mandatory unbundling. He shall have at all times access to the accounts of the undertaking. He shall report to the Commission at least once a year and each time he ascertains a failure to maintain the mandatory unbundling. Article 5 The Users Committee at the Twelve months latest following the entry into force of this Directive, Member States shall introduce the measures necessary to set up a committee of users' representatives the airports referred to in the second subparagraph of Article 2 (1). for each of 1. Twelve months at the latest following the entry into force of this directive, Member States shall ensure that the Committee of Users' Representatives is set up for each of the airports referred in the second subparagraph of Article 2(1). to Article 6 Groundhandling for third parties 2. limit Member States may the number of suppliers authorized to provide the following categories of groundhandling services: 2. Member States may limit the number of suppliers authorized to provide the following categories of groundhandling services: baggage handling ramp handling fuelling freight and mail handling. baggage handling air side operations fuelling freight and mail handling aircraft cleaning the carriage of passengers, baggage and freight between the aircraft and any other point at the airport. Unchanged Unchanged 2. Article 7 Self handling 2. Member States may reserve the right to self- handle to a limited number of users, provided they are chosen on the basis of relevant, objective, transparent and non discriminatory criteria. Member States may reserve the right to self- handle to at least two users for each category of service, provided that they are chosen on the basis of relevant, objective, transparent and non-discriminatory criteria. Article 8 Centralized infrastructures reserve Without prejudice to the application of Articles 6 and 7, Member States the technical may the centralized management of de-icing, water baggage sorting, fuel distribution purification and the for either infrastructures managing body of the airport or for another body. They may make it obligatory suppliers of groundhandling services and self- these handling infrastructures. to use users for 1. Without prejudice to the application of Articles 6 and 7, Member States may reserve the technical and operational management of the centralized package sorting, deicing, water purification, distribution infrastructures either for the managing body of the airport or for another body. They may make it obligatory for suppliers of groundhandling services and self-handling users to use these infrastructures. fuel Article 9 Exemptions specific constraints Where available space or capacity warrant, the Member State question may decide of so in 1. Where specific constraints of available space or capacity so warrant, the Member State in question may decide (a) stet (b) stet (c) stet (a) stet (b) stet (c) stet to prohibit self handling for the (d) categories of groundhandling service referred to in Article 7. 2 or to restrict these to a single user. All exemptions decided by virtue of point 1 must 2. All exemptions decided by virtue of point 1 must (a) specify the category or categories of services for is which. granted and the technical constraints which justify it; the exemption (a) specify the category or categories of service for which the exemption is granted and the specific space or available-capacity constraints which justify it. (b) stet (b) stet Article 11 Consultations a between Member States shall take the necessary measures compulsory to organize the procedure consultation managing body of the airport, the Users' Committee and the undertakings providing services. This consultation shall cover, inter alia, the price of those services which have been exempted by the Commission pursuant to Article 9 of this Directive as well as the organization of the provision of these shall be services. Such organised at least once every year. consultation a between to organize procedure Member States shall take the necessary measures compulsory the consultation managing body of the airport and the Users' Committee and the undertakings providing services. That consultation shall cover, inter alia, the price of those service which have been exempted by the Commission pursuant to Article 9 as well as the organization of the provision of the services, where it is covered by the payment exacted by the airport for access to the airport installations groundhandling in order operations. Such consultation shall be organized at least once every year. to perform Article 12 Approval 2. Approval may be withheld only if the supplier does not meet, for reasons of his doing, the criteria referred to in paragraph 1. 2. Approval may be withheld only if, lor reasons of his doing, the supplier does not meet the criteria referred to in paragraph 1. grounds The for withholding approval must be communicated to the supplier concerned. The grounds for withholding approval must be communicated to the supplier concerned and to the airport management body. Article 13 Rules of conduct self-handling A Member State may withdraw its approval of a supplier or prohibit a user from that supplier or user fails to comply with the rules imposed upon him to ensure the proper functioning of the airport. if rules must The following principles: embody the (a) (b) (c) to the they must be applied in a non-discriminatory manner to the various suppliers and users; they must relate intended objective; they may not in practice reduce market access or the freedom to self-handle to a that lesser degree provided this for Directive. than in 1. stet (a) stet (b) stet (c) stet (d) The security checks carried out on the staff of a service provider shall comply with the national regulations and be approved during the selection procedure; (e) The staff employment conditions shall comply with the regulations in force. 2. stet 2. stet 1C Article 14 Access to installations 3. intended Access to airport installations for suppliers of groundhandling services and users wishing to self-handle may give rise to the collection of a fee to cover the costs which this access occasions for the airport and reflecting the level of the costs. This fee must be determined according to objective, transparent and non-discriminatory criteria. 3. Access to airport installations for suppliers services and users of groundhandling wishing to self-handle may give rise to _ihe collection of a fee. This fee must be determined objective, transparent and non-discriminatory criteria. according to Article 19 Implementation regulations Member States shall bring into force the laws, administrative provisions necessary to comply with this directive by 30 June 1996. They shall immediately inform the Com miss ion thereof. and regulations Member States shall bring into force the administrative laws, provisions necessary to comply with this directive by 31 December 1996. They shall immediately inform the Commission thereof. and Stet Article 20 Stet Article 20a Without preiudice to the implementation of the provisions of this directive and while complying with the social provisions of the Treaty and of the regulations deriving there from. Member States may take the measures needed in order to ensure compliance with the standards in force and the upholding of employees social rights. i\ ISSN 0254-1475 COM(96) 75 final DOCUMENTS EN 07 05 Catalogue number : CB-CO-96-085-EN-C ISBN 92-78-00921-0 Office for Official Publications of the European Communities L-2985 Luxembourg </*

OPINION OF THE COMMISSION on the amendments proposed by the European Parliament to the Council's common position on the proposal for a COUNCIL DIRECTIVE ON THE APPOINTMENT AND VOCATIONAL QUALIFICATION OF SAFETY ADVISERS FOR THE TRANSPORT OF DANGEROUS GOODS BY ROAD, RAIL AND INLAND WATERWAY

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< • *. COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 12. 03. 1996 COM(96) 96 final - SYN 516 OPINION OF THE COMMISSION on the amendments proposed by the European Parliament to the Council's common position on the proposal for a COUNCIL DIRECTIVE ON THE APPOINTMENT AND VOCATIONAL QUALIFICATION OF SAFETY ADVISERS FOR THE TRANSPORT OF DANGEROUS GOODS BY ROAD, RAIL AND INLAND WATERWAY (presented by the Commission pursuant to Article 189 c (d) of the EC Treaty) OPINION OF THE COMMISSION on the amendments proposed by the European Parliament to the Council's Common Position on the proposal for a COUNCIL DIRECTIVE ON THE APPOINTMENT AND VOCATIONAL QUALIFICATION OF SAFETY ADVISERS FOR THE TRANSPORT OF DANGEROUS GOODS BY ROAD, RAIL AND INLAND WATERWAY On 17 January 1996 the European Parliament amended the Common Position adopted by the Council on 6 October 1995 on the above-mentioned proposal. The amendments of the Parliament are at annex. Under Article 189 C, sub-paragraph (d) of the EC Treaty, the Commission has reexamined its proposal and decided not to accept the amendments for the following reasons : Amendment 1: The aim of this amendment is for the safety adviser to prepare an accident report. Furthermore, that report must be sent to the competent authority. The Commission considers this amendment to be less flexible than the text agreed by the Council. Amendment 2: The second amendment, requesting that the Commission be provided with the relevant information concerning accidents, is not considered to be a useful contribution to the overall goal of improving safety performance in the transport of dangerous goods, because it simply sets an obligation for Member States to forward relevant information to the Commission. However, in the European Community system a more effective measure is provided by Council Directive 94/55/EC, and in particular its Article 5 thereof, which already includes appropriate provisions for emergency measures and further steps to be taken following accidents. Amendment 3: The proposed earlier date for coming into force of this Directive (1. January 1998 instead of 2000) can not be deemed as achievable as Member States need time to establish appropriate training facilities. The Commission therefore maintains its proposal. Annex: 3 amendments Common position of the Council Amendments (Amendment 1) Article 7 Whenever an accident affects persons, property or the environment or results in damage to property or the environment during transport, loading or unloading carried out by the un dertaking concerned, the adviser shall, after collecting all the rel evant information, prepare an acci dent report to the management of the undertaking or to a local public authority, as appropriate. That report shall not replace any report by the management Qf the un dertaking which might be required in the Member States under any other international, Community or national legislation. Whenever an accident affects persons, property or the environment or results in damage to property or the environment during transport, loading or unloading carried out by the un dertaking concerned, the risk preven tion officer must, after collecting all the relevant information, prepare an accident report^ That report must be sent to the auth ority or body designated by the Mem ber State within two months of the date of the accident. However, it shall not replace any report by the management of the undertaking which might be required in the Member States under any other international Community or national legislation. (Amendment 2) Article 7 a (new) Every year Member States shall for ward the relevant information to the Commission concerning the number and circumstances of the accidents within the meaning of Article 7 that have taken place on their territory. (Amendment 3) Article 11(1) 1. The Member States shall bring into force the necessary laws, regulations and administrative provisions in order to comply with this Directive no later than 31 December 1999. They shall forthwith inform the Commission thereof. 1. The Member States shall bring into force the necessary laws, regulations and administrative provisions in order to comply with this Directive no later than 1 January 1998. They shall forthwith inform the Commission thereof. When Member measures they ences to this accompagny them on their offic Member States manner in which be made. States adopt those shall include refer- Directive or shall with such references ial publication. The shall prescribe the such references shall When Member States adopt those measures they shall include refer ences to this Directive or shall accompagny them with such references on their official publication. The Member States shall prescribe the manner in which such references shall be made. 1 a?g«*rjji>i ^ a w rg w j - j ^ g g r. L. '?r'^?T-«»-V'--^«ftT •; ISSN 0254-1475 COM(96) 96 final DOCUMENTS EN 07 Catalogue number : CB-CO-96-100-EN-C ISBN 92-78-01313-7 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) amending the Regulation (EC) no. 1975/95 of the Council of 4.8.1995 on the free supply of agricultural products to the people of Georgia, Armenia, Azerbaijan, Kyrgyzstan and Tajikistan

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COMMISSION OF THE EUROPEAN COMMUNITIES •it it iz it it à Brussels, 11. 03. 1996 COM(%) 104 final Proposal for a COUNCIL REGULATION (EC) amending the Regulation (EC) no. 1975/95 of the Council of 4. 8. 1995 on the free supply of agricultural products to the people of Georgia, Armenia, Azerbaijan, Kyrgyzstan and Tajikistan (presented by the Commission) EXPLANATORY MEMORANDUM Subject: Amendment to Council Regulation 1975/95 It is proposed to amend Council Regulation 1975/95 on actions for free supply of agricultural products to Georgia, Armenia, Azerbaijan, Kyrgyzstan and Tajikistan by including Turkmenistan among the beneficiary countries of the 197 MECU food aid operation. This amendment will allow the supply of some 10 000 t of wheat flour to Turkmenistan without an increase of the initial budget approved by the Council. The supply of food aid will, however, be submitted to the condition that Turkmenistan respects its financial obligations towards the Community, in particular the agreed deadlines of reimbursement. This point will be explicitely mentionned in the memorandum of understanding to be concluded with Turkmenistan. The corresponding Council Regulation is presented to the Council for approval. I COUNCIL REGULATION (EC) No of 19% amending the Regulation (EC) no. 1975/95 of the Council of 4. 8. 1995 on the free supply of agricultural products to the people of Georgia, Armenia, Azerbaijan, Kyrgyzstan and Tajikistan THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 1975/95 of 4 August 1995 on the supply of agricultural products to the peoples of Georgia, Armenia, Azerbaijan, Kyrgyzstan and Tajikistan free of charge*1) , Having regard to the proposal from the Commission, Whereas the shortage of food in Turkmenistan has worsened during the previous months up to becoming a critical situation, confirmed by the data of FAO and other international organisations, and a request for food aid by the Government of Turkmenistan was received at the end of 1995, Whereas it is advisable to supply Turkmenistan with agricultural products in order to improve the food supply situation in that country; Whereas it is therefore necessary to amend Regulation (EC) No 1975/95 in order to include Turkmenistan among the countries eligible to receive aid by virtue of that Regulation, Whereas it is urgent to start the operation, HAS ADOPTED THIS REGULATION: Article 1 The terms 'and Tajikistan" shall be replaced by ',Tajikistan and Turkmenistan" in the title and in Article 1 of Regulation (EC) No 1975/95. Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. WOJno. 191 of 12. 8. 1995, p. 2 3 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at For the Council The President v ISSN 0254-1475 COM(96) 104 final DOCUMENTS EN H ©3 Catalogue number : CB-C0-96-112-EN-C ISBN 92-78-01435-4 Office for Official Publications of the European Communities L-2985 Luxembourg s

Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases

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L_1996077EN. 01002001. xml 27. 3. 1996    EN Official Journal of the European Communities L 77/20 DIRECTIVE 96/9/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 March 1996 on the legal protection of databases THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 57 (2), 66 and 100a thereof, Having regard to the proposal from the Commission (1), Having regard to the opinion of the Economic and Social Committee (2), Acting in accordance with the procedure laid down in Article 189b of the Treaty (3), (1) Whereas databases are at present not sufficiently protected in all Member States by existing legislation; whereas such protection, where it exists, has different attributes; (2) Whereas such differences in the legal protection of databases offered by the legislation of the Member States have direct negative effects on the functioning of the internal market as regards databases and in particular on the freedom of natural and legal persons to provide on-line database goods and services on the basis of harmonized legal arrangements throughout the Community; whereas such differences could well become more pronounced as Member States introduce new legislation in this field, which is now taking on an increasingly international dimension; (3) Whereas existing differences distorting the functioning of the internal market need to be removed and new ones prevented from arising, while differences not adversely affecting the functioning of the internal market or the development of an information market within the Community need not be removed or prevented from arising; (4) Whereas copyright protection for databases exists in varying forms in the Member States according to legislation or case-law, and whereas, if differences in legislation in the scope and conditions of protection remain between the Member States, such unharmonized intellectual property rights can have the effect of preventing the free movement of goods or services within the Community; (5) Whereas copyright remains an appropriate form of exclusive right for authors who have created databases; (6) Whereas, nevertheless, in the absence of a harmonized system of unfair-competition legislation or of case-law, other measures are required in addition to prevent the unauthorized extraction and/or re-utilization of the contents of a database; (7) Whereas the making of databases requires the investment of considerable human, technical and financial resources while such databases can be copied or accessed at a fraction of the cost needed to design them independently; (8) Whereas the unauthorized extraction and/or re-utilization of the contents of a database constitute acts which can have serious economic and technical consequences; (9) Whereas databases are a vital tool in the development of an information market within the Community; whereas this tool will also be of use in many other fields; (10) Whereas the exponential growth, in the Community and worldwide, in the amount of information generated and processed annually in all sectors of commerce and industry calls for investment in all the Member States in advanced information processing systems; (11) Whereas there is at present a very great imbalance in the level of investment in the database sector both as between the Member States and between the Community and the world's largest database-producing third countries; (12) Whereas such an investment in modern information storage and processing systems will not take place within the Community unless a stable and uniform legal protection regime is introduced for the protection of the rights of makers of databases; (13) Whereas this Directive protects collections, sometimes called ‘compilations’, of works, data or other materials which are arranged, stored and accessed by means which include electronic, electromagnetic or electro-optical processes or analogous processes; (14) Whereas protection under this Directive should be extended to cover non-electronic databases; (15) Whereas the criteria used to determine whether a database should be protected by copyright should be defined to the fact that the selection or the arrangement of the contents of the database is the author's own intellectual creation; whereas such protection should cover the structure of the database; (16) Whereas no criterion other than originality in the sense of the author's intellectual creation should be applied to determine the eligibility of the database for copyright protection, and in particular no aesthetic or qualitative criteria should be applied; (17) Whereas the term ‘database’ should be understood to include literary, artistic, musical or other collections of works or collections of other material such as texts, sound, images, numbers, facts, and data; whereas it should cover collections of independent works, data or other materials which are systematically or methodically arranged and can be individually accessed; whereas this means that a recording or an audiovisual, cinematographic, literary or musical work as such does not fall within the scope of this Directive; (18) Whereas this Directive is without prejudice to the freedom of authors to decide whether, or in what manner, they will allow their works to be included in a database, in particular whether or not the authorization given is exclusive; whereas the protection of databases by the sui generis right is without prejudice to existing rights over their contents, and whereas in particular where an author or the holder of a related right permits some of his works or subject matter to be included in a database pursuant to a non-exclusive agreement, a third party may make use of those works or subject matter subject to the required consent of the author or of the holder of the related right without the sui generis right of the maker of the database being invoked to prevent him doing so, on condition that those works or subject matter are neither extracted from the database nor re-utilized on the basis thereof; (19) Whereas, as a rule, the compilation of several recordings of musical performances on a CD does not come within the scope of this Directive, both because, as a compilation, it does not meet the conditions for copyright protection and because it does not represent a substantial enough investment to be eligible under the sui generis right; (20) Whereas protection under this Directive may also apply to the materials necessary for the operation or consultation of certain databases such as thesaurus and indexation systems; (21) Whereas the protection provided for in this Directive relates to databases in which works, data or other materials have been arranged systematically or methodically; whereas it is not necessary for those materials to have been physically stored in an organized manner, (22) Whereas electronic databases within the meaning of this Directive may also include devices such as CD-ROM and CD-i; (23) Whereas the term ‘database’ should not be taken to extend to computer programs used in the making or operation of a database, which are protected by Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (4); (24) Whereas the rental and lending of databases in the field of copyright and related rights are governed exclusively by Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (5); (25) Whereas the term of copyright is already governed by Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain related rights (6); (26) Whereas works protected by copyright and subject matter protected by related rights, which are incorporated into a database, remain nevertheless protected by the respective exclusive rights and may not be incorporated into, or extracted from, the database without the permission of the right-holder or his successors in title; (27) Whereas copyright in such works and related rights in subject matter thus incorporated into a database are in no way affected by the existence of a separate right in the selection or arrangement of these works and subject matter in a database; (28) Whereas the moral rights of the natural person who created the database belong to the author and should be exercised according to the legislation of the Member States and the provisions of the Berne Convention for the Protection of Literary and Artistic Works; whereas such moral rights remain outside the scope of this Directive; (29) Whereas the arrangements applicable to databases created by employees are left to the discretion of the Member States; whereas, therefore nothing in this Directive prevents Member States from stipulating in their legislation that where a database is created by an employee in the execution of his duties or following the instructions given by his employer, the employer exclusively shall be entitled to exercise all economic rights in the database so created, unless otherwise provided by contract; (30) Whereas the author's exclusive rights should include the right to determine the way in which his work is exploited and by whom, and in particular to control the distribution of his work to unauthorized persons; (31) Whereas the copyright protection of databases includes making databases available by means other than the distribution of copies; (32) Whereas Member States are required to ensure that their national provisions are at least materially equivalent in the case of such acts subject to restrictions as are provided for by this Directive; (33) Whereas the question of exhaustion of the right of distribution does not arise in the case of on-line databases, which come within the field of provision of services; whereas this also applies with regard to a material copy of such a database made by the user of such a service with the consent of the right-holder, whereas, unlike CD-ROM or CD-i, where the intellectual property is incorporated in a material medium, namely an item of goods, every on-line service is in fact an act which will have to be subject to authorization where the copyright so provides; (34) Whereas, nevertheless, once the rightholder has chosen to make available a copy of the database to a user, whether by an on-line service or by other means of distribution, that lawful user must be able to access and use the database for the purposes and in the way set out in the agreement with the right-holder, even if such access and use necessitate performance of otherwise restricted acts; (35) Whereas a list should be drawn up of exceptions to restricted acts, taking into account the fact that copyright as covered by this Directive applies only to the selection or arrangements of the contents of a database; whereas Member States should be given the option of providing for such exceptions in certain cases; whereas, however, this option should be exercised in accordance with the Berne Convention and to the extent that the exceptions relate to the structure of the database; whereas a distinction should be drawn between exceptions for private use and exceptions for reproduction for private purposes, which concerns provisions under national legislation of some Member States on levies on blank media or recording equipment; (36) Whereas the term ‘scientific research’ within the meaning of this Directive covers both the natural sciences and the human sciences; (37) Whereas Article 10 (1) of the Berne Convention is not affected by this Directive; (38) Whereas the increasing use of digital recording technology exposes the database maker to the risk that the contents of his database may be copied and rearranged electronically, without his authorization, to produce a database of identical content which, however, does not infringe any copyright in the arrangement of his database; (39) Whereas, in addition to aiming to protect the copyright in the original selection or arrangement of the contents of a database, this Directive seeks to safeguard the position of makers of databases against misappropriation of the results of the financial and professional investment made in obtaining and collection the contents by protecting the whole or substantial parts of a database against certain acts by a user or competitor; (40) Whereas the object of this sui generis right is to ensure protection of any investment in obtaining, verifying or presenting the contents of a database for the limited duration of the right; whereas such investment may consist in the deployment of financial resources and/or the expending of time, effort and energy; (41) Whereas the objective of the sui generis right is to give the maker of a database the option of preventing the unauthorized extraction and/or re-utilization of all or a substantial part of the contents of that database; whereas the maker of a database is the person who takes the initiative and the risk of investing; whereas this excludes subcontractors in particular from the definition of maker; (42) Whereas the special right to prevent unauthorized extraction and/or re-utilization relates to acts by the user which go beyond his legitimate rights and thereby harm the investment; whereas the right to prohibit extraction and/or re-utilization of all or a substantial part of the contents relates not only to the manufacture of a parasitical competing product but also to any user who, through his acts, causes significant detriment, evaluated qualitatively or quantitatively, to the investment; (43) Whereas, in the case of on-line transmission, the right to prohibit re-utilization is not exhausted either as regards the database or as regards a material copy of the database or of part thereof made by the addressee of the transmission with the consent of the rightholder; (44) Whereas, when on-screen display of the contents of a database necessitates the permanent or temporary transfer of all or a substantial part of such contents to another medium, that act should be subject to authorization by the rightholder; (45) Whereas the right to prevent unauthorized extraction and/or re-utilization does not in any way constitute an extension of copyright protection to mere facts or data; (46) Whereas the existence of a right to prevent the unauthorized extraction and/or re-utilization of the whole or a substantial part of works, data or materials from a database should not give rise to the creation of a new right in the works, data or materials themselves; (47) Whereas, in the interests of competition between suppliers of information products and services, protection by the sui generis right must not be afforded in such a way as to facilitate abuses of a dominant position, in particular as regards the creation and ditribution of new products and services which have an intellectual, documentary, technical, economic or commercial added value; whereas, therefore, the provisions of this Directive are without prejudice to the application of Community or national competition rules; (48) Whereas the objective of this Directive, which is to afford an appropriate and uniform level of protection of databases as a means to secure the remuneration of the maker of the database, is different from the aim of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (7), which is to guarantee free circulation of personal data on the basis of harmonized rules designed to protect fundamental rights, notably the right to privacy which is recognized in Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms; whereas the provisions of this Directive are without prejudice to data protection legislation; (49) Whereas, notwithstanding the right to prevent extraction and/or re-utilization of all or a substantial part of a database, it should be laid down that the maker of a database or rightholder may not prevent a lawful user of the database from extracting and re-utilizing insubstantial parts; whereas, however, that user may not unreasonably prejudice either the legitimate interests of the holder of the sui generis right or the holder of copyright or a related right in respect of the works or subject matter contained in the database; (50) Whereas the Member States should be given the option of providing for exceptions to the right to prevent the unauthorized extraction and/or re-utilization of a substantial part of the contents of a database in the case of extraction for private purposes, for the purposes of illustration for teaching or scientific research, or where extraction and/or re-utilization are/is carried out in the interests of public security or for the purposes of an administrative or judicial procedure; whereas such operations must not prejudice the exclusive rights of the maker to exploit the database and their purpose must not be commercial; (51) Whereas the Member States, where they avail themselves of the option to permit a lawful user of a database to extract a substantial part of the contents for the purposes of illustration for teaching or scientific research, may limit that permission to certain categories of teaching or scientific research institution; (52) Whereas those Member States which have specific rules providing for a right comparable to the sui generis right provided for in this Directive should be permitted to retain, as far as the new right is concerned, the exceptions traditionally specified by such rules; (53) Whereas the burden of proof regarding the date of completion of the making of a database lies with the maker of the database; (54) Whereas the burden of proof that the criteria exist for concluding that a substantial modification of the contents of a database is to be regarded as a substantial new investment lies with the maker of the database resulting from such investment; (55) Whereas a substantial new investment involving a new term of protection may include a substantial verification of the contents of the database; (56) Whereas the right to prevent unauthorized extraction and/or re-utilization in respect of a database should apply to databases whose makers are nationals or habitual residents of third countries or to those produced by legal persons not established in a Member State, within the meaning of the Treaty, only if such third countries offer comparable protection to databases produced by nationals of a Member State or persons who have their habitual residence in the territory of the Community; (57) Whereas, in addition to remedies provided under the legislation of the Member States for infringements of copyright or other rights, Member States should provide for appropriate remedies against unauthorized extraction and/or re-utilization of the contents of a database; (58) Whereas, in addition to the protection given under this Directive to the structure of the database by copyright, and to its contents against unauthorized extraction and/or re-utilization under the sui generis right, other legal provisions in the Member States relevant to the supply of database goods and services continue to apply; (59) Whereas this Directive is without prejudice to the application to databases composed of audiovisual works of any rules recognized by a Member State's legislation concerning the broadcasting of audiovisual programmes; (60) Whereas some Member States currently protect under copyright arrangements databases which do not meet the criteria for eligibility for copyright protection laid down in this Directive; whereas, even if the databases concerned are eligible for protection under the right laid down in this Directive to prevent unauthorized extraction and/or re-utilization of their contents, the term of protection under that right is considerably shorter than that which they enjoy under the national arrangements currently in force; whereas harmonization of the criteria for determining whether a database is to be protected by copyright may not have the effect of reducing the term of protection currently enjoyed by the rightholders concerned; whereas a derogation should be laid down to that effect; whereas the effects of such derogation must be confined to the territories of the Member States concerned, HAVE ADOPTED THIS DIRECTIVE: CHAPTER I SCOPE Article 1 Scope 1. This Directive concerns the legal protection of databases in any form. 2. For the purposes of this Directive, ‘database’ shall mean a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means. 3. Protection under this Directive shall not apply to computer programs used in the making or operation of databases accessible by electronic means. Article 2 Limitations on the scope This Directive shall apply without prejudice to Community provisions relating to: (a) the legal protection of computer programs; (b) rental right, lending right and certain rights related to copyright in the field of intellectual property, (c) the term of protection of copyright and certain related rights. CHAPTER II COPYRIGHT Article 3 Object of protection 1. In accordance with this Directive, databases which, by reason of the selection or arrangement of their contents, constitute the author's own intellectual creation shall be protected as such by copyright. No other criteria shall be applied to determine their eligibility for that protection. 2. The copyright protection of databases provided for by this Directive shall not extend to their contents and shall be without prejudice to any rights subsisting in those contents themselves. Article 4 Database authorship 1. The author of a database shall be the natural person or group of natural persons who created the base or, where the legislation of the Member States so permits, the legal person designated as the rightholder by that legislation. 2. Where collective works are recognized by the legislation of a Member State, the economic rights shall be owned by the person holding the copyright. 3. In respect of a database created by a group of natural persons jointly, the exclusive rights shall be owned jointly. Article 5 Restricted acts In respect of the expression of the database which is protectable by copyright, the author of a database shall have the exclusive right to carry out or to authorize: (a) temporary or permanent reproduction by any means and in any form, in whole or in part; (b) translation, adaptation, arrangement and any other alteration; (c) any form of distribution to the public of the database or of copies thereof. The first sale in the Community of a copy of the database by the rightholder or with his consent shall exhaust the right to control resale of that copy within the Community; (d) any communication, display or performance to the public; (e) any reproduction, distribution, communication, display or performance to the public of the results of the acts referred to in (b). Article 6 Exceptions to restricted acts 1. The performance by the lawful user of a database or of a copy thereof of any of the acts listed in Article 5 which is necessary for the purposes of access to the contents of the databases and normal use of the contents by the lawful user shall not require the authorization of the author of the database. Where the lawful user is authorized to use only part of the database, this provision shall apply only to that part. 2. Member States shall have the option of providing for limitations on the rights set out in Article 5 in the following cases: (a) in the case of reproduction for private purposes of a non-electronic database; (b) where there is use for the sole purpose of illustration for teaching or scientific research, as long as the source is indicated and to the extent justified by the non-commercial purpose to be achieved; (c) where there is use for the purposes of public security of for the purposes of an administrative or judicial procedure; (d) where other exceptions to copyright which are traditionally authorized under national law are involved, without prejudice to points (a), (b) and (c). 3. In accordance with the Berne Convention for the protection of Literary and Artistic Works, this Article may not be interpreted in such a way as to allow its application to be used in a manner which unreasonably prejudices the rightholder's legitimate interests or conflicts with normal exploitation of the database. CHAPTER III SUI GENERIS RIGHT Article 7 Object of protection 1. Member States shall provide for a right for the maker of a database which shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents to prevent extraction and/or re-utilization of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database. 2. For the purposes of this Chapter: (a) ‘extraction’ shall mean the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form; (b) ‘re-utilization’ shall mean any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission. The first sale of a copy of a database within the Community by the rightholder or with his consent shall exhaust the right to control resale of that copy within the Community; Public lending is not an act of extraction or re-utilization. 3. The right referred to in paragraph 1 may be transferred, assigned or granted under contractual licence. 4. The right provided for in paragraph 1 shall apply irrespective of the eligibility of that database for protection by copyright or by other rights. Moreover, it shall apply irrespective of eligibility of the contents of that database for protection by copyright or by other rights. Protection of databases under the right provided for in paragraph 1 shall be without prejudice to rights existing in respect of their contents. 5. The repeated and systematic extraction and/or re-utilization of insubstantial parts of the contents of the database implying acts which conflict with a normal exploitation of that database or which unreasonably prejudice the legitimate interests of the maker of the database shall not be permitted. Article 8 Rights and obligations of lawful users 1. The maker of a database which is made available to the public in whatever manner may not prevent a lawful user of the database from extracting and/or re-utilizing insubstantial parts of its contents, evaluated qualitatively and/or quantitatively, for any purposes whatsoever. Where the lawful user is authorized to extract and/or re-utilize only part of the database, this paragraph shall apply only to that part. 2. A lawful user of a database which is made available to the public in whatever manner may not perform acts which conflict with normal exploitation of the database or unreasonably prejudice the legitimate interests of the maker of the database. 3. A lawful user of a database which is made available to the public in any manner may not cause prejudice to the holder of a copyright or related right in respect of the works or subject matter contained in the database. Article 9 Exceptions to the sui generis right Member States may stipulate that lawful users of a database which is made available to the public in whatever manner may, without the authorization of its maker, extract or re-utilize a substantial part of its contents: (a) in the case of extraction for private purposes of the contents of a non-electronic database; (b) in the case of extraction for the purposes of illustration for teaching or scientific research, as long as the source is indicated and to the extent justified by the non-commercial purpose to be achieved; (c) in the case of extraction and/or re-utilization for the purposes of public security or an administrative or judicial procedure. Article 10 Term of protection 1. The right provided for in Article 7 shall run from the date of completion of the making of the database. It shall expire fifteen years from the first of January of the year following the date of completion. 2. In the case of a database which is made available to the public in whatever manner before expiry of the period provided for in paragraph 1, the term of protection by that right shall expire fifteen years from the first of January of the year following the date when the database was first made available to the public. 3. Any substantial change, evaluated qualitatively or quantitatively, to the contents of a database, including any substantial change resulting from the accumulation of successive additions, deletions or alterations, which would result in the database being considered to be a substantial new investment, evaluated qualitatively or quantitatively, shall qualify the database resulting from that investment for its own term of protection. Article 11 Beneficiaries of protection under the sui generis right 1. The right provided for in Article 7 shall apply to database whose makers or rightholders are nationals of a Member State or who have their habitual residence in the territory of the Community. 2. Paragraph 1 shall also apply to companies and firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community; however, where such a company or firm has only its registered office in the territory of the Community, its operations must be genuinely linked on an ongoing basis with the economy of a Member State. 3. Agreements extending the right provided for in Article 7 to databases made in third countries and falling outside the provisions of paragraphs 1 and 2 shall be concluded by the Council acting on a proposal from the Commission. The term of any protection extended to databases by virtue of that procedure shall not exceed that available pursuant to Article 10. CHAPTER IV COMMON PROVISIONS Article 12 Remedies Member States shall provide appropriate remedies in respect of infringements of the rights provided for in this Directive. Article 13 Continued application of other legal provisions This Directive shall be without prejudice to provisions concerning in particular copyright, rights related to copyright or any other rights or obligations subsisting in the data, works or other materials incorporated into a database, patent rights, trade marks, design rights, the protection of national treasures, laws on restrictive practices and unfair competition, trade secrets, security, confidentiality, data protection and privacy, access to public documents, and the law of contract. Article 14 Application over time 1. Protection pursuant to this Directive as regards copyright shall also be available in respect of databases created prior to the date referred to Article 16 (1) which on that date fulfil the requirements laid down in this Directive as regards copyright protection of databases. 2. Notwithstanding paragraph 1, where a database protected under copyright arrangements in a Member State on the date of publication of this Directive does not fulfil the eligibility criteria for copyright protection laid down in Article 3 (1), this Directive shall not result in any curtailing in that Member State of the remaining term of protection afforded under those arrangements. 3. Protection pursuant to the provisions of this Directive as regards the right provided for in Article 7 shall also be available in respect of databases the making of which was completed not more than fifteen years prior to the date referred to in Article 16 (1) and which on that date fulfil the requirements laid down in Article 7. 4. The protection provided for in paragraphs 1 and 3 shall be without prejudice to any acts concluded and rights acquired before the date referred to in those paragraphs. 5. In the case of a database the making of which was completed not more than fifteen years prior to the date referred to in Article 16 (1), the term of protection by the right provided for in Article 7 shall expire fifteen years from the first of January following that date. Article 15 Binding nature of certain provisions Any contractual provision contrary to Articles 6 (1) and 8 shall be null and void. Article 16 Final provisions 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1998. When Member States adopt these provisions, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States. 2. Member States shall communicate to the Commission the text of the provisions of domestic law which they adopt in the field governed by this Directive. 3. Not later than at the end of the third year after the date refered to in paragraph 1, and every three years thereafter, the Commission shall submit to the European Parliament, the Council and the Economic and Social Committee a report on the application of this Directive, in which, inter alia, on the basis of specific information supplied by the Member States, it shall examine in particular the application of the sui generis right, including Articles 8 and 9, and shall verify especially whether the application of this right has led to abuse of a dominant position or other interference with free competition which would justify appropriate measures being taken, including the establishment of non-voluntary licensing arrangements. Where necessary, it shall submit proposals for adjustment of this Directive in line with developments in the area of databases. Article 17 This Directive is addressed to the Member States. Done at Strasbourg, 11 March 1996. For the European Parliament The President K. HÄNSCH For the Council The President L. DINI (1)  OJ No C 156, 23. 6. 1992, p. 4 and OJ No C 308, 15. 11. 1993, p. 1. (2)  OJ No C 19, 25. 1. 1993, p. 3. (3)  Opinion of the European Parliament of 23 June 1993 (OJ No C 194, 19. 7. 1993, p. 144), Common Position of the Council of 10 July 1995 (OJ No C 288, 30. 10. 1995, p. 14), Decision of the European Parliament of 14 December 1995 (OJ No C 17, 22 1. 1996) and Council Decision of 26 February 1996. (4)  OJ No L 122, 17. 5. 1991, p. 42. Directive as last amended by Directive 93/98/EEC (OJ No L 290, 24. 11. 1993, p. 9. ) (5)  OJ No L 346, 27. 11. 1992, p. 61. (6)  OJ No L 290, 24. 11. 1993, p. 9. (7)  OJ No L 281, 23. 11. 1995, p. 31

Council Regulation (EC) No 462/96 of 11 March 1996 suspending Regulations (EEC) No 990/93 and (EC) No 2471/94, and repealing Regulations (EC) No 2472/94 and (EC) No 2815/95, concerning the interruption of economic and financial relations with the Federal Republic of Yugoslavia (Serbia and Montenegro), the United Nations Protected Areas in the Republic of Croatia and those areas of the Republic of Bosnia and Herzegovina under the control of Bosnian Serb forces

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L_1996065EN. 01000101. xml 15. 3. 1996    EN Official Journal of the European Communities L 65/1 COUNCIL REGULATION (EC) NO 462/96 of 11 March 1996 suspending Regulations (EEC) No 990/93 and (EC) No 2471/94, and repealing Regulations (EC) No 2472/94 and (EC) No 2815/95, concerning the interruption of economic and financial relations with the Federal Republic of Yugoslavia (Serbia and Montenegro), the United Nations Protected Areas in the Republic of Croatia and those areas of the Republic of Bosnia and Herzegovina under the control of Bosnian Serb forces THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Articles 73g and 228a thereof, Having regard to the common position of 4 December 1995 defined by the Council on the basis of Article J. 2 of the Treaty on European Union, with regard to the suspension of the restrictions on trade with the Federal Republic of Yugoslavia (Serbia and Montenegro) and with the Bosnian Serbs (1), decided on by the United Nations Security Council in its Resolution 1022 (1995), Having regard to the proposal from the Commission, Whereas the United Nations Security Council, in view of the agreement reached between the parties concerned with regard to the Republic of Bosnia and Herzegovina, has decided, in its Resolution 1022 (1995) to suspend the restrictions concerning economic and financial relations with the Federal Republic of Yugoslavia (Serbia and Montenegro), the United Nations Protected Areas in the Republic of Croatia and, when certain conditions are fulfilled, those areas of the the Republic of Bosnia and Herzegovina under the control of Bosnian Serbs forces; Whereas the Security Council has been informed that the aforementioned conditions are fulfilled; Whereas the Council has already adopted Regulation (EC) No 2815/95 (2), suspending Regulation (EEC) No 990/93 (3) with regard to the Federal Republic of Yugoslavia (Serbia and Montenegro); Whereas, for reasons of transparency, the Community legislation, implementing United Nations Security Council Resolution 1022 (1995), should be incorporated in an all-embracing Community instrument, and, therefore, Regulation (EC) No 2815/95 should be repealed, HAS ADOPTED THIS REGULATION: Article 1 1. Regulations (EEC) No 990/93 and (EC) No 2471/94 (4) are hereby suspended. 2. As long as the Regulations referred to in paragraph 1 remain suspended, all funds and assets previously frozen or impounded pursuant to those Regulations may be released by Member States in accordance with law, provided that any such funds or assets that are subject to any claims, liens, judgments, or encumbrances, or which are the funds or assets of any person, partnership, corporation, or other entity found or deemed to be insolvent under the law or the accounting principles prevailing in the relevant Member State, shall remain frozen or impounded until released in accordance with the applicable law. 3. Regulations (EC) No 2472/94 (5) and (EC) No 2815/95 are hereby repealed. Article 2 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. It shall apply with effect from 27 February 1996. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 11 March 1996. For the Council The President L. DINI (1)  OJ No L 297, 9. 12. 1995, p. 4. (2)  OJ No L 297, 9. 12. 1995, p. 1. (3)  OJ No L 102, 28. 4. 1993, p. 14. Regulation as last amended by Regulation (EC) No 2815/95 (OJ No L 297, 9. 12. 1995, p. 1). (4)  OJ No L 266, 15. 10. 1994, p. 1. (5)  OJ No L 266, 15. 10. 1994, p. 8. Regulation as last amended by Regulation (EC) No 2815/95

Proposal for a Council Regulation (EC) amending for the fourth time Regulation (EC) No 3699/93 laying down criteria and arrangements regarding Community structural assistance in the fisheries and aquaculture sector and for processing and marketing of its products

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^ *. v COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30. 04. 1996 COM(%) 189 final 96/0124<CNS) Proposal for a amending for the fourth time Regulation (EC) No 3699/93 laying down criteria and anangements regarding Community structural assistance in the fisheries and aquaculture sector and for processing and marketing of its products (presented by the Commission) EXPLANATORY MEMORANDUM The attached proposal amending Council Regulation (EC) No 3699/93 (1) makes three modifications: 1. Product promotion: Regulation (EC) No 3699/93 permits part-financing from the FIFG of action to promote and find new outlets for fishery and aquaculture products. These include quality certification and labelling, the idea being to encourage efforts to increase market value. In order to restrict promotion to a message to the consumer about the intrinsic qualities of products or the qualities of manufacturing procedures and so prevent promotion from distorting competition between Member States and regions, which in most cases catch at sea species the quality of which does not depend on the zone in which they are taken, no reference is permitted in the message to a particular country or production zone. Some species, particularly farmed species, have however specific qualities resulting from the nature of the place where they are raised (the natural conditions) and the techniques used. It is only fair to concede that in such cases mention of the geographical origin of the product or the processing procedure will give the consumer objective information about the particular qualities conferred by the product's origin, always provided that the quality claim for the particular origin is backed up by official recognition in the form of a protected geographical indication or designation of origin. Reference should therefore be allowed in promotional operations to the origin of a product or location of a processing proceduK? provided that recognition has been obtained under Council Regulation (EEC) No 2081/92 of 14 July 1992 on projection of geographical indications and designations of origin for agricultural products and foodstuffs'2'. Amendment is therefore proposed of Article 12 of Regulation (EC) No 3699/93 to widen the terms of eligibility to include such cases. 2. Launching aids for producer organizations: Article 13 of Regulation (EC) No 3699/93 refers to Article 7 of Council Regulation (EEC) No 3759/92 of 17 December 1992 on organization of the market in fishery and aquaculture products'3'; a new Article 7b of the latter provides for financial aid to producer organizations implementing a plan to improve the quality and marketing of their products. It is necessary therefore for the sake of legal and budgetary consistency to mention this aid in Article 13 of Regulation (EC) No 3699/93. (,) Council Regulation (EC) No 3699/93 of 21 December 1993 laying down criteria and arrangements regarding Community structural assistance In the fisheries and aquaculture sector and for processing and marketing ofits products (OJ L 346, 31. 12. 1993, p. 1) last amended fay Regulation (EC) No 2719/95 of 20 November 1995 (OJ L 283, 25. 11. 1995, p. 3) (i> OJ L 208, 27. 7 1992, p. 1 '*' OJ L 388, 31 12 1992, p. 1 Last amended by Regulation (EC) No 3318/94 (OJ L 350, 31 12. 1994, p 15) 1 3. Confirmation of the budgetary conversion rate for the ecu f budgetary ecu"): in the negotiations leading to adoption by the Council of Regulation (EC) No 3699/93 in December 1993 the Commission stated (4) that "the budgetary conversion rate ("budgetary ecu") will apply to all future aid financed by the FIFC under Regulation (EEC) No 2080/93*9' and this implementing Regulation [3699/93J' but added that "however in order to comply with the previous levels of aid made available by Regulation (EEC) No 4028/86(ei, [it] would agree to the request of the Council, which will decide whether this is politically advisable, to increase by 13% the levels of aid ceilings for permanent withdrawals and joint enterprises". The "Presidency compromise"^ agreed to by the Council on conclusion of the negotiations did include a 13% increase in these aid ceilings, the Council in this way manifesting its agreement that the agrimonetary ecu rate should not be used for FIFG aid. The provisions on use of this rate set by Council Regulation (EEC) No 3813/92 of 28. 12. 1992 on the unit of account and the conversion rates to be applied for the purposes of the common agricultural policy'8' apply as a general rule however to all action under Article 43 of the Treaty and hence to the common fisheries policy. For clarity therefore it should be indicated formally that with effect from 1. 1. 1994 the budgetary rate for the ecu is the only one to be used for the FIFG. None of the amendments has any financial implication either for the Community budget or for each Member State's allocation for the present Structural Fund programming period. Annex: Proposal for a Council Regulation amending for the fourth time Regulation (EC) No 3699/93 w Coreper report to Council, doc; 11223/93 PECHE 525 of 16. 12. 1993, Annex Ilia w Council Regulation (EEC) No 2080/93 of 20 July 1993 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the Financial Instrument for Fisheries Guidance (OJ L 193, 31. 7. 1993, p. 1) m Council Regulation (EEC) No 4028/86 of 18 December 1986 on Community measures to improve and adapt structures in the fisheries and aquaculture sector (OJ 1376,31. 12. 1986, p. 7), last amended by Regulation (EEC) No 2794/92 (OJ L 282. 26. 8. 1992. p. 3) and repealed with effect from 1 January 1994 by Article 9 of Regulation (EEC) No 2080/93. m Council document SN 412/93 (PECHE) of 20. 12. 1993 m OJ L 387, 31. 12. 1992, p. 1. Last amended by Regulation (EC) No 150/95 (OJ L 22, 31. 1. 1995, p. 1). 2 amending for the fourth time Regulation (EC) No 3699/93 laying down criteria and arrangements regarding Community structural assistance in the fisheries and aquaculture sector and for processing and marketing of Proposal for a Council Regulation (EC) its products The Council of the European Union, Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof, « Having regard to Council Regulation (EEC) No 2080/93 of 20 July 1993 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the Financial Instrument for Fisheries Guidance'1', and in particular Article 6 thereof, Having regard to the proposal from the Commission'2), Having regard to the opinion of the European Parliament'3*, Having regard to the opinion of the Economic and Social Committee'4', Whereas Council Regulation (EC) No 3699/93 of 21 December 1993<5), as last amended by Regulation (EC) No [2719/95 of 20 November 1995]'6), lays down criteria and arrangements for Community structural action in the fisheries and aquaculture sector and for processing and marketing of its products; Whereas promotion of products or forms of processing should be encouraged in those cases where official recognition of origin with reference to a specified geographical zone is granted under Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs'7'; whereas the use of geographical references can be permitted only if such official recognition of origin has been granted; Whereas Article 7b of Council Regulation (EEC) No 3759/92 of 17 December 1992 on common organization of the market in fishery and aquaculture products'8', as last amended by Regulation (EC) No 3318/94(9), provides for financial aid to producer organizations implementing a plan to improve the quality and marketing of their products; whereas for legal and budgetary consistency Article 13 of Regulation (EC) No 3699/93 should refer to this aid; (" OJ No L 193,31. 7. 1993, p. 1 w OJ No C. lS) OJ No C. w OJ No C. 'Sl OJ No L 346, 31. 12. 1993, p. 1 m [OJ No L 283, 25. 11. 1995, p. 3] to be replaced as soon as possible by references to the third amendment l7) OJ No L 203, 27. 7. 1992, p. 1 S1 OJ No L 383, 31. 12. 199?, p 1 <a> OJ No L 350, 31. 12. 1994, p. 15 Whereas the agrimonetary rate for the ecu is not being used for aid from the FIFG, as may be implied from the premium scales shown in Annex IV to Regulation (EC) No 3699/93; whereas however the provisions on use of the agrimonetary ecu»of Council Regulation (EEC) No 3813/92 of 28 December 1992 on the unit of account and the conversion rates to be applied for the purposes of the common agricultural policy'10', as last amended by Regulation (EC) No 150/95'11', apply as a general rule to all action under Article 43 of the Treaty; whereas for clarity it should therefore be specified in this Regulation that the budgetary rate for the ecu is the only one applicable for its purposes from the date of its entry into force on 1 January 1994, HAS ADOPTED THIS REGULATION Article 1 Regulation (EC) No 3699/93 is hereby amended as follows: 1) The following is added to the last paragraph of Article 12: ". except in specific cases where official recognition of origin with reference to a specified geographical zone for a product or process is granted under Regulation (EEC) No 2081/92. The reference may be used only from the date on which the name has been entered on the register provided for in Article 6(3) of Regulation (EEC) No 2081/92. " 2) In the second paragraph of Article 13 the words "of Article 7" are replaced by "of Articles 7 and 7b". 3) The following paragraph is added to Article 16: "1a. Amounts in ecus set by this Regulation shall be converted into national currency at the rate published in the Official Journal of the European Communities, series C, applicable on 1 January of the year of the Member State's decision to grant the premium or aid. Article 2 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. Point 3 of Article 1 shall however be applicable with effect from 1 January 1994. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at, For the Council The President <,0, OJ No L 387, 31. 12. 1992, p. 1 <M) OJ No L22, 31. 1. 1995, p. 1 ISSN 0254-1475 COM(96) 189 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-197-EN-C ISBN 92-78-03175-5 Office for Official Publications of the European Communities L-29S5 Luxembourg r

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE - AN INDUSTRIAL COMPETITIVENESS POLICY FOR THE EUROPEAN CHEMICAL INDUSTRY: AN EXAMPLE

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COMMISSION OF THË EUROPEAN COMMUNITIES Brussels, 30. 04. 1996 COM(96) 187 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL. THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE AN INDUSTRIAL COMPETITIVENESS P O L I CY F OR T HE THE EUROPEAN CHEMICAL INDUSTRY : AN EXAMPLE TABLE OF CONTENTS EXECUTIVE SUMMARY table a : Actions enhancing chemical industry competitiveness I. INTRODUCTION II. THE EU CHEMICAL INDUSTRY II. A Facts about the industry II. B Features of the industry II. C Challenges facing the industry II. C. l II. C. 2 Better and more environmentally sound products Competitively priced products III. ACTIONS TO ENHANCE COMPETITIVENESS III. A Actions to improve the regulatory framework III. A. l The current framework III. A. 2 Principles for future action III. B Actions to ensure effective competition III. B. 1 Effective competition internally III. B. 2 Effective competition externally III. C Actions to strengthen intangible investment III. C. l Research and development Intellectual property III. C. 2 III. C. 3 The need for a scientific culture III. C. 4 Training III. D Actions to develop industrial cooperation III. D. l III. D. 2 External industrial cooperation Industrial cooperation within the EU I V. OPERATIONAL CONCLUSIONS AND WORK PROGRAMME V. ANNEXES table 1 : Output, trade in 1994 (Ecu Billion) table 2 : Top 30 chemical companies in the world (1994) table 3 : Employment (in thousands) table 4 : Growth rates table 5a : Most ingenious companies table 5b : Most ingenious companies table 6 : Capital spending (% of turnover) ; Application of principles for Regulatory Impact Assessment to the problem of nickel allergy - an example pages I V 1 1 1 3 4 4 4 5 6 6 7 10 10 12 13 13 14 15 16 16 16 17 19 21 22 23 24 25 26 27 28 /* EXECUTIVE SUMMARY This Communication, drawn up in consultation with representatives from the European chemical industry, is within the framework of the 'Communication on an Industrial Competitiveness Policy for the European Union1 (EU). It seeks to identify the industry's main challenges and needs and to define a set of actions2 to enhance its competitiveness. 1. The features of and challenges facing the EU chemical industry * The main challenge facing the European chemical industry is to strengthen its long term international competitiveness. by supplying its clients, in Europe and abroad, with high quality, environmentally sound and competitively priced products* In the light of this challenge and bearing in mind the need to maintain a level of profitability sufficient to ensure that investment continues in Europe, several key features of the industry have been identified : - Chemical products and environmental and health policy The chemical industry has a wide range of customers : big industrial sectors (e. g. automobiles and other means of transport, food and beverage, pharmaceuticals, textiles, construction); the agricultural sector for fertilizers and pesticides; and individual end-users for plastic packaging, paints, detergents, cosmetics, etc. Chemical products are closely related with everybody's daily life. Within Europe, there is thus a high level of awareness of the related health and environmental implications. This, as well as the actual risk and the complexity of the issues have given rise to an increasing number of regulations, frequently of national origin: such regulations should be founded on a sound scientific basis and their potential economic impact, including on the international competitiveness of this industry must be fully taken into account. - The European and global dimension of its markets In this context it is important to promote a level playing field, at least with the main OECD and newly industrialised competing countries, in terms of market access, environmental framework, and, if possible,competion rules, fiscal and social regulations. - Its dependence on imported raw materials and energy inputs Oil and gas, used in the production of petrochemicals and their derivatives, as well as industrial minerals required for the production of inorganic chemicals, are in general not endogenous to Europe and must be imported. Together with energy sources such as electricity and gas, which are supplied by European companies, these represent up to 60% of chemical companies' production costs. Effective competition requires that the unit prices for these inputs must not be distorted; whether in the third countries that supply them, or within the EU. - Its high reliance on capital and RTD Net assets higher than 1 Million ECU per employee, for a major part of industry (especially basic chemicals) and an average expenditure on research and technological development (RTD) of about 5% of turnover, compel the chemical industry to seek high capacity utilisation rates in order to minimize fixed costs and maximise income. This involves : • continuing restructuring. tending towards production in the most efficient facilities and the possible closure of the least profitable ones. • • an effort to ensure the largest possible markets, requiring the consolidation of an effective Internal Market within the EU and, access under conditions of undistorted competition to external markets. increased efforts towards co-operative research, both with competing and user companies in more "horizontal" fields of RTD (promotion of recycling, greater use of information technology, etc. ). the continuous development of innovative new products and manufacturing processes, as a long term strategy in order to counter the increasing pressure from newly industrialising countries (e. g. Asia, Arabian Gulf states) particularly in products with lower value-added, and' from those • 'COM(94)319 2See also "I able A , / A industrialised countries (e. g. USA, Canada) benefiting from certain comparative advantages (raw material and lower energy prices, etc. ) * These characteristics represent, by their diversity, complexity and interdependence, a genuine challenge for an effective implementation of an horizontal industrial competitiveness policy for the EU chemical industry. A number of courses of action and concrete measures have been identified in the context of the chemical industry ; these could be used as an example for similar industries. 2. Basic principles and actions aimed at strengthening the international competitiveness of the EU chemical industry. In any market economy, each industrial company is responsible for the strategic decisions and initiatives it must take in order to maintain or strengthen its medium and long term international competitiveness. Nevertheless, public authorities have a role to play in creating the legal and economic framework and by adopting, if necessary, accompanying measures for the actions taken by industry. The actions to be developed by the Commission, industry and/or Member States are grouped around the four priority areas of the industrial Competitiveness Communication : 2. 1. Actions to improve the regulatory framework This improvement, in line with the recently adopted "Guidelines for Regulatory Policy", should concentrate on : - - the consolidation, the updating and/or the simplification of the current regulatory framework for chemical substances and preparations. Among examples of such activities are the codification of the Directives on fertilizers, on limitations for placing on the market, and on detergents; the reshaping of the Directive on preparations, the simplification of the Directive on the protection of the health and safety of workers from the risks related to chemical agents at work and the simplification of procedures for the notification of new chemicals, especially by the SMEs, are other examples of such activities. the application of a sound approach for all new possible regulatory initiatives concerning chemical products or facilities, involving : • a scientific evaluation of the risk that the substance, preparation or type of facility in question represents for health, safety and/or the environment and a comparison with the risks associated with possible substitute products or alternative processes; • an appropriate analysis of the costs and benefits of the options available at EU level, and also of possible national measures; • whenever possible and relevant, a comparative analysis of similar legislation, in force or under elaboration, in the most competitive third countries. If the results of these three types of analysis justify a new initiative, be it at international or at EU level, this should be implemented by means of the instrument which is the simplest and the least costly and which ensures a high level of health and environment protection. A wide range of such instruments exists : unilateral industrial initiatives, negotiated agreements at EU or national level (for which the Commission is preparing a general framework), economic incentives and regulatory initiatives at EU or, if possible and necessary, at international level. This approach will also apply, whenever possible, to current cases where, despite harmonization measures already taken, the internal market for chemical products is still fragmented: partial directives (asbestos); national requests for implementation of article 100A§4 (pentachlorophenol-, cadmium, creosote,. ) These different actions should be analysed and developed in co-operation with the representatives of industry and/or the Member States concerned. /o 2. 2 Actions to ensure effective competition The global dimension of the chemical industry and the need for the permanent adaptation of its structures will be taken into account by the Commission in the application of the competition rules, inside and outside the EU, in particular when : - analysing possible proposals coming from industry aiming at finding solutions to structural overcapacity in certain basic chemical industries, through appropriate actions by the companies concerned, provided the existence of such structural over-capacity is proved and the proposed action is compatible with the competition rules ; - pursuing efforts to liberalize the electricity and gas markets within the EU, which will allow a reduction of costs for the chemical industry, being an intensive energy user. - pursuing efforts for the effective use of trade instruments, and in particular for the elimination, among the members and in certain WTO applicant countries (Arabian Gulf states, China), of non-tariff barriers (double pricing systems for certain raw materials, registers of imports, etc); - exploring bilaterally, with the main trading partners (e. g. with the USA, through the Transatlantic Business Dialogue and the Joint Action Plan), and multilaterally new agreements on competition and international trade, in particular on the removal of barriers to international investment. 2. 3 Actions to strengthen intangible investment The increasing need for innovation in new, high quality chemical products for diversified markets and for the development of more efficient sustainable manufacturing processes, lead industry, the Commission and national authorities, to focus their efforts on RTD, education and scientific training, in particular on : - the continuation of co-operative research programmes at European level, not only between industries with similar characteristics (such as the SUSTECH and PRIMA initiatives for process industries such as food, steel and paper), but also with user industries (transport, construction) and with computer software suppliers (for greater use of information technologies); - a greater integration of the chemical industry in existing or future multi-sectoral initiatives (task forces, clusters), which will allow better access to the various Community programmes and an optimization of their results through a better coordination; - - a greater flexibility in the development and revision of the Community-specific RTD programmes; - the improvement of patent protection for example for pesticides or products resulting from biotechnology; the industrial initiatives aimed at improving young people's chemical education and the scientific training of workers which, together with the Community programmes SOCRATES, Leonardo da Vinci, certain sub-programmes of the 4th Framework Programme and actions eligible for Structural Funds,and with the necessary cooperation of the educational programmes of the Member States, will strengthen the essential educational and scientific basis for an innovative chemical industry, which must include education in health and safety of workers. 2. 4 Actions to develop industrial cooperation The complex and highly diversified structure of this industry - containing not only major multinational corporations, but also numerous SMEs - as well as the risks and the opportunities offered by certain international markets, require an intensification of actions for industrial co-operation. - The importance of the SMEs in a number of sectors and their essential role in the creation of jobs subcontracting , requires the continuation and/or the development, by industry and the and Commission, of actions such as: • • the improvement of access by the SMEs to non confidential technical, economic and legislative information, through a more computerized communication system being developed by the European Chemical Industry Federation (CEFIC) and through the DG III coordinated network RISC (Reseau d'Information du Secteur Chimique. ). The Bilbao Agency on health and safety will also be a source of impartial, validated information. the promotion, among chemical industry SMEs of various Community programmes developed by the Commission to facilitate partnerships and subcontracting, to improve management techniques,etc Ill Id. - International co-operation projects, to be developed by industry, with the support of the Commission, can reduce the risks and increase the opportunities existing in third country markets : • for the countries neighbouring the European market (CEECs. certain NIS and the Mediterranean countries), training and technical assistance projects for national administrations and for managers within the chemical industry, in order to promote the progressive establishment of a regulatory framework (public and occupational health, environment, competition laws, etc. ) similar to that of the EU, will help those countries which are candidates for accession, but would also allow the extension of the EU internal market providing more stable and homogeneous conditions of competition; • for third countries with fast growing markets (certain CEECs, China, South-East Asia and Latin America), training and technical assistance projects combined with other activities more centred on technology transfer and investment promotion, will allow better access ; • for countries rich in raw materials or energy resources (e. g. Russia, the countries of the Gulf Cooperation Council), investment in infrastructure or in industrial minerals will allow better access to these resources and perhaps better control over erratic prices. 3. Conclusions. * The Commission considers that the chemical industry of the EU, though among the most modern and competitive in the world, faces a set of challenges that must be met if it is to maintain and, if possible, strengthen, its international competitiveness. * In order to do this, a set of actions to be developed or pursued, by industry, the Commission and Member States, has been identified in the present Communication. The Commission will implement, in co-operation with representatives from the European chemical industry, a structured follow-up programme, and will closely monitor the evolution of the international competitiveness of this sector and the adoption of the various measures proposed in this Communication. IV U TABLE A ACTIONS ENHANCING CHEMICAL INDUSTRY COMPETITIVENESS Actions Commis sion MS Industry 1. Consolidate Internal Market legislative work; resolve 2. asbestos, dioxins, PCP cases In absence of international level regulation, take account of competitiveness of EU industry prior to EU regulation 3. Undertake risk assessment and adequate analysis of the costs and benefits for all new regulation or action 4. Develop and widen Responsible Care initiatives 5. Establish a Community framework for voluntary agreements in MS 6. Assess rapidly mergers and joint ventures 7. Continue to increase the transparency of State aids rules 8. Liberalise energy, especially gas and electricity, markets 9. Investigate causes of structural and cyclical overcapacity and capacity shortage 10. Seek new WTO members apply tariffs of 0 %, 5. 5 %, 6. 5 % 11. Pursue non-tariff barriers, especially double pricing (distorting investments incentives) 12. Reflect the Transatlantic Business Dialogue suggestions to harmonize rules on classification, etc of chemicals 13. Explore multilateral agreements for trade and competition 14. Improve 4th RTD Framework Programme including Task Forces; develop 5th Framework Programme 15. Promote SUSTECH and PRIMA approaches 16. Enhance scientific and technological culture 17. Implement Commission proposal for increased patent protection for crop protection products 18. Develop RISC 19. Intensify actions for SMEs 20. Relaunch EASTT 21. Enhance technical assistance on chemical legislation to CEECs Increase industrial cooperation with China and others 22. S S ^ - S ^ S V S s s y s s K) 00 Y s s - y s K) - - - ^ - - ( ' )• - - - - - - S S - K) - - - - - S K) - - - OO oo V - s s - y V V K) s li I. INTRODUCTION 1. The Communication will briefly describe the chemical industry and the challenges it faces, and will propose a series of initiatives to enhance its competitiveness. The initiatives or actions will be either those currently pursued or those to be undertaken by the Commission, by Member States and by industry. Those to be undertaken are contained in the paragraphs in bold type. The Commission's actions should be seen as part of the the September 1994 horizontal Communication1 which in turn built upon the 1990 Communication2 on industrial policy. The actions or initiatives will have particular relevance to the chemical industry but not only be applicable to it. The preparation of the Communication has involved consultation with representatives of industry from the earliest stages. Significant divergences of views between the Commission and industry are made explicit. This approach could be used as an example for other similar industries. industrial competitiveness policy prescribed in 2. Following a description of the industry and the foreseeable challenges it faces for the next ten years, the Communication will examine certain measures grouped under the four priorities of the industrial competitiveness Communication : improving the regulatory framework (there referred to as the modernisation of the role of the public authorities), ensuring effective competition, promoting developing industrial cooperation. A final chapter will seek to establish overall conclusions and a common work programme to ensure that the Commission and industry improve their working together to enhance competitiveness. intangible investment and II. THE EU CHEMICAL INDUSTRY II. A FACTS ABOUT THE INDUSTRY 3. The chemical industry is very heterogeneous in character. Its principal activity is chemically transforming materials into diverse substances with new chemical and physical properties. Its main sectors can be grouped into: basic organic and inorganic chemical products; fertilizers and nitrogen compounds; basic plastics and synthetic rubber; pharmaceutical and medical products; speciality chemicals, which include agrochemicals, and specialty polymers; paints, varnishes and coatings; cleaning and polishing preparations; perfumes and toiletries; and man-made fibres. The industry is divided into two upstream sectors: basic inorganic chemicals and petrochemicals (or basic organics), while the rest of the sectors are downstream. The upstream sectors' outlets are almost exclusively the downstream sectors. This Communication will generally not cover the pharmaceutical sector which is already the subject of a separate Communication3, nor man-made fibres, though some of the statistics include data from these two sectors. 4. The chemical industry is the EU's second largest manufacturing industry, just behind food, drink and tobacco, in terms of production, and electrical engineering in terms of value added. The EU is the world's most important producer of chemicals, well in front of the USA and even further ahead of Japan. Its positive trade balance is also bigger than that of chemical industries in the USA or Japan. 15 of the world's top 30 chemical companies have EU headquarters (a further three are in Switzerland) and the three largest are German. 'COM (94) 319 An industrial competitiveness policy for the European Union 2COM (90) 556 Industrial policy in an open and competitive environment 3COM(93)718 The EU chemical industry directly employs 1. 65 million people and has a turnover of ECU 316 bn. (see tables 1,2) Another three million employees work in sectors using output of the chemical industry as direct inputs and thus depend on its competitiveness. 5. Popular belief sees the typical chemical company as a large firm; this is true for petrochemicals, but small and medium sized enterprises (SMEs^) play a vital role in the chemical industry as a whole and overwhelmingly characterise sectors such as paints, specialty chemicals, cosmetics, basic pharmaceuticals and plastic processing. Eurostat data for 1990 show the chemical industry in the EU 12 comprised 32,700 enterprises (this excludes the plastics transformers). 87% of the enterprises have less than 50 employees, although they only account for 12% of persons employed and 16% of total turnover. Medium-sized firms, i. e. those employing between 50 and 249 employees, represent nearly 9% of total enterprises or nearly 17% of persons employed, and 16% of total turnover. 6. Employment in the EU chemical industry fell by 4. 4% in 1994, a year of good economic recovery. 1995 is also likely to have seen a decline though a smaller one. Although 1. 65 million people worked in the chemical industry in 1994, this figure has almost continually declined from the 1980 figure of 1. 95 million (though with a plateau during the boom years 1987-1990). It might be noted that both the USA and Japan saw much smaller declines in chemical industry employment (table 3). Declining employment has been offset by improved quality of the workforce, e. g. even blue collar staff now require advanced education and training to cope with computer-controlled processes. The chemical industry has had to continually restructure in the face of global competition; declining employment is one indication of this. The basic chemical sectors have been especially affected by this : the fertilizer industry has seen its workforce fall from 140,000 in 1980 to 28,000 in 1995. 7. Certain parts, especially petrochemicals, are very cyclical, experiencing wild swings in prices and profitability. Some people have seen industrial cooperation measures as a possible means of avoiding the problems of excess capacity during economic downturns : high unit costs, cut-throat price cutting, large financial losses and a lack of investment in new technologies. Structural excess capacity is essentially the result of an inability to adapt the structure to the cycle, taking the appropriate measures which may include shutting down plants. New capacity coming on stream in a depressed market can add to the problem. 8. The EU chemical industry is currently doing reasonably well in terms of profitability after several years of depressed earnings. Sustained worldwide economic recovery is certainly part of the reason for this. The gross operating surplus rose in 1994 to 13. 5%. Real output of the industry grew 6% in 1994. 1995 will have seen lower growth but still a satisfactory rate, especially compared with the depressed years 1990-1993. But even with those poor years the EU chemical industry increased output while all manufacturing industry saw output fall in the early 1990s. Between 1985 and 1994 the chemical industry saw output increase faster than GDP, which in turn grew faster than total industry output (see table 4). The relative decline that has been affecting the EU's manufacturing sector as a whole is less prevalent in the chemical sector but the average return on capital employed across economic cycles is lower in Europe than in the USA or East Asia. 9. The European chemical industry owes its current competitiveness to five principal factors : flexibility and willingness to restructure; a multinational structure favouring open markets and free trade; a heightened sense of responsibility towards the environment; a capacity to innovate; and a high quality workforce and management. II. B FEATURES OF THE INDUSTRY 10. The chemical industry is a global industry with many multinational companies, though several product markets remain regional. In Europe a sizeable number of factories belong to American companies. European companies also have significant investments in the USA and other parts of the world. Many sectors benefit from significant economies of scale in production and distribution that may lead to global product markets. Trade as well as investment is important. 20% of EU chemical output is exported. 11. In general terms, the industry is both capital and research intensive. Many parts of the industry see over ECU lm capital assets per worker employed. This means that there are very high fixed costs and a need for substantial cash flows. More than 5% of turnover goes on research and technology development (RTD). Intellectual property plays a vital role and becomes an increasingly valuable component of competitiveness : therefore the chemical industry is especially vulnerable to a lack of protection for intellectual property. Patents are a key indicator of efforts to acquire such assets. European-based chemical companies are among the world leaders in patent ownership (table 5). However the EU chemical industry cannot afford to become complacent in this area. As a whole the EU had only 36% of patents in the field of chemicals in 1987/9 period, no better than the EU average for all types of technologies. The USA has a higher than average share of patents in chemicals. 12. In terms of capital spending, the European chemical industry appears less well placed against the USA and Japan. 1994 saw a slightly higher figure for investment in the European chemical industry compared with 1993, but this figure was 25% down on 1990. In contrast the US chemical industry significantly increased capital spending in 1994 and was spending 40% more than in 1990. Japan saw capital spending fall in 1994, a slight reduction from 1990 ( table 6). Different phases of the economic cycle explain some of this. 13. Energy and gas-as-feedstock costs play an important role in the chemical industry as a whole, representing between 15% and 60% of manufacturing costs for most products. The vital importance of electricity for chlorine products and natural gas for fertilizers are just two examples. Much of the primary energy is imported into the EU as are many of the raw materials for the industry, especially for basic chemicals. This tends to lead to certain input cost disadvantages. 14. Energy efficiency in the chemical industry has made substantial progress. The energy consumption per unit of output fell by 25% between 1960 and 1980 and a further 25% between 1980 and 1993. In many sectors energy efficiency is reaching its theoretical limits. Lower gas and electricity prices are therefore even more necessary for competitiveness. The Paris-based International Energy Agency produces data showing that industry in European OECD Members paid $169/toe for natural gas against $127/toe in the USA in 1993. Electricity prices to industry were 7. 4 c. /KWh ($866/toe) in OECD Europe and 4. 9 c. /KWh ($565/toe) in the USA. Furthermore, inside Europe energy prices vary by as much as 100% between Member States. 15. The chemical industry produces products which affect everybody's life. This is part of the reason why there are special sensitivities surrounding the public and occupational health and environmental aspects of chemical products. Governments and the industry are fully aware of and respond to these sensitivities. II. C THE CHALLENGES FACING THE EU CHEMICAL INDUSTRY 16. The EU chemical industry's aim is to retain or improve its place in the global economy and achieve a satisfactory return on capital. To this end, its objective is to supply its customers worldwide with the highest quality products, at the lowest competitive cost, in a healthy and environmentally sustainable fashion and on a long term basis. This requires it to generate sufficient profits from current sales to provide for the investment necessary to find new products. Furthermore, in a world of highly mobile capital, Europe must offer attractive rates of return on capital invested or see a dwindling of investment and a decline in activity therein. The objective of the Commission and Member States is to provide the best possible horizontal framework. to allow the chemical and other industries to fulfil their aims and objectives and ensure that this maintains or increases the level of highly qualified employment in the EU. II. C. l Better and more environmentally sound products 17. New and higher quality products require innovation. These are the products that meet environmental concerns and consumer preferences, that can reduce car exhaust emissions, result in new fabrics or improve skin care. The challenge is to ensure that innovation continues to produce better products, with reduced environmental impact through the complete life cycle of the product. Innovation may represent an incremental improvement Innovation requires significant or a radically different set of molecules altogether. spending on RTD. It also requires excellence in the science base and an adequate pool of well educated scientists and researchers. 18. Companies can decide on how much they spend on RTD but the public authorities must ensure that the population is well educated and should encourage a rational scientific debate over issues such as new products and processes. The authorities recognise the need for independent public sector research to address public concerns and perceptions in the acceptability of the risks involved. Furthermore, these authorities can inhibit innovation with requirements for the testing and registering of new products. Innovation is the key to guarantee and enhance the EU's industry competitiveness. There are reports from certain segments of the European chemical industry that the number of new products launched per year have fallen significantly over the past 15 years; a fall of 50% is reported by the dyes industry. There are indications that many of Europe's chemical companies are increasingly locating their innovation activities outside the EU - notably in the USA. The public authorities and industry must work together to address these worrying trends. In particular environmental legislation should encourage innovation while guaranteeing a high level of protection of the environment. It can best perform this dual role when appropriately integrated into other policies. II. C. 2 Competitively priced products 19. Competitively priced products are the only way the EU chemical industry will sell, make money, contmue to invest and operate. The challenge is to ensure that Europe can continue to produce good products at sufficiently low prices to compete with products made in other parts of the world. One way is to concentrate on those products and _4_ processes where Europe has a comparative advantage. Continual restructuring is necessary with the least efficient firms leaving a particular sector and the industry as a whole shifting investment from unprofitable sectors to profitable ones. Certain impediments to the process exist; barriers to exit, e. g. excessive state aid, are part of the challenge. 20. Efficient resource allocation requires markets to work and as a global industry the EU chemical industry benefits from open markets worldwide. Such markets initiate continual restructuring but efficient resource allocation and real competitiveness indications can only be achieved if competition is effective. The EUshould ensure that foreign chemical producers abide by World Trade Organisation fWTO^ rules. 21. Europe will continue to provide the basis for the EU chemical industry's sales but exports are a vital source of earnings. European firms have every interest in being present in those markets which are experiencing fast growth, in order to reap the benefits of economies of scale and reduce costs Most forecasters see the Pacific Rim as providing the fastest growing markets. EU firms are already present in all the Pacific Rim countries but need to be more present. China will probably be an important sales area for the next decade and the other East and South Asia countries will drive world sales. It is not easy to sell or engage in business ventures half way round the world but it is a challenge which must be met. This can be helped by ensuring fair conditions for free access to and investment in these countries. The Pacific Rim will also pose a major challenge as a supplier of chemical products to other parts of the world. 22. Competing globally and being able to produce competitively through economies of scale requires minimum efficient scale sites and companies. Joint ventures or mergers offer two of the possible ways of creating companies large enough to obtain these advantages provided that such operations do not lead to an appreciable restriction of competition. The challenge is for the EU competition authorities to ensure that companies are allowed to to compete, but not to allow such operations which can impede grow big enough effective competition within the EU. However, SMEs also play an important role, especially in some sectors such as specialty chemicals and paints and varnishes where sales are made to final consumers. SMEs are often suppliers or customers of the larger companies and one key challenge facing the industry is how to improve this complicated but potentially highly flexible structure to reduce costs. 23. The rationale for the Single Market is to allow firms to benefit from the economies of scale from a large market. The Single Market has certainly come a long way, but the challenge is to ensure that remaining barriers are abolished and that integration is improved. Certain specific national regulations for chemicals still exist. As with other industries, chemicals suffer from the lack of truly integrated railway or road transport networks. The still missing internal market for electricity and gas is a big drawback impacting negatively on the competitive position of the chemical industry. The lack of a single European currency is a further challenge with currency fluctuations causing major complications. III. ACTIONS TO ENHANCE COMPETITIVENESS 24. To meet these challenges, industry, the Commission and Member States need to take specific actions. Some actions are currently underway and need reinforcing; but some new initiatives are required. The Commission, together with industry and the Member States, must act within the four priority areas for industrial competitiveness policy: - 5- improving the regulatory framework, ensuring effective competition; promoting intangible investment; and developing industrial cooperation. I I I. A ACTIONS TO IMPROVE THE REGULATORY FRAMEWORK 25. Most of the chemical industry's activities have an impact on public health and the environment, and therefore many of the industry's domains of activity are regulated. More specifically, regulation covering production processes and products is of paramount importance for the chemical industry. Being a highly capital intensive industry, it is most important that the legal framework is as stable and predictable as possible. III. A. 1. The current framework 26. The legal basis of a Community legislative measure is determined, in accordance with the case-law of the Court, in the light of the objective pursued by this measure. Legislation, the objective of which is to guarantee free movement of goods within the Internal Market, is based on Article 100 A. When the objective of legislation is to protect the environment, the legal base used is Article 130 S. Article 118 A provides a mechanism for developing health and safety initiatives wich calls for cost effectiveness studies to avoid constraints on SMEs, a full scientific base for regulations and a tripartite consultation process. It enables Member States to maintain or introduce more stringent measures for the protection of working conditions. Article 129 provides the framework for the development of measures dealing with public health. 27. Internal Market issues and environmental protection are closely linked to each other. When proposing Internal Market legislation, the Commission must take as a base a high level of environmental protection (Article 100 A3), while Member States wishing to "apply" (under Article 100 A4), "maintain or introduce" (under Article 130 T) stricter envrionmental rules than those in force at EC level must make sure, according to Article 130 T, that such national measures are compatible with Treaty rules, including principles relating to the free movement of goods. Free movement of chemicals 28. Chemical products move freely within the Internal Market. According to the principle of mutual recognition which has been derived from the "Cassis de Dijon" judgement4, products legally produced and marketed in one Member State must in principle be admitted in all other Member States. In order to identify cases in which a Member State has refused the free movement of goods, despite the fact that they were legally produced and/or marketed in another Member State, an information procedure has been set up under which the Commission and the Member States will exchange information, from January 1997 onwards, on national measures which derogate from the principle of the free movement of goods. 29. Whilst the principle of mutual recognition applies to all types of products, some Member State actions may have the effect of fragmenting the Internal Market. This places an obligation on the Commission to harmonise, that is, to propose Union-wide regulations which deal with the risk to health and the environment while assuring free circulation. A comprehensive framework for chemicals control has been created at Union level. The Community's direct contribution began with ad-hoc measures. Development of a harmonised system for classification, packaging and labelling of dangerous substances 4 Case 120/78 Court of Justice 20 February 1979 began with adoption of Directive 67/548/EEC. A harmonised system for limiting the marketing and use of dangerous preparations5 and substances6 followed. Harmonised rules for the classification, packaging and labelling of dangerous preparations were established by Directive 88/379/EEC. In more recent years, controls have been extended in a more programmed way to include notification of new substances7 and the systematic evaluation of existing substances8. A systematic approval system is to be set up for biocides. Moreover, a Community framework has been set up which lays down essential safety requirements that have to be met throughout the Community in order to allow for free movements of dangerous goods. The Community's legislative action in the field of chemicals has been generally appreciated in the sense that a single set of rules at Union level is, clearly, more efficient than fifteen different systems at national level. Further consolidation is of course possible and is already under way for dangerous preparations, fertilizers and detergents. 30. Environmental conditions are different between the Member States and, for that reason, some Member States may wish to apply national rules going beyond Community legislation. The major challenge is to balance the need to develop and maintain the nternal market with the need for higher levels of environmental protection in those Member States. 31. The Commission will continue to consolidate the internal market rules for chemicals to avoid difficulties, such as restrictions of trade, caused by different sets of national legislation. Environmental regulation and sustainable development 32. Complying with environmental requirements is sometimes seen by industry as a non productive cost. However, environmental leadership can stimulate innovation for new technologies and products and thus provide a competitive advantage. Also, good environmental performance can bring about important savings in resources and contribute to creating a good corporate public image for each company. 33. A key objective of both public authorities and industry is to enhance the international competitiveness of industry in a context of sustainable development. The concept of sustainable development involves economic, social and environmental aspects, as was concluded in the 1992 United Nations Conference on Environment and Development that met in Rio de Janeiro. The Fifth Environment Action Programme9 stresses that these three aspects are key elements in developing policies based on sustainable development. III. A. 2 Principles for future action 34. The internal "Guidelines for Regulatory Policy", adopted by the Commission on 16 January 1996, constitute the basic reference for future proposals. The main objective is to make sure that the evaluation of policies reflects the common interest. The paragraphs below 5 Directive 76/769/EEC 6 Directive 79/117/EEC 7 By the 6th Amendment to Directive 67/548/EEC 8 Council Regulation 793/93/EEC 9COM (92) 23 Final - 7- summarise how this could be pursued when legislation affecting the EU chemical industry is being prepared. 35. Once a potential risk to health or the environment has been identified (often in a Member State), the Commission should decide whether or not to act. Perhaps no intervention is necessary and the matter can be resolved through mutual recognition of Member States rules. Article 130R. 2 of the Treaty foresees that the precautionary principle is to be applied to environmental questions. This application could potentially occur when indications for a very high level of danger for the environment or the human health exist and risk assessment, for practical reasons, can not be carried out. 36 A detailed analysis to justify intervention is also needed. In this context a risk assessment is first carried out according to Community principles. Then, having confirmed that an unacceptable risk does exist, detailed strategies for risk reduction are identified and the most cost-effective option is chosen. This process must involve an appropriate analysis of the costs and benefits of the options available. (See in annex an example of the proper application of such principles in the case of nickel) As far as proposals relating to the environment are concerned, Art. 130R. 3 of the Treaty requires that in preparing its actions relating to the environment, the Community take account of the potential benefits and costs of action or lack of action. This is also foreseen in the Fifth Environmental Action Programme. The same should apply to Member States in their areas of competence. A proper economic and environmental analysis aiming at appraising the net benefit for society of a measure, sheds light on its efficiency and helps add more objectivity to an otherwise potentially emotional debate. CEFIC has to continue to provide proper scientific data (exposure of workers, toxicological studies) in order to facilitate the proper legal framework for an improved competitive environment. 37 The Commission will carry out a comprehensive risk assessment and an adequate analysis of the costs and benefits prior to the adoption of proposals affecting the chemical industry. In areas where Member States intend to apply stricter rules than those in force at EU level, the Commission will encourage them to carry out the same analysis. When Member States already apply these stricter rules the Commission will, in the framework of the analyses that it carries out as regards the compatibility of national measures with Community law, pay special attention to the analysis of risks and to the cost-benefit aspects of such national measures. 38. Deciding on the level at which intervention should take place is important. Will it be at international level (OECD, UNEP, PARCOM) or will it take place at EU level? Evidently, consideration needs to be given as to whether the risk is one that transcends the relevant territorial boundaries. Also, stricter regulation by the EU may affect the EU chemical industry's competitive position vis-à-vis the chemical industries in other zones of the world. International convergence of policies, one of the central issues of the present debate on trade and environment,10 is needed not only to avoid the temptation to use environmental and health protection arguments to justify protectionism, but also to prevent some countries from exploiting a comparative advantage as 'dirty producers' of chemical products. When rules in other industrial economies are less strict than in the EU, délocalisation of certain production lines may occur; this may also encourage imports from third countries of products whose production is no longer possible within the EU. 10 See the (draft) Communication to the Council on trade and environment, Section I point 2. 3 39. When agreement at international level is not possible, the implications of new European environmental measures on the competitiveness of the chemical and other industries will be taken into account. It might be preferable to involve at least the OECD countries and advanced developing countries in environmental rules. 40. The most appropriate type of action must be selected. Besides regulation, voluntary action and economic instruments can play a complementary role in achieving desirable health and environment targets. Voluntary agreements and economic instruments are more likely to be effective in improving environmental performance than in regulating the free circulation of chemicals. 41. Voluntary action can take the form of unilateral industry programmes, such as the chemical industry's Responsible Care Programme or the Voluntary Energy Efficiency Programme (VEEP). Voluntary approaches and agreements reflect bilateral cooperation between public authorities and industry and may serve to achieve Community objectives. One high-profile example where voluntary sectoral agreements can play an important role is in reducing CO2 emissions, provided that they include quantified reduction targets. This approach is favoured by industry instead of a C02/energy tax. Examples of voluntary actions concerning products at international and EU level include the reduction of risks from brominated flame-retardants (implemented at OECD level) and the labelling of detergents (implemented at EU level). Another example of voluntary action is the substitution applied by industries in some Member States of some dangerous pesticides by less dangerous ones. 42. Industry will develop and widen Responsible Care initiatives and other environmental management systems leading to better overall environmental It will develop new processes and products that are more performance. environmentally friendly and more resource effective and invest in new equipment and facilities which decrease emissions and energy use (Voluntary Energy Efficiency Programme (VEEP)) 43. When preparing voluntary agreements, attention should be paid to conformity with competition rules, since voluntary agreements which imply cooperation among firms may pose problems with regard to potential anti-competitive practices by participating firms. Where such voluntary agreements fall within the scope of Article 85 §1 of the Treaty, they may nevertheless benefit from an individual exemption provided that the conditions of Article 85§3 are met. 44. As far as the use of voluntary approaches or agreements is concerned, a Community framework is under consideration, aiming at establishing criteria within EU environmental policy and at ensuring that such agreements do not fragment the Internal Market. 45. Economic instruments are becoming widely used in the environmental field. In particular, public authorities can influence the environmental choices of companies and consumers through taxation. As a rule, fiscal instruments e. g. incentives for accelerated depreciation are decided at Member State level, taking into account the Commission policy on state aids and, in particular cases, specific provisions for fiscal instruments in Council Directives11. The CO2 dossier has shown the difficulties of reaching unanimous agreement 11 [An example is Art. 15 of Directive 94/62/EC on packaging and packaging waste (O. J. n° L 365, 31. 12. 94,pl0)] - 9- on environmental-related taxes. To date, some Member States (Denmark, Finland, the Netherlands and Sweden) have unilaterally proceeded with national schemes, including exemptions for certain activities. They think that economic instruments are a cost- effective way to deal with environmental problems. In order to avoid unfair competition and distorted resource allocation, these exemptions must respect the conditions laid down in the framework for environmental aids, which was adopted by the Commission in December 199312. At the request of the ECOFIN Council, the Commission is currently considering the possibility of devising a new approach for the taxation of energy products which will deal, at a Community level, with the problem of competition, whilst creating a framework within which Member States can, if they so wish, pursue other specific policies such as reduction of CO2 emissions. However, the EU chemical industry is not convinced that environmental levies are a good way of addressing environmental issues. 46. In addition, a communication on environmental levies is under consideration by the Commission. This Communication will give Member States guidelines on how to reconcile the use of economic instruments to achieve environmental targets with the requirements of the Internal Market, while strictly observing inter alia the above- metioned framework for environmental aids. III. B ACTIONS TO ENSURE EFFECTIVE COMPETITION 47. The chemical industry, comprising many firms operating across several Member States and indeed operating as multinationals in the global economy, requires effective competition inside and outside the EU. III. B. 1 Effective competition internally Competition law, mergers and joint ventures 48. The competitiveness of the industry as a whole requires that large companies should not abuse possible dominant positions, nor engage in anti-competitive practices. The competition authorities should allow mergers or joint ventures which do not threaten to lead to an appreciable restriction of competition and disallow those which do. In this context it is particularly necessary to assess how the partners are placed on the market which is increasingly global, especially for certain basic chemicals and advanced technologies. 49. The Commission will ensure that both cooperative and concentrative joint ventures are assessed rapidly. The Commission has submitted a Green Paper on the revision of the Merger Regulation which is presently being discussed with the Council and European Parliament. The Commission is seeking to lower the thresholds for the Merger Regulation removing the need for multiple notifications and creating a real 'one stop shop'. Cycles of excess capacity and capacity shortage 50. Many capital-intensive industries are prone to cycles of excess capacity and capacity shortage and the petrochemicals sector is particularly vulnerable. The problem is easy to identify, the development of effective mechanisms to address the issue is much harder, particularly in a competitive climate where each firm believes it will succeed and even capture market share from others. Furthermore, in the petrochemicals sector, the cycles of 12O. J. n°C72, 10. 3. 94, p. 8 -10 capacity excess and shortage may have causes and consequences outside Europe and a global analysis would be appropriate. The industry is providing certain input for the Commission work as part of a scenario-planning exercise. 51. The Commission will encourage restructuring in cases of structural inadaptation and will investigate the causes of cyclical and structural capacity mismatches in petrochemicals when assessing whether any form of industrial cooperation might alleviate the apparent problems without infringing competition rules. State aid 52. State aids should not give unfair advantages to some chemical companies, allowing less efficient producers to maintain or even increase market share, lowering the efficiency and thus competitiveness of the industry as a whole. The industry should also not face unfairly subsidised competition from other sectors. The chemical industry contains many capital intensive activities and has an interest in minimising distortions caused by state aid. In determining which State aids are allowed, the Commission will continue to apply transparent and objective criteria. Sectoral aid frameworks may discriminate against small entreprises and new-comers. The new synthetic fibres framework, for example, has reduced this distorting effect,which was present in the former one. The revised framework for state aids for SMEs makes it easier for all small companies to invest in intangible investment. 53. The Commission will continue its efforts to increase transparency in the rules on State aid and in its administration of State aid cases to reduce the overall amount of state aids granted, and to minimise the distortions such aid can cause. The Commission will continue to study a horizontal control system for regional aid to big investment projects, which would set up a multisectoral discipline. Prices of energy and other inputs 54. Effective competition requires unrestricted access to inputs at world market prices if the EU is not to be disadvantaged. Energy is one key input. However, agricultural based products, e. g. sugar and starch, which serve as basic products for certain fine chemicals and specialties should also be included. 55. Much work has already been done in identifying the remaining obstacles to the integration of energy markets, and some progress has been made in removing barriers. However, it has to be recognised that within the energy sector, the markets for electricity and gas are still far from being open and competitive. An industry like the chemical industry, being exposed to global competition needs to benefit from competitive energy input prices which can only be assured through the realisation of internal energy market. Large industrial users, will gain particular benefits in terms of lower costs, thus leading to direct and indirect advantages to all consumers, increasing global industrial competitiveness. 56. The Commission will continue efforts to liberalise energy markets in the EU, leading to more efficient energy production and distribution and also to cheaper energy inputs for the chemical and other industries. Effective third party access for gas and electricity is one major element of such liberalisation. 11 - III. B. 2 Effective competition externally 57. Externally, effective competition requires the Commission to create a level playing field and ensure that the newly-created WTO works effectively. The long term objective of both the Commission and the European chemical industry is to eliminate all barriers to trade. Tariffs for chemicals in developed countries are relatively low and will decrease further and be harmonised at 0%, 5. 5% and 6. 5% thanks to the Uruguay Round in which the industries of the EU, USA, Canada and Japan played a major role. Developing countries, especially the richer, more advanced nations such as Malaysia, Thailand, Brazil and Mexico and China, should be encouraged to reduce their tariffs to these harmonised rates. 58. The Commission will seek to ensure that new members of the WTO , especially those that are relatively advanced, apply the harmonised rates for chemicals, from the start. Efforts to reduce others' tariffs will also be made. 59. Non-tariff-barriers or measures, and in particular double-pricing of raw materials and feedstocks, distort trade. The latter is of particular concern to the petrochemical industry for whom feedstock double-pricing in certain developing countries causes unfair competition. Among the various means available to tackle this problem, countries intending to join the WTO should, when possible, be obliged to refrain from applying such practices. Double-pricing of natural resources may have a distorting impact on trade- flows and on investment decisions. Testing and certification problems also frequently represent non tariff barriers to trade in chemicals, with China and Poland being recent sources of such difficulties for EU exporters. Special registration and mandatory declaration procedures that distort trade should be ended. Although not considered illegal measures by the WTO, technical rules on the classification, packaging and labelling of dangerous chemicals and preparations and on Prior Informed Consent for trade in hazardous substances which differ from region to region, also constitute barriers to trade. Whilst the United Nations is trying to promote global harmonization of these rules the work is proceeding only slowly. There are moves to accelerate this through joint EU/USA leadership. 60. In consistency with its market access initiative, the Commission will seek to address these problems firstly by using all available instruments at multilateral level and in particular by being vigilant to ensure that the Community's trading partners adhere to WTO obligations and respect them. It will also, whenever appropriate, raise market access issues in the context of its bilateral relations with third countries as well as pursue other policies such as the promotion of international industrial cooperation. 61. The Community adopted the Trade Barriers Regulation (TBR) in December 1994 to address non-tariff-barriers and other trade distortions. It will act upon a complaint by a company or industry concerned. Imports into the Community subject to injurious dumping and subsidisation will be combated, though a rigorous application of the updated commercial policy instruments, further to a valid complaint from the company or industry concerned. The Transatlantic Business Dialogue (TABD) contains working groups covering inter alia certification, regulation and trade liberalisation. If the TABD so recommends, the Commission could reactivate bilateral discussions with the USA to harmonise the rules on classification, packaging and labelling and Prior Informed Consent, first bilaterally then globally. 12- 62. The international dimension of competition policy, combined with the lack of international rules, also affects competitiveness. This is particularly damaging when the nature of the market is global. One example is the export cartel of US rock phosphate producers, which prevents EU fertilizer manufacturers gaining access to phosphate at prices low enough to compete with US-made phosphate fertilizers. Trade and competition is an important issue on the new trade agenda. The Commission will seek a multilateral agreement whose main elements would be the creation of a framework based on a set of common rules, a binding positive community instrument and a dispute settlement procedure. 63. Coordination between the competition authorities in the EU and USA is already assured via an agreement. Similar arrangements are being considered with other countries, e. g. Japan. The Europe Agreements incorporate rules on competition with implementing provisions similar to those of the EU/US agreement. Such rules are also included in the agreements being concluded with Mediterranean countries. 64. The Commission plans to explore international agreements on competition law -both bilaterally and plurilaterally. The Commission will evaluate, on a case by case basis, possibilities and benefits of the incorporation of competition rules in new cooperation and association agreements, in order to remove barriers to trade in these countries. In addition, within the OECD, work on International Investment might permit the reduction of such practices as double pricing. This will tackle export cartels and barriers to market access caused by coordinated practices between domestic producers. III. C ACTIONS TO STRENGTHEN INTANGIBLE INVESTMENT 65 A company's competitiveness on the eve of the 2 1st Century depends increasingly on its innovative power13 in terms of processes, products, work organisation and the rapid dissemination of new technologies. Investment in research and development, intellectual property, training, health and safety, data processing and the whole panoply of areas covered by 'intangibles', is essential if the chemical industry is to remain competitive. Research productivity is a major target, taking into account the contribution of research to standards and regulations, the role of RTD in promoting rapid absorption of new technologies in particular by SMEs, the need for a more coherent and coordinated public intervention and private efforts in RTD. Furthermore, the chemical industry will continue to give due attention to education and training issues involving chemistry and chemical engineering; and to reinforcing the science base of industry. Innovation in the chemical industry also has an important effect on other sectors e. g. vehicles and electronics. III. C. l Research and development 66. The chemical industry has long realised the importance of RTD leading to innovation in products and processes as a fundamental source of competitiveness. Until recently it has tended to avoid collaboration with its competitors. Although it has been involved in previous Framework Programmes, this was relatively low key given the level of its own RTD capabilities. However, growing pressure from society 'cleaner' technologies and to maintain a competitive position in the global market, coupled with high costs and high risks for such RTD, have made participation in the 4tn Framework to develop 13See 1995 Green Paper on Innovation - 13 Programme more attractive and important for the chemical industry. This has led industry to launch SUSTECH, an initiative extending beyond the chemical industry, aimed at promoting collaborative RTD in technologies for sustainable process industries in Europe. The term "sustainable" is used in this context to mean process industries which are resource and energy efficient and which generate the minimum of waste and damage to the environment. 67 Within the current 4m Framework Programme, specific programmes such as Industrial and Materials Technologies (BRITE-EURAM), Standards Measurement and Testing (SMT), Information Technologies (ESPRIT), Environment and Climate and Marine Science and Technology and Biotechnologies finance a large number of projects relevant to the chemical industry. To take two examples: within ESPRIT, the PRIMA initiative involves 16 large companies from the chemical, food and beverages, steel, paper and utility industries and is designed specifically to strengthen the competitiveness of Europe's processing industries by securing the maximum business advantage from information technology; within BRITE-EURAM the ADMIRE project involves several chemical companies cooperating on new design methods for large scale gas liquid reactors. 68 The creation of Task Forces has been an important step to promote better coordination within industries and European authorities in RTD Programmes : the chemical industry can and should participate actively in the car, train and plane of the future projects as well as in water technology and healthcare subjects. Concerns over competitiveness mean that the structure of the RTD programmes needs to support cross-disciplinary working, to get results to market faster and to make processes simpler and more flexible. Part of this can be achieved by thematic clusters, whose aim is, through coordination and integration, to secure added value by improving synergies, facilitating technology transfer and catalysing the dissemination and exploitation of results. Clusters can also be based around particular suppliers or user groups, such as the process industries and include demonstration and application-oriented actions. 69. The 4*n Framework Programme will continue to support collaborative RTD initiatives of the chemical industry. The research-industry Task Forces combine other Community policies with RTD and application projects. This model has already proved its worth and could be extended. New thematic clusters could arise directly out of industry and user demands, with the chemical industry playing a key role as a vital supplier. The Commission is seeking industry input on the orientations for the 5th Framework Programme. III. C. 2 Intellectual property 70. Intellectual property is a vital asset in the competitiveness of the chemical industry. The patent system allows companies to recoup the investment they put into RTD. One threat to European competitiveness has been the short effective life of the intellectual property protection afforded to pharmaceuticals and, still today, to crop protection products. Though the patents themselves last 20 years, their effective life is as short as ten years because of the time taken between patent granting and the bringing of these products onto the market. This long period is because of the stringent and lengthy testing procedures necessary for such powerful chemicals. 14- 71. Although an additional patent protection term of up to five years has been granted for pharmaceuticals via a Supplementary Patent Protection Certificate scheme14 , the same is now about to be adopted for crop protection products15. Its early adoption is important in ensuring Europe remains the global leader in RTD and production of crop protection products when, as hoped, it is fully adopted by Council in early 1996. 72. Biotechnology is an important factor for future competitiveness, since it is a technology that can provide high added value products, which address people's needs (e. g. drugs to fight so far incurable diseases, improved crop plants which allow the application of more environmentally-friendly growing methods or which are less affected by severe climate conditions -drought, cold-, etc. ). Biotechnology is therefore a key part of the activities of certain chemical companies, but suffers from a number of shortcomings in its legislative framework, among which is the lack of harmonised patent protection in Europe. Without a clear and risk-based legal framework, research and production will increasingly take place in Japan and the USA, already the global leaders in this field. The European Parliament rejected a proposal to harmonise and improve patent protection for biotechnological inventions. A new Commission proposal was put forward in December 199516. It makes a clear distinction between invention and discovery. If accepted, this new proposal will contribute to a more innovative climate and will provide a harmonised basis for patent protection within the EU It will ensure the patentability of biotechnological inventions in Europe while taking into account ethical aspects. 73. The Commission has also just proposed a modification to the rules on the contained use of genetically modified micro-organisms, which without jeopardising the current high level of protection for human health and the environment, aims at making the Directive more risk-based and at increasing its flexibility. The proposal is streamlining the administrative procedures for certain no and low risk activities, thus eliminating regulatory redundancies which are not justified by safety reasons and which therefore cannot fail to have a negative impact on Europe's capacity to innovate, while maintaining a sufficient transparency for the consumers. Furthermore, the recently revised block exemption on technology transfer offers the indispendable legal security for agreements on licensing intellectual property which is of particular importance for the biotechnology sector. III. C. 3 The need for a scientific culture 74. The EU chemical industry is worried about the decline of the scientific culture in Europe. literate workforce and To remain a global leader, industry needs a scientifically governments which Too many schoolchildren and university students believe science is 'too hard' or 'too dirty' for them. More must be done by national governments, and to whatever extent possible by the Commission to foster an atmosphere which is pro-science. take decisions based on scientific principles. 75. Industry will intensify efforts to improve the scientific and technological culture in Europe. Under the title of "Education, Industry Partnership", CEFIC has already launched three actions: 'Chemical Industry and the Young' is a multi-annual programme to nurture in the under-18s a better understanding of the fundamentals 1 Regulation 1768/92 15COM(95) 456 Final 16COM(95)661 Final - 1 5- of science and an awareness of the benefits and risks brought by the chemical industry and the means used to reduce such risks. The 'Science Education Award' is an annual competition to find the best European science teachers. The 'Museums Project* is aimed at renewing chemistry exhibitions in Europe's museums. The Commission also emphasises the need for a strong scientific and technical base within education in its published White Paper, "Teaching and learning : towards the learning society"17. The SOCRATES programme funds educational exchanges and promotes the use of new technologies in schools. m,Ç,4 Training 76. Training is a major area of Commission activity and can play a role in improving the climate for science. Three separate sets of Community financial supports contribute to improved training: The Leonardo da Vinci programme seeks to promote actions to improve the quality of training policies and practices and to develop new ways of learning through pilot projects, exchanges and placements as well as surveys and analyses in the context of transnational partnerships. The 4th RTD Framework Programme, already referred to, provides specific financial aid for research projects linked with training and long distance learning. The fourth activity of the Framework Programme concerns the stimulation of mobility of researchers, with the aim of promoting a quantitative and qualitative increase in human resources within Europe. The objectives are to stimulate training through research and to improve transnational mobility and cooperation. In some RTD programmes, specific training is also included as an accompanying measure to research projects, as for example the industrial training of young candidates through participation in a research project within the BRITE-EURAM programme. One specific programme Environment and Climate, also finances projects in socio-economic areas including examination of the best way of diffusing innovation and projects to facilitate exchanges and further research. The Structural Funds provide financial assistance for training and development. Such finance can come either from national programmes or Community initiatives. ADAPT and the new Objective 4 programmes are particularly focused on training. The incorporation of health and safety within such training programmes is equally important as a cost effective approach and a contribution to competitiveness. 77. The future RTD Framework Programmes will provide further opportunities to support training through research. The Structural Funds will continue to target training as a component to enhance competitiveness. A new call for proposals for the Leonardo da Vinci programme for 1996 has been published on 29 February 1996. III. D ACTIONS TO DEVELOP INDUSTRIAL COOPERATION 78. Industrial policy measures involving industrial cooperation have an internal and an external dimension. Both sets of measures seek to make businesses more competitive by giving them opportunities they would not have as isolated players, by facilitating the transfer of non confidential knowledge and experience between companies. III. D. l Industrial cooperation within the EU Chemical sector information network 17COM (95)590 - 1 6- 79. One area of industrial cooperation is in the field of better information and communication. The Commission has set up a comprehensive network for the chemical sector: 'Le Réseau d' Information pour le Secteur Chimique (RISC)" to allow it and industry to be better aware of the activities and desires of the other. The main aim of RISC is to create a synergy between the various private and public operators in order to encourage dialogue and to allow the exchange of information between the Commission and industry via European federations. The current activities within the network are to exchange, collect, process and analyse the data in various fields such as economics, foreign trade and the legislative area while fully respecting competition laws. 80 RISC will be further developed including increased integration with industry federations, thus gaining maximum benefit from electronic data transmission. RISC will also enable other European federations to be better integrated into the policy making process. The Commission and industry will continue to devote significant resources to improving communications, in particular linked with the means provided by the Information Society. Investment in information technology will continue to increase. Better links will be created to harness the results of advances in information technology to the needs of the chemical industry thereby enhancing its competitiveness in concrete terms. SMEs 81. There are numerous programmes and support measures in favour of SMEs under both Enterprise policy and other Union policies to improve the business environment and to support the creation and development of SMEs. In March, the Commission presented a proposal for a Council decision on a new Multi-annual Programme for Enterprise and SMEs to cover the period 1997-2000 which will provide the legal and budgetary basis for the Community's specific enterprise policy actions18. While these policies are not specifically geared towards the chemical sector, there are some which are particularly interesting to chemical SMEs. The Euro-Info-Centres, provide a business information network and act as a 'first stop shop', the B. C. Net, Europartenariat and Interprise programmes provide co-operation opportunities, and there are other measures aimed at improving SMEs' management capability, access to finance and technological know-how. One specific example of an area for enhanced competitiveness is certification to international quality standards. This is difficult for chemical industry SMEs to achieve but Quality Assurance Certification is vital for their ability to sell. SMEs should be encouraged and assisted to obtain it. The proposed SAFE programme will also contribute to supporting improved quality management within SMEs. 82. Specific action is underway to enhance the competitiveness of chemical SMEs and promote better links between SMEs and between them and bigger companies. CEFIC, other federations and the Commission are involved in studies to understand better how SMEs function in the chemical sector and on what their competitiveness depends. To this end their role in subcontracting, employment-creation and exporting will be carefully examined and proposals made to enhance their competitiveness. III. D. 2 External industrial cooperation l8COM(96) 98 Final of 20 March 1996 - 17- 83. The role of the Commission is to set the framework for individual companies to undertake investment or other forms of industrial cooperation. It is for individual firms to decide with whom and how to cooperate. The Commission has a more direct role to play in cooperation involving more state controlled economies. Industrial cooperation benefits the recipient areas and European industry. In all areas direct investment by chemical companies will provide much needed capital for the host countries and ensure better allocation of resources. It also provides opportunities for access to and a presence on new fast growing markets. 84. No single industrial cooperation strategy is appropriate for all the different regions of the world: each region's specificity requires a particular regional orientation within a common set of institutional instruments. Outside the Transatlantic Business Dialogue and specific cooperation with Japan, three non-mutually-exclusive types of industrial cooperation can be highlighted : that with regions close to the EU, including Central and Eastern European Countries (CEECs)^, Russia and some Newly Independent States(NIS), and the Mediterranean; that with fast growing economies, which includes China, ASEAN and Latin America; and projects which improve Industrial cooperation is a feature within the PHARE access to raw materials including energy. and TACIS programmes and ECIP (European Community Investment Partners) and AL Invest for Latin America, and Med Invest for the Mediterranean. Furthermore, industrial actions in favour of the African, Carribean and Pacific (ACP) countries are carried out under the "Lomé IV Convention". That Convention has a chapter on "Industrial development, manufacturing and processing", that provides inter alia for (i) industrial joint ventures between EU and ACP companies, (ii) support to "engineering, metallurgical and chemical industries", (iii) transfers of technologies, (iv) external investment in favour of ACP industrial companies, (v) training, (vi) research. Under the same Convention, the Centre for the Development of Industry (CDI) was established to foster the industrial development of the ACP countries. Regions in close proximity 85. The pre-accession strategy, designed to prepare those countries of Central and Eastern Europe so desiring it for EU membership, defines the framework for structured dialogue between the EU and CEECs and provides a concrete vade-mecum for the exercise in legislative compatibility: the White Paper on the preparation of associated CEECs for integration into the EU internal market. The chemical industry has a direct role to play in the process. The Commission has developed contacts with CEECs in order to clarify certification procedures which were incompatible with EU procedures. Cooperation between EU and CE EC producers of detergents and cosmetics have allowed certain CEECs to better understand certification legislation in the EU and move to adopt similar legislation themselves. The Cosmetics Federation (COLIPA) organised a meeting with Eastern European national authorities and cosmetics producers in Prague in late 1995. The Fertilizer Manufacturers Association (EFMA) has also been involved in a project to encourage better fertiliser use in Russia. 86. The Commission, together with the participation of the federations and companies concerned, will continue to provide technical assistance to the CEECs with legislation for future membership,in support of investment and development of harmonised institutional frameworks. EU industry will cooperate with industry in the CEECs and national administrations to ensure that such legislation is operated in such a way as to avoid unnecessary administrative burdens or barriers to trade,as well as exports from these countries distorted by lower levels of environmental protection in their chemical facilities. It will also pursue specific industrial cooperation themes in 19See the Commission Communication on Industrial Cooperation with the CEECs, COM(95) 71 Final - 1 8- the mixed committees set up with CEECs by the Association Agreements and develop industrial cooperation with the Mediterranean. 87. Cooperative actions in support of management training and other areas for CEEC chemical companies in which CEFIC is already involved may continue to be financed by PHARE subject to the priorities of theses countries. Industry will relaunch the E A S ÏT technology for environment programme for CEECs with the objective of providing the best practice techniques and know-how to ensure environmental performance and standards in the pre-accession countries will be compatible with EU membership. Presence on fast-growing markets 88. China is a huge market with enormous potential. Many EU chemical companies are already investing in China but the Commission has a role to play to ensure China continues to welcome such investment. In order to facilitate and to promote investment one task of the Commission has been to encourage China to adopt regulation frameworks compatible with EU regulations. Some actions in the field of certification and quality have already been completed. COLIPA is cooperating with Chinese cosmetic producers on regulations for cosmetics. 89. The Commission will develop industrial cooperation with China and other E. Asia countries and Latin America to ensure EU in their development and to take advantage of these fast growing markets. The main issues will revolve around chemical product legislation (especially for China), technology transfers, successful joint ventures and other forms of foreign direct investment. Environmental industrial cooperation projects. issues will be a growing concern and subject for is well placed industry Access to raw materials including energy 90. Industrial cooperation projects can improve access to raw materials. One possible set of projects would be to extend the western European petrochemical feedstock pipelines into Central and Eastern Europe and even into Russia. Gas pipelines originating in Russia could also be developed specifically to supply European chemical companies. There are ideas to develop gas supplies from the Gulf region. Industrial cooperation could involve the Gulf Cooperation Council (GCC) and Mediterranean countries, for example to bring such gas overland from Saudi Arabia to a North African port. 91. The Commission will favour projects which improve access to raw materials and energy and put in place mechanisms to encourage EU companies to undertake such initiatives. IV. OPERATIONAL CONCLUSIONS AND WORK PROGRAMME 92. The EU chemical industry is the EU's second largest manufacturing industry and the world's most important producer of chemicals. It also accounts for 30% of RDT spending by the EU manufacturing sector. It must meet many challenges if it is to retain, let alone increase, its global competitiveness. The primary responsibility for the chemical industry's competitiveness lies with itself. The Commission and the Member States have to provide the adequate framework and, if needed, undertake specific actions, to enhance this competitiveness. 93. Grouped around the four priority areas of the Communication on an industrial competitiveness policy for the EU, a set of actions for the industry, the Commission and Member States have been identified. The pursuit of those actions will certainly help the competitiveness of the - 1 9- European chemical industry and thus can constitute a model for the implementation of such policy in industries with similar characteristics and challenges. 94. To confront the challenge of improving the regulatory framework, the European Union will ensure that the legislative aspects of the Internal Market are consolidated and the problems caused by disparate national legislation be resolved. A formal set of principles will be applied at Union level for individual cases of classification, limitation or authorising schemes governing the marketing of chemicals. The principles will ensure that the Community decides whether to regulate, who will regulate and how such regulation should be done. In the same vein, environmental regulation will pay close attention to competitiveness always involving an analysis of costs and benefits and proper risk assessment in line with the Treaty. Where appropriate and feasible, international environmental regulation will be preferred to EU level action. Voluntary agreements will be studied on a case by case basis and a Community framework for them is being prepared. 95. To confront the challenge of ensuring effective competition, the Commission will analyse possible industry proposals to overcome structural overcapacity where this exists, in conformity with the rules of the Treaty. It will pursue liberalisation in the electricity and gas markets thereby affording the chemical and other industries more competitively priced energy. Within the WTO, the Commission will seek reduced tariff and non tariff barriers, paying particular attention to the problem of double pricing especially for new WTO members. The OECD as well as the WTO will see continued work on Distorting Investment Incentives as well as multilateral agreements on trade and competition. Chemicals will also feature in the Transatlantic Business Dialogue. The chemical industry is invited to convey to the Commission informations regarding the market access problems it encounters in third countries so that it can take steps to solve them. 96. To confront the challenge of assuring more intangible investment, industry, the Commission and Member States should concentrate efforts to reinforce innovation, RTD, education and the whole scientific culture. , As regards the EU RTD actions, the chemical industry will be better integrated into the existing Task Forces and more focused clusters. Intellectual property protection will be strengthened: the agrochemicals and biotechnology sectors will benefit from specific patenting improvements. Commission programmes ranging from the RTD Framework Programme to the Structural Funds, SOCRATES, and Leonardo da Vinci will intensify the education and training of scientists in Europe. 97. To confront the challenge of promoting more industrial cooperation, the Commission and industry will further develop the RISC information network and improve knowledge about and actions undertaken for SMEs in the chemical industry. Externally, industrial cooperation will be reinforced with the USA via the TABD and Japan via specific deregulation projects. Actions will also be pursued with chemical companies in : countries near to the EU, e. g. CEECs; fast growing economies, e. g. China; and energy and raw material rich countries e. g. the GCC and Russia. 98. Launching and implementing the actions identified in the above text implies a deepening and strengthening of the already existing relations between the varied representatives of the EU chemical industry (CEFIC, sectoral associations and, sometimes, individual firms), Member States and the Commission. A work programme should review initiatives in the main areas of action, e. g. internal market rules, environmental actions, internal and external SMEs issues, information/communication and cooperation with third countries. competition education training, RTD, and - 2 0- Table 1 : Output trade in 1994 (Ecu Billion) Output Exports Imports EU U SA Japan 316 287 196 67 43 20 41 28 17 Sources : CEFIC & Eurostat Trade Balance 26 15 3 350 E EU B U SA DJapan Output Exports Imports Trade Balance 21 Table 2 : Top 30 chemical companies in the World (1994) Company Worldwide Turnover in million ECU in million US$ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 HOECHST BASF BAYER DU PONT DOW CIBA-GEIGY RHONE POULENC MERCK& Co ELF GROUP ICI MITSUBISHI CHEMICAL ASAHI CHEMICAL AKZO NOBEL SANDOZ ROCHE SHELL SUMITOMO CHEMICAL EXXON PFIZER MONSANTO SOLVAY ENICHEM ZENECA HULS L'AIR LIQUIDE LILLY, ELI GENERAL ELECTRIC MITSUI TOATSU BOC HENKEL 25 714 22 625 22 494 18 932 16 827 13 771 13 069 12 586 11 934 11 826 11 021 10 983 10 261 9 760 9 069 8 705 8 046 8 024 6 962 6 955 6 588 6 024 5 765 5 392 4 808 4 802 4 740 4 712 4 482 4 389 30 586 26 911 26 755 22 518 20 015 16 380 15 545 14 970 14 195 14 066 13 109 13 063 12 204 11 608 10 787 10 354 9 570 9 544 8 281 8 272 7 836 7 166 6 857 6414 5719 5712 5 638 5 604 5 331 5 220 Sources : Chemical Insight & CEFIC 22 Table 3 : Employment (in thousands) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 EU 1959. 90 1890. 90 1850. 00 1799. 50 1788. 30 1780. 40 1779. 20 1767. 60 1769. 50 1790. 90 1797. 40 1897. 90 1816. 40 1734. 10 1656. 90 U SA 1107. 40 1109. 00 1075. 10 1042. 80 1049. 00 1043. 50 1021. 00 1024. 60 1057. 30 1073. 90 1086. 10 1075. 80 1084. 00 1078. 40 1053. 90 JAPAN 409. 30 408. 10 405. 00 402. 00 395. 90 395. 70 396. 30 391. 60 390. 60 393. 00 401. 00 406. 00 415. 00 413. 00 410. 00 Source : CEFIC 1980 1982 1984 1986 1988 1990 1992 1994 23 Table 4 : Growth rates F^ 1985-1994 EU Chemicals EU Industry EU GDP | : (% P-a) 3 1. 7 2. 4 Sources : CEFIC & Eurostat 11935-1994 (%p. a. ) EU Industry EU GDP Chemicals 24 Table 5a : Most ingenious companies Number of inventions in 1988/1989 (Source : Panorama 1993) Worldwide Eastman Kodak (USA) Bayer (EU) Hoechst (EU) Bosch (EU) Fujitsu (JPN) BASF (EU) GE (USA) Canon (JPN) Philips (EU) Fuji (JPN) IBM (USA) Hitachi (JPN) Mitsubishi Electric (JPN) Siemens AG (EU) Toshiba (JPN) 1014 1198 1198 1229 1289 1290 1306 1414 1541 1545 1623 1723 1747 1966 2009 500 1000 1500 2000 2500 \ \ { Toshfca(JPN) Semens AG(EU) Mtsubshi Bectric (JPN) Htachi (JPN) IBM (USA) Fuf (JPN) imimmtmmttittfmfttMiattiib Fhiips (EU) sggasapSaiaite Canon( (JW) JiiifPPnfPffil G£(USA) wmfÊm$^ *«*<*> mmmm hbechst(EU) j ^ ^ | § g | ^ | ^ j| Bayer (BJ) Eastman Kodak V (USA) fcàiS&S 25 Table 5b : Most ingenious companies Number of inventions in 1988/1989 (Source : Panorama 1993) From Europe Alcatel (FR) ABB (CH) Rh6ne Poulenc (FR) Shell (UK/NL)) Unilever (NL) ICI (UK) Henkel (D) Thomson (FR) Daimler (D) Ciba Geigy AG (CH) Bayer(D) Hoechst (D) Bosch (D) BASF (D) Philips (NL) Siemens AG (D) 339 367 382 424 475 490 553 557 685 738 1198 1198 1229 1290 1541 1966 26 Table 6 : Capital spending (% of turnover) WE U SA 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 5. 10 4. 70 4. 50 4. 20 4. 20 4. 60 5. 40 5. 90 5. 90 6. 40 7. 00 6. 70 6. 20 5. 30 4. 60 6. 40 6. 30 6. 60 4. 80 4. 80 5. 30 5. 00 5. 20 5. 60 6. 80 6. 70 8. 30 8. 20 7. 60 7. 90 JAPAN 6. 10 6. 40 6. 60 6. 40 6. 40 6. 90 7. 00 7. 90 8. 50 9. 10 9. 90 9. 90 9. 60 7. 40 6. 20 Sources : ESCIMO & CEFIC 10. 00 Annex Application of principles for Regulatory Impact Assessment to the problem of nickel allergy - an example OLP 1. Introduction Many people are allergic to nickel in jewellery products. In other words they suffer from soreness and inflammation of the ears when they wear cheap earrings, from soreness and inflammation of the arms when they wear cheap bracelets and watch-straps and so on. In addition to the effects of direct contact with cheap jewellery, many suffer soreness of the hands which keeps them away from work. Nobody is allergic to nickel at birth. They usually become sensitised when they have their ears (or noses) pierced and nickel comes into contact with the wound. Once sensitised they may suffer from nickel allergy whenever they wear cheap jewellery. Cheap costume jewellery is very popular especially among adolescents. The annual turnover of the industry in the EU is about 850 million ECU and much of this involves trade between Member States. It is an industry which is highly competitive and which relies on nickel because of its low cost and contribution to quality. Because of the widespead use of costume jewellery, the incidence of nickel allergy is thought to effect about 30 million people in the EU. Not only does this cause a large amount of suffering, it also leads to substantial spending by public authorities in treating those affected and to significant costs to the economy as a result of working days lost, without including the additional costs arising from occupational exposure. There are no rules applied outside the EU to the use of nickel in costume jewellery. 2. Why act? It is necessary to act for a number of reasons. Firstly, there is a need to reduce the risk to public health, already affecting 30 million people. Secondly, the Internal Market in costume jewellery, worth several hundred million ECU/year, must not be allowed to fragment further - national rules on nickel are applied already by Denmark, Germany and Sweden and are being discussed in Italy. Thirdly, it is necessary to act for reasons of cost - treatment costs for the EU being estimated at 40 million ECU/year and the cost of working days lost is also thought to be substantial. 3. Who should act ? Obviously nickel allergy is not an exclusively European problem. It affects the whole developed world. This being, so the first choice would be to have the OECD take action. There is, however, no consensus on the problem at the OECD level. Unanimity is required and at least two countries would oppose (USA, Switzerland). Intervention must be at EU level to protect the Internal Market. The Commission should take the lead, and has done so (see 6 below) -29- 4. What should be done ? To decide what needs to be done it is necessary first of all to examine the risks. The main risk is associated with the piercing of ears and noses. The use of nickel in piercing and healing should be stopped. A secondary risk is associated with the wearing of costume jewellery. Research has shown that these products provoke an allergic reaction when nickel is released in large quantities through the action of sweat on the jewellery. There is no need to stop the use of nickel in costume jewellery altogether, though clearly something more than a warning label is needed on these products (experience has shown that adolescents often don't read labels). In short the best way to control risk would seem to be the following: to ban the use of nickel for the piercing of ears and noses, and to impose a limit on the rate at which nickel is released from costume jewellery products This is a feasible strategy as safe substitutes for nickel are available. However, before it can be adopted it is necessary to check that the advantages of the controls exceed the drawbacks. The advantages are clear : 30 million people would be protected from the risks of nickel allergy, the internal market of several hundred million ECU/year would be preserved, the public authorities would save 40 million ECU/year and the economy would avoid the loss of many working days. There are drawbacks, however, at the levels of consumers, industry and the state. Consumers will have to pay up to 15 % more for costume jewellery. EU industry may have to bear once-off investments of about 70 million ECU and may suffer increased operating costs of about 30 million ECU/year. Finally, the Commission will have to invest 150 000 ECU in developing test methods. The advantages, however, would seem to more than offset the drawbacks. 5. How should it be done ? An approach involving voluntary co-operation between the Commission and the costume jewellery industry would not be effective for several reasons. Firstly, there is no industry partner as the costume jewellery industry is not organised at Union level or even at national level. Secondly, voluntary controls are unlikely to be effective given that most costume jewellery originates outside the Union, there are many importers and there are millions of retail outlets. The Commission needs to devise binding rules which can be enforced by national authorities. There is no need, however, to regulate the detailed design of all the various -30- products which might cause nickel allergy i. e. earrings, bracelets, watches and necklaces but also spectacles, buttons, buckles, catches, hair slides, zips etc. What is needed is the following: firstly, a Directive which bans the use of nickel in piercing; and which establishes a limit for nickel release for all products which come into direct and prolonged contact with the skin and secondly, a set of harmonised test methods to enable the national authorities to easily and cheaply control these provisions. 6. Closing remarks Directive 94/27 of the European Parliament and Council1, based on the above described approach, was adopted unanimously by the Council in July 1994. It will enter into force 6 months after publication by CEN of three European Standards, incorporating the test methods needed for control (latest estimate of entry into force is mid 1997). 1OJL188,22July 1994, p. 1 -31- ISSN 0254-1475 COM(96) 187 final DOCUMENTS EN 10 08 15 Catalogue number : CB-CO-96-212-EN-C ISBN 92-78-03857-1 Office for Official Publications of the European Communities L-2985 Luxembourg 32

Proposal for a COUNCIL DECISION on a First Multiannual Programme to Assist European Tourism "PHILOXENIA" (1997- 2000)

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* ** + * it it * * * ** COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30. 04. 1996 COM(96) 168 final 96/0127 (CNS) Proposal for a COUNCIL DECISION on a First Multiannual Programme to Assist European Tourism "PHILOXENIA" (1997-2000) (presented by the Commission) EXPLANATORY MEMORANDUM INTRODUCTION The tourism industry has been, and will continue to be, of great importance for the attainment of the broader objectives of the European Union. Its main contributions to these wider goals are that: tourism creates jobs and wealth and it will become increasingly important in this respect; tourism generates jobs rapidly and at low relative cost; tourism gives employment opportunities for varied groups, such as women and young people, which may in some way be at a disadvantage; tourism helps to achieve economic and social cohesion, and often gives less developed and peripheral regions a real opportunity to progress in economic terms; tourism can contribute cultural environment; to the protection and enhancement of the natural and tourism brings Europeans European identity and vision. together, breaks down barriers and consolidates By the end of the decade, international arrivals will increase by around 100 million, making tourism the world's largest industry(l). Europe continues to be the principal destination in global terms. Directly it employs over nine million people (6% of the labour market) and indirectly many millions of others. It represents an average of 5. 5% GDP and one third of service exports. This level of achievement reflects a long-term market position of global dominance. Europe's history, culture, landscapes and peoples have created a powerful attraction drawing vast numbers from other countries. These visitors have added to high numbers of Europeans who have traditionally been great travellers throughout the Continent. However, the threat from growing competition has become increasingly evident and Europe's market share has steadily eroded over the last 20 years. Destinations such as those in South and East Asia, and the Americas are becoming increasingly competitive offering top quality infrastructure, facilities and service. In some cases Europe's response is a higher cost product of inferior quality. A number of problems relating to quality and professionalism require both immediate and longer-term action. These problems have been caused by: complacency due to Europe's status as the predominant destination since the industry's rapid growth began in the 1960s; historically a lack of recognition within government of the importance of the industry; outdated facilities and poor infrastructure requiring wholesale regeneration of particular types of destination; a diverse and highly fragmented industry, most of which are SMEs, often resulting in less coherent policy formulation and ineffective coordination at many levels; a large number of sub-sectors which have historically not worked together in the most effective manner; ( i) WTO, International Tourism Overview-Highlights 1995, Madrid, 1996. 2 over-concentration in terms of both the products offered and the destinations Terved leading to standardisation of product, over-development of certain areas and under-development of others; limited use of strategic planning and lax development controls with consequent negative impacts on often fragile natural and built environments; a short-term investment culture which has served to reduce the ability to plan tourism strategically in the longer term; poor training provision and a lack of an industry image. As tourism occurs across borders a number of these problems clearly have a Community dimension, both in terms of tourist flows and destinations. This is continually accentuated by improvements to intra-European modes of travel ("reducing distances"); new tourism company ownership patterns; new technology allowing greater product choice and other factors relating to the completion of the single market. In this context it is acknowledged that all Member States to varying degrees are concerned by the evolution of European tourism and that there is a clear need at local regional, national and European levels for action to address the issues of quality and competitiveness. It is important to point out that many of the current policies, programmes and initiatives of the Community contribute to the development of tourism in different respects, for instance: the Internal Market, competition policy, environment policy, regional and cohesion policies, transport policy, education and training programmes, consumer policy, culture, research and development programmes, etc. While having all due regard for the principle of subsidiarity and acknowledging that primary responsibility and overriding competence for tourism in all its operational aspects rests with the Member States and private operators, Community-level inputs have the potential to provide significant added-value, especially in the following fields: collection and dissemination of research on tourism numbers, expenditure, trends, value of the industry, etc. at the European level; provision of market research such as that on existing and emerging third markets and other technical studies where there is a recognized pan-European need; promotion of a legislative, administrative and financial environment to enhance the development of tourism; consultation and cooperation with the Member States and the industry and in partnership with relevant bodies and public administrations; implementing specific innovative actions which address particular technical issues; production and dissemination of guidance on good practice, stimulating networking and transfer of know-how. Given the problems facing the industry mentioned above, together with the opportunities for Europe inherent with the approach of the Millennium, the Commission is submitting its proposal for the first Multiannual Programme to Assist Tourism 1997-2000. SECTION L CONTEXT AND SCOPE The present proposal relates to the Commission's work programme for 1996 which refers to "Community action in support of tourism to stimulate quality and competitiveness"(2). The present proposal is set in the context of the progressive specific involvement of the Community in tourism since the early 80s(3). It seeks to ensure continuity of Community action in this field whilst, at the same time, rationalizing and deepening tourism as a phenomenon with a major economic and social impact(4). it by taking greater account of European It is justified in that Community actions to assist European tourism, in accordance with the principle of subsidiarity, are the Member States and respond to the expectations of both the industry and the tourist. the European Union and interest of both the in All actions provided for in this proposal have a common denominator: they are not, or cannot be, satisfactorily undertaken at the local, regional or national level. In addition they aim to make other Community measures more cohesive. All the actions proposed will give added value. The proposal integrates the results of the consultation on the Green Paper on the role of the Union in the field of tourism(5), presented and discussed at the Forum on European Tourism on 8 December 1995(6), and takes account of the evaluation of the Action Plan based on an independent evaluation by an external consultant^. (2) (3) (4) (5) (6) (7) COM(95) 512 final of 10 November 1995, p. 29. Council Decision 86/664/EEC establishing a consultation and cooperation procedure in the field of tourism of 22 December 1986, OJ No L 384, 31. 12. 1986, p. 52. Council Decision 89/46/EEC on an Action Programme for a European Year of Tourism of 21 December 1988, OJ No L 17, 21. 1. 1989, p. 53. Council Decision 92/421/EEC of 13 July 1992 on a Community Action Plan to assist Tourism, OJ No L 231, 13. 8. 1992, p. 26. Cf. Eurostat-DG XXIII, Tourism in Europe, Office for Official Publications of the European Communities, Luxembourg, 1995 and Tourism in the European Union - Key figures 1994-95, Office for Official Publications of the European Communities, Luxembourg, 1996. COM(95) 97 final of 4 April 1995. See DG XXIII working document, Consultation on the basis of the Green Paper - A further step towards recognition of Community action to assist tourism, Forum on European Tourism, 1995. Report on the evaluation of the Action Plan to Assist Tourism, COM(96) 166 final. It is in line with the conclusions of the report of the Commission to the Council on civil protection, tourism and energy, which specifies that action in this field "could be stepped up within the existing framework of the Treaty "(8). It provides an answer to many of the requests made by the European Parliament00, the Economic and Social Committee(,0) and, more recently, the Committee of the Regions0°, which have highlighted the growing attention paid to tourism, to be seen in the light of concerns expressed ever more forcefully by tourist operators in the face of the challenges posed by growth and employment. It also responds to the needs of the tourist and the protection of natural and cultural heritage. The present proposal, which is based on Article 235 of the Treaty, seeks to establish a multiannual Programme to Assist European Tourism (PHILOXENIA), for a period of four years beginning on 1 January 1997 Its ultimate objective is to stimulate quality and competitiveness of European tourism, in order to contribute to growth and employment. To ensure a focused approach and a coherent set of actions, this objective is broken down into four intermediate objectives and seven immediate objectives, presented in the following programme model. This table illustrates the proposed programme, in relation to the complementarity of the objectives and the close link between objectives and corresponding actions. (») (9) (10) (H) See SE€(96> 496 final of 2 April 1996, p. 6. See the Resolution on tourism in the approach to the year 2000 (OJ No C 44, 18. 1 1994, p. 61), the Resolution on the report from the Commission on Community measures affecting tourism (OJ No C 18, 23. 1. 95, p. 159) and the Resolution on the Commission Green Paper on the role of the Union in the field of tourism (EP 215. 091/fmal) adopted on 25 January 1996. See the own initiative opinion on Tourism of 4 August 1994 (CES 453/94), OJ No C 393, 24. 9. 1994, and the Opinion on the role of the Union in the field of tourism (CES/976/95), OJ No C 301, 13. 11. 1995, p. 68. See the Opinion on the Commission Green Paper on the role of the Union in the field of tourism of 16 November 1995 (CdR 376/95). PROGRAMME MODEL Ultimate objective Intermediate objectives Immediate objectives Actions A. Improving 1. Developing knowledge in the field of tourism tourism related information European statistical system for tourism Surveys, studies and desk/field analysis 2. Pooling tourism information from other sources European research and documentation network on tourism 3. Facilitating the assessment of Community measures affecting Tourism Establishment of a legal and financial watch Improving the legislative and financial environment for tourism 1. Reinforcing cooperation with Member States, the industry and other stakeholders Stimulating quality and competitiveness of European tourism, in order to contribute to growth and employment C. Raising quality in European tourism 1. Promoting sustainable tourism 2. Removing obstacles to tourism development Organization and follow up of regular meetings (technical/thematic meetings, round-tables, European fora) Local initiatives network Environmentally friendly management systems European Prize Identification of obstacles and development of appropriate responses D. Increasing the number of tourists from third countries 1. Promoting Support for Europe as a tourist destination multiannual promotion campaigns The programme is concerned with catalytic actions which complement and support those undertaken within other Community polices and programmes*12) (see table below), as well as measures taken at national level0 3). Compliance with the principle of subsidiarity is further guaranteed by the definition of selection criteria designed to prevent measures which do not ensure Community added value. Partnership, cooperation, and consultation with the member States and the tourism industry are fundamental to the success of the programme. (12) See Annual reports of the Commission on Community measures affecting tourism, COM(94) 74 final of 6 April 1994 and COM(96) 29 final of 5 February 1996. (13) See Annual reports of OECD on tourism policy and international tourism. Intermediate/immediate objectives of flie PHILOXENIA Programme A. Improving knowledge in the field of tourism B. Improving the Legislative and Financial environment for tourism C. Raising quality in European tourism C. l. Promoting sustainable tourism COMMUNITY ACTIONS IN FAVOUR OF TOURISM Actions onder other Community policies* of interest to Tourism Compkineniary Actions (MiilrtannrMl Tourism Programme) Added Value Collection and dissemination of harmonised statistics (Working Programme on Community Statistics)-Council Directive on tourism statistics (ECU 4. 5 million 1995- 1997) Various EC policies and programmes (i. e. consumers, internal market, environment, transport, employment education and training, R&D) Structural funds, (ERDF objective 1: ECU 3 313 million for 1994-1999, Objective 2: ECU 491 million for 1994- 1996; Objective 5 b: ECU 788 million for 1994-1999 (EUR 12, of which ECU 462 million from ERDF, the rest from EAGGF), Objective 6: for 1995-1999^ (ECU 34. 9 million), ESF: 360 million for 1994-1999) Community Initiatives (**) 5th Community Action programme on the Environment, LIFE (total budget ECU 400million), coastal zones and tourism (ECU 650 00 in 1994) research projects on Environmental protection and conservation of the European cultural heritage (ECU 4. 419 million in 1994); Protection of cultural heritage (ECU 7. 195 million for 1994) European statistical system for tourism Surveys, studies, desk/field analysis European research and documentation network on tourism Legislative and financial watch Organization and follow up of regular meetings with member States, industry and other stakeholders (technical/thematic meetings, round tables, European fora) Comparable, timely, more accessible and user-friendly data and information Exploitation of synergies Improve impact of Community measures affecting tourism Improve European cooperation and consultation Raise awareness on Community measures affecting tourism Stimulate complementarity of actions - Local initiatives network - Environmentally friendly management systems - European Prize - Effective implementation of the concept of sustainabihty, transfer and dissemination of best practices - Raise awareness on the issue of sustainable development C. 2. Removing obstacles to tourism development HELIOS II ("Tourism for all") Promotion of best practices Facilitate mobility, promote solidarity Transferring good practices D. Increasing the number of tourists from third countries D. 1 Promoting Europe as a tourist destination Support for multiannual promotion campaigns - Promote attractiveness of Europe as a tourist destination alongside national campaigns * See Report from the Commission on Community measures affecting Tourism COM(96) 29 final of 5 February 1996. ** The majority of Community' initiatives, except RETEX, consider tourism relevant measures as eligible for support. In order to ensure their efficiency, the actions planned under the proposed programme give pride of place to operating in concert as a principle and partnership as the operating method. The proposed actions focus on the technical approach, with the aim of: enabling surveys and common interest studies to be carried out for the benefit of European tourism; promoting exchanges of experiences and good practice, both among responsible public authorities and among tourism operators in the Member States; encouraging operations and projects of a European dimension which are of a demonstrative character and clearly prove exemplary European-wide. In order to ensure a sound and efficient management of the programme, the Commission will rigorously evaluate all the measures undertaken. The Commission will select indicators0 4) to ensure effective implementation, monitoring and evaluation throughout, namely: analysing the effectiveness of actions taken notably on the basis of cost/benefit criteria; strengthening procedures relating to the selection and monitoring of studies and projects; using performance indicators for each type of action planned, in relation to the objectives to which it refers. In addition, intermediate monitoring and final evaluation reports will be produced, the latter based on an external source. The reinforcement of the consultation process (involving both the Member States, the industry and other concerned parties) shall also contribute to a more transparent and effective monitoring and implementation of the programme. SECTION A. OBJECTIVES AND PROPOSED ACTIONS A. IMPROVING KNOWLEDGE IN HIE FIELD OF TOURISM Accurate information is clearly required to enable correct decisions to be taken, both in terms of investment by the private sector and the development of policy by the public sector. This is especially the case in tourism given its continued rapid growth, its volatility, the transnational nature of the industry and the potential of its impacts (both negative and positive). Much of the current information often remains dispersed and is still neither adequately disseminated nor fully exploited. The effective dissemination of data once gathered is also a priority for this programme. In order to improve knowledge on European tourism a diverse range of information is required. This includes: comparable statistical data to enable accurate tracking and analysis of pan-European tourism figures, expenditure, flows, trends, tourist types, etc. ; market research to identify and assess existing and emerging market opportunities; research based information of a technical nature to assist with the development and/or management of tourism; (14) For a detailed presentation, see point 9. 3 of the Financial Statement annexed to the proposal. applied information of a:technical nature on current good practice, management issues, demonstration projects, new ways of working, etc. ; consumer based information on quality requirements, tourism business performance, etc. This information is required for a diverse group of sectors and bodies within tourism. These include ministries, national tourist organizations, regional and local authorities, private sector, tourism trade associations, universities and research establishments, and so forth. Much of this type of information is not yet available at European level. An improvement in knowledge of tourism at European level will make it easier to analyse tourism as a broader phenomenon, ensure the integration of relevant information, and allow for a systematic assessment of Community measures affecting tourism. Through this type of comprehensive approach the Commission can improve the effectiveness of its tourism related activities and provide decision makers with a better understanding of tounsm issues. A central element to this information role is the dissemination of the information obtained. A. 1 Developing tourism related information The work undertaken since 1990 by the Commission, in cooperation with EU and EFTA Member States has resulted in significant progress, first the development of statistical indicators for tourism and second, on the establishment of a specific Community-wide statistical framework. The 1995 Directive0'1 on the collection of statistical information provides a basis for a European statistical system for tourism. This Directive is now being implemented with the support of the Commission by Member States. It is proposed to further develop this by making the data more accessible and user friendly. In addition a new annual tounsm survey will be incorporated into 'Eurobarometer' and this will provide further general data complementing that provided by the Directive. Further research will be produced where appropriate after a further analysis of needs and in partnership with the industry bodies concerned where relevant. Action Consolidation of the European statistical system for tourism, improving the availability of reliable and up-to-date statistics. Development of surveys, studies and desk/field analyses, taking into account the needs of the tourism industry. A. 2 Pooling tourism information from other sources Many organizations are involved in the provision of technical tourism information. This is produced by local/regional/national tourist organizations, national/European professional associations, major companies, research centers, experts associations, documentation services and international organizations such as the World Tourism Organization, the OECD, Unesco and the Council of Europe. Effective access to and dissemination of much of this information can be difficult and so it does not always benefit a wide public. It is proposed to establish a European Research and Documentation Network to collect existing information and provide a means to disseminate this more widely. This Network would be charged with the following types of activity: developing a comprehensive database of tourism related publications and other information; providing a reference point for all EU information on tourism; (15) O J No L 291, 6. 12. 1995. 10 distributing other relevant information in agreement with relevant participating bodies: providing an advisory service for those seeking specialist advice. The Network would gather together a range of providers and via electronic and other means allow for the better dissemination of research to all interested parties Specifically it will assist in the identification of issues which have not yet been adequately studied and allow relevant action to be taken by the Commission, launch further actions to address any problems identified; ensure that research produced at Community level is complementary, avoids duplication, and makes the best use of available information and resources. Action Establishment of a European research and documentation network on tourism. A. 3 Facilitating the assessment of Community measures affecting tourism Actions on tourism taken under other Community programmes have considerable relevance for the industry. However, as the central policy areas under which this support is given are often of a broader context, tourism is not always considered in the most effective manner possible. Given the diverse nature of tourism many instruments of Community policy have the potential to affect the industry to a large degree. These effects cannot always be foreseen with accuracy and may serve in the long term to reduce Europe's competitive position. Coordination of the various programmes affecting tourism should be continued and consolidated in compliance with current rules and internal procedures. With the objective of improving the impact of legislation and instruments which directly and indirectly affect tourism this proposal provides the means to: assess the appropriateness of any relevant measures and to react in accordance with the standard decision-making process; guarantee the coherence of Community measures as a whole; enhance the efficacy of these measures in practice. The accent will be placed on the collection, selection and dissemination of information via the establishment of a legal and financial watch enabling the Commission, in collaboration with all the parties concerned, to closely monitor the impact of the proposals and decisions of the various Community institutions on the competitiveness of European tourism. The number and diversity of these measures affecting tourism are sufficient grounds for the establishment of a system of this kind, which, in addition, would raise awareness on Community activity and facilitate strategic decisions by both public and private tourism operators. Action Establishment of a legal and financial watch for Community measures affecting tourism. the systematic assessment of If In summary, community actions for improving the knowledge of tourism will have five principal advantages: effective pooling of information currently available at many different levels; easier and more accurate identification of needs for further analysis; reduced duplication of effort and greater complementarity of research produced at Community level; impartiality in the production and dissemination of information; enhancement of the multiplier effect through economies of scale. B. IMPROVING THE LEGISLATIVE AND FINANCIAL ENVIRONMENT FOR TOURISM B. l. Reinforcing cooperation with Member States, the industry and other stakeholders A precondition for increasing the competitiveness of European tourism is securing a "tourism-friendly" environment. Broadly this can be defined as one where the importance of tourism is recognized; where appropriate policies are implemented, and where other related legislative and financial instruments are fully taken into account. The diverse nature of tourism is such that it involves different types of activities covering over 100 different branches which channel tourism spending throughout the economy. Businesses range from a small number of large multinational companies to an enormous number of SMEs. Additionally tourism is subject to certain other aspects such as a heavy reliance on the use of both public goods and infrastructure. in involved the players this tourism can None of "tourism friendly" environment. Partly, success is dependent upon the establishment and development of partnerships which cut across and bring together various levels and sectors. It is currently often difficult for operators and organizations on the ground to provoke and influence these partnerships because of the diversity of the industry and the often weak vertical and horizontal linkages between and within sectors. independently, create therefore, A culture of partnership throughout the many levels and sectors of tourism has only been practiced successfully in a limited fashion and has yet to become a widely used principle. Clearly there is a need to stimulate cooperation and coordination given the many bodies involved and the potential for synergy together with greater effectiveness. Transnational partnerships offer a real opportunity to start this process on a European scale. In particular this proposal seeks to develop the following: if they were to work an extension of the function of the Advisory Committee which was established in 1986 to facilitate information exchange, consultation and cooperation, so that it can assist the Commission in the implementation of the programme. regular meetings on established major parts of the industry, to promote public/private partnership actions at national, regional and local level; topic specific meetings with representatives of the main European organizations and/or leading companies in Europe, on technical matters; specific working groups, drawing together experts from different bodies, to ensure effective technical assistance in the implementation of elements of this Programme. 12 This framework aims to depart from the sector specific approach common in tourism and give the opportunity for those involved to combine efforts with greater effect and find solutions to current problems. In addition this type of cooperation can offer real prospects of tackling common issues which are found across many or all Member States. When this approach is combined with expertise from the Commission and other specific actions contained in this and other Programmes the positive effects could be considerable. While this programme is concerned primarily with the competitiveness of European tourism there is a need to address other wider issues, such as that relating to so called "sex tourism"', which continue to have a negative effect on the image of the industry In this respect, and given the grave concerns felt in the international community by the persistence of organized "sex tourism" involving children, particular care should be taken in drafting and strengthening industry's code of conduct and self-regulatory mechanisms against such practices, as well as supporting initiatives to prevent them the tourist Action Organization and follow-up of regular meetings with the parties concerned, to reinforce initiatives cooperation at European (technical/thematic meetings, round-tables, European fora). level and to raise awareness of Community C. RAISING QUALITY IN EUROPEAN TOURISM Given the existence of other Community policies which have already in their remit taken into account certain tourism related issues, priority will be given to promoting sustainable tounsm and removing obstacles to tourism development. C I. Promoting sustainable tourism Tourism appears quite different in comparison with other European industries. First, tourism activities are diffused, involving every region of the Union. Second, tourist attractions are often concentrated in certain zones, often subject to intense seasonal use and development pressure. The successful development of tourism, notably in terms of local development and job creation'I6), is dependent upon the ability of those responsible, to manage its growth Only an attractive range of services in surroundings offering natural and cultural attractions will in the long term ensure, a viable tourism development. Hence, the necessity of making much more rational use of Europe's natural and cultural heritage The implementation of sustainable development in European tourism is of vital importance. This issue has been specifically recognized in other Community programmes particularly those relating to environment and culture. Due note will be taken of the 'European Spatial Development Perspective ('ESDP') where one of the main priorities is the wise and sustainable management of natural and cultural heritage There is also a need here to consider the special circumstances which surround the cohesion countries. This is particularly the case in their less developed regions where tourism is often identified as one of the central planks of development policy. Due regard will be taken therefore of the special needs of these regions when implementing the following actions Strategic and integrated planning at appropriate levels, together with the use of technical "tools" to address particular problems, can make an important contribution to the sustainable and balanced development of tourism. While much research has been undertaken on how to progress towards a more sustainable tourism, much now needs to be done to encourage the practical application of the concept. (16) See Commission Communication on A European strategy for encouraging development and employment initiatives, OJ No C 265, 12. 10. 1995, p 3. local 13 At local level, a range of techniques can be applied, reconciling tourism development and protection of natural and cultural heritage, which helps to tackle the problem of the concentration of tourism in space and time. In order to improve the efficiency of such tools, attention shall be paid to: access to expertise developed outside the area concerned, exchange of experiences and transfer of know-how; regular reporting on the pressures and effects of tourism on natural and cultural resources on the basis of permanent and systematic observations; involvement of the local population as well as the tourism interests with the definition and the implementation of tourism development policy. It is appropriate therefore to encourage exemplary local initiatives geared towards sound management of visitor flows, while at the same time stimulating networking of these initiatives. This would allow for the effective transregional and/or transnational dissemination of best practices. The added value of these actions consists in the dissemination of best practices and the multiplier effects, which will be developed through networking. In addition, it is essential to encourage individual operators- or groups of operators - to adopt environmental measures as far as their immediate "territory" is concerned. Incentive measures can encourage the implementation of innovative good practice in the field of sustainable tourism and, more precisely, in terms of environmentally friendly management systems in tourist accommodations. Lastly, the development of sustainable tourism will be encouraged by stimulating competition amongst tourism destinations. The organization of a "European Prize for Tourism and Environment" (every two years) will help to identify the best initiatives and publicising them. This will contribute to raise awareness of both operators and the general public on the importance of a rational use of natural and cultural resources. Such concrete and targeted actions, although limited to the field of tourism, should ensure the practical application of the sustainable tourism development concept. Action Support for local initiatives geared towards sound management of visitor flows and encouragement of their networking. Support for the implementation of environmentally friendly management systems in tourist accommodations. Organization of a "European Prize for Tourism and the Environment" (every two years). C. 2 Removing obstacles to Tourism development The issue of quality is connected with the large variety of products offered to the tourist. Europe has great appeal because of its great diversity of cultures, landscapes, history and peoples. During the last years several elements have influenced the development of tourism, such as: more disposable income, greater independence, more leisure time; more numerous holidays of a shorter duration; 14 a growing sophistication as tourists explore new areas and demand more variety in holiday choice and the availability of more activities during holidays; These have provided an impetus to tourism development and resulted in a series of specific forms of tourism (health, business, cultural, rural, urban tourism etc. ). Yet these forms of tourism are facing difficulties for their integration into the tourism system. In order to remove the obstacles faced by these forms of tourism, the actions will consist of the identification of these obstacles and the evaluation of their impact, opening the way to the development of projects which will provide European-wide solutions which are transferable. The further development of these forms of tourism grants a series of new advantages to European tourism: satisfaction of the new needs and requirements of the tourists, solutions to the problems of the concentration of tourists in space and time, development of some regions and areas of the Union, support to traditional tourism activities, and creation of new professions and new services. Moreover such an action can contribute significantly the competitiveness of the European tourism as a whole, both because it demonstrates the great variety of the European tourist products (i. e. the majority of the Americans tourists comes to Europe mainly for cultural reasons) and because it will help to win a greater share of the world market (i. e. business, health tourism). improvement of the to Another issue which can be dealt with successfully - Community-wide - is the access of different groups within the population ( youth, elderly and disabled people) to tourism. In this context, it is vital to take account of the expectations expressed more particularly by these "categories" of tourists with a view to making tourism more accessible to them, since by helping to eliminate the physical and psychological obstacles to mobility, Community action can help to extend tourism to these "categories". The fulfilment of the specific needs of these groups of tourists can contribute substantially to the improvement of the quality of European tourism as well as to the strengthening of the solidarity between the citizens of the Union. The action of the Community will concentrate on the identification of the problems faced by these groups in accessing tourism, as well as the development of projects which will provide innovative and transferable solutions. In both fields, the action of the Community can bring important added value, because it is about matters which concern all Member States It is worthy to underline here that similar kinds of actions have been undertaken during the Action Plan in favour of tourism, with considerable success. Action Identification of the principal obstacles at European level faced by various forms of tourism as well as by specific categories of tourists (such as young people, the elderly and disabled people), development of appropriate responses. 15 D. INCREASING THE NUMBER OF TOURISTS FROM THIRD COUNTRIES D. l. Promoting Europe as a tourist destination Measures which address specific markets, namely promoting Europe as a tourist destination, are an important element in the effort to attract tourists from third countries to our Continent. There is a proven and accepted role for the public sector in the promotion of tourism. This can be undertaken at local or regional levels, as well as at national and transnational levels. The public sector finds it essential to provide a supportive role to the private sector, primarily because of the diverse and sectoral nature of the industry which can prevent coherent 'branding' or precise messages to be effectively established in third country markets. This role is undertaken in most cases by the NTO's which run their own marketing actions. Whilst it is entirely logical that a function of an NTO is to market a country and its regions, it is also recognized that countries can work effectively together to market a "supra-national" destination. 'Europe' is accepted as such a destination by both established markets, such as the USA, and others which demonstrate rapid growth, such as Japan. The present situation is that each Member State runs its own marketing actions. Parallel to this, the European Travel Commission (ETC) pursues its promotion campaigns which however cover many more countries than the Member States of the Union. It is precisely this situation that could justify campaigns and other supporting actions at the European Union level, which would highlight the attractiveness of Europe and greatly benefit the tourism industry of the EU. The aim of any actions taken will not be to replace the marketing efforts of the individual countries of Europe or present any country specific promotional material. Rather the aim will be to draw thematically on the great diversity and pluralism of Europe and present the many opportunities which exist for visitors from third countries. It should also be noted that the celebrations and events which will take place before and during the Year 2000 will provide considerable scope for increasing tourist numbers from third countries. The type of action proposed can therefore be described as providing complementary framework for both the individual actions of Member States and the private sector. These bodies may also wish to complement the EU-wide actions by linking their own promotional efforts. Actions will be based on the following principles. longer term philosophy and commitment; a focused approach, with a small number of well defined actions; stimulation of industry partnerships; EU funds will act as "seed" money which will stimulate further financial support (sponsorship) and therefore add value. The Commission will work in close cooperation with national tourist organizations and other European tourist promotion bodies such as the ETC regarding: the definition of general guidelines for promotion; development and implementation of joint operational strategies; evaluation of measures, including spin-off benefits, on other levels of promotion. 16 Cooperation between the Commission and its partners should be formalised in a framework agreement defining the terms of such promotion In the interests of efficiency, the Commission's participation in such cooperation should be contingent on ail partners agreeing on a qualified-majority decision-making procedure. Action Support for multiannual promotional campaigns in major issuing countries and/or emerging zones, with the support of participating sponsors. 17 Proposal for a COUNCIL DECISION on a First Multiannual Programme to Assist European Tourism "PHILOXENIA" (1997-2000) (Text with EEA relevance) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof, Having regard to the proposal from the Commission0}, Having regard to the opinion of the European Parliament(2), Having regard to the opinion of the Economic and Social Committee0', Having regard to the opinion of the Committee of the Regions(4), Whereas, owing to the growing importance and to the nature of tourism it is recognized that it can contribute to the achievement of the objectives of the Community and in particular to growth and employment, to the reinforcement of economic and social cohesion and to the promotion of European identity; Whereas Community measures competitiveness of European tourism, integrating at the same time the satisfaction of tourists' needs and the rational use of natural, infrastractural and cultural resources, thus contributing to the balanced and sustainable development of tourism; stimulate quality should and Whereas on 13 July 1992 the Council adopted Decision 92/421/EEC(5) on a Community action plan to assist tourism (1993-1995), which expired on 31 December 1995; to the Whereas, in the framework of that Decision, the Commission has submitted European Parliament, the Committee of the Regions annual reports on Community measures affecting tourism for 1993 and 1994; the Economic and Social Committee and the Council, Whereas, in the framework of that Decision, the Commission has submitted European Parliament, Committee of the Regions an evaluation implementation of the Action Plan to Assist Tourism; the Economic and Social Committee and including an external audit, on the Council, report, to the the the ( i) (2) O) (4) OJ No L 231, 13. 8. 1992, p. 26. 18 Whereas the Commission has adopted a Green Paper on the role of the Union in the field of tourism, stimulating a deep and wide consultation process, whose conclusions presented on the occasion of the Forum on European Tourism of 8 December 1995 show that a consensus does exist as to the desirability of ensuring the continuity of Community action in the fieid of tourism, the need to rationalize it and the possibility of deepening it; in Parliament, the European its Resolutions 18 January 1994(6, Whereas 15 December 1994(7), and 13 February 1996(8), and the Economic and Social Committee, in its initiative opinion of 15 September 1994(<)) and its Opinion of 14 September 1995(l0), have confirmed the need to strengthen Community action to assist tourism and have called for a genuine medium- and long-term tourism strategy; whereas the Committee of the Regions, in its Opinion of 16 November 1995(n), takes the view that a more active, better coordinated Community contribution is necessary to cope with the dynamic development of tourism and the scope of tourist activities; of Whereas it is essential that there should be coherence and complementarity between the actions to be carried out under this programme and the other relevant Community programmes and initiatives affecting tourism, Whereas the Commission is to be assisted by the Advisory Committee established by Council Decision 86/664/EEC(12), whereas, accordingly, the Committee set up by Article 3(2) of Decision 92/421/EEC should be abolished; Whereas the measures set out in this Decision, complying with the principle of subsidiarity established by the second paragraph of Article 3b of the Treaty, contribute - through cooperation and coordination - added value to efforts pursued by interested parties at the local, regional, national and international level, thus allowing European tourism to overcome its weaknesses and to exploit its vast potential; Whereas the improvement of knowledge in the field of tourism should be fostered by the Community in order to enable decision makers to improve the planning of their strategies and to assess the impact of their implementation; Whereas a legislative and financial environment conducive to tourism should be secured, through reinforced cooperation, in order to foster the performance of European tourism; Whereas quality in European tourism should be enhanced by the Community through innovative schemes and incentives, with a view to the promotion of sustainable tourism and to the removal of obstacles to its development; Whereas the promotion of Europe as a tourist destination should contribute to an increase in the number of tourists from third countries; Whereas, due to the importance of tourism for the associated countries of Central and Eastern Europe as well as for Cyprus and Malta, this programme is to be open to those countries; (6) (7) (8) (9) (10) (11) (12) OJ No C 44, 14. 2 1994, p. 61. OJ No C 18, 23. 1. 1995, p. 159. OJ No C OJ No C 393, 31. 12. 1994, p. 168. OJ No C 301, 13. 11. 1995, p. 68. O J N oC OJ No L 384, 31. 12. 1986, p. 52. 19 Whereas special attention will be paid to the actions and initiatives taken in the field of tourism in the framework of Euro-Mediterranean cooperation, as reflected in the Barcelona declaration and work programme adopted on 27 and 28 November 1995; Whereas, taking into account the evaluation on the implementation of the previous action plan to assist tourism and of the Community experience gained to date in this field, it is therefore necessary to adopt a multiannual programme for a four-year period and to endow it with sufficient resources to attain its objectives; Whereas the Treaty provides no powers other than those in Article 235 for the adoption of this Decision, HAS DECIDED AS FOLLOWS Article 1 A Multiannual Programme to Assist European Tourism (PHILOXENIA) is hereby adopted for a period of four years from 1 January 1997. Article 2 1. The programme referred to in Article 1, incorporating the actions specified in the Annex shall, through coordination and cooperation, seek generally to stimulate the quality and competitiveness of European tourism, in order to contribute to growth and employment. The specific objectives of the programme are the following: to improve knowledge in the field of tourism; - to improve the legislative and financial environment for tourism; to raise the quality of European tourism; to increase the number of tourists from third countries. 2. The budget authority shall determine the appropriations available for each financial year. Article 3 1. Criteria for granting Community financial ai<J, other than those stated in the second paragraph of Article 3b of the Treaty, shall include those relating to: cost-efficiency; a partnership approach, as far as possible of trans-national character; a significant impact on Community tourism or, at least, transferability at this level; regard for the principle of sustainable development. 2. The actions shall be implemented through coordination with the national authorities and, if necessary, with the regional and/or local authorities as well, so as to take account of the importance of tourism for regional and/or local development. The following shall be adopted in accordance with the procedure defined in Article 5(2): Article 4 the priorities for the selection of actions; 20 the procedures for the submission of requests for Community assistance; in exceptional circumstances, the Community assistance to be granted for actions other than those listed in the Annex, when they meet the objectives set out in Article 2 and are compatible with the priorities referred to in the first indent. Article 5 The Commission shall be assisted by the Advisory Committee in the field of tourism set up by Decision 86/664/EEC. The committee set up by Article 3(2) of Decision 92/421/EEC is abolished. The representative of the Commission shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on the draft, within a time-limit which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote. The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes. The Commission shall take the utmost account of the opinion delivered by the committee. It shall inform the committee of the manner in which its opinion has been taken into account. Article 6 This programme shall be open to the participation of the associated countries of Central and Eastern Europe in accordance with the conditions laid down in the additional protocols to the association agreements on participation in Community programmes to be concluded with those countries. This programme shall be open to Cyprus and Malta on the basis of additional appropriations the EFTA countries being parties to the EEA Agreement, in accordance with procedures to be agreed with those countries. in accordance with the same rules as those applicable to 1 2. 1. 2. Article 7 Every year from the date of adoption of the programme, the Commission shall present the principal measures affecting tourism which have been adopted or carried out by the Community, in a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions. Article 8 The Commission shall regularly evaluate the results of the programme. This evaluation shall include wherever possible the measurable results of the programme and shall observe the criteria set out in Article 3. On the basis of this evaluation process, the Commission shall present to the European Parliament and to the Council - and for information to the Economic and Social Committee and to the Committee of the Regions - an interim report, no later than three years from the beginning of the programme, and a final report within twelve months from the end of the programme. Done at Brussels, For the Council The President 21 ANNEX ACTIONS IN FAVOUR OF EUROPEAN TOURISM A. Improving knowledge in the field of tourism A. l Developing tourism related information Consolidation of the European statistical system for tourism, improving the availability of reliable and up-to-date statistics. Development of surveys, studies and desk/field analyses, taking into account the tourism industry needs. A. 2 Pooling tourism information from other sources Establishment of a European research and documentation network on tourism. A. 3 Facilitating the assessment of Community measures affecting tourism Establishment of a legal and financial watch allowing for assessment of Community measures affecting tourism. the systematic B. Improving the legislative and financial environment for tourism B. l. Reinforcing cooperation with Member States, the Industry and other stakeholder Organization and follow-up of regular meetings with the parties concerned, to reinforce cooperation at European level and to raise awareness of Community initiatives (technical/thematic meetings, round-tables, European fora). C. Raising quality in European tourism C. l. Promoting sustainable tourism Support for local initiatives geared towards sound management of visitor flows and encouragement of their networking. Support for the implementation of environmentally friendly management systems in tourist accommodations. Organization of a "European Prize for Tourism and Environment" (every two years). C. 2 Removing obstacles to tourism development Identification of the principal obstacles at European level faced by various forms of tourism as well as by specific categories of tourists (such as young people, the elderly and disabled people), development of appropriate responses. D. Increasing the number of tourists from third countries D. l Promoting Europe as a tourist destination Support for multiannual promotional campaigns in major issuing countries and/or emerging zones, with the support of participating sponsors. 22 FINANCIAL STATEMENT 1. Tide of operation Proposal for a Council Decision on a First Multiannual Programme to Assist European Tourism (1997-2000) - PHILOXENIA 2. Budget heading involved B5 - 325 3. Legal basis Article 235 EC 4. Description of operation 4. 1 General objective Stimulate quality and competitiveness of European tourism, in order to contribute to growth and employment. 4. 2 Period covered Four years: 1997-2000 5. Classification of expenditure or revenue 5. 1 Non-compulsory expenditure 5. 2 Differentiated appropriations 6. Type of expenditure Subsidy for joint financing (up to 60% of eligible expenses)with other sources in the public and/or private sector. Subsidy allocated following selection of projects presented on the basis of call for proposals regularly published in the Official Journal of the European Communities. Purchases or subsidies for actions (up to 100%) to be undertaken on behalf of the Commission which, because of their specific scope, could not be realized otherwise, such as studies, meetings, information and publications tools for dissemination of results of Community activity in the field of tourism. Expenditure allocated following selection of projects presented on the basis of call for tender or for proposals regularly published in the Official Journal of the European Communities. The total amount of the latter expenditure shall not exceed 30% of the total amount requested for implementing the programme. 23 7. Financial impact 7. 1 Method of calculating total cost of operation (relation between individual and total costs) The estimation of the cost is based on both: the experience gained to date in the implementation of previous financial years as assessed following the evaluation of the Action Plan to Assist Tourism (Council Decision 92/42l/EEC), and on a more rationalized use of resources following a focused approach for action. The method of calculating total cost is based on a detailed estimation and evaluation of the needs for each of the specific actions presented hereinafter, taking into account the specific nature and scope of the action concerned. 24 7. 2 Itemized breakdown of cost indicative amounts Breakdown Commitment appropriations ECU million (at current prices) 1997 1998 1999 2000 T O T AL A. Improving knowledge in fhr ftrM of tourism Statistics, survey, studies European network of tourism research and documentation centers Legislative & financial watch 0. 45 0. 25 0. 04 0. 53 0. 2 0. 5 0. 2 0. 5 0. 2 1. 980(a) 0. 85 (b) p. m. 0. 06 p. m. 0. 1(c) B. Improving the legislative and flu—rial environment for tourism B. 1 Reinforcing coopération with Member States, industry, other stakeholders Organization and follow-up of 0. 35 0. 35 0. 40 0. 415 1. 515 (d) regular meetings C. Raising quality in European tourism CI Promoting sustainable tourism Local initiatives on visitor flows and 2. 0 1. 0 p. m. Networking Environmentally friendly management systems European Prize "Tourism & environment" 0. 5 p. m. C. 2 Removing obstacles to tourism development p. m. p. m. 2. 0 0. 5 5. 0 (e) 1. 0(f) 1. 0 p. m. 1. 0 20 (g) Promotion of best practices 0. 455 0. 5 1. 0 2. 0 3. 955 (h) D. Increasing the number of tourists ftom thud countries D. l Promoting Europe as a tourist distillation Promotion campaigns TOTAL p. m. 4. 045 3. 6 7. 180 4. 0 6. 160 1. 0 8. 6 (i) 7. 615 25. 0 (a) Contribution for the cooperation with Eurostat of ECU 200 000 x year (1998-2000). 1997 already covered by 1995 engagements. Contribution for Eurobarometer, ten blocks of questions (cost per question ECU 10 000) for four surveys. Amount of ECU 200 000 estimated for two studies per year. 12 publications envisaged in this framework for dissemination of information, cost per publication via OPOCE, on average ECU 15 000. (b) Contribution for the establishment of a network and follow-up ECU 250 000 first year, ECU 200 000 (per year) following years. (c) Adaptation software ECU 40 000 as technical support tool. External evaluation implementation tourism programme ECU 60 000. (d) Paper/electronic newsletter, cost per year ECU 43 750 (ECU 175 000). 12 publications guides, reports via OPOCE, on average ECU 15 000 (ECU 180 000). Organization of yearly European Forum (500/600 participants) ECU 140 000 per year x 4 (ECU 560 000). Participation to different major international tourism fairs (stand and seminars contribution) 12 x ECU 50 000 (ECU 600 000). (e) Network ECU 200 000; contribution to 20 major European projects (average per project ECU 240 000). (0 Contribution for ten European projects (average per project ECU 100 000). (g) Amount for the two events: contribution to Member States |UK, F, I, E, D ECU 120 000 x 5; 1. ECU 48 000: others ECU 96 000 x 9, technical assistance consultant company ECU 488 000. (h) 15 European projects (on average ECU 263 000). (i) Campaigns: ECU 8. 6 million of sponsorship to be added (total amount campaign ECU 17. 2 million): 1 066 666 contacts generated by daily press (cost per contact ECU 3) ECU 3. 2 million 700 000 contacts generated by magazines (cost per contact ECU 10) 582 666 contacts generated by Free phone calls (cost per contact ECU 12) - ECU 7 nv'. ion (this shall represent about 10-15% of inbound tourism from Japan and from USA). ECU 7 million 25 7. 3 Schedule of commitment and payment appropriations Commitment appropriations Payment appropriations 1997 1998 1999 2000 following years Total 1997 4. 045 1998 7. 180 1999 6. 160 ECU million Total 25. 0 2000 7. 615 1. 45 1. 4 1. 195 p. m. p. m. 4. 045 - 3. 180 2. 5 1. 5 p. m. 7. 180 - - 2. 9 2. 0 1. 260 6. 160 - - - 3. 5 4. 115 7. 615 1. 45 4. 58 6. 595 7. 0 ' 5. 375 25. 0 8. Fraud prevention measures Specific control measures envisaged The implementation of all actions for which Community funding is foreseen, is launched through the publication of call for tenders and call for proposals in the Official Journal. The checking of the receipt of projects, furnishing or supplies ordered or the correct use of subsidies is carried out by Commission services prior to payment and taking account of the contractual obligations and principles of economic and sound financial and global management. Anti fraud measure (monitoring, submission of intermediary and final reports, etc. ) form an integral part of all agreements or contracts concluded between the Commission and beneficiaries of funds. 9. Elements of cost-effectiveness analysis 9. 1 Specific and quantified objectives; target population The objectives and actions of the proposal encompasses the results of both the consultation on the basis of the Green Paper on the role of the Union in the field of Tourism [COM(95) 97 final of 4 April 1995] and the evaluation of the 1993-95 Action Plan to assist tourism based on an independent evaluation conducted by an external consultant. In order to ensure their efficiency, the measures planned under the proposed programme give pride of place to concertation as the operating principle and partnership as the operating method. In particular, it concerns trigger and catalyst actions, which seek to complement and render more efficient those undertaken within the framework of other policies and Community programmes, as well as measures taken at national and regional level The general objective and the specific objectives of this programme must be seen in this context. On the one hand, they take account of the responsibilities of each administrative level of intervention and on the other hand, of the need to optimise the effects of the actions undertaken beyond the programme in question. The programme thus only represents the trigger for these numerous initiatives. 26 The proposed actions focus on the technical approach, with the aim of: enabling surveys and common European tourism; interest studies to be carried out for promoting exchanges of experiences and good practice, both among the responsible public authorities and among tourism operators in the Member States; encouraging the setting up of operations and projects which have are of a demonstrative character, exemplary at European scale. Target population ' In principle, action envisaged could potentially be of interest to the entire tourism industry throughout the EU, as well as to public authorities at national, regional and local level. Activities directly relating to tourism represent over nine million direct jobs (i. e. 6% of total employment), 5. 5% of the GDP and one third of the exports in services. It is estimated that more then two million enterprises are directly involved in tourism activities. In this framework, and taking into account the human and financial resources available, so as to avoid a dispersion of funds and initiatives while maximizing their impact, these will concentrate on medium/large scale actions which shall involve the key players in each of the domains concerned. For example, the organization of a yearly European Forum with the participation of over 500 major decision makers in European tourism as well as the consultation and involvement of the most representative tourism professional associations and organizations the European level in the tourism field), shall ensure a direct multiplier effect on the whole represented population; as far as regional authorities are concerned, it is expected that the regions which are most dependent on tourism activities shall benefit from the measures of the plan; the participation in three of the major world tourism fairs and their follow up shall ensure broad direct contacts with visitors and exhibitors totalling over 300 000 people. (about 40 acting at 9. 2 Grounds for the operation In general, the tourism industry is characterised by its heterogeneity and the numerous actions to assist tourism by their scattered nature. It is therefore necessary to invest in a programme at Community level aimed at encouraging better coordination of actions. The actions foreseen in the framework of the proposed programme complement: measures taken at national level, which in all Member States, aim to stress the economic and social importance of tourism, to develop structural cohesion and to encourage the professional representativity of this activity, whilst improving the quality of the service offered to clients; the general measures which derive from the competence of the Community or the implementation of (See COM(96) 29 final of 5 February 1996). its specific policies 93 Monitoring and evaluation of the operation Several types of action are foreseen in order to ensure an evaluation of actions undertaken: cost/benefit analysis of actions to be taken; 27 reinforcing controls with regard to the selection and monitoring of studies and projects; using "performance indicators" for each type of action planned, in relation to the specific objective to which it refers. In addition to this, a monitoring report and a final evaluation report will be produced, the latter on the basis of an external audit for the The establishment, since the adoption of the programme, of a timetable/rolling relevant administrative plan and evaluation steps, shall ensure a better management and control of its engagements/payments implementation, notably required. four years concerned, in respect of the financial including the The reinforcement of the consultation process (involving both the Member States, the industry and other concerned parties) shall ensure a more transparent and effective monitoring and implementation of the programme The ex post evaluation process will be based on the application of a set of objectively quantifiable indicators with regard to results and outputs of activities to achieve the specific objectives identified in the programme. Specific/immediate Main final out-put Main Performance Indicators objectives/Actions A. Improve knowledge in the field of Tourism A. l Developing tourism related analyses Consolidation of the European Statistical system Development of surveys, studies, desk field analyses Completion of data-base on Coverage: number of variables tourism demand and supply basic indicators; Tourism section in Eurobarometer, desk-field analysis and market oriented reports; production of communication tools (at least 64) and Countries (all EU-EFTA) included, level of geographical breakdown ensured (NUTS Il/lll); Reliability: margin of error declared (3-5%),% of total relevant universe covered (90%); Access/use: effective use of the various tools: number and periodicity of publications (stat: 2 yearly/per year, I monthly; studies: 3 per year) gap between period of reference and availability of the information (official statistics: T + 9 annual, T+3 monthly; EU survey T + 3). I 28 A. 2 Pooling of information originating from other sources Establishment of a European research and documentation network interactive network/information from other relevant sources Effective coverage (references about at least 60% of relevant information originated by other sources) Use of the network: number of participants in the network (at least 50 covering at least all EU-EFTA countries), variety of subjects covered (by type: 60), number of in-put/out put "transactions" (500) Yearly assessment of satisfaction rate on the basis of internal survey among users A. 3 Facilitating the assessment of Community measures affecting tourism Establishment of a legal and financial watch Software development for a monitoring system; evaluation forms of the impact on tourism of EC measures; regular reporting to inter-services group Delay for defining and implementing the watch system, (T +• 9) Number of dossiers dealt with and stored (200). Other Commission services connected (all) Effective use (internal survey on satisfaction rate) Periodicity of interservice meetings (4 per year), number and variety of participants (at least 10 services) B. Improving the legislative and financial environment for tourism B. l Reinforcing cooperation with member States, industry, other stakeholders Organization and follow-up of regular meetings Meeting with and reporting to Member States and the industry, annual reports on Community measures affecting tourism, organization and follow-up of regular meetings, participation in major tourism fairs, seminars and conferences Improvement of the implementation rate at national level of EC measures affecting tourism, development at national level of EC compatible measures which facilitate tourism businesses Number of requests for information, of complaints introduced, and follow-up ensured Number of copies of repoi I requested/disseminated. Periodicity of meetings (3 per year with MS, and 3 per year with others); number and variety of participants (all EU-EF I A MS, representatives from at least 40 organizations) Improvement of the awareness on Community measures affecting tounsm measured on the basis of specific survey 29 Specific/immediate objectives/Actions Main final out-put Main Performance Indicators C. Raising quality in European tounsm C. l Promoting sustainable tourism Development of innovative projects, networking, Number of applications submitted, number and relevance of partners/area involved in the projects financed (covering all Member States); follow-up ensured after Community financial support; Network of local "laboratories" applying visitor management techniques Implementation of environmentally friendly management systems European Prize "Tourism & Environment" C. 2 Removing obstacles to tourism development Promotion - transfer of best practices Development of innovative projects Number and relevance of partners involved in the projects financed (covering all Member Slates), number of models identified/applied, follow-up ensured after Community financial support (further application of at least 60% of innovative models identified), D. Increasing the number of tourists from third countries DA. Promoting Europe as a tourist destination Multiannual promotional campaigns Definition and use of marketing, information, promotion and communication tools Increase rate of international arrivals/expenditures. Sponsorship ensured in % of total budget (at least 50%): number of contacts in respect of target population (10-15%) Cost per contact; coverage ensured in respect of total target area, complementary use ensured by national and regional authorities in the framework of their specific campaigns. 30 10. Administrative expenditure (Section III, Part A of the budget) Actual mobilization of the necessary administrative resources will depend on the Commission's annual decision on the allocation of resources, taking into account the number of staff and additional amounts authorised by the budgetary authority Additional request should in no way prejudice the decision that the Commission will be brought to make with regard to the allocation of resources 10. 1 Effect on the number of posts Type of post Staff to be assigned to managing the operation Temporary Permanent posts posts A Officials or B temporary staff C Other resources Total 10 2 4 16 2 9 4 Source Existing resources in the DG or department concerned 8 1 3 6 18 Duration Additional resources 4 1 1 -4 2 As shown in the table above, additional resources should be obtained in the following way in total six new posts in the established plan (4A, IB, I C) of these six posts, four can be obtained through TCE: 3 A, IC In view of the fact that 1997 will be the last year of implementation of the TCE program, that transformation would have to be made in 1997 In budgetary terms the net increase in human resources will therefore be limited to two posts 10. 2 Overall financial impact of additional human resources Amounts 494. 092 Officials Temporary staff Other resources (indicate budget heading) Method of calculation ECU I A x 72. 778 I B x 50. 745 (per year) 123. 523 Total 494. 092 123. 523 x 4 31 10. 3 Increase in olher administrative expenditure as a result of the operation Budget heading Amounts Method of calculation A 2510: - Advisory Committee representatives from Member States (See Article3(2) of draft Decision) 414. 540 (125 100) 695 x IS 10 425 x 3(mertings/yenr) 1 ! 275 x \ P. S I 00 24. 120 \ 8 0 1 x 30 3(mectings/year) 289. 140 72. 360 x 4 500(average cost per mission) x 8 x 12 (average mission per peison, pci year) 48. 000 x 4 192. 000 48. 000 - Technical committees (289. 410) (See Annex draft Decision, paragraph 2) A-130 Total 192. 000 606. 540 32 ISSN 0254-1475 COM(96) 168 final DOCUMENTS EN 16 Catalogue number : CB-CO-96-211-EN-C ISBN 92-78-03846-6 Office for Official Publications of the European Communities L-2985 Luxembourg Hi 33

Proposal for a COUNCIL REGULATION (EC) on aid to shipbuilding

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30. 04. 1996 COM(96) 309 final 96/ 0165 (CNS) Proposal for a COUNCIL REGULATION (EH on aid to shipbuilding (presented by the Commission) Commission proposal further to prolong the Seventh Council Directive on aid to Shipbuilding 1. Introduction 1. 1 In 1994, after several years of negotiation an international agreement was concluded within the framework of OECD respecting normal competitive conditions in the commercial shipbuilding and shiprepair industry. The agreement had been due to enter into force on 1 January 1996. 1. 2 Council regulation 3094/95 of 22 December 1995 on aid to shipbuilding is intended to give effect to the State aid provisions of the OECD agreement. 1. 3 Article 10 of the regulation provides that the regulation shall apply as from the date of entry into force of the OECD agreement with the relevant provisions of the shipbuilding aid directive (Directive 90/684/EEC, as most recently amended by Directive 94/73/EC) continuing to apply ad interim and until 1 October 1996 at the latest. 1. 4 In a declaration to the Minutes, the Council and Commission agreed that if the OECD agreement had not entered into force by 1 June 1996 the Commission should put forward appropriate proposals so that the Council could decide before 1 October 1996 on the position that should be adopted by the European Union. 1. 5 At its meeting on 20 May 1996, the Industry Council reviewed the situation regarding ratification of the OECD agreement. It called upon the Commission closely to monitor developments, and to submit in due course further evaluations on the matter, accompanied if necessary by appropriate proposals, in accordance with the Council's previous conclusions. 1. 6 Since there are some uncertainties over the entry into force of the agreement, this paper reviews the situation and puts forward proposals regarding future shipbuilding aid policy beyond 1 October 1996 against the possibility that by that date the OECD agreement has still not entered into force. 2. OECD agreement 2. 1 Under the OECD agreement, generally all measures of support for shipbuilding are prohibited except for aid for research and development, social aid related to closures; export credits complying with the revised 1994 OECD understanding on export credits for ships; and domestic credits for ships under equivalent terms and conditions. 2. 2 Although the European Union, Korea, Norway and also, within the last few days, Japan have ratified the agreement, the ratification of the USA is still awaited. At an OECD meeting in December 1995 it was agreed that the revised target date for ratification would be 15 June 1996 at the latest, with entry into force 30 days According to the following the last ratification, i. e. before 15 July 1996. information available to the Commission, it seems that although the US administration was committed to press for timely ratification, the US failed to ratify by the deadline as expected because of delays in passing the necessary legislation. The prospects of when the US will ratify are uncertain at this stage. Against this background, the European Union is obliged to prepare possible contingency measures. 3. Existing State aid Rules 3. 1 As noted in paragraph 1. 3 above, with the continuing delays in entry into force of the OECD agreement, the rules of the Seventh Council Directive on aid to shipbuilding continue to apply at present. 3. 2 The directive maintains the policy established by the Sixth Directive, adopted in 1986 against a background of abnormally difficult market conditions, caused by a declining demand for ships and a rapid increase in shipbuilding capacities, particularly in the Far East (with competitors benefitting from home credit schemes and domestic-build practices), leading to a significant imbalance between supply and demand and depressed prices. The main aim of the directive has therefore been: to safeguard the Community shipbuilding industry by providing a defensive instrument against unfair competition through injurious pricing below costs, thereby maintaining a sufficient level of Community shipbuilding activity in those market segments where the Community will remain competitive under normal market conditions, such as less labour-intensive, technologically complex specialised ships; to encourage the necessary structural adjustment of EC shipbuilding toward these directions; to provide, in accordance with the aims of the internal market, a level playing field so that intra-Community competition in shipbuilding is carried out on a fair and equitable basis. 3. 3 Under the Directive (Article 4) production aid for shipbuilding and ship conversions, (but not ship repair) may be granted, up to a common maximum aid ceiling which reflects the difference between the costs of the most competitive Community yards and market prices of their main international competitors, with particular regard to those market segments in which Community shipbuilders remain relatively most competitive. 3. 4 The production aid ceiling must be reviewed at least once every 12 months, which serves to ensure that the most competitive parts of the EC shipbuilding industry can maintain their activities despite the abnormal world market conditions; and which at the same time encourages less efficient yards to undertake the necessary restructuring measures. This is reinforced by the principle of degressivity established by the Directive. The ceiling, which was 28% in 1987, has been progressively reduced to 9% currently. 3. 5 In order to ensure transparency as far as possible all types of production aid, whether direct or indirect, are subject to the ceiling. Article 3 provides that aid to shipowners or to third parties linked to the construction of ships is counted under the ceiling. Similarly operating aid granted to yards, not linked to an individual contract, but in the form of e. g. loss compensation or rescue aid is also subject to the ceiling. 3. 6 3. 7 3. 8 3. 9 The only operating aids exempted from the ceiling are credit facilities complying with the 1981 OECD Understanding on Export Credits for Ships (Article 4. 6) and aid granted as development assistance to developing countries (Article 4. 7) In order to ensure the maximum intra - Community competition, Article 4. 5 of the directive provides that where only Community yards are competing for the same that the Commission will, contract competition is not distorted by aid. if requested, to ensure intervene The Directive also lays down specific rules for investment aids (Article 6), which must be linked to a restructuring plan which does not involve any increase in the yard's shipbuilding capacity or which must be directly linked to a corresponding irreversible reduction in capacity of other yards in the Member State concerned; aid for closures (Article 7), on condition that the resulting capacity reduction is of a genuine and irreversible nature (with the facilities having to remain closed for not less than 5 years; and not being reopened within â further 5 years after the 5 years, i. e. for a total of 10 years, without the Commission's prior approval); and aid for research and development (Article 8). In addition the directive (Articles 11 and 12) imposes notification and reporting obligations on Member States in order that the Commission can monitor compliance with the rules. In the Commission's view the Directive has been generally effective and largely achieved its aims. It has provided a transparent and stable framework safeguarding Community yards and enabling the Community broadly to maintain its world market share in recent years at around 20%. At the same time it has been possible to undertake the necessary restructuring. Over the last 20 years the size of the Community's shipbuilding industry has shrunk significantly. (For example in Western Europe (EU 15 plus Norway) capacity has fallen from 8. 5 million cgt in 1975 to 4. 2 million cgt in 1994. During the same period the workforce has also been reduced substantially, in the EU 12 ( minus the three new Member States) from nearly 209,000 in 1975 to under 68,000 in 1994). This approach has demonstrated to our trading partners that the Community will protect its shipbuilding industry against unfair competition but at the same time will not prop up uncompetitive capacity. 4. Future Policy 4. 1 The early entry into force of the OECD agreement is vitally important if a normalisation of world shipbuilding market is to be achieved. By ratifying, the Community has already signalled its commitment to the agreement. However, so long as other parties to the agreement have not ratified and continue to maintain subsidies and other market-distortive measures, it is necessary to maintain a defensive instrument for Community yards against unfair competition. This is particularly necessary given the prevailing market situation which, notwithstanding some encouraging signs, remains difficult. It would be inappropriate in such circumstances for the European Union unilaterally to dismantle its existing aid arrangements. 5- Proposal 5. 1 In the light of the above it is proposed that if necessary the Community should be prepared to maintain the rules of the directive beyond 1 October 1996 should there be a continuing delay in the entry into force of the OECD agreement. In that event, since these rules have generally operated satisfactorily, and new measures of support are in any case prohibited by the "standstill" provisions of the Final Act of the negotiations concluding the OECD agreement, the rules of the directive could be maintained unchanged. This would include the principle of degressivity in the level of the production aid ceiling. The aim of a progressive reduction in the aid ceiling would remain, but the actual level set would be dependent on the market situation and the size of the cost/price gap. 5. 2 As regards the duration of any prolongation of the rules of the directive, a lengthy prolongation could send the wrong signals to the other parties to the OECD agreement. On the other hand, given the current uncertainties over the timing of the entry into force of the OECD agreement, too short a prolongation could create further uncertainty for Community yards over possible future policy direction. To avoid these problems it is proposed that the directive be prolonged until 31 December 1998 unless the OECD agreement enters into force in the meantime. This would also allow sufficient time to undertake a more fundamental review of future policy if appropriate. 6. Conclusion 6. 1 Accordingly, it is proposed that the Council adopts, after consultation of the European Parliament and the Economic and Social Committee, the attached amendment to Regulation 3094/95 providing for its entry into force as from the date of entry into force of the OECD agreement, with the relevant provisions of the shipbuilding directive continuing to apply ad interim and until 31 December 1998 at the latest. 6. 2 In order to avoid any legal vacuum the Council should take a decision before 1 October 1996. Proposal for a Council Regulation on aid to shipbuilding THE COUNCIL OF THE EUROPEAN UNION Having regard to the Treaty establishing the European Community, and in particular Articles 92(3)(c), 94 and 113 thereof; Having regard to the proposal from the Commission; Having regard to the opinion of the European Parliament; Having regard to the opinion of the Economic and Social Committee; Whereas, an agreement respecting normal competitive conditions in the commercial shipbuilding and repair industry0} concluded between the European Community and certain third countries with the framework of the Organisation for Economic Co-operation and Development (OECD), has not yet entered into force. Whereas, therefore Council Regulation 3094/95 of 22 December 1995 on aid to shipbuilding^ has not yet entered into force. Whereas, in accordance with Article 10 of Regulation, the relevant rules of Council Directive 90/654/EEC(3) on aid to shipbuilding continue to apply ad interim, pending the entry into force of the OECD agreement and until 1 October 1996 at the latest; Whereas as a contingency measures against the possibility that the entry into force of the OECD agreement is delayed beyond 1 October 1996 the Council needs to take appropriate steps. HAS ADOPTED THIS REGULATION Article 1 The third paragraph of Article 10 of Regulation 3094/95 shall be replaced by the following: Pending the entry into force of the said Agreement, the relevant provisions of Directive 90/684/EEC shall apply until the Agreement enters into force and until 31 December 1998 at the latest. Article 2 This Regulation shall be binding in its entirety and directly applicable in all Member States. (D (2) (3) O J N ° C 3 7 5, 30. 12. 1994, p. 3 O J N °L 332, 31. 12. 1995, p. 1 OJ N° L 380, 31. 12. 90, p. 27, Directive last amended by Directive 94/73/EC (OJ no L 351, 31. 12. 1994, p. 10) KSN0254-U75 COM(96) 309 final DOCUMENTS EN vi Catalogue number : CB-CO-96-311-EN-C ISBN 92-78-05798-3 Office for Official Publications of the European Communities L-2985 Luxembourg

Report on the Evaluation of the Community Action Plan to Assist Tourism 1993-95 - Council Decision 92/421 EEC

http://publications.europa.eu/resource/cellar/ac185435-bdf7-4d9a-a4bc-77178e7fefbd

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COMMISSION OF THE EUROPEAN COMMUNITIES Tir & <r -6- Brussels, 30. 04. 1996 COM(96) 166 final R E P O RT ON T HE E V A L U A T I ON OF T HE C O M M U N I TY A C T I ON P L AN TO A S S I ST T O U R I SM 1993-95 C O U N C IL D E C I S I ON 92/421EEC (presented by the Commission) I INTRODUCTION 1. The three year Community Action Plan to Assist Tourism, agreed on 13 July 1992, recognised the importance of tourism and set out a framework to enable the Community to specifically assist its development1. The Action Plan to Assist Tourism (hereafter 'the Plan') broadly stated that Community action should: strengthen the horizontal approach to tourism in Community and national policies; implement specific measures; and coordinate the measures undertaken by other Commission departments. The Plan recognised the Community's role in improving the quality and competitiveness of tourism and that a joint approach to tourism by the Community and the Member States could promote the wider development of the Community in both economic and social terms. 2. The purpose of this document is to report on the evaluation of the Plan. This is pursuant to Article 6 which states that the Commission shall undertake such an evaluation and report to the Council and the European Parliament. The date specified in Article 6 for the production of this report was 30. 6. 95. While this timetable has not been met the delay has allowed for a more comprehensive evaluation of the Plan than would have been the case had the original timetable been followed. Even taking account of this delay however the external evaluator was only able to fully evaluate the results of the first two years of the Plan, which represents 55% of total expenditure commitments made under the Plan. Actions financed in the second year of the Plan were in general only completed at the end of 1995 while most actions financed in 1995 were started at the end of that year. 3. This document responds to an independent evaluation of the Plan undertaken by external consultants. Their final report was accepted by the Commission on 26. 2. 96 and has the following structure: Summary of Findings and Key Recommendations Section 1 Introduction Section 2 Programme model of the Plan Section 3 Technical evaluation of actions Section 4 Administrative and operational aspects Section 5 Assessment by contractors Appendices 4. The Commission responds here to the Consultants' Report using the framework developed by the Consultants in the first part of their Report entitled 'Summary of Findings and Key Recommendations'. All the points discussed in detail in the body of the Consultants' Report are contained in that Summary, and are set out in the following order: The Contents of the Programme (Paragraphs 2-6 / pg. i) The Role and Market Positioning of the Tourism Unit ( Paragraphs 7&8 / pg ii) 1 Council Decision 92/421/EEC, OJ L231 of 13. 8. 92 Compliance with Article 4 of the Action Plan and Achievement of Objectives (9-12) Technical Evaluation (13-33) Administrative and Operational Aspects (34 - 41) Key Recommendations (42 - 60) 5. 6. Sections II to VII of this document therefore deal sequentially with all the issues raised by the Consultants in their 'Summary of Findings and Key Recommendations'. Where reference numbers are given below these relate to paragraphs contained in the Consultants' Summary although more detailed comment can also be found in the later sections of their Report. Three annexes complement this Report. Annex 1 gives supplementary information on the Plan and its administration; Annex 2 gives a breakdown of the expenditure commitments made under the Plan; and Annex 3 is the Consultants' Report. The Consultants were not called upon to specifically investigate the allegations regarding the conduct of affairs in the Tourism Unit in the period prior to March 1994. Enquiries by the Commission, the Court of Auditors and other authorities are still proceeding. The Consultants were, however, asked to bear in mind the effect which these allegations and enquiries had on the overall effectiveness of the implementation of the Plan. II THE CONTENTS OF THE PROGRAMME 7. The Commission welcomes the evaluation undertaken by the Consultants and agrees with the substance of many of the issues identified. This is particularly the case in respect of the Consultants' analysis of the contents of the programme. Paragraphs 2 to 5 outline weaknesses in the structure of the Decision which caused difficulties throughout the lifetime of the Plan. These include the following: i) ii) iii) iv) v) vi) fragmented and incoherent Measures (set out in the Annex of the Plan); confusion between ends (or objectives) and means (the measures); lack of clarity on how some of the actions would contribute to wider objectives; incomplete or overlapping measures; over ambition given the available resources, lack of continuity over the 3 year period. 8. The Commission broadly agrees with these criticisms. The Commission views the Plan however as the outcome of a long discussion which resulted in a number of competing priorities. Tourism policy as such does not exist and a specific tourism 'strategy' at EU level is at a formative stage. The differing views and priorities of the Member States; the complex nature of the different interests associated with tourism; the lack of previous specific action at EU level; the subsidiarity principle; and the requirement for unanimity within the Council all served to shape the Plan. The Commission accepts that the measures would have benefited from further analysis by both Commission and Management Committee before implementation. This proved difficult due to its relatively short-term nature and the constraints imposed by budgetary rules applicable during the first year (differentiated appropriations). The Commission will take account of all the aspects noted by the Consultants in the drafting of any new programme. In particular there will be: • an unambiguous and logical link between objectives and measures; • • a reduced number of clear and focused measures; realism given available resources; • clear added value to existing actions taken by both Member States and other Commission services; • coordination with other Community actions; • respect for the principle of subsidiarity; • a logical work programme to ensure continuity of actions in T HE ROLE AND " M A R K ET POSITIONING" OF THE TOURISM UNIT 9. Paragraphs 7 and 8 of the Consultants' Report refer to the role and mandate of the Tourism Unit. There was, in the view of the consultant, a lack of market positioning. The Commission is in broad agreement that this remit should be defined with greater focus and clarity in the future but would also point out that role and mandate is dependent upon the content of any Decision which is agreed. Certainly the experience gained with both the Plan and the consultation on the Green Paper on the role of tourism in the Union2 has assisted with the definitions of any future role and function. A number of specific options are given in the Consultants' Report on the type of role which could be undertaken by the Tourism Unit. The Commission will ensure that the Tourism Unit concentrates mainly on the specific role of ensuring greater coordination of all Community actions affecting tourism. This will be achieved by the: • further development of internal coordination mechanisms; • active cooperation and partnerships with Member States and the tourism industry; • regular identification o£ and consultation on, specific issues of concern. COM (95) 97 of 4. 4. 9 5 IV COMPLIANCE WITH ARTICLE 4 AND ACHIEVEMENT OF OBJECTIVES 10. Paragraphs 9 to 12 of the Consultants' Summary state that the objectives (contained in Article 4 of the Plan) are at a high level and sometimes vague. The Consultants identify that the 11 measures ("Policy Areas") were never clearly linked to these objectives which were both high level and too broad. In addition it is apparent that intermediate objectives and performance indicators were either missing or were poorly defined. The Commission is in agreement with this analysis and accepts that the nature of the Plan made it difficult to implement. The Consultants recognise that the attainment of these high level objectives, given both resources and framework, was not realistic. 11. The Consultants note however that particular initiatives were successful, such as work on statistics and coordination, and that these successes made a contribution to the attainment of the intermediate objectives expressed in the Plan. The 'Programme Analysis' undertaken by the Consultants also reveals that objectives were confused with mechanisms, particularly in the case of Transnational Measures' which featured as a measure in the Annex. This analysis revealed the value of a continuous evaluation of the objectives. Such an evaluation includes analysis of the objectives in terms of their coherence and links to performance indicators and targets. This analysis will be undertaken by the Commission on an ongoing basis. Based on the lessons learnt the objectives of any new programme will be set out in a hierarchy as follows: • Long term objective. • Medium term objectives • Short term objectives linked to tasks • Specified performance indicators enabling progress towards the objectives to be measured • Targets to measure effective completion of objectives V TECHNICAL EVALUATION 12. Paragraphs 13 to 33 of the Consultants' Summary show the results of the technical evaluation. This included an assessment of all projects funded in 1993 and '94 and 10 case studies. The main points noted by the Consultants on the technical side are that: The quality of projects was low in 1993 but improved significantly in 1994; i) ii) The impact of actions was limited in space, scope and time; iii) The work on statistics was successful; iv) Studies were usually well executed although lacked clear analysis of needs; v) Built in post-project sustainability was often not well considered and some projects appear to have been largely designed to access EC Funds. vi) The commercial application of some projects does not appear to have been well thought through; vii) Publications relating to tourists with disabilities have produced excellent results; viii) Pilot projects on culture, technology and training have produced varied results, ix) The work on coordination made a positive contribution to reaching certain intermediate objectives, SMEs were not well enough considered in some actions, such as technology. x) These 10 findings are considered separately below. 13. The Commission is confident that the methodology employed by the Consultants has resulted in an accurate technical assessment. The Commission recognises that project quality was low in 1993 and welcomes the fact the quality of projects improved significantly between 1993 and 1994. It is also to be recalled that the Consultants have judged that a further improvement is likely with the 1995 work. The Commission believes however that there are a number of presentational points in the Consultants' Report which may not always result in the most accurate view being given. For example the data presented in Table 3. 1 (pg. 13) does not correspond with comments made in 65 (pg. 17). Here it is stated that the quality of projects is 'poor to average' while Table 3. 1 indicates that this is not the case and the number of good or very good quality projects is significant, reaching 44% in 1994. 14. The Commission notes the Consultants' view that the impact of actions was limited in space, scope and time and accepts the principle that a smaller number of larger actions is desirable. However the Consultants point out that the number of commitments made were too many in relation to the size of the Unit and this statement largely fails to take into account that many commitments were related to the same subject using standard contracts where the project management is reduced due to their similar nature. For example 40 of the 75 commitments in 1995 related to statistics and many of these were made under identical conditions to each Member State. 15. The Consultants also comment in 16 that actions taken were too small to make a significant impact It is not however suggested at what level of funding the actions would become more 'significant'. This comment is then partially contradicted with a recognition that some small actions have been successful and cost-effective. The Commission views this statement as one which is rather simplistic (given the many variables which can impact on project effectiveness) and believes that certain types of small action can be very significant due to the multiplier effect. 16. The Commission notes the Consultants' judgment that the work on statistics has been successful. This work, undertaken via a partnership with the industry, resulted in the agreement of a Directive on the gathering of comparable data at Member State level across the EEA3. The fulfillment of this widely recognised need has been a significant achievement. Further work on this topic will continue over the next years. 3 Council Directive 95/57/EC of 23. 11. 95 (OJ L 291 of 6. 12. 95) 17. The Consultants note that studies were usually well executed although lacked a clear analysis of needs. (Here 'studies' are defined as research work which is 100% funded by the Commission). The Commission accepts that this was the case in some circumstances and that this was partly a because of shortcomings with the Plan itself already noted. Additionally the Consultants' Report acknowledges that studies have been agreed or proposed by the Management Committee and usually. discussed with the sector. The procedure for proposing and selecting studies has been modified in such a way that after 1994 only studies which were based on a clear assessment of requirements and outputs have been progressed. 18. The Consultants note that there was a lack of built in post-project sustainability with some projects. The Commission would make the following points. Projects of the type requested are usually demonstrative, aiming to encourage others to do similar work. They should however be suitable to become longer term actions; Innovative projects are more likely to have a higher failure rate than other forms of intervention due to the nature of the action; Many of the impacts of the projects will occur in the medium term and have not been picked up in the evaluation, which examined directly measurable outputs; Many of the impacts are dependent on effective publicity which will be continued. This said the Commission is clearly concerned to ensure that the impact of its financial support is as effective as possible. The 1995 series of projects has taken on this issue and revised selection procedures have improved the quality of projects selected. The Consultants note that reference publications can become out of date rapidly and the Commission agrees that such publications should have sustainability built in. The Consultants also judge that some projects appeared to have been designed to "access" EC funds. This refers to a small number of projects selected in 1993 which were subsequently shown to be of poor quality. The Commission agrees with this and would state that no final payments have yet been made on these projects pending further assessment. 19. The Consultants note that the commercial application of some actions do not appear to have been fully thought through. Earlier in paragraph 18 the Consultants divide actions into those which promote 'European' concepts and those which are 'commercially interesting'. While the Commission agrees that commercialisation can be desirable it does not hold the view that this was the main goal of the Plan. Indeed networks and other initiatives which promote information exchange and greater knowledge are vital and cannot always be made immediately commercially feasible. Aspects such as accurate European-wide statistics and specific research are preconditions to ensure the industry's success. There is also a clear role for the public sector in certain areas, such as the environment, where the use of subsidy to ensure the conservation of public goods is widely accepted. 20. The Commission notes that the publications relating to tourists with disabilities have produced excellent results. The Commission would also add that a variety of other initiatives, such as the tourism and environment prize, and the coordination function with other Services have also created a significant and positive impact. 21. The Consultants state that the pilot projects on culture, technology and training have produced varied results. These fields of activity were those with the most projects and represented considerable expenditure, the details of which are set out in Annex 2. The Commission would question the Consultants' view stated in the body of the Report that the cultural projects have reduced or diverted demand from other areas. This statement cannot be made with great accuracy at present and may fail to take into account overall and niche market growth. The Consultants note that certain technology projects have had a positive impact in accelerating the application of new technology. The Consultants comment on the 'one-off training actions undertaken in Central & Eastern Europe (27) and accept that they may have been effective but were considered rather in isolation. Nevertheless the Commission considers this type of training to be of benefit and holds the view that adequate coverage in other similar regions is as important as follow-up in the region where training has taken place. The Commission accepts however that there remain issues to be examined relating to dissemination, post project follow-up and longer-term impacts. Further dissemination of results, continuing with partnerships where appropriate will create publicity and encourage follow-up action. 22. An area positively evaluated is that of coordination of other Commission policies with tourism objectives (see Paragraph 11). This work is seen by many as the most important aspect of the Plan. The results of this wide ranging task have been varied but specific initiatives such as the reports on matters affecting Tourism4 and a number of working partnerships with other services have been particularly successful. An example is the coordinating group on tourism for people with special needs, which served as a link between the Plan and the Helios II programme. An area where the Commission still needs to increase the direct influence of the Tourism Unit is on other established Community programmes, which often have a substantial tourism component. In the interests of improved coordination the Commission is now holding more specific and thematic meetings with the sector where policy implications can be discussed with the services responsible and independent experts. 23. The Consultants note in 33 that one issue which was not adequately addressed was the relevance to SMEs of the technology projects and other actions. While recognising that tourism SMEs have not been the subject of a specific call for proposals, the Commission would recall that some work, such as that on 'Yield managment in Small and Medium sized Enterprises in the Tourism Industry', did seek to examine how the application of technology could be applied by SMEs. 24. One major action on Promotion in Third Countries was launched in 1993 at a cost of 1 MECU. The action consisted of the development of an image for Europe and a publicity campaign. The concept was to present various common European themes under one 'umbrella'. The project suffered from a lack of coordination with other campaigns run presently by the European Travel Commission, (ETC) a representative organisation of various National Tourist Organisations (NTOs). While the technical quality of the work was COM (94) 74 of 6. 4. 94 & COM (96) 29 of 5. 2. 96 high, the value for money as measured by direct responses was low. This was largely due to lack of sponsorship, which had been anticipated in the original proposal, but which was not forthcoming. Second, in 1994 a market research project was jointly funded. This consisted of research on the demands of the major and emerging markets outside Europe and was recognised by the Consultants as a useful addition to current knowledge in this area. Third, in August 1995 a call for proposals was published relating to a promotion action in Japan. It had been hoped to transfer the necessary funds from the general budget line of the Plan or finance the action from 1996 funds. In the event neither of these options was possible and the campaign was not implemented, although the required sponsorship funds had already been guaranteed. All the recommendations made by the Consultants on promotion will be taken into account in future actions. In summary the Commission: • welcomes the recognition that significant improvements in project quality were made over the period of the Plan; • accepts that a smaller number of larger projects is a sound principle; • accepts that greater account should be taken in any future activities of the analysis of study needs, project sustainability and commercialisation; • will take account of the points made on the technology, training and cultural projects in order to ensure that they provide greater impact and added value within any further specific actions; • continues to pursue work on the dissemination of project material; • has already, or intends to, recover sums paid to certain projects. VI ADMINISTRATIVE AND OPERATIONAL ASPECTS 25. In March 1994, following an inquiry into affairs in the Unit by DG XXIII and a subsequent internal audit by the responsible Directorate General, the Head of the Tourism Unit was transferred to another service and subsequently suspended. In July 1994 a Temporary Agent was also suspended and both these members of staff were later dismissed. Following further work by the Commission's anti-fraud service these matters were later referred to authorities in a number of Member States which are now conducting an investigation into allegations of fraud. The results of these actions had great significance, both in terms of the administration of the remainder of the Plan and for the quality of some of the work which began in 1993. 26. Paragraphs 34 to 41 of the Consultants' Summary show the findings of the administrative evaluation. From this the following is apparent: i) Administrative arrangements and procedures were weak at the start of the Plan but have significantly improved; ii) The administrative load is unfavourable in relation to direct tasks such as project monitoring etc. ; iii) DGXXIII communication lines are lengthy and slow; iv) There has been high staff turnover, a lack of tourism expertise, poor staff training and understaffing of the financial administration; v) The procedures used to implement the Plan were too burdensome given resources; vi) Financial management was poor during the first part but has improved. The Commission accepts these findings and would add that many of these issues have now been addressed. It is also the case that the events during the first part of the Plan created considerable operational difficulties for the rest of the period. 27. As regards weak administrative arrangements and procedures the Consultants note that actions have been taken by the Commission to ensure improvement. This included reviews and strengthening of: Specifications of calls for tender and proposals Standard contracts and declaration forms; Selection procedures both for studies and pilot projects; Monitoring systems Post-project evaluation systems Payment control systems 28. These changes have resulted in a much improved operational system. In addition some of the purely administrative load has been reduced and a further review is in process which will enable desk officers to devote more time to direct project management. These measures include: Production of an external reference guide for project directors; Production of internal guidance for Desk officers within the Unit; Updating and improving the register of external consultants; Establishment of databases and other computerised systems for archiving etc. 29. The Consultants note in 37 that DGXXIII communication lines are lengthy and slow. This issue has been addressed by the recent approval of a new organisational structure which will incorporate a number of major changes. This includes the strengthening of the financial administration with a separate Unit, at the level of the Directorate General, concerned with budget and internal control. Another new Unit will be responsible for legal affairs and contracts. There will also be structural changes within the Tourism Unit itself. 30. In 38 the Consultants identified problems of high staff turnover, a lack of tourism expertise, poor staff training and understaffing of the financial administration. Some of these problems were caused or compounded by events during the first part of the Plan. The Unit has improved staffing, with a higher proportion of officials who are complemented by a number of tourism related national experts. The training needs of staff are examined on a regular basis. 31. As regards the burdensome procedures used to implement the Plan the Unit is reviewing options for efficiently adapting the administrative work in order to further improve quality of outputs and cost-effectiveness while ensuring compliance with standard Commission procedures. It is evident from the above actions taken by the Commission that the financial management which was poor during the first part of the Plan has now been substantially improved. 10 In summary changes made to administrative aspects include: • strengthened procedures relating to all aspects of project selection; • improved monitoring, control and evaluation systems; • new organisational structure which includes new Units responsible for budget control and contractual matters; • an increased number of officials working with tourism national experts. V II KEY RECOMMENDATIONS 32. The key recommendations are contained from paragraphs 42 to 60. The Consultants note that action has already been taken on many of their recommendations. As the Commission has already responded to many of these points this Section only comments on those areas which have not yet been covered, namely: the need for greater partnership and meetings based on specific issues; dissemination of results via the Committees in existence; identification of needs by independent experts; the greater use of performance indicators; greater autonomy in certain operational areas; the annual cycle of the Plan; i) ii) iii) iv) v) vi) vii) priorities for 1996; viii) guidelines for a future tourism programme. 33 The issue of partnership with external organisations is one which the Commission has already developed further in 1995. The Commission accepts however that existing arrangements with the industry are not yet ideal and will work with the various interests concerned to ensure that relationships are improved. Close partnership with the tourism industry will be a key element of any new programme. 34. Likewise some of the ways to increase cooperation mentioned in the Consultants' Report have already been progressed. The Commission agrees that a key value-added element 11 comes with the dissemination of results. It will examine with the various committees how best this is undertaken. The committees will continue to advise the Unit on the identification of needs and ensure that EU funding does not duplicate existing activities. Other experts, in the form of smaller technical working groups, will continue to be consulted. The Commission is in full agreement with the greater use of performance indicators and targets and will build these into any new programme. 35. As far as greater autonomy in certain operational areas for the Unit is concerned this issue will be examined when the new organigramme is in place. The Commission is in broad agreement that purely operational issues should be addressed at Unit level wherever possible. As regards the annual cycle of the Plan this issue has been addressed in 1995 where projects are now of a longer term - up to 3 years in length and this approach will be continued. The proposals of the Consultants relating to the priorities for 1996 (paragraph 59) have already been applied. The Guidelines for a future tourism programme (Paragraph 60) have been considered in the drafting of the proposal for the new Programme. In summary the Commission • wishes to strengthen its partnership with the tourism industry; • will examine with the relevant bodies how information and projects can be better publicised and be of greater practical use to the tourism industry; • will ensure that needs for studies and other work are fully assessed prior to • publication of tender specifications; is currently examining how the Unit can function with greater effectiveness within the framework of the new organisational structure. vm CONCLUSIONS 36 In general the Commission agrees with and, despite the criticisms, welcomes the overall assessment of the Consultants' Report. The complexity of tourism at EU level, together with the widely diverging views of Member States and European Parliamentarians on how best to develop policy in this area, made it difficult to maintain coherence within the Plan. This was particularly reflected in its Annex which was diverse and ambitious, especially when viewed in relation to the objectives and the available budget. 37. The goals of the Plan were first, to achieve better coordination and knowledge of the industry, and secondly, to stimulate innovation, create additional activity and encourage exchanges of information and transfer of experience. The encouragement of innovation and the transfer of experience was to a certain extent achieved by the joint-funding of pilot 12 projects (which always involved at least 2 transnational partners and usually more), and the creation of networks. Work on the dissemination of the results of pilot projects will continue, and the maintenance of networks will encourage the replication of best practice, transfers of experience and coordinated efforts throughout the Community. 38. The technical quality of the actions progressed was not always good. The evaluator recommends that a smaller number of larger projects fulfilling an identified need is required. This could increase the technical and political impact of expenditure and would reduce the administration of this expenditure at the level of the Unit. Without doubt, the extraordinary circumstances that prevailed during the first 18 months of the Plan's operation, and which ended in changes to Tourism Unit staff, affected its overall performance. This is evident in the poor results of certain projects. Improvements made during 1994 and 1995 have had a positive impact. 39. Other initiatives launched during the lifetime of the Plan, such as the Green Paper on the role of the Union in tourism and various intergovernmental tourism meetings, stimulated wide consultation specific to tourism. Indeed the conclusion of the majority as a result of these initiatives was that a consensus does exist as to the appropriateness of ensuring continuing Community action in the field of tourism, rationalising this activity and possibly deepening it. 40. The Commission believes that the Plan, while being of an experimental nature, nevertheless established a framework which provided a useful context for practical action. The Plan has been successful in establishing links between Commission services, Member States and other regional and sectoral interests. It has also provided the basis on which partnerships with the industry can be increased and further developed. The development of robust and effective policies to assist tourism is a challenging task. The diversity, nature and enormous potential of tourism requires appropriate action at many different levels: local, regional, national as well as European. Only concerted and complementary efforts will help to ensure a competitive, high quality and sustainable tourism industry. 41. This report has shown that the Community Action Plan to Assist Tourism has had both shortcomings and positive effects. It has served as a useful basis that has indicated the type of future actions which may assist this vital industry. The Commission therefore is submitting with this Report, a proposal for a first Multiannual Programme in favour of tourism. ANNEX 1 Background to the Community Action Plan to Assist Tourism Al. Prior to the Council Decision of 13. 7. 92 administrative arrangements relating to tourism were based on a Council Decision of 22. 12. 86 which established a consultation and cooperation procedure in the field of tourism, specifically an Advisory Committee made up of representatives of the Member States5. This Committee continues to exist and ran concurrently with the Management Committee set up under the Action Plan. A2. The Plan came into operation on 1. 1. 93 with a duration of 3 years and a proposed budget of 18 MECU. The measures undertaken were to be consistent with the principle of subsidiarity and to be progressed by reference to criteria set out in Article 4. Given the diverse nature of tourism the Plan was concerned with strengthening the horizontal aspects of the sector generally and improving its coordination within the Commission. It made therefore specific reference to the requirement to produce an annual report which evaluated the Community's activities which affected tourism and stressed the requirement for other related actions. The Plan also included as an Annex a list of 11 measures which established a range of priorities which were themselves divided into sections specifying particular actions. This Annex also set out which of these actions were to be taken forward in 1993. A3. In summary the principal objective of the Plan was to assist the sector's development by encouraging and strengthening the coordination of Community actions affecting tourism and by implementing a range of specific measures. The latter were pursued by encouraging integrated actions which were to be transnational, additional, innovative and respectful of the principle of subsidiarity. These actions were to be progressed with reference to criteria by way of pilot projects, research studies, publications and other appropriate means. Administrative Arrangements A4. To assist the Commission with the execution of the Plan the Council Decision specified that a Management Committee be established composed of representatives of Member States. This Committee agreed priorities, delivered its opinion on annual work programmes and guided specific actions. The Management Committee first met in December 1992 and subsequently on 10 occasions over the 3 years of the Plan, (twice in 1993 and 4 times during the other 2 years). A5. In January 1994 membership of the Committee was widened to include the Member States of the European Economic Area, which includes Austria, Finland, Iceland, Norway and Sweden. Three of these States namely Austria, Finland and Sweden became members of the Union in January 1995 and at that time Liechtenstein also became a Member of the Committee. Council Decision 86/664/EEC, OJ L 384 of 31. 12. 86 14 A6. Prior to the Plan the Council Decision of 1986 had established an Advisory Committee made up of representatives of Member States. The Management and Advisory Committee meetings often met consecutively and were usually followed by meetings of representatives industry. The Commission also organised separate meetings with of the tourism representatives from the tourism private sector. Member States' representatives were generally invited to attend these meetings as observers. A7. The Plan was progressed via a series of annual work programmes based on the actions listed in the Annex to the Plan and agreed by the Management Committee. Various mechanisms were used to disburse the funds. These normally included published calls for tender (principally for 100% financed studies and other actions), and published calls for proposals (for co-financed pilot projects with a Community contribution). Further projects were supported via the responsible Directorate's Subvention Committee and in particular cases funds were disbursed via direct contract. Project selection procedures were mainly undertaken within the Tourism Unit with other services invited to participate where appropriate. In almost all cases Commission services alone were solely responsible for the selections made. Mechanisms designed to facilitate coordination included the establishment of an Inter-Service Group which met on 9 occasions (twice in '93, 3 times in '94 and 4 times in '95) and the development of specific technical meetings involving both the Advisory Committee and the tourism sector. Staff and Financial Resources A8. The average number of staff employed in the Tourism Unit was 16, of which 11 were 'A' Grade level. The ratio of permanent staff relative to total staff was 5:17 at the start of the Plan rising to 11:17 by the end of 1995. Staff turnover was 86%. The Unit was occasionally supported by other staff of the Directorate, and where appropriate and possible drew on available administrative and technical services from both the Directorate and elsewhere in the Commission. A9. Financial resources available were increased from the original estimated budget of 18 MECU to a total of 21. 71 MECU. This was due to an increase of 3 MECU in budgetary provision for 1995 and the inclusion of the EEA Member States which contributed 566. 400 ECU in 1994 and 141. 300 ECU in 1995. Financial commitments amounted to a total of 19. 75 MECU. There was a 1. 9 MECU shortfall in commitments (originally assigned for actions on promotion in Japan). The Work Undertaken A10. The Plan can be divided into actions which were concerned with improving the coordination of Community actions affecting tourism and those actions which were related to the 11 annexed measures. In many cases these measures were also subject to initiatives to improve coordination and likewise the objectives and/or effects of many projects were to strengthen such coordination both at the transnational level and within specific technical areas. All. Activities relating to coordination were pursued in a number of different ways. These included mechanisms to improve liaison and coordination within the Commission, and those targeted at the tourism industry or interests associated with its development. Mechanisms used were varied and included those initiated as a result of legal or institutional requirements, and those developed for pragmatic consultative or technical reasons. They included the following: 15 The Management Committee The Advisory Committee An internal Inter-Service Group Established internal procedures Consultation with representatives from the tourism industry Meetings with National Tourist Organisations Ad-hoc groups of experts on specific subjects The 1994 Report on Tourism to the Council and European Parliament The 1995 Report on Tourism to the Council and European Parliament Conferences and exhibitions at tourism trade fairs Other conferences, presentations and publications Technical networks as the rationale or result of projects The Green Paper consultation process A12. The first year's work programme was specifically set out in the Annex to the Plan and the priorities progressed were as stated in that Annex. In Year's 2 and 3 the Commission proposed a programme based on the Annex, the budget available and on the requirements expressed by the Management Committee, the industry and other relevant interests. Over the period work on all the specified measures was undertaken. The degree to which each measure was progressed was dependent upon a range of factors including the priorities agreed by the Management Committee, the extent and similarity of work being undertaken by other Commission Services and the budgetary notes of the Parliament. A13. A number of changes were made to the annual programmes because of changing priorities. The Parliament identified a need to develop technical solutions relating to transport management in tourism, while an Environment Council held in Greece in 1994 expressed the importance of better information on tourism/ environment issues. Both these concerns were addressed in the 1995 call for proposals. The Parliament also invited the Commission to examine the issue of so called 'sex tourism' involving the abuse of minors. The Commission therefore submitted working papers to the Management Committee and consulted with the sector on this topic. 16 ANNEX 2 Expenditure Commitments made under the Plan A14. This annex gives a breakdown of expenditure commitments according to three categories: by each of the 11 measures; by the type of mechanism used to select projects; and by the type of organisation which received the funds. It should be stressed that these commitments do not always reflect the number of actions carried out. For example the Tourism and Environment prize included the disbursement of funds via direct contract to relevant organisations in 17 participating states even though this was essentially one action, albeit a major one. A15. Annex 2a shows a breakdown of the number of commitments made and the level of expenditure for each year by each of the 11 measures specified in the Annex of the Plan. Six of the measures absorbed 95% of the budget. The majority of expenditure was made under the measures 'Improving Knowledge' (37% of the total budget), especially concerning statistics where expenditure until 1997 has been provided and which accounted for 27% of total expenditure. 'Transnational Measures' accounted for a further 16% of expenditure; 'Tourism and the Environment' (14%); and 'Cultural Tourism' (13%). Two other measures that recorded significant expenditure were 'Training' and 'Promotion in Third Countries' (7% and 8% of total commitments respectively). The remaining 5% was spent on the other 5 measures. A16. Annex 2b gives a breakdown of expenditure commitments by selection mechanism. Calls for proposals seeking co-financed projects were published in all three years relating to Transnational Actions (annually); Cultural Tourism (twice); Training (once); and Tourism and the Environment (once). A total of 43% of the Plan's funds was disbursed using this procedure. Seven per cent of the funds were disbursed via the Directorate's Subvention Committee. Open calls for tender were published in all three years and related to various studies, publications and major initiatives funded entirely by the Commission. A total of 22% of the funds was spent via this mechanism. Approximately 26% of the funds were awarded via direct contract, most notably to the Member States. A17. Annex 2c gives a breakdown by type of organisation which benefited from the funds. The main categories are: Public Sector; NGOs/Associations; Universities/Research Institutes and the Private Sector. Because of the widely differing nature and type of tourism bodies and the varied options for their definition this Annex should be treated with caution. However on this basis it is evident that around 33% of the funds were disbursed to the public sector; 14% to NGOs/Associations; 6% to universities; and almost 48% to the private sector. ANNEX 2A 17 No. of Commitments by 1993 1994 1995 Total %of Av. Cost Measure Number ECU (000) Number ECU (000) Number ECU (000) Number ECU (000) Budget Of Action 1. Improving knowledge a) Statistics b) Studies c) Consultation Sub-total 2. Staggering holidays 3. Transnational a) Transnational b) Technology c) PECO Sub-total 4. Tourists as Consumers 2 4 5 11 0 6 9 3 18 0 399 302 188 889 0 458 1448 302 2208 0 1 2 3 6 2 0 1 2 3 1 249 726 211 1186 80 0 114 61 175 161 5. Cultural Tourism 18 1262 12 1245 6. Tourism/Environment a) Prize b) Projects Sub-total 7. Rural Tourism 8. Social Tourism 9. Youth Tourism 10. Training 11. Promotion* 12. Unclassified/ Mise 1 0 1 1 3 1 2 1 3 382 0 382 120 175 10 17 1 18 1 0 2 236 50 286 80 0 218 197 10 1259 1000 25 1 2 30 30 40 4 5 49 0 0 0 6 6 0 1 4656 266 312 5234 0 0 0 822 822 0 66 5 9 14 203 1829 2032 0 2 0 0 1 2 0 70 0 0 500 12 43 10 13 66 5304 1294 711 7309 26. 9% 6. 6% 3. 6% 37. 0% 123 129 55 111 2 80 0. 4% 40 6 10 11 27 1 458 1562 1185 2. 3% 7. 9% 6. 0% 3205 16. 2% 76 156 108 119 161 0. 8% 161 31 2573 13. 0% 83 23 10 33 2 5 3 821 1879 2700 4. 2% 9. 5% 13. 7% 36 188 82 200 1. 0% 100 245 1. 2% 228 1. 2% 49 76 12 1456 7. 4% 121 3 7 1530 7. 7% 510 67 0. 3% 10 Total All Measures 59 6268 58 4750 75 8736 192 19754 100. 0% 103 * NB: The Promotion project started in 1993 was undertaken at a cost of IMECU. The figure of 500. 000 ECU specified in 1995 relates to this project and was an administrative provision. ANNEX 2B 18 Number of Commitments by Type of Selection Mechanism 1993 Number ECU (000) 1994 Number ECU (000) 1995 Number ECU (000) Total Number ECU (000) % 100% Funded Actions Open Calls for Tender Major Initiatives Research Studies Publications Statistics Sub-total Restricted Calls for Tender Conferences Direct Contract (Member States) Statistics Environment Prize Conferences Sub-total Direct Contract (Other) Expert Groups: Travel etc Publications Other Sub-total 2 1 4 2 9 1382 200 201 399 2182 1 110 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 1 5 2 0 17 1 18 1 0 0 1 0 726 329 249 1304 80 0 236 43 279 15 0 0 15 2 2 0 0 4 1 40 0 1 41 4 2 3 9 646 196 0 0 842 4 5 6 3 18 2028 1122 530 648 4328 10. 3% 5. 7% 2. 7% 3. 3% 21. 9% 84 4 274 1. 4% 4656 0 60 4716 57 70 75 202 40 17 2 59 5 2 3 10 4656 236 103 4995 23. 6% 1. 2% 0. 5% 25. 3% 72 70 75 217 0. 4% 0. 4% 0. 4% 1. 1% Sub-total: 100% Funded Actions 10 2292 26 7678 55 5844 91 9814 49. 7% Jointly-Funded Actions Calls for Proposals Open: Pilot Projects Restricted: Pilot Projects Sub-total Subvention Committee Pilot Projects: Publications Conferences Research Study Other Sub-total 35 0 35 7 1 5 1 0 14 3173 0 3173 684 23 85 11 0 803 23 2 25 2 0 3 2 0 7 2618 61 2679 65 0 248 80 0 393 16 0 16 0 0 1 0 3 4 2658 0 2658 0 0 28 0 206 234 74 2 76 9 1 9 3 3 25 8449 61 8510 42. 8% 0. 3% 43. 1% 749 23 361 91 206 1430 3. 8% 0. 1% 1. 8% 0. 5% 1. 0% 7. 2% Sub-total: Joint financed actions 49 3976 32 3072 20 2892 101 9940 50. 3% Total AH Mechanisms 59 6268 58 4750 75 8736 192 19754 100. 0% ANNEX 2C No. of Commitments by 1993 1994 1995 Total Recipient Organisation Number ECU (000) Number ECU (000) Number ECU (000) Number ECU (000) Public Sector Management Committee National Statistical Organisation National Tourist Organisation Regional / Local Authority Sub total NGOs & Associations NGOs European Associations National Associations Sub total 2 0 0 12 14 2 9 5 16 198 0 0 893 1091 66 445 345 856 11 0 8 2 21 2 6 3 11 195 0 208 281 684 145 470 246 861 University / Research Institutes 4 320 5 648 19 % 5. 3% 16. 0% 2. 1% 9. 4% 32. 7% 1. 1% 8. 5% 3. 9% 13. 5% 648 3160 209 675 4692 0 769 189 958 18 31 12 19 80 4 17 9 30 1041 3160 417 1849 6467 211 1684 780 2675 153 10 1121 5. 7% 5 31 4 5 45 0 2 1 3 1 8 2 1 3 3 2 2 Private Sector Tourism Consultancy Major Management Consultancy Tour operator/Travel agent Non-tourism Company: Conference Organiser TV/Publications/Other media Technology/Consumer General consultancy Sub total Other Experts:Travel & meetings Mise Sub total 8 0 1 0 6 2 6 23 0 2 2 1197 0 10 0 1675 110 987 3979 0 22 22 12 2 2 0 1 1 2 1274 726 61 0 51 161 269 1647 164 91 250 545 70 102 20 2542 21 2869 1 0 1 15 0 15 4 1 5 57 7 64 28 4 4 3 10 5 10 64 5 3 8 4118 20. 8% 890 162 4. 5% 0. 8% 250 2271 341 1358 9390 1. 3% 11. 5% 1. 7% 6. 9% 47. 5% 72 29 101 0. 4% 0. 1% 0. 5% Total all Recipients 59 6268 58 4750 75 8736 192 19754 100. 0% EUROPEAN COMMISSION DIRECTORATE GENERAL XXIII Enterprise Policy, Distributive Trades, Tourism and Cooperatives EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT Prepared by Price Waterhouse February 1996 Price Waterhouse le> DIRECTORATE GENERAL XXIII EVALUATION OF THE COMIVIUNITY ACTION PLAN TO ASSIST TOURISM CONTENTS Page SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS SECTION 1-INTRODUCTION Circumstances of the Evaluation 1. 1- Background and Context 1. 2 - Aims and Objectives of the Evaluation 1. 3 - Scope of the Evaluation 1. 4 - Methodology 1. 5 - Definitions 1. 6 - Structure of the Report SECTION 2 - PROGRAMME MODEL OF THE PLAN 2. 1 - Introduction 2. 2 - Objectives 2. 3 - Policy Areas 2. 4 - Measures 2. 5 - Strategies and Instruments SECTION 3 - TECHNICAL EVALUATION OF ACTIONS 3. 1 - Methodology 3. 2 - Overall Scores 3. 3 - Case Studies 3. 4 - General Assessment SECTION 4 • ADMINISTRATIVE AND OPERATIONAL ASPECTS 4. 1 - Description of the Administrative and Management Arrangements 4. 2 - Assessment of Arrangements in Place 4. 3 - Recommendations SECTION 5 - ASSESSMENT BY CONTRACTORS 5. 1 - Methodology 5. 2 - Analysis 5. 3 - Lessons, Recommendations, Suggestions and Best Practice i 1 7 12 25 33 Final Report • V2. 0 -27 Appendices I Descriptive statistics of actions II Checklist for interviews of key informants III Evaluation Fiche for project assessment by PW experts IV Evaluation Fiche for project assessment by contractors V Checklist for case studies VI Council Decision of 13 July 1992 VII List of contacts VIII Assessment by key informants Final Report -V2. 0 < 2^ EVALUATION OF THE ACTION P UN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS # SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS This section presents a summary of the evaluation of the Community Action Plan to Assist Tourism (hereafter "the Plan") carried out by Price Waterhouse, and gives the key recommendations. This summary makes little reference to individual actions. Summary of Findings The Contents of the Programme In sum, the Tourism Action Plan looks like a patchwork of piecemeal initiatives, a fragmented, and sometimes incoherent and incomplete list of fragmented policies and activities. Most policies and measures contained in the Plan are probably defensible if considered individually, but it lacks an overall consistency. In Section 2 we present our analysis of the Plan, based on the links between actions and their objectives. We give below the main insights from this analysis. They are: 1 2 3 (1 ) The 11 areas (we will call them "policy areas") identified in the Annex to the Council Decision of 1992 do not constitute a coherent set of initiatives (2) There is confusion between ends (objectives) and means (measures such as studies and projects funded) (3) It is unclear how some actions would contribute to the stated policy objectives (4). The policy " transnational measures", since it is not an end in itself, is very difficult to fit into a logical framework. This policy seems to duplicate other policies, and its aims are unclear (5) Some of the 11 policies combine areas which are quite distinct and would be better separated (6) Some of the policies seem to be phrased in a rather oblique and partial way, which leads to apparent incompleteness in the supporting measures (this partly reflects Community areas of competence and subsidiarity) (7) Some of the policies seem undersupported in terms of specific measures. 4 5 6 The Plan also appears to be too ambitious given the human and financial resources available for the preparation and the implementation of the projects. The general lack of continuity between years is another drawback. The general findings of this analysis are corroborated by the main conclusions drawn from our interviews with key informants. Final Report -V2. 0 n -» EVALUATION OF THE ACTION PUN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS 41 The Role and "Market Positioning" of the Tourism Unit The Unit does not seem to have a clear and operational vision on how to position itself vis-à-vis competing and complementary service providers such as National Tourism Offices (NTOs), regional and international organisations, and other Commission Directorates General. Linked to this "market positioning" issue is the issue of the definition of the role and mandate of the Unit. Options include: a b c d e f g a department co-ordinating EU initiatives in the tourism sector a forum through which interested parties can debate and seek consensus a regulatory department involved in managing aspects of the tourism sector, for example in respect of accommodation rating, fire safety, and package holidays a monitoring department (watchdog) tracking and influencing events, for example in respect of statistics, identification of pressure points affecting the tourism sector (such as transportation, air traffic, staffing, seasonality) acting in a "commercial" capacity for example in running external promotional campaigns, in cooperation with the private sector and NTOs a body identifying, funding and promoting pilot schemes of potential European significance or value a body providing technical assistance to other EU institutions (eg to the Directorates General dealing with the structural funds) and the sector generally. Compliance with Article 4 of the Action Plan and Achievement of Objectives As our analysis of the programme model of the Plan indicates (see Section 2), the objectives of the Plan are often defined at a very high level and are sometimes vague. In addition, these are medium and long term objectives. It would be rather unfair to assess the effectiveness of the Plan against these objectives. If such an assessment is to be made, the answer would certainly be: "no, the Plan has not yet achieved these objectives, if ever. " However, Community Institutions should specify the timescales envisaged for an evaluation of such longer term objectives. The question must be rephrased: did the actions implemented under the Plan make a contribution towards the attainment of these strategic, long term objectives? In other words: did these actions (measures) achieve the associated intermediate objectives? Again, as demonstrated by the analysis of the programme model, such intermediate objectives are often missing or inadequately formulated to carry out such an assessment of effectiveness. A number of initiatives have made a positive contribution towards the attainment of certain intermediate objectives "set up" in the Plan (such as the provision of tourism statistics, and the co-ordination with the other EU policies and departments). It must be underlined, however, that the Tourism Unit has faced very difficult circumstances. In particular, most serious administrative disruptions were generated by charges of mismanagement 7 8 9 10 11 12 Final Report - V2. 0 7 it EVALUATION OF THE ACTION PUN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS • made against two senior members of the Tourism Unit staff. It must also be recognized that the nature of the Plan made the task of implementing and delivering it very difficult. Technical Evaluation Under these circumstances, it is easier (and more meaningful) to assess effectiveness at action (eg project and study) level than at a more general level. We carried out two main activities in this area: a technical assessment of all 1993-94 funded actions, and ten case studies of significant actions. Section 3 presents our findings of the technical evaluation of actions undertaken under the Plan. For 1993 and 1994 actions evaluated, individual scores from 1 to 5 were given, where a score of 5 means very good. In 1993, the average scores were 2. 9 for overall assessment and 2. 7 for cost effectiveness. In 1994, both scores increased to 3. 4 and 3. 0 respectively. In other words, the overall quality of the projects improved considerably in 1994 (reflecting improved selection procedures) and the cost effectiveness also improved. The overall number judged good or very good increased from 34% to 44%. The overall quality of the projects and studies carried out is poor to average (24% of the 1993 and 1994 actions reviewed are assessed as very poor or poor) while only 14% of completed projects were judged to be very good. There has been, however, a significant improvement in 1994. In most instances, the impact of the action is limited in space, scope, and time. There were numerous financial commitments (a total of 59 in 1993, 58 in 1994 and 74 in 1995), in our view too many in relation to the Tourism Unifs resources to adequately define and monitor them. Most actions had a size too small to make a significant impact, although a number of successful small actions were very cost effective. The average size of the actions we evaluated was ECU 121144 in 1993, ECU 117030 in 1994 and ECU 127015 in 1995. DG XXIII's achievements in the development of common tourism statistics has been very significant. Data collection is a necessary but expensive procedure in the tourism sector, and the approach adopted by DG XXIII was appropriate in the circumstances. The approach essentially focused on agreeing a common core minimum data set to be collected. Around this common core, related but optional data sets have been defined, again with commonality of definition, so that overall comparability is ensured. A Directive on collection of Statistics has recently been issued (23/11/1995 and will come into force by the end 1996), and Governments are now receiving financial support under the Action Plan for bringing their respective systems into line with this. A total of 4. 5 MECU has been committed to this task over a three year period (1995-1997). Most actions (projects and studies) funded can be classified into two groups. On the one hand, there are actions fulfilling political objectives; these actions promote "European" concepts and networks, and are of a fairly high profile and newsworthy; on the other hand, there are commercially interesting actions, with sustainability built in. These two groups can occasionally coincide. The promotion of "transnational networks" is, in our view, not an objective, but a means to achieve an objective. There is an obligation, under Article 4 of the Council Decision, for cost effective measures. Political objectives eg of promoting transnational networks, may be achieved better and more cost effectively through other means and do not need the cover or justification of a pilot project which is only occasionally really innovative. 13 14 15 16 17 18 19 Final Report • V2. 0 'IS' EVALUATION OF THE ACTION P UN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS <H> 20 21 22 23 24 25 26 27 28 29 A number of studies were funded to look at major issues of importance to the tourism sector. These were generally well executed, even if the choice of topics (youth tourism, business and conference, yield management, for example) did not appear to be based on a careful analysis of needs taking into account existing available data. We are aware that the topics relating to studies were proposed and/or agreed by the Management Committee. We take the view that more time must be used to define precisely the studies to be funded, taking into account existing studies, ongoing research programmes, and the travel industry needs. A number of projects and studies had as their objective the preparation of reference lists, handbooks and guides of potential interest to the sector. All of these suffered from a lack of in-built post project sustainability, which are essential when data need frequent (and often expensive) updating. The Plan made a number of strong contributions for tourists with disabilities. Guides to make Europe accessible to the disabled tourists are examples of excellent and cost effective studies emerging from the Plan. Most of the cultural components of the Plan focused on building-up transnational routes and networks based on a range of themes. Most of these were relatively low cost exercises, which produced interesting results. At the same time, the sustainability and impact on tourism demand are likely to be limited, and the main longer term benefits may arise from the strengthening of linkages between regions. If there is no intention to secure a sustained economic benefit, then this must be made clear and the actions must be judged on that basis. But the need to be cost-effective remains. It is also noted that the concept of routes and trails of linked destinations was already well established before the Plan, and the marginal value of creating further routes/trails may be limited, and should thus be assessed. The innovative aspect of the DG XXIIPs funded trails is their transnational design. The longer impact is still unknown and needs research. The scope of the education and training projects has been quite wide, including development networks, curriculum definition, and identification of new professional needs. Those networking projects which seem the most successful have been the ones reinforcing existing networks, while the creation of new networks is judged in general less successful on sustainability and other grounds. Where projects have focused on curriculum needs with European commonality they have served very useful roles. Less successful in contrast have been a number of projects which have focused on the identification of new professional categories. They have also been a number of one-off training exercises (eg in Eastern and Central Europe) which although in themselves useful, do not fit within an institutional or other framework providing a basis for follow up and sustainability. Though rather in isolation they may have been effective, although they did not fit into a coherent plan and are best avoided in the future unless mechanisms to ensure sustainability are put into place. The technology pilot projects supported under the Plan are broadly either generic, addressing key issues such as data definition procedures for information exchange; or specific in seeking to apply new technology to specific situations. This distinction generic/specific broadly coincides with project responsibilities with DG XXIII, where the essentially generic projects (such as CIRT, EDITIN, ET1, TIRS, all good projects) are considered as "technology" projects and classified under the policy area Transnational measures". A number of Final Report • V2. 0 lé EVALUATION OF THE ACTION P UN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS 4» 30 31 32 33 34 35 36 37 38 projects in the cultural area are dominated by technology solutions and from these specific important conclusions relating to their technology can be drawn. In contrast to the cultural activities funded, there are indications that one way or another, many of the "generic" technology projects funded would have in due course proceeded without EC funding, since they addressed issues of industry significance, such as globalisation of data or access advances. The EC funding, while contributing very usefully to addressing these issues, could be described as supportive. It has however had a positive impact in accelerating the application of new technology to tourism-specific tasks (for example, the 1993 project EDITIN). The specific projects have not been particularly successful because there is a strong likelihood that most will wither following completion of project funding because they lack any in-built sustainability or commercialisation component. These projects appear to have been largely designed to "access" EC funds, rather than to address specific needs. Running through many of the new technology oriented database projects is apparently a failure to address post project sustainabilty. Tourism databases need constantly updating and administrative and financial mechanisms for achieving this are as important a component of project design as the technical components. These follow up and commercialisation issues were in the majority of cases not satisfactorily addressed, with as a result a number of interesting projects completed, but having most probably no lasting contribution to make to the tourism sector. One issue that was not specifically addressed in the design of the technology and other projects was the question of relevance to SMEs. Technology offers both a barrier and an opportunity to SMEs, and this issue has not been satisfactorily addressed. Some projects omit any link to suppliers at all, concentrating on tour operators and travel agents, and omitting hotels. The Internet, with its low cost of entry, represents, it can be argued, a major area of potential for SMEs, yet there has not been any project, so far, addressing this area. Administrative and Operational Aspects In Section 4, we give an overview of administrative and management arrangements and procedures, followed by our assessment. Our main findings are summarised below. Administrative arrangements and procedures were weak at the beginning of the implementation period, but have been significantly improved in 1994 and 1995. Members of the staff we have seen are clearly committed and hard-working. Staff members are overloaded with administrative tasks, the rationale and effectiveness of which are not always evident. The balance between direct applied (project preparation, site visits, contacts with contractors etc) and administrative tasks is unfavourable. Communication lines at DG XXIII are lengthy, procedural and slow, and so is the decision-making process. Procedures have however progressively improved on matters related to the Plan. We also identified the following shortcomings in the area of staffing: high turnover; low percentage of "tourism experts" and generally inadequate presence of tourism skills; understaffing of the financial administration; inadequate training (eg in area of financial and project management). 39 Given the limited staff resources available at the Unit in 1993-95, it was ill-advised to implement the v Final Report - V2. 0 EVALUATION OF THE ACTION PUN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS # 40 41 Plan through the funding of such a large number of projects and studies (mainly through open calls for proposals) because of the heavy administrative burden implied by such an approach. Hence, the quality of a number of selected proposals was poor, without clear objectives, without a strong project team, or with a very limited innovative aspect. The projects selected in 1994 showed an improvement and the result of the 1995 calls for tenders and for proposals display a significant improvement in quality, and expectations of good results are running high. Financial management was poor during the first half of the implementation but has since been improved. It still needs to be strengthened. Poor performance in the area of financial management was due to the conduct by senior members of the staff (who were removed from the Unit in the first half of 1994), and also due to inadequate systems (such as poor use of information technology), inadequate staff training, and insufficient staffing at administrative level (ie grade B). Key Recommendations 42 We now give our main recommendations to the Tourism Unit and DG XXIII. These recommendations are amplified in the relevant sections of the document. Strategic Aspects J 43 We think that the Unit should limit the scope of its activities by concentrating its resources in a few strategic areas in order to become more effective. The Unit should seek to achieve a clearly spelled out vision on its "market positioning", mission and objectives, and should select its means of action accordingly. 44 The Unit must take action in order to regain credibility and increase the "tourism" profile of the Unit (current staff are often perceived by our interviewees as not having sufficient expertise in the area). Operational Aspects 45 46 47 48 Partnership and co-operation with the various stakeholders (private and public, including Member States, National Tourism Offices and other industry interests) should be improved. The three (Management, Consultative and Advisory) Committees could become the main vehicle for dissemination of the results of the activities funded or undertaken by the Unit. These committees must accept that they have a large part to play in dissemination and undertake this responsibility. Committees in place could also be used to help the Unit in the identification of needs (eg possible pilot projects) and to ascertain that EU funding will not duplicate existing initiatives. Independent experts could fulfill a similar role. In the area of staffing, corrective actions should be considered: to reduce staff turnover; to improve the in-house technical tourism expertise, eg through secondments from NTOs; to provide more training to the staff (at all grade levels), perhaps through secondment to the sector, eg in management, financial and administrative aspects of Community procedures. 49 The information systems in place should be reviewed and significantly improved, eg to generate more management information to support staff members. Final Report - V2. 0 1* EVALUATION OF THE ACTION P UN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS «» 50 51 52 53 54 55 56 57 The Unit and the hierarchy should consider a review of its administrative arrangements and select performance indicators as far as possible (with associated targets) in a number of areas, allowing for limitations imposed by the Commission administrative rules. The Unit should review internal procedures to free up time to prepare, monitor, and follow up the actions funded. The staff is devoting a disproportionate amount of time to essentially non productive paperwork. There is a need to strengthen the monitoring and evaluation of projects, and, more generally, to design and implement simple but efficient procedures, designed at the outset and not retrofitted. Also, more site visits should take place on a regular basis. This is an aspect which already improved in 1994-95. Actions should also be considered to ensure that an adequate dissemination/distribution of project results takes place, for example, by earmarking resources in the project budget at the preparation/selection stage. These aspects were better considered in the 1995 call for proposals. The number of projects and studies funded should be significantly reduced in order to increase their impact and to limit administration. The use of the "call for proposals" procedure should be reviewed to reduce the administrative load and to maximise the effectiveness of the procedure. The possibility of contracting out some of the work must be considered. The proportion of meetings organised around a theme or a technical issue should be increased. The Unit should be given more autonomy in a number of strictly operational areas such as the management of the budget for missions. The Unit should be able to respond quickly and flexibly to the needs of project implementation (site visits, participation to workshops etc), within the strict limits of an agreed budget. This should of course not make the Unit less accountable or transparent. 58 The annual cycle of the Plan had a negative impact on the quality of the actions selected and on the their implementation. A longer project timespan is required (eg three years). 59 In the short term (ie 1996), we feel that initiatives should focus on: a b c d dissemination of the best outputs generated by the actions funded (eg publication and distribution of completed reports) follow-up to successful projects and studies to draw lessons, and transfer best practice development of relationships with the tourism industry and other stakeholders continuation of activities in the area of co-ordination with other Directorates General and to develop Community tourism statistics. Guidelines for a Future Tourism Programme 60 A future tourism programme should: a be more focused (fewer priorities, fewer funded actions, larger average project value) vii Final Report - V2. 0 o c EVALUATION OF THE ACTION PUN TO ASSIST TOURISM FINAL REPORT SUMMARY OF FINDINGS AND KEY RECOMMENDATIONS «» b c d e f g increase internal consistency of the programme include actions of a multiannual character have well prepared and specified terms of reference based on a logical framework taking into account measurable indicators of success, post project ownership, responsibility and sustainability issues improve the procedures of preparation and planning, monitoring and evaluation of projects (both internal and external, ie independent) give a high priority to the dissemination of the results and the follow-up of the actions ensure that the most successful sustainable actions carried out in 1993-95 are continued, and reinforce the areas of success. viii Final Report-V2. 0 Jo EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 1 - INTRODUCTION 4Jà W SECTION 1 - INTRODUCTION Circumstances of the Evaluation Price Waterhouse is aware of certain allegations regarding the conduct of affairs in the Tourism Unit in the period prior to March 1994. Directorate-General XXIII gave Price Waterhouse the following briefing on the matter: "The Director-General of DG XXIII became aware during 1993 of these allegations. He immediately launched in-depth internal inquiries within the Directorate-General into the allegations. As soon as he became convinced that there was at least some truth in these allegations other services were involved. As a result of these various inquiries two members of the Tourism Unit were suspended and later dismissed from the services of the Commission. The Commission informed the civil authorities in a number of Member States of the information which had come to hand and invited them to carry out their own inquiries. " In view of all these inquiries, some of which are still underway, Price Waterhouse were not called upon to investigate the allegations. They were, however, asked to bear in mind the effect which the allegations and inquiries they entailed had on the overall effectiveness of the plan. In the light of this, Price Waterhouse have only commented in their/evaluation on circumstances affected by these events. In particular it should be noted that in addition to the inquiry conducted by DG XXIII itself the other inquiries involved the staff of the Unit in tracing and supplying information. This deprived them of considerable amounts of time which would normally have been devoted to other duties. A further consequence of the allegations and inquiries is that the budgetary and financial authorities of the Community Institutions became, quite naturally, very strict and precise in relation to the application of rules to activities of the Tourism Unit. This led to considerable delay in processing matters some of which would normally have been regarded as routine. This was most frustrating for the Tourism Unit, again costing time normally devoted to direct implementation of the Plan and delaying that implementation. 1. 1 - Background and Context The Community Action Plan to Assist Tourism (the Plan) began in January 1993 further to Council Decision 92/421/EEC of 13 July 1992. The Plan lasted three years finishing at the end of December 1995. Article 6 of the Plan stipulated that an evaluation would be undertaken. The Annex to the Action Plan gives 11 specific groups of measures relating to tourism. Article 4 of the Plan states that actions taken must: a b c be consistent with the principle of subsidiarity be cost-effective and make a significant impact on the Community tourism industry facilitate the development of the industry with particular reference to small and medium sized businesses Final Report-V2. 0 V EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 1 - INTRODUCTION # d e f g h encourage competition within the Community and increase the competitiveness of Community tourist services on the world market be conducive to preserving and protecting the quality of the natural environment, the cultural heritage and the integrity of local populations be conducive to improving the provision of information and services to the protection of tourists help improve the quality of Community tourist services be implemented through coordination with the national authorities and, if necessary, with the regional or local authorities as well, so as to take account of the importance of tourism for regional development. 1. 2 - Aims and Objectives of the Evaluation 7 8 The principal aim of this study is to undertake an evaluation of the Plan. The evaluation includes a technical evaluation of pilot projects, studies and other initiatives of work undertaken in 1993 and 1994, and an assessment of the (as yet) uncompleted work selected under the 1995 programme. The basis for the evaluation is the general criteria stated above and the specific criteria stated in the Annex to the Action Plan and in subsequent calls for tenders and proposals. In the case of ad-hoc projects the evaluation considered the application as submitted. The evaluation focuses on all the measures within the Action Plan and considers quantitative and qualitative aspects. 1. 3 - Scope of the Evaluation 9 Actions taken under the Plan consist of a range of horizontal and specific initiatives. These include: a b c d e a co-ordination task within the Commission concerning other policies with an impact on tourism transnational pilot projects jointly funded by the Commission and other partners research studies on specific aspects of the tourism industry conferences and networks related to specific aspects of the tourism industry reports and consultative documents on tourism policy and practice for Community institutions and the industry. 10 11 Appendix I contains the list of all the projects and studies supported. In addition to the evaluation of these specific actions we were required to evaluate the priorities given to the various different measures under the Plan, and the administrative aspects relating to the Plan and the extent and allocation of resources. 1. 4-Methodology 12 In this section we describe the programme of work we carried out and the main activities completed. We also present the ten "case studies" selected. 2 Final Report-V2. 0 3" r> EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 1 - INTRODUCTION «» Programme of Work 13 The programme of work was as follows: Phase 1 - Overview of the Plan. Programme of (face-to-face and telephone) interviews with officials of DG XXIII and of other DGs, members of the Management Committee, members of the industry, independent experts. In total we carried out over 60 interviews (of which 53 were outside DG XXIII). • Phases 2 and 3 - Analysis of projects. We carried out a technical evaluation of all projects completed in 1993 and 1994 (Phase 2), and of the proposals of the projects selected in 1995 (Phase 3). Most 1993 and 1994 contractors received a questionnaire covering the following aspects: project description, achievement of objectives, project implementation. • Phase 4 - Analysis, conclusions and recommendations. Activities Completed 14 15 16 17 18 19 The assignment started on 10 November 1995 (launch meeting at DG XXIII). Our final report was accepted by DG XXIII on 26 February 1996. Price Waterhouse was assisted by Mr Esmond Devas, tourism expert. j In November and December 1995 we carried out a first round of interviews and meetings with DG XXIII officials. About ten interviews were completed by the end of December. The main objectives of this first round of interviews were to establish contact with the Tourism Unit staff, and to gain an overview of the activities and to collect views on the (past, current, present) role of the Tourism Unit. We then contacted 69 key independent informants and experts (external to DG XXIII), and carried out 53 face-to-face or telephone interviews. The key issues discussed were (see Appendix II for checklist): a b c d e f g Exposure to the Tourism Action Plan Interface with Tourism Action Plan (co-ordination, complementarity, overlap etc) Assessment of the rationale of Tourism Action Plan: does the programme makes sense? Assessment of impact and effects: what has happened as a result of the programme? Achievement of programme objectives: has the programme achieved what was expected? Alternatives: are there better ways of achieving the results/objectives? Lessons, recommendations, suggestions, best practice. All the members of the Management Committee and all the members of the Consultative Committee received a letter from PW explaining the objectives of the assignment and encouraging them to contact us if they wanted to contribute. We received written responses from Germany, Greece and Portugal. We interviewed the representatives of Italy, Ireland, Spain, France, Finland, Belgium and Luxembourg. We set up a project database containing descriptive and financial information for all the 1993-95 actions (see Appendix I). 77 contractors for the 1993 and 1994 projects received a short questionnaire covering project description, achievement of objectives, implementation, and assessment of the implementation. The Final Report -V2. 0 V EVALUATION OF THE COMMUNITY ACTION P UN TO ASSIST TOURISM FINAL REPORT SECTION 1 - INTRODUCTION «» proforma used is given in Appendix IV. We received 47 responses which represents a response rate of 61%. We treated the findings from this survey with caution because of the possible bias expressed in the responses. 20 We carried out a technical evaluation of all completed actions (1993 and 1994 contracts, 90 in total). To carry out this assessment, we prepared an Evaluation Fiche for project assessment (see Appendix III). Our approach to project evaluation was, as far as feasible, to proceed in five steps, as follows: a b c d e group the projects for review according to the official(s) in charge set up a first discussion with the official(s) who made a brief introduction to the projects complete the Evaluation Fiches discuss the fiches with the EC official (s) finalise the fiche and enter the score in the database. 21 We carried out ten case studies (see Table 1. 1). We used the following criteria to make our selection, which was agreed with DG XXIII: a b c d need to cover all three years in so far as possible need to select, for each year, the projects with most significant budgets need to be representative of the annual priorities need for balance between successes and failures. Final Report-V2. 0 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 1 - INTRODUCTION •• Table 1. 1 -Case Studies Contractor Title 1. L&R Leisure European Project for the Training of Operators in Tourism in Bulgaria and Slovakia 2. HTL Tourism & Environment Prize 3. Delvico/Bates Tourism Promotion of Europe as a Destination for Tourists in Long Distance Source Markets Year Funding ('000 Ecus) 1993 220 Domain Training Central & Eastern Europe 1993 1993 381 1000 Environment Promotion 4. Regione Toscana ETI - European Tourism Information & Booking 1993 200 New Technologies 5. Hjoerring Business College Development of a Training Strategy for Employees and Trainers within the Tourism Sector in the Cold Water Regions around the North Sea 1994 195 Training 6. FECTO/FOTVE The "Art Cities in Europe" Programme 1994 7. Arthur Andersen Yield Management in Small and Medium Sized Enterprises in the Tourism Industry 1994 195 392 Culture Study 8. National Institutes of Stat. & Others Theme: Development of Community Tourism Statistics On going 4500 (1995-97) Statistics 9. WTTC Theme: analysis of procedures through analysis of 1995 Environment projects, in particular the project European Community Network for Environmental Travel and Tourism 1995 631 Analysis of tendering, assessment and implementation procedures 10. - Theme: Coordination by Tourism Unit On going - Horizontal activity We also reviewed the administrative aspects of the Plan, in particular selection and monitoring procedures and management arrangements. 1. 5-Definitions The Plan consists of 11 groups of Community measures to assist tourism (see Appendix VI). We call these "policy areas', and reserve the term "measure" for the actions taken to implement the Plan. 22 23 24 We distinguish between three types of actions: a b c studies (100% funded actions) projects (jointly-funded normally up to a maximum of 60%) other activities such as the co-ordination within the Commission. Final Report-V2. 0 3T EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 1 - INTRODUCTION 4 1k \\\W 1. 6 - Structure of the Report 25 26 The rest of the report is structured into five main sections. Section 2 presents our analysis of the Plan, based on the links between actions and their objectives. Section 3 summarises the findings of the technical evaluation of actions (studies, projects and other activities) undertaken under the Plan. In Section 4 we give an overview of administrative and management arrangements and procedures, followed by our assessment. Section 5 gives the findings of the postal survey we carried out for the 1993 and 1994 projects and studies. Appendix VIII contains a summary of the assessment by the key informants we talked to (we provide a list of contacts in Appendix VII). Waterhouse. It should be noted that these are not necessarily the views of Price Final Report • V2. 0 3/ EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 2 - PROGRAMME MODEL OF THE PLAN • SECTION 2 - PROGRAMME MODEL OF THE PLAN 2. 1 - Introduction 27 A structured approach is required to analyse policy objectives and their outcomes in a systematic way. We began our evaluation process with the preparation of a "profile" of the Plan's policy and its component parts. This section gives our analysis of the Plan, based on the notion of a programme model - a schematic representation of the links between measures (or actions) and their objectives (ie a "hierarchy of objectives"). A programme model is an important tool not only for monitoring and evaluation purposes but also for strategy planning and policy-making. 28 We used a simple four-level structure of objectives, which could be refined and further sub-divided. These levels are: a b c the immediate objectives which relate to particular actions (measures) and which must be expressed in quantitative terms as far as possible. the intermediate objectives are more detailed and specific. They generally represent a "cause- and-effect" assumption. the ultimate objectives (also called final or strategic objectives) of a policy are broad, long term objectives, eg "to promote economic growth and employment". 29 Table 2. 1 gives an example of a four-level hierarchy of objectives. Table 2. 1 - Example of Hierarchy of Objectives Measures Immediate Objectives Intermediate Objectives Ultimate Objectives to increase the competitiveness of the European tourism industry to generate employment and growth in the European tourism industry - campaign sustained over three years - to promote Europe as a destination - improve use of existing infrastructures - support cultural itineraries - training (eg languages) - to improve communication links (eg links with Japan) - to launch new products targeting US and Japanese markets -etc. - to improve level of services -etc. 30 31 The Plan appears to have been built from the bottom up ie starting with individual measures trying to aggregate these into broad policy areas and only implicitly linking these to the ultimate objectives. The approach taken here, as a test of the coherence and completeness of the programme, was to analyse the programme top down, and to ask at each level in the hierarchy of objectives: Final Report-V2. 0 1> EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 2 - PROGRAMME MODEL OF THE PUN • (1) are the items at each level consistent with each other? (horizontal consistency) (2) (3) do the items at the next level down in the hierarchy contribute to the items at this level? (vertical consistency) are the items at the next level down the most effective ones to enable us to achieve our objectives, or are there other possibly more effective options? (completeness) 32 This section does not explicitly consider consistency with other Community objectives. DG XXIII needs to spell out these linkages because: a b c other policies contribute to the objective of fostering tourism tourism policy can contribute to the objectives of policy in other domains and policy in other domains can act as a constraint on tourism policy. 2. 2 - Objectives 33 Figure 2. 1 shows a logical model setting out the links between the measures, intermediate objectives and ultimate objectives (immediate objectives have been left out for the sake of clarity) implicit in the Plan and the 11 policy areas (groups of measures). I 34 The ultimate objectives of Community tourism policy seem to be: a b c to promote economic growth and employment to promote economic and social cohesion to promote "European citizenship". 35 36 37 38 39 40 But the programme can only be understood in terms of other objectives, explicit in the documentation but relating to other policy areas, notably to protect and promote the natural and cultural heritage and to protect the consumers' interests. There may be tensions between these two sets of high level objectives (eg between promoting growth and protecting the environment). It is not clear how some of the 11 "policies areas" identified in the Annex to the Council Decision contribute to these high level objectives, implying that there are other implicit but unstated aims: eg social tourism (8); viewed solely as an instrument for achieving the higher level objectives this must rank as a very low priority, although it might be important in support of some other (unstated) social aims. The objectives of promoting competition and of helping SMEs, stated in the Council decision, do not seem to be clearly supported by specific measures or policies. Other policies only make sense if intermediate objectives are added eg "to improve knowledge of the tourist industry" requires an intermediate objective such as "To improve the quality of decision making at Community, Member State, local and private level" (see Figure 2. 1). The policy area " Transnational Measures" designed to promote transnational tourist development initiatives, since it is not an objective but a mechanism, is very difficult to fit into such a logical framework. Final Report-V2. 0 It Measures To ensure that the environment is more fully taken into account in the development of tourism To highlight the importance of the cultural heritage for tourism and to promote a greater knowledge of the culture, traditions and ways of life of Europeans To make Europe a more attractive destination for tourists from distant countries To promote a better seasonal distribution of tourism To provide support for increased professionalism To develop tourist activities in a rural environment Figure 2. 1 - Programme Model of the Plan Intermediate objectives Ultimate objectives To protect and promote the natural and cultural heritage ? Tension To promote the diversification of tourist activity To generate income and employment To promote the development of the tourist industry To improve the quality and competitiveness of the Community's tourism services on offer To contribute to economic and soda! cohesion To facilitate access to tourism by groups who have difficulty in taking holidays To expand the demand for the Community's tourism services To promote youth tourism To help tourists as consumers To improve knowledge of the tourist industry To promote transnational initiatives To allow people of all kinds to gain a better knowledge of Europe's cultural roots and of the cultures and ways of life in the Member States To improve the quality of decision making at Community, Member State, local and private level To ensure greater consistency of Community measures To preserve free competition \ \ -© ©- To foster "European Citizenship" To protect consumers Indirect impact - feedback via other measures To promote small and medium sized enterprises Tf EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 2 - PROGRAMME MODEL OF THE PLAN • 2. 3 - Policy Areas 41 42 43 The word " policy area" is used here to refer to the 11 groups of measures identified in the Annex to the Council decision of 1992. There is a confusion between ends and means; the 11 policy areas are a mixture of instrumental objectives or ends eg " [to promote] staggering of holidays" (2), and types of measure or means eg "transnational measures", " promotion in third countries". Some of the 11 policy areas combine two areas which are quite distinct and would be better separated, for example: (1 ) "Improving knowledge of the tourism industry" and "ensuring greater consistency of Community measures " (1); whilst both of these are important in their own right, neither will necessarily lead to the other, nor do the measures contributing to the attainment of one necessarily contribute to the attainment of the others (2) The policy "transnational measures" seems to duplicate other policies, and its aims are unclear. It is a tactic, not a policy objective. 44 45 There is a degree of confusion between certain policy areas. For example the "support for the exchange of experience in the field of visitor management techniques", included in the policy "cultural tourism" (5. b) should come under the policy "tourism and the environment" (6). Some of the policies seem to be phrased in a rather oblique and partial way, which leads to apparent incompleteness in the supporting measures (this may reflect Community areas of competence and subsidiarity) eg (1 ) "to highlight the importance of the cultural heritage for tourism and to promote a greater knowledge of the cultures, traditions and ways of life in Europeans" (5); this is expressed in terms of awareness rather than substance (a substantive policy would be eg to safeguard the cultural heritage in the interests of tourism1), and accordingly substantive measures such as actions to protect ancient monuments are omitted. (2) This contrasts with policy 6 (Tourism and the environment) where a much more direct approach is taken to environmental protection, leading to a more coherent set of measures. 2. 4 - Measures 46 47 The measures (studies, projects and other actions) identified in the Annex to the Council Decision of 1992 in the main bear a logical relationship to the 11 policy areas. However, there are exceptions as detailed below. It is unclear how some measures would contribute to the stated policy objectives eg "development of tourist cooperation with central and Eastern Europe and the Maghreb" (3 c): how does this promote tourism in the Community? 48 Some of the measures are confused, eg (1 ) "[to promote the interests of] tourists as consumers" (4): is a policy, to be implemented by measures to Final Report-V2. 0 U^ EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 2 - PROGRAMME MODEL OF THE PUN • (2) (3) improve information and protection: " in areas such as existing classification systems, signposting symbols, time share arrangements, over-booking and procedures for redress". It is unclear whether it is intended merely to inform tourists of their rights, or to strengthen those rights. These are quite distinct and should be distinguished. " consultation of (sic) tourism professionals within the Community" (1. a); consultation about what and with what purpose? Why should it be done independently of either the development of statistics (1. a) or studies and strategies (1. b)? the policy objective "to make Europe a more attractive destination for tourists from distant countries" (policy area 11) implies action to change the tourism product itself. Yet the proposed measures appear to be confined to promotion ie increasing awareness of the product in third countries. If the aim is in fact "to increase the number of visitors from third countries" then there would be a much wider range of possible measures as shown in Figure 2. 2 which is an example of how one area of policy might be analysed; the measures are purely illustrative. ' Figure 2. 2: Example of Low Level Logical Framework (Hierarchy of Objectives) for Policy Area 11 Measure Immediate objectives Intermediate objective 49 Some of the policies seem undersupported in terms of specific measures - ie the measures do not form a sufficiently complete set to be likely to contribute significantly to the achievement of the policy eg (1 ) "ensuring greater consistency of Community measures" (part of policy 1 ) appears to be supported only by the measure "preparation of strategies adapted to keep pace with demand" (other measures under this heading being in support of the other aspect of policy 1); this seems very weak for what surely should be a central aim (2) "youth tourism"; the two measures indicated are far more specific than those in other policy areas; they may be very effective but are there not other possible measures? 10 Final Report-V2. 0 Inf EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 2 - PROGRAMME MODEL OF THE PLAN 4» 2. 5 - Strategies and Instruments 50 It would be possible to group the actions in terms of the underlying strategies: a b c d implementation of specific measures, complementary to those taken at national level coordination of measures undertaken by Commission departments which affect tourism, and ensuring better integration of tourism with the various Community policies promoting the development of transnational measures ensuring close cooperation between all public and private bodies in the sector. 51 52 53 Similarly, two main types of instruments - a policy instrument is a mechanism chosen to achieve an objective - are used: legislation and financial support. In further plans, the Commission should undertake an analysis of the completeness of the programme for each of the policy areas, and an assessment of the appropriate strategies. More generally, the Commission should prepare a programme model of the actions to assist tourism, focusing on a reduced number of policy areas and linking in a systematic way the elements of the model, ie instruments, measures, immediate objectives, intermediate objectives and ultimate objectives. Output and performance measures or indicators, and targets (ie quantified objective to be attained at a specified future date) should then be set. These should be intrinsic to the whole process of management, including planning, monitoring, evaluation, and public accountability. Examples of indicators are: percentage increase in the number of visitors from third countries; number of pilot projects leading to commercially viable transnational products; evolution of the EU market share in world tourism. 11 Final Report - V2. 0 li EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • SECTION 3 - TECHNICAL EVALUATION OF ACTIONS 3. 1 - Methodology 54 Whenever possible, our approach was in five steps, as follows: a b c d e we grouped the files for review according to the EC official(s) in charge, the officials gave a brief introduction to the actions, the consultants assessed the actions against agreed criteria, discussed his/her evaluation with the relevant EC official(s) and then finalised the fiches. 55 56 57 58 59 60 In total, we reviewed 90 files, 53 1993 actions and 37 1994 actions. We also reviewed the studies and projects selected in 1995, but since these actions are just starting, our review was limited to the terms of reference and the contractors' proposals. We also carried out ten case studies, of which three were "thematic" case studies. All actions have been reviewed. However, an assessment for each policy area specifed in the Plan was not practical because a number of groups of measures (Staggering holidays, Tourists as consumers, Rural tourism and Youth tourism) include only a very small number of actions. These four groups represented only 3. 2% of the total spend under the Plan. In this report, we focus on the other policy areas but make reference to specific actions included in these groups of measures where appropriate. 3. 2 - Overall Scores Tables 3. 1 to 3. 3 give a summary of the main results for the projects and studies funded in 1993 and 1994. In order to avoid any misinterpretation of these findings, it is important to emphasize that the overall score attributed for each action is based on a large number of criteria (see Appendix III). In particular, both the rationale of the project (ie does the project make sense?) and its effectiveness (achievement of planned objectives) are taken into account. Therefore, this score is OQÎ solely a judgment on the contractor. A score of 5 means "very good". A score of 3 means "average", and less "poor" or "very poor". We classified a satisfactory action - which, using an examination metaphor, would be a pass but without honours - as "average" (score of 3). "Average" is therefore not to be confused with an arithmetical mean. In that sense, one should ideally expect most actions to achieve a score above 3. This technical assessment, although expressed for convenience in quantitative terms, is a subjective one. Criteria against which actions are judged are mixed and the actions themselves have been concluded recently, so that their longer term impact is uncertain. It must be noted that we consider that the criteria used are not additional to the ones specified in Article 4 of the Council Decision, but that they are integral part of the Plan as a whole and implied (on any rational assessment) in most of the projects themselves. For example, how can any project involving database creation be cost effective (Article 4) if there is no built in mechanism to update information which by definition will be quickly out of date? 61 In 1993, the average scores were 2. 9 for overall assessment and 2. 7 for cost effectiveness. In 1994, both scores increased to 3. 4 and 3. 0 respectively. In other words, the overall quality of the projects 12 Final Report - V2. 0 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • improved considerably in 1994 (reflecting improved selection procedures) and the cost effectiveness also improved. The overall number judged good or very good increased from 34% to 44%. Table 3. 1 - Overall Technical Assessment of 1 £ 93 and 1994 Ac tions. Breakdown by Year (% of total) Poor or very poor Average Good Very good Not relevant or not possible* 1993 36% 25% 19% 15% 5% (53 actions reviewed) 1994 8% 46% 30% 14% 2% (37 actions reviewed) * In a small number of cases, we consider that it was not possible to give a credible/robust assessment given the available information. 62 In Section 3. 4 we discuss the main factors explaining the variations displayed in Table 3. 1. Table 3. 2 gives a breakdown by policy area. It shows that the group measures "Improving knowledge of the tourist industry" has performed, on average, better than the other groups of measures. In 1994, the actions undertaken in the field of cultural tourism have, on average, been of good quality. * Table 3. 2 - Overall Technical Assessment of 1993 and 1994 Actions. Breakdown by Type of Action 1993 Group 1 ** Overall Assessment Cost Effectiveness Number of actions 3. 3 3. 3 9 Groups 2 and 4 No action funded Group 3 Group 5 2. 9 2. 6 17 2. 8 2. 6 18 1994 Group 1 Groups 2 and 4 Group 3 Group 5 Overall Assessment Cost Effectiveness Number of actions 3. 8 3. 0 6 3. 0 2. 0 3 Only two actions 3. 5 3. 3 12 Groups 6 to 11 2. 7 2. 6 9 Groups 6,9 and 11 4. 3 4. 5 4 Group 10 All Actions Only two actions, included in groups 6 to 11 2. 9 2. 7 53 Group 10 All Actions 2. 7 2. 2 10 3. 4 3. 0 37 * We do not report scores on groups of measures with less than three actions. ** i=lmproving knowledge; 2=Staggering holidays; 3=Transnational; 4=Tourists as consumers; 5*Cultural tourism; 6=Tourism and environment; 7= Rural tourism; 8=Social tourism; 9=Youth tourism; 10=Training; 11 «Promotion. Group 3 is a composite group of measures; "transnational" actions scored on average higher than the two other types of actions, "technology" and "cooperation with Eastern and Central European countries". 63 Table 3. 3 gives a breakdown by size, expressed in Ecus. It indicates that there was in 1993 a much larger proportion of small actions (38% against 19% in 1994 and 23% in 1995); that, in 1994 and 1995, large actions (above ECU 100000) represented about one half of the total; and that, in 1993, smaller projects achieved better results and were more cost effective. However the negative relationship between size and (cost) effectiveness is less marked in 1994. 13 Final Report-V2. 0 44 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST 1 OURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS <§ Table 3. 3 - Overall Technical Assessment of 1993 and 1994 Actions. Breakdown by Size (ECU) Up to 50000 50001 to 100000 100001 to 400000 Above 400000 21 38% 3. 5 3. 9 7 19% 3. 9 4. 1 16 23% 11 20% 2. 9 1. 9 12 32% 3. 3 2. 8 17 25% 21 38% 2. 2 1. 7 18 49% 3. 3 2. 6 33 48% 2 4% 0 3 (4%) 1993 Number of actions As % of total reviewed Overall Assessment Cost Effectiveness Average size: 121144 1994 Number of actions As % of total reviewed Overall Assessment Cost Effectiveness Average size: 117030 1995 Number of actions As % of total Average size: 127015 3. 3 - Case Studies 64 Tables 3. 4 (parts A and B) give a summary of the main findings of the case studies carried out. 14 Final Report - V2. 0 EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • Table 3. 4 - Summary of Findings from the Case Studies (Part A) Project Description Assessment & Key Learning Points European Project for the Training of Operators In Tourism in Bulgaria and Slovakia Strengths - Significant involvement of local communities; successful pilot, new course material (fully customized) prepared with possible dissemination; achievement indicators indicate targets were met (No of attendees, assessment of university partners, response of participants); site visited by DG XXIII; good press coverage in Bulgaria Weaknesses - Innovative character limited; project delayed due to slow response by DG XXIII; project takes place in isolation; no follow up, no strategic framework; no local presence of EU delegation; expensive project Learning Points - Need to take trainees' needs into account; use of "consecutive translation" (instead of simultaneous translation) was a success; ex post evaluation of impact needed; any future action must be co-ordinated with PHARE (DG I); use local PR consultant for visibility. Tourism & Environment Prize Strengths - Important project with high visibility and potentially large spin off effects; overall good organisation; good co-operation with experts; if repeated and improved, could raise profile of DG XXIII; use of Euro Info Centres was a success; very good logo; good contribution of the PR firm Weaknesses - Difficulties in co-operation between main contractor and DG XXIII; lack of experience of main contractor; concepts and strategy slow to develop; mobilisation of Member States ("Steering Groups") poor in certain cases; weaknesses in selection of projects (mainly because of a language problem); political and geographical mix considerations; proposal/contract did not specify procedures/arrangements for follow up and supervision j Learning Points - For maximum visibility, need dedicated staff in every participating country; suggestion to modify the format to adopt a "Festival de Cannes' format with several prizes; publication of Newsletter good idea; consider translation all short listed applications in a common language; need to improve the checklist used for screening and evaluation; better synergy with other projects in field; more time needed for applications to be prepared; more involvement of the experts needed ; should become a focal point of DG XXIII's activities. Tourism Promotion of Europe as a Destination for Tourists in Long Distance Source Markets Strengths - Good logo and tagline; highly rated consultants used; good idea to use themes to sell Europe as a destination to avoid national sensitivities Weaknesses - Widely perceived by the travel industry as a waste of time and money; no sponsorship obtained; are logo and tagline suitable for all markets? Conflict with ETC Learning Points - "Pilot" wasted because not followed up; long term view and adequate resources needed for a promotion to yield results; it is a challenge to sell Europe as a destination; need to use existing networks and to involve NTOs more closely; a campaign without sponsors does not make sense. 15 Final Report-V2. 0 UL EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • ETI - European Tourism Information & Booking Strengths - Good partnership structure and international network; standardisation of existing local tourism information services can be a key factor in encouraging use of technology by tourists; vision of a European-wide network providing standardised information for tourists; link with other initiatives such as EDITIN Weaknesses - Innovative character of the technical solution now largely obsolete because of the development of the Internet (we recognise that Internet has become only recently a viable alternative); sustainability and follow up not ensured but meeting between partners planned for March 1996; not all outputs promised in the proposal delivered (eg 60 outlets); involvement of two of the partners very limited Learning Points - Technical pilot studies in new technologies quickly obsolete; this problem was compounded by delays in implementation, and thus need for DG XXIII to fund is unclear unless objectives are to establish network and raise awareness; need close links with other programmes in the field (eg TIM); project underlined the role of DG XXIII as overall co-ordinator, facilitator of trans-regional project. Strengths - Strong rationale because addresses a key problem ie youth unemployment; several interesting ideas/concepts and innovative solutions developed; long term impact might be high; good follow up and strong local support in Denmark; Weaknesses - Proposal of very general nature ("aim is to develop a concept"), no clear description of outputs; not a pilot project, more like fundamental research and network building; follow up in UK, NL and D uncertain because weak local support as illustrated by poor attendance at conference in Denmark; partnership more at the stage of research and intellectual debate than operational partnership to design and pilot schemes; expensive project given outputs are mainly local and uncertain in other countries Learning Points - DG XXIII in fact funded the development of a network of partners linked more by the similarity of problem they address than by a common operational project: this may be useful but was it the role of the Plan and of DG XXIII? Development of a Training Strategy fa Employees and Trainers within the Tourism Sector in the Cold Water Regions around the North Sea The "Art Cities in Europe" Programme Strengths - Innovative basic idea developed in a few years into a good product supported by a large network of cities; members of the network comprise both famous and less known cities which may benefit from being linked with the established cultural cities; good distribution and marketing; links with key operators (travel agencies, tour operators); impressive project management and efficient implementation Weaknesses - Proposal focusing more on means than on objectives; a number of key cities and important cultural institutions not yet (or no longer) in the network; benefits accruing to the small cities still uncertain; success partly depending on ability of cities to generate bookings Learning Points -1996 will be an important year for the future of the project which must now demonstrate its commercial viability, ie generate bookings; level of development of network of tourism offices varies widely from one city/country to the other one. thus need to strengthen structures in ceratin cities/countries; US market must be covered to create additional effect not diversion; travel agencies and tour operators must be convinced of the commercial viability of the project; need to have a key attraction. Yield Management in Small and Medium Sized Enterprises in the Tourism Industry Strengths - High quality final report with good executive summary for dissemination of key findings; concept of yield management powerful Weaknesses - High cost, particulalry because unclear if the concept is relevant for SMEs Learning Points - Poor relevance for SMEs should have been anticipated (eg through discussions with experts); the study should have been redefined to meet the needs of the smafl hotels in particular, many of which have no computerised reservation systems, or on-line reservations capability. 16 Final Report -V2. 0 o EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • 3. 4 - General Assessment Projects and Studies Undertaken in 1993 and 1994 65 66 67 68 69 70 The overall quality of the projects and studies carried out is poor to average (24% of the 1993 and 1994 actions reviewed are assessed as very poor or poor, 22 in total) while 14% (13 in total)of completed projects were judged to be very good. There has been, however, a significant improvement in 1994. In most instances, the impact of the action is limited in space, scope, and time. There were numerous financial commitments (a total of 59 in 1993, 58 in 1994 and 74 in 1995), in our view too many in relation to the Tourism Unit's resources to adequately define and monitor them. Most actions had a size too small to make a significant impact, although a number of successful small actions were very cost effective. The average size of the actions we evaluated was ECU 121144 in 1993, ECU 117030 in 1994 and ECU 127015 in 1995 (see Table 3. 3 above). Most actions can be classified into two groups. On the one hand, there are actions fulfilling political objectives; these actions promote "European" concepts and networks, and are of a fairly high profile and newsworthy; on the other hand, there are commercially interesting actions, with sustainability built in. These two groups can occasionally coincide in instances such as the project "Routes to the Roots", a 1993 project conducted by the University of Oldenburg. I The promotion of "transnational networks" is, in our view, not an objective, but a means to achieve an objective. There is an obligation, under Article 4 of the Council Decision, for cost effective measures. The problem with this is that the political objectives eg of promoting transnational networks, may be achieved better and more cost effectively through other means and do not need the cover or justification of a pilot project which is only occasionally really innovative. Alternative actions that could have been considered to promote European concepts and networks include: a "roadshow" going round each European country with a high class presentation of European issues and challenges for the sector, and including a European agenda; hiring a public relations company with appropriate terms of reference and budget; working with existing database providers across Europe to put together a consolidated database of European research; launching a Newsletter etc. Studies A number of studies were funded to look at major issues of importance to the tourism sector. These were generally well executed, even if the choice of topics (youth tourism, business and conference, yield management, for example) did not appear to be based on a careful analysis of needs taking into account existing available data. We are aware that the topics relating to studies were proposed and/or agreed by the Management Committee. We take the view that more time must be used to define precisely the studies to be funded, taking into account existing studies, ongoing research programmes, and the travel industry needs. For example, the value of the study on conference and business tourism is limited by the fact that this subject area is already quite well researched. Examples of recent studies are: the 1990 survey of European Incentive Travel by Touche Ross; the 1994 study by the Economist Intelligence Unit - EIU on the European Conference and Meetings Market; a 1993 publication by the Maison de France on the "Tourisme de Congrès". 71 Another example is the study on yield management (one of our case studies), which is an example of a well executed study. However, the relevance of the concept for SMEs is limited. The study focused 17 Final Report-V2. 0 13 EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • on the use of computer systems, but most establishments are small and they have no such systems applied to reservations. At the same time, they already apply (to a greater or lesser extent) yield management for instance when a client can "negotiate" a favourable room rate at an off peak period. Most hotels and other accommodation establishments are independent and have rather few rooms. They lack marketing strength, including access to computer reservation systems. They are ways to help them, for instance in promoting group marketing exercises such as the Gîtes de France scheme. A number of projects and studies had as their objective the preparation of reference lists of potential interest to the sector, for instance a Who's Who of personalities and organisations, a multilingual Thesaurus of tourism terms, and a database of student employment opportunities. All of these suffered from a lack of in-built post project sustainability, which are essential when data need frequent (and often expensive) updating. Some of these projects and studies competed with existing commercially available products. These studies had rather low viability and served little useful purpose. Guides to make Europe accessible to disabled tourists (one for the disabled, one for the tourism industry) and "the study "Older persons and mobility" are examples of excellent and cost effective studies emerging from the Plan. The guide books for the blind are further examples of the strong contribution made through the Plan for tourists with disabilities- Cultural Tourism I Most of the cultural components of the Plan focused on building-up transnational routes and networks based on a range of themes. Most of these were relatively low cost exercises, which produced interesting results. At the same time, the sustainability and impact on tourism demand are likely to be limited, and the main longer term benefits may arise from the strengthening of linkages between regions. If there is no intention to secure a sustained economic benefit, then this must be made clear and the actions must be judged on that basis. But the need to be cost-effective remains. If the strengthening of linkages is the main output, then it is one that may be achieved in other more cost effective ways, for instance by organising conferences. Designing routes and trails is in itself not- sufficient, interesting as these may be, to justify project funding. For example, the route linking Wexford in Ireland to Dover in England, France, Portugal and Spain is likely to have very limited value except in bringing people together. But it was an expensive way to achieve this. If we take post project sustainability as a measure of success, then the "Routes to the Roots" project (first funded in 1993 with an extension in 1994) is noteworthy. It has developed a commercial momentum indicative of longer term sustainability. The project "Art Cities in Europe" (one of our case studies) may also develop such a commercial momentum although it too early to define exactly what it may be. Another example of a successful cultural route project was that undertaken by Naturfreunde Landesberband Saarland (1993) which linked a sensible set of parties, transnational but in relative close proximity, and created a range of interesting routes with excellent prospects for sustainability. The Province of North Holland project (1993) is one example of a feasibility study, in this case for cultural trails relating to military heritage in three regions. It had the advantage that the nature of participants (local authorities involved in tourism) does mean that there is a reasonable prospect of it being sustained. 72 73 74 75 76 77 78 Much of the work on routes can be classified, and is perceived as essentially promotional within Europe, and its impact may largely be to divert existing tourists along the promoted routes. The 18 Final Report -V2. 0 hf EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • impact of these routes may not be additional. This does not apply to the routes targeted at non- European markets (such as "Routes to the Roots" targeted at the North American market). We do recognise, however, that the diversification of tourist destinations within Europe is also a legitimate objective. It is also noted that the concept of routes and trails of linked destinations was already well established before the Plan, and the marginal value of creating further routes/trails may be limited, and should thus be assessed. The innovative aspect of the DG XXIIPs funded trails is their transnational design. The longer impact is still unknown and needs research. Pilot projects are, by definition, test cases. There is no case for funding innovative and speculative projects without proper post project follow up, in detail, by independent evaluators, followed by publication and dissemination of findings. Apparently successful projects can then be replicated elsewhere with a further evaluation process, leading to a definite conclusion. Training The scope of the education and training projects has been quite wide, including development networks, curriculum definition, and identification of new professional needs. Those networking projects which seem the most successful have been the ones reinforcing existing networks, while the creation of new networks is judged in general less successful on sustainability and other grounds. Where projects have focused on curriculum needs with European commonality - for instance curriculum development for sustainable tourism by the University of Deusto-Bilbao (1994 project)- they have served very useful roles. Less successful in contrast have been a number of projects which have focused on the identification of new professional categories, for instance Club des Métropoles project (1993) and the Greta du Golfe project (1994), and the work by Conzorcio Civita (1994) on new professional categories. They have also been a number of one-off training exercises (eg in Eastern and Central Europe) which although in themselves useful, do not fit within an institutional or other framework providing a basis for follow up and sustainability. Though rather in isolation they may have been effective, although they did not fit into a coherent plan and are best avoided in the future unless mechanisms to ensure sustainability are put into place. An example is the 1993 project undertaken by L&R Leisure in Bulgaria and Slovakia. It was well executed, but had little innovation and no institutional funding availability for follow-up on site post project. The Tourism Belarus project implemented by Frotsi du Limousin (1993) was rather similar, but its budget more modest. Technology The technology pilot projects supported under the Plan are broadly either generic, addressing key issues such as data definition procedures for information exchange; or specific in seeking to apply new technology to specific situations. This distinction generic/specific broadly coincides with project responsibilities with DG XXIII, where the essentially generic projects (such as CIRT, EDITIN, ET1, TIRS, all good projects) are considered as "technology" projects and classified under the policy area "Transnational measures". A number of projects in the cultural area are dominated by technology solutions and from these specific projects 79 80 81 82 83 84 85 86 19 Final Report -V2. 0 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST VOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • 87 88 89 90 91 92 93 94 important conclusions relating to their technology can be drawn. Specific examples often include the design of multimedia databases of product information, such as the project Odyssey by International Interactive Multimedia (1993), and the feasibility study on music festivals by Sygna (1994). In contrast to the cultural activities funded, there are indications that one way or another, many of the "generic" technology projects funded would have in due course proceeded without EC funding, since they addressed issues of industry significance, such as globalisation of data or access advances. The EC funding, while contributing very usefully to addressing these issues, could be described as supportive rather than essential. It has however had a positive impact in accelerating the application of new technology to tourism-specific tasks (for example, the 1993 project EDITIN). The more specifically targeted technology-rich projects have mostly focused on transnational databases, often multimedia. These projects, while addressing different specific tasks, have to some extent duplicated each other in terms of the technical approaches and software used to implement them. In this sense, the most innovative aspects have been their transnational character, and the attempt to apply new technology to new areas, such as information handling, previously addressed through guide books and maps. These specific projects have not been particularly successful because there is a strong likelihood that most will wither following completion of project funding because they lack any in-built sustainability or commercialisation component. These projects appear to have been largely designed to "access" EC funds, rather than to address specific needs. The 1993 project for a multimedia CD Rom presentation of cities linked to the Odyssey (conducted by International Interactive Multimedia) is technically similar to the project conducted by Turinform (EPTIS, 1993) and the Fenici Route (Consorzio Civita, 1993). All three cover widely dispersed tourist centres, and none have strong commercialisation or sustainability prospects. All three give the appearance of projects designed specifically to respond to the availability of EC funding. These projects could usefully be followed up to identify lessons that can be learnt. The above three projects compare unfavourably with the Infonet project (TIRS, 1993) which is designed around a more logical geographical grouping of parties (Saarland in Germany and Lorraine in France) and has a clear link with existing database systems, ensuring long term sustainability. Running through many of the new technology oriented database projects is apparently a failure to address post project sustainabilty. Tourism databases need constantly updating and administrative and financial mechanisms for achieving this are as important a component of project design as the technical components. These follow up and commercialisation issues were in the majority of cases not satisfactorily addressed, with as a result a number of interesting projects completed, but having most probably no lasting contribution to make to the tourism sector. Some of the technology projects were essentially feasibility studies, sometimes for projects which have a long term objective behind them (eg Sygna on new technology in cultural tourism). The results may be interesting but question marks are attached in respect of ownership of results (particularly when co- financed) and the associated confidentiality issues. A further example of such a feasibility study is the Eurolodging project conducted by AGTE (1993). 95 One issue that was not specifically addressed in the design of the technology and other projects was 20 Final Report-V2. 0 9/ EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • 96 97 98 99 100 101 102 the question of relevance to SMEs. Technology offers both a barrier and an opportunity to SMEs, and this issue has not been satisfactorily addressed. Some projects omit any link to suppliers at all, concentrating on tour operators and travel agents, and omitting hotels. The Internet, with its low cost of entry, represents, it can be argued, a major area of potential for SMEs, yet there has not been any project, so far, addressing this area. The Eurogites project (1993) is an example of one project successfully addressing the specific needs of an important SME sector (Bed & Breakfeast and rural accommodation. ) It is also noted that other directorates within the Commission are financing database projects targeted at the needs of the tourism sector (eg SAM), yet the compatibility, complementarity and competitive aspects of the schemes funded by DG XXIII have not, to the best of our knowledge, been explicitly examined in relation to these. Actions Initiated in 1995 We give below comments on a selection of the actions initiated in 1995. The programme for 1995 is dominated by the statistical programme, in particular support to the individual countries and major contracts with consultant groups (eg Gruppo Clas) as these countries get their statistics into line with the agreed format set out in the Directive. There is a demonstration "Heritage trails" project (conducted by CTA) which is interesting. As a pilot project it is to be hoped that sustainability issues will be fully addressed, and that independent post project review - covering also similar 1993 and 1994 projects - will be in due course undertaken to draw conclusions and learn lessons. Another significant project relates to Cyprus, where the objective is the development of cultural and special interest tourism, with a focus on SMEs. Another project extending beyond the EU proper covers thermalism in the Eastern and Central Europe and in the Mediterranean area. An "exchange of views" is a major output identified. The project should also include a formally published report documenting overall market characteristics (demand and supply on an European basis) including a description of the pilot thermal plants to be studied, together with an assessment of overall future prospects for this market segment. The Network of Tourism and the Environment (EcoNett) being developed by WTTC represents a major commitment (ECU 631000) whose potential for success is strengthened by the strong industry backing of WTTC. This project has high visibility and good sustainability prospects. To what extent WTTC's EcoNett will serve as a practical tool, accessible and useful to not only large multinational organisations but also to modest tourism related businesses (small hotels, restaurants, attractions) is difficult to judge at this stage. The 1995 programme covers other important topics such as transport management (eg Airport of Palma de Mallorca), and visitor management. In the latter category, the research and piloting to be undertaken by the Tourism Company ("Demonstration of the potential for voluntary financial schemes within Europe") addresses a very important issue, ie funding mechanisms for environmental conservation. Although projects are still at an early stage, the outcome looks less promising for other projects dealing with visitor management, such as the "Mantova Ticket Tour" and " HELLO tourism". We would have preferred to have seen earlier projects of this kind (eg in Germany, Northern Italy and Austria) subjected to a detailed independent technical and financial evaluation before proceeding further down this route. 21 Final Report-V2. 0 C 7 EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS • Other Actions Carried Out Under the Plan 103 104 Activities undertaken under the Plan are described in detail in the various reports to the Council and the European Parliament prepared by DG XXIII. The Tourism Unit has prepared two "horizontal reports" on Community measures affecting tourism, in 1994 and 1995. They are comprehensive and very informative. The 1994 report is almost exclusively descriptive and does not include an assessment of the Community measures; the 1995 report (still a draft at the time of our evaluation of the Plan) tries to address this weakness. 105 In Table 3. 4 we summarise the findings (assessment and key learning points) from the three "thematic" case studies carried out, ie: a b c the development of Community tourism statistics the selection procedures (based on the 1995 environmental projects generally and on the WTTC's "European Community Network for Environment Travel & Tourism" project more specifically) the internal co-ordination by the Tourism Unit with other Directorates General of the Commission (activity connected with the preparation of the "horizontal report"). 106 We describe below the achievements in the area of Community tourism statistics, where achievements were significant and co-ordination by DG XXIH effective. 107 108 109 The approach adopted by DG XXIII for the introduction of a common statistical set was to work closely from the beginning with the key existing stakeholders, Eurostat at the Commission level and the National Statistical Authorities at the National level. At the national level, there are practical commitments to longstanding data series reflecting their specific needs, and representing substantial investments, and there are also different emphases concerning the data collected, reflecting in particular geographic realities. For instance the Irish and UK data sets reflect the relative ease of collection of demand data in Island situations, while continental Europe has tended to concentrate more on supply side measurement. Data collection is a necessary but expensive procedure in the tourism sector, and it is considered that the approach adopted by DG XXIII, following a long period of consultation with National Governments, and with the Commission's own Statistical service (Eurostat), was appropriate in the circumstances. The approach essentially focused on agreeing a common core minimum data set to be collected. Around this common core, related but optional data sets have been defined, again with commonality of definition, so that overall comparability is ensured. 110 While the overall co-ordination has been by DG XXIII, the approach has been essentially tripartite (DG XXIII, Eurostat, and national governments), and given the challenge represented in reaching agreement for a common approach covering such a wide range of countries, the achievement has been very significant. A Directive on collection of Statistics has recently been issued (23/11/1995 and will come into force by the end 1996), and Governments are now receiving financial support under the Action Plan for bringing their respective systems into line with this. A total of 4. 5 MECU has been committed to this task over a three year period (1995-1997). 22 Final Report - V2. 0 c EVALUATION OF THE COMMUNITY ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 3 - TECHNICAL EVALUATION OF ACTIONS 41k ^ilF 111 The process of identifying and defining data sets, and responding to the methodological problems and hurdles presented by varying conditions in member countries, has been assisted by external consultants, selected by Eurostat and contracted on a trilateral basis. Consultants have also assisted in the definition of appropriate dissemination procedures, in particular for the Statistical Yearbook for tourism, and for the publication Tourism in Europe". The most recent edition of this excellent publication appeared in 1995, and it is scheduled for annual publication in future. 23 Final Report-V2. 0 St EVALUATION OF THE COMMUNITY ACTION P UN TO ASSIST TOURISM FINAL REPORT SECTION 3 -TECHNICAL EVALUATION OF ACTIONS 0 Table 3. 4 - Summary of Findings from the Case Studies (Part B) Description of Action Assessment & Key Learning Points Theme 1 : Development Ot C o m m u n i ty tourism Statistics Strengths/Achievements - Overall, achievements are very significant and the approach appropriate; Directive "welcome as a first step"; co-operation with other organisations (OECD, WTO, and of course Eurostat and national institute of statistics) takes p|a ce eg to avoid duplication of efforts and develop core common set of data and methodologies; closely with the key existing stakeholders, Eurostat at the Commission level and the National Statistical Authorities at the National level. Weaknesses - Methods for implementation (Eurostat, National Institutes of Statistics) slow and "bureaucratic"; certain interviewees feel that the Directive has taken the "lowest common denominator"; a number of areas perceived as not properly covered, such as inbound tourism for long haul tourism and more generally on the demand side; lack of ambition, too conservative an approach? But it is also recognized that going too fast/far may put the whole endeavour at risk; political factors also slowing the process Learning points - Must be a focal point for DG XXIII because of clear need, demand expressed by industry, unanimity among member states and industry participants; use of private statistical organisations raises controversy, being supported by a number of organisations representing the private sector while being questioned by interviewees from international public organisations; however, there is a consensus for more co-operation private/public in particular for demand statistics. T h e me 2: Selection p r o c e d u r es (based on 1995 environment projects). Strengths/Achievements - Establishment of network will receive EU support for three years; contractor is a major international professional body ie good trade links and political strength; contract specifies project outputs and the content of progress and annual reports; annua) audited financial statement to be produced annually ; involvement of DG XI, DG XII and tourism industry Weaknesses - How will the data base be updated regularly? What is the incentive for suppliers to provide data on a regular basis to maintain the database? The exact coverage of the concept of "environmental travel" needs to be specified Learning points - Need to set up mechanisms to ensure that the database is maintained and regularly updated. T h e me 3: Internal CO-ordinatlon by Tourism Unit Strengths/Achievements - Increasing awareness of the importance of co-ordination with other EU departments; Inter Service Group (ISG) meet regularly; DG XXIII "good at organising"; good bi-lateral contacts; there is a "permanent flow of information" between departments; consultation for the Green Paper was a success; good co- operation with DG V in the context of the "HELIOS" group; General Directors of DG V and DGXXIII to co-preface publications Weaknesses - Participants to ISG not well prepared, but situation improving; turnover of representatives for some DGs and thus lack of continuity; DG XXIII staff perceived as over-worked, "not always able to cope" Learning points - ISG should be better prepared by participants (DG XXIII normally sends the agenda and relevant documents about ten working days in advance); interest in ISG meetings increasing as participants more familiar with issues; thematic discussion well received; Suggestion of format made by one interviewee: 1) information given by DG XXIII, 2) round table on work in progress in other departments, 3) take up precise points and questions; Unit needs more tourism specialists to be able to claim a co-ordinating role within EC; need to designate a unique, permanent correspondent/representative to ensure good follow up. 24 Final Report - V2. 0 EVALUATION OF THE COMIVIUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS • SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS 4. 1 - Description of the Administrative and Management Arrangements 112 113 114 115 116 Administrative arrangements, financial resources and activities undertaken under the Plan are described in detail in the 1994 and 1995 "horizontal" reports to the Council and to the European Parliament prepared by DG XXIII. In this section we give an overview of the main arrangements in place; we then give our assessment. Management, Advisory and Consultative Committees The Commission is assisted in implementing the Plan by the Management Committee composed of representatives of the Member States of the European Union (Council Decision of 13 July 1992). In January 1994, membership of the Management Committee was broadened to include the member states of the Economic European. Area, and, in January 1995, to include Liechtenstein. The Management Committee met on nine occasions over the three years, twice in 1993, four times in 1994 and three times in 1995. An earlier Council Decision of 22 December 1986 established an Advisory Committee under the auspices of the Commission, made up of members designated by each Member State. The task of this Committee was to facilitate exchange of information, consultation and cooperation on tourism, and, in particular, on the provision of services for tourists. This Committee met four times in 1994 and three times in 1995. It did not meet in 1993. Also prior to the launch of the Plan, the Commission established a Consultative Committee made up of the representatives of various industry interests. The Consultative Committee has no legal basis and was established by the Commission to allow dialogue and consultation with the industry. During the implementation of the Plan, the Consultative Committee met on five occasions, once in 1993, twice in 1994 and twice in 1995. Staffing The number of staff employed in the Tourism Unit (permanent and temporary staff, all grades and statuses, except stagiaires) was 17 in 1993 (11 grade A, one grade B and five grade C), 14 in 1994 (11 grade A, one grade B and two grade C), 16 in 1995 (11 grade A, one grade B, and four grade C) (situation on 1 January). At the end of 1995, the number of staff employed was 17 (13 grade A, one grade B, and three grade C). (Grade A staff are the administrators and above, grade B the assistants and grade C the support staff. ) 117 A total of 29 stagiaires were employed for periods of three, or, more usually, five months. 118 119 120 In 1994, the head of the Unit was transferred, and later dismissed from the Commission following disciplinary hearings. His acting deputy was suspended in 1994 and later dismissed. A total of 36 different staff were employed in 1993-95. Only five staff members were employed by the Unit through the whole 1993-95 period. Staff turnover was thus high at 86%. The ratio of permanent staff to total staff (excluding stagiaires) was 5:17 at the start of the Plan and rising significantly to 11:17 by the end of 1995. 25 Final Report -V2. 0 Ç6 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS • 121 122 123 Out of the 36 staff members, we estimated that ten (28%) can qualify as "tourism experts" (we define "tourism expert" as someone who is seconded from a Ministry of Tourism or equivalent, who has worked in the industry, or has a degree in the field). Certain other staff members had gained tourism experience "on the job" before joining the Unit. Implementation Mechanisms and Administrative Procedures The Plan was implemented via three annual work programmes. A "timetable of priorities" for 1993 was specified in the Plan. The priorities and work programmes for 1994 and 1995 were prepared by DG XXIII and agreed with the Management Committee. 124 The funds were disbursed through five different mechanisms: a b c d e open calls for tenders (published in the Official Journal) for 100% funded actions. A total of 15 projects were financed through this mechanism (7 in 1993, 4 in 1994, 4 in 1995), representing a total spend of ECU 3. 68 million open calls for proposals (published in the Official Journal) for co-financed actions (jointly- funded up to a maximum of 60%). In total 74 were co-financed (35 in 1993, 23 in 1994,16 in 1995), representing a total spend of ECU 8. 45 million 25 co-financed projects were supported via DG XXIIPs Subvention Committee, ie without a competitive process (14 in 1993, 7 in 1994 and 4 in 1995) representing a total spend of ECU 1. 43 million 73 direct contracts of which 43 were for the development of Community statistics (2 in 1993, 20 in 1994 and 51 in 1995) representing a total of ECU 5. 95 million in total, of which 84% went to the Member States and restricted selection procedures were used in five cases (two pilot projects and three conferences), amounting to ECU 251000. 4. 2 - Assessment of Arrangements in Place Our assessment is based on a desk analysis of procedures in place and of staff statistics; on the evidence collected through the case studies and project file reviews; and on the results of our interviews with the Tourism Unit staff, members of the Management Committee, and members of the Consultative Committee. We also reviewed most minutes of the meetings of these Committees. Relations with External Bodies The contacts with the travel trade have not been strong enough. The main non -governmental contacts are with the associations and pressure groups of various kinds and with consultants. The Unit does not seem to have a clear and operational vision of current "market positioning" vis-à-vis competing and complementary service providers such as: National Tourism Offices (NTOs), international associations of importance (such as ETC, IATA, WTTC, WTO), internal competing and complementary service providers such as DG I, DG VIII and other EU directorates. 125 126 127 26 Final Report -V2. 0 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS 41k fllF Administrative Arrangements and Procedures 128 129 130 131 Administrative arrangements and procedures were weak at the beginning of the implementation period, but have been significantly improved in 1994 and 1995. Members of the staff are clearly very committed and hard-working. Staff members are overloaded with administrative tasks the rationale and effectiveness of which are not always evident. The balance between quality work (project preparation, site visits, contacts with contractors etc) and administrative tasks is unfavourable. Communication lines at DG XXIII are lengthy, procedural and slow, and so is the decision-making process. The morale of the staff is rather low and staff members are displaying an exemplary resilience. Low staff morale is partly explained by the factors described above (administrative workload, lengthy communication lines etc), but also by the negative impact on the Unit of the allegations relating to senior staff members which have tarnished its reputation and image. 132 We observed that the amount of administrative work performed by the Unit is considerable. The Unit estimates that they receive around 100 external letters weekly. Telephone calls come in "non stop". Parliamentary questions come in regularly, usually with tight deadlines. Many documents must be translated and often re-formatted because of a software conflict between the Translation Office in Luxembourg and DG XXIII. 133 We also identified the following shortcomings in the area of staffing: a b c d e high turnover low percentage of "tourism experts" and generally inadequate presence of tourism skills inadequate training (eg in area of financial and project management) understaffing for the financial administration high number of stagiaires: it takes time to supervise them if they are to be used effectively. 134 Given the limited staff resources available at the Unit, it was ill-advised to implement the Plan through the funding of such a large number of projects and studies (mainly through open calls for proposals) because of the heavy administrative burden implied by such an approach as illustrated by Table 4. 1 which gives an analysis of the results of the various calls for proposals published in the Official Journal. 27 Final Report - V2. 0 a EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS • Table 4. 1 - Project Se ection. Calls for Proposals (Part-Funded Projects) 1993 1994 1995 Stage 1 Formal Conditions 368 (86 failed) 281 ( 28 failed) Stage 2 Screening 282 (158 failed) 253 (139 failed) Stage 3 In-Depth Evaluation Final Selection 124 (63 failed) 114 (93 failed) 61 shortlisted 33 selected 21 selected 288 (39 failed) 249 (130 failed) 119 (72 failed) 47 shortlisted 15 selected 135 136 One negative effect of inadequate staffing and existing procedures was that the quality of a number of selected proposals was poor, for example without clear objectives, without a strong project team, or with a very limited innovative aspect. The projects selected as a result of the 1995 calls for tenders and for proposals display a significant improvement in quality, and expectations of good results are running high. The terms of reference of the 1993 and 1994 calls for proposals and invitations to tender were very, weak and lacked clarity. In particular, outputs (deliverables) and sustainability requirements were riot adequately covered. Current contracts have much improved in terms of specifying outputs, but these could still be more precise in terms of measurable indicators, eg by giving target number of attendees at seminars and conferences. Contractors should however be required, as much as possible, to respond specifically to each output and target identified in their contract in their final reports. 137 We understand that in certain instances proposals were selected for "political" reasons, ie to achieve some "fair" distribution of the funds available among Member States. More efficient mechanisms to achieve this objective should be designed. 138 As illustrated by the case study looking at the selection in 1995 of the contractor for the tourism and environment projects, the procedures now in place have improved significantly. Much improved procedures and forms have been introduced, including progress reporting and an interim evaluation by the Unit at the interim report phase. The evaluation procedure (as described in an internal Explanatory Note on Evaluation Procedure) is now well structured. 139 However, there is still a lack of clarity in a number of areas: a b whether and how the political and geographical mix is taken into account at an early stage the consultation of other Directorates General on the proposed projects prior to the final selection. 140 We were indeed concerned by the fact that the evaluation and screening of projects take place without any input from officials or experts external to DG XXIII prior to the final selection. Although we understand that this is common practice at the Commission, we take the view that this is inadequate. 141 Until 1995, measurable indicators of performance were not systematically defined at the outset (for example as part of the contractors' contract). Without objective measures, it is difficult both for the contractors and evaluators to measure progress against expectations. 28 Final Report • V2. 0 It EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS 0 142 Financial management was poor during the first years of the implementation but has then improved. It still needs to be strengthened. Poor performance in the area of financial management was not only due to the mismanagement by senior members of the staff (who were dismissed in 1995), but also to inadequate systems (such as poor use of information technology), inadequate staff training, and insufficient staffing (only one grade B through most of the Plan implementation). 4. 3 - Recommendations Relations with External Bodies 143 The effectiveness of the Plan could be enhanced by: a b c d e f improving the partnership with the Member States. The Unit could make a number of propositions to the members of the Management Committee and put this topic on the agenda of a forthcoming meeting encouraging a more proactive role of the various Committees, with the support of experts, in identifying projects (innovative, trans-European, well funded, etc. ) improving consultation mechanisms with the industry, for example by setting up ad-hoc working groups j increasing the involvement of NTOs involving other Directorates General in the selection process before the final selection is made by DG XXIII involving independent and external experts in the selection process (one possibility is to have every Member State to nominate one or two experts who would be called in to review proposals submitted by potential contractors from other Member States). 144 145 146 147 More generally, there is a need to extend the level of participation of relevant stakeholders/partners (both private and public) to broaden ownership and commitment. The (Management, Advisory and Consultative) Committees could become the main vehicles for dissemination of the results of the activities funded or undertaken by the Unit. These Committees could also be used to help the Tourism Unit identify needs (eg possible pilot projects) and to ascertain that EU funding will not duplicate existing initiatives. Independent experts could fulfill a similar role. DG XXIII has been very active in the area of co-ordination within the Commission. The co-ordination with the other DGs is a very important role for the Unit that must be given even more emphasis. The Unit should seek to set the standard in this area. This role has several facets, such as bringing tourism within the orbit of other EU programmes, and informing the tourism (both private and public) stakeholders of the developments taking place at the Commission. 29 Final Report-V2. 0 &t> EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS 0 Staffing 148 In the area of staffing, corrective actions should be considered: 149 150 151 a b c d to reduce staff turnover to improve the in-house technical tourism expertise, eg through secondment from NTOs, and improvements in training provision to provide much more training to the staff (at all grade levels) to review the information technology in place. Administrative Arrangements and Procedures In order to establish administrative standards, the Unit should review its administrative arrangements to specify a number of performance indicators and targets. For example: every external letter to be acknowledged (by fax, telephone, or letter) within five days and to receive a reply within eg 15 working days (if realistic). There is a need to review internal procedures to free up time to prepare, monitor, and follow up the projects. The staff are apparently using a disproportionate amount of time to essentially non productive paperwork. There is a need to strengthen the monitoring and evaluation of projects, and, more generally, to design and implement simple but efficient procedures, designed at the outset and not retrofitted. Also, more site visits should take place. Monitoring and evaluation procedures should be reviewed along the following lines, although we recognise that some of the elements are already being developed: a b c d e f to put in place simple procedures to monitor and evaluate the actions as they are implemented (on-going monitoring and evaluation) to set up ad-hoc working groups to prepare, steer and evaluate actions. These groups should include a small number of recognised experts in the field and representatives of the private and public partners directly concerned to commission an interim evaluation at the mid-point of the Plan to draw first lessons, take corrective actions and inform the preparation of future actions to achieve a much closer involvement of DG XXIII in monitoring (in a spirit of partnership) the contractors. This would require more visits to the contractors, attendance at key events (eg conferences, workshops) and systematic follow up longer term follow up of completed projects should take place, with on site visits or follow up by phone. Key aspects to cover include: sustainability, outcomes, commercialisation and dissemination of results the Unit should consider drawing from experience of other DGs and programmes, in particular in the area of monitoring and evaluation, consider adopting best practice from other Directorates General of the Commission. For example, DG I and DG VIII have standardised 30 Final Report - V2. 0 L' EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS 4Là HIF their approach to project design using the so-called "Logical Framework" approach, fully documented by the Commission, and used for training not only EC staff but also their partners such as consultants. Use of this framework provides a standard format and checklist through which the project design, implementation, and evaluation cycle naturally falls g a copy of all monitoring and evaluation forms prepared during the course of an action should be filed centrally and analysed on a regular basis (say every six months). A short summary report drawing together the key lessons should be prepared and circulated within the DG and the other Directorates. 152 Actions should also be considered to ensure that an adequate dissemination/distribution of project results takes place. Options include: a b to earmark resources in the project budget at the preparation/selection stage (we understand that this has been done in 1995) in relevant cases, to make the last payment conditional on the preparation of a publishable output, in which case such a publication must be explicitly itemised as an output in the contract. 153 A rigorous and continuous pre-registration process for all consultants covering some basic information could have prevented some of the problems that have arisen from "phantom" companies, and have provided back up in ensuing litigation and other problems. One possibility is to operate a system inviting consultants to confirm regularly (eg annually) their interest to be on the list, and if they don't their name would be automatically deleted. 154 All projects with media outputs (disc, CD, video, others) should have those separately evaluated by an appropriate mix of technical and professional staff. Some of the existing outputs, integral to projects, were not (to the best of our knowledge) examined. 155 Some outputs are in non-standard formats. DG XXIII should specify output formats eg one copy of all videos in VHS format, discs in PC format unless otherwise stated. 156 Other corrective actions to be considered by the Unit are: a b c d to reduce the number of projects and studies funded in order to increase their impact and to limit administration to review the "call for proposal" procedure to reduce the administrative load and to maximise the effectiveness of the procedure to increase the proportion of meetings organised around a theme or a technical issue, and drastically reduce the number of formal meetings too often characterised by the passivity of the audience. to launch a Newsletter or similar (possibly including a copy on the Internet) to present the activities of the Tourism Unit. 157 Action should be taken to improve the internal information systems (such as project databases) so that more management information is generated to support staff members and to consider the systematic and generalised use of e-mail for example to improve communications within the DG and with the 31 Final Report -V2. 0 61 EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 4 - ADMINISTRATIVE AND OPERATIONAL ASPECTS 4Lfc ^IIF 158 159 160 other DGs. The Unit should be given more autonomy in a number of strictly operational areas such as the management of the budget for missions. The Unit should be able to respond quickly and flexibly to the needs of project implementation (site visits, participation in workshops etc), within the strict limits of an agreed budget. This should of course not make the Unit less accountable or transparent, but simply more efficient. Miscellaneous Timing. The annual cycle of the Plan had a negative impact on the quality of the projects selected and on the their implementation. A longer timespan is certainly required (eg three years) and projects should take account of the special seasonal considerations of the industry. Co-financing issues. There are a number of issues related to co-financing that must be addressed. The maximum level of EU contribution of 60% should be reviewed and possibly made more flexible. Other issues are how to check that the contributions of other sources of financing are real and how to avoid funding projects that have already started or are even completed. 161 EC logo. The continuing use of the EC logo needs to be controlled: only good projects should be entitled to use the EC logo. Registration issues should be clarified and resolved. 32 Final Report -V2. 0 &3 EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 5 - ASSESSMENT BY CONTRACTORS g\k fllF SECTION 5 - ASSESSMENT BY CONTRACTORS 5. 1 - Methodology 162 In order to obtain an assessment by contractors of the main aspects of project (and study) implementation, we sent a short questionnaire to 77 contractors for the 1993 and 1994 projects. This questionnaire covers the following aspects: a b c d e project description achievement of objectives project implementation assessment of various aspects of project implementation lessons, recommendations, suggestions and best practice. 163 164 The proforma used is given in Appendix IV. Note that in this section, the term "project" covers both projects and studies funded under the Plan. Although we told the contractors that their individual responses will remain private and confidential to Price Waterhouse, and will only be aggregated prior to discussion with DG XXIII, we feel that there is a bias in the overall assessment of the project (Tables 5. 1 and 5. 2 below) because of the self- assessment nature of the questions. To address this issue, we treated certain responses with caution. However, we donl think that this bias has a significant influence on the other aspects of the questionnaire such as the assessment of the various aspects of project implementation. 5. 2 - Analysis 165 We sent 77 questionnaires, and received 47 responses, thus achieving a response rate of 61 %. The number of valid responses varied between questions, but there were typically between 42 and 36 valid responses. Degree of Achievement of Objectives 166 We asked the contractors to rate the degree of achievement of the project objectives. More than half the contractors considered that they have been very successful in achieving the project objectives, while one third of them replied that they have been fairly successful. In total 86% of the respondents felt that they have been successful in achieving the main objectives of their action. There is no marked difference between 1993 and 1994 projects. Table 5. 1 below summarises the results. 33 Final Report -V2. 0 •it EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 5 - ASSESSMENT BY CONTRACTORS 0 Table 5. 1 - Degree of Achievement of Objectives Not at all successful Not very successful Fairly successful Very successful Mixed Not relevant or no reply 1322 Number of valid responses: 19 1324 Number of valid responses: 23 Total Number of valid responses: 42 0 0 0 0 2 7 8 9 12 2 1 1 0 2 (5%) 15 (36%) 21 (50%) 3 (7%) 1 (2%) Additionality: What Would Have Happened in the Absence of the Plan's Funding 167 To obtain an assessment of the Plan's additionality, we asked the contractors what would have happened in the absence of EU funding. The majority of respondents (58%) consider that EC funding has been additional ie the project would not have taken place in the absence of the Plan, while another 36% thought that the project would have taken place later or on a smaller scale. Project Implementation 168 We also asked the contractors to assess various aspects of the project implementation, and to give an overall assessment of the project's implementation. Tables 5. 2 and 5. 3 below give the scores obtained. Table 5. 2 - Overall Assessment of Pro ect Implement ation Poor or very poor Average Good Very good Do not know Not relevant or no reply 1322 Number of valid responses: 19 1994 Number of valid responses: 23 2 (10%) 4 (21%) 7 (37%) 6 (32%) 0 0 15 (65%) 7 (31%) Total number of valid responses: 42 2 (5%) 4 (10%) 22 (52%) 13 (31%) 0 1 (4%) 1 (2%) 0 0 0 169 Table 5. 2 indicates that 83% of the respondents think that the project implementation has been good or very good. This positive assessment is not surprising as the contractors are in fact to a large extent 34 Final Report-V2. 0 EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM FINAL REPORT SECTION 5 - ASSESSMENT BY CONTRACTORS 0 assessing the quality of their own work. When asked to assess the different components of project implementation, the contractors' answers depict a much less rosy picture of the situation, as shown by Table 5. 3. Table 5. 3 - Assessment of Project Implementation* Indicators No of contractors "dissatisfied" ** (No of responses) As a % of total No of valid responses A - Planning & preparation A1 - Clarity of objectives A2 - Quality of project design A3 - Effectiveness of partner(s)' participation in preparation and planning B - Dissemination B1 - Follow up of project after completion B2 - Dissemination of main results C - Management by Tourism Unit staff C1 - Financial & administrative monitoring by Tourism Unit staff C2 - Overall efficiency of Tourism Unit staff C3 - Responsiveness of Tourism Unit staff D - Co-ordination D1 - Quality of dialogue between Tourism Unit staff and other partners D2 - Coordination with other EU departments and non EU agencies 6 5 3 16 10 15 13 9 12 9 11 7 9 8 14% 12% 7% 38% 24% 36% 31 % 21 % 29% 21 % 26% 17% 21% 19% * Multiple response is possible ** Measured by total of responses in three categories: average, poor, very poor. 170 Table 5. 3 above indicates the a number of shortcomings, weaknesses, and areas for improvement. The main shortcomings/weaknesses of project implementation are perceived to be in the following areas: 35 Final Report-V2. 0 C^ EVALUATION OF THE ACTION PUN TO ASSIST TOURISM FINAL REPORT SECTION 5 - ASSESSMENT BY CONTRACTORS 0 (1) Effectiveness of partner(s)' participation in the preparation and planning of the project: 38% of contractors had difficulties in this area (2) Dissemination and follow up: these areas are clearly perceived as the weakest aspect of project implementation: about one third of contractors take the view that the follow up after completion and the dissemination of the results have not been satisfactory. (3) Management by the Tourism Unit staff: more than one quarter of respondents were not satisfied by the quality of financial and administrative monitoring and by the responsiveness of the Unit's staff. 5. 3 - Lessons. Recommendations. Suggestions and Best Practice 171 A number of lessons/recommendations/suggestions were also made by the contractors who responded to our questionnaire. Monitoring and Evaluation 172 173 174 175 176 It is essential to have more communication between the Unit, the project coordinator and the other project stakeholders. In particular, during the preparation/planning phase of the project, more co- ooperation between the Unit and the contractors is needed. There is s need for more exchange of information on (past, current) projects in similar fields of intervention. DG XXIII should supervise much more closely the projects funded. There is also a demand for more contacts (such as site visits) by Unit officials. Indicators of achievement and targets should be specified (and quantified as much as possible) at the beginning of the project. Procedures followed by DG XXIII should be streamlined, simplified. In particular, the decision-making process must be made much more efficient. 177 Steps must be taken to improve the responsiveness of DG XXIII staff. Follow Up and Dissemination of Results 178 Suggestions were made to improve the dissemination of results: a b c to circulate copies of the main deliverables to all the contractors to earmark in the project budget an amount for dissemination and distribution of key outputs to include in the budget, where relevant, an element for marketing the outcome of the project. 179 More consideration should be given to the sustainability of actions. 36 Final Report-V2. 0 EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX I - DESCRIPTIVE STATISTICS OF ACTIONS gjjk f HF This appendix contains the database of the actions implemented under the Plan. Key for Classification of Actions bv Type 1 = Improving knowledge (includes statistics, studies and consultation) 2 = Staggering holidays 31 = Transnational 32 = Technology 33 = PECO (Eastern and Central European Countries) 4 = Tourists as consumers 5 = Cultural tourism 6 = Tourism and environment 7 = Rural tourism 8 = Social tourism 9 = Youth tourism 10 = Training 11 = Promotion Final Report -V2. 0 £>% APPENDIX I EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM TOURISM AC" •ION PLAN - PROJECTS & STUDIES 1993-1995 Contract Number Main C o n t r a c t or Initial Budget (ECU} Type ùf Action Delvico Bates GIAT Forum Dello Svilluppo FIPE AA-Automobile Association International Interactive Multimedia GSI Transport Tourism Regione Toscana GEIST Club des Eurométropoles TIRS Chambre Régionale de Commerce Rhône-Alpes AGTE CISET Province of North-Holland Instituto Geogrâfico Nacional (IGN/CNIG) Wexford County Council Regione Emilia-Romagna Conselleria de Cultura, Educacio, i esports EETAA - Hellenic Agency Preseli Pembrokeshire Universitât Oldenburg Interface Naturfreunde Landesberband Saarland R E D- Ruralité Environnement Dévelopement Royal National Institute for the Blind Landkreis Eisleben Ministero del Toujismo e dello Spettacolo GruppoClas System TV CEPFAR F y n T o ur Eurogites ETAG L & R Leisure PLC AIT/FIA Contour Mobility International Bates & Wacker Directors General de Turismo Mobility International Associano Nacional de Jovens E T E N1 TURINFORM Frosti du Limousin DGF - Deutsche Gesellschaft fur Freizeit EFCO TV5 ITE ETEN 2 FEG CETOS Agrupacion de Asesores Mouvement HTL Conseil 1993 93 180001 93 530001 93 540004 93 540007 93 540009 93 540010 93 540012 93 540013 93 540014 93 540015 93 540017 93 540018 93 540019 93 540020 93 540021 93 540022 93 540023 93 540024 93 540027 93 540028 93 540029 93 540030 93 540031 93 540032 93 540035 93 540036 93 540037 93 540039 93 540040 93 540041 93 540043 93 540044 93 540045 93 540046 93 540047 93 540048 93 540054 93 540055 93 540056 93 540058 93 540059 93 540060 93 540062 93 540063 93 540064 93 540066 93 540068 93 540069 93 540071 93 540072 93 540076 93 540077 93 540079 93 540080 93 540081 No projects 93: Total 1993: Mean value 93: Maximum 93: Minimum 93: 11 1 1 33 32 32 32 32 32 31 32 31 32 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 3 31 5 31 1 33 1 1 8 1 1 8 9 10 32 33 1 7 5 3 10 12 8 1 1 6 55 999628 697800 23250 50000i 99000j 1200001 2132001 200000! 244635 j 130000; 102300 ; 96000 i 114000! 61980: 70000j 606061 63600; 460751 900001 136445i 29275 ! 61000: 36000: 46000' 49659, 47586 j 102000; 48000 105000. 160000 15000; 9840 ; 34278 10200 220000 11400 49000 60000. 42100 150000 50000 10189 100800 154890 32000 20000 120000 198000 200000; 95750 20000 65000 199620 110258 381550, I j i I ; i ! i ! ! i i i ! j i 55 i 6663 < "000 ECU 121144 999628 ECU ECU 9840 i ECU 61 APPENDIX EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM TOURISM AC ION PLAN - PROJECTS & STUDIES 1993-1995 Contract Number Main Contractor Initial Budget LECU) Typ» Of Action 1994 94 540011 94 540018 94 540019 94 540023 94 540024 94 540025 94 540026 94 540027 94 540028 94 540029 94 540031 94 540032 94 540033 94 540034 94 540035 94 540036 94 540037 94 540039 94 540043 94 540044 94 540045 94 540046 94 540047 94 540048 94 540049 94 540050 94 540051 94 540053 94 540054 94 540064 94 540065 94 540067 94 540075 94 540077 94 900107 94 900118 94 900120 Greek National Tourist Organisation (conference) Earthwatch Europe World Systems Europe Gemeinnutziger Verein zQr Forderung der Region Sandl unteres Muhlviertl Naturfreunde Saarland Projekt Sanfter Tourismus SYGNA A/S FOTVE/FECTO - Fédération des Offices du Tourisme des Villes Européennes Royal National Institute for the Blind (RNIB) BC Brandenburg-Consult GmbH Universitët Oldenburg/FB3 Forschungsstelle Niedersachsische - Nausa Baltic Tourism Cooperation Il Quartettone Foden Fyn Tour Arthur Andersen SA Horwath Axe Consultants-Tourisme Hôtellerie Loisirs Movimento Consumatori CTS Centra Turistico Studentesco e Giovanile Conference Etalement des Vacances Gruppo Clas Greta du Golfe Lancashire Enterprises Universidad de Deusto-Bilbao - Inst. de Estudios de Ocio Fondo Iberico para la Conservaciôn de la Naturaleza ITD-lnstitute of Tourism and Services economics Hjoerring Business College EMI-Effective Management International Consorzio Civita (ARIFOC) Association Réunionaise Interprofessionelle pour l'Insertion et la Formation Continue Centre Méditérannéen d'Environnement d'Athènes ETOA - European Tour Operators Association AFI Alpenforschunginstitut Ministère de rEquipement, Transports et Tourisme Atlas (Tilburg University) Concorde Travel Rita de Landtsheer European Travel Commission (ETC-CET) Agence Européenne pour la Culture - AEC (UNESCO) 43200 50000 249233 59694 94995 79175 195000 71587 99610 183300 129000 64031 49800 392600 333000 160610 167615 50963 167000 146830 62500 120000 127000 115000 195200 78995 176872 134416 102000 30187 104040 63553 50000 11100 71000 50000 51000 j 1 6 1 5 5 5 5 5 5 5 5 5 5 1 1 4 9 2 5 10 10 10 10 10 10 10 10 10 10 11 1 1 33 33 2 9 5 No projects 94: Total 1994: Mean value 94: Maximum 94: Minimum 94: 37 4330 117030 392600 11100 •000 ECU j ECU ECU ECU ! 37 | i 1 i ! ^ O APPENDIX I EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM TOURISM AC "ION PLAN - PROJECTS & STUDIES 1993-1995 Contract Number Matrt Contractor 1995 y J Initial Budget (EÔUI Type of Action 9S530001 95530002 95530003 95530004 95530005 95530006 95530008 95530009 95530010 95530011 95530012 95530013 95530014 95530015 95530016 95530017 95530018 95530019 95540013 95540014 95540015 95540016 95540017 95540018 95540019 95540027 95540028 95540030 95540031 95540032 95540033 95540034 95540035 95540037 95540038 95540039 95540040 95540041 95540042 95540043 95540044 95540045 95540046 95540047 95540048 95540049 95540050 95540054 95540055 95540056 95540057 95540058 95540059 9554006 95540060 95540061 95540062 95540063 95540065 95540066 95540067 95540068 95540069 95540070 95540072 95540075 95540076 95540079 95540080 No projects 95: Total 1995: Mean value 95: Maximum 95: Minimum 95. Osterreichisch Werbung (A) Statistics Finland (FIN) Ministère Equipement, Transports et Tourisme (F) The Stat. Bureau of Iceland (IS) Inst. Nacional de Estadistica (E) Inst. National de Statistiques (B) Stat. Norway (N) Danmarks Statistik (DK) Stat. Sweden (S) Stat. Portugal (P) Central Statistical Office - CSO (UK) Istituto Naz. di Stat. (I) Centraal Bureau Voor de Stat. (NL) ETI (L) Central Statistical Office - CSO (IRL) Stat. Bundesamt {D)^ Gruppo Clas (I) Nat. Stat. Service of Greece (GR) AFI Alpenforschunginstitut Gugg & Partner Delvico Bates Ministry of Communications Nortra Arthur Andersen Office Natinal du Tourisme Grand Prix - 2e meeting of jury Grand Prix - 2e meeting of jury HTL Conseil Osterr. Stat. Zent. (A) Inst. Nat. de Stat. (B) Inst. Nat. de Stat. (D) InsLNat. de Stat. (DK) Min. Eq. Transp. & Tourism Inst. Nat. de Stat. (GR) Inst. Nat. de Stat. (IRL) InsLNat. de Stat. (IS) Inst. Nat, de Stat. (I) InsLNat. de Stat. (L) - ETI InsLNat. de Stat. (NL) InsLNat. de Stat. (UK) Swedish Tourist Authority InsLNat. de Stat. (P) InsLNat. de Stat. (N) Min. Comercio y Turismo - Secretaria General de Turismo (E) InsLNat. de Stat. (IRL) Gruppo Clas Conférence "Livre Vert" du 12/12 - SCIC CTA Economie & Export Analysis Gemeente Budel OING Lumières de la Méditerranée Kienbaum Dev. Services ASTER WTTC InsLNat. de Stat. (FIN) AENA - Aeropuerto de Palma de Mallorca Nord Info GmbH MEWCAT - Milos European Women's Cooperation for the Advancement in Tourism St Andrews Tourism Management Group The Tourism Company Mobility International University of Thessaly Azienda di Promozione Turistica del Mantovano ARGE Sanfte Mobilitat NIT Messe Berlin (ITB) BIT, Milano Watch TV Près. Consiqlio Minis. Turismo nstituto Municipal de Formacion y Empleo (Ayuntamiento de Granada) j 40000 40000 120000 40000 120000 70000 40000 70000 40000 70000 120000 120000 70000 20000 70000 120000 259700 70000 27900 205000 499628 7500 9500 66742 7500 22100 12000 146450 130000 130000 230000 130000 230000 130000 130000 ! 70000 230000 40000| 1300001 230000 130000 130000 70000 230000 130000 500240 84478 238792 38630 ! 137670 ! 156486| 1893901 6310001 1300001 91380 60700 178300 195757 127800 30000 152971 98552 190000 98749 99840 66121 40000 60000 163159 69 8764 127015 631000 7500 •000 ECU ECU ECU ECU 1 i ; 1; ii ii 1 • 1, 1 ; 1 ; 1 , i; ij ij 1 1 i i! ij 1 i| 11i ii ij ii 6i '«I 6 6| 1i 1 1 1 : 11 i! n ii 1 , 1 ! 1 ; 1 ; 1! 1! ij il 11 1 i 1 ; 3 2; 32] 32; 3 2| 32; 6 1 6| 32; 6i 61 6i 8i 6! el •1 1 1. 5i i| il 6i , 1 ! ! i EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX II - CHECKLIST FOR INTERVIEWS OF KEY INFORMANTS 41a *MW Final Report • V2. 0 it EVALUATION OF THE TOURISM ACTION PLAN PROGRAMME - CHECKLIST 1 - Exposure to Tourism Action Plan PROMPTS: 1. 1- How familiar are you with the Tourism Action Plan programme? Please describe your exposure to Tourism Action Plan. 1. 2 - Please describe the objectives, the role of Tourism Action Plan as you perceive them? Did you perceive any significant change, evolution, trend? 1. 3 - If relevant, please describe your current involvement in area related to tourism policy. 2 - Interface with Tourism Action Plan (Co-Ordination. Complementarity. Overlap. Etc) PROMPTS: 2. 1 - Please describe the objectives of your programme and compare them with Tourism Action Plan in terms of: - objectives, priorities - instruments (means, techniques used) - processes. 2. 2 - In what manner and to what extent does Tourism Action Plan complement, duplicate, overlap or work at cross-purposes with other programmes? 2. 3 - Please assess the quality of the co-ordination between Tourism Action Plan activities and the activities undertaken by your programme. 3 - Assessment of the Rationale of Tourism Action Plan: Does the Programme Make Sense? PROMPTS: 3. 1 - Are the activities and outputs of Tourism Action Plan consistent with its mandate and realistically linked to the attainment of objectives? 3. 2- To what extent are the objectives and mandate of Tourism Action Plan relevant (in the past, present, future)? 3. 3 - What should Tourism Action Plan's role and activities look like in the future (exercise of wishful thinking)? 4 - Assessment of Impacts and Effects: What Has Happened As A Result of the Programme? PROMPTS : 4. 1 - What impacts and effects, both intended and unintended, resulted from carrying out Tourism Action Plan? 4. 2 - If relevant: do the (unintended ) negative effects outweigh the benefits of Tourism Action Plan? ?3 4. 3 - Give examples, illustrations of success stories, also failures. 5 - Achievement of Programme Objectives: Has the Programme Achieved What Was Expected? PROMPTS : 5. 1 - In what manner and to what extent were the appropriate objectives achieved as a result of Tourism Action Plan? 5. 2 - What are the reasons for failures to meet objectives and can these be remedied? See above 4. 3 - Give examples, illustrations of success stories, also failures. 6 - Alternatives: Are There Better Ways of Achieving the Results/Obiectives? PROMPTS : 6. 1 - Are there most cost-effective alternative programmes which might equally achieve the objectives? 6. 2 - Are there more cost-effective ways of delivering the existing programme? 7 - Lessons. Recommendations. Suggestions. Best Practices 7. 1 - Any key lessons/recommendations/suggestions to convey to Tourism Action Plan staff? 7. 2 - Any best practices from other programmes to convey to Tourism Action Plan staff? 8 - Overall Assessment 8. 1 - Main strengths of the Tourism Action Plan? 8. 2 - Main weaknesses/shortcomings of the TAP? 8. 3 - What should be done differently? ^ EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX III - EVALUATION FICHE FOR ASSESSMENT BY PW EXPERTS 4» Final Report • V2. 0 15 Price Waterhouse - Evaluation of the TOURISM ACTION PLAN Proforma for Assessment by Expert Consultant Status of Assessment U Discussed with Project Official BEFORE completion LI Discussed with Project Offical AFTER completion U To be completed U Pending issue(s) Project Title Contractantfs) Contract Number Project Official Documentation Used for Evaluation U Call for Tender LI Proposal by Consultant LI Contract Li I Proposal Assessments by DGXXIII LI In-House Interim Evaluation LI In-House Final Evaluation LI Final Report LI Interim Report (only if final report not submitted) L) Other Evidence If other, please specify: 7é Score (1-5) Comments 1 - Quality of Goal-Setting 1. 1- Clarity of objectives in call for tender 1. 2 - Quality of goal-setting in proposal 1. 3 - Degree of innovation in the European context 1. 4 - Is the project transferable? 1. 5- Overall quality of project design Subtotal I I 2 - Outputs of the Proiects - Incidence of Effects | | Score (1-5) Comments , " " ' " 2. 1 - Degree of achievement of objectives in terms of quantity 2. 2 - Degree of achievement of objectives in terms of quality Subtotal 2. 3 - What if any are the weaknesses of the project? 2. 4 - What if any are the positive outcomes of the project? X X i | _i i j j _ _ _ _ _ _ _ —i I J ^ ^ I i i j j ! 1 j ! | 77 3 - Rnal Report/Deliverable & Follow Up Score (1-5) Comments 3. 1 - Overall quality of final report (presentation, format) 3. 2 - Overall quality of final report/deliverable (contents) 3. 3 - Assessment of final deliverable in terms of distribution/dissemination( ie is the final deliverable of immediate use?) Subtotal n 4 - Compliance with Article 4 of the Council Decision (13 July 1fl921 Score (1-5) Comments 4. 1 - Cost-effectiveness 4. 2 - Impact on the Community tourist industry 4. 3 - Facilitate development of SMEs 4. 4 - Improve quality of tourist services 4. 5 - Encourage competition within EU 4. 6 - Increase competitiveness of EC tourist services j 4. 7 - Conducive to preserving and protecting the environment 4. 8 - Conducive to preserving and protecting the cultural heritage i 4. 9 - Conducive to preserving and protecting integrity of local | populations i | 4. 10 - Conducive to improving the provision of information and to the protection of tourists Subtotal. *T 5 - Overall Assessment of the Project Score (1-5) Comments Overall Assessment of the Project 6 - Other Comments 7 - Pending Issues. Questions. Queries fo EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX IV - EVALUATION FICHE FOR ASSESSMENT BY CONTRACTORS 0 Final Report - V2. 0 if Price Waterhouse - Evaluation of the TOURISM ACTION PLAN Proforma for Assessment by Project Contractors Thank you very much for agreeing to help us in this important evaluation commissioned by the European Commission (DGXXIII). Please note that individual responses will remain strictly confidential to Price Waterhouse and no information about your assessment of individual projects will be provided to the European Commission. We will aggregate and analyse the results prior to reporting to the European Commission. If you consider that a question does not apply to your project, please say so. This document contains two sections: Section A - Project Description and Section B - Assessment by Contractor. Section B is made of three subsections: Achievement of Objectives; Project Implementation; Lessons, Recommendations, Suggestions, Best Practice. A - PROJECT DESCRIPTION A1 - Project Title A2 - Year started: A3 - Project Description (full description, maximum 10 lines) A4 - Principle contractor names, not acronyms): If consortium, please name ajj participating organisations (give full A5 - If project co-financed, please name other bodies involved in co-financing (give full names, not acronyms): A6 • Please name other stakeholders and project partners (ie excluding TOURISM ACTION PLAN and Other CO-financing bodies) of t he project - Stakeholders are groups and individuals that have an interest in the outcome of the project, such as: international agencies, national administrations, research institutes, consulting firms, project implementing agencies, andintended beneficiaries. u A7 - State of advancement: I—I Not started I I Abandoned I I I I I Still ongoing but NOT delayed I Still ongoing but delayed I Completed and final report submitted I Completed but no final report submitted 1_J Other A8 - If project not started, abandoned or delayed, give reasons: A9 - If final report submitted, please give date of submission of the final report: MONTH: YEAR: A10 - If project completed but final report not submitted, give reason and expected date of submission: A11 - Type of Project: LJ Pilot Project I I Research Study I I Conference I I Publication U Other A12 - If other, please specify: A13 - Countries - Please give specific countries where the project is taking place : A14 - Please give other sources of funds (ie other than DGXXIII-TOURISM ACTION PLAN): A15 - COMMENTS - Please give any further comments on project description: 1* B - ASSESSMENT BY CONTRACTOR B1 - Achievement of Objectives (including impact) B1. 1 - If any, please specify target group(s)- Target Groups are the intended beneficiaries of the project, the groups that should benefit from it. If no target group(s), please explain why. B1. 2 - Please specify the main initial objectives of the project, starting with the most important one: Objective 1 (most important): Objective 2: Objective 3: Other objectives, if any: B1. 3 - Please rate the degree of attainment of these objectives - Tick only one box Attainment of Project Objectives Not at all successful Not very successful Fairiy successful Very successful Do not know Not relevant Objective 1 (as defined above) Objective 2 (as defined above) Objective 3 (as defined above) Objective 4 (as defined above) Objective 5 (as defined above) Overall Assessment B1. 4 - Main Indicators of Achievement Please give the main indicators of achievement specified for the project, which may be either quantitative (ie expressed in numbers) or qualitative (ie expressed in words): Indicator 1: Indicator 2: Indicator 3: Other indicators, if any: I l I j i i i Vr B 1. 5 - D e g r ee of A c h i e v e m e nt of P e r f o r m a n ce Indicators Please indicate t he e x t e nt to w h i ch t he p e r f o r m a n ce indicators have been a t t a i n e d. 1 Indicator of Achievement Target(s) initially planned Actual outcome(s) at completion 1 1 ! | Reasons for differences from j target — i | j i I | j l ! i j i Indicator 1 (as defined above) Indicator 2 (as defined above) Indicator 3 (as defined above) Other: I I Benefits a nd N e g a t i ve Effects Arising f r om t he Project B 1. 6 - Please give t he m a in benefits arising f r om t he project: Benefit 1 : Benefit 2: Benefit 3: / Other benefits. If any: B 1. 7 - If a n y, please give t he m a in n e g a t i ve e f f e c ts arising f r om t he project: Negative effect 1 : Negative effect 2: Negative effect 3: Other negative effects, if any: B 1. 8 - W h at w o u ld have h a p p e n ed in t he a b s e n ce of T O U R I SM A C T I ON PLAN f u n d i n g? I I The project would NOT have taken place I I I The project would have taken place but LATER I The project would have taken place but AT A SMALLER SCALE I I Don't know/no opinion LI Other If other, please specify: tf B1. 9 - COMMENTS - Please give any further comments on achievement of objectives: B2 - Project Implementation Changes in Project Design B2. 1 - Were there significant changes in project design such as changes in scope, objectives, target groups, approach? YES NO B2. 2 - If yes, please specify: B2. 3 - Please give the reasons for these changes in project design? Delays B2. 4 - Was the start of the project delayed? YES NO B2. 5 - If yes: By how many months? MONTHS B2. 6 - If yes: Reasons for these delays? B2. 7 - Was the project completed on time? YES NO B2. 8 - If no: By how many months was the project delayed? MONTHS B2. 9 - If no: Reasons for these delays? Cost Overruns B2. 10 - Was the project completed within the initial budget? YES NO B2. 11 - If no: Give size of cost overrun (final budget divided by initial budget): ECU B2. 12 - If no: Reasons for cost overruns?. 4 B2. 13 - An Index for Assessing Project Implementation Please help us to assess the implementation of the project. Please tick one box only per r o w. Indicators Poor Very poor Average Good Very good Don't know Not relevant A - Planning & Preparation of Project i A1 - Clarity of objectives A2 - Quality of project design A3 - Effectiveness of the partner(s)' participation in preparation & planning B • Dissemination B1 - Follow up of project after completion B2 - Dissemination of main results C - Management by TOURISM ACTION PLAN staff C1 - Financial & administrative monitoring by TOURISM ACTION PLAN staff C2 - Overall efficiency of TOURISM ACTION PLAN staff C3 - Responsiveness of TOURISM ACTION PLAN staff D • Co-ordination D1 - Quality of dialogue between TOURISM ACTION PLAN staff and other partners D2 - Co-ordination with other EU departments and non EU agencies Your overall assessment of the project implementation 1 ! i i j 1 1 j J j 1 1 i 1 I i i i j i i I Sv B2. 14 - COMMENTS - Please give any additional comments on project implementation: B3 - LESSONS. RECOMMENDATIONS. SUGGESTIONS. BEST PRACTICE B3. 1 - Any key lessons/recommendations/suggestions to convey to the TOURISM ACTION PLAN staff? B3. 2 - Any best practice to convey to the TOURISM ACTION PLAN staff? Have you any comments to make about this proforma? If yes, Price Waterhouse would be very grateful if you could indicate how to improve it: J Completed by: Name: Position: Tel number: Fax Number: Date: Thank you very much for your co-operation Please fax the completed document to: Price Waterhouse Project TOURISM ACTION PLAN - EC SERVICES c/o Luc MOENS Fax: + 44 171 9 39 3 4 74 Tel: + 44 171 9 39 3 3 31 EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX V - CHECKLIST FOR CASE STUDIES 0 Final Report - V2. 0 it CASE STUDIES ASSESSMENT BY KEY INFORMANTS NAME OF THE CASE STUDY: • ASSESSMENT OF PROJECT BY KEY INFORMANTS - CHECKLIST Foreword A very happy New Year and thank you for your co-operation. You will find below a list of prompts/questions for each issue we need to address to complete this case study. The objective of the interview we wish to set up with you is M to discuss in detail every item in this checklist. We wish to focus on the areas where your contribution is most valuable and relevant. If your organisation was the main contractor for this project, you will also receive from Price Waterhouse a short questionnaire designed to record descriptive information and to collect the contractor's views on the project implementation. Please return it completed as soon as possible as we have to report to the Commission by the end of January 1996. Introduction/Interface with the Case Study A. B. Involvement in the project: since/until when? Role? Exposure to the Tourism Action Plan: How familiar are you with the Tourism Action Plan programme? Preparation & Rationale 1. 2. 3. 4. 5. Origin of the project: who initiated the project? Brief history/background. Rationale: principles underlying the project? Justification? Which problems is it addressing? Main relevant characteristics of the environment in which project is taking place? Describe preparation and planning of the project. Briefly describe how the consultant contracts have been awarded and the reasons for the selection. Summarise key dates and milestones (including future ones if project not completed), and main (realised or expected) outputs/events (reports, key meetings, seminars/workshops, other key events). Stakeholders & Key Informants 6. Please name all important stakeholders and describe their role/contribution. Stakeholders are groups and individuals that have an interest in the outcome of the project such as: other EU and non-EU international agencies, national administrations, research institutes, consulting firms, project implementing agencies, and intended beneficiaries. Objectives 7. If any, please specify target group(s)- Target Groups are the intended beneficiaries of the project, the groups that should benefit from it. If no target group(s), please explain why. 8. Main initial objectives of the project, starting with the most important one: t\ù CASE STUDIES ASSESSMENT BY KEY INFORMANTS NAME OF THE CASE STUDY: • Objective 1 (most important): Objective 2: Objective 3: Other objectives, if any: 9. Please rate the degree of attainment of these objectives - Tick only one box per row in the table below. Not at all successful Not very successful Fairly successful Very successful Do not Know Not Relevant • Attainment of Project Objectives Objective 1 (as defined above) Objective 2 (as defined above) Objective 3 (as defined above) Objective 4 (as defined above) Objective 5 (as defined above) Overall Assessment Main Indicators of Achievement 10. Please give the main indicators of achievement specified for the project, which may be either quantitative (ie expressed in numbers) or qualitative (ie expressed in words): Indicator 1 : Indicator 2: Indicator 3: Other indicators, if any: CASE STUDIES ASSESSMENT BY KEY INFORMANTS NAME OF THE CASE STUDY: O 11. Please indicate in the table below the extent to which the performance indicators defined above have been attained. Indicator of Achievement Target (initially planned) Actual (at completion) Reasons for differences from target Indicator 1 (as defined above) Indicator 2 (as defined above) Indicator 3 (as defined above) Other: Interface of Tourism Action Plan with other programmes/policies (Co-Ordination. Complementarity. Overlap. et£l 12. 13. In what manner and to what extent does Tourism Action Plan complement, duplicate, overlap or work at cross-purposes with other EU and non-EU programmes? Please assess the quality of the co-ordination between Tourism Action Plan activities and the activities undertaken by other EU and non-EU programmes. Impacts and Effects: What Has Happened As A Result ot the Programme? 14. What positive impacts and effects, both intended and unintended, resulted from carrying out the project? 15. What negative impacts and effects resulted from carrying out the project? Project Implementation Monitoring & Evaluation 16. Describe procedures/arrangements to monitor the project implementation 17. Describe procedures/arrangements to evaluate the project during and after implementation n CASE STUDIES ASSESSMENT BY KEY INFORMANTS NAME OF THE CASE STUDY: Changes in Project Design • 18. Were there significant changes in project design? If yes, please specify and give the reasons for these changes in project design? Delays 19. Was the start of the project delayed? If yes: By how many months? If yes: Reasons for these delays? 20. Was the project completed on time? If no: By how many months was the project delayed? If no: Reasons for these delays? Cost Overruns 21. Was the project completed within the initial budget? If no: Give size of cost overrun (final budget divided by initial budge) If no: Reasons for cost overruns? Dissemination & Follow Up 22. 23. Has the project results been disseminated? What was the follow up, and who did it? Has the project been replicated? (If relevant) For how long are the operational cost (partly) covered by Tourism Action Plan? What will happen next? Lessons. Recommendations. Suggestions. Best Practices 24. What are the reasons for failures to meet objectives and canthese be remedied? 25. Any key lessons/recommendations/suggestions for future projects? 26. Which elements can be replicated, under which conditions? OVERALL ASSESSMENT 27. Main strengths of the project? 28. Main weaknesses/shortcomings of the project? 29. Contribution/value added by Tourism Action Plan? 30. What would have happened in the absence of the Tourism Action Plan funding? Would the project exist? If yes, would it be different? 31. What would you do differently? 31 EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX VI - COUNCIL DECISION OF 13 JULY 1992 0 Final Report - V2. 0 • ft No L 231726 Official Journal of the European Communities 13. 8. 92 COUNCIL DECISION. of 13 July 1992 on a Community action plan to assist tourism (92/421/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European in particular Article 235 Economic Community, and thereof Having regard to the proposal from the Commission ('), Whereas, tourism can make an effective contribution to achieving economic and social cohesion in the Community and whereas the Community a harmonious development of economic activity, continuous and balanced expansion, a higher standard of living and closer relations between the States which it links; it can promote in Having regard Parliament (2),. to the opinion of the European Whereas the measures tô be implemented under the action plan must comply with certain criteria in particular the need to comply with the subsidiarity principle; Having regard to the opinion of the Economic and Social Committee (3), Whereas tourism occupies- an important place in the economy of the Member States, with tourist activities. representing a large potential source of employment; Whereas tourism in the Community will have to show consideration for local populations and for the natural and cultural environment, in order to improve the quality of services offered; Whereas tourism allows people of all kinds to gain a better knowledge of Europe's cultural roots and of the cultures and ways of life in the Member States, thus making a' contribution to the progress of the idea of 'European citizenship'; j Whereas the results of the European. Year of Tourism should be taken into account; in view of Whereas, the above, Community action regarding tourism should take the form of a strengthening of the' horizontal approach to tourism in Community and national policies, and of the implementation of specific measures, and whereas that apporach should also include coordination of the measures, undertaken by Commission departments which affect tourism; whereas certain Communie/ policies, in particular transport policy, have a major impact on tourism in the various regions of the Community; Whereas the Community can contribute to improving the quality and competitiveness of the Community's tourism services on offer, by encouraging a joint apporach to the medium-term problems tourism; by promoting the development of the tourist industry and thç diversification of tourist activity and the development of transnational measures, and by developing the promotion of European tourism on- the main ' markets of third countries; facing European Whereas free competition should be preserved in the sector, both for the benefit of consumers, and in order to promote small and medium-sized enterprises (SMEs); Whereas it is necessary to encourage not only better integration of tourism into the various Community policies but also close cooperation between all public and private bodies in the sector, including- représentâmes of tourist regions, and whereas the implementation at Community level of à number of specific measures, complementary to those taken at national level, is the best way of achieving such cooperation, while avoiding any distortion of competition which may be caused; Whereas statistics on tourism, should be developed and forward analysis of new types of tourism carried out; Whereas a, plan of three years' duration is called for; («) OJ No C 120, 12. 5. 1992. p. I J. (*} OJ NoC/57. 16. J. 1992, p, 2J5. (J) Oj. Nu C 49. 24. 2, 1992. (». 4J_ Whereas an amount of ECU 18 million is deemed necessary to implement (his-plan;. fr 13. 8. 92 Official Journal of the. Europeah Conimunitics No L 231/27 Whereas the amounts to be committed for thé financing of the plan will have to come within the Community financial framework in force; The Commission shall refer to the committee referred to in paragraph 2 and the Council those initiatives adopted in the framework of Community policies which h aw a major effect on tourism. Whereas procedures should. be laid down for the exercise of the powers for implementing this plan conferred on the Commission pursuant to Decision 87/373/EEC ('); Whereas the Treaty does not provide for any powers for the adoption of this Decision other than those mentioned in Article 235, HAS DECIDED AS FOLLOWS: Article I A Community action plan to assist tourism shall be drawn up. The measures forming the subject of this plan are contained in the Annex. • - i Article 2 1. The duration of the action plan shall be three years from 1 January 1993. 2. The Commission shall be assisted in implementing the action plan by a committee composed of representatives of the Member States and chaired by the reprcsentativeof the Commission. The representative of the Commission shall submit to the to be taken. The committee a draft of the measures committee shall deliver its opinion on the draft within a time limit which the chairman may lay down according to the urgency of the matter. T he opinion shall be delivered by the majority laid down in Article 148 (2) of the Treaty. in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the committee shall be_weighted in the manner set out in that Article. The chairman lhall not vote. the Member States within if these measures are not The Commission shall adopt measures which shall apply \ immediately. However, in accordance with the opinion of the committee, they shall be communicated by the Council the Commission to forthwith. the Commission shall defer application of the measures which it has decided for a period of two months from the date of communication. that event In 2. The Community financial resource|_decmed necessary for its implementation amount to ECUM8ynilIion and shall fall within the Community financial framework in force. The Council, acting by a qualified majority, may take a different decision within the time limit referred to in the previous paragraph. 3. The budget authority shall determine the appro priations available for each financial year, taking into account the principles of sound management referred to in Article 2 of the Financial Regulation applicable to the general budget of the European Communities. Article J the action plan I. The Commission shall put into operation. In order to fulfil the objectives of the plan, it may undertake measures other than those set out in the \nncx, where, exceptionally, additional, action is required n order to carry out one of the measures in full. Such tdditional action shall be assessed to existing priorities and to available financial resources. The -ommission shall coordinate the action with the various Community policies, and through the various Dircctoratcs- /cncral -current' roceduces. accordance • with in relation both concerned, in ) OJ No I. 197. 18. 7, 1987, p. JJ. Article 4 1. The measures must be consistent with (he principle of subsidiarity. 2. A selection shall be made, for the different measures proposed, by reference to the following criteria: (a) the measures must be cost-effective and make a significant impact on the Community tourist industry; (b) they niust facilitate the development of the industry with particular medium-sized businesses; reference tourist to small and (c) they must help improve the quality of Community tourist services;. (d) "they must encourage Community and increase ' C o m m u n i ty tourist services on the world market;. competition within the the competitiveness of M> No L 2 3 1 / 28 Official Journal of the European Communities 13. 8. 92 (e) they must be conducive to preserving and protection the quality of the natural environment, the cultural heritage and the integrity of local populations; (f) they must be conducive to improving the provision of information and services and to the protection ot tourists. be through shall 3. The measures coordination with if and, the national necessary, with the regional or local authorities as well, so as to take account of the for regional development. implemented authorities importance of tourism Article 6 The Commission shall regularly evaluate the results of the action plan. This evaluation will include wherever possible measurable outputs of the plan and be in accordance with the criteria in- Article. 4. T he committee will be informed by the Commission of the latter's evaluation of the plan, and of the results thereof. No later than 30 June 1 9 9 5, the Commission will submit a report on this evaluation to the European Parliament and the Council. On the basis of that report, the Council shall decide, in accordance with the provisions of the Treaty, whether or not to extend the plan for a further period. Article S Done at Brussels, 13 July 1 9 9 2. Every year from. the date of adoption of the action plan, the Commission, in a report to the European Parliament and the Council, shall evaluate the Community's activities which affect tourism. For the Council The President J. CUMMER f-r* 13. 8. 92 Official Journal of the European Communities No L 231/29 I. COMMUNITY MEASURES TO ASSIST TOURISM ANNEX V. Improving knowledge of the tourist industry and ensuring greater consistency of Community measures Community action 'is intended to improve the consistency of the measures taken to assist tourism by increasing knowledge of its characteristics, components and development. This will be carried out by means of the following measures: (a) development of Community statistics on tourism; (b) detailed studies aimed at improving knowledge of tourism as an activity, assessment of the impact of current Community. policies to assist tourism, forward analysis of new types of tourism, and the preparation of strategies adapted to keep pace with demand-, (c) consultation of tourism professionals within the Communicy. 2. Staggering of holidays Community action is designed to promote a better seasonal distribution of tourism. This will be carried out by means of the following measures: - (a) support for the setting-up of an international framework Jwhose purpose would be to exchange information and monitor the activities of governments and the tourist industry; (b) support for measures aimed at coordinating actions and strategies to encourage the use of tourism infrastructure and facilities outside the peak season. 3. Transnational measures Community action is designed to promote transnational tourist development initiatives covering many different specialist sectors of the industry. This will be carried out by means of the following measures: (a) support for cooperation between border regions; (b) support for transnational initiatives contributing to the improvement of tourist information, in particular those using new technology; (c) development of tourist cooperation wich Central and Eastern Europe and the Maghreb through the transfer of k n o w - h ow on training and the implementation of strategies for promotion, as well as on marketing and the crearion of small and medium-Sized tourist enterprises; (d) support for tourist and technical cooperation in the context of partnerships between towns; (e) support for. pilot projects aimed ar cooperation between the public and private sectors for the development of traditional tourist regions in decline as well as less developed rural regions. 4. Tourists as consumers Community action aims to support initiatives which improve the information of tourists and their time-share existing classification protection, arrangements, over-booking and procedures for redress. systems, ' signposting in areas such symbols, is 5. Cultural tourism , Community action is designed both to highlight theimportancc of the cultural heritage for tourism and to promote a greater knowledge of the cultures, traditions and ways of life of Europeans, ff No L 231/30 Official Journal of the European Communities 1 3. 8. 92 This will be carried out by means of the following measures: (a) support for initiatives to develop n ew European cultural tourism routes, in cooperation with the - Member States, regions arid local authorities concerned, and to disseminate information on these routes by means of brochures and publications; (b) support for the exchange of experience in the field of visitor management techniques; (c) promotion and assistance in the use of European networks enabling tourist operators and cultural institutions to exchange experience, -especially as regards highlighting the value of cultural heritage. 6. Tourism and the environment T he aim of Community action in the area of the interaction between tourism and the environment is to ensure that the environment is more fully taken into account. This will be carried out by means of the following measures: (a) support for iniriatives aimed at informing arid increasing the awareness of tourists and suppliers of services about the interaction between tourism and the environment and in particular through the creation of a European environmental prize;' (b) support for innovative pilot projects to reconcile tourism and nature protection at local or regional level, in particular coastal and mountain areas, nature parks and reserves, e. g. by measures for the guidance of visitors; (c) support for the development of networks including experience of environmental problems and their possible solution management at sites; involving transnational exchanges of experience, through visitor (d) support for initiatives'encouraging forms of environment-friendly tourism. 7. Rural tourism I Community action in this field is designed to develop tourist activities in a rural environment, notably farm tourism, small family-run hotels or facilities set up by associations or local authorities. This will be carried out by means of the following measures: (a) support for partnership initiatives between operators at local, regional, national or European level, to facilitate exchanges of experience and the transfer of good practice through the organization of visits, seminars, exchanges of experts and the development of transnational pilot schemes, in particular in the field of vocational training; (b) improved information for rural operators and better access for them to the various Community aid schemes available for rural tourism, in-particular through the publication of documents for mass circulation and the publication of an operators' manual-, (c) encouragement for. improving the quality of rural tourism supply and support for measures to facilitate access to tourism in a rural environment. 8. Social tourism Community activity in this field seeks to facilitate access to tourism hy groups of people w h o, for various reasons, but especially for social or health reasons, have difficulty in taking holidays. This will be carried out by means of the following measures: (a) shared information at Community level between public and'private sector partners concerning the various methods used in the Member States to encourage holiday-taking by certain categories of tourists; (b) support for the coordination between Member. States of measures aimed at eliminating barriers to the development of tourism for the disabled, and for the exchange"of information in (his field. 9. Youth tourism Community action in this field is, through support for existing Community policies, aimed both at promoting young people's knowledge of cultures and lifestyles'in the various Member States and at making it easier for young people'to take holidays. " ft 1 3. 8. 9 2,. Official Journal of the European Communities •• No L 2 3 1 / 31 This will be carried out by means of the following measures: (a) a feasibility study into establishing links between ' y ° -tn cards'; (b) support for research into the need to create a network of exchanges with regard to 'European classes* (school travel for pupils from several Member States). 10. Training Community action in this field is aimed, through support (or existing Community policies, at making the tourist industry in the Community more competitive through support for increased professionalism in Community tourism. This will be carried out by means of the following measures: (a) dissemination of information among young people on tourist resources and profession; (b) support for ongoing measures to draw up professional profiles for the industry and improvement of mutual information on the qualifications attained in the various Member States; (c) encouragement of the participation of tourist businesses and their employees in existing Community training programmes and measures; (d) support for transnational cooperation projects, between universities, tourism schools, tourism professionals, or the authorities concerned, especially for training in the fields of rural, cultural and environmental tourism; (e) support for networks aimed at improving the quality of vocational training so as to raise the quality of tourism services. 11. Promotion in third countries Community action in this field is directed at making Europe a more attractive destination for tourists from distant countries. This will be carried out by means of measures confined to pilot projects to promote Europe as a tourist destination on the markets of distant countries, particularly North America and Japan, whose growth is likely to have an impact on tourism within the Community. I II. TIMETABLE OF PRIORITIES When implementing measures in accordance with thé procedure laid down in Article 3, priority will be given for 1993. to the following measures. These priorities may be modified for the financial years 1994/95 according ro the procedure referred ro in Article 3 (2). Priority measures for 1993: I. Improving knowledge of the tourist industry and ensuring greater consistency of Community measures: (a) development of Community statistics on tourism; (b) detailed studies aimed at improving knowledge of tourisme as an activity, assessment of the impact of current Community policies to assist tourism, forward analysis of new' types of tourism and the preparation of strategics adapted to keep pace with demand; (c) consultation of tourism pofcssionals within the Community. 2. Staggering of holidays: • i- (a) support for the setting-up of an. international framework whose prupose would be to exchange information and monitor the activities of governments and the. tourist industry. Ac® No L 2 3 1 / 32 Official j o u r n al of the E u r o p e an C o m m u n i t i es 1 3 : 8. 92 '3'. Transnational measures: (a) support of cooperation between border regions: (b) support for transnational initiatives contributing to the. improvement of tourist information, in particular those using new technology; • ' ,. '- (c) development of tourist cooperation with Central and Eastern Europe and the Maghreb through the transfer of k n o w - h ow on training and the implementation of strategies for promotion, as well as on marketing and the creation of small and medium-sized tourist businesses. 5. Cultural tourism: (a) support for initiatives to develop new European cultural tourism routes, in cooperation with the Member States, regions and local authorities concerned, and to disseminate information on these routes by means of brochures and publications; (b) support for the exchange of experience in the field of visitor management techniques-, 6. Tourism and the environment: (a) support for initiatives aimed at informing and increasing the awareness of tourists and suppliers of services about the interaction between tourism and the environment and in particular through the creation of a European environmental prize; (b) support for innovative pilot projects to reconcile tourism and nature protection at local or regional level, in particular coastal and mountain areas, nature parks and reserves, e. g. by measures for the guidance of visitors-, (c) support for the development of networks transnational exchanges of experience, including experience of environmental problems and their possible solution through visitor management at sites; involving (d) support for initiatives encouraging forms of environment-friendly tourism. 7. Rural tourism: (b) improved information for rural operators and better access for them to the various Community aid schemes available for rural tourism, in particular through the publication of documents for mass circulation and the publication of an operators's manual; / (c) encouragement for improving the quality of rural tourism supply and support for measures to • facilitate access to tourism in a rural environment. 8. Social tourism: (b) support for the coordination between Member States of measures aimed at eliminating barriers to the development of tourism for the disabled, and for the exchange of information in this field. 10. Training: (b) support for ongoing measures to draw up professional profiles for the industry and improvment of mutual information on the qualifications attained in thevarious Member States; (c) encouragement of the panicipation of tourist businesses and their employees in existing Community training programmes and measures; (d) support for transnational cooperation projects between universities, tourism schools, t o u r i s m, professionals, or the authorities concerned, especially for training in the fields of rural, cultural and environmental tourism. • i ' 1 I. Promotion in third countries: Pilot projects to promote Europe as a tourist destination on the markets of distant countries, particularly North America and Japan, whose growth is likely to have an impact on tourisrk within the Community. ^1 EVALUATION OF THE TOURISM ACTION PLAN TO ASSIST TOURISM APPENDIX VII - LIST OF CONTACTS • Final Report - V2. 0 -M APPENDIX VII EVALUATION OF THE COMMUNITY ACTION PLAN TO ASSIST TOURISM ILIST OF CONTACTS (excluding DG XXIII) No Nam» ;; piyantwdon Department of National Heritage (UK) Minlsterio de Comercio y Turismo (E) Department of Trade & Tourism (IRL) Department of Trade & Tourism (IRL) Borde Fallte (IRL) ETOA ETC AIT/FIA ECTAA Deutscher Stadte und Gemeintebund (D) EUTO WTTC HOTREC ECATRA IATA ETAG UFTAA European Travel Monitor (Munich, D) Luxembourg Finland France Greek National Tourism Organisation Belgium 1 Daniela Hesse-Wagner 2 Robert Hollier 3 Lisa Davies 4 De Blust 5 E Giesen 6 W Burnett 7 G Llpman 8 M Sequaris 9 F H Aldous 10 Mr Smithies 11 LLickorish 12 Lepage 13 MrFreitag 14 RZimmer 15 Bent PilstrSm 16 JL Deroide 17 E Hadzinikolaou 18 Claude Pirard 19 Dr. ssa. Cesarina Mislani Dipartimento del Turismo (1) 20 Keith Gibbins 21 Teresa Castillo 22 Shane O'Neill 23 Paul Bates 24 Ciaran Tulte 25 JP Bastos Salazar Lelte Directorate General for Tourism (P) 26 Mr Schneider 27 L Harrison 28 E McMillan-Scott 29 P Comelissen 30 Mr Hansen 31 Giacomo Regaldo 32 Kirchberger 33 Van Hasselt 34 E Power 35 D Givord 36 Comaert 37 M Lepelletier 38 BWeherns 39 Manuel Ruiz Sanz 40 Xavier Coyer 41 Danae Penn 42 Pyrhus Mercouris 43 Mr Enthoven 44 T O'Dwyer 45 G Barrett 46 E Pongas 47 Professor V Middleton 48 E Pad 49 Mr Dupeyras 50 Prof John O'Hagan 51 George Moustakas 52 Palle Damkjaer 53 Rene Ladiges 54 Elsisabeth de Bodinat 55 Christine Bussière 56 Yves Comu 57 Sylvie Blangy 58 Paolo Bonglni 59 Gerry Carver 60 A de Varax 61 Elizabeth Jeffries 62 Hans Domenlcus 63 Kal Gelger 64 Jan Kobemuss 65 Falco de Clerck 66 Andrew Lennox 67 Carlos Freite 68 Ana Alonso 69 lEulogio Bordas Bundesmlnlsterium fur Wirtschaft (D) European Parliament European Parliament European Parliament Committee of the Regions Economic & Social Committee DG XXII Air Transport Policy - DG VII DG XVI « Regional Policies Rural Development - DG VI DGXI DG VII DGV DGV DGV DGVII DG X DGXl DGXX1I DGVIII Eurostat World Trade Organisation (WTO) OECD Trinity College (Dublin. IRL) International Interactive Multimedia Hjoerring Business College (DK) Hjoerring Business College (DK) Agence Vitesse (Paris. F) Agence Vitesse (Paris. F) HTL - Bossard Sociologie (Paris. F) Expert (Montpellier. F) Regione Toscana (Florence, I) L&R Leisure (Haywards Heath, UK) Office du Tourisme (Lyon, F) Greater Manchester (UK) Amsterdam Tourist Office (Amsterdam, NL) IfB (Konstanz. D) Institute fur Freizeit (Cologne. D) Institute for Service Management (Leeuwarden. NL) Central College of Commerce (Glasgow, UK) Arthur Andersen (Lisbon. P) DeMco Bates (Madrid. E) |THR (Barcelona, E) I AD _? EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX VIII - ASSESSMENT BY KEY INFORMANTS 0 In this Appendix, we give a summary of the assessment made by the key informants (professional associations representing industry interests, representatives of the Member States, independent experts, Commission officials from other Directorates General). The views expressed are not necessarily shared by Price Waterhouse. Exposure to the Plan The vast majority of interviewees are familiar with the Plan, although some of them consider their knowledge of the plan stems from extensive contacts and length of time within the industry, rather than from the Plan's contact with the tourism organisation. Whilst many interviewees have only a more general understanding of the Plan, certain interviewees feel they have more of a knowledge of individual projects rather than an understanding of the Plan's strategy itself. Many interviewees gained familiarity with the Plan as a result of attending Management or Consultative Committees. The degree of familiarity with the Plan by officials from other Directorates General appear to be the lowest. An important feature is the background of the interviewees, especially which part of the travel and tourism industry they represent. There is a strong tendency for the "major players" in the industry such as the organisations representing the European travel agents and tour operators to consider that the Plan focuses mainly on peripheral tourism issues (green / social) and not on the key mainstream issues such as transport links and infrastructure. On the other hand, organisations such as those representing tourist offices in local communities consider the Plan only consults major forces in the industry and does not seek or take account of the views of other important but less powerful representatives. Interface with the Plan The interviewees have highlighted a number of organisations, particularly at the "global" level working towards the same broad objectives as the Plan: creating jobs by stimulating tourism and developing tourism with due regard for the environment. Whilst the Plan consults regularly with these organisations through attendance at meetings, advisory committees etc, it is felt that there is a need for the Plan to ensure greater coordination with the strategies of these other organisations. In particular, difficulties were expressed vis-à-vis the ability to co-ordinate what member states are doing with what the EU is doing. One interviewee felt that the Plan was a "small scale" model of what an overall strategic programme of Travel and Tourism in Europe should be aiming to achieve. Another common theme was that the Plan required much greater coordination and integration with the infrastructure projects handled by other DGs in the Commission eg air traffic control systems, transport measures for vehicles etc. Final Report - V2. 0 4 &^i EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX VIII - ASSESSMENT BY KEY INFORMANTS gtfk ^IlF Rationale for the Plan 10 11 12 13 14 15 16 The majority of interviewees expressed a view on whether the Plan made sense. Whilst these interviewees generally felt that the overall framework was commendable and "going in the right direction", they considered the actual outputs and activities were too fragmented and that the individual projects were on too small a scale. There is a general view that undertaking these small projects spread over a number of different tourism aspects has made it difficult to achieve the Plan's objectives. A number of interviewees to date consider the activities have focused on peripheral issues eg cultural and social tourism rather than on the mainstream tourism industry which accounts "for about 80% of all tourism activity". Some also felt that the Plan had concentrated too much on theoretical issues and research studies. Even more importantly, many considered that the results of these studies had not been made available to a wide enough audience and in particular to those bodies and organisations that could make best use of them. One interviewee felt there was too much emphasis on supporting the public sector's role in tourism and that there were insufficient projects related to the private sector's role. / There is a general view that one of Plan's most valuable roles has been to act as a focal point for tourism within the EU and to get the many different stakeholders within the industry together and thinking about the same issues. To some extent, the Plan has acted as a catalyst for future action. Generally, interviewees think that the following factors have contributed to "the small and fragmented project" approach: a b c d e the need to satisfy a very broad framework of objectives ("a patchwork") the tendency to attempt to meet the needs of every lobby with an interest in tourism which has led to funding fragmented, small projects on a number of areas inadequate funding given the ambitious objectives of the Plan inadequate staffing of the Tourism Unit (both in terms of number and expertise) the lack of top level policy commitment and an insufficient authority vested in DG XXIII to enable it to fulfill adequately its coordination role with other EU mainstream policy areas such as Agriculture (DG VI) Regional Policy (DG XVI). 17 These factors have meant that, to date, the Plan has been unable to play a significant role in maximising tourism's potential contribution to economic growth and job creation. Final Report • V2. 0 <i e>f EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX VIII - ASSESSMENT BY KEY INFORMANTS gVk ^S\W Assessment of Impacts and Effects 18 19 Whilst a majority of interviewees consider that the net effects of the Plan are positive, several of them take the view that the negative effects have outweighed the positive effects. It is generally felt that the overall impact of the Plan on the competitiveness of the EU tourism industry has been very limited. 20 The Plan has had the following positive impacts: a b c brought Member States together for useful discussions on Tourism (catalyst role) increased the awareness of particular key issues amongst Member States, for example the environmental aspects enhanced cooperation on Tourism issues amongst Member States (eg through the consultation process of the Green Paper) d activated several sectoral/regional projects in Europe. The general opinion is that DG XXIII has done as well as it could have done, given the very broad framework for Plan and the constraints on funding. There is however a minority view that the implementation of the plan has been a "lost opportunity" and that the Unit has been ineffective. One reason sometimes given is the lack of tourism experience of most staff members. Travel agents and tour operators generally consider that the Plan has provided few benefits and has had little impact on the tourism industry. This sector and the industry generally feel they should have been consulted much more on the strategy at the outset. They generally felt that the Plan should have concentrated on the mainstream areas of tourism; that there should have been more effective coordination internally across the EU directorates responsible for Transport policy etc. as well as those responsible for the Structural Funds. There should also have been more coordination between other external organisations, especially those responsible for environmental issues. More emphasis should be placed on the great potential which the Tourism industry has for promoting sustainable development, and improving and maintaining the environment. Most representatives of the Member States contacted think that they need to be involved much more directly in the formulation of tourism policy and programmes, so that they take "ownership" of the programme and subsequently work actively together to implement it. The Plan has been regarded much more as the Commission's plan rather than that of the Member States'. There is a feeling that the Plan is "caught between two stools", ie in meeting the subsidiarity principle, yet still being expected to deal with core issues: if the Plan adheres to subsidiarity, then it may only add value in areas not seen as core such as social and green tourism. There is a view that many of the Plan's initiatives are related to local authority activities and not so much to the private sector. There is no unanimity on the effectiveness of the implementation of the Plan by the Tourism Unit. Whilst some interviewees feel that DG XXIII have done as well as they could "given the broad 21 22 23 24 25 26 27 28 Final Report - V2. 0 s?£><3 EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX VIII - ASSESSMENT BY KEY INFORMANTS 4» framework and the constraints or funding", others take the view that the Commission has not been effective. The latter group gives evidence such as: cancelation of Conference on Quality of Tourism, lack of expertise in tourism, very long and bureaucratic procedures, delays in payment, lack of responsiveness of DG XXIII staff, lack of transparency in the selection of projects, poor execution of the budget (eg in 1994). 29 It is also clear from our interviews that the misallocations of funds have given the Plan a "bad name": the credibility of the Tourism Unit and of a possible EU tourism policy has been seriously tarnished. It has also to some extent created the some of the administrative difficulties and weaknesses referred to above. Relative Successes and Failures at Project Level 30 Interviewees cited the following as "successes" at project and study level: a b c d e f I Cultural itineraries, such as "Routes to the Roots" and "Art Cities in Europe" Baltic Sea Region Cultural Project A number of projects in the area of Tourism & the Environment (eg Prize) Certain projects in the area of information technology Projects developed in Greece to develop training modules on training, management and technical skills Senior citizens' and youth tourism; both were seen to be examples of projects which were expanding tourism in culturally and environmentally sensitive ways 31 The Directive of Community Statistics and certain conferences organised by the Tourism Unit are other activities which appear to have been appreciated. 32 Interviewees cited the following as relative "failures" at project and study level: a b c The study on "overbooking in hotels etc" was cited as unnecessary since it was looking at an issue already being resolved by the industry itself The promotion in the USA, "a monumental worry", a "complete waste of money" The failure of the promotion in Japan (1995 call for tender). Role and Activities in the Future 33 For the future, a number of common themes emerged, although there is no unanimity. Among the representatives of the Member States at the Management Committee, examples of common themes include: a more and better coordination and dialogue (partnership) with: (a) the EU directorates responsible for the relevant mainstream programmes such as Transport, Regional Policy, issues of Taxation and Single Currency (including a better Final Report • V2. 0 4 ° ? EVALUATION OF THE ACTION PUN TO ASSIST TOURISM APPENDIX VIII - ASSESSMENT BY KEY INFORMANTS use of the existing EU instruments) (b) the national tourist strategies and plans 0 (c) regional and local authorities, Chambers of Commerce and other industry stakeholders b c d e f formally recognise Tourism's potential in the areas of economic development and generating employment opportunities concentrate on promoting "Europe" to third party countries such as Japan and the Far East - with individual EU countries left to promote themselves at international, national, regional and local level need for planning a Tourism strategy which will have the greatest impact on economic growth and job creation within the EU, and for supporting projects which meet these objectives greater involvement of the private sector in both the formation and implementation of policy need to rethink the co-operation with third countries in order to make it consistent with the objectives of tourism policy g need to publicise the results and the outcomes of seminars, projects etc. I Summary of Findings We now summarise the findings from our interviews with key informants. Note that these are not necessarily the views of Price Waterhouse. The Plan has given "Tourism" more recognition within the EU. It has brought interested parties and stakeholders together to discuss common issues. But the Plan's framework covers too many objectives. Some of these objectives are on fringe or peripheral issues. Consequently, the plan did not include all the mainstream issues, especially regarding infrastructure aspects. It is felt by many key informants inten/iewed that funding and staffing of the Tourism Unit have not been adequate and these are seen as a key factors in limiting the programme's impact. There is a need for greater consultation of all key parties at the strategy formulation stage. This needs to include both the public and private sectors. Both Member States and industry representatives consider they were not actively involved in deciding on the Plan's strategy. There needs to be greater coordination on key issues (such as competitiveness) both internally within the Commission and with external bodies to ensure compatibility of policies, especially on transport and environmental issues. Need to be clear what the "high level" key objectives are and ensure that projects are assessed against these "key criteria" eg from which areas of the world is the EU trying to attract tourists to come to Europe? Which are the target markets? 34 35 36 37 38 39 40 41 This leads on to thinking about what needs to be developed eg. high standards and common Final Report - V2. 0 yip EVALUATION OF THE ACTION PLAN TO ASSIST TOURISM APPENDIX VIII - ASSESSMENT BY KEY INFORMANTS 0 classification of these standards for hotels etc across Member States. This is also seen to link with the need to develop educational programmes on tourism in colleges etc in the different Member States as well as to widen the use and capability of information technology for tourism on a pan - European basis. i Final Report • V2. 0 ^1 ISSN 0254-1475 COM(96) 166 final DOCUMENTS EN 16 Catalogue number : CB-CO-96-209-EN-C ISBN 92-78-03582-3 Office for Official Publications of the European Communities L-2985 Luxembouig

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30. 04. 1996 COM(96) 153 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on LINKING RELIEF. REHABILITATION AND DEVELOPMENT (LRRD) Communication from the Commission to the Council and the European Parliament on Linking Relief, Rehabilitation and Development (LRRD) BACKGROUND, CONCLUSIONS AND RECOMMENDATIONS (i) Background Over the last year, important decisions on long-term development cooperation relationships were taken : negotiations on the Lomé IV mid-term review were concluded and the Agreement amending the Fourth ACP-EC Convention of Lomé was signed in Mauritius on 4 November 1995; negotiations commenced with South Africa towards the establishment of a framework for long-term cooperation; a new EU-Mediterranean policy was decided; periodic conferences with Central American (San José) and Latin American countries (Rio groupe) took place and new framework agreements with Asian countries were negotiated (Vietnam), or are under preparation (Cambodia, Laos). At the same time, a series of legal bases/draft regulations have been proposed, regarding a number of instruments ranging from short-term relief and rehabilitation to longer-term development. This reconfirmation of the comprehensive "toolbox" of different instruments available for our relations with developing countries over the coming years, requires that they are not dealt with in isolation but that a coordinated approach to their management is adopted in order to strengthen linkages between them, thereby improving their complementarity and ensuring their global coherence in the most efficient way and with a view to achieve the greatest impact. At a time when aid efficiency is the keyword, such efficiency should not only be considered separately within the fields of relief, rehabilitation and development aid, but attention must also be given to strengthening linkages between these fields of action. Furthermore, aid is increasingly subject to policy and institutional conditionality and it is an appropriate moment for the donor community to reflect upon the way in which their own internal policies and institutional set-ups could be rendered more efficient and effective. This communication is the outcome of an extensive internal and external consultation process: an interservice working group of the Commission, consisting of representatives of the different Directorates General for External Relations and ECHO, prepared a discussion document on "Linking Relief, Rehabilitation and Development (LRRD)"; the document was discussed in a workshop with experts in this matter (invited in their personal capacity) from Member States, US AID, UN agencies, NGOs and academic institutions; it was subsequently discussed in the quarterly meeting of ECHO and the Heads of Humanitarian Relief Services of the Member States and in the half-yearly meeting of the Commission and the Directors General for Development of the Member States in November 1995; the document was discussed in a seminar with 20 experts of NGOs with experience in relief, rehabilitation and development issues, organised in February 1996 by the Commission, the NGO-Liaison Committee and VOICE; finally, as proposed by the Directors General for Development from the Member States, the Commission has organised a meeting with relief and development experts of the Member States on 28 February 1996, on the basis of the discussion document and replies of Member States to the questionnaire prepared by the Commission on LRRD bilateral policies (see annex for a summary of these replies) The communication takes account of the different remarks made during this consultation exercice. The global conclusion of the different discussions is that they were very useful, because a formulation of a coherent policy on the LRRD-isue is very timely, and that although general agreement exists on the policy approach and the concept of the linkage problem, there is also agreement on the fact that it is a difficult task to implement in practice. Participants in the different meetings, while agreeing on the policy approach and proposals made in the document, considered that they could also be applied, if necessary in adapted form, in their own organisations (either bilateral, multilateral or non-governmental). Since a certain number of Member States are currently in different stages of formulating documents on policies and procedures regarding linkages between relief, rehabilitation and development (see annex), it was agreed in the meeting with the experts of the Member States that these documents would be exchanged between the members of the Union, an exercise for which the Commission offered its services. (ii) The Relief-Rehabilitation-Development (RRD) Continuum1 The role of relief assistance2 is to provide urgent short term humanitarian assistance to save and preserve lives of people facing serious difficulties resulting from natural or manmade 1 It has been suggested that the term "contiguum" would be more appropriate, reflecting the fact that operations in relief, rehabilitation and development may all be ongoing simultaneously within any given country. 2 "Relief assistance" and/or "humanitarian aid" are used interchangeably in the text. The scope of humanitarian aid is defined in the Proposal for a Council Regulation concerning Humanitarian Aid as follows: "The Community's humanitarian aid shall comprise assistance, relief and protection operations on a non-discriminatory basis to help people in third countries, particularly the most vulnerable among them, and as a priority those in developing countries, victims of natural disasters, man-made crises, such as wars and outbreaks of fighting, or exceptional situations or circumstances comparable to natural or man-made disasters. It shall do so for the time needed to meet the humanitarian requirements resulting from these different situations. Such aid shall also comprise operations to prepare for risks or prevent disasters or comparable exceptional circumstances". ii disasters. Rehabilitation programmes are seen as progressively taking over from relief assistance to stabilise the economic and social situation and facilitate the transition towards a medium and long term development strategy. The basic justification for linking relief, rehabilitation and development is simple and sensible: disasters are costly in both human life and resources; they disrupt economic and social development; they require long periods of rehabilitation; they lead to separate bureaucratic structures and procedures which duplicate development institutions. At the same time, however, development policy too often ignores the risks of drought and other shocks and the need to protect vulnerable households by helping them to develop "coping strategies". If relief and development can be linked, these deficiencies could be reduced. Better "development" can reduce the need for emergency relief; better "relief can contribute to development; and better "rehabilitation" can ease the transition between the two. This simple model however, fails to deal with the realities of many current emergency situations. Most are not due to natural disasters, but are the result of the interaction of political, economic and social instability, frequently stemming from bad governance, failed economic policies and inappropriate development programmes which have exacerbated ethnic or religious differences. The assumption inherent in this model is that the path of short term relief leading via rehabilitation to long term development, underestimates the chronic nature of many disaster situations. Even when there is no overt conflict, the combined effects of bad governance, failed economic policies, abuses of human rights and the democratic process may lead to the suspension of long term development aid, resulting in an acceleration of economic and social disintegration. "Complex emergencies" or chronic crises involving armed conflict represent the most difficult context in which to develop a coordinated approach to RRD. Disaster prevention and preparedness measures are difficult to apply, and increasing prominence needs to be given to conflict prevention, through early and coordinated intervention at both political and developmental levels with the ultimate goal to reach a situation of "structural stability" i. e. a situation involving sustainable economic development, democracy and respect for human rights, viable political structures, healthy social and environmental conditions, with the capacity to manage change without resort to violent conflict. It is important to introduce gender analysis into the RRD response, so as to avoid further marginalisation of disadvantaged groups. A gender approach helps to identify women and men's differing vulnerabilities to crises as well as their different (and ever-changing) capacities and coping strategies. Vulnerability is a key concept, and may be determined by membership of a particular ethnic or social group. The regional dimension also requires specific attention. Crises may spread beyond the borders of the country concerned, threatening the socio-economic and political stability of neighbouring countries and the entire region. This will require specific action in favour of neighbouring countries, and at the regional level to support any regional initiatives to address crisis situations through political interventions. in Two other issues need to be considered. The first is the institutional separation of relief and development which exists within most donor organisations. Different criteria and procedures are applied to sustainability, funding and implementation arrangements. The international response to chronic crises in particular may risk reflecting the organisational and political priorities of implementing agencies, rather than the needs of war affected populations and the vulnerability of those threatened by war. The second issue is financial. Over the period 1988 to 1993, relief expenditure by OECD member states rose from US$ 500 mio to US$ 3,500 mio per year, at a time when overall aid programmes are tending to stagnate or even decline. In the Community aid programme, emergency and distress relief amounted to 764 MECU in 1994 and represented in that year 18. 8% of total Community aid. For all the above reasons, it is timely that we should reconsider our approach to linking relief, rehabilitation and development and examine ways in which their impact and effectiveness can be improved. (iii) General conclusions The analysis of the LRRD problem makes clear that the approach to the economic, political and social development of developing countries should be more holistic than is the case until now. This is especially important for countries which are prone to the risks/tensions of political, economic and/or natural disasters. At all phases of their development - not only when a crisis is imminent - there is a need for a strategic planning policy which comprises political, developmental, social, and technical aspects. This global policy framework should define : the way in which conflict prevention as a means of managing the inevitable strains resulting from social, political and economic change can be incorporated into development operations : "peacebuilding" must be an intrinsic element of development cooperation strategies; the way in which disaster prevention and vulnerability analyses should be taken into account in development planning and operations; the way in which, once an emergency situation has erupted (either natural or man- made), relief actions should, apart from their primary objective of saving the lives of victims, take account of the longer term objectives of reconstruction and development; the way in which, for countries in a post-emergency phase, rehabilitation actions should be undertaken so as to ensure the most effective transition from emergency assistance to long term development The "backward" and "forward" linkages between political, development, relief and rehabilitation operations constitute a complex network of relationships, which has to be examined within the global policy framework or strategic planning policy, which is a dynamic function of the specific situation of each country or region. In other words, the components iv of the RRD-linkage and their design are highly situation specific and should be considered in the light of the "hic et nunc" realities of the country or region concerned. This means also that the structure of the document should be seen in this light, in a holistic way. The fact that it starts with relief, followed by rehabilitation, subsequently by development, including a political approach to the aim of structural stability, does not mean that the so-called RRD-continuum is to be considered in this linear manner. As indicated before, reality is more complicated and requires a multi-faceted approach, based on the real situation of each country or region under consideration. If GLOBAL STRATEGIC PLANNING POLICY is the first keyword in the recommendations made in this document, the second one is : COORDINATION. Also institutionally a holistic approach is required : coordination between donors, as well as internal coordination between services is a prerequisite for efficient policy and action, but can only operate successfully in the framework of this overall strategic plan of action. In addition TIMING is of the essence and procedures should be adapted, where necessary, to the requirements of appropriate timing and a smooth handover and articulation between the different aid approaches. Indeed the existence of rapid decision procedures is necessary at all stages of the relief, rehabilitation, development continuum if momentum is to be maintained both on the donor and the beneficiary side. In many cases a loss of momentum at a critical stage can plunge a country back into crisis, resulting in even higher donor spending in the future. Procedures must be flexible enough to prevent this happening. (iv) Recommendations Global policy frameworks should be prepared for each country and region, with the overall aim of achieving in due time "structural stability" and based upon a detailed analysis of risk and vulnerability. These frameworks should draw together economic, social, (including gender,) and political (démocratisation, human rights and the rule of law) factors in development and define more clearly linkages between relief, rehabilitation and development. As a first step, a pilot exercise should be undertaken for a representative sample of countries, which are particularly prone to the risk/tensions of political, economic and/or natural disasters. Conflict prevention, by which is meant the broad range of policies to anticipate and react towards the social, economic and political factors which could result in a breakdown of society. This concept should be considered within the broader sense of "peacebuilding" and be treated as an intrinsic element of these global policy frameworks. Political analysis capacity must be enhanced, in order to focus on structural root causes of conflict, identify potential trouble spots and translate analysis into timely political actions at the level of the Union. Political reports of EC delegates, based on coordination with EU Member States' representatives on the spot, are key contributions to this analysis and should be adapted to the new requirements. Intensified political cooperation and development coordination with Member States and other donors, at HQ and field level is an essential element of the above process. Internal coordination will be enhanced by the creation of country Task Forces, at HQ and field levels, consisting of officials from departments dealing with relief, rehabilitation, development and political relations. Country specific relief impact analyses will be undertaken in situations where humanitarian assistance is likely to be required beyond the immediate short term, in order to take account of longer term objectives so that humanitarian aid becomes as effective as possible. Training in such analyses will* be undertaken. Rehabilitation planning strategies in post-emergency situations must be developed, including assessments of the causes of crises, evaluation of constraints and structural weaknesses highlighted during the emergency phase - specific tools for situation analyses have to be further elaborated. This must be accompanied by the application of appropriate rules and procedures allowing rapid and flexible response to ensure effective bridging with relief assistance. Disaster preparedness programmes should be given increased prominence within longer term development programmes and policies. Macroeconomic planning and economic reform programmes should include considerations of risk and vulnerability to natural and manmade disasters during their design and implementation. For the Community, this also means that risk and vulnerability should be taken into account in programming of Community assistance. Sectoral policies and programmes must also build in risk and vulnerability as key factors in design and implementation. vi LINKING RELIEF, REHABILITATION AND DEVELOPMENT (LRRD) 1. HOW CAN RELIEF ACTIONS TAKE BETTER ACCOUNT OF DEVELOPMENT REQUIREMENTS/OBJECTIVES : DEVELOPMENT ASPECTS OF EMERGENCY OPERATIONS. 1. 1 Introduction The explicit aim of humanitarian aid is to save and preserve the lives of victims of emergency situations. Agencies involved in relief are obliged on humanitarian grounds as well as by their mandates and public opinion and the media to save lives irrespective of the lack of preventive actions, the poor state of preparedness against natural disasters or prevailing social, economic and political conditions in the crisis areas. Since the humanitarian aid of the Commission is non-political and often demand-driven, it is difficult to define very specific goals for its operations beyond saving lives. Although in such situations, the long-term perspective must come second to saving life, it is nevertheless extremely important to keep sight of the longer-term view. Indeed, the short- term and long-term perspectives in relief operations can sometimes be conflictive: what makes good sense in terms of saving lives may conversely make longer-term solutions harder to attain. For example, in certain major refugee crises it is expedient to set up laige refugee camps. Logistically this may be the only way for foreign relief agencies to quickly feed and shelter the large numbers of people at risk. Once the camps are established (almost by default), they may attract more people than intended (the pull-factor), they may discourage refugees from going home, give rise to epidemics and internal security problems and can very often destroy the local environment and alienate the local population. All these elements have been experienced in the huge refugee camps outside the borders of Rwanda. Another example of the conflict between short-term and long-term consideration in humanitarian actions concerns woridng closely with local administrative systems and local NGOs. In major crisis situations, the local structures are often destroyed or totally overwhelmed, and the international relief agencies set up their own systems to procure and distribute humanitarian aid. When relief agencies leave, an administrative vacuum may arise which can make rehabilitation very difficult and which can even affect political stability (e. g. in Somalia). It is obviously a challenge - and a very difficult one - for all relief actions to try to involve local institutions (official, NGOs or community based structures) in planning and implementation so that they are ready to take responsibility when the international attention is gone. There are two main ways to deal with the conflict between the short-term and long-term perspectives: (a) improved awareness of the impact (short and long term) of humanitarian actions, on the part of humanitarian actors (local and foreign); (b) organisational coordination (links between humanitarian-development aid branches, headquarters-field, between international and local structures, etc). donor-implementing agencies, donor-donor, links 1. 2 The Ideal Relief Model The basic elements of the ideal relief model are the following: (1) Relief should not undermine development (all relief operations, even the most urgent ones, should be carefully planned to protect development assets, e. g. tools, seeds and livestock). (2) The basic principles normally applied in development projects should be applied to relief: Relief should be integrated into existing government structures or (if these are absent or party to the conflict) into independent local NGO operations and/or beneficiaries' own representative structures, thereby ensuring the participation of the beneficiaries of aid. Relief should be flexible in such a way that relief items and distribution systems match local culture and society. Relief should pay special attention to the gender dimension by taking into account the division of labour between men and women which is likely to be even more important under emergency situations. Relief should be predictable and should not be terminated in an abrupt or premature manner. (3) Relief should be immediately followed up by and where possible implemented in parallel with rehabilitation and reconstruction programmes in order to ensure a smooth "continuum" on the way back to a long term development process. Against this conceptual model, the actual programmes of relief agencies are often criticised as being mediatic, short-term and short-lived, top-heavy, centralized, standardized, resource- intensive, donor-dependent and neglecting local administrative structures and social mores. Although relief agencies may be well aware of these criticisms, they may have difficulties in addressing them all because of the framework in which they work: lives must be saved, time is short, highly specialized partners are implementing actions, the mandates for follow-up actions belong to development agencies or departments whose procedures and resources are not always suitable for ensuring a smooth transition from relief to development. 1. 3 Natural Emergencies Pure natural disasters are less common than generally thought. In Third World countries man-made factors exacerbate "natural catastrophes", e. g. droughts are often combined with civil wars (Horn of Africa). Even in a "regular" drought situation, the real cause of the hardships suffered by victims in affected areas can be existing structural problems and abject poverty. In such crises the whole socio-economic and political structure of a country needs an overhaul. The lack of rain is often simply the straw that breaks the camel's back. A key factor which is important to keep in mind in dealing with long-term relief following droughts, is local purchases of food. It is extremely important to monitor the impact of aid on the local food price mechanisms to avoid distortions which could affect future production. The use of local markets and institutions in food aid distribution must also be examined. At the on-set of each crisis, and in parallel with any relief operation, efforts must be made by relief donors to ensure protection and/or supplies of development assets such as livestock, seeds and tools. Limited natural disasters such as floods, earthquakes and tropical storms often put exceptional demands on donors and relief agencies to provide relief very quickly. When the crisis strikes it is too late to build up a management capacity within local government structures. The answer to this is preparedness programmes in order to test local government structures, identify relief supplies and stock-piles (local or international). Officials and local representatives should be trained to handle a major disaster and to cooperate with foreign agencies, if necessary. The value of preparedness programmes is accepted, but donor support towards these programmes is still limited. 5 MECU was made available in 1995 by the Community budget for these purposes. This should, however, be regarded as "seed money" to stimulate disaster prone countries to give greater attention to this approach in their long term development programmes and policies. Many "development" programmes funded by the Commission have disaster prevention, mitigation or preparedness as implicit objectives. 1. 4 Man-Made Emergencies Man-made emergencies are used here to describe emergencies which involve violent conflict. However, it must be made clear that many so-called "civil wars" and "ethnic conflicts" have also been given a misleading label as is the case for "droughts". The underlying causes for these crises are often structural economic and social problems. In many cases local political and economic conditions do not give much hope for reform in the immediate future. We have many examples of this type of situation in Africa, Central Asia and in the Caucases. Humanitarian aid can address the symptoms when severe conflicts break out, but does not have the means to address the root causes. Neither humanitarian nor development resources suffice for a global long-term mitigation of abject poverty in the foreseeable future. A global response is required including, in particular, appropriate policy reforms by the Governments concerned. However, if humanitarian aid can in some situations defuse an explosive situation, this in itself may pave the way for development agencies to help and/or for the local authorities to assume responsibility for reform and development. Relief supplies may reduce tensions, when they can ease competition between population groups in search of scarce primary necessities. One such example is the rehabilitation of Sarajevo's water supplies, which has helped to reduce tension between different sections of the city. Even where an uneasy peace is established, some problems remain, most notably that of landmines, the elimination of which remains a top priority for action by the international community. Another difficulty which must also be kept in mind is the increasing politicisation of humanitarian aid. In structural crises, humanitarian aid can easily be seen as supporting rulers whose shortcomings in terms of providing for their people would otherwise be exposed. Care must be taken to associate relief in these cases with other types of support attacking the root causes of the structural crises, including "democratic deficits". In open conflict situations humanitarian aid can be interpreted, not only as saving and preserving lives, but also as "meddling" in the conflict itself. Humanitarian aid may fall into the hands of warring parties. This means that humanitarian relief can be often regarded by one party as supplying their enemies. Consequently, humanitarian agencies become unwanted and their local distribution could be subject to violent attacks. In some cases, local warlords have seized humanitarian aid supplies, either to prevent it falling into enemy hands or simply to supply their own soldiers (e. g. Ex-Yugoslavia and the Horn of Africa). This situation raises important questions about the possible need for military protection of victims and humanitarian aid workers in certain situations. 1. 5 Country-Specific Impact Analysis A solid long-term perspective of relief operations can only be assured if a clear impact analysis is made before relief actions are implemented (especially in case of chronic crises). Such country-specific impact analyses in man-made and natural crises consist of several elements beyond the traditional, and still the most important, short-term objective of saving and preserving lives: (a) (b) (c) (d) (e) The role that relief can play in quickly covering basic human needs, e. g. food, health, shelter and education, which in itself may reduce tensions and promote a climate of conciliation. How beneficiaries could play a more participatory and active role ? How effective humanitarian aid could be not only in covering basic needs but improving, for instance, nutrition levels ? This political analysis includes an examination of whether relief affects or is affected by the local security situation. Does humanitarian aid affect population movements? e. g. do we for the sake of logistical expediency establish camps and other centres which are disastrous for long-term settlement and development ("pull-factor" into refugee camps in Afghanistan)? What is the social impact of humanitarian aid? e. g. does humanitarian aid have a negative long-term effect against certain ethnic groups, age groups or a particular gender and how does humanitarian aid inter-relate with other demographic factors? How does humanitarian aid influence the division of labour between men and women and specifically women's responsibility for productive labour, which is likely to intensify under emergency situations? The central role of women must recognised and women must be reasserted in the decision making process, planning, management and distribution of relief assistance as the best way of ensuring that relief reaches the most vulnerable. What is the short-term and long-term economic impact of humanitarian aid? e. g. an analysis of how relief affects local markets, price mechanisms and supplies is always important. Environmental consequences is now regarded as an essential element in any impact analysis. Environmental destruction has already had severe consequences for the host population in and around many refugee camps (e. g. around Rwanda). Could we finance and promote the use of alternative sources of energy in a more environmental friendly manner thereby avoiding tree- cutting ? (f) The impact analysis should always include a section on how relief affects local administrative structures. Future reduction of vulnerability and shock absorption capacity depends on strong permanent local structures. Local government structures and local NGOs and community groups have their complementary roles to play as long as this does not endanger humanitarian aid principles of impartiality and neutrality. If local government is absent, local NGOs could be engaged. If local NGO's lack experience and capacity they can work with, and at the same time receive training from international NGOs in order to improve their capacities in the long term. Obviously, the international NGOs must be encouraged to accept greater responsibility for local partners. At the same time, care must be taken that levels of pay offered by NGO's do not become disproportionately high compared to local administrations, thereby leading to an exodus of staff from the latter. (g) In general the impact analysis must always ascertain that implementing partners have clear ideas of how to follow-up relief operations. Relief agencies should feel responsible for long- term consequences of their actions and for ensuring a smooth transition to the post relief - operations even if it involves other agencies or organisations. Once an impact analysis with these and other elements has been carried out (within the time and the resources available), account can be taken of longer term objectives in the planning and implementation of each relief operation. This in turn will help relief donors, implementing agencies and field workers to keep the long-term perspective in mind from the start of each "relief operation". Once the routine of solid impact analyses are available, the Commission will be in much better position to work out a "Relief Code of Good Practices" aimed at improving all aspects of relief work. 1. 6 Organisational Aspects However, a detailed impact analysis and the formulation of clear goals can not be done in isolation. The organisations involved and their staff must be equipped to carry out these tasks. First of all, relief and development staff need guidance and training so that long-term consequences of relief for development becomes a natural reflex in preparation of all relief actions. When dealing with crises-ridden countries, in countries with severe structural imbalances, in countries which are prone to ethnic problems and in countries often affected by natural disasters, the Commission is in the process of creating Task Forces as a flexible coordination structure, composed of officials dealing with humanitarian aid and with longer-term programmes. Planning of relief, rehabilitation, reconstruction and development programmes should be considered by the Task Force, and its members should be informed of individual actions in this context before they are submitted for decision. Follow-up links must be recorded in an accessible form and discussed at regular intervals. Regarding assistance to refugees, internally displaced persons and returnees in third countries, the Commission has already set up a permanent internal coordination structure. In a more general way the Commission, in its meeting of 20 September 1995 has asked its services responsible for different instruments in the external relations field to carry on the efforts already made in the area of coordination in order to ensure maximum coherence between actions financed from different budget lines. To ensure good coordination, not only between Commission services, but also with implementing partners, relevant NGOs and UN agencies responsible for relief and/or rehabilitation and development should be invited to take active part in specially arranged open meetings of the Task Force. The strategy adopted for Liberia is an example of this. Regular weekly meetings of the DG VIII and ECHO staff dealing with Liberia were complemented by quarterly meetings between the Commission and its main NGO and UN partners. Another vital element to improve in the existing organisational structure is coordination with and in the field. In crisis-ridden or crisis-prone countries EC Delegation staff should convene regular coordination meetings with ECHO coordinators and local representatives and implementing partners. Global coordination of all international relief, rehabilitation and reconstruction efforts at field level is of utmost importance. If the United Nations Department of Humanitarian Affairs (DHA) or other UN bodies have set up effective coordination structures at field level, the Commission and other donors must make every effort to take part and support such structures. Within this global coordination framework, coordination between Commission and Member States will take place as normal, in the light of Council resolution of 2 December 1993 on procedures for coordination between the Community and its Member States. In this case the main role of a Field Task Force would be to keep regular contact with the Brussels Task Force and vice-versa to ensure that all plans, initiatives and actions within the field of relief, rehabilitation and development are properly linked. On the other hand, if in a given crisis situation there is no appropriate global coordination in place (between actors involved in relief, rehabilitation and reconstruction), the Commission will have to coordinate the activities funded by the Community. This should be done by the Field Task Force in an open-ended manner together, to the largest extent possible, with interested EU Member States, other donors, UN and other relief agencies, NGOs and local structures. The EC Aid Coordination office in Monrovia is a good example of a "one stop shop" for aid to the victims of the crisis in Liberia. Finally, the Task Force in Brussels should take steps in a similar way to ensure proper coordination of all plans and initiatives with other donors, especially the relevant EU Member States. This proposal for the setting up of task forces does not apply only to countries in which crises have erupted but also to disaster prone countries throughout the RRD continuum. 2. REHABILITATION - POST CRISIS ASSISTANCE Rehabilitation may be defined as an overall, dynamic and intermediate strategy of institutional reform and reinforcement, of reconstruction and improvement of infrastructure and services, supporting the initiatives and actions of the populations concerned, in the political, economic and social domaines, and aimed towards the resumption of sustainable development. People - both victims and participants in violent conflicts - must be reintegrated into civil society, in its economic, social and political aspects. In other words, the human dimension is an essential feature of rehabilitation. At this stage it is most feasible to ensure integration of the gender dimension. Attention should also be paid here to the changed roles and circumstances of men and women, and the need to address such issues if social integration is to take place. Rehabilitation can also play an important role in those countries on a path towards peace but still suffering sporadic conflict. Rehabilitation can build upon stable zones and aim to extend areas of peace. 2. 1 Rebuilding of Civil Society The reconstruction phase of a country which has undergone a period of conflict must necessarily include the reestablishment of the rule of law and civil society. One of the key elements is the rapid installation of a government and administration able to inspire public confidence and trust and to reestablish economic activities, health and education systems etc. Such an administration must be regarded by its citizens as serving all groups, in order to allay the inevitable tensions which will continue to exist during such a period. From the outset, it is therefore essential that these aspects are not under-estimated, as they will have a determining influence on the reconstruction of the country itself. On the basis of these preconditions, reconstruction efforts should be built around the following axes: 2. 1. 1 Reconstruction and functioning of the rule of law Particular attention should be given to certain guiding principles on which the rule of law should be built, that is, the separation of powers; respect for the rules of good management of public affairs with a view to legality and transparency; the establishment of institutional mechanisms accepted by the main actors, including the importance of clear laws and of institutions which are accessible to the public, and respect for universally recognised human rights, specifically including recognition of the rights of minority groups. It may be that the laws which were in force prior to the conflict can be utilised, provided they are reestablished within a framework of national consensus. On the basis of the particular situation in each country, priorities should be established concerning the specific actions to be put in place. Amongst these, particular importance should be given to the effective and independent administration of justice (cf. actions in favour of Rwanda). This aspect is fundamental to the reestablishment of public confidence and to allow them to rebuild their lives in an environment where they do not feel under threat. 2. 1. 2 Development of Political Dialogue and Public Participation As a basic prerequisite of democracy, the development of political dialogue should not await the arrival of better times before being put in place. From the very beginning, particular attention must be given to allow various groups and minorities to express themselves. Questions such as freedom of association, or the encouragement of political parties should be included in the political agenda as quickly as possible in order that the new administration possesses the necessary transparency. Political dialogue and public participation can only be achieved if civil and human rights are guaranteed, including the opportunity for both men and women to participate on equal terms. At the same time, it is necessary to carry out actions aimed at effective public participation in the exercise of power, through elections e. g. Mozambique, South Africa, as well as economic participation in the costs and benefits of development. In this context, actions in the field of freedom of expression and independence of the media allowing unbiased and informative reporting are essential to allow the forging of public opinion and may have positive repercussions in reducing any continuing tensions. In addition, it will be useful to undertake actions in the areas of training, civic education, support to associations, decentralised cooperation etc. All the actions described above clearly apply not only in the context of rebuilding of the civil society, but also in all situations of transition towards democracy, even when not preceded by a period of armed conflict. The actions may also extend beyond the period of reconstruction itself and be incorporated into longer term development plans. Such actions are essential if external assistance is to have a sustainable impact in the long term. Community actions in these areas can only play a catalytic role in assisting governments to start the ball rolling. It will however, be up to the latter to internalise the process. These issues should therefore be the subject of dialogue set up with each government when rehabilitation and development actions are being planned, and must be taken into account in the global policy framework. One section of the public which may require particular attention in post conflict situations are the ex-combatants. Their demobilisation and reintegration into civilian life may be particularly difficult in countries which have suffered long periods of civil war, and where it may take some time to achieve demilitarisation and a removal of the "culture of killing". Ex-combatant reintegration schemes should preferably take place in parallel with programmes to resettle returnees and refugees, in order to remove any impression that the fact of having carried arms gives any right to priority treatment. Schemes to encourage ex-combatants to give up their weapons have not generally been very successful, and it may be preferable to concentrate on creating conditions under which weapons are not used even though they remain in private hands. Particular attention may be required where the ex-comb attants are women and/or children. 2. 1. 3 The particular case of anti-personnel mines Responsible for the daily loss of human life, anti-personnel mines constitute a serious hindrance to the development of the regions affected: they are an obstacle to the repatriation of refugees and displaced persons, to the utilisation of arable land and to the functioning of infrastructure. Demining, even if it is often considered as a rehabilitation activity, may also well have a humanitarian character or be a component of a long term development process. Furthermore, demining is a political priority for the European Union, as witnessed by the common action recently adopted within the CFSP framework. In view of the magnitude of the problem, it would seem particularly important to aim at a more global coordinated approach and the continuity of the different interventions, in particular in countries where humanitarian, rehabilitation and development activities coexist. The existence of rules and procedures ensuring the necessary rapidity and flexibility of the interventions, whilst facilitating the development of local capacities and guaranteeing a longer term donor commitment, should go hand in hand with efforts to increase coordination and complementarity. 2. 2 How can rehabilitation form a bridge between relief and development In order that rehabilitation can contribute towards the continuity of the transition from the emergence from serious crisis to the resumption of development, certain essential elements of the "continuum" must be in place at the time of the transition period, in particular the existence of a minimum level of security, and the commencement of a transition process which respects democratic values and fundamental freedoms. It is necessary, however, to insist on three principles: rehabilitation should be implemented in a way which is determined by the situation of each country concerned (duration, priorities, gender issues) rehabilitation should be of a transitional nature, and in principle of limited duration, although specific situations may require interventions of longer term; rehabilitation should not simply aim for a return to the previous situation but should prepare, not necessarily in a linear way for the resumption of sustainable development in a better way than before and taking account of the lessons learned from the crisis. Wherever possible, rehabilitation should build upon the achievements of humanitarian assistance by (i) avoiding a significant deterioration in services and infrastructure to which populations have had access during the crisis period and (ii) by conserving and improving local expertise utilised or created during the crisis period. Rehabilitation should, however, aim at the same time to reduce any perverse effects of humanitarian aid by (i) progressively removing the economic substitution role of humanitarian aid, (ii) removing as soon as possible the system of free distribution of goods and services in favour of a system of paying at minimum costs, particularly for those which can be produced locally and (iii) supporting actions in favour of vulnerable groups (demobilised soldiers, orphans, female heads of family, the handicapped) with the aim of reinserting them into economic and social life. In this light rehabilitation should also take into account the psychological effects of exposure to violence, in particular on children. In designing rehabilitation programmes, four factors should be borne in mind to maximise their contribution to the transition process: (i) "leverage effect" Choose actions which are balanced geographically and sectorally, taking account of changes which have taken place during the crises (displacement of population etc). Reorient, complete and accelerate through rehabilitation actions, the implementation of development programmes already underway in the basic and productive sectors. Give priority, in those areas which lend themselves to it, to methods which maximise the involvement of the local population (microprojects, food for work), and make use of small scale credit for the private sector. Put in place appropriate technical assistance both at the level of projects and programmes and at the general level (priority sectors, overall management). This support is especially required for the management of programmes by beneficiary government and NGO structures. (ii) "critical mass" Make available, in a timely way through donor coordination financial resources, taking into account macro-economic forecasts. Implement accelerated and flexible procedures to limit the period of "intensive" rehabilitation during which certain benchmarks should be attained. Decide, on the basis of the situation in each country, the priority sectors, bearing in mind that institutional strengthening, reconstruction and rehabilitation of infrastructure, and the supply of essential goods and services for the rehabilitation period are those linked to production, notably agriculture, and health/sanitation, primary education, access to land, demining and demobilisation. (iii) "continuity of partners" more support for the longer term operations of international and local NGO's which were present at the time of the humanitarian crisis, by associating those which are able to do so with the programming of rehabilitation funds, in the basic sectors, and by insisting during implementation on an approach emphasising viability of actions in the medium term and use of local structures. support basic community groups which have survived the crisis (village associations, women's groups, producer groups, local administrations). support the restructuring of administration in the priority sectors necessary for the planning and management of rehabilitation and long term development programmes, support for restructuring of administrations by concentrating actions on those sectors able to support the process of return to peace and those able to give to the State the minimal means of action, notably at the macro-economic and public finance levels. 10 (iv) " a phased approach" programme and finance actions on the basis of sectoral or geographic "channels" e. g. from supply of medicines under emergency aid to the reorganisation of essential medical supplies, redeployment of human resources and rehabilitation of health centres during rehabilitation; integration and development of these centres within the health pyramid when development aid recommences. give priority to social viability (assimilation) and seek, in the first instance, micro- economic viability. consider, during the various phases of aid programming, rehabilitation actions as important elements in the definition of the priority sectors for support, integrate into the approach the policy elements relating to the campaign against poverty and the macroeconomic context to which the country should evolve by the end of the rehabilitation period. provide a conducive environment for the recovery of production and trade; initial activities under the macroeconomic framework should focus upon ensuring the functioning of basic exchange, trade and banking services and on rebuilding institutions for basic macroeconomic management. determine the conditionality criteria which are necessary for the success of the rehabilitation programme and with a view to the recommencement of development (political, economic or specific eg. demining) and make them effective through dialogue on (sectoral) policies. • 3 HOW CAN DEVELOPMENT ACTIONS TAKE BETTER ACCOUNT OF THE RISK OF EMERGENCIES: EMERGENCY ASPECTS OF DEVELOPMENT OPERATIONS 3. 1 The macro-economic context Violent conflicts and natural disasters can wreck development plans. The explicit consideration of the risk of natural and manmade disasters when formulating development programmes can greatly increase their chances of success. In practice, however, such risks have in general not been considered explicitly in macro- economic planning, nor in the preparation of structural adjustment programmes. Yet, a recent study on crises forcing the adoption of IMF stabilisation programmes in Africa indicates that drought or other natural disasters had been "an important, perhaps dominant" factor in over one third of these programmes. At the macroeconomic level three basic principles should therefore be borne in mind: (i) (ii) economic reform programmes should take account of the vulnerability of countries to disasters, natural or manmade. This should influence both the pace of reform and flexibility in the utilisation of performance indicators. good economic management in countries prone to disasters requires systematic provision for resources and capacities to improve disaster preparedness. This should be reflected in the government budget and taken into account when preparing economic reform programmes. economic reform programmes must ensure that basic social services (health, education, water supply and sanitation) continue to receive adequate funding. 11 For the Community, this also means that risk and vulnerability should be taken into account in programming of Community assistance. The following sections look in more detail at practical ways of addressing the risk of natural and manmade disasters in development policies on a sectoral basis. 3. 2 The sectoral context In practice, all sectors must deal with risk and vulnerability. Here, two sectors - food and health - are given as examples, bearing in mind their particular importance within the LRRD context. 3. 2. 1 The Food Sector: Food Aid and Food Security 3. 2. 1. 1 General Orientations The Community food aid and food security contributions are growing in importance within its development aid policy and the Development Council Resolution of 25 November 1994 has confirmed the following orientations: integration of the role of food aid as one component of long term food security (at household, national and regional levels) in food insecure countries; the inclusion of food security policies within the general framework of poverty alleviation and their long term impact in development; the need for sectoral policies to meet food security objectives and to develop coherent long term food security strategies; the reinforcement of the linkage between emergency, rehabilitation and development operations; 3. 2. 1. 2 Emergency-Rehabilitation-Development: a dynamic approach to food crises. Community food aid and food security operations are frequently confronted with complex situations in which different types of crisis exist alongside one another. These reflect the extent to which the conditions of supply (availability of supplies in the marketplace) and demand (level of income giving access to food) have deteriorated. A simple structural food shortfall combined with balance of payments difficulties can quickly turn into a situation of endemic poverty where the population is totally dependent on aid for its survival. Food security should therefore be defined, not in static, but in dynamic terms, as a set of supply and demand conditions (availability of food and access to it) providing a starting point from which urban and rural households can begin to build up reserves (stocks, cattle, savings), develop more reliable means of production or ways of increasing their income and organise a more reliable social safety net. The upshot of all of these steps is to reduce people's vulnerability to food crises. Below a certain threshold, however, urban and rural households are obliged to eat into their reserves, fall back on their support network or even sell off their means of production - in short, increase their level of vulnerability. Above this threshold, people are embarked on a development pattern, which well-designed 12 aid (which does not include food aid in kind) can help to speed up. Below this threshold, however, a process of impoverishment takes place which can lead to economic and social degradation, extreme dependency and increased mortality, which become more difficult to reverse, the longer it is allowed to continue. This is the prevention or risk reduction phase. At this stage, food aid and food security operations should aim at reducing the level of social and economic vulnerability to food crises, which in turn will reduce the risk of food emergencies. Rapidity is crucial as ill-considered or belated responses can result in greater dependence. The lack of success in reversing the tide of growing dependence, caused by increasing social breakdown, partly explains why a number of cases have remained bogged down at the humanitarian aid stage. The rehabilitation phase consists of restoring productive capacities and providing everyone with a certain access to basic means of production (lands, seeds, tools). In view of the complexity of crises, only interventions which are adapted to each type of crisis can provide an adequate response to crises of different natures. No food aid and food security action can be viable if it is not closely associated with development operations capable of reactivating the process of income creation and development. For this reason, it is essential to establish a global policy framework and common strategy. 3. 2. 1. 3 Food Security in the framework of Prevention/Mitigation of food crises Economic instability within some countries can lead to food insecurity and eventually social conflict. Such "potentially at risk" countries merit particular attention and should be the target of measures which contribute towards improved food security. Such measures essentially aim at promoting household food security at local, national and regional levels; they thereby permit a reduction in vulnerability during times of crisis and facilitate the implementation of rehabilitation and development operations. Gender issues are of particular importance due to the potential for disaster in the absence of a system of distribution which effectively reaches the intended beneficiary population. Amongst the food security assistance programmes which can contribute to crisis prevention, one may cite: village food stocks as well as national and regional food security stocks; actions in support of emergency planning; livestock production; rural credit; added value to local production; risk reduction mechanisms; support to agricultural policies; promotion of private sector; local and interregional trade; labour intensive projects, employment generation schemes establishment of information systems (data bases, early warning systems) which principally aim at detection of food crises sufficiently early to be able to supply food aid in a timely way. One of the key elements for crisis prevention and for the efficiency of assistance programmes 13 (emergency aid, rehabilitation) is the availability and quality of Information Systems. The collection, processing and distribution of information and analyses of higher risk countries allows for the strengthening of early warning capacity and the identification of the best form of responce to be provided. The Commission intends to expand for the most food insecure countries, its capacity to collect, process and analyse information through the establishment of information networks which will be based on i) existing information systems and ii) a European team of experts. The aim of the system is to provide in the shortest possible time, relevant information for decision making at the time of crises. 3. 2. 1. 4 Organisational/Procedural Aspects Community policy in the area of food aid is structured around (i) the integration of food aid as a long term food security instrument within the overall of the Community's development policy framework; and (ii) the insertion of food aid as one of the elements of humanitarian aid policy. The division of responsibilities between the different services, both from the viewpoints of Community development policy and that of humanitarian aid is based on the following principles: food aid actions which are specifically humanitarian in character are under the responsibility of ECHO; food aid actions of a developmental or structural character, support for food security or other food aid actions which include a developmental element, are implemented by the Food Aid/Food Security Unit in agreement with the competent geographical services; in case of serious food crises or humanitarian crises with an important food element, the entirety of Community aid instruments will contribute towards a intervention, such intervention being assured by the Food coordinated Aid/Food Security Unit in the case of food crises, and by ECHO for humanitarian crises. a permanent coordinating mechanism is ensured between the services in order to guarantee a maximum coherence and coordination, and to permit the most efficient and smooth transition between humanitarian actions and those of rehabilitation and development. Presently existing arrangements allow for the establishment of a policy framework, or a common strategy well suited to the reality of each country, the establishment of a body of procedures for appraisal, management and follow-up, as well as the build up of internal expertise in areas as complex and diverse as early warning systems, harvest estimates, food product markets (Community and international), transport, storage, etc. In the present situation, it is necessary to progressively harmonise structures and procedures 14 for management, control and follow-up of all food aid/food security operations. The unified nature of our policy, the common regulatory framework, a coherent overall strategy adapted to each geographical area should ensure a coherent approach for our interventions, the best use of resources, the reinforcement of expertise within the Commission as well as the improved effectiveness and efficiency of Community aid, notably within the RRD continuum. 3. 2. 2 The Health Sector Health is at the centre of all emergency situations (natural disasters or man-made conflicts). Reliefs primary objective is to cover essential needs of populations affected by crisis: saving lives and reducing human suffering through appropriate medical care is a basic component of this relief strategy. The nature and quality of response to basic health care needs linked with emergency situations will depend on effectiveness of existing health structures: weaknesses in terms of organisation of health services, availability of essential médecines (including vaccines) could make the crisis worse (for instance influence the spread of epidemics). Also inequity or inaccessibility to health services for important segments of the population could lead to social discontent and eventually to civil unrest. In this context the need for early gender analysis to identify differing needs and constraints is acknowledged. Moreover, poor conditions or performance in terms of environmental health (for instance limited access to water and sanitation, poor housing conditions or structural malnutrition) will also constitute aggravating factors in emergency situations. Structural support to the health sector should therefore take into account more systematically prevention and management of emergency situations. 3. 2. 2. 1 General Orientations In the health sector, the new policy orientations and strategic priorities laid down for the Community and Member States (Council Resolution of May 1994) are based upon the following essential objectives: - support to the development of an environment more favourable to health - support to the organisation of health systems with priority to the development of basic and primary health services - strengthening of preventive activities - more rational and equitable mobilisation of national resources - support to institutional reform through reinforcement both at central level (planning, legislation, management) and at regional and local level in order to improve national health coverage - support to community initiatives in health Through actions in support of these objectives, more emphasis should be given in assisting countries to: - better identify risks and risk factors, foresee the onset of crisis or emergency situations 15 - prevent the outbreak of crises or reduce the extent of emergency situations. - facilitate and accelerate the return to a normal situation after the crisis. 3. 2. 2. 2 Better identify the risks and foresee crisis situations This consists essentially, through the transfer of knowledge and experience, of methods and techniques, and through permanent dialogue, to help countries to build up their own capacities to analyse situations, evaluate and foresee risks and future prospects. Depending upon the particular requirements of each country, particular assistance can be given to the following elements: (i) development of epidemiological surveillance, establishment of health information systems and early warning systems. Such support aims to assist the country to plan and implement simple low cost systems, which are sufficient to collect, process and distribute epidemiological data (also including demographic data, sociological information, data on health services, nutritional situation etc). At the same time it consists, particularly through training programmes, to develop local capacity to analyse data and foresee risks. (ii) development of capacity to identify risk factors and the most vulnerable areas and populations: specific attention should be paid on population in urban settings and to the urban poor in particular, as well as the specific needs of women and children. This implies the development of national research capacity through training, institutional support, and more direct organisational support and financing of studies and surveys. 3. 2. 2. 3 Contribute to prevent the outbreak of crises and/or reduce the extent of emergency situations Efforts should be directed to reduce the factors and sources of risk and to improve the organisational capacities to respond more rapidly and efficiently in crisis or emergency situations. In the short term: - support to the establishment of basic structure, methodologies and means to intervene rapidly in epidemic situations. Methodologies for rapid assessments of health needs in emergency situations have been developed by different organisations (ICRC, WHO etc. ) which should be disseminated at country level for appropriation by relevant national authorities. In the medium term: - to encourge social cohesion through improved physical and financial accessibility to health services. In this context, support to the efficient supply and distribution channels for essential medicines, including vaccines could improve the quality of 16 response to emergencies, (epidemics. ). At the same time support to decentralisation and to district health policy allows an improved health coverage in times of crisis, enabling minimum supplies of services to be guaranteed (e. g. Zaire). Further efforts should be developed to improve access and coverage in periurban areas, taking into account gender and child specific needs. In the long term: - to create a more favourable environment for health, to develop primary prevention e. g. by improving access to drinking water, nutrition standards, urban development, education, promotion of women etc. 3. 2. 2. 4 Facilitate the return to a "normal" situation Rehabilitation and development strategies in a post emergency situation should be based on an analysis of the health sector in order to: - identify weaknesses in the structure, organisation and performance of health systems brought to light during crisis situations - evaluate the responses and actions financed during emergency situations as well as the roles and performance of the different actors (Government - NGO - international organisations). On the basis of this information, a rehabilitation strategy can be sketched out covering long term requirements for restructuring the sector (improvement of environmental health organisation of the health system, medicines, human resources) as well as immediate needs to respond to demand for health services. This may imply the follow-up of assistance, financed under emergency aid, notably through NGO's adapting their programmes and strategies towards restructuring of the health system. 4. MAN-MADE EMERGENCIES : A POLITICAL APPROACH3 The process of economic development necessarily involves social and political changes, superimposed upon often rapidly evolving demographic and environmental situations. In such a dynamic process, the costs an benefits of change may be unequally distributed amongst the population. In the absence of specific mechanisms to address the grievances of groups which perceive they have been adversely affected, and means to deal with such issues, tensions can 3 This section contains some relevant key ideas of the Communication from the Commission to the Council on "The European Union and the issue of conflicts in Africa: Peace-building, conflict prevention and beyond", adopted by the Commission on 6 March 1996. 17 rapidly build up, often aggravated by natural disasters, ethnic differences or economic dislocations. In such circumstances these tensions can easily degenerate into violent conflict. The growing number of violent conflicts since the end of the cold war represents a major challenge to the international community. Most of these conflicts are intra-state wars, directed mainly against civilians and often fought by militias that are difficult to control. These conflicts result in increasing human suffering and loss of life, the creation of massive movements of refugees, devastating effects on local and regional economies as well as on the environment, and serious threats to the viability of neighbouring countries and populations. They can even lead to the implosion of states and major humanitarian tragedies. Even though the means available to the European Union are limited compared to the magnitude of the task of effectively preventing, managing, and resolving violent conflicts, the Union should aspire to maximise its leverage through an optimal use of its instruments and resources. This approach should be pro-active because the European Union has not only an important interest but also an important potential for actively addressing this issue. The approach should be comprehensive in so far as the European Community, within its competencies, should address the entire cycle of conflict and peace. While the European Union has to be prepared to respond to situations of violent conflicts rapidly and in a reasonable manner, it goes without saying that effectively preventing conflicts is better than responding to their consequences. As no amount of humanitarian aid and no effective peace-keeping operation will solve a crisis of peace and security, justice and resources in a sustainable way, there is a need to try to go beyond ad-hoc decisions and a policy of damage limitation. Furthermore, responding to the effects of violent conflicts has become an extremely costly endeavour. In view of all these considerations, the prevention of violent conflicts should be at the centre of a comprehensive response of the European Union towards the problem of violent conflicts. Given the complexity of the issue of conflicts, an analytical distinction between different situations of conflict and peace seems helpful. While in each of these situations specific measures move to the forefront, it should be clear that in practice, there is no clear-cut dividing line between the different situations and different measures. As it will be impossible to develop an overall blueprint for action, the following survey of measures that the European Community could take, support or advocate is intended as a general political orientation. Situation without obvious tension This is the situation where the country is seemingly stable and largely quiet but where (structural) sources of potential conflict may be discerned. For example, the constant marginalisation of an important minority or the use of repressive instruments in the absence of effective mechanisms for the peaceful conciliation of divergent group interests. Immediate aims Peace-building: Establishment - under respect of democracy and fundamental human rights - of viable political and socio-economic structures (mechanisms of peaceful conciliation of interests, viable democratic models and so on). Targeted assistance incl. training, education, social and economic cohesion, strengthening human and social development, democracy building, good governance and civil society, institution building etc. , political dialogue, watching changes, voicing concerns. Instruments 18 Situation of tension This is the situation where conflict in society become clearly apparent (social unrest, armed opposition, mass demonstrations etc. ). The gravity of the situation depends not only on the events themselves but also on the existing political and power structures (Is the 'opposition' able to present negotiable demands? Is the government in a position to fulfil them? And so on). Immediate aims Conflict prevention (in the strict sense): Reduction of tensions; prevention of full outbreak of hostilities. Instruments Political dialogue with the parties concerned (missions, preventive diplomacy); advocacy of specific measures (incl. preventive deployment of troops) and/or of specific solutions to the problems; (threat of) sanctions; deployment of observers; own and contribution to other humanitarian / emergency aid (also to prevent refugee flows for economic reasons). Peace-building measures could continue to apply and could even be intensified. They will have most effect if targeted to the heart of the conflict (easing the economic situation of a marginalized group while offering assistance to the government to find a sustainable solution, for example). Open conflict Immediate aims 1 Conflict management: Reducing the threat of vertical and horizontal escalation Instruments (incl. the reduction of immediate human suffering and the handling of the refugee problem). Threat of sanctions (incl. to third countries), political dialogue, own and contribution to other humanitarian / emergency aid, (advocacy of) preventive military intervention; observer missions. Immediate aims 2 Conflict resolution: Ending the hostilities and starting peace Instruments negotiations. Sanctions, political dialogue, advocacy of specific solutions, support for peace initiatives, (advocacy of) peace-enforcement. Post-conflict situation This is the situation where there is no longer organized armed violence. A cease-fire or a peace agreement might of might not yet have been already signed. In any case, the consequences of the war are still present and obvious in a large part of the society (refugees and ex-combatants still in the progress of re-integration etc. ), and it is still uncertain if the situation will deteriorate (back into the phase of tensions or open conflict) or improve (towards a situation without obvious tensions or structural stability). Immediate aims Conflict resolution / peace-building: Successful peace negotiations, return to normality Instruments Demobilisation and disarmament, repatriation and re-integration, de-mining, post-conflict relief and humanitarian aid, rehabilitation, peace-building measures (see above), political dialogue, advocacy of specific solutions, watching changes, confidence building measures, (support for) conflict resolution initiatives, re building of government structures. Central to a comprehensive approach and a more effective engagement in the field of conflict prevention is a broad definition of the term: "Conflict prevention" should not only be understood as easing a situation where an outbreak of violence is imminent ( = conflict prevention in a narrow sense) but also as preventing the occurrence of such a situation ( = conflict prevention in a wider sense). Activities of conflict prevention in a wider sense should be summarized under the term peace-building. Defined as such, a policy of conflict prevention would apply mainly in a situation of tensions. Peace-building measures, by contrast, could apply in all phases of conflict and peace. However, as peace-building measures will generally embrace projects and programmes with the longer-term aim of the stabilization of societies, their impact will be greatest in non-violent situations. 19 A policy of peace-building and conflict prevention is not necessarily dependent on the adoption of new programs or the creation of new institutions. First and foremost, it necessitates the adaption of a peace-building approach in the sense that all measures should take the structural root-causes of violent conflicts into consideration, and should be targeted at the stabilization of societies ('targeted assistance^, in particular at the imbalance of political and socio-economic opportunities between different (regional, ethnic, religious etc. ) identity groups within a given state, the absence of viable mechanism for the peaceful conciliation of the divergent interests of these groups, the need for a government that enjoys widespread legitimacy among the population, and for consensus on key 'national' issues. The design of such measures or programs will be greatly facilitated if a countrv-bv-countrv analysis of structural root-causes of conflicts has led to the establishment of comprehensive policy frameworks that could point to specific measures or priority areas for particular countries and regions, be it in a stable situation, a situation of conflict or in a post-conflict situation. As peace and security are closely interlinked with economic and social development, an adequate combination of political, economic, legal, social, environmental and, as far as helpful and feasible, also military measures of stabilisation should be considered within these frameworks. The establishment of comprehensive policy frameworks will be facilitated through the adoption of an ultimate policy goal, a policy goal that gives a common header to the different 'economic' and 'political' goals (development, democracy, human rights etc. ) of the European Union's policies. Given the fact that (i) experience shows that lack of development is not the only major source of violent conflict; that (ii) the general EU foreign policy aims that can be deducted from the Treaties and the declarations of the European Council could be summarized as helping to foster peace and stability, development, democracy and the respect of human rights; that (iii) those aims are interdependent/mutually re-enforcing; and that (iv) sustained development is often interpreted in a narrow economic sense, the ultimate policy goal could be summarized under the term structural stability. Structural stability is to be understood as a term denoting a dynamic situation, a situation of stability able to cope with the dynamics inherent in (emerging) democratic societies. Structural stability could thus be defined as a situation involving sustainable economic development, democracy and respect for human rights, viable political structures, and healthy social and environmental conditions, with the capacity to manage change without to resort to violent conflict. Working towards structural stability would mean the targeted reinforcement of those factors that enable peaceful change. Operating with the term structural stability in no way implies a major departure from the current policies of the European Union. As it goes without saying that economic development and prosperity are major factors for ensuring non-violent change, sustainable development is a central objective for the attainment of structural stability. Operating with the term structural stability rather means to give expression to the fact that working towards economic development alone is insufficient for an effective policy of peace building and conflict prevention, that the policy goals sustainable development, democracy and human rights, viable political structures, healthy social conditions and healthy environmental conditions are interdependent which implies the need for a comprehensive approach. 20 A pro-active and effective policy concerning the issue of violent conflicts requires a major effort of international coordination and cooperation. Access to and exchange of information and analysis, and the integration of the people concerned into the necessary discussions, is a major problem that needs to be tackled. Within the European Union, it needs also to be ensured that the common development policy is complementary to the policies by the Member States, as laid down in the EC Treaty. The inclusion of conflict analysis and prevention within the policy frameworks will also have implications within the CFSP process. Coherence with CFSP should be ensured at all levels. The difficulties of arriving at a coherent Common Foreign and Security Policy of the European Union should not be underestimated in this regard. In order to address this issue one should envisage an enhancement of the Union's capacity to analyze root-causes of conflict for an effective utilization of targeted assistance. Another key aspect of both man-made and natural emergencies is their regional dimension. which may require specific policy actions at a regional level. For example, conflict in one country may spill over into its neighbours, lending to political and ethnic tensions in addition to massive movements of refugees. In such circumstances, support must be provided, not only to the crisis country but also to those neighbours affected by the crisis. At a political level, support can be given to regional or sub-regional initiatives launched by the countries themselves, with the aim to address crisis situations through political interventions. 21 ANNEX QUESTIONNAIRE on Linkages between Relief, Rehabilitation and Development (LRRD) Actions and Programmes carried out by EU Member States in Third Countries This following summary is intended as a guide to Member States replies to the questionnaire. All Member States received the questionnaire and, where possible, the replies have been completed as a result of clarifications provided during the meeting of experts held on 28/2/1996. The summary is not intended to replace the full replies, but has been prepared so as to facilitate comparisons and to convert the available data into a more manageable form. The summary follows exactly the format of the questionnaire with the replies inserted in table form underneath the questions. The following general comments may help to explain the approach adopted. Reference statistics have been taken at face value; the only adjustment has been to convert the different currencies to ECUs. As regards the organisational and budgetary aspects, it is often the case that the Ministry of Foreign Affairs acts as the umbrella organisation for all aid operations, with in reality different departments taking responsibility for different aspects of aid. This is borne out by the replies to question 2. 2 which indicate a greater divergence than would be expected from the replies to point 2. 1. Member States have not yet formulated specific LRRD policies. However, most have thought seriously about the issues and many are actively preparing policy documents. Such policies will probably be inspired by actual current practice, as despite the absence of any formal guidelines to ensure that relief takes better account of development requirements, this would appear to often take place in practice. Likewise, the absence of guidelines to ensure that risk and vulnerability be taken into account have not prevented Member States acting. Conflict prevention, on the other hand, appears to be an area where Member States have been quicker to formalise and most replied that this is taken into account in the design of development policy. Various examples have been provided by Member States and those which feature in the summary are undoubtedly only a small portion of what has actually been done. a 1. REFERENCE STATISTICS 1. 1 Bilateral and multilateral development aid (not channelled through the EC and excluding humanitarian aid) in 1994 and 1995. Member State 1994 (MECU) 1995 (MECU) Austria Belgium Denmark Finland France Germany Greece Netherlands Ireland Italy Luxemburg Portugal Spain Sweden United Kingdom 466 449 1135 191 6477 4612 8 1845 55 1050 186 * 1084 1300 1732 * all aid (humanitarian and development) Figures quoted are as supplied by Member States N/A N/A 1133 192 N/A N/A N/A N/A 67 470 N/A 1251 1274 1723 2b 1. 2 Humanitarian aid in Third countries (excluding contributions to peace-keeping and in-coming refugees) in 1994 and 1995 Member State 1994 (MECU) 1995 (MECU) Austria Belgium Denmark Finland France Germany Greece Netherlands Ireland Italy Luxemburg Portugal Spain " Sweden 8. 7 N/A 103 27. 9 18. 5 33. 9 5 282 7. 1 52 3. 2 184. 8 213 United Kingdom 1 ' I • Figures quoted are as supplied by Member States 8. 4 N/A 111 23. 3 18. 8 45. 8 N/A N/A 6. 9 54 N/A 14. 5 161. 5 247 1 ' & 2. ORGANISATIONAL AND BUDGETARY ASPECTS Please provide outline of the organisational structure for the management of humanitarian and development aid respectively. In particular, 2. 1 whether a single organisational structure exists, or whether different ministries/departments are responsible for different aspects. If so, please provide details. Member State Reply Austria Belgium Denmark Finland France Germany Greece Different departments Different departments Ministry of Foreign Affairs Ministry for Foreign Affairs - Dpt for Internat. Dev. Coop. Different ministries and departments Different ministries Mainly Ministry of Foreign Affairs Netherlands Different departments Ireland Italy Luxemburg Portugal Spain Sweden United Kingdom Foreign Affairs Department - Development Cooperation Division Different departments Instituto da Cooperaçào Portuguesa (ICP) Administracion Central and decentralised cooperation All aid managed by Sida, a government authority under the Ministry of Foreign Affairs Overseas Development Administration - different departments is 2. 2 whether humanitarian and development aid is provided from different budget sources, subject to different procedures. Member State Different Budget Source Different Procedures Austria Belgium Denmark Finland France Germany Greece Netherland Ireland Italy Luxemburg Portugal Spain Sweden United Kingdom Yes Yes Yes Yes No - international development N/A cooperation budget line Yes Yes Yes Yes No Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes (under review) 3^ POLICIES 3. 1 Has your Government formulated specific policies on LRRD? If yes, please give a brief description below. Member State Reply Austria Belgium Denmark Finland France Germany Greece LRRD working group set up to deal with coordination To be prepared Referred to in Statement of Intent (Danish Development Policy towards the year 2000) Under preparation No Information document exists Not at present Netherland Yes - 1993 Policy document "Humanitarian Aid between Ireland Italy Luxemburg Portugal Spain Sweden United Kingdom Conflict and Development" Policy review under way Under preparation (approval expected in April 1996) Focus on Angola and Mozambique Not at present No specific policies, but efforts made to make humanitarian aid "development promoting". Approach is also foreseen in country strategies. Not yet, but under preparation & 3,2 Is there, in the administration of your government's humanitarian aid programmes, any guidelines or procedures for ensuring that relief take better account of development requirements and objectives (e. g. impact analysis of humanitarian aid as part of operational procedures or evaluation)? Member State Reply Austria Belgium Denmark Finland France Germany Concept of durable development Humanitarian aid tends increasingly to include development consideration (in policy papers) No (results evaluation humanitarian assistance available by mid- 1996) ' No - in practice, this is the role of the "attachés" in the field ; , : _ —, , Yes - instructions issued in 1986 to all embassies (but only really covers straightforward relief aid) Greece No Netherland Guidelines for emergency & humanitarian aid in preparation - Ireland Italy Luxemburg Portugal Spain Sweden includes criteria for long-term effects of interventions No Policy guidelines from 1995 address these issues; specific guidelines are being drafted No, but this occurs informally Occurs informally Policy and guidelines under preparation United Kingdom Exists internally, for rapid-onset disasters only I _ — —_ — —— I. , 1. • i. ' un. — — — _ — — »• II I w 3. 3 Does your Government have any guidelines or procedures for ensuring that risk and vulnerability are taken into account in the planning, programming and implementation of development aid? Member State Reply Austria. Belgium Denmark Finland France Germany Greece These factors are taken into account Yes for bilateral aid Mentioned in the strategy papers - these factors are taken into account in practice No, but these factors are taken into account Will be taken into account in policy review These factors are taken into account No, but these factors are taken into account Netherland The so-called "development test" - involving the evaluation of "risks" in the field of poverty, environment and gender Ireland Italy Luxemburg Portugal Spain Sweden United Kingdom Yes ' No, but these factors are taken into account Taken into account in country strategies Exists but will be further developped 3. 4 Does the conflict prevention play a part in design of your Government's development policy. Member State Reply Austria Belgium Denmark Finland France Germany Yes - policy paper exists Yes - mentioned in strategy papers Yes - strategic outline paper Will play a more important role in the future; policy paper under preparation Greece Yes - in the majority of cases Netherland Yes - see "Humanitarian Aid between Conflict and Ireland Italy Luxemburg Portugal Spain Development" Will become more important with policy review Yes_. Yes - in practice support is linked to these issues Mainly through multilateral projects Sweden United Kingdom Yes - policy paper will be ready in November 1996 Will play a larger role in the future/ draft non-paper exists • *> 3. CONCRETE EXAMPLES Please provide, if possible, some recent examples of actions/projects/programmes, funded by your Government, involving linkage between relief, rehabilitation and development. If useful, kindly use the format annexed to this questionnaire. Member State Reply Austria Belgium Denmark Finland France Germany Greece Guinea - move from crisis management of health sector to a more intersectoral longer term approach Bosnia - evolution of building project; involvement of local population Netherland Transfer of responsibility from emergency to structural depts. in Ireland Italy Luxemburg Portugal Spain Sweden United Kingdom Cambodia, Palestinian Entities, Eritrea and Angola Examples of integrated projects provided Rehabilitation programmes in Mozambique Examples in Haiti, Angola, Rwanda, Guatemala and ex- Yugoslavia Cambodia, West Bank and Gaza transferred from Humanitarian to Development department in 1995. More aid to Angola and Mozambique now comes from development budget Examples in both the way all assistance is managed within ODA, how strategies are set and in the type of activities implemented (Angola, Sierra Leone, Afghanistan, Sri Lanka,etc. ) Case study 1 : Health Transitions Project in Angola : Managing the transition between emergency aid and development. Case study 2 : The Angola Development Fund : Providing Development Assistance during an Emergency 31 ISSN 0254-1475 COM(96) 153 final DOCUMENTS EN U Catalogue number : CB-C0-96-163-EN-C ISBN 92-78-02568-2 Office for Official Publications of the European Communities L-2985 Luxembourg &

Proposal for a COUNCIL REGULATION (EC) introducing transitional measures into Regulation (EC) No 1626/94 laying down certain technical measures for the conservation of fishery resources in the Mediterranean

http://publications.europa.eu/resource/cellar/1b859fbe-a9c0-4d57-a914-b788f2b610a0

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30. 04. 1996 COM(%) 128 final 96/0091 (CNS) Proposal for a COUNCIL REGULATION (EC) introducing transitional measures into Regulation (EC) No 1626/94 laying down certain technical measures for the conservation of fishery resources in the Mediterranean (presented by the Commission) EXPLANATORY MEMORANDUM Regulation (EC) No 1626/94, adopted by the Council on 27 June 1994, laying down certain technical conservation measures for Mediterranean fishery resources sets inter aiia minimum catch sizes for certain species and minimum net mesh sizes. Its entry into force on 1 January 1995 has brought specific problems for Italian fishermen in the Adriatic, particularly for hake and red mullet. Use of the mesh sizes permitted by the Regulation entails capture of a large proportion of fish below the minimum size that the Regulation itself imposes and these have to be discarded into the sea. These problems are aggravated by the presence of fishermen from non-Union countries competing for the same fishing grounds, species and markets, but who are not subject to the same restrictions as regards fish size. The solution is to introduce temporary derogations from the rules causing these problems in the Adriatic. The aim of these measures is to permit the fishermen concerned to adjust their activities gradually to the rules in question, reducing catches of small-sized fish to a minimum by the gradual alteration of fishing practices. in its resolution of 5 April 1995 considered it indispensable also that Parliament Regulation (EC) No 1626/94 be amended to enable the Italian regions concerned to implement it correctly. The Commission has accordingly drawn up a draft Regulation transitional provisions as follows: introducing certain Authorization is granted to take fish below the minimum size. The derogation is subject to: a quantitative ceiling of 30% of the total catch in terms of individual fish numbers; a time limit: adjustment is to be a two-stage operation resulting in the application of the general rule on 1 January 1999; a restriction in terms of its scope meaning that it covers only catches of hake taken by trawl and red mullet taken by bottom trawls in the Adriatic Sea. Provision difficulties might arise. is made for extending the derogation to other areas where similar The Community rules on marketing in the area concerned are amended accordingly. PROPOSAL FOR COUNCIL REGULATION (EC) No of introducing transitional measures into Regulation (EC) No 1626/94 laying down certain technical measures for the conservation of fishery resources in the Mediterranean THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof, Having regard to the proposal from the Commission1, Having regard to the opinion of the European Parliament2, Having regard to the opinion of the Economic and Social Committee3, Whereas application in the Adriatic Sea of the provisions of Council Regulation (EC) No 1626/94 of 27 June 1994 laying down certain technical measures for the conservation of fishery resources in the Mediterranean4 has brought about specific difficulties linked to the inevitable capture of a large proportion of undersized fish, particularly hake and red mullet; Whereas these difficulties are aggravated in the Adriatic by the presence of vessels flying the flag of non-member countries which are competing for the same stocks and the same markets but which are not required to observe the same technical rules as apply to Community fishermen; Whereas it is necessary to find solutions that are not detrimental to the purpose behind the rules that entered into force in 1995, i. e. improvement of resource conservation in the Mediterranean; whereas temporary derogations, applicable to the Adriatic Sea, should therefore be introduced from the provisions on minimum fish sizes set in Annex IV to Regulation (EC) No 1626/94; Whereas the purpose of these temporary derogations is to enable fishermen in the Adriatic to adjust gradually to the introduction of more selective measures, in particular where catches of hake and red mullet are concerned; O J No L 171, 6. 7. 1994, p. l. 3 Whereas on 5 April 1995 the European Parliament adopted a resolution advocating amendment of Regulation (EC) No 1626/94 so that its provisions could be applied by fishermen in the Italian regions; Whereas a similar situation could arise in other areas of the Mediterranean; whereas a procedure should be adopted under which the provisions of this Regulation could be extended to those areas; Whereas specific provision should also be made as regards marketing of the species in question in the Adriatic coastal zones of Italy, HAS ADOPTED THIS REGULATION: Article 1 Article 8(1) of Regulation (EC) No 1626/94 notwithstanding, all catches of hake (Merluccius merluccius) and red mullet (Mullus spp. ) taken in the Adriatic Sea by bottom trawls may include fish smaller in size than indicated in Annex IV to that Regulation, on the following terms: - up to 31 December 1996, for hake retained on board, the number of fish of a size between 14 cm and 20 cm may not exceed 30% of catches. This minimum length is raised to 17 cm for the period 1 January 1997 to 31 December 1998; - up to 31 December 1996, for red mullet retained on board, the number offish of a size between 7 cm and 11 cm may not exceed 30% of catches. This minimum length is raised to 9 cm for the period 1 January 1997 to 31 December 1998. Article 2 For the purposes of Council Regulation (EEC) No 103/76 of 28 January 19765, the minimum marketing size for hake in the Adriatic coastal zones of Italy shall be 14 cm up to 31 December 1996 and 17 cm for the period 1 January 1997 to 31 December 1998. Article 3 The derogation specified in Article 1 may, at the adequately grounded request of a Member State, be extended, in accordance with the procedure laid down in Article 18 of Council Regulation (EEC) No 3760/92 of 20 December 19926, for the period referred to in Articles 1 and 2 to other zones where stocks shared with non-Union countries are fished. 5 6 OJNo L 20,28. 1. 1976, p. 29. OJNOL 389, 31. 12 1992, p. I. Article 4 4- This Regulation shall enter into force on the seventh day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at, For the Council ISSN 0254-1475 COM(96) 128 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-136-EN-C ISBN 92-78-01886-4 Office for Official Publications of the European Communities L-2985 Luxembourg c

Proposal for a COUNCIL REGULATION (EC) relating to aid for reconstruction and rehabilitation in Bosnia- Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonia

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eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 29. 04. 1996 COM(96) 123 final 96/ 0 0% (CNS) Proposal for a COUNCIL REGULATION (EC) relating to aid for reconstruction and rehabilitation in Bosnia-Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav'Republic of Macedonia (presented by the Commission) Explanatory Memorandum 'Ihe economic development, the restoration of civil society and cooperation between the republics of Tonner Yugoslavia are a prerequisite for peace and stability in the Balkans; As stated by the Commission in its paper on the financial aspects of reconstruction in former Yugoslavia (C()M(95)58I, p. 6), the present drall Regulation will provide a legal basis (Article 235 of the VJC Treaty) for the use of funds from the following budget headings: B7-541: B7-545N: B7-542N: Measures for the reconstruction of the Republics formerly part of Yugoslavia (I «XXI 27 million, including 20 from budget chapter B0- 40); Kurope for Sarajevo (f>CU 35 million); Special aid to refugees in the Republics formerly part of Yugoslavia (ECU 30 million). Ihe European Community has decided to contribute to these operations under the conditions indicated by the Council on 30 October 1995. It intends to make its support contingent on adherence to the political and economic terms oflhe peace agreements signed in Paris on 14 December 1995, notably respect for human rights; In order to foster reconciliation between the various parlies and prevent any resurgence of fighting, special attention should be accorded to operations aimed at achieving economic and social objectives, in particular employment, and the return and reintegration of refugees and displaced persons; As the draft covers three budget headings, it is very wide in scope /^ CQtMOI, REGULATION Œ€\ relating to aid for reconsonction and rehabtfila&on m Bosnia-Herzegovina, Croatia, me Federal Republic of Yugoslavia and the Fonner Yugoslav Republic of [Vfecedonia nmœtJMOLor \m EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Articfe 235 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, Whereas economic development, the restoration of civil society and cooperation between the republics of former Yugoslavia are a prerequisite for peace and stability in the Balkans; Whereas it is appropriate to start repair work and renovate infrastructure whilst pressing ahead with political and economic reforms; Whereas the European Community has decided to contribute to these operations under the conditions indicated by the Council on 30 October 1995; Whereas it intends to make its support contingent on adherence to the political and economic terms of the peace agreements signed in Paris on 14 December 1995, notably respect for human rights; Whereas to foster reconciliation between the various parties and prevent any resurgence of fighting, special attention should be accorded to operations aimed at achieving economic and social objectives, in particular employment, the restoration of civil society and the return and reintegration of refugees and displaced persons; (à Whereas it is necessary to provide a selection procedure lor projects, programmes and actions which is both flexible and rigorous and consequently a "Consultative Committee on Reconstruction/Rehabilitation in former Yugoslavia", made up of representatives of the Member States and the Commission, with responsibility for giving an opinion on the choices made by the Commission is established; Whereas a multiannual approach should be adopted to enable elfectivc management of the measures provided for in this Regulation and undertake medium-term operations; Whereas implementation of these operations will help achieve the Community's objectives; whereas the Treaty docs not provide, for the operations in question, powers other than those set out in Article 235, HAS ADOPTED Tl US REGULATION: Article 1 The Community shall implement aid measures comprising projects, programmes and cooperation schemes for reconstruction, return of refugees and displaced persons and for economic and regional cooperation in Bosnia-I ler/egovina Croatia, the federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonian accordance with the criteria set out in this Regulation. These operations shall be funded as part of the indicative multiannual programming (1996-99) for cooperation with the republics of former Yugoslavia. The annual appropriations shall be authorized by the budgetary authority within the limits of the financial perspectives. Community funding under this Regulation shall take the form of grants. Article 2 Regional and international organizations, public and semi-public bodies, organizations providing support to businesses, private operators, cooperatives, mutual societies, associations, foundations and non-governmental organizations, shall be eligible for Community aid for projects, programmes and cooperation schemes. Article 3 The aim of the projects, programmes and cooperation schemes shall be to underpin the reconstruction process, to encourage the return of refugees, reconciliation and regional economic cooperation, and to create the economic and social conditions that will lay the foundations for the development of the recipient countries. 2. They shall cover the following fields: - The consolidation of civil society and the reinlbrcement of non-governmental organizations as well as cultural institutions and teaching establishments. - rebuilding of infrastructure and other individual or collective facilities damaged in the lighting; - return of refugees; integration or reintegration of refugees, displaced persons and former soldiers into working life; - preparation of the production apparatus for economic recovery; - development of the private sector, notably small businesses, and promotion of investment; - regional cooperation projects. Article 4 The granting or continuation of community aid shall be subject to certain conditions, notably: - - - application of the clauses of the peace agreement; respect for human rights, the rights of minorities and the right of all refugees and displaced persons to return home; in relation to the Federal Republic of Yugoslavia (Serbia-Montenegro) the granting within that state of a wide measure of autonomy to Kosovo; - observance of the principles of a market economy; - cooperation with the International War Crimes Tribunal. Article 5 The measures to be financed shall be subject to a selection process that takes account of the potential recipients' requests, their urgency, the actual aid take-up capacity and their impact on the return of refugees and displaced persons and on reconciliation between the parties through participation in common projects. A r i d e* 1. In order to ensure the consistency of cooperation projects and improve their complementarity and effectiveness, Member States and the Commission shall exchange all useful information on the financing they intend to make available. Scope for cofinancing shall be sought as part of this exchange of information, which shall also be used to explore the scope for complementarity, notably by means of cofinancing or parallel financing. 2. Member States and the Commission shall also communicate, in particular within the Committee referred to in Article 12, any information they may have on other bilateral and multilateral aid schemes for the states concerned by this Regulation. To that end, Member States and the Commission shall maintain a mutual information system. Article 7 Financing decisions and agreements and contracts stemming therefrom shall among other things provide for monitoring and financial control by the Commission and audits by the Court of Auditors, where necessary on the spot. Article 8 1. I he operations referred to in this Regulation may cover expenditure relating to the importation of goods and services and the local expenditure necessary to complete the projects and programmes, faxes, duties and charges and the acquisition of real estate shall be excluded from Community financing. Agreements and contracts for the implementation of the operations financed by the Community pursuant to this Regulation shall benefit in the recipient state from tax and customs arrangements which are not less favourable than those which that state applies to the most favoured state or international organization responsible for promoting economic development. 2. 3. Project running and maintenance costs on the ground may be covered by Community financing within a limit set in advance for each measure on the understanding that those costs may be covered only during the start-up phase and that they shall decrease progressively. With regard to investment projects, Community financing shall be combined with the recipient's own resources or with other sources of funding. Community cofinancing shall not exceed 80% of the total cost of the investment. Article 9 Invitations to tender and contracts shall be open without discrimination to all natural and legal persons in the Member States and the recipient stales. The following shall be considered to be legal persons of a Member State or recipient state: legal persons established in accordance with the legislation of a Member State or recipient stale and having their central administration or principal establishment in the territories in which the Treaty establishing the European Community applies or in Ihe recipient stales, or which have their registered office there, where their activity has an actual and continuous link with the economy of the said territories or slates. In the event of cofinancing, participation in invitations to tender and contracts by nationals of other countries may be authorized by the Commission on a case-by-case basis. In the latter case, the participation of companies of third countries shall not be taken into account unless reciprocity is applied by those countries towards the Community. Service contracts shall be awarded by restricted invitations to tender with the exception of operations not exceeding 200. 000 ECU which may be awarded by private treaty. Article 10 financing decisions exceeding ECU 2 million shall be adopted in accordance with the procedure provided for in Article 12(2). Ihe Committee provided for in Article 12 shall be informed of operations involving financing of less than ECU 2 million. Decisions amending decisions adopted in accordance with the procedure provided for in Article 12 shall be adopted by the Commission without consulting the Committee where they do not comprise substantial changes to the nature of the original projects and operations or, as regards the financial element, where they do not exceed 20% of the total amount of the initial commitment. Article II Operations covered by this Regulation which are financed from the Community budget shall be managed by the Commission in accordance with the financial Regulation of 21 December 1977 applying to the general budget of the European Communities, as last amended by Regulation No 2335/95 of 18 September 1995. In presenting the financing proposals submitted to the Committee referred to in Article 12 and the evaluation referred to in Article 13, the Commission shall take account of the principles of sound financial management, in particular the principles of economy and cost/effectiveness referred to in Article 2 of the financial Regulation. Article 12 Ihe Commission shall be assisted by a committee of an advisory nature composed of the representatives of the Member States and chaired by the representative of the Commission. Ihe representative of the Commission shall submit to the committee a draft of the measures to be taken. Ihe committee shall deliver its opinion on the draft, within a time limit which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote. The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes. The Commission shall take the utmost account of the opinion delivered by the committee. It shall inform the committee of the manner in which its opinion has been taken into account. Article 13 1. The Commission shall supervise implementation of the aid and the conditions in which ongoing projects and operations financed by that aid are being implemented by the recipients. 2. In the course of the supervision provided for in paragraph 1 above, the Commission shall carry out an evaluation of the main projects completed so as to ascertain whether the objectives defined at the project appraisal stage have been achieved and to draw up guidelines for enhancing the elTectivcness and profile of future activities. 3. Ihe Commission shall submit to Parliament and to the Council, by 30 April of each year at the latest, a report on the implementation of the aid, in particular on the evaluation referred to in paragraph 2 above. This Regulation shall enter into force. Article 14 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at. ,. 1. TITLE OF 'II IE ACTION Financial form Council regulation on help in the reconstruction/rehabilitation in Bosnia and I Ierzegovina, Croatia, the federal Republic of Yugoslavia and in the fomier Yugoslavian Republic of Macedonia. 2. BUDGET LINI^S) CONCERNED (o (1) ITie line B7-. v1() (linaneial protocols) iilrcady has a legal base. * B7-541 : Reconstruction actions for the Yugoslavia (27 Mecus of which 20 in chapter BO-40); the Republics of former * B7-542N : Special help to refugees in the former Yugoslavia (30 Mecus); * B7-545N : Europe for Sarajevo (35 Mecus). 3. LEGAL BASIS Article 235 establishing the European Community and the Council Regulation on help in the rehabilitation/reconstruction in Bosnia and I Ierzegovinia, Croatia, the federal Republic of Yugoslavia and in the former Yugoslavian Republic of Macedonia of" 4. DESCRIPTION Of' THE ACTION : 4. 1 Objective of the action In its communication on maximum amounts and legal bases (SEC (94)1106), the Commission committed itself to propose a legal base as quickly as possible, for actions considered significant. themselves with democratic political Hie Community supports the efforts of Bosnia-I Ierzegovina, Croatia, the federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia to institutions and a modem provide competitive production mechanism in the framework of an open market economy. It specially supports the reconstruction and modernization of the. infrastructure of Sarajevo and provides a special humanitarian aid to refugees and displaced persons in consequence of the tragic conflict in the former Yugoslavia. 7 In the context of the 1996 budgetary exercise, the Budgetary Authority inserted considerable amounts for this end in the (ieneral Budget of the European Union and, in accordance with what the Commission declared to the Council in its in the former communication on the financial aspects on reconstruction Yugoslavia ((X)M(95)5K1 p. 6), the Commission presents this draft regulation. 4. 2 Period covered by the action An unlimited period. 5. CLASSIFICATION Of THE EXPENDI TURPyREŒIPPS 5. 1 NIX) 5. 2 DA 5. 3 Type of receipts envisaged : none 6. TYPE of fin- f;xpi;Ni)iTURfyRf:cf;iPis Non reimbursable aid * a large part of the envisaged actions take the form of a grant of up to 100% of the operational expenses of a project, programme or cooperative actions. 'Ihose actions can equally lake the form of interest rate subsidies on loans from the EIB. * grants for co-financing with other sources from the public or private sector ; co-financing with other sponsors, the member states of the Union, NGOs are equally foreseen, particularly in the context of cooperation actions ; concerning investment projects the Community financing may not exceed 80% due to the risks in this region ; * does the proposed action involve a modification of the level of receipts: none; * reuse : none. 7. FINANCIAI. CONSEQl IENCES 7. 1 Method of calculation of the total cost of the action : Ihe Community aid will particularly locus on the areas of reconstruction of infrastructure, the reinsertion in professional life of refugees and displaced persons and the conversion of armaments industries to civil activities. Ihe new actions require the engagement of specialized experts with competence other than those of Community oflicials. Subject to the annual budgetary procedure, it is foreseen to reserve an indicative financial envelope of 400 Mecus for this action for the period 1996-1999 from this programme. PI IARE will complete the Community aid on the basis of its regulation. 'Ihe activities covered by this regulation will he Imanccd as a matter of priority by the chapter B7-54 'reconstruction1. Regional cooperation, help to SMI'Is, to the private sector and to the promotion of investment will be considered principally as the responsibility of PI IARE in so far as this is possible. x e 7. 2 Breakdown by the element of the action : The principle areas of intervention will be amongst others : the reconstruction of infrastructure, the preparation of the mechanism of production necessary to relaunch the economy, the different forms of economic cooperation, including interest rate subsidies on loans from the LIB. 7. 3 Indicative schedule of appropriations Indicative financial envelope for the period 1996-1997 : 400 Mecus. These rehabilitation/reconstruction actions are inserted in the framework of the indicative financial programming of chapter B7-54 : Rehabilitation/reconstruction in the fomier Yugoslavia Indicative multiannual financial programming (subject to the annual budgetary procedure) Commitment appropriations in millions of Ixu, current prices. - Chapter B7-54 - (in Meats current) lilMlgl-t 19% 1997 1998 1999 98 100 100 102 5. 264 5. 622 6. 181 6. 849 Financial perspectives ceilings (rubric IV) Total 1996/1999 400 23. 916 8. ANTI FRAUD MI'ASURKS fORKSIT-N The projects and programmes financed will be the object of regular follow up and systematic audits by the Commission services including the service created specially to combat fraud (UCLAF), or by mandated agents as well as the Court of Auditors. The coordination of the Commission services shall be ensured by the 'Yugoslavia' Interservice Group created for this. 9. COST/RFFKTI-NCY ANALYSIS ITTM-NTS The economics of the four countries concerned have been profoundly disrupted by four years of conflict. Their economic development, the restoration of civil society and cooperation between them is undissociablc from peace and stability in this region. Consequently it is necessary to give priority to actions directed to economic and social objectives, particularly employment, the restoration of civil society as well as the return and reinsertion of refugees and displaced persons. The cost efficiency management methods will be developed on an ongoing basis and in view of the nature of the projects and programmes which will be selected. sr 1 10. ADMINISTRATIVE EXPENDITURE (part A of the budget) the operational appropriation, It is necessary to underline that the present communication concerns the management of around 100 Mecus per year in commitment appropriations and to ensure sound financial management of the availability of" administrative appropriations should equally be foreseen. The increase in the work flowing from the growth in activities foreseen for the period concerned will be more than proportional to the increase in commitment appropriations. By means of redeployment, the Commission has allocated 7 oflicials and 6 temporaries / auxiliaries to the management of this tasks at headquarters (management of projects and finances). ( )n the ground, by means of own resources, 4 officials and 17 local agents as well as one temporary agent are foreseen. However, it should be underlined that the effective mobilization of human resources and the necessary related budgetary appropriations will result from the annual Commission decision concerning the allocation of resources, in particular taking account of staff and supplementary amounts which will have been granted by the Budgetary Authority. 0. 1 1 leadquarters Effects on the number of posts (for 4 years) Ty|x. * of post Staff lor inaiui^cnrnt of (lie notion of which duration permanent posts lenyxMary JTOStS •1 • I i Officials or temporary agents Other resources M ( A 11 0 Total 7 4 1 1 6 by use of" existing resources within the I Xi or service concerned 4 1 2 4 1 1 13 96-99 10. 2 111crease in <>lhcr administrative expenditure flowing form the action (for 4 years) In order to deal with the increasing number of actions in favour of reconstruction in former Yugoslavia and to guarantee adequate follow up of the projects on the ground it is necessary to increase the budget lor missions. ^ Id I Budget line (n & title) I I 1 Amounts Method of calculation A - HO M i n i o ns l i om headquartci s 3 6 0. 0 00 A-6006 Missions from delegations and offices 184. 000 Total 544. 000 6 ollicials lor 20 days x 250 I xu x 4/years 30 returns x 2. 000 I xu x 4 / y- 240. 000 Ixu 120. 000 20 returns x 2. 000 Ixu/tickets R = 40. 000 3 ollicials x 200 Ixu/day x 60 days = 144. 000 The amounts expivss the cosl of Ihe lolal supplementary post lor the duration of the action if this is determined, for 12 months if Ihe duration is indeterminate. jS II ISSN 0254-1475 COM(96) 123 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-153-EN-C ISBN 92-78-02469-4 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 3508/92 establishing an integrated administrative and control system for certain Community aid schemes ("integrated system")

http://publications.europa.eu/resource/cellar/25175c93-cd17-4e3c-8471-0b4eace41cbf

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iPi COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 29. 04. 1996 COM(96) 174 final 96/0122 (CNS) COMMISSION REPORT on the application in the Member States of the Integrated Administrative and Control System for certain Community aid schemes Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 3508/92 establishing an integrated administrative and control system for certain Community aid schemes ("integrated system") (presented by the Commission) COMMISSION REPORT on the application in the Member States of the Integrated Administration and Control System for certain Community aid schemes d 1 2 3 4 5 6 7 8 Introduction Scale of expenditure verified Basic components of Integrated System 3. 1 3. 2 3. 3 3. 4 3. 5 3. 6 3. 7 System for identifying land System for identifying livestock Applications for aid in respect of land Applications for aid in respect of livestock Administrative structures Computerized crosschecks Summary of statistics of checks Part-financing Scope of Integrated System and future outlook Situation at 31 December 1995 Remarks in connection with clearance of accounts Conclusions Annex: Summary of situation in Member States 3 4 5 5 6 7 8 9 9 10 11 12 13 15 15 INTRODUCTION The reform of the common agricultural policy (CAP) adopted in June 1992 represents a watershed in agricultural support measures, involving a shift from price support to compensatory aid paid directly to producers. This aid is related to the land cultivated and the number of livestock reared by the farmer. It entails measures to control production, such as set-aside and support for extensification of stockfarming. The methods for administering and monitoring the aid must be adapted accordingly, in line with two main concerns: - - facilitating the task of farmers who wish to take advantage of the aid offered, administering the huge number of applications with the greatest speed and security. Experience gained in the past in the administration and monitoring of this type of aid showed that unless a totally new approach was adopted, the difficulties of application would have been considerable for both farmers and the departments in charge of administration and controls. It was also unthinkable to administer and verify each scheme separately. Accordingly it was decided that a single processing system would cover all aid applied for by each agricultural holding. In view of the large number of applicants, special means were adopted to optimize controls. In order to deal with this large number of applications and make payments to the farmers in time, exhaustive on-site checks could not be contemplated and provision was accordingly made for a maximum number of checks to be carried out at the administrative verification stage. Sight needed not to be lost of the practical consequences for the farmers themselves of the adoption of new aid schemes. To that end, the administrative procedures were simplified as far as possible while a uniform framework was introduced for the application of several types of aid. On that basis, the Integrated Administration and Control System for compensatory aid provided for under the reform of the CAP ("Integrated System") was adopted, utilizing in particular modern techniques like data-processing and remote sensing, and perhaps one day soon the electronic identification of animals. The Integrated System provides for a single area aid application, to be submitted by the farmer each year. This is the key component for the administration and monitoring of area-related aid schemes. The Integrated System also entails the setting-up of computerized databases enabling crosschecks to be conducted on holdings, as well as parcels and livestock. To conduct this type of check, provision was made for a system for identifying and registering agricultural parcels and livestock. Regulation (EEC) No 3508/92, which introduces the Integrated System, provides for Community part-financing of expenditure incurred on its establishment. The Integrated System became applicable from 1 February 1993 as regards aid applications and integrated controls thereof, and as regards the system for identifying and registering cattle. The Member States had until 1 January 1996 to introduce the other components of the system. For the new Member States which acceded to the Community in 1995, the transitional period expires on 1 January 1997. Coming at the close of the transitional period for the former Member States, this report has three objectives: to review the introduction of the Integrated System, to draw initial conclusions regarding its introduction, to propose solutions to the problems encountered and to outline the possible uses of this instrument for other measures, existing or planned, under the common agricultural policy. SCALE OF EXPENDITURE VERIFIED In the wake of the reform of the CAP, the breakdown of EAGGF Guarantee Section expenditure has been substantially modified. Payments under the schemes subject to the Integrated System in respect of aid applications submitted by farmers in 1993 and subsequent years are covered from the 1994 budget year. Such payments have increased sharply. Total EAGGF Guarantee Section expenditure amounted to ECU 33 410 million in 1994, ECU 34 500 million in 1995 and ECU 41 258 million in the 1996 budget. Expenditure on direct aid under the Integrated System schemes amounts to ECU 14 150 million in 1994, ECU 17 760 million in 1995 and ECU 19 170 million in the 1996 budget. This expenditure therefore represents 42% (1), 51% (1) and 46% (1) of total EAGGF Guarantee Section expenditure for the 1994, 1995 and 1996 budget years. (1) expenditure executed for 1994 and 1995, budget estimates for 1996. BASIC COMPONENTS OF INTEGRATED SYSTEM 3. 1 System for identifying land The requirement for a system to identify areas can be explained by the need to define a system of communication between the farmer and the administration to allow areas declared to be located so they can be monitored over time, so computerized crosschecks can be organized and on-the-spot checks conducted. Member States do not apply the same system of identification. The systems for identifying agricultural land applied by the Member States may be distinguished by reference to two main criteria: • • Some systems are based on references (maps and numbering) existing beforehand, like the land register in Spain, Italy, France, Germany, Luxembourg and Austria, and the Ordnance Survey maps which cover most of the United Kingdom. Other systems have been created from scratch to meet requirements laid down by regulation. This is the case in Ireland, Greece, Portugal, the Netherlands, Belgium, Denmark, Scotland (fodder areas) and probably Finland (1) and Sweden(l). Some systems identify agricultural parcels, as in Germany (11 Lander), Belgium, Italy, Spain, France (simplified system), Ireland (arable land), Luxembourg and the United Kingdom. Others identify blocks (or îlots) comprising land declared, as in Germany (5 Lander), Austria, Denmark, France (general system), Finland, Sweden, Portugal, Greece, Ireland (fodder areas), Scotland (fodder areas) and the Netherlands. In the latter case, two major variants exist alongside each other, whereby the block is created by the farmer (AT, DE, FR, IE and FI) or defined by the authorities on the basis of maps or aerial photographs (DK, EL, NL, PT and SE). As a result there are various situations differing in terms of: • • Cost and time required for introduction: where it is feasible, the land-registry approach whether or not involving blocks is the quickest to introduce and, on the face of it, least costly; Ease of use for declarants: the approach by blocks makes declaration easier in so far as the references are fewer in number and more stable over time; (1) which only adhered to in 1995. The need to validate the units created by the farmer by comparison with official sources, on-the-spot inspections and recent aerial photographs; Effectiveness of computerized crosschecks based on the size of the reference units, their stability, the updating intervals, the proportion of ineligible land, and the number of farmers using the same identifier. 3. 2 System for identifying livestock The fundamental purpose in verifying aid applications is to ascertain the actual existence of the declared livestock as identified by an individual number, and to check compliance with the various eligibility criteria. To achieve those objectives, a single livestock identification and registration system was needed. This was defined and introduced by Directive 92/102/EEC of 27 November 1992, which mainly covers the veterinary health surveillance of livestock. Care has therefore been taken to avoid superimposing two systems. to register all That Directive stipulates that all animals must be identified by an individual number shortly after birth or introduction into the Community. Marking must involve the use of eartags which cannot be tampered with without sign and are approved by the Member State. The producer is individual required identification numbers and enter details of animals arriving at or leaving the farm with the corresponding dates. It does not make explicit provision for registering livestock in a central database but, in view of the obligation to administer the issuing of numbers and to monitor the health of large herds, all the Member States have developed or are developing a database. The Commission feels that the need for such a database should be taken into account when that Directive is reviewed as planned in the near future. livestock he keeps under the The livestock must be marked using large-format plastic rings which are easy to read; metal rings, which are not very legible, have gradually been phased out, except in the United Kingdom, where the possibility of using either plastic or metal has been maintained. The marking is affixed by an approved identifier in Belgium, Greece, France, Ireland and Portugal. Some Member States do not yet have a database for identifying livestock but are currently developing a central computerized system; pending completion of this work, conduct administrative checks using hard-copy documents (AT, EL, ES, IE, IT and SE). Depending on the type of information recorded and updated in the database, three levels of efficiency may be distinguished: - Databases containing the numbers issued (as in DE (currently being developed) and UK), - - Databases identical to the above but also containing additional information on the animals identified, such as sex, breed and date of birth (DK, LU and PT), Databases in which all movements of livestock are recorded and which thus enable compulsory retention periods, in particular, to be verified (BE, FR, NL and FI (now being prepared)). This third type of computerized database provides the ideal solution but is also the most costly; Luxembourg and Ireland are developing a project along these lines. The Commission advises the Member States as a minimum to adopt the second approach, which affords adequate control capacity. Naturally, the details used for checks must be selected on the basis of the characteristics of production in the Member States. In Denmark, for example, animals generally remain on the holding of birth until slaughter, whereas in Ireland the animal often passes through several holdings or dealers before slaughter. Methods of verification must obviously take account of such special local factors. 3. 3 Area aid applications The Commission has not imposed a single type of form for the whole Community. Area aid applications comprise four main sections, namely administrative data (name, bank account, etc. ), references to parcels (number and official area), areas cultivated (per parcel, group) and any annexes (diagrams, copies of maps and plans, etc. ). The form and complexity of forms and explanatory notes are the result of choices made by the Member States and depend largely on the system of parcel identification selected and any combination with Community aid under other national aid schemes (e. g. environmental aid). The form may even vary within a Member State by region (DE and UK) or scheme (FR). In 1995, in order to make declarations lighter work and to reduce the percentage of mistakes, most Member States sent farmers preprinted forms containing administrative data and parcel references. In Belgium and Italy, in digital form via professional most declarations were received associations. requests reasoned for Each year many Member States present postponements of the time limit for submitting declarations, set by regulation at 31 March (8 requests in 1994, 12 in 1995 and 13 in 1996). The arguments put forward generally concern local cropping calendars, the anticipated rate of alterations to cropping schedules, work plans and procedures for the year concerned. The Commission considers that in the future the Member States should be given responsibility for taking this decision on the basis of the effectiveness of control procedures introduced (see point 7 and Annex II to proposal for Regulation), subject, naturally, to verification under clearance of accounts procedures. 3. 4 Applications for aid in respect of livestock Unlike practice in the case of area aid, it was not possible to introduce a single application covering all aid granted in respect of livestock (special premium for male bovine animals, suckler-cow premium, sheep and goat premiums, compensatory allowances for natural handicaps). As structures and cycles vary from one type of production to another, it seemed necessary and logical to take account of this fact by allowing for some flexibility and variation in the dates set for the submission of applications and in the retention periods during which the animals are to be kept. Nevertheless, the Commission encourages the Member States to group them as much as possible. Application forms for the various types of aid are generally set out in a similar way to make them easier to compile and process. Whatever the premium concerned, aid applications comprise all requisite information to be provided compulsorily, namely the administrative identification of the farmer, data on the holding (maximum individual entitlement, milk quota, reference of application for area aid), particulars relating to the animals covered by the aid application (number, species, place of retention and identification numbers of cattle), an undertaking by the producer to observe the compulsory retention period and a declaration to the effect that he is aware of the conditions governing the grant. All this information is generally included in a form of up to four pages, which poses no practical difficulties for declarants. Compulsory annexes, comprising farm registers (DE and EL) and a document accompanying or identifying the animals (BE, FR, IE and UK), are appended in certain Member States. It is not general practice for the accompanying document to be presented at the same time since the Regulation covering the sector allows the Member States under certain conditions to use a comprehensive list of livestock instead of individual documents. However, where they exist, accompanying documents are to be presented to the authorities when the aid application is submitted. Some Member States keep such documents at the department concerned during the retention period (BE, FR, IE and UK). The Commission recommends this practice, which provides one of the best safeguards for complying with the compulsory retention period, in cases where the animal cannot move without an accompanying document under the veterinary rules applicable. Applications are generally submitted to the local offices (at provincial, nomos or departmental level), which undertake an initial administrative check of applications in addition to registering them and provide information and advice to producers (along similar lines in all Member States). Submission periods vary according to the type of premium concerned: special premium for male bovine animals: continuous submission (AT, BE, DK, DE, ES, FR, SE and UK); two or three periods lasting one or two months (EL, FI, IE, IT, LU, NL and PT). In the case of DK, DE and SE, the special premium for male bovine animals is granted after slaughter on presentation of slaughterhouse certificates, which are subject to special checks; suckler-cow premium: one or two periods lasting one or two months; sheep premium and compensatory allowance for natural handicaps: generally a single period; all applications are often submitted together on the same form. 3. 5 Administrative structures The cross-sector nature of the Integrated System has induced the Member States to adjust their administrative structures. New units have been established (e. g. in BE, FR and PT), major restructuring has taken place (e. g. in NL and IE) and in general staff has been increased. Three main types of organization have been adopted, involving: • • • centralized payments, checking and submission of applications (DK, IE, IT, LU and PT); binding national rules, with regional application subject to verification by a central body (AT, BE, EL, FR, FI, NL and SE); national interpretation of regulatory constraints, with responsibility for implementation at regional level (DE, ES and UK). 3. 6 Computerized crosschecks In addition to straight crosschecks on each aid application submitted to ensure that aid is only paid once on each parcel and animal, one of the basic functions of administrative checks is to conduct systematic crosschecking with identification/registration files covering agricultural parcels and livestock. Given the large number of applications for processing in a relatively short time, such verification can only be fully effective if it is computerized. In accordance with the regulatory obligation to verify the grounds for payment of area aid, the Commission has required the Member States to introduce efficient computerized crosschecks so that any anomaly can be detected systematically and as quickly as possible. In addition to detecting the splitting-up of holdings through registers of farmers, efforts have focused on the validation of parcel references via official sources (land registry). Checks to ensure that references exist, to compare areas cultivated with official figures and to detect duplicate declarations have been developed in particular. In the stockfarming sector, crosschecks of basic data on animal identification and aid applications mean that one or more criteria governing eligibility for the premium can be verified from the administrative stage, using recorded data like the identification number, date of birth, sex, breed, holder and retention period. 3. 7 Summary of statistics of checks The Commission has prepared questionnaires on checks conducted and results obtained. Although all Member States have not forwarded all the data requested, certain conclusions can nevertheless be drawn, on the basis of replies forwarded, concerning the practical introduction of the Integrated System and checks conducted. Late submission of aid applications entails a 1% reduction per day in the amounts covered by the application. Where the overrun in the deadline exceeds 20 days, the application is inadmissible and no aid is payable. In 1993 and 1994, the percentage of late applications was generally low. The Community average for area aid applications submitted over 20 days late was 0. 1%. The figure for aid applications relating to livestock is slightly higher at 0. 2%. Although the number of applications submitted late but within 20 days of the deadline was higher, the Community average was below 1%. It may be concluded that although they wait until the last minute to submit their aid applications, the overwhelming majority of farmers do comply with the time limit. Obviously, in some Member States, the first year of application of the system did pose some problems. For example, a large number of area aid applications were not completed properly and had to be corrected in 1993 (e. g. for mistakes in identifying parcels, calculating the rate of set-aside, etc. ). In the stockfarming sector, where the detailed rules of application governing aid schemes have undergone less change, the number of applications containing anomalies was smaller. A significant improvement was observed in 1994, the second year of application. The provision of preprinted declarations readily available to farmers and the possibility, in certain Member States, of submitting applications in computerized form through producer organizations should bring a further improvement in the future. 10 inspections, regards on-the-spot As the minimum percentage of applications subject to checks is set at 5% for area aid and 10% for livestock. The Community average for checks actually conducted is slightly over 7% for areas. Although the figure for livestock aid applications seems fairly high (17% in 1993), some Member States (in particular France and Portugal) have conducted the minimum number only (10%). The percentage of applications for area aid verified by remote sensing has risen. In 1993, 31% of checks covering area aid applications were conducted by this method. The figure rose to 40% in 19941. The percentage of area aid applications where amounts applied for were reduced in 1994 as a consequence of on-the-spot checks amounted to 2. 2%; in 0. 7% of applications, the amounts were reduced without penalties being applied; penalties were applied in 1% of cases and 0. 5% were rejected out of hand. In 1993, penalties were applied or aid applications were rejected in 0. 8% of cases relating to areas against 1% of cases relating to livestock. The penalties laid down under the Integrated System have acted as a deterrent and in general the rate of compliance has been acceptable. PART-FINANCING Article 10 of Regulation (EEC) No 3508/92 introduces Community part-financing of expenditure covering the implementation of the Integrated Administration and Control System as regards temporary staff resources and data-processing and technical equipment. Initially set at three years from 1992, the duration of the part-financing arrangements was extended to the end of 1995 in view of the work still to be completed and the transitional period laid down for the introduction of the system. On account of the late publication of the Regulation, the Member States could only draw the Community financial contribution from 1993, although five Member States (DK, DE, FR, NL and UK) did take advantage of the possibility offered to include expenditure relating to 1992 in their financing applications for 1993. Of the ECU 50 million available in the 1993 budget, Member States' expenditure amounted to ECU 44 million, a rate of utilization of 88%. In 1994, Member States' expenditure accounted for around 76% of the ECU 50 million of Community appropriations available. A special report on controls by remote sensing will be presented during 1996 in accordance with Article 6 of Regulation (EC) No 165/94. 11 their allocations under Regulation Under-utilization of appropriations stems from the fact that certain Member States (EEC) No 3508/92. do not use (BE,DK,EL,ES,IT,Lu,PT,UK) Some expenditure incurred by others has been rejected as ineligible (unconnected with the introduction of the Integrated System). A few Member States' requirements substantially exceed the appropriations allocated to them; however, given the delays in setting up the Integrated System, they were not able to qualify for part-financing during the period when provision existed. (DE,FR,IE,NL) As regards 1995, although the final expenditure will only be known in May 1996, the trend can be worked out on the basis of the Member States' forecasts, which point to an overall rate of utilization of around 92% of the ECU 43 360 million available (including expenditure in the three new Member States). In total, as an initial investment Community part-financing on the introduction of this entirely new system of controls represents significantly less than 1% of expenditure on the relevant aid schemes for a single year. When set against the proportionately very small cost of the initial investment and the very lengthy period over which the system is expected to function, the greater effectiveness of controls achieved through part-financing is clearly fully worthwhile. SCOPE OF INTEGRATED SYSTEM AND FUTURE OUTLOOK Product groups covered as from the inception of the Integrated System comprised arable crops (cereals, oilseeds, protein plants and set-aside), beef/veal (special premium, suckler-cow premium), sheepmeat (ewe premium), compensatory allowance for less-favoured areas (solely as regards payments in respect of livestock). The Integrated System has applied to the ewe premium scheme and the compensatory allowance from 1 January 1994 only. Since then, its scope has widened, in particular as a result of the inclusion of linseed under the arrangements for arable crops. The reform of the arrangements covering rice makes provision for that product group to be covered by the Integrated System too. In addition to the abovementioned arrangements, which provide for aid per hectare paid directly to the farmers, other schemes exist which are indirectly linked to the land cultivated. Although the Integrated System should not cover them in toto, provision should be made for some components of the System to apply. Under the reform of the arrangements covering dried fodder, for example, agricultural parcels are to be identified using the method applying in the Integrated System, so that crosschecks with other utilizations can be conducted. The same approach is followed for cotton. The Member States can also extend the systems they introduce to other schemes. By way of an example, some States have decided to include agri-environmental measures. 12 The progressive introduction of the agricultural parcel identification system will afford further possibilities of introducing aid schemes linked to area. A system for identifying and registering parcels permits uniform monitoring of measures applying to land management. In the future, consideration could be given at Community level to extending the Integrated System to cover agri-environmental and afforestation measures (Council Regulation (EEC) No 2078/92 and No 2080/92), compensatory allowances for land, and other product groups like hemp. The same working methods will need to be followed with regard to the register of olive cultivation and the vineyard register. SITUATION AT 31 DECEMBER 1995 Area aid As at 31 December 1995 all Member States have taken the requisite steps to introduce the Integrated System, though they have not all made the same progress. Member States fall into three groups: Member States where work of limited scale remains to be done or some improvements made, although if they are not implemented immediately this will not call into question the acceptability of the system in place (DE, DK, ES, IT and NL); • • Member States where programmes for identifying parcels (BE, IE and UK) or defining databases (FR, LU and AT) have been undertaken and a few more months are needed for their completion; Member States (EL, PT, FI and SE) where work still to be completed on parcel identification is such that completion during 1996 cannot be confirmed. Aid in respect of livestock Implementing legislation for Directive 92/102/EEC has been adopted in all Member States except Ireland and Italy, where infringement procedures are under way. However, a single identification! system operates effectively in Ireland. Implementing legislation for the Directive (and rules of application) is being adopted in the new Member States. Farm registers have been introduced for beef and veal. However, shortcomings have been observed in Spain and Italy, where records are frequently incomplete since they simply repeat the particulars given in aid applications. The introduction of official farm registers has not been fully completed in Greece and Portugal. For sheepmeat, registers will generally be in use in the first half of 1996 only. 13 Two Member States have completed introduction of the Integrated System, namely Belgium and the Netherlands. Four Member States have a system which, although satisfactory, could be improved in certain aspects. These are Denmark (crosschecks and registers), France, Ireland and Luxembourg (data-processing system for crosschecks). Four Member States' (and the three new Member States') systems are incomplete and on significant points are still in the developmental phase: - - - Germany is introducing a central database in order to conduct crosschecks nationally; the database will permit checks covering livestock movements between Lander; Portugal and Greece are introducing computerized crosschecks with the livestock identification database; Greece also needs to complete marking and registering of livestock; the United Kingdom needs to improve security in its system for issuing identification numbers. Two Member States' systems show shortcomings and/or are lagging behind: - - Spain has established a detailed organization plan but its practical introduction as regards both livestock identification/registration and crosschecks is in the early stages only; Italy has not adopted implementing legislation for Directive 92/102/EEC, and as a result there are shortcomings in livestock identification and registration and possibilities of verification are consequently very limited. Overall, work still remains to be done and the corresponding programmes are under way in many Member States, in particular to step up the effectiveness of crosschecks. REMARKS IN CONNECTION WITH CLEARANCE OF ACCOUNTS The introduction of the Integrated System has gone hand-in-hand with active coordination and advisory work by the Directorate-General for Agriculture. During the transitional period covering the introduction of the Integrated System for the 1 January 1996 deadline, controls under the clearance of accounts were intended to be especially deterrent. Furthermore, even where a system devised by a Member State was appraised favourably by the Commission, the way it actually functioned needed to be checked to see there were no failings. As checks were conducted almost concurrently with the introduction of the system by the Member State, the main objective was to detect any shortcomings and identify the risks inherent in the way it operated so the Member State could take the necessary measures to remedy problems noted. 14 Many positive and negative remarks regarding the first and second years of application were made to the Member States, which were all concerned, albeit to various degrees. In cases where a particular Member State did not comply with the regulations or control provisions applicable on the entry into force of the system or did not take the transitional measures agreed with the Commission, the latter will draw the financial consequences resulting from the failings observed in the clearance of accounts. CONCLUSIONS The adoption of the CAP reform in general and the introduction of the Integrated System in particular have compelled the Member States to reorganize their administration and controls. This necessary adaptation has entailed a substantial effort on their part. The setting-up of the agricultural parcel identification system livestock together with the introduction of and the system for identifying computerized databases has called for considerable work and significant investments. This work was monitored very closely by the Commission departments. In each Member State, discussions and on-the-spot inspections concerning the introduction of the Integrated System took place at least once every six months. In addition, within the EAGGF Committee, ten meetings lasting one or two days were devoted entirely to discussions on the introduction of the Integrated System. On two occasions during those meetings, on-the-spot inspections of systems introduced by the Member States were organized (Italy and Belgium). The initial situation varied substantially from one Member State to another depending on the scale of data immediately available. Some Member States were able to base their parcel identification systems on existing land-registry data or reliable, updated topographical maps while others had to set up a system practically from scratch. Technically speaking, the introduction of the livestock identification system presents fewer difficulties. However, problems, which arose in several Member States, involving coordination between departments responsible for verifying aid and veterinarians delayed the introduction of this component of the Integrated System. In view of the diversity and scale of the technical and administrative problems to be solved, it must be observed that the Member States all experienced difficulties in meeting the deadline for the introduction of the Integrated System as a whole. At the present stage and in order to avoid financial corrections based on Regulation (EEC) n" 729/70, one additional year should suffice to complete work to bring the system fully into operation. For this reason, it is proposed to delay by one year the date of definitive implementation. A draft Regulation proposing an amendment to Regulation (EEC) No 3508/92 along these lines is attached to this report. In the light of that proposal putting back the final date for implementation of the Integrated System, the Commission feels that one further extension of one year is needed for the part-financing arrangements provided for in Article 10(2) of Regulation (EEC) No 3508/92. 15 The draft Regulation also proposes an amendment to the provisions on the date of submission of area aid applications to allow the Member States to set the date without requesting the Commission's authorization. Such an amendment to the Regulation will simplify administrative procedures. In addition, the Commission has always found it difficult to take a decision on dates to be set each year on the basis of past experience, given the way systems change from one year to the next. By setting the deadline for the submission of aid applications themselves, the Member States will assume the responsibility of seeing to the proper administrative and financial management of aid and the execution of controls within the time limits laid down. Furthermore, the draft Regulation contains no proposal to extend the scope of the Integrated System. Such amendments will be adopted under the relevant regulations covering the product groups concerned. At this stage, observations during on-the-spot inspections and via expert groups show that the Integrated System has proved to be an excellent instrument for gathering information on the situation in the field and conducting controls. Many of its components are already operational and the others will come into force within one year. Foreseeably, various functions such as parcel/livestock identification and the aid application database will allow other types of aid to be covered from the technical and administration viewpoints in the near future. This will assist the Member States, in so far as they will reap the benefit of their investments on the introduction of the System and their tasks will be facilitated. The Commission should support the trend towards wider utilization of the Integrated System, which must ultimately reduce the cost of processing and monitoring aid, improve management and provide a better service to the farmer, thanks to greater clarity, speed and security in processing applications. 16 Integrated Administration and Control System Annex Report to the Council Situation in the Member States. Land Parcel identification system: Development of parcel administration software still in The parcel identification system progress will use: the agricultural parcel Data base: Will be centralized under Oracle; development in progress identified on the individualized Cross-checks: Wll be carried out at the level of farm parcels, effective once orthophoto plan produced for each system set up farmer Completion of work: validation after 1996 declaration. First large-scale operation in 1996. Livestock Overall, the system is satisfactory Identification: Directive* transposed for bovine animals, in progress for ovine and operational animals. Double marking (within thirty days by the farmer, within six months by the identifying agent). Completion of work: Register: Farm register made up of identification files to be accompanied by a system complete summary. Data base: Central identification register, computerized and linked to the "premiums" data base. Cross-checks: effective because of computerized linking of the two data bases. 17 Danmark Land The parcel identification system Parcel identification system: being developed; blocks will contain 5 to 10 will use: crop blocks defined by agricultural parcels. the authorities, marked on Data base: Although the system was improved in 1995, there is still a very large individualized maps for the number of anomalies. farmers. Cross-checks: at present checks are not effective, but should be improved by the Completion of work: expected new parcel identification system end of 1995 Livestock Identification: Directive transposed (bovine animals), very clear marking using plastic rings. Satisfactory overall, registers to Register: different types of farm register, official register to be defined. be improved Data bases: Register of marking rings issued, central base for the computerized administration of applications. Completion of work: Cross-checks: effective, but not systematic between the 2 data bases. validation in 1996 Deutschland Land The parcel identification system Parcel identification system: system complete (except Saxony Anhalt, where will use: in the case of 11/16 development in progress). Lander: the agricultural parcel with Data base: Organized by Land, but data not always exchanged. Regional data direct reference to the land bases, even at Kreis level (Hessen) in 1995 register; in the case of 5/16: the Cross-checks: validation using computerized land register partly in place (e. g. Feldstuck (block) BW, NW, SH, HE. ) Livestock Completion of work: With a few exceptions, in place for the end of 1995. Identification: Directive transposed (bovine, ovine and caprine animals), single identification system in place from October 1995 (plastic tags attached by the farmer). System development in progress Register: single farm register for veterinary purposes and for premiums. Data bases: regional identification registers not interconnected, creation of central Completion of work: data base in Munich. during 1996 Cross-checks: will be carried out by Bavaria for all the Lander, first tests in November 1995. Land The parcel identification system Parcel identification system: Phase 1 invitation to tender (creation of digital will use: crop blocks defined by orthophotos) cancelled (and reissued 1-Sep-95). Phase 2 announced 1-Oct-95. the authorities, marked on Data base: Centralized, and in 1995 enabled 150 000 declaration papers to be orthophoto plans. pre-printed - but divided into 52 dBASE files (by Prefecture) Completion of work: the Cross-checks: not currently being made on parcel data. cancellation of Phase 1 delayed Livestock Identification: Directive transposed (bovine, ovine and caprine animals), marking completion by a further year - no chance of completion before the end of 1996. by veterinarians (plastic rings) in progress for bovine animals, from January 1996 System still being developed, for ovine animals. making progress thanks to the Register: detailed farm registers under veterinary supervision, copy in local support of the veterinary service. ' veterinary office. Data bases: development of 2 data bases (identification and applications) with Completion of work: computer link. computerized system to be Cross-checks: document-based checks pending completion of computerized completed during 1996 system, cross-checks using copies of the abovementioned farm registers endorsed by veterinary officials. 19 Land The parcel identification system Parcel identification system: system complete; however, land register quality will use: the agricultural parcel varies according to region. with direct reference to the land Data base: centralized, including parcel data register Cross-checks: carried out regionally and centrally, with occasional regional Completion of work: system differences Livestock complete, in operation during 1995. Identification: Directive transposed for bovine animals, marking inadequate in certain regions. Register: farm register limited to animals for which a premium application is Development of a coherent made. system in collaboration with the Data bases: local identification registers, not interconnected, central data base for regions. applications. Cross-checks: effective where using the application data base, inadequate with Completion of work: regard to identification files. during 1996 20 Land The parcel identification system Parcel identification system: reference-based system being developed (planned will use: the block or the for first quarter of 1996). Mixed system (simplified scheme:land register parcel; agricultural parcel, references to general scheme:the block). the land register. Data base: award of Pacage contract planned before the end of 1995; no use Completion of work: during 1996 planned for 1996 declarations. Cross-checks: at present principally manual; validation of land register in progress; first cross-checks of parcel references in 1996 Livestock Identification: Directive transposed (bovine, ovine and caprine animals), double marking of bovine animals (by the farmer at birth, by the identifying agent within System providing guarantees, to four months). be supplemented by data cross Register: farm register in place for bovine animals, not yet systematically for checking at national level ovine animals. Data bases: 2 computerized data bases (identification and applications) in each Completion of work: Département. first quarter of 1996 Cross-checks: linkage of the two data bases per Département currently being systematized, cross-checking of data at national level planned from the first quarter of 1996. 21 Ireland Land The parcel identification system Parcel identification system: development in progress, aerial photography will use: Forage (90% of completed for the whole country. Structural reorganization still in progress. declarations) - blocks defined by Data base: Centralized under Supra, Oracle: on-line access possible from County the farmer; cereals - borders of offices; development still in progress - but this year 100% of declarations were pre the agricultural parcels; both on printed. A few flaws with unambiguous farm identification. the 1995 orthophoto plans. Cross-checks: Cannot be carried out until the parcel identification system is in Completion of work: last place. Livestock validations after 1996 declarations. Identification: Directive not transposed, infringement procedure, marking using rings with poor legibility. System improvement planned for Register, new farm registers complying with requirements. 1996 (computerized livestock Data bases: development project for a new centralized computerized registration) identification/registration system, central data base for applications. Cross-checks: carried out regionally and centrally. Completion of work: 1996 Italia Land The parcel identification system Parcel identification system: operational; reference system clearer every year. will use: direct reference to the Data base: Centralized, Oracle; but decentralized data input presents some quality land register problems. Completion of work: system Cross-checks: detailed, but no very satisfactory way of solving the problems complete. identified has yet been found. Livestock Identification: Directive not transposed, infringement procedure, marking inconsistent or non-existent. Register: farm registers often incomplete. Very unsatisfactory, undertaking by the Ministry of Health to Data bases: central identification register which only covers animals for which regularize situation before premium applications are made, central data base for applications. summer 1995 Cross-checks: central, but incomplete identification data base. Completion of work: 1996 22 Luxembourg Land The parcel identification system Parcel identification system: reference system operational; land register data will use: direct reference to the base available. land register. Data base: SIGC studies in 1995; 62% of declarations pre-printed in 1995. Completion of work:in principle Cross-checks: carried out after payments in 1995. planned for mid-1996. Livestock Identification: Directive transposed (bovine, ovine and caprine animals),marking clear and generally applied, within six months or before moving the animal. Register: farm registers well designed and well kept. Improvement of the computerized Data bases: central identification register managed by veterinarians, central data system for the end of 1995 base for applications. Completion of work:validation in Cross-checks: carried out centrally. 1996 Nederland Land The parcel identification system Parcel identification system: development in progress, with the topographical will use: topographical blocks, department in charge of implementing and administering the project. Project test defined by the authorities, with 2 000 declarants facilitated planning for 1996. Completion of work: planned for Data base: centralized since Jan. 1995; system being developed. the end of 1995. Cross-checks: limited at present - improvements expected in 1996 when the parcel identification system is in place. Livestock Identification: Directive transposed (bovine and ovine animals), very clear double marking by the producers. System satisfactory overall. Register: farm registers using identification records. Data bases: central identification/registration system with automatic safeguards, Completion of work: central data base for applications. system complete Cross-checks: carried out using the central data bases. 23 Portugal Land The parcel identification system Parcel identification system: Award of contracts (creation of parcel identification will use: crop blocks and system) planned in Nov. 1995; work schedule extended to end of 1996. agricultural parcels defined by the Data base: Centralized - but redevelopment expected for 1997 (SINGA) authorities, marked on orthophoto Cross-checks: detailed, but inefficient because of the current weakness of the plans. parcel identification system Livestock Completion of work: 1. 1. 97 proposed by the INGA. Identification: Directive transposed (bovine, ovine and caprine animals), metal tags replaced this year by plastic tags, tattooing for ovine animals. Register: farm registers in place, definition of an official register underway. System improvement in progress. Data bases: local or regional identification files, project for the creation of a central file, central data base for applications. Completion of work: Cross-checks: to be improved using an animal identification file. during 1996 United Land The parcel identification system M Kingdom Parcel identification system: England and Wales have finally adopted a strategy; will use: England and Wales: Scotland carrying out production tests in 1995; in Northern Ireland strategy and topographical maps checked by progress are satisfactory overall. the authorities; Scotland: blocks Data base: England and Scotland - centralized, development in progress, end of validated with Ordnance Survey work 1995; Wales - still three separate data bases with manual data exchange; digital data; Northern Ireland: Northern Ireland generally operational end of 1995. individual plans of farms, updated Cross-checks: Need to validate declaration data (especially in England) - except by the authorities. for Northern Ireland, where validation should be completed for end 1995. Completion of work: England and Wales: 1996; Scotland and Northern Ireland: 1. 1. 1996. Livestock. Identification: Directive transposed for bovine animals, marking within thirty days Checks on the use of tags issued by the farmer, single identification number, various types of approved marking. and links between data bases to Register: in place, but no uniform model. be improved. Data bases: data base of tags issued, regional data bases for applications. Completion of work: Cross-checks: cross-checks with identification file to be improved. during 1996 New Member States - Deadline 1997 24 Osterreich Land The parcel identification system Parcel identification system: Pre-printing of 100 000 declarations (50%) ; will use: the Feldstuck (block), compilation of parcels declared (+/- 2 million) on "master cards" in local offices based on the land register. before 1995 declaration. Completion of w o rk planned for Database: In July 1995 work schedule insufficiently detailed but satisfactory overall ! 11 1997 for the first year. Cross-checks: a list of checks for 1995 was submitted, but was limited by the state of development of computerized tools. No direct computerized link with the land register before 1996 - although references are available at the land registry. Livestock Identification: Transposition of Directive in progress, various marking systems ] System still to be developed, administered by associations, project for single numbering system and double \ identification data base to be marking. created. Register: farm register in place, but not yet generally kept effectively. Data bases: local identification files administered by veterinarians and associations; Completion of work: central data base for applications being developed. planned for 1. 1. 1997 Cross-checks: not yet operational. 25 Suomi/Finland Land The parcel identification system Parcel identification system: Reference based on photocopies, plans or will use: crop blocks, possibly photographic plans with sequential numbering in 1995. Validation of data validated against orthophotos. submitted by declarants in digital format planned for 1996. Completion of work: planned Data base: Centralized, development in progress. Data input at local level. 1. 1. 1997, but no work schedule in Cross-checks: A list of checks for 1995 has been submitted to the Commission. place at present. Livestock Identification: Directive transposed, plastic tags attached by the farmer Register: in place. System still to be developed: Data bases: computerized administration of identification, data base for checks on issuing of tags to be applications being developed. Cross-checks: still at project stage. stepped up, cross-checks to be put in place Completion of work: planned for 1. 1. 1997 Sverige Land The parcel identification system Parcel identification system: Agricultural parcel identified using topographical will use: not yet decided. plans (of varying quality), with numbering system linked to the "fastighet" (farm Completion of work: estimated block in the land register). However, steps to improve the system should be beginning of 1997, more detailed discussed as soon as possible. schedule expected. Data base: proper commencement of implementation, but still being developed. Cross-checks: detection of parcel problems, but manual checks are still required to resolve them. Livestock Identification: transposition of Directive in progress, multiple identification and System still to be developed. marking systems, start-up of a single system in 1995. Register: official farm register in place, its design to be reviewed. Completion of work: Data bases: at planning stage. planned for 1. 1. 1997 Cross-checks: detailed project being developed. 26 PROPOSAL FOR COUNCIL REGULATION (EC) No /96 of amending Regulation (EEC) No 3508/92 establishing an integrated administrative and control system for certain Community aid schemes ("integrated system") THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof, Having regard to the proposal from the Commission1, Having regard to the opinion of the European Parliament2, Whereas Article 6(2) of Council Regulation (EEC) No 3508/92 of 27 November 19923 provides that area aid applications must be submitted during the first quarter of the year; whereas, however, the Commission may allow a Member State to fix a date for the submission of area aid applications between 1 April and the dates referred to in Articles 10, 11 and 12 of Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for producers of certain arable crops4; whereas, in the light of experience, it should be possible for Member States to set the deadline for the submission of applications on their own responsibility without seeking the authorization of the Commission, taking into account in OJ No C. Opinion delivered on OJ No L 355, 5. 12. 1992, p. 1. Regulation last amended by Regulation (EC) No 3235/94 (OJ No L 338, 28. 12. 1994, p. 16. ). OJ No L 181, 1. 7. 1992, p. 12. Regulation last amended by Regulation (EC) No 1664/95 (OJ No L 158, 8. 7. 1995, p. 13). 27 particular the time required for all relevant data to be available for the proper administrative and financial management of the aid and for checks to be carried out; Whereas Article 13(1) of Regulation (EEC) No 3508/92 provides that all the elements of the integrated system are to apply from 1 January 1996 at the latest; whereas, in view of experience gained, notably in setting up alphanumeric identification systems for agricultural parcels and data bases, this deadline should be postponed for one year; Whereas, given the considerable investment required to ensure that the integrated system is established definitively, provision should be made to prolong by one year the period for which the Community financial contribution may be granted, HAS ADOPTED THIS REGULATION: Article J Regulation (EEC) No 3508/92 is hereby amended as follows: 1. Article 6(2) is replaced by the following: "2. Area aid applications must be submitted by a date to be set by the Member State which may not be later than the dates referred to in Articles 10, 11 and 12 of Regulation (EEC) No 1765/92. In all cases, the date shall be set bearing in mind, inter alia, the period required for all relevant data to be available for the proper administrative and financial management of the aid and for the checks provided for in Article 8 to be carried out. " 2. Article 10(2) is amended as follows: (a) The first subparagraph is replaced by the following: 28 "The Community's financial contribution shall be granted for a period of five years from 1992, within the limits of the appropriations allocated for this purpose. " (b) The third subparagraph is replaced by the following: "The total amount shall be shared among the Member States as follows: "for 1995: Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom for 1996: 2,2 2,3 9,2 8,0 16,5 13,3 4,2 18,1 0,6 2,8 3,3 5,3 2,7 2,4 9,1 Belgium Denmark Germany Greece Spain France 1,8 1,9 7,7 6,7 13,7 11,1 29 Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom for 1997: Austria Finland Sweden 3,5 15,1 0,5 2,3 9,3 4,4 7,6 6,8 7,6 39,3 32,1 28,6 " 3. Article 13(l)(b) is replaced by the following: "(b) as regards the other elements referred to in Article 2, at the latest from: - 1 January 1998 in the case of Austria, Finland and Sweden, and - 1 January 1997 in the case of the other Member States. " Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. Article 1(2) shall apply from 1 January 1996. 30 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council The President 31 Item Bl - 360 : Monitoring and preventative measures concerning the EAGGF Guarantee Section 1. TITLE OF OPERATION Council Regulation (EC) amending Regulation (EEC) No 3508/92 an integrated administrative and control system for certain Community aid schemes ('integrated system') establishing 2. BUDGET HEADING INVOLVED Bl - 360 3. LEGAL BASIS Article 43 of the Treaty establishing the European Community 4. DESCRIPTION OF OPERATION 4. 1. To prolong by one year the period of co-financing of expenditure incurred by Member States in implementing the integrated administrative and control system. The system was established to enhance the effectiveness and usefulness of the mechanisms for controlling aid schemes linked to area (principally arable crops and beef, sheepmeat and goatmeat) adopted as part of the reform of the common agricultural policy. The aim of Regulation (EEC) No 3508/92, which introduces the integrated system, is to set up systems for identifying agricultural parcels and animals together with an electronic data base that can be used for cross-checking aid applications. Provision is made for the system to be definitively in place from 1 January 1996 (Austria, Finland, Sweden: from 1 January 1997). The Regulation provides for Community co-financing of expenditure incurred by the Member States in introducing it. In view of the difficulties that Member States have had to face, it is proposed postponing the system's definitive introduction by one year (to 1 January 1997, and 1 January 1998 for Austria, Finland and Sweden). For the same reason it is also proposed prolonging the co-financing arrangements for a year. This operation represents a part only of the control measures in the EAGGF Guarantee Section area covered by item B1-360. 4. 2. Period covered: one year. 5. CLASSIFICATION OF EXPENDITURE OR REVENUE 5. 1. Compulsory expenditure 5. 2. Non-differentiated appropriations 32 6 TYPE OF EXPENDITURE Subsidy for joint financing with other sources in the public or private sector (see point 9. 1 for a detailed description of the type of expenditure). 33 7. FINANCIAL IMPACT "Method of calculation: Maximum authorized as an EAGGF Guarantee Section contribution 7. 2. Itemized breakdown of cost of operation in ECU million: Commitment appropriations in ECU million (current prices) Budget year n (1996) n+ 1 n + 2 n + 3 n + 4 Co-financing of expenditure incurred by Member States 24* Total 24 Total n + 5 and subs. years 24 24 T he breakdown in 1992 and 1993 by type of expenditure (see 9. 1) was as follows: Data-processing structures:36%; Control structures:24%; Staff:40% 7. 3. Schedule of commitment/payment appropriations Commitment appropriations in ECU million n+ 1 n + 2 n + 3 n + 4 n + 5 and subs. years Total 24 Budget year n (1996) 24 18 6 Commitment appropriations Payment appropriations n n+ 1 n + 2 n + 3 n + 4 n + 5 and subsequent years Total 24 24 34 8. FRAUD PREVENTION MEASURES - Specific control measures planned: Verification of eligibility of expenditure incurred by national authorities and of consistency between amounts claimed and accounting documents; on-the-spot inspection visits to examine supporting documents and determine the progress of work or the extent to which operations have been implemented. 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 9. 1. Specific and quantified objectives; target population: - Specific objectives: links with general objective: The types of expenditure covered by the operation are the following: Data-processing structures: host computers, including installation costs; work stations, PCs, network infrastructure (cables, connectors, etc. ); software; costs of digitizing topographical maps. Control structures: printing and preparation of registers and forms; animal identifiction rings; devices for fitting them; land vehicles (e. g. 4 x 4) and equipment; equipment for measuring parcels; costs of informing farmers. Staff costs: expenses of temporary staff recruited for work directly linked with the introduction of the system or of officials specifically assigned to this work; systems analysts, engineers, programmers, encoders etc. The majority of the technical and administrative difficulties encountered by the Member States concern the introduction of systems for identifying parcels and animals. The initial situation differed appreciably between Member States depending on the extent of the data immediately available: some Member States were able to construct their parcel identification systems on the basis of existing land registry data or reliable and up-to-date topographical maps while others had to establish the system practically from scratch. Technically speaking, the introduction of a system for identifying animals presents fewer difficulties. However, coordination difficulties between the departments controlling the aids and veterinarians, that have come to light in a number of Member States, have delayed implementation of this element of the integrated system. - Target population: The beneficiaries of the Community's financial contribution are national authorities responsible for controlling aid in the agricultural field. 35 9. 2 Grounds for the operation: - Need for Community financial assistance, particularly having regard to the principle of subsidiarity: The assistance is justified by the need to safeguard the Community's financial interests and to satisfy the requirements of the Member States, for which the work involved in introducing the integrated system represents a substantial additional financial burden. - Choice of ways and means: * advantages over possible alternatives (comparative advantages): the Community financial aid constitutes support for their operation and an incentive encouraging new initiatives. * examination of any similar Community or national operations: the operation involves the implementation of an entirely new administration and control system. No comparison can be made with other Community or nationally administered operations. * spin-off and multiplier effects: the Community assistance will contribute (for a limited period) to the implementation of the modern administration and control systems introduced by the integrated system. The expenditure on aid schemes (arable crops, livestock premiums) covered by the integrated system represents around 50% of EAGGF Guarantee Section expenditure. The total Community co-financing required as an initial investment to set up this entirely new control system represents considerably less than 1% of the expenditure on the aid schemes in question for a single year. If the proportionally very low cost of the initial investment and the fact that the system will be required to operate for a very long time are taken into consideration, the co-financing is seen to be entirely cost-effective given the benefits in terms of more effective control. - Main factors of uncertainty which could affect the specific results of the operation: The factors of uncertainty include the technical problems faced by the Member States and their political will together with the budgetary problems they encounter in complying with the rules. 9. 3 Monitoring and evaluation of the operation: - Performance indicators: 36 From the information provided by the Member States on checks carried out and the results achieved, and from inspection visits by Commission staff, a number of conclusions can be drawn on the practical implementation of the integrated system and on the progress of controls. It is clear that in its first year of implementation the system has presented problems in a few Member States. For example, a large number of area aid applications were incorrectly completed and had to be corrected in 1993 (e. g. because of errors in identifying parcels, in calculating the rate of set-aside, etc. ). In the livestock sector, where fewer changes were made to the scheme arrangements, the number of files containing anomalies was smaller. 1994, the second year of implementation of the system, saw a distinct improvement. The availability of preprinted declaration forms for farmers and the possibility, in some Member States, of submitting applications in electronic form through producers' organizations are expected to improve the situation further in the future. For on-the-spot inspection visits, the minimum percentage of files to be checked is set at 5% for area-linked aid and 10% for livestock aid. The Community average for checks actually carried out is slightly above 7% for area-linked aid. While the equivalent figure for livestock aid (17% in 1993) seems fairly high, some Member States (notably France and Portugal) only carried out the minimum. The number of area aid files checked using remote sensing has risen, with 31% of applications having been checked in this way in 1993. The figure rose to 40% in 1994. The percentage of area aid files in which the amount sought was reduced following on-the-spot inspections amounted to 2,2% in 1994: 0,7% of applications were reduced without penalty; 1% had a penalty applied and 0,5% were rejected outright. In 1993, 0,8% of area aid applications had a penalty applied or were rejected as against 1% of livestock aid applications. From this it can be inferred that the penalties introduced under the integrated system have had a deterrent effect and that as a rule the level of compliance has been acceptable. Details and frequency of planned evaluation: The implementation of the integrated system has been monitored very closely by the Commission. Discussions and control visits have taken place in each Member State at least quarterly. Ten one- or two-day meetings of the EAGGF Committee have been given over entirely to discussion of the introduction of the system. A report has been prepared for the Council giving details of the setting up of the system and setting out findings regarding its implementation. Assessment of the results obtained (where an existing operation is to be continued or renewed) 37 Given the wide range of technical and administrative problems to be resolved and their scale, all Member States are having difficulties in respecting the deadline for bringing all the elements of the integrated system into effect. As matters now stand, there is reason to believe that with an extra year to complete the work the system will be fully operational. 38 ISSN 0254-1475 COM(96) 174 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-184-EN-C ISBN 92-78-03032-5 Office for Official Publications of the European Communities L-2985 Luxembourg

COMMISSION REPORT on the application in the Member States of the Integrated Administrative and Control System for certain Community aid schemes

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iPi COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 29. 04. 1996 COM(96) 174 final 96/0122 (CNS) COMMISSION REPORT on the application in the Member States of the Integrated Administrative and Control System for certain Community aid schemes Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 3508/92 establishing an integrated administrative and control system for certain Community aid schemes ("integrated system") (presented by the Commission) COMMISSION REPORT on the application in the Member States of the Integrated Administration and Control System for certain Community aid schemes d 1 2 3 4 5 6 7 8 Introduction Scale of expenditure verified Basic components of Integrated System 3. 1 3. 2 3. 3 3. 4 3. 5 3. 6 3. 7 System for identifying land System for identifying livestock Applications for aid in respect of land Applications for aid in respect of livestock Administrative structures Computerized crosschecks Summary of statistics of checks Part-financing Scope of Integrated System and future outlook Situation at 31 December 1995 Remarks in connection with clearance of accounts Conclusions Annex: Summary of situation in Member States 3 4 5 5 6 7 8 9 9 10 11 12 13 15 15 INTRODUCTION The reform of the common agricultural policy (CAP) adopted in June 1992 represents a watershed in agricultural support measures, involving a shift from price support to compensatory aid paid directly to producers. This aid is related to the land cultivated and the number of livestock reared by the farmer. It entails measures to control production, such as set-aside and support for extensification of stockfarming. The methods for administering and monitoring the aid must be adapted accordingly, in line with two main concerns: - - facilitating the task of farmers who wish to take advantage of the aid offered, administering the huge number of applications with the greatest speed and security. Experience gained in the past in the administration and monitoring of this type of aid showed that unless a totally new approach was adopted, the difficulties of application would have been considerable for both farmers and the departments in charge of administration and controls. It was also unthinkable to administer and verify each scheme separately. Accordingly it was decided that a single processing system would cover all aid applied for by each agricultural holding. In view of the large number of applicants, special means were adopted to optimize controls. In order to deal with this large number of applications and make payments to the farmers in time, exhaustive on-site checks could not be contemplated and provision was accordingly made for a maximum number of checks to be carried out at the administrative verification stage. Sight needed not to be lost of the practical consequences for the farmers themselves of the adoption of new aid schemes. To that end, the administrative procedures were simplified as far as possible while a uniform framework was introduced for the application of several types of aid. On that basis, the Integrated Administration and Control System for compensatory aid provided for under the reform of the CAP ("Integrated System") was adopted, utilizing in particular modern techniques like data-processing and remote sensing, and perhaps one day soon the electronic identification of animals. The Integrated System provides for a single area aid application, to be submitted by the farmer each year. This is the key component for the administration and monitoring of area-related aid schemes. The Integrated System also entails the setting-up of computerized databases enabling crosschecks to be conducted on holdings, as well as parcels and livestock. To conduct this type of check, provision was made for a system for identifying and registering agricultural parcels and livestock. Regulation (EEC) No 3508/92, which introduces the Integrated System, provides for Community part-financing of expenditure incurred on its establishment. The Integrated System became applicable from 1 February 1993 as regards aid applications and integrated controls thereof, and as regards the system for identifying and registering cattle. The Member States had until 1 January 1996 to introduce the other components of the system. For the new Member States which acceded to the Community in 1995, the transitional period expires on 1 January 1997. Coming at the close of the transitional period for the former Member States, this report has three objectives: to review the introduction of the Integrated System, to draw initial conclusions regarding its introduction, to propose solutions to the problems encountered and to outline the possible uses of this instrument for other measures, existing or planned, under the common agricultural policy. SCALE OF EXPENDITURE VERIFIED In the wake of the reform of the CAP, the breakdown of EAGGF Guarantee Section expenditure has been substantially modified. Payments under the schemes subject to the Integrated System in respect of aid applications submitted by farmers in 1993 and subsequent years are covered from the 1994 budget year. Such payments have increased sharply. Total EAGGF Guarantee Section expenditure amounted to ECU 33 410 million in 1994, ECU 34 500 million in 1995 and ECU 41 258 million in the 1996 budget. Expenditure on direct aid under the Integrated System schemes amounts to ECU 14 150 million in 1994, ECU 17 760 million in 1995 and ECU 19 170 million in the 1996 budget. This expenditure therefore represents 42% (1), 51% (1) and 46% (1) of total EAGGF Guarantee Section expenditure for the 1994, 1995 and 1996 budget years. (1) expenditure executed for 1994 and 1995, budget estimates for 1996. BASIC COMPONENTS OF INTEGRATED SYSTEM 3. 1 System for identifying land The requirement for a system to identify areas can be explained by the need to define a system of communication between the farmer and the administration to allow areas declared to be located so they can be monitored over time, so computerized crosschecks can be organized and on-the-spot checks conducted. Member States do not apply the same system of identification. The systems for identifying agricultural land applied by the Member States may be distinguished by reference to two main criteria: • • Some systems are based on references (maps and numbering) existing beforehand, like the land register in Spain, Italy, France, Germany, Luxembourg and Austria, and the Ordnance Survey maps which cover most of the United Kingdom. Other systems have been created from scratch to meet requirements laid down by regulation. This is the case in Ireland, Greece, Portugal, the Netherlands, Belgium, Denmark, Scotland (fodder areas) and probably Finland (1) and Sweden(l). Some systems identify agricultural parcels, as in Germany (11 Lander), Belgium, Italy, Spain, France (simplified system), Ireland (arable land), Luxembourg and the United Kingdom. Others identify blocks (or îlots) comprising land declared, as in Germany (5 Lander), Austria, Denmark, France (general system), Finland, Sweden, Portugal, Greece, Ireland (fodder areas), Scotland (fodder areas) and the Netherlands. In the latter case, two major variants exist alongside each other, whereby the block is created by the farmer (AT, DE, FR, IE and FI) or defined by the authorities on the basis of maps or aerial photographs (DK, EL, NL, PT and SE). As a result there are various situations differing in terms of: • • Cost and time required for introduction: where it is feasible, the land-registry approach whether or not involving blocks is the quickest to introduce and, on the face of it, least costly; Ease of use for declarants: the approach by blocks makes declaration easier in so far as the references are fewer in number and more stable over time; (1) which only adhered to in 1995. The need to validate the units created by the farmer by comparison with official sources, on-the-spot inspections and recent aerial photographs; Effectiveness of computerized crosschecks based on the size of the reference units, their stability, the updating intervals, the proportion of ineligible land, and the number of farmers using the same identifier. 3. 2 System for identifying livestock The fundamental purpose in verifying aid applications is to ascertain the actual existence of the declared livestock as identified by an individual number, and to check compliance with the various eligibility criteria. To achieve those objectives, a single livestock identification and registration system was needed. This was defined and introduced by Directive 92/102/EEC of 27 November 1992, which mainly covers the veterinary health surveillance of livestock. Care has therefore been taken to avoid superimposing two systems. to register all That Directive stipulates that all animals must be identified by an individual number shortly after birth or introduction into the Community. Marking must involve the use of eartags which cannot be tampered with without sign and are approved by the Member State. The producer is individual required identification numbers and enter details of animals arriving at or leaving the farm with the corresponding dates. It does not make explicit provision for registering livestock in a central database but, in view of the obligation to administer the issuing of numbers and to monitor the health of large herds, all the Member States have developed or are developing a database. The Commission feels that the need for such a database should be taken into account when that Directive is reviewed as planned in the near future. livestock he keeps under the The livestock must be marked using large-format plastic rings which are easy to read; metal rings, which are not very legible, have gradually been phased out, except in the United Kingdom, where the possibility of using either plastic or metal has been maintained. The marking is affixed by an approved identifier in Belgium, Greece, France, Ireland and Portugal. Some Member States do not yet have a database for identifying livestock but are currently developing a central computerized system; pending completion of this work, conduct administrative checks using hard-copy documents (AT, EL, ES, IE, IT and SE). Depending on the type of information recorded and updated in the database, three levels of efficiency may be distinguished: - Databases containing the numbers issued (as in DE (currently being developed) and UK), - - Databases identical to the above but also containing additional information on the animals identified, such as sex, breed and date of birth (DK, LU and PT), Databases in which all movements of livestock are recorded and which thus enable compulsory retention periods, in particular, to be verified (BE, FR, NL and FI (now being prepared)). This third type of computerized database provides the ideal solution but is also the most costly; Luxembourg and Ireland are developing a project along these lines. The Commission advises the Member States as a minimum to adopt the second approach, which affords adequate control capacity. Naturally, the details used for checks must be selected on the basis of the characteristics of production in the Member States. In Denmark, for example, animals generally remain on the holding of birth until slaughter, whereas in Ireland the animal often passes through several holdings or dealers before slaughter. Methods of verification must obviously take account of such special local factors. 3. 3 Area aid applications The Commission has not imposed a single type of form for the whole Community. Area aid applications comprise four main sections, namely administrative data (name, bank account, etc. ), references to parcels (number and official area), areas cultivated (per parcel, group) and any annexes (diagrams, copies of maps and plans, etc. ). The form and complexity of forms and explanatory notes are the result of choices made by the Member States and depend largely on the system of parcel identification selected and any combination with Community aid under other national aid schemes (e. g. environmental aid). The form may even vary within a Member State by region (DE and UK) or scheme (FR). In 1995, in order to make declarations lighter work and to reduce the percentage of mistakes, most Member States sent farmers preprinted forms containing administrative data and parcel references. In Belgium and Italy, in digital form via professional most declarations were received associations. requests reasoned for Each year many Member States present postponements of the time limit for submitting declarations, set by regulation at 31 March (8 requests in 1994, 12 in 1995 and 13 in 1996). The arguments put forward generally concern local cropping calendars, the anticipated rate of alterations to cropping schedules, work plans and procedures for the year concerned. The Commission considers that in the future the Member States should be given responsibility for taking this decision on the basis of the effectiveness of control procedures introduced (see point 7 and Annex II to proposal for Regulation), subject, naturally, to verification under clearance of accounts procedures. 3. 4 Applications for aid in respect of livestock Unlike practice in the case of area aid, it was not possible to introduce a single application covering all aid granted in respect of livestock (special premium for male bovine animals, suckler-cow premium, sheep and goat premiums, compensatory allowances for natural handicaps). As structures and cycles vary from one type of production to another, it seemed necessary and logical to take account of this fact by allowing for some flexibility and variation in the dates set for the submission of applications and in the retention periods during which the animals are to be kept. Nevertheless, the Commission encourages the Member States to group them as much as possible. Application forms for the various types of aid are generally set out in a similar way to make them easier to compile and process. Whatever the premium concerned, aid applications comprise all requisite information to be provided compulsorily, namely the administrative identification of the farmer, data on the holding (maximum individual entitlement, milk quota, reference of application for area aid), particulars relating to the animals covered by the aid application (number, species, place of retention and identification numbers of cattle), an undertaking by the producer to observe the compulsory retention period and a declaration to the effect that he is aware of the conditions governing the grant. All this information is generally included in a form of up to four pages, which poses no practical difficulties for declarants. Compulsory annexes, comprising farm registers (DE and EL) and a document accompanying or identifying the animals (BE, FR, IE and UK), are appended in certain Member States. It is not general practice for the accompanying document to be presented at the same time since the Regulation covering the sector allows the Member States under certain conditions to use a comprehensive list of livestock instead of individual documents. However, where they exist, accompanying documents are to be presented to the authorities when the aid application is submitted. Some Member States keep such documents at the department concerned during the retention period (BE, FR, IE and UK). The Commission recommends this practice, which provides one of the best safeguards for complying with the compulsory retention period, in cases where the animal cannot move without an accompanying document under the veterinary rules applicable. Applications are generally submitted to the local offices (at provincial, nomos or departmental level), which undertake an initial administrative check of applications in addition to registering them and provide information and advice to producers (along similar lines in all Member States). Submission periods vary according to the type of premium concerned: special premium for male bovine animals: continuous submission (AT, BE, DK, DE, ES, FR, SE and UK); two or three periods lasting one or two months (EL, FI, IE, IT, LU, NL and PT). In the case of DK, DE and SE, the special premium for male bovine animals is granted after slaughter on presentation of slaughterhouse certificates, which are subject to special checks; suckler-cow premium: one or two periods lasting one or two months; sheep premium and compensatory allowance for natural handicaps: generally a single period; all applications are often submitted together on the same form. 3. 5 Administrative structures The cross-sector nature of the Integrated System has induced the Member States to adjust their administrative structures. New units have been established (e. g. in BE, FR and PT), major restructuring has taken place (e. g. in NL and IE) and in general staff has been increased. Three main types of organization have been adopted, involving: • • • centralized payments, checking and submission of applications (DK, IE, IT, LU and PT); binding national rules, with regional application subject to verification by a central body (AT, BE, EL, FR, FI, NL and SE); national interpretation of regulatory constraints, with responsibility for implementation at regional level (DE, ES and UK). 3. 6 Computerized crosschecks In addition to straight crosschecks on each aid application submitted to ensure that aid is only paid once on each parcel and animal, one of the basic functions of administrative checks is to conduct systematic crosschecking with identification/registration files covering agricultural parcels and livestock. Given the large number of applications for processing in a relatively short time, such verification can only be fully effective if it is computerized. In accordance with the regulatory obligation to verify the grounds for payment of area aid, the Commission has required the Member States to introduce efficient computerized crosschecks so that any anomaly can be detected systematically and as quickly as possible. In addition to detecting the splitting-up of holdings through registers of farmers, efforts have focused on the validation of parcel references via official sources (land registry). Checks to ensure that references exist, to compare areas cultivated with official figures and to detect duplicate declarations have been developed in particular. In the stockfarming sector, crosschecks of basic data on animal identification and aid applications mean that one or more criteria governing eligibility for the premium can be verified from the administrative stage, using recorded data like the identification number, date of birth, sex, breed, holder and retention period. 3. 7 Summary of statistics of checks The Commission has prepared questionnaires on checks conducted and results obtained. Although all Member States have not forwarded all the data requested, certain conclusions can nevertheless be drawn, on the basis of replies forwarded, concerning the practical introduction of the Integrated System and checks conducted. Late submission of aid applications entails a 1% reduction per day in the amounts covered by the application. Where the overrun in the deadline exceeds 20 days, the application is inadmissible and no aid is payable. In 1993 and 1994, the percentage of late applications was generally low. The Community average for area aid applications submitted over 20 days late was 0. 1%. The figure for aid applications relating to livestock is slightly higher at 0. 2%. Although the number of applications submitted late but within 20 days of the deadline was higher, the Community average was below 1%. It may be concluded that although they wait until the last minute to submit their aid applications, the overwhelming majority of farmers do comply with the time limit. Obviously, in some Member States, the first year of application of the system did pose some problems. For example, a large number of area aid applications were not completed properly and had to be corrected in 1993 (e. g. for mistakes in identifying parcels, calculating the rate of set-aside, etc. ). In the stockfarming sector, where the detailed rules of application governing aid schemes have undergone less change, the number of applications containing anomalies was smaller. A significant improvement was observed in 1994, the second year of application. The provision of preprinted declarations readily available to farmers and the possibility, in certain Member States, of submitting applications in computerized form through producer organizations should bring a further improvement in the future. 10 inspections, regards on-the-spot As the minimum percentage of applications subject to checks is set at 5% for area aid and 10% for livestock. The Community average for checks actually conducted is slightly over 7% for areas. Although the figure for livestock aid applications seems fairly high (17% in 1993), some Member States (in particular France and Portugal) have conducted the minimum number only (10%). The percentage of applications for area aid verified by remote sensing has risen. In 1993, 31% of checks covering area aid applications were conducted by this method. The figure rose to 40% in 19941. The percentage of area aid applications where amounts applied for were reduced in 1994 as a consequence of on-the-spot checks amounted to 2. 2%; in 0. 7% of applications, the amounts were reduced without penalties being applied; penalties were applied in 1% of cases and 0. 5% were rejected out of hand. In 1993, penalties were applied or aid applications were rejected in 0. 8% of cases relating to areas against 1% of cases relating to livestock. The penalties laid down under the Integrated System have acted as a deterrent and in general the rate of compliance has been acceptable. PART-FINANCING Article 10 of Regulation (EEC) No 3508/92 introduces Community part-financing of expenditure covering the implementation of the Integrated Administration and Control System as regards temporary staff resources and data-processing and technical equipment. Initially set at three years from 1992, the duration of the part-financing arrangements was extended to the end of 1995 in view of the work still to be completed and the transitional period laid down for the introduction of the system. On account of the late publication of the Regulation, the Member States could only draw the Community financial contribution from 1993, although five Member States (DK, DE, FR, NL and UK) did take advantage of the possibility offered to include expenditure relating to 1992 in their financing applications for 1993. Of the ECU 50 million available in the 1993 budget, Member States' expenditure amounted to ECU 44 million, a rate of utilization of 88%. In 1994, Member States' expenditure accounted for around 76% of the ECU 50 million of Community appropriations available. A special report on controls by remote sensing will be presented during 1996 in accordance with Article 6 of Regulation (EC) No 165/94. 11 their allocations under Regulation Under-utilization of appropriations stems from the fact that certain Member States (EEC) No 3508/92. do not use (BE,DK,EL,ES,IT,Lu,PT,UK) Some expenditure incurred by others has been rejected as ineligible (unconnected with the introduction of the Integrated System). A few Member States' requirements substantially exceed the appropriations allocated to them; however, given the delays in setting up the Integrated System, they were not able to qualify for part-financing during the period when provision existed. (DE,FR,IE,NL) As regards 1995, although the final expenditure will only be known in May 1996, the trend can be worked out on the basis of the Member States' forecasts, which point to an overall rate of utilization of around 92% of the ECU 43 360 million available (including expenditure in the three new Member States). In total, as an initial investment Community part-financing on the introduction of this entirely new system of controls represents significantly less than 1% of expenditure on the relevant aid schemes for a single year. When set against the proportionately very small cost of the initial investment and the very lengthy period over which the system is expected to function, the greater effectiveness of controls achieved through part-financing is clearly fully worthwhile. SCOPE OF INTEGRATED SYSTEM AND FUTURE OUTLOOK Product groups covered as from the inception of the Integrated System comprised arable crops (cereals, oilseeds, protein plants and set-aside), beef/veal (special premium, suckler-cow premium), sheepmeat (ewe premium), compensatory allowance for less-favoured areas (solely as regards payments in respect of livestock). The Integrated System has applied to the ewe premium scheme and the compensatory allowance from 1 January 1994 only. Since then, its scope has widened, in particular as a result of the inclusion of linseed under the arrangements for arable crops. The reform of the arrangements covering rice makes provision for that product group to be covered by the Integrated System too. In addition to the abovementioned arrangements, which provide for aid per hectare paid directly to the farmers, other schemes exist which are indirectly linked to the land cultivated. Although the Integrated System should not cover them in toto, provision should be made for some components of the System to apply. Under the reform of the arrangements covering dried fodder, for example, agricultural parcels are to be identified using the method applying in the Integrated System, so that crosschecks with other utilizations can be conducted. The same approach is followed for cotton. The Member States can also extend the systems they introduce to other schemes. By way of an example, some States have decided to include agri-environmental measures. 12 The progressive introduction of the agricultural parcel identification system will afford further possibilities of introducing aid schemes linked to area. A system for identifying and registering parcels permits uniform monitoring of measures applying to land management. In the future, consideration could be given at Community level to extending the Integrated System to cover agri-environmental and afforestation measures (Council Regulation (EEC) No 2078/92 and No 2080/92), compensatory allowances for land, and other product groups like hemp. The same working methods will need to be followed with regard to the register of olive cultivation and the vineyard register. SITUATION AT 31 DECEMBER 1995 Area aid As at 31 December 1995 all Member States have taken the requisite steps to introduce the Integrated System, though they have not all made the same progress. Member States fall into three groups: Member States where work of limited scale remains to be done or some improvements made, although if they are not implemented immediately this will not call into question the acceptability of the system in place (DE, DK, ES, IT and NL); • • Member States where programmes for identifying parcels (BE, IE and UK) or defining databases (FR, LU and AT) have been undertaken and a few more months are needed for their completion; Member States (EL, PT, FI and SE) where work still to be completed on parcel identification is such that completion during 1996 cannot be confirmed. Aid in respect of livestock Implementing legislation for Directive 92/102/EEC has been adopted in all Member States except Ireland and Italy, where infringement procedures are under way. However, a single identification! system operates effectively in Ireland. Implementing legislation for the Directive (and rules of application) is being adopted in the new Member States. Farm registers have been introduced for beef and veal. However, shortcomings have been observed in Spain and Italy, where records are frequently incomplete since they simply repeat the particulars given in aid applications. The introduction of official farm registers has not been fully completed in Greece and Portugal. For sheepmeat, registers will generally be in use in the first half of 1996 only. 13 Two Member States have completed introduction of the Integrated System, namely Belgium and the Netherlands. Four Member States have a system which, although satisfactory, could be improved in certain aspects. These are Denmark (crosschecks and registers), France, Ireland and Luxembourg (data-processing system for crosschecks). Four Member States' (and the three new Member States') systems are incomplete and on significant points are still in the developmental phase: - - - Germany is introducing a central database in order to conduct crosschecks nationally; the database will permit checks covering livestock movements between Lander; Portugal and Greece are introducing computerized crosschecks with the livestock identification database; Greece also needs to complete marking and registering of livestock; the United Kingdom needs to improve security in its system for issuing identification numbers. Two Member States' systems show shortcomings and/or are lagging behind: - - Spain has established a detailed organization plan but its practical introduction as regards both livestock identification/registration and crosschecks is in the early stages only; Italy has not adopted implementing legislation for Directive 92/102/EEC, and as a result there are shortcomings in livestock identification and registration and possibilities of verification are consequently very limited. Overall, work still remains to be done and the corresponding programmes are under way in many Member States, in particular to step up the effectiveness of crosschecks. REMARKS IN CONNECTION WITH CLEARANCE OF ACCOUNTS The introduction of the Integrated System has gone hand-in-hand with active coordination and advisory work by the Directorate-General for Agriculture. During the transitional period covering the introduction of the Integrated System for the 1 January 1996 deadline, controls under the clearance of accounts were intended to be especially deterrent. Furthermore, even where a system devised by a Member State was appraised favourably by the Commission, the way it actually functioned needed to be checked to see there were no failings. As checks were conducted almost concurrently with the introduction of the system by the Member State, the main objective was to detect any shortcomings and identify the risks inherent in the way it operated so the Member State could take the necessary measures to remedy problems noted. 14 Many positive and negative remarks regarding the first and second years of application were made to the Member States, which were all concerned, albeit to various degrees. In cases where a particular Member State did not comply with the regulations or control provisions applicable on the entry into force of the system or did not take the transitional measures agreed with the Commission, the latter will draw the financial consequences resulting from the failings observed in the clearance of accounts. CONCLUSIONS The adoption of the CAP reform in general and the introduction of the Integrated System in particular have compelled the Member States to reorganize their administration and controls. This necessary adaptation has entailed a substantial effort on their part. The setting-up of the agricultural parcel identification system livestock together with the introduction of and the system for identifying computerized databases has called for considerable work and significant investments. This work was monitored very closely by the Commission departments. In each Member State, discussions and on-the-spot inspections concerning the introduction of the Integrated System took place at least once every six months. In addition, within the EAGGF Committee, ten meetings lasting one or two days were devoted entirely to discussions on the introduction of the Integrated System. On two occasions during those meetings, on-the-spot inspections of systems introduced by the Member States were organized (Italy and Belgium). The initial situation varied substantially from one Member State to another depending on the scale of data immediately available. Some Member States were able to base their parcel identification systems on existing land-registry data or reliable, updated topographical maps while others had to set up a system practically from scratch. Technically speaking, the introduction of the livestock identification system presents fewer difficulties. However, problems, which arose in several Member States, involving coordination between departments responsible for verifying aid and veterinarians delayed the introduction of this component of the Integrated System. In view of the diversity and scale of the technical and administrative problems to be solved, it must be observed that the Member States all experienced difficulties in meeting the deadline for the introduction of the Integrated System as a whole. At the present stage and in order to avoid financial corrections based on Regulation (EEC) n" 729/70, one additional year should suffice to complete work to bring the system fully into operation. For this reason, it is proposed to delay by one year the date of definitive implementation. A draft Regulation proposing an amendment to Regulation (EEC) No 3508/92 along these lines is attached to this report. In the light of that proposal putting back the final date for implementation of the Integrated System, the Commission feels that one further extension of one year is needed for the part-financing arrangements provided for in Article 10(2) of Regulation (EEC) No 3508/92. 15 The draft Regulation also proposes an amendment to the provisions on the date of submission of area aid applications to allow the Member States to set the date without requesting the Commission's authorization. Such an amendment to the Regulation will simplify administrative procedures. In addition, the Commission has always found it difficult to take a decision on dates to be set each year on the basis of past experience, given the way systems change from one year to the next. By setting the deadline for the submission of aid applications themselves, the Member States will assume the responsibility of seeing to the proper administrative and financial management of aid and the execution of controls within the time limits laid down. Furthermore, the draft Regulation contains no proposal to extend the scope of the Integrated System. Such amendments will be adopted under the relevant regulations covering the product groups concerned. At this stage, observations during on-the-spot inspections and via expert groups show that the Integrated System has proved to be an excellent instrument for gathering information on the situation in the field and conducting controls. Many of its components are already operational and the others will come into force within one year. Foreseeably, various functions such as parcel/livestock identification and the aid application database will allow other types of aid to be covered from the technical and administration viewpoints in the near future. This will assist the Member States, in so far as they will reap the benefit of their investments on the introduction of the System and their tasks will be facilitated. The Commission should support the trend towards wider utilization of the Integrated System, which must ultimately reduce the cost of processing and monitoring aid, improve management and provide a better service to the farmer, thanks to greater clarity, speed and security in processing applications. 16 Integrated Administration and Control System Annex Report to the Council Situation in the Member States. Land Parcel identification system: Development of parcel administration software still in The parcel identification system progress will use: the agricultural parcel Data base: Will be centralized under Oracle; development in progress identified on the individualized Cross-checks: Wll be carried out at the level of farm parcels, effective once orthophoto plan produced for each system set up farmer Completion of work: validation after 1996 declaration. First large-scale operation in 1996. Livestock Overall, the system is satisfactory Identification: Directive* transposed for bovine animals, in progress for ovine and operational animals. Double marking (within thirty days by the farmer, within six months by the identifying agent). Completion of work: Register: Farm register made up of identification files to be accompanied by a system complete summary. Data base: Central identification register, computerized and linked to the "premiums" data base. Cross-checks: effective because of computerized linking of the two data bases. 17 Danmark Land The parcel identification system Parcel identification system: being developed; blocks will contain 5 to 10 will use: crop blocks defined by agricultural parcels. the authorities, marked on Data base: Although the system was improved in 1995, there is still a very large individualized maps for the number of anomalies. farmers. Cross-checks: at present checks are not effective, but should be improved by the Completion of work: expected new parcel identification system end of 1995 Livestock Identification: Directive transposed (bovine animals), very clear marking using plastic rings. Satisfactory overall, registers to Register: different types of farm register, official register to be defined. be improved Data bases: Register of marking rings issued, central base for the computerized administration of applications. Completion of work: Cross-checks: effective, but not systematic between the 2 data bases. validation in 1996 Deutschland Land The parcel identification system Parcel identification system: system complete (except Saxony Anhalt, where will use: in the case of 11/16 development in progress). Lander: the agricultural parcel with Data base: Organized by Land, but data not always exchanged. Regional data direct reference to the land bases, even at Kreis level (Hessen) in 1995 register; in the case of 5/16: the Cross-checks: validation using computerized land register partly in place (e. g. Feldstuck (block) BW, NW, SH, HE. ) Livestock Completion of work: With a few exceptions, in place for the end of 1995. Identification: Directive transposed (bovine, ovine and caprine animals), single identification system in place from October 1995 (plastic tags attached by the farmer). System development in progress Register: single farm register for veterinary purposes and for premiums. Data bases: regional identification registers not interconnected, creation of central Completion of work: data base in Munich. during 1996 Cross-checks: will be carried out by Bavaria for all the Lander, first tests in November 1995. Land The parcel identification system Parcel identification system: Phase 1 invitation to tender (creation of digital will use: crop blocks defined by orthophotos) cancelled (and reissued 1-Sep-95). Phase 2 announced 1-Oct-95. the authorities, marked on Data base: Centralized, and in 1995 enabled 150 000 declaration papers to be orthophoto plans. pre-printed - but divided into 52 dBASE files (by Prefecture) Completion of work: the Cross-checks: not currently being made on parcel data. cancellation of Phase 1 delayed Livestock Identification: Directive transposed (bovine, ovine and caprine animals), marking completion by a further year - no chance of completion before the end of 1996. by veterinarians (plastic rings) in progress for bovine animals, from January 1996 System still being developed, for ovine animals. making progress thanks to the Register: detailed farm registers under veterinary supervision, copy in local support of the veterinary service. ' veterinary office. Data bases: development of 2 data bases (identification and applications) with Completion of work: computer link. computerized system to be Cross-checks: document-based checks pending completion of computerized completed during 1996 system, cross-checks using copies of the abovementioned farm registers endorsed by veterinary officials. 19 Land The parcel identification system Parcel identification system: system complete; however, land register quality will use: the agricultural parcel varies according to region. with direct reference to the land Data base: centralized, including parcel data register Cross-checks: carried out regionally and centrally, with occasional regional Completion of work: system differences Livestock complete, in operation during 1995. Identification: Directive transposed for bovine animals, marking inadequate in certain regions. Register: farm register limited to animals for which a premium application is Development of a coherent made. system in collaboration with the Data bases: local identification registers, not interconnected, central data base for regions. applications. Cross-checks: effective where using the application data base, inadequate with Completion of work: regard to identification files. during 1996 20 Land The parcel identification system Parcel identification system: reference-based system being developed (planned will use: the block or the for first quarter of 1996). Mixed system (simplified scheme:land register parcel; agricultural parcel, references to general scheme:the block). the land register. Data base: award of Pacage contract planned before the end of 1995; no use Completion of work: during 1996 planned for 1996 declarations. Cross-checks: at present principally manual; validation of land register in progress; first cross-checks of parcel references in 1996 Livestock Identification: Directive transposed (bovine, ovine and caprine animals), double marking of bovine animals (by the farmer at birth, by the identifying agent within System providing guarantees, to four months). be supplemented by data cross Register: farm register in place for bovine animals, not yet systematically for checking at national level ovine animals. Data bases: 2 computerized data bases (identification and applications) in each Completion of work: Département. first quarter of 1996 Cross-checks: linkage of the two data bases per Département currently being systematized, cross-checking of data at national level planned from the first quarter of 1996. 21 Ireland Land The parcel identification system Parcel identification system: development in progress, aerial photography will use: Forage (90% of completed for the whole country. Structural reorganization still in progress. declarations) - blocks defined by Data base: Centralized under Supra, Oracle: on-line access possible from County the farmer; cereals - borders of offices; development still in progress - but this year 100% of declarations were pre the agricultural parcels; both on printed. A few flaws with unambiguous farm identification. the 1995 orthophoto plans. Cross-checks: Cannot be carried out until the parcel identification system is in Completion of work: last place. Livestock validations after 1996 declarations. Identification: Directive not transposed, infringement procedure, marking using rings with poor legibility. System improvement planned for Register, new farm registers complying with requirements. 1996 (computerized livestock Data bases: development project for a new centralized computerized registration) identification/registration system, central data base for applications. Cross-checks: carried out regionally and centrally. Completion of work: 1996 Italia Land The parcel identification system Parcel identification system: operational; reference system clearer every year. will use: direct reference to the Data base: Centralized, Oracle; but decentralized data input presents some quality land register problems. Completion of work: system Cross-checks: detailed, but no very satisfactory way of solving the problems complete. identified has yet been found. Livestock Identification: Directive not transposed, infringement procedure, marking inconsistent or non-existent. Register: farm registers often incomplete. Very unsatisfactory, undertaking by the Ministry of Health to Data bases: central identification register which only covers animals for which regularize situation before premium applications are made, central data base for applications. summer 1995 Cross-checks: central, but incomplete identification data base. Completion of work: 1996 22 Luxembourg Land The parcel identification system Parcel identification system: reference system operational; land register data will use: direct reference to the base available. land register. Data base: SIGC studies in 1995; 62% of declarations pre-printed in 1995. Completion of work:in principle Cross-checks: carried out after payments in 1995. planned for mid-1996. Livestock Identification: Directive transposed (bovine, ovine and caprine animals),marking clear and generally applied, within six months or before moving the animal. Register: farm registers well designed and well kept. Improvement of the computerized Data bases: central identification register managed by veterinarians, central data system for the end of 1995 base for applications. Completion of work:validation in Cross-checks: carried out centrally. 1996 Nederland Land The parcel identification system Parcel identification system: development in progress, with the topographical will use: topographical blocks, department in charge of implementing and administering the project. Project test defined by the authorities, with 2 000 declarants facilitated planning for 1996. Completion of work: planned for Data base: centralized since Jan. 1995; system being developed. the end of 1995. Cross-checks: limited at present - improvements expected in 1996 when the parcel identification system is in place. Livestock Identification: Directive transposed (bovine and ovine animals), very clear double marking by the producers. System satisfactory overall. Register: farm registers using identification records. Data bases: central identification/registration system with automatic safeguards, Completion of work: central data base for applications. system complete Cross-checks: carried out using the central data bases. 23 Portugal Land The parcel identification system Parcel identification system: Award of contracts (creation of parcel identification will use: crop blocks and system) planned in Nov. 1995; work schedule extended to end of 1996. agricultural parcels defined by the Data base: Centralized - but redevelopment expected for 1997 (SINGA) authorities, marked on orthophoto Cross-checks: detailed, but inefficient because of the current weakness of the plans. parcel identification system Livestock Completion of work: 1. 1. 97 proposed by the INGA. Identification: Directive transposed (bovine, ovine and caprine animals), metal tags replaced this year by plastic tags, tattooing for ovine animals. Register: farm registers in place, definition of an official register underway. System improvement in progress. Data bases: local or regional identification files, project for the creation of a central file, central data base for applications. Completion of work: Cross-checks: to be improved using an animal identification file. during 1996 United Land The parcel identification system M Kingdom Parcel identification system: England and Wales have finally adopted a strategy; will use: England and Wales: Scotland carrying out production tests in 1995; in Northern Ireland strategy and topographical maps checked by progress are satisfactory overall. the authorities; Scotland: blocks Data base: England and Scotland - centralized, development in progress, end of validated with Ordnance Survey work 1995; Wales - still three separate data bases with manual data exchange; digital data; Northern Ireland: Northern Ireland generally operational end of 1995. individual plans of farms, updated Cross-checks: Need to validate declaration data (especially in England) - except by the authorities. for Northern Ireland, where validation should be completed for end 1995. Completion of work: England and Wales: 1996; Scotland and Northern Ireland: 1. 1. 1996. Livestock. Identification: Directive transposed for bovine animals, marking within thirty days Checks on the use of tags issued by the farmer, single identification number, various types of approved marking. and links between data bases to Register: in place, but no uniform model. be improved. Data bases: data base of tags issued, regional data bases for applications. Completion of work: Cross-checks: cross-checks with identification file to be improved. during 1996 New Member States - Deadline 1997 24 Osterreich Land The parcel identification system Parcel identification system: Pre-printing of 100 000 declarations (50%) ; will use: the Feldstuck (block), compilation of parcels declared (+/- 2 million) on "master cards" in local offices based on the land register. before 1995 declaration. Completion of w o rk planned for Database: In July 1995 work schedule insufficiently detailed but satisfactory overall ! 11 1997 for the first year. Cross-checks: a list of checks for 1995 was submitted, but was limited by the state of development of computerized tools. No direct computerized link with the land register before 1996 - although references are available at the land registry. Livestock Identification: Transposition of Directive in progress, various marking systems ] System still to be developed, administered by associations, project for single numbering system and double \ identification data base to be marking. created. Register: farm register in place, but not yet generally kept effectively. Data bases: local identification files administered by veterinarians and associations; Completion of work: central data base for applications being developed. planned for 1. 1. 1997 Cross-checks: not yet operational. 25 Suomi/Finland Land The parcel identification system Parcel identification system: Reference based on photocopies, plans or will use: crop blocks, possibly photographic plans with sequential numbering in 1995. Validation of data validated against orthophotos. submitted by declarants in digital format planned for 1996. Completion of work: planned Data base: Centralized, development in progress. Data input at local level. 1. 1. 1997, but no work schedule in Cross-checks: A list of checks for 1995 has been submitted to the Commission. place at present. Livestock Identification: Directive transposed, plastic tags attached by the farmer Register: in place. System still to be developed: Data bases: computerized administration of identification, data base for checks on issuing of tags to be applications being developed. Cross-checks: still at project stage. stepped up, cross-checks to be put in place Completion of work: planned for 1. 1. 1997 Sverige Land The parcel identification system Parcel identification system: Agricultural parcel identified using topographical will use: not yet decided. plans (of varying quality), with numbering system linked to the "fastighet" (farm Completion of work: estimated block in the land register). However, steps to improve the system should be beginning of 1997, more detailed discussed as soon as possible. schedule expected. Data base: proper commencement of implementation, but still being developed. Cross-checks: detection of parcel problems, but manual checks are still required to resolve them. Livestock Identification: transposition of Directive in progress, multiple identification and System still to be developed. marking systems, start-up of a single system in 1995. Register: official farm register in place, its design to be reviewed. Completion of work: Data bases: at planning stage. planned for 1. 1. 1997 Cross-checks: detailed project being developed. 26 PROPOSAL FOR COUNCIL REGULATION (EC) No /96 of amending Regulation (EEC) No 3508/92 establishing an integrated administrative and control system for certain Community aid schemes ("integrated system") THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof, Having regard to the proposal from the Commission1, Having regard to the opinion of the European Parliament2, Whereas Article 6(2) of Council Regulation (EEC) No 3508/92 of 27 November 19923 provides that area aid applications must be submitted during the first quarter of the year; whereas, however, the Commission may allow a Member State to fix a date for the submission of area aid applications between 1 April and the dates referred to in Articles 10, 11 and 12 of Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for producers of certain arable crops4; whereas, in the light of experience, it should be possible for Member States to set the deadline for the submission of applications on their own responsibility without seeking the authorization of the Commission, taking into account in OJ No C. Opinion delivered on OJ No L 355, 5. 12. 1992, p. 1. Regulation last amended by Regulation (EC) No 3235/94 (OJ No L 338, 28. 12. 1994, p. 16. ). OJ No L 181, 1. 7. 1992, p. 12. Regulation last amended by Regulation (EC) No 1664/95 (OJ No L 158, 8. 7. 1995, p. 13). 27 particular the time required for all relevant data to be available for the proper administrative and financial management of the aid and for checks to be carried out; Whereas Article 13(1) of Regulation (EEC) No 3508/92 provides that all the elements of the integrated system are to apply from 1 January 1996 at the latest; whereas, in view of experience gained, notably in setting up alphanumeric identification systems for agricultural parcels and data bases, this deadline should be postponed for one year; Whereas, given the considerable investment required to ensure that the integrated system is established definitively, provision should be made to prolong by one year the period for which the Community financial contribution may be granted, HAS ADOPTED THIS REGULATION: Article J Regulation (EEC) No 3508/92 is hereby amended as follows: 1. Article 6(2) is replaced by the following: "2. Area aid applications must be submitted by a date to be set by the Member State which may not be later than the dates referred to in Articles 10, 11 and 12 of Regulation (EEC) No 1765/92. In all cases, the date shall be set bearing in mind, inter alia, the period required for all relevant data to be available for the proper administrative and financial management of the aid and for the checks provided for in Article 8 to be carried out. " 2. Article 10(2) is amended as follows: (a) The first subparagraph is replaced by the following: 28 "The Community's financial contribution shall be granted for a period of five years from 1992, within the limits of the appropriations allocated for this purpose. " (b) The third subparagraph is replaced by the following: "The total amount shall be shared among the Member States as follows: "for 1995: Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom for 1996: 2,2 2,3 9,2 8,0 16,5 13,3 4,2 18,1 0,6 2,8 3,3 5,3 2,7 2,4 9,1 Belgium Denmark Germany Greece Spain France 1,8 1,9 7,7 6,7 13,7 11,1 29 Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom for 1997: Austria Finland Sweden 3,5 15,1 0,5 2,3 9,3 4,4 7,6 6,8 7,6 39,3 32,1 28,6 " 3. Article 13(l)(b) is replaced by the following: "(b) as regards the other elements referred to in Article 2, at the latest from: - 1 January 1998 in the case of Austria, Finland and Sweden, and - 1 January 1997 in the case of the other Member States. " Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. Article 1(2) shall apply from 1 January 1996. 30 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council The President 31 Item Bl - 360 : Monitoring and preventative measures concerning the EAGGF Guarantee Section 1. TITLE OF OPERATION Council Regulation (EC) amending Regulation (EEC) No 3508/92 an integrated administrative and control system for certain Community aid schemes ('integrated system') establishing 2. BUDGET HEADING INVOLVED Bl - 360 3. LEGAL BASIS Article 43 of the Treaty establishing the European Community 4. DESCRIPTION OF OPERATION 4. 1. To prolong by one year the period of co-financing of expenditure incurred by Member States in implementing the integrated administrative and control system. The system was established to enhance the effectiveness and usefulness of the mechanisms for controlling aid schemes linked to area (principally arable crops and beef, sheepmeat and goatmeat) adopted as part of the reform of the common agricultural policy. The aim of Regulation (EEC) No 3508/92, which introduces the integrated system, is to set up systems for identifying agricultural parcels and animals together with an electronic data base that can be used for cross-checking aid applications. Provision is made for the system to be definitively in place from 1 January 1996 (Austria, Finland, Sweden: from 1 January 1997). The Regulation provides for Community co-financing of expenditure incurred by the Member States in introducing it. In view of the difficulties that Member States have had to face, it is proposed postponing the system's definitive introduction by one year (to 1 January 1997, and 1 January 1998 for Austria, Finland and Sweden). For the same reason it is also proposed prolonging the co-financing arrangements for a year. This operation represents a part only of the control measures in the EAGGF Guarantee Section area covered by item B1-360. 4. 2. Period covered: one year. 5. CLASSIFICATION OF EXPENDITURE OR REVENUE 5. 1. Compulsory expenditure 5. 2. Non-differentiated appropriations 32 6 TYPE OF EXPENDITURE Subsidy for joint financing with other sources in the public or private sector (see point 9. 1 for a detailed description of the type of expenditure). 33 7. FINANCIAL IMPACT "Method of calculation: Maximum authorized as an EAGGF Guarantee Section contribution 7. 2. Itemized breakdown of cost of operation in ECU million: Commitment appropriations in ECU million (current prices) Budget year n (1996) n+ 1 n + 2 n + 3 n + 4 Co-financing of expenditure incurred by Member States 24* Total 24 Total n + 5 and subs. years 24 24 T he breakdown in 1992 and 1993 by type of expenditure (see 9. 1) was as follows: Data-processing structures:36%; Control structures:24%; Staff:40% 7. 3. Schedule of commitment/payment appropriations Commitment appropriations in ECU million n+ 1 n + 2 n + 3 n + 4 n + 5 and subs. years Total 24 Budget year n (1996) 24 18 6 Commitment appropriations Payment appropriations n n+ 1 n + 2 n + 3 n + 4 n + 5 and subsequent years Total 24 24 34 8. FRAUD PREVENTION MEASURES - Specific control measures planned: Verification of eligibility of expenditure incurred by national authorities and of consistency between amounts claimed and accounting documents; on-the-spot inspection visits to examine supporting documents and determine the progress of work or the extent to which operations have been implemented. 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 9. 1. Specific and quantified objectives; target population: - Specific objectives: links with general objective: The types of expenditure covered by the operation are the following: Data-processing structures: host computers, including installation costs; work stations, PCs, network infrastructure (cables, connectors, etc. ); software; costs of digitizing topographical maps. Control structures: printing and preparation of registers and forms; animal identifiction rings; devices for fitting them; land vehicles (e. g. 4 x 4) and equipment; equipment for measuring parcels; costs of informing farmers. Staff costs: expenses of temporary staff recruited for work directly linked with the introduction of the system or of officials specifically assigned to this work; systems analysts, engineers, programmers, encoders etc. The majority of the technical and administrative difficulties encountered by the Member States concern the introduction of systems for identifying parcels and animals. The initial situation differed appreciably between Member States depending on the extent of the data immediately available: some Member States were able to construct their parcel identification systems on the basis of existing land registry data or reliable and up-to-date topographical maps while others had to establish the system practically from scratch. Technically speaking, the introduction of a system for identifying animals presents fewer difficulties. However, coordination difficulties between the departments controlling the aids and veterinarians, that have come to light in a number of Member States, have delayed implementation of this element of the integrated system. - Target population: The beneficiaries of the Community's financial contribution are national authorities responsible for controlling aid in the agricultural field. 35 9. 2 Grounds for the operation: - Need for Community financial assistance, particularly having regard to the principle of subsidiarity: The assistance is justified by the need to safeguard the Community's financial interests and to satisfy the requirements of the Member States, for which the work involved in introducing the integrated system represents a substantial additional financial burden. - Choice of ways and means: * advantages over possible alternatives (comparative advantages): the Community financial aid constitutes support for their operation and an incentive encouraging new initiatives. * examination of any similar Community or national operations: the operation involves the implementation of an entirely new administration and control system. No comparison can be made with other Community or nationally administered operations. * spin-off and multiplier effects: the Community assistance will contribute (for a limited period) to the implementation of the modern administration and control systems introduced by the integrated system. The expenditure on aid schemes (arable crops, livestock premiums) covered by the integrated system represents around 50% of EAGGF Guarantee Section expenditure. The total Community co-financing required as an initial investment to set up this entirely new control system represents considerably less than 1% of the expenditure on the aid schemes in question for a single year. If the proportionally very low cost of the initial investment and the fact that the system will be required to operate for a very long time are taken into consideration, the co-financing is seen to be entirely cost-effective given the benefits in terms of more effective control. - Main factors of uncertainty which could affect the specific results of the operation: The factors of uncertainty include the technical problems faced by the Member States and their political will together with the budgetary problems they encounter in complying with the rules. 9. 3 Monitoring and evaluation of the operation: - Performance indicators: 36 From the information provided by the Member States on checks carried out and the results achieved, and from inspection visits by Commission staff, a number of conclusions can be drawn on the practical implementation of the integrated system and on the progress of controls. It is clear that in its first year of implementation the system has presented problems in a few Member States. For example, a large number of area aid applications were incorrectly completed and had to be corrected in 1993 (e. g. because of errors in identifying parcels, in calculating the rate of set-aside, etc. ). In the livestock sector, where fewer changes were made to the scheme arrangements, the number of files containing anomalies was smaller. 1994, the second year of implementation of the system, saw a distinct improvement. The availability of preprinted declaration forms for farmers and the possibility, in some Member States, of submitting applications in electronic form through producers' organizations are expected to improve the situation further in the future. For on-the-spot inspection visits, the minimum percentage of files to be checked is set at 5% for area-linked aid and 10% for livestock aid. The Community average for checks actually carried out is slightly above 7% for area-linked aid. While the equivalent figure for livestock aid (17% in 1993) seems fairly high, some Member States (notably France and Portugal) only carried out the minimum. The number of area aid files checked using remote sensing has risen, with 31% of applications having been checked in this way in 1993. The figure rose to 40% in 1994. The percentage of area aid files in which the amount sought was reduced following on-the-spot inspections amounted to 2,2% in 1994: 0,7% of applications were reduced without penalty; 1% had a penalty applied and 0,5% were rejected outright. In 1993, 0,8% of area aid applications had a penalty applied or were rejected as against 1% of livestock aid applications. From this it can be inferred that the penalties introduced under the integrated system have had a deterrent effect and that as a rule the level of compliance has been acceptable. Details and frequency of planned evaluation: The implementation of the integrated system has been monitored very closely by the Commission. Discussions and control visits have taken place in each Member State at least quarterly. Ten one- or two-day meetings of the EAGGF Committee have been given over entirely to discussion of the introduction of the system. A report has been prepared for the Council giving details of the setting up of the system and setting out findings regarding its implementation. Assessment of the results obtained (where an existing operation is to be continued or renewed) 37 Given the wide range of technical and administrative problems to be resolved and their scale, all Member States are having difficulties in respecting the deadline for bringing all the elements of the integrated system into effect. As matters now stand, there is reason to believe that with an extra year to complete the work the system will be fully operational. 38 ISSN 0254-1475 COM(96) 174 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-184-EN-C ISBN 92-78-03032-5 Office for Official Publications of the European Communities L-2985 Luxembourg

Decision of the EEA Joint Committee No 28/96 of 26 April 1996 amending Annex XVIII (Health and safety at work, labour law and equal treatment for men and women) to the EEA Agreement

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L_1996186EN. 01008101. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/81 DECISION OF THE EEA JOINT COMMITTEE No 28/96 of 26 April 1996 amending Annex XVIII (Health and safety at work, labour law and equal treatment for men and women) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex XVIII to the Agreement was amended by Decision of the EEA Joint Committee No 3/96 (1); Whereas Council Regulation 95/C 168/02 of 27 March 1995 on the balanced participation of men and women in decision-making (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 21. A (Resolution 95/C 296/06 of the Council and of the representatives of the Governments of the Member States meeting within the Council) in Annex XVIII to the Agreement: ‘21. B. 395 Y 0704(02): Council Resolution 95/C 168/02 of 27 March 1995 on the balanced participation of men and women in decision-making (OJ No C 168, 4. 7. 1995, p. 3). ’ Article 2 The texts of Resolution 95/C 168/02 in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 90, 11. 4. 1996, p. 41. (2)  OJ No C 168, 4. 7. 1995, p. 3

Decision of the EEA Joint Committee No 26/96 of 26 April 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement

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L_1996186EN. 01007801. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/78 DECISION OF THE EEA JOINT COMMITTEE No 26/96 of 26 April 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex II to the Agreement was amended by Decision of the EEA Joint Committee No 13/95 (1); Whereas Commission Regulation (EC) No 529/95 of 9 March 1995 deferring for imports from certain third countries the date of application of Article 11 (1) of Council Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs (2) is to be incorporated into the Agreement; Whereas Commission Regulation (EC) No 1201/95 of 29 May 1995 amending Annex VI to Council Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring hereto on agricultural products and foodstuffs (3) is to be incorporated into the Agreement; Whereas Commission Regulation (EC) No 1202/95 of 29 May 1995 amending Annexes I and III to Council Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs (4) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 In point 54. B (Council Regulation (EEC) No 2092/91) of Chapter XII of Annex II to the Agreement the fifth indent (Commission Regulation (EEC) No 3713/92) shall be replaced by the following: ‘— 395 R 0529: Commission Regulation (EC) No 529/95 of 9 March 1995 (OJ No L 54, 10. 3. 1995, p. 10). ’ Article 2 The following indents shall be added in point 54. B (Council Regulation (EEC) No 2092/91) of Chapter XII of Annex II to the Agreement: ‘— 395 R 1201: Commission Regulation (EC) No 1201/95 of 29 May 1995 (OJ No L 119, 30. 5. 1995, p. 9), — 395 R 1202: Commission Regulation (EC) No 1202/95 of 29 May 1995 (OJ No L 119, 30. 5. 1995, p. 11). ’ Article 3 The texts of Regulations (EC) No 529/95, (EC) No 1201/95 and (EC) No 1202/95 in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision are authentic Article 4 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 5 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 83, 13. 4. 1995, p. 45. (2)  OJ No L 54, 10. 3. 1995, p. 10. (3)  OJ No L 119, 30. 5. 1995, p. 9. (4)  OJ No L 119, 30. 5. 1995, p. 11

Decision of the EEA Joint Committee No 27/96 of 26 April 1996 amending Annex XIII (Transport) to the EEA Agreement

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L_1996186EN. 01008001. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/80 DECISION OF THE EEA JOINT COMMITTEE No 27/96 of 26 April 1996 amending Annex XIII (Transport) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex XIII to the Agreement was amended by Decision of the EEA Joint Committee No 20/96 (1); Whereas Council Regulation (EC) No 3051/95 of 8 December 1995 on the safety management of roll-on/roll-off passenger ferries (ro-ro ferries) (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 56. B (Council Directive 95/21/EC) in Annex XIII to the Agreement: ‘56. C. 395 R 3051: Council Regulation (EC) No 3051/95 of 8 December 1995 on safety management of roll-on/roll-off passenger ferries (ro-ro ferries) (OJ No L 320, 30. 12. 1995, p. 14). ’ Article 2 The texts of Regulation (EC) No 3051/95 in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 124, 23. 5. 1996, p. 28. (2)  OJ No L 320, 30. 12. 1995, p. 14

Decision of the EEA Joint Committee No 29/96 of 26 April 1996 amending Annex XVIII (Health and safety at work, labour law and equal treatment for men and women) to the EEA Agreement

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L_1996186EN. 01008201. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/82 DECISION OF THE EEA JOINT COMMITTEE No 29/96 of 26 April 1996 amending Annex XVIII (Health and safety at work, labour law and equal treatment for men and women) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex XVII to the Agreement was amended by Decision of the EEA Joint Committee No 3/96 (1); Whereas Resolution 95/C 296/06 of the Council and of the representatives of the Governments of the Member States, meeting within the Council, of 5 October 1995, on the image of women and men portrayed in advertising and the media (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 21 (Council Directive 86/613/EEC) in Annex XVIII to the Agreement: ‘21 A. 495 Y 1110(02): Resolution 95/C 296/06 of the Council and of the representatives of the Governments of the Member States, meeting within the Council, of 5 October 1995, on the image of women and men portrayed in advertising and the media (OJ No C 296, 10 11. 1995, p. 15). ’ Article 2 The texts of Resolution 95/C 296/06 in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 90, 11. 4. 1996, p. 41. (2)  OJ No C 296, 10. 11. 1995, p. 15

Decision of the EEA Joint Committee No 25/96 of 26 April 1996 amending Annex I (Veterinary and phytosanitary matters) to the EEA Agreement

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L_1996186EN. 01007701. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/77 DECISION OF THE EEA JOINT COMMITTEE No 25/96 of 26 April 1996 amending Annex I (Veterinary and phytosanitary matters) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol Adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex I to the Agreement was amended by Decision of the EEA Joint Committee No 4/95 (1); Whereas Commission Directive 94/50/EC of 31 Ooctober 1994 amending Council Directive 70/524/EEC concerning additives in feedingstuffs (2) is to be incorporated into the Agreement; Whereas Commission Directive 94/77/EC of 20 December 1994 amending Council Directive 70/524/EEC concerning additives in feedingstuffs (3) is to be incorporated into the Agreement; Whereas Commission Directive 95/37/EC of 18 July 1995 amending Council Directive 70/524/EEC concerning additives in feedingstuffs (4) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following indents shall be added in point 1 (Council Directive 70/524/EEC) in Chapter II of Annex I to the Agreement: ‘— 394 L 0050: Commission Directive 94/50/EC of 31 October 1994 (OJ No L 297, 18. 11. 1994, p. 27), — 394 L 0077: Commission Directive 94/77/EC of 20 December 1994 (OJ No L 350, 31. 12. 1994, p. 113), — 395 L 0037: Commission Directive 95/37/EC of 18 July 1995 (OJ No L 172, 22. 7. 1995, p. 21). ’ Article 2 The texts of Commission Directives 94/50/EC, 94/77/EC and 95/37/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 47, 2. 3. 1995, p. 24. (2)  OJ No L 297, 18. 11. 1994, p. 32. (3)  OJ No L 350, 31. 12. 1994, p. 113. (4)  OJ No L 172, 22. 7. 1995, p. 21

Decision of the EEA Joint Committee No 23/96 of 26 April 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement

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L_1996186EN. 01007501. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/75 DECISION OF THE EEA JOINT COMMITTEE No 23/96 of 26 April 1996 amending Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex II to the Agreement was amended by Decision of the EEA Joint Committee No 14/96 (1); Whereas Commission Directive 95/45/EC of 26 July 1995 laying down specific purity criteria concerning colours for use in foodstuffs (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 1. The following indent shall be added in point 1 (362 L 2645: Council Directive of 23 October 1962) in Chapter XII of Annex II to the Agreement: ‘— 395 L 0045: Commission Directive 95/45/EC of 26 July 1995 (OJ No L 226, 22. 9. 1995, p. 1). ’ 2. The following point shall be inserted after point 46A (Commission Directive 95/31/EC) in Chapter XII of Annex II to the Agreement: ‘46. B 395 L 0045: Commission Directive 95/45/EC of 26 July 1995 laying down specific criteria concerning colours for use in foodstuffs (OJ No L 226, 22. 9. 1995, p. 1). ’ Article 2 The texts of Directive 95/45/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 124, 23. 5. 1996, p. 16. (2)  OJ No L 226, 22. 9. 1995, p. 1

Decision of the EEA Joint Committee No 22/96 of 26 April 1996 amending Annex XIII (Transport) to the EEA Agreement

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L_1996186EN. 01007301. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/73 DECISION OF THE EEA JOINT COMMITTEE No 22/96 of 26 April 1996 amending Annex XIII (Transport) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol, adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex XIII to the Agreement was amended by Decision of the EEA Joint Committee No 19/96 (1); Whereas Council Directive 94/55/EC of 21 November 1994 on the approximation of the laws of the Member States with regard to the transport of dangerous goods by road (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following point shall be inserted after point 17. D (Council Directive 95/50/EC) in Annex XIII to the Agreement: ‘17. E. 394 L 0055: Council Directive 94/55/EC of 21 November 1994 on the approximation of the laws of the Member States with regard to the transport of dangerous goods by road (OJ No L 319, 12. 12. 1994, p. 7), as corrected by OJ No L 301, 14. 12. 1995, p. 47. ’ Article 2 The texts of Directive 94/55/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 124, 23. 5. 1996, p. 27. (2)  OJ No L 319, 12. 12. 1994, p. 7

Decision of the EEA Joint Committee No 24/96 of 26 April 1996 amending Annex VI (Social security) to the EEA Agreement

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L_1996186EN. 01007601. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/76 DECISION OF THE EEA JOINT COMMITTEE No 24/96 of 26 April 1996 amending Annex VI (Social security) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex VI to the Agreement was amended by Decision of the EEA Joint Committee No 11/96 (1); Whereas Decision No 159 of 3 October 1995 amending Decision No 86 of 24 September 1973 concerning the methods of operation and the composition of the Audit Board of the Administrative Commission of the European Communities on Social Security for Migrant Workers adopted by the Administrative Commission of the European Communities on Social Security for Migrant Workers (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The indent (Decision No 106 of 8 July 1976) in point 10 (Decision No 86) in Annex VI to the Agreement shall be replaced by the following: ‘— 395 D 0512: Decision No 159 of 3 October 1995 (OJ No L 294, 8. 12. 1995, p. 38). ’ Article 2 The texts of Decision No 159 in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 124, 23. 5. 1996, p. 21. (2)  OJ No L 294, 8. 12. 1995, p. 38

Decision of the EEA Joint Committee No 30/96 of 26 April 1996 amending Annex IX (Financial services) to the EEA Agreement

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L_1996186EN. 01008301. xml 25. 7. 1996    EN Official Journal of the European Communities L 186/83 DECISION OF THE EEA JOINT COMMITTEE No 30/96 of 26 April 1996 amending Annex IX (Financial services) to the EEA Agreement THE EEA JOINT COMMITTEE, Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement, hereinafter referred to as ‘the Agreement’, and in particular Article 98 thereof, Whereas Annex IX to the Agreement was amended by Decision of the EEA Joint Committee No 2/96 (1); Whereas Commission Directive 95/67/EC of 15 December 1995 making a technical amendment to Council Directive 89/647/EEC on a solvency ratio for credit institutions as regards the definition of ‘multilateral development banks’ (2) is to be incorporated into the Agreement, HAS DECIDED AS FOLLOWS: Article 1 The following indent shall be added in point 18 (Council Directive 89/647/EEC) in Annex IX to the Agreement: ‘— 395 L 0067: Commission Directive 95/67/EC of 15 December 1995 (OJ No L 314, 28. 12. 1995, p. 72). ’ Article 2 The texts of Directive 95/67/EC in the Icelandic and Norwegian languages, which are annexed to the respective language versions of this Decision, are authentic. Article 3 This Decision shall enter into force on 1 May 1996, provided that all the notifications under Article 103 (1) of the Agreement have been made to the EEA Joint Committee. Article 4 This Decision shall be published in the EEA Section of, and the EEA Supplement to, the Official Journal of the European Communities. Done at Brussels, 26 April 1996. For the EEA Joint Committee The President P. BENAVIDES (1)  OJ No L 90, 11. 4. 1996, p. 39. (2)  OJ No L 314, 28. 12. 1995, p. 72

Proposal for a COUNCIL REGULATION (EC) amending Regulation (EC) No. 3090/95 laying down for 1996 certain conservation and management measures for fishery resources in the Regulatory Area as defined in the Convention on Future Multilateral Cooperation in the North West Atlantic Fisheries

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COMMISSION OF THE EUROPEAN COMMUNITIES. ** •A- -ir Brussels, 25. 04. 1996 COM(96) 179 final Proposal for a COUNCIL REGULATION ( EO amending Regulation (EC) No. 3090/95 laying down for 1996 certain conservation and management measures for fishery resources in the Regulatory Area as defined in the Convention on Future Multilateral Cooperation in the North West Atlantic Fisheries (presented by the Commission) * Û EXPLANATORY MEMORANDUM On 22 December 1995, the Council established certain conservation and management measures which are applicable in the NAFO Regulatory Area in 1996(,). Those measures also comprise the distribution of the share of Greenland halibut in NAFO area 3LMNO which is available to the Community between the Member States. The objective of the present proposal is to change, for Member States and masters of Community vessels, the existing 48-hour reporting system for the Greenland halibut fishery into a weekly reporting system. Now that the allocation of the Community quota of Greenland halibut among the Member States has been established, it appears to be appropriate to bring the existing 48-hour rule, which had its merits in the case of an unallocated quota, in line with the currently applicable NAFO rule which requires Contracting Parties to report their Greenland halibut catches on a weekly basis, i. e. "every Tuesday for the week ending at 24:00 hours on the previous Sunday". However, provisions have to be made for the weekly reports to be received by the Commission sufficiently in advance, i. e. every Tuesday by noon at the latest, so that they can be transmitted to the Executive Secretary of NAFO in due time. Furthermore, this proposal offers the possibility to correct drafting errors which occurred in Council Regulation (EC) No. 3090/95 in relation to the by-catch rules that are applicable in connection with the ban of directed fishing for cod, witch flounder and capelin respectively in NAFO area 3NO. This proposal intends to address these matters by amending Council Regulation (EC) No. 3090/95. (i) Council Regulation (EC) No. 3090/95 of 30. 12. 1995, O. J. No. L 330, p. 108 yi J» i Proposal for a COUNCIL REGULATION (EC) No /96 of. 1996 amending Regulation (EC) No. 3090/95 laying down for 1996 certain conservation and management measures for fishery resources in the Regulatory Area as defined in the Convention on Future Multilateral Cooperation in the North West Atlantic Fisheries THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No. 3760/92 of 20 December 1992 establishing a Community system for fisheries and aquaculture (l), and in particular Article 8 (4) thereof, Having regard to the proposal from the Commission, Whereas Regulation (EC) No. 3090/95 (2) lays down, inter alia, fishing quotas for Member States in the Regulatory Area for 1996; Whereas following the distribution of the share of Greenland halibut which is available to the Community between Member States, it now appears appropriate to change the existing 48- hour reporting system into a weekly reporting system, in accordance with the conservation and enforcement measures that are applicable in the Regulatory Area; Whereas reference has to be made to the by-catch rules that are applicable in connection with the ban of directed fishing for cod, witch flounder and capelin respectively in NAFO area 3NO; Whereas Regulation (EC) No. 3090/95 should therefore be amended; (1) O. J. No. L 389, 31. 12. 1992, p. 1. (2) O. J. No. L 330 of 30. 12. 1995, p. 108 HAS ADOPTED THIS REGULATION: Article 1 Regulation (EC) No. 3090/95 is hereby amended as follows: 1. Article 5, last paragraph, shall be replaced as follows: "Member States shall report to the Commission every Tuesday before 12:00 hours for the week ending at 24:00 hours on the previous Sunday the quantities of Greenland halibut caught by their vessels". 2. Article 7 (4) shall be replaced as follows: "4. Masters of Community vessels fishing for Greenland halibut shall notify the competent authorities of the Member State whose flag their vessel is flying or in which their vessel is registered, 48 hours in advance of engaging in that fishery, including if possible an estimate of the projected catch, and shall report every Monday for the week ending at 24:00 hours on the previous Sunday the quantities of Greenland halibut caught". 3. Annex I shall be replaced by the Annex to this Regulation Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 1996 For the Council The President 3 ANNEX I Species Stock Geographical region Member State 1996 quota (tonnes) Zone Cod North West Atlantic NAFO 2J3KL Cod North West Atlantic NAFO 3NO (1) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total 0 0 (1) There will be no direct fishing on this species, which will be caught only as a by-catch, without prejudice to the rules set out in Article 6 (3) hereof. 4 Species Stock Geographical region Member State 1996 quota (tonnes) Zone Cod North West Atlantic NAFO 3M Atlantic redfish North West Atlantic NAFO 3 M Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total 513 1,574 221 2,155 1,022 5,485 4,030 Species Stock Geographical region Member State 1996 quota (tonnes) Zone Atlantic redfish North West Atlantic NAFO 3LN American plaice North West Atlantic NAFO 3M(I) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total 374 374 0 (l) There will be no direct fishing on this species, which will be caught only as a by-catch, without prejudice to the rules set out in Article 6 (3) hereof. <f Species Stock Geographical region Member State 1996 q u o ta (tonnes) Zone American plaice North West Atlantic NAFO 3LNO(1) Yellowtail flounder North West Atlantic NAFO 3LNO(l) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total 0 0 (l) There will be no direct fishing on this species, which will be caught only as a by-catch, without prejudice to the rules set out in Article 6 (3) hereof. * Stock Species Geographical region Zone Witch flounder North West Atlantic NAFO 3NO (I) Capelin North West Atlantic NAFO 3NO (" Member State 1996 q u o ta (tonnes) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total 0 0 (I) There will be no direct fishing on this species, which will be caught only as a by-catch, without prejudice to the rules set out in Article 6 (3) hereof. % Stock Species Geographical region Zone Squid North West Atlantic NAFO- subzones 3+4 Greenland halibut North West Atlantic NAFO 3LMNO Member State 1996 q u o ta (tonnes) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total A p. m. 332 7 616 3 122 11 070 Species Stock Geographical region Member State 1996 quota (tonnes) Zone Shrimp North West Atlantic NAFO 3LNO(,) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Austria Finland Sweden Available for Member States EC total 0 (,) There will be no direct fishing on this species, which will be caught only as a by-catch, without prejudice to the rules set out in Article 6 (3) hereof. y** ISSN 0254-1475 COM(96) 179 final DOCUMENTS EN 03 11 Catalogue number : CB-CO-96-188-EN-C ISBN 92-78-03076-7 Office for Official Publications of the European Communities L-2985 Luxembourg

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE APPLICATION OF SUMMER TIME IN THE EUROPEAN UNION

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 25. 04. 19% C'OM(%) 106 final 96/0082 (COD) PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS (presented by the Commission) REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE APPLICATION OF SUMMER TIME IN THE EUROPEAN UNION PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS "1 PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS EXPLANATORY MEMORANDUM Most Member States introduced summer time in the seventies; others introduced it even earlier. Community legislation (first Council Directive of 1980') entered into force in 1981. Its sole objective was the gradual harmonization of the dates on which summer time began and ended, stemming from the need to remove the obstacles to the free movement of goods and services which differing national summer-time arrangements would create. 2. This goal was partially achieved, in that the starting date was harmonized throughout the Community, but successive Directives allowed two finishing dates: the last Sunday in September for the continental Member States, and the fourth Sunday in October for Ireland and the United Kingdom. Full harmonization was finally achieved in the 7th Directive (94/21 /EC of 30 May 19942), which laid down that in 1996 and 1997 summer time would begin on the last Sunday in March and end on the last Sunday in October throughout the Union. In accordance with its undertaking to Parliament and the Council when the 7th Directive was adopted, the Commission has launched several initiatives to look at the matter in greater depth. A vast study was carried out in 1995 on how applying summer time and changing the clocks twice a year affects energy consumption, public health, working conditions and lifestyles, agriculture, environmental protection, road safety and the tourism and leisure industries. Bodies representing industries affected by summer time and associations for and against summer time were also consulted. The Commission has covered the findings of the study and the observations of the various sectors in a report to Parliament and the Council. The report shows that the sectors consulted all agree on the need to aim at MI 1iarmtMorizatk*n and to continue to apply the summer-time arrangements introduced by the 7fh Directive for f9% and 1W7. OJ L 2@5, 7. S. Î980, p. 17. 03 L 1*4, 3@ie. 1994, p. 1. 2i Contacts with national experts have shown that the Member States intend to maintain the summer-time arrangements. Moreover, virtually all the other countries of Europe have introduced summer time and are applying it in step with the European Union. The Commission therefore proposes to continue working towards harmonization and, accordingly, to fix the dates and times for the beginning and end of summer time in the Union after 1997. It also proposes to establish the dates for a four-year period so that the sectors concerned, especially transport and communications, can draw up their timetables over a sufficiently long period. 5. Since the measure is aimed at facilitating the provision of services in the transport and communications sectors, it is an area where jurisdiction is shared. Directive 94/21/EC of 30 May 1994 already provided for harmonization in 1996 and 1997 as proposed in this draft. All Member States are concerned. At a meeting of representatives of the Member States on 16 October 1995 all the Member States said they were in favour of maintaining the harmonized Community arrangements. Pursuant to Article 4 of the seventh Directive, the Council must adopt by 1 January 1997 the arrangements to apply from 1998 onwards. The proposed Directive is based on Article 100a, as were the fourth, fifth, sixth and seventh Directives. The codecision procedure referred to in Article 189b of the Treaty must therefore be used. J EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 100a thereof, Having regard to the proposal from the Commission,1 Having regard to the opinion of the Economic and Social Committee,2 Acting in accordance with the procedure referred to in Article 18% of the Treaty,3 Whereas the seventh European Parliament and Council Directive 94/21/EC of 30 May 1994 on summer-time arrangements' introduced a common date ami time througliout the Community for the beginning of summer time in 1995, 1996 and 1997; whereas the seventh Directive retained two different dates for the end of summer time in 1995, one lor Member States other than Ireland and the United Kingdom and one for Ireland and the United Kingdom, but nonetheless introduced a common date and time for the end of summer time in 1996 and 1997; Whereas, given that the Member States apply summer-time arrangements, it is important for the functioning of the internal market that a common date and time for the beginning and end of the summer-time period be fixed throughout the Community; Whereas, with due regard for subsidiarity, a Community measure is necessary to ensure complete harmonization of the timetable with a view to facilitating transport and communications; Whereas me Member States consider the end of October to be the most appropriate date for the end of the summer-time period; whereas mis date should therefore be maintained; Wlïereas Article 4 of the seventh Directive lays down that the I European l*arliamenl and llic Council must adopt hy 1 January 1997 the arrangements to apply from 1998 onwards; Whereas, for geographical reasons, common summer-lime arrangements should not apply to the overseas territories of the Member States; Whereas, for reasons of timetabling, particularly in the transport and communications sectors, a timetable of summer-time arrangements should foe set for a sufficiently long period; whereas provisions ought therefore to be adopted for 1998, 1999, 3030 and 2601, I M ¥E APGFFED THIS DIRECTIVE: 4 mt 164, 30. 6,1994, p. 1. 4 J Ankle 1 For the purposes of this Directive "summer-time period" shall mean the period of the year during which clocks are put forward by 60 minutes compared with the rest of the year. Article 2 In each Member State the summer-time period for 1998, 1999, 2000 and 2001 shall begin at 1 a. m. Greenwich Mean Time on the last Sunday in March, i. e. : - in 1998: on 29 March, - in 1999: on 28 March, - in 2000: on 26 March, - in 2001: on 25 March. Article 3 In each Member State the summer-time period for 1998, 1999, 2000 and 2001 shall end at 1 a. m. Greenwich Mean Time on the last Sunday in October, i. e. : - in 1998: on 25 October, - in 1999: on 31 October, - in 2000: on 29 October, - in 2001: on 28 October. Article 4 The arrangements to apply from 2002 onwards shall be adopted before 1 January 2001 on a proposal from the Commission presented before 1 January 2000. This Directive does not apply to the overseas territories of the Member States. Article 5 Article 6 The Member States shall adopt all the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 1997 at the latest. They shall immediately inform the Commission thereof. When Member States adopt these provisions, they shall contain a reference to this Directive and shall be accompanied by such reference at the time of their official publication. The detailed arrangements for such reference shall be adopted by Member States. This Directive is addressed to the Member States. Article 7 Done at Brussels, For the European Parliament For the Council REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE APPLICATION OF SUMMER TIME IN THE EUROPEAN UNION € Report from the Commission to the European Parliament and the Council on the application of summer time in the European Union Introduction When the seventh Directive 94/21 /EC of 30 May 1994 on summer-time arrangements' was adopted, the Commission gave an undertaking to Parliament and the Council to have a detailed study made of summer time, in collaboration with those groups in society with an interest in the matter and with experts from the Member States, and to report back on its findings. This report looks at the economic and other effects of summer time as such and of changing the clocks twice a year. It should also fuel the discussion on the proposal for an eighth directive, which should be adopted by 1 January 1997 in accordance with Article 4 of the seventh Directive. The report draws in particular on a vast study commissioned2 in the first half of 1995 on the effects of summer time, particularly in the areas of energy consumption, public health, working conditions and lifestyles, agriculture, environmental protection, road safety and the tourism and leisure industries. It includes observations from the sectors concerned and from associations for and against summer time which were consulted in writing and invited to attend a hearing on 25 September 1995 in Brussels. I. Background Summer time has been applied in the European Union and almost all other European countries for some twenty years now. It was first introduced in most Member States by national decision, starting with the United Kingdom and Ireland in 1916, followed by Italy in 1966 and France in 1976. Germany and Denmark were among the last countries to introduce summer time, in 1980. By the end of the 1970s, however, summer time was beginning and ending at different times in different countries, causing many problems in the transport and communications sectors. After a considerable worsening of the situation between 1976 and 1980, the Council asked the Commission to come up with measures to harmonize summer-time arrangements. On 22 July 1980 the Council adopted the first Directive3, setting common starting and ending dates for 1981 and 1982. However, the second Council Directive of 10 June 19824 laid down a common starting date for summer time (the last Sunday in March) but two different ending dates: the last Sunday in September for the continental Member States and the end of October for the United 1 OJ L 164, 30. 6. 1994 2 ADAS, Consultant, Guildford, United Kingdom, 1995 3OJ L 205, 7. 8. 1980, p. 17 4OJ L 173, 19. 6. 1982, p. 16 Kingdom and Ireland. These arrangements were maintained in successive Directives until 1995, when the seventh Directive (the first to be adopted jointly by Parliament and the Council under the codecision procedure) reintroduced fully harmonized summer-time arrangements for 1996 and 1997. The 7th Directive retained the last Sunday in March as the starting date, butjook the last Sunday in October as the ending date to apply throughout the Union. II. Application of summer time in the Union 1. General We need to distinguish between summer-time arrangements and time zones. The European Union currently extends over three time zones: West European Time (Greenwich Mean Time: GMT), Central European Time (GMT + 1 hour) and East European Time (GMT + 2 hours). However, the time in the Member States does not necessarily correspond to the time zone they are located in. N. B. Member States alone are responsible for setting their standard time. The full harmonization of summer time introduced by the 7th Directive will take effect from 1996 onwards, so we are as yet unable to comment on the effects it might have. 2. Economic and other effects The study launched in the first half of 1995 set out to examine the situation on the basis of national, European and international studies of duly attested scientific value carried out by private or public bodies. The consultant in charge of the study was also asked to check the value and reliability of the collected data and to update it where necessary. To assess the economic and other advantages and disadvantages of summer time and of changing the clock twice a year, the study looked at three working hypotheses, taking account of the current arrangements in the Member States, any drawbacks thereof and possible means of dealing with them. The three options were: Option 1: Option 2: Option 3: the status quo, with all Member States continuing to maintain a summer time clock from spring to autumn, the status quo for the continental countries but with the UK and Ireland joining the Central European Time zone (GMT + 1 hour), the summer-time clock arrangement abandoned in all EU countries, and the UK and Ireland joining the Central European Time zone. 8 This report sets out the main conclusions of the study in each area considered, together with the particular positions of the industries and bodies consulted, where appropriate. 2. 1. Energy consumption The main reason for introducing summer time at the end of the 1970s was to reduce energy consumption, especially electric lighting in the evening. The study shows that summer time influences energy consumption by varying the demand for lighting and heating, predominantly in the early morning in April and May. The small increase in morning demand when the clocks first go forward appears to be significantly outweighed by the net reduction in evening consumption. Moreover, the heat storage capacity of buildings keeps the increase in consumption small. It is interesting to note that domestic consumption has a greater impact on demand, especially for lighting, than do the industrial, commercial and public sectors. This is because lights in offices, shops and warehouses are often left on very late, or even all night, regardless of time arrangements. Furthermore, there are considerable energy savings in the domestic sector at the weekend owing to changes in behaviour: getting up later, outdoor activities. The anti-summertime associations argue that any energy saving here would have little financial impact. Lighting savings - estimated by ACHE5 to be between 27 and 36 kWh per year per household - would be matched if not exceeded by extra demand for heating, more evening journeys, air conditioning and the still considerable use of energy-intensive incandescent lamps. The Belgian anti-summertime associations raise similar arguments without providing figures. None of the industries consulted commented on this matter. Unlike ACHE, the study concludes that the daily reduction in domestic demand in the evenings during •summer time with Option 1 significantly outweighs the small increase in demand by the few early risers. On the other hand, lighting demand in the industrial, commercial and public sectors is hardly affected, as the benefits of lighter evenings may be lost in the darker mornings in the month just after the switch to, and the month just before the switch from, summer time. We can therefore conclude that summer time provides some benefit in terms of overall energy consumption. This benefit would be lost if Option 3 were adopted. For the same reasons, the adoption of Option 2 by the UK and Ireland would lead to further energy saving in those countries. 5 French anti-summertime association 3 2. 2. Public health The main health argument raised most frequently against summer time is disruption of circadian rhythms, especially when the clocks are changed, interrupting some people's sleep patterns and even causing mood changes. It would appear also that more problems arise in spring than in autumn. However, most studies agree that these effects are very temporary, lasting no more than three weeks. Moreover, they may even be due to other factors not really linked to summer time. For instance, difficulties in getting to sleep could be explained by the rapid increase in daylight hours rather than changes in the circadian cycle. Lastly, experts seem to agree that summer time has no serious consequences for health. Indeed, they point out that the lighter evenings encourage physical and sports activities, which benefit people of all ages. The Belgian and French anti-summertime associations stress the difficulties experienced in particular by young children, the elderly and the sick, claiming that putting the clocks forward can initially cause loss of sleep, and even a reduction in intellectual capacity, while during summer time itself there may be difficulties in sleeping owing to warmer evenings. ACHE even refers to higher consumption of medicinal products when the clocks change, though no medical studies have yet attributed this phenomenon solely to the time change and other factors may be involved. As all these adverse effects are limited, very temporary and reversible after two or three weeks, we can conclude that summer time as such and the accompanying time changes have no lasting or serious consequences for health. 2. 3. Working conditions The study looked in detail at the impact of summer time on the construction industry, trade, communications and transport. The working day in these sectors is governed by fixed or variable timetables, and activities may be indoors or outdoors. This provides a range of situations broad enough to guarantee a representative survey. Further data were gathered by reference to existing literature and from questionnaires sent to the national Ministries and to a number of companies and professional federations. The time at which the sun rises and sets has a particular bearing on the construction industry, where most activities have to be carried out in daylight and above a certain ambient temperature. However, most of the industry seems willing to maintain summer time, as working hours can be geared towards the lighter evenings and thus offset the darker mornings (especially in the first weeks after the clocks go forward) and the midday heat of the summer. A distinction 1o should be drawn, however, between the opinion expressed on the continent in favour of the status quo (Option 1) and the situation in the United Kingdom, where a good proportion of the industry would not oppose retaining summer time and moving onto Central European Time (Option 2). The anti-summertime associations point out the disadvantages of double summer time in some continental countries, where rest periods would be set back and work would begin again when the sun is at its highest (and the day at its hottest). Generally speaking, the trade and communications sectors encounter no difficulties and have expressed no opinion for or against summer time as such. However, all the sectors, and especially transport, stress the importance of harmonized dates for the beginning and end of summer time, not least to facilitate the timetabling of railway services (European timetable Conference) and aircraft slotting (I AT A6 and ACE7). On the other hand, the representatives of the industries concerned generally favoured standardizing the time as this would facilitate communications and travel within the Union. For instance, the organizations representing the airlines (IATA and ACE), as well as railway companies such as European Passengers Service, which serves London, Paris and Brussels on the Eurostar line, stressed the problems encountered by travellers from the United Kingdom, who to get to an early morning meeting on the continent had to leave the day before, thus incurring extra expenses, while the same journey in the other direction is easily completed the same day. With the exception of agriculture (see section 2. 5), the other sectors did not report any major difficulties caused in this area by summer time. The representatives of the construction industry in the continental countries all seem to favour maintaining the status quo (Option 1); the summer time arrangements make it possible to work longer or to pursue outdoor activities after work. The only slight problem comes from the darker mornings in the weeks after the clocks go forward. Representatives of the UK construction industry have mixed feelings about Option 2, even though new working practices allow more flexibility. Lastly, organizations in the trade, banking and communications sectors would prefer an option with no time difference, even if they have no particular feelings on summer time as such. These organizations would therefore prefer Options 2 or 3 on account of the benefits that would stem from harmonization of clock times throughout the Union. 2. 4. Lifestyles and leisure Major socio-cultural differences are apparent here both within and between Member States. Lifestyles and leisure activities are determined partly by climate and by seasonal variations in the number of daylight hours. People in the north of Europe have less opportunity than those in the south for outdoor recreation on weekdays in winter, but more in summer. IATA: International Air Transport Association ACE: Association of Airline Companies of the EEC n i However, with summer daytime temperatures higher in the south, the people there tend to pursue leisure activities after sundown, when it is cooler. So shifting an hour of daylight from morning to evening in the summer has a direct impact on recreational opportunities. Public opinion surveys show that the lighter evenings provided by summer time are much appreciated, especially in the south, where night falls earlier. The extra daylight encourages people who like to be home before nightfall (especially children, women and the elderly) to get out more and pursue outdoor activities. The study surveys showed increased participation in outdoor sports and other activities throughout the Union. The anti-summertime associations refer to certain adverse effects on leisure activities. ACHE says the arrangements discourage recreation in the morning, the early afternoon, when it is hot, in the evening where activities are subject to fixed opening times, and, lastly, at night for such events as firework displays and son et lumière. They also claim that individuals in whom summer time causes loss of sleep are penalized by the need to catch up on their sleep at the weekend when they could otherwise be out and about. Of course, this is opinion rather than the result of careful study. Other associations, including the Belgians (Flemish and French- speaking sections) stress that farmers use the extra daylight in the summer to continue harvesting late into the evening. So unlike the rest of the population they find their leisure opportunities curtailed rather than expanded, to the extent that they decide to use the extra daylight hour for work. The study concludes that as far as continental Europe is concerned, Option 1 (retaining the status quo) would bring more benefits than Option 3 (abandoning the system), which would result in the loss of about a quarter of the number of evening hours of daylight from March to October, thereby decreasing the opportunity for daytime leisure activities. For the UK and Ireland Option 2 would provide an extra hour of evening daylight throughout the year. Option 3 would give those two countries more leisure opportunities than at present, but only for the five months from November to March. 2. 5. Agriculture A lot of agricultural activity is dictated, inter alia, by the seasons and by the time of day. For instance, the sun determines the treatment and harvesting of crops owing to its effects on the temperature and humidity of air and soil. The time also impacts on stockbreeding and dairy farming, though other activities are not time-critical. European agriculture has changed greatly over the last thirty years. Mechanization has reduced the workforce and intensive farming has increased agricultural and dairy yields. Better work distribution and the resulting improvement in productivity have changed the way work is 'lc organized and the time taken to accomplish it. Nonetheless, the crop workload peaks from July to October, i. e. during the summer-time period (harvesting in summer and sowing in autumn), so any time change which lengthens or shortens the working day will affect the working habits of agricultural labourers. At the hearing the representative of COPA (Committee of Agricultural Organizations in the EEC) reported a number of concerns regarding summer time, including the possible spoiling of vegetables if work is not carried out at the right time of day and the consequences for cattle, which need to be fed and milked at regular times. The study concludes that the application of summer time has no negative effect on most agricultural activity. Most operations which depend on solar time are carried out in summer, i. e. when days are longest (longer mornings in the south, longer evenings in the north). However, it is very hard to determine the impact of summer time as such on the working conditions and leisure activities of the agricultural population. Agricultural work, and especially harvesting, is dictated by the ripening of crops and by the weather, which means that at harvest time farmers have to work at any time of day, including nights and weekends, whatever time arrangements are in force. In conclusion, the study indicates that relatively few agricultural activities on the continent would be affected if summer time were abandoned (Option 3), though the leisure opportunities of agricultural workers, and of workers in other sectors such as construction, would be curtailed by the loss of an hour of daylight in the evenings. Thus the continental countries would prefer Option 1. In the UK and Ireland Option 3 could cause some problems in the early morning, while Option 2 would require some change to meet the requirements of time-critical operations. However, the negative impact of adopting either of these options is small and would be offset by other advantages. 2. 6. Environmental protection While summer time has no direct impact on the environment, we still need to examine its indirect impact. The study examined the potential impact on ozone formation and road vehicle emissions. Ozone formation depends on a number of factors, including weather conditions and population density in a given area, i. e. urban or rural. Moreover, ozone concentration at a given place and time will depend, inter alia, on the horizontal and vertical travel of the ozone, spatial variations in the intensity of solar radiation and the force of decomposition processes. Concentrations thus vary widely in space and time, and the values for a city like Paris cannot be extrapolated to other regions of France or Europe. In view of the complex chemistry involved, the study concludes that too many questions are still unanswered and that, ultimately, significant 13 reductions in ozone formation are far more likely to be achieved by reducing emissions of primary pollutants at source than through clock arrangements. Two things need to be considered with regard to the environmental impact of cars during summer time: catalytic converters and the increase in road traffic as more people travel to their leisure activities. With regard to catalytic converters, ambient air temperature plays an important role when the engine is first started as it affects the length of time needed for the engine and the converter to reach peak performance. So during summer time, when the time change means mornings are colder, it takes the converter longer to warm up, with the consequences described above. If we then add up all early morning journeys, a time difference of one hour in early April can result in increased pollutant emissions, though this problem should be significantly reduced once the new generation of catalytic converters is introduced. It might also be argued that the extra summer-time daylight can affect the organization of leisure activities, causing, for example, a increase in car journeys at the end of the afternoon, and thus an increase in emissions. A study by the Université Libre de Bruxelles on the effects of the time change on energy consumption and photo-oxidizing vehicle pollution in Belgium appears to show certain increases which vary considerably from year to year. In fact, these variations suggest that weather conditions have a bigger impact than summer time on the increase in traffic at certain times of the day (caused by journeys whose purposes and impact are looked at in sections 2. 2, 2. 4 and 2. 8). 2. 7. Road safety A statistical model was created for the study to examine the effects of summer time on the number of road accidents in the light of the three options. The experimental introduction of "British Standard Time" <GMT + I) in the United Kingdom between 1968 and 1971 showed the potential for reducing road accidents by shifting daylight (the adoption of summer time all year round gave an extra hour of evening light at the cost of an hour of morning light). The number of morning accidents rose, but the overall number of accidents fell. The fact is that more accidents occur in the dark than in the daytime, so by shifting daylight to the evening, when accidents are more common, the overall number goes down. On the other hand, some people object that secondary factors such as the presence of ice on the roads during the morning rush hour and the extra traffic generated by the light evenings could offset the benefits of the time change. The study shows such effects to have no significant impact, the British experiment having resulted in an overall reduction in accident numbers. For the purposes of the study, a statistical model was developed to simulate the effects of adjusting the clock in other EU countries on the basis of the results Of the British experiment. The model used figures showing the number of accidents in each of the countries which provided information, plus the findings of studies of the day/night ratio of accidents. It showed that Option 3 (abandonment of summer time) would have no significant effect on the number of 4'\f accidents in Denmark, Norway and Spain, the only countries which provided full information on numbers and times of accidents. For the United Kingdom it showed that Option 2 would lead to 0. 75% fewer people being injured and 1. 73% fewer being seriously injured or killed, while Option 3 would achieve around hall that level of casually reduction. 2. 8. Tourism and leisure industries In view of the lack of specific study in this area a survey was conducted in all the Member States, though with a poor rate of response. Lighter evenings of course encourage more outdoor sport. The French Ministry of Physical Education and Sport reports increased sports activity after the clocks go forward in spring. This opinion is shared by a number of British sports bodies, which feel an extra hour of daylight could only benefit outdoor sport. Summer time benefits other outdoor activities, too. Cultural tourism (visits to galleries, museums, etc. ) does not depend on daylight, and these institutions generally apply a fixed timetable all year round. However, certain historic monuments, theme parks and gardens open to the public generally close at sundown, so an extra hour of daylight ought to be of benefit to them. On the other hand, theatres, cinemas and libraries lose business over the summer. Lastly, the lighter evenings appear to encourage the elderly to get out and about, as they are able to get back home before dark. The same applies for children and adolescents. The study concludes that extra daylight in the evenings benefits tourism and outdoor activities. The continental tourism and leisure industries benefit from the status quo (Option 1) and would lose out if summer time were abandoned (Option 3). The Irish and UK industries overwhelmingly favour Option 2 for the same reasons. 2. 9. Economic analysis As well as analysing the advantages and disadvantages of summer time, the study tried to assess its economic impact on the industries under consideration and to highlight the advantages of one or other option for all the countries. Of course, this is necessarily based on a number of hypotheses, and the study's figures are purely indicative. A number of areas derive overall benefit from the summer-time arrangements, principally leisure and tourism and the related industries, public health and road safety. For agriculture, is energy and the environment, however, the advantages and disadvantages either balance out or are not very significant. In the area of leisure activity, the study calculated the number of extra daylight hours offered by each option and tried to put a figure on the financial benefit this would bring. Thus for Ireland and the United Kingdom Option 2 would provide the equivalent of three extra weeks of daytime leisure compared with Option 1. Working on the basis of ECU 1 per hour per household, this represents an annual economic gain of ECU 6 716 million in the UK and ECU 332 million for Ireland. Option 3 would bring a lesser benefit of ECU 1 655 million for the UK and ECU 107 million for Ireland. Option 3 would be a worse option for the continental countries than Option 2. For instance, Paris would lose 214 daylight hours a year (after 5 p. m. ), representing an economic loss of ECU 4 817 million. The same calculation indicates that Option 3 would mean a loss of ECU 21 033 million for the 13 continental countries. Option 2 would bring the tourism and leisure industries in Ireland and the UK substantial benefits, estimated in the Hillman report at ECU 1 200 million per year, i. e. around 4% of their current revenue. On the other hand, Option 3 would bring annual losses of ECU 6 240 million for these industries in the thirteen continental countries. The standardization of time would benefit travellers. The countries of Central and Western Europe already have standardized time and would derive no additional benefit from Options 2 or 3. The main beneficiaries would be the United Kingdom and Ireland, as either option would favour journeys to and trade with the continent. The study estimated the resulting financial gain at anything from zero for people making no journeys, to several hundred ecus for a person travelling regularly in Europe, to tens of millions of ecus for large companies. It also calculated that standardization could bring financial gain of ECU 626 million for the UK and Ireland and ECU 308 million tor the other Member States, i. e. a total gain of ECU 934 million for the 15 EU States. For public health the study calculated that the increased opportunity to pursue physical activities and sport under Option 2 would produce a 5 % reduction in the risk of cardio-vascular disease and allow savings of ECU 335 million in the UK, while Option 3 would allow savings of only 1 %. The same calculation showed that for the 13 continental countries Option 3 would increase health costs by an estimated ECU 1 410 mil ion. For road safety the study estimated that the cost of accidents in the UK would be reduced by ECU 180 million under Option 2 and by ECU 100 miliion under Option 3. Lack of comparable statistics meant no precise figures could be given for the financial impact in the other Member States, mough Option 3 would presumably entail increased accident-related costs. Conckiskaa All tne study's findings and the observations made to ttie Commission indicate an overwhelming preference for mainta;ining a summer-time regàrne in the Earapean Utnon and nei^teoariag countries- 16 The study shows that putting the clocks forward and back causes no great problems, though some people may experience certain discomforts. For continental Europe Option I, the status quo, is a satisfactory arrangement, preserving the substantial economic benefits summer lime brings to leisure activities, tourism,'public health and road safety. By comparison, Option 3 would bring economic drawbacks in all these areas. The study shows that Ireland and the United Kingdom would benefit greatly by harmonizing their clocks with the 13 other Member States. They would enjoy the same benefits those countries already enjoy, as described above. At the same time this standardization would also benefit the 13 continental Member States. All the sectors consulted, notably at the hearing organized by the Commission, agreed on the need for full harmonization of dates and times for the beginning and end of summer time throughout the Union. tourism and communications sectors. It is important therefore that we maintain harmonization and continue to apply the summer-time timetable introduced by the 7th Directive, viz. a single starting date in March and a single ending date in October throughout the EU. This is particularly in the transport, important Lastly, it should be remembered that the Commission's task as regards time is aimed essentially at harmonizing the summer-time timetable, provided the Member States agree to keep on apply wig the system. Any decision to alter other time arrangeraient» in the Member States falls to then» alone. ISSN 0254-1475 COM(96) 106 final DOCUMENTS EN 12 07 Catalogue number : CB-CO-96-114-EN-C ISBN 92-78-01622-5 Office for Official Publications of the European Communities L-2985 Luxembourg U

PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 25. 04. 19% C'OM(%) 106 final 96/0082 (COD) PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS (presented by the Commission) REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE APPLICATION OF SUMMER TIME IN THE EUROPEAN UNION PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS "1 PROPOSAL FOR AN EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS EXPLANATORY MEMORANDUM Most Member States introduced summer time in the seventies; others introduced it even earlier. Community legislation (first Council Directive of 1980') entered into force in 1981. Its sole objective was the gradual harmonization of the dates on which summer time began and ended, stemming from the need to remove the obstacles to the free movement of goods and services which differing national summer-time arrangements would create. 2. This goal was partially achieved, in that the starting date was harmonized throughout the Community, but successive Directives allowed two finishing dates: the last Sunday in September for the continental Member States, and the fourth Sunday in October for Ireland and the United Kingdom. Full harmonization was finally achieved in the 7th Directive (94/21 /EC of 30 May 19942), which laid down that in 1996 and 1997 summer time would begin on the last Sunday in March and end on the last Sunday in October throughout the Union. In accordance with its undertaking to Parliament and the Council when the 7th Directive was adopted, the Commission has launched several initiatives to look at the matter in greater depth. A vast study was carried out in 1995 on how applying summer time and changing the clocks twice a year affects energy consumption, public health, working conditions and lifestyles, agriculture, environmental protection, road safety and the tourism and leisure industries. Bodies representing industries affected by summer time and associations for and against summer time were also consulted. The Commission has covered the findings of the study and the observations of the various sectors in a report to Parliament and the Council. The report shows that the sectors consulted all agree on the need to aim at MI 1iarmtMorizatk*n and to continue to apply the summer-time arrangements introduced by the 7fh Directive for f9% and 1W7. OJ L 2@5, 7. S. Î980, p. 17. 03 L 1*4, 3@ie. 1994, p. 1. 2i Contacts with national experts have shown that the Member States intend to maintain the summer-time arrangements. Moreover, virtually all the other countries of Europe have introduced summer time and are applying it in step with the European Union. The Commission therefore proposes to continue working towards harmonization and, accordingly, to fix the dates and times for the beginning and end of summer time in the Union after 1997. It also proposes to establish the dates for a four-year period so that the sectors concerned, especially transport and communications, can draw up their timetables over a sufficiently long period. 5. Since the measure is aimed at facilitating the provision of services in the transport and communications sectors, it is an area where jurisdiction is shared. Directive 94/21/EC of 30 May 1994 already provided for harmonization in 1996 and 1997 as proposed in this draft. All Member States are concerned. At a meeting of representatives of the Member States on 16 October 1995 all the Member States said they were in favour of maintaining the harmonized Community arrangements. Pursuant to Article 4 of the seventh Directive, the Council must adopt by 1 January 1997 the arrangements to apply from 1998 onwards. The proposed Directive is based on Article 100a, as were the fourth, fifth, sixth and seventh Directives. The codecision procedure referred to in Article 189b of the Treaty must therefore be used. J EIGHTH EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON SUMMER-TIME ARRANGEMENTS THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 100a thereof, Having regard to the proposal from the Commission,1 Having regard to the opinion of the Economic and Social Committee,2 Acting in accordance with the procedure referred to in Article 18% of the Treaty,3 Whereas the seventh European Parliament and Council Directive 94/21/EC of 30 May 1994 on summer-time arrangements' introduced a common date ami time througliout the Community for the beginning of summer time in 1995, 1996 and 1997; whereas the seventh Directive retained two different dates for the end of summer time in 1995, one lor Member States other than Ireland and the United Kingdom and one for Ireland and the United Kingdom, but nonetheless introduced a common date and time for the end of summer time in 1996 and 1997; Whereas, given that the Member States apply summer-time arrangements, it is important for the functioning of the internal market that a common date and time for the beginning and end of the summer-time period be fixed throughout the Community; Whereas, with due regard for subsidiarity, a Community measure is necessary to ensure complete harmonization of the timetable with a view to facilitating transport and communications; Whereas me Member States consider the end of October to be the most appropriate date for the end of the summer-time period; whereas mis date should therefore be maintained; Wlïereas Article 4 of the seventh Directive lays down that the I European l*arliamenl and llic Council must adopt hy 1 January 1997 the arrangements to apply from 1998 onwards; Whereas, for geographical reasons, common summer-lime arrangements should not apply to the overseas territories of the Member States; Whereas, for reasons of timetabling, particularly in the transport and communications sectors, a timetable of summer-time arrangements should foe set for a sufficiently long period; whereas provisions ought therefore to be adopted for 1998, 1999, 3030 and 2601, I M ¥E APGFFED THIS DIRECTIVE: 4 mt 164, 30. 6,1994, p. 1. 4 J Ankle 1 For the purposes of this Directive "summer-time period" shall mean the period of the year during which clocks are put forward by 60 minutes compared with the rest of the year. Article 2 In each Member State the summer-time period for 1998, 1999, 2000 and 2001 shall begin at 1 a. m. Greenwich Mean Time on the last Sunday in March, i. e. : - in 1998: on 29 March, - in 1999: on 28 March, - in 2000: on 26 March, - in 2001: on 25 March. Article 3 In each Member State the summer-time period for 1998, 1999, 2000 and 2001 shall end at 1 a. m. Greenwich Mean Time on the last Sunday in October, i. e. : - in 1998: on 25 October, - in 1999: on 31 October, - in 2000: on 29 October, - in 2001: on 28 October. Article 4 The arrangements to apply from 2002 onwards shall be adopted before 1 January 2001 on a proposal from the Commission presented before 1 January 2000. This Directive does not apply to the overseas territories of the Member States. Article 5 Article 6 The Member States shall adopt all the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 1997 at the latest. They shall immediately inform the Commission thereof. When Member States adopt these provisions, they shall contain a reference to this Directive and shall be accompanied by such reference at the time of their official publication. The detailed arrangements for such reference shall be adopted by Member States. This Directive is addressed to the Member States. Article 7 Done at Brussels, For the European Parliament For the Council REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE APPLICATION OF SUMMER TIME IN THE EUROPEAN UNION € Report from the Commission to the European Parliament and the Council on the application of summer time in the European Union Introduction When the seventh Directive 94/21 /EC of 30 May 1994 on summer-time arrangements' was adopted, the Commission gave an undertaking to Parliament and the Council to have a detailed study made of summer time, in collaboration with those groups in society with an interest in the matter and with experts from the Member States, and to report back on its findings. This report looks at the economic and other effects of summer time as such and of changing the clocks twice a year. It should also fuel the discussion on the proposal for an eighth directive, which should be adopted by 1 January 1997 in accordance with Article 4 of the seventh Directive. The report draws in particular on a vast study commissioned2 in the first half of 1995 on the effects of summer time, particularly in the areas of energy consumption, public health, working conditions and lifestyles, agriculture, environmental protection, road safety and the tourism and leisure industries. It includes observations from the sectors concerned and from associations for and against summer time which were consulted in writing and invited to attend a hearing on 25 September 1995 in Brussels. I. Background Summer time has been applied in the European Union and almost all other European countries for some twenty years now. It was first introduced in most Member States by national decision, starting with the United Kingdom and Ireland in 1916, followed by Italy in 1966 and France in 1976. Germany and Denmark were among the last countries to introduce summer time, in 1980. By the end of the 1970s, however, summer time was beginning and ending at different times in different countries, causing many problems in the transport and communications sectors. After a considerable worsening of the situation between 1976 and 1980, the Council asked the Commission to come up with measures to harmonize summer-time arrangements. On 22 July 1980 the Council adopted the first Directive3, setting common starting and ending dates for 1981 and 1982. However, the second Council Directive of 10 June 19824 laid down a common starting date for summer time (the last Sunday in March) but two different ending dates: the last Sunday in September for the continental Member States and the end of October for the United 1 OJ L 164, 30. 6. 1994 2 ADAS, Consultant, Guildford, United Kingdom, 1995 3OJ L 205, 7. 8. 1980, p. 17 4OJ L 173, 19. 6. 1982, p. 16 Kingdom and Ireland. These arrangements were maintained in successive Directives until 1995, when the seventh Directive (the first to be adopted jointly by Parliament and the Council under the codecision procedure) reintroduced fully harmonized summer-time arrangements for 1996 and 1997. The 7th Directive retained the last Sunday in March as the starting date, butjook the last Sunday in October as the ending date to apply throughout the Union. II. Application of summer time in the Union 1. General We need to distinguish between summer-time arrangements and time zones. The European Union currently extends over three time zones: West European Time (Greenwich Mean Time: GMT), Central European Time (GMT + 1 hour) and East European Time (GMT + 2 hours). However, the time in the Member States does not necessarily correspond to the time zone they are located in. N. B. Member States alone are responsible for setting their standard time. The full harmonization of summer time introduced by the 7th Directive will take effect from 1996 onwards, so we are as yet unable to comment on the effects it might have. 2. Economic and other effects The study launched in the first half of 1995 set out to examine the situation on the basis of national, European and international studies of duly attested scientific value carried out by private or public bodies. The consultant in charge of the study was also asked to check the value and reliability of the collected data and to update it where necessary. To assess the economic and other advantages and disadvantages of summer time and of changing the clock twice a year, the study looked at three working hypotheses, taking account of the current arrangements in the Member States, any drawbacks thereof and possible means of dealing with them. The three options were: Option 1: Option 2: Option 3: the status quo, with all Member States continuing to maintain a summer time clock from spring to autumn, the status quo for the continental countries but with the UK and Ireland joining the Central European Time zone (GMT + 1 hour), the summer-time clock arrangement abandoned in all EU countries, and the UK and Ireland joining the Central European Time zone. 8 This report sets out the main conclusions of the study in each area considered, together with the particular positions of the industries and bodies consulted, where appropriate. 2. 1. Energy consumption The main reason for introducing summer time at the end of the 1970s was to reduce energy consumption, especially electric lighting in the evening. The study shows that summer time influences energy consumption by varying the demand for lighting and heating, predominantly in the early morning in April and May. The small increase in morning demand when the clocks first go forward appears to be significantly outweighed by the net reduction in evening consumption. Moreover, the heat storage capacity of buildings keeps the increase in consumption small. It is interesting to note that domestic consumption has a greater impact on demand, especially for lighting, than do the industrial, commercial and public sectors. This is because lights in offices, shops and warehouses are often left on very late, or even all night, regardless of time arrangements. Furthermore, there are considerable energy savings in the domestic sector at the weekend owing to changes in behaviour: getting up later, outdoor activities. The anti-summertime associations argue that any energy saving here would have little financial impact. Lighting savings - estimated by ACHE5 to be between 27 and 36 kWh per year per household - would be matched if not exceeded by extra demand for heating, more evening journeys, air conditioning and the still considerable use of energy-intensive incandescent lamps. The Belgian anti-summertime associations raise similar arguments without providing figures. None of the industries consulted commented on this matter. Unlike ACHE, the study concludes that the daily reduction in domestic demand in the evenings during •summer time with Option 1 significantly outweighs the small increase in demand by the few early risers. On the other hand, lighting demand in the industrial, commercial and public sectors is hardly affected, as the benefits of lighter evenings may be lost in the darker mornings in the month just after the switch to, and the month just before the switch from, summer time. We can therefore conclude that summer time provides some benefit in terms of overall energy consumption. This benefit would be lost if Option 3 were adopted. For the same reasons, the adoption of Option 2 by the UK and Ireland would lead to further energy saving in those countries. 5 French anti-summertime association 3 2. 2. Public health The main health argument raised most frequently against summer time is disruption of circadian rhythms, especially when the clocks are changed, interrupting some people's sleep patterns and even causing mood changes. It would appear also that more problems arise in spring than in autumn. However, most studies agree that these effects are very temporary, lasting no more than three weeks. Moreover, they may even be due to other factors not really linked to summer time. For instance, difficulties in getting to sleep could be explained by the rapid increase in daylight hours rather than changes in the circadian cycle. Lastly, experts seem to agree that summer time has no serious consequences for health. Indeed, they point out that the lighter evenings encourage physical and sports activities, which benefit people of all ages. The Belgian and French anti-summertime associations stress the difficulties experienced in particular by young children, the elderly and the sick, claiming that putting the clocks forward can initially cause loss of sleep, and even a reduction in intellectual capacity, while during summer time itself there may be difficulties in sleeping owing to warmer evenings. ACHE even refers to higher consumption of medicinal products when the clocks change, though no medical studies have yet attributed this phenomenon solely to the time change and other factors may be involved. As all these adverse effects are limited, very temporary and reversible after two or three weeks, we can conclude that summer time as such and the accompanying time changes have no lasting or serious consequences for health. 2. 3. Working conditions The study looked in detail at the impact of summer time on the construction industry, trade, communications and transport. The working day in these sectors is governed by fixed or variable timetables, and activities may be indoors or outdoors. This provides a range of situations broad enough to guarantee a representative survey. Further data were gathered by reference to existing literature and from questionnaires sent to the national Ministries and to a number of companies and professional federations. The time at which the sun rises and sets has a particular bearing on the construction industry, where most activities have to be carried out in daylight and above a certain ambient temperature. However, most of the industry seems willing to maintain summer time, as working hours can be geared towards the lighter evenings and thus offset the darker mornings (especially in the first weeks after the clocks go forward) and the midday heat of the summer. A distinction 1o should be drawn, however, between the opinion expressed on the continent in favour of the status quo (Option 1) and the situation in the United Kingdom, where a good proportion of the industry would not oppose retaining summer time and moving onto Central European Time (Option 2). The anti-summertime associations point out the disadvantages of double summer time in some continental countries, where rest periods would be set back and work would begin again when the sun is at its highest (and the day at its hottest). Generally speaking, the trade and communications sectors encounter no difficulties and have expressed no opinion for or against summer time as such. However, all the sectors, and especially transport, stress the importance of harmonized dates for the beginning and end of summer time, not least to facilitate the timetabling of railway services (European timetable Conference) and aircraft slotting (I AT A6 and ACE7). On the other hand, the representatives of the industries concerned generally favoured standardizing the time as this would facilitate communications and travel within the Union. For instance, the organizations representing the airlines (IATA and ACE), as well as railway companies such as European Passengers Service, which serves London, Paris and Brussels on the Eurostar line, stressed the problems encountered by travellers from the United Kingdom, who to get to an early morning meeting on the continent had to leave the day before, thus incurring extra expenses, while the same journey in the other direction is easily completed the same day. With the exception of agriculture (see section 2. 5), the other sectors did not report any major difficulties caused in this area by summer time. The representatives of the construction industry in the continental countries all seem to favour maintaining the status quo (Option 1); the summer time arrangements make it possible to work longer or to pursue outdoor activities after work. The only slight problem comes from the darker mornings in the weeks after the clocks go forward. Representatives of the UK construction industry have mixed feelings about Option 2, even though new working practices allow more flexibility. Lastly, organizations in the trade, banking and communications sectors would prefer an option with no time difference, even if they have no particular feelings on summer time as such. These organizations would therefore prefer Options 2 or 3 on account of the benefits that would stem from harmonization of clock times throughout the Union. 2. 4. Lifestyles and leisure Major socio-cultural differences are apparent here both within and between Member States. Lifestyles and leisure activities are determined partly by climate and by seasonal variations in the number of daylight hours. People in the north of Europe have less opportunity than those in the south for outdoor recreation on weekdays in winter, but more in summer. IATA: International Air Transport Association ACE: Association of Airline Companies of the EEC n i However, with summer daytime temperatures higher in the south, the people there tend to pursue leisure activities after sundown, when it is cooler. So shifting an hour of daylight from morning to evening in the summer has a direct impact on recreational opportunities. Public opinion surveys show that the lighter evenings provided by summer time are much appreciated, especially in the south, where night falls earlier. The extra daylight encourages people who like to be home before nightfall (especially children, women and the elderly) to get out more and pursue outdoor activities. The study surveys showed increased participation in outdoor sports and other activities throughout the Union. The anti-summertime associations refer to certain adverse effects on leisure activities. ACHE says the arrangements discourage recreation in the morning, the early afternoon, when it is hot, in the evening where activities are subject to fixed opening times, and, lastly, at night for such events as firework displays and son et lumière. They also claim that individuals in whom summer time causes loss of sleep are penalized by the need to catch up on their sleep at the weekend when they could otherwise be out and about. Of course, this is opinion rather than the result of careful study. Other associations, including the Belgians (Flemish and French- speaking sections) stress that farmers use the extra daylight in the summer to continue harvesting late into the evening. So unlike the rest of the population they find their leisure opportunities curtailed rather than expanded, to the extent that they decide to use the extra daylight hour for work. The study concludes that as far as continental Europe is concerned, Option 1 (retaining the status quo) would bring more benefits than Option 3 (abandoning the system), which would result in the loss of about a quarter of the number of evening hours of daylight from March to October, thereby decreasing the opportunity for daytime leisure activities. For the UK and Ireland Option 2 would provide an extra hour of evening daylight throughout the year. Option 3 would give those two countries more leisure opportunities than at present, but only for the five months from November to March. 2. 5. Agriculture A lot of agricultural activity is dictated, inter alia, by the seasons and by the time of day. For instance, the sun determines the treatment and harvesting of crops owing to its effects on the temperature and humidity of air and soil. The time also impacts on stockbreeding and dairy farming, though other activities are not time-critical. European agriculture has changed greatly over the last thirty years. Mechanization has reduced the workforce and intensive farming has increased agricultural and dairy yields. Better work distribution and the resulting improvement in productivity have changed the way work is 'lc organized and the time taken to accomplish it. Nonetheless, the crop workload peaks from July to October, i. e. during the summer-time period (harvesting in summer and sowing in autumn), so any time change which lengthens or shortens the working day will affect the working habits of agricultural labourers. At the hearing the representative of COPA (Committee of Agricultural Organizations in the EEC) reported a number of concerns regarding summer time, including the possible spoiling of vegetables if work is not carried out at the right time of day and the consequences for cattle, which need to be fed and milked at regular times. The study concludes that the application of summer time has no negative effect on most agricultural activity. Most operations which depend on solar time are carried out in summer, i. e. when days are longest (longer mornings in the south, longer evenings in the north). However, it is very hard to determine the impact of summer time as such on the working conditions and leisure activities of the agricultural population. Agricultural work, and especially harvesting, is dictated by the ripening of crops and by the weather, which means that at harvest time farmers have to work at any time of day, including nights and weekends, whatever time arrangements are in force. In conclusion, the study indicates that relatively few agricultural activities on the continent would be affected if summer time were abandoned (Option 3), though the leisure opportunities of agricultural workers, and of workers in other sectors such as construction, would be curtailed by the loss of an hour of daylight in the evenings. Thus the continental countries would prefer Option 1. In the UK and Ireland Option 3 could cause some problems in the early morning, while Option 2 would require some change to meet the requirements of time-critical operations. However, the negative impact of adopting either of these options is small and would be offset by other advantages. 2. 6. Environmental protection While summer time has no direct impact on the environment, we still need to examine its indirect impact. The study examined the potential impact on ozone formation and road vehicle emissions. Ozone formation depends on a number of factors, including weather conditions and population density in a given area, i. e. urban or rural. Moreover, ozone concentration at a given place and time will depend, inter alia, on the horizontal and vertical travel of the ozone, spatial variations in the intensity of solar radiation and the force of decomposition processes. Concentrations thus vary widely in space and time, and the values for a city like Paris cannot be extrapolated to other regions of France or Europe. In view of the complex chemistry involved, the study concludes that too many questions are still unanswered and that, ultimately, significant 13 reductions in ozone formation are far more likely to be achieved by reducing emissions of primary pollutants at source than through clock arrangements. Two things need to be considered with regard to the environmental impact of cars during summer time: catalytic converters and the increase in road traffic as more people travel to their leisure activities. With regard to catalytic converters, ambient air temperature plays an important role when the engine is first started as it affects the length of time needed for the engine and the converter to reach peak performance. So during summer time, when the time change means mornings are colder, it takes the converter longer to warm up, with the consequences described above. If we then add up all early morning journeys, a time difference of one hour in early April can result in increased pollutant emissions, though this problem should be significantly reduced once the new generation of catalytic converters is introduced. It might also be argued that the extra summer-time daylight can affect the organization of leisure activities, causing, for example, a increase in car journeys at the end of the afternoon, and thus an increase in emissions. A study by the Université Libre de Bruxelles on the effects of the time change on energy consumption and photo-oxidizing vehicle pollution in Belgium appears to show certain increases which vary considerably from year to year. In fact, these variations suggest that weather conditions have a bigger impact than summer time on the increase in traffic at certain times of the day (caused by journeys whose purposes and impact are looked at in sections 2. 2, 2. 4 and 2. 8). 2. 7. Road safety A statistical model was created for the study to examine the effects of summer time on the number of road accidents in the light of the three options. The experimental introduction of "British Standard Time" <GMT + I) in the United Kingdom between 1968 and 1971 showed the potential for reducing road accidents by shifting daylight (the adoption of summer time all year round gave an extra hour of evening light at the cost of an hour of morning light). The number of morning accidents rose, but the overall number of accidents fell. The fact is that more accidents occur in the dark than in the daytime, so by shifting daylight to the evening, when accidents are more common, the overall number goes down. On the other hand, some people object that secondary factors such as the presence of ice on the roads during the morning rush hour and the extra traffic generated by the light evenings could offset the benefits of the time change. The study shows such effects to have no significant impact, the British experiment having resulted in an overall reduction in accident numbers. For the purposes of the study, a statistical model was developed to simulate the effects of adjusting the clock in other EU countries on the basis of the results Of the British experiment. The model used figures showing the number of accidents in each of the countries which provided information, plus the findings of studies of the day/night ratio of accidents. It showed that Option 3 (abandonment of summer time) would have no significant effect on the number of 4'\f accidents in Denmark, Norway and Spain, the only countries which provided full information on numbers and times of accidents. For the United Kingdom it showed that Option 2 would lead to 0. 75% fewer people being injured and 1. 73% fewer being seriously injured or killed, while Option 3 would achieve around hall that level of casually reduction. 2. 8. Tourism and leisure industries In view of the lack of specific study in this area a survey was conducted in all the Member States, though with a poor rate of response. Lighter evenings of course encourage more outdoor sport. The French Ministry of Physical Education and Sport reports increased sports activity after the clocks go forward in spring. This opinion is shared by a number of British sports bodies, which feel an extra hour of daylight could only benefit outdoor sport. Summer time benefits other outdoor activities, too. Cultural tourism (visits to galleries, museums, etc. ) does not depend on daylight, and these institutions generally apply a fixed timetable all year round. However, certain historic monuments, theme parks and gardens open to the public generally close at sundown, so an extra hour of daylight ought to be of benefit to them. On the other hand, theatres, cinemas and libraries lose business over the summer. Lastly, the lighter evenings appear to encourage the elderly to get out and about, as they are able to get back home before dark. The same applies for children and adolescents. The study concludes that extra daylight in the evenings benefits tourism and outdoor activities. The continental tourism and leisure industries benefit from the status quo (Option 1) and would lose out if summer time were abandoned (Option 3). The Irish and UK industries overwhelmingly favour Option 2 for the same reasons. 2. 9. Economic analysis As well as analysing the advantages and disadvantages of summer time, the study tried to assess its economic impact on the industries under consideration and to highlight the advantages of one or other option for all the countries. Of course, this is necessarily based on a number of hypotheses, and the study's figures are purely indicative. A number of areas derive overall benefit from the summer-time arrangements, principally leisure and tourism and the related industries, public health and road safety. For agriculture, is energy and the environment, however, the advantages and disadvantages either balance out or are not very significant. In the area of leisure activity, the study calculated the number of extra daylight hours offered by each option and tried to put a figure on the financial benefit this would bring. Thus for Ireland and the United Kingdom Option 2 would provide the equivalent of three extra weeks of daytime leisure compared with Option 1. Working on the basis of ECU 1 per hour per household, this represents an annual economic gain of ECU 6 716 million in the UK and ECU 332 million for Ireland. Option 3 would bring a lesser benefit of ECU 1 655 million for the UK and ECU 107 million for Ireland. Option 3 would be a worse option for the continental countries than Option 2. For instance, Paris would lose 214 daylight hours a year (after 5 p. m. ), representing an economic loss of ECU 4 817 million. The same calculation indicates that Option 3 would mean a loss of ECU 21 033 million for the 13 continental countries. Option 2 would bring the tourism and leisure industries in Ireland and the UK substantial benefits, estimated in the Hillman report at ECU 1 200 million per year, i. e. around 4% of their current revenue. On the other hand, Option 3 would bring annual losses of ECU 6 240 million for these industries in the thirteen continental countries. The standardization of time would benefit travellers. The countries of Central and Western Europe already have standardized time and would derive no additional benefit from Options 2 or 3. The main beneficiaries would be the United Kingdom and Ireland, as either option would favour journeys to and trade with the continent. The study estimated the resulting financial gain at anything from zero for people making no journeys, to several hundred ecus for a person travelling regularly in Europe, to tens of millions of ecus for large companies. It also calculated that standardization could bring financial gain of ECU 626 million for the UK and Ireland and ECU 308 million tor the other Member States, i. e. a total gain of ECU 934 million for the 15 EU States. For public health the study calculated that the increased opportunity to pursue physical activities and sport under Option 2 would produce a 5 % reduction in the risk of cardio-vascular disease and allow savings of ECU 335 million in the UK, while Option 3 would allow savings of only 1 %. The same calculation showed that for the 13 continental countries Option 3 would increase health costs by an estimated ECU 1 410 mil ion. For road safety the study estimated that the cost of accidents in the UK would be reduced by ECU 180 million under Option 2 and by ECU 100 miliion under Option 3. Lack of comparable statistics meant no precise figures could be given for the financial impact in the other Member States, mough Option 3 would presumably entail increased accident-related costs. Conckiskaa All tne study's findings and the observations made to ttie Commission indicate an overwhelming preference for mainta;ining a summer-time regàrne in the Earapean Utnon and nei^teoariag countries- 16 The study shows that putting the clocks forward and back causes no great problems, though some people may experience certain discomforts. For continental Europe Option I, the status quo, is a satisfactory arrangement, preserving the substantial economic benefits summer lime brings to leisure activities, tourism,'public health and road safety. By comparison, Option 3 would bring economic drawbacks in all these areas. The study shows that Ireland and the United Kingdom would benefit greatly by harmonizing their clocks with the 13 other Member States. They would enjoy the same benefits those countries already enjoy, as described above. At the same time this standardization would also benefit the 13 continental Member States. All the sectors consulted, notably at the hearing organized by the Commission, agreed on the need for full harmonization of dates and times for the beginning and end of summer time throughout the Union. tourism and communications sectors. It is important therefore that we maintain harmonization and continue to apply the summer-time timetable introduced by the 7th Directive, viz. a single starting date in March and a single ending date in October throughout the EU. This is particularly in the transport, important Lastly, it should be remembered that the Commission's task as regards time is aimed essentially at harmonizing the summer-time timetable, provided the Member States agree to keep on apply wig the system. Any decision to alter other time arrangeraient» in the Member States falls to then» alone. ISSN 0254-1475 COM(96) 106 final DOCUMENTS EN 12 07 Catalogue number : CB-CO-96-114-EN-C ISBN 92-78-01622-5 Office for Official Publications of the European Communities L-2985 Luxembourg U

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the opening of a Representation Office

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COMMISSION OF THE EUROPEAN COMMUNITIES •à -it Brussels, 24. 04. 1996 COM(96) 181 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the opening of a Representation Office " Communication of the Commission to the Council and the European Parliament on the opening of a Representation Office Summary This Communication informs the Council and the European Parliament of the intention of tho Commission to open a Representation Office in the following capital: Sarajevo (Bosnia-Herzegovina) 1. Introduction After the Communications concerning the opening of new Delegations of June 1988, June 1989, September 1990, October 1991, September 1992, July 1994 and June 1995, a further examination of the Commission's external representation is necessary in the light of the evolution of the international situation and, in particular, following the peace agreement in Bosnia. 2. Delegations recently opened In 1995 the Commission announced the opening of five new Delegations. Those in Riga (Latvia), Tallinn (Estonia), Vilnius (Lithuania) and Colombo (Sri Lanka) are open. The fifth, Managua (Nicaragua) will open in 1996. 3. New opening envisaged Sarajevo (Bosnia-Herzegovina) The conclusion of the peace accords at Dayton last year and the participation of the European Community in the international efforts at reconstruction make it necessary that the Commission be formally present in Sarajevo. The Community is currently implementing, through PHARE, an aid programme of 62. 5 MECU which is intended to renew in the second half of 1996. The Commission is also proposing a reconstruction programme of 100 MECU. Additionally, Bosnia-Herzegovina is a major recipient of humanitarian assistance through ECHO. This makes the EC the most important donor in Bosnia-Herzegovina. At present, the Commission is represented by a Special Envoy. The purpose of formally opening a Representation Office is to be able to negotiate with the host government an Establishment Agreement which would grant, inter alia, diplomatic protection under the Vienna Convention to its personnel and premises. The necessary credits and posts will be provided from the 1996 budget. I FINANCIAL STATEMENT - OPENING OF DELEGATIONS 1896 SARAJEVO enclature 600 A 6000 A 6001 A 6002 A 6003 A 6004 A 6005 A 6006 A 6007 A 6008 A 6009 A Heading STAFF EXPENDITURE Salaries, all. & reimb. expenses, officials and temp, stajf Remuneration of other staff Expenses of other staff and payment for other services Further training of officials Exps. & allowances - recruitment, transfer* termjn. ol servie* Entertainment expenses Mission expenses Social and medical expenditure Training of young experts Any adjustments to remuneration 601 ' 6010 6011 6012 A A A A A - * 6013 Vehicles A A A A A 6014 6015 6016 6017 6018 ADMINISTRATIVE EXPENDITURE Rent and other charges on buildings Construction and acquisition of buildings Office furniture and equipment Documentation and library expenditure Stationery and office supplies Other administrative expenditure Furniture, fittings for residential accommodation Postage, diplomatic bag, telecommunications DELEGATIONS = 1 4 officials (2A + IB +1C) + 12 AL °? OPENING I D EL Official 4. § mths 145. 000 120. 000 45. 000 1. 500 130. 000 10. 000 10. 000 2. 000 0 12. 000 475. 500 239. 000 0 100. 000 60. 000 3. 000 3. 000 6. 000 50. 000 20. 000 481. 000 856. 500 ABTt&ieACOe^TOTM. AflTlCLfASOJ-TOTAL AC00 + A6Ç1 -TOTAL ISSN 0254-1475 COM(96) 181 final DOCUMENTS EN 11 Catalogue number : CB-CO-96-200-EN-C ISBN 92-78-03472-X Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) modifying Regulation (EC) 3059/95 opening and providing for the administration of Community tariff quota for certain agricultural and industrial products

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 24. 04. 1996 COM(96) 176 final Proposal for a COUNCIL REGULATION (EC) modifying Regulation (EC) 3059/95 opening and providing for the administration of Community tariff quota for certain agricultural and industrial products. (presented by the Commission) EXPLANATORY MEMORANDUM Subsequent to requests made by various Member States, the Services of the Commission have examined, in conjunction with the Government experts concerned, the question of opening in 1996 tariff quotas for various products. Following this examination, which took place during the "Economic Tariff Questions" group meetings, it has been determined that the opening and increase of tariff quotas for industrial and fishery products could have the agreement of the Member States without disturbing the markets for such products, 2- Proposal for a COUNCIL REGULATION (EC) No 796 of modifying Regulation (EC) 3059/95 opening and providing for the administration of Community tariff quota for certain agricultural and industrial products THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 28 thereof, I hiving regard lo the proposal from (he Commission, Whereas produclion in the community of certain industrial and fishery products will remain in the course of 1996 unable to meet the specific requirements of the user industries in the Community; whereas, consequently, Community supplies of products of this type will depend to a considerable extent on imports from third countries; whereas the most urgent Community requirements for the products in question should be met immediately on the most favourable terms; Whereas by Regulation (HC)n°3059/95' the Council opened, for 1996 Community tariff quotas for certain agricultural and industrial products; whereas the volume of the quota for glass granulate (Order Nr. 09. 2867), and felt tips (order Nr. 09. 2894) should be increased and new tariff quotas should be opened within the limits of appropriate volumes taking into account of the need not to disturb the markets for such products nor the starting out or development of Community production. HAS ADOPTED THIS REGULATION: Article I In the Regulation (ICC) n° 3059/95 (he table shown m the Annex is replaced, for the order n° 09. 2867 and 09. 2894 by the table shown in the Annex of this Regulation. In addition, the order numbers 09. 2701, 09. 2791,09. 2933, 09. 2934,09. 2935 listed in the Annex of this Regulation arc added to the table in the Annex of Regulation (EC) n° 3059/95. Article 2 This Regulation shall enter into force on the 3rd day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, I'or the ( 'ouncil The /'resident 1 O. J. n° L 326, 30. 12. 1995, p 19 3 ANNEX Order CN Code Number 09 2701 ex 0301 92 00 ex 0302 66 00 ex 0303 76 00 Taric Code 10 10 10 Description A m o u nt of Quota Quota Eels (Anguilla spp ) live fresh, chilled or frozen, 4 0 0 0T intended for processing by curing or skinning entreprises or for use in the industrial manufacture of products falling within CN Code 1604 (a) Duty (%) 0 09. 2933 ex 2903 69 90 30 1,3-dichlorobenzole 3 000 T 0 Quota period 1 7 1996 30. 06. 1997 from the entry into force of this Regulation 31. 12. 1996 09. 2867 ex 3207 40 90 30 Glass granulate, containing by weight : 150 T 0 1. 1. 1996- - 73 % or more but not more than 77 % of silicon 31. 12. 1996 dioxyde - 12 % or more but not more than 18 % of dibroron trioxide and 4 % or more but not more than 8 % of polyethylene glycol 09. 2935 3806 10 10 - Gum rosin 50 000 T 09. 2934 ex3818 00 10 30 Doped silicon slices for use in the manufacture of 400 000 T solar cells of subheading 8541 40 91 (a) 0 0 1. 7. - 31. 12. 1996 from the entry into force of this Regulation 31 12 1996 09 2791 ex 3905 99 00 93 Polyvinyl butyral in the form of powder for the 2 0 0 0T 0 1. 7- production of film for laminated safety glass (a) 31 12. 1996 09. 2894 ex 9608 91 00 20 Felt tips and other porous-tips for markers, without 180 000 000 0 1. 1 1996- internal canal pièces 31. 12. 1996 (a) Checks on their prescribed end use shall be carried out pursuant to the relevant Communtiv provisions. FINANCIAL RECORD 1. Budget line concerned : Chap. 12 Art. 120 2. 3 4. 5. Legal basis : Art. 28 of the Treaty Title of the tariff measure concerned : Proposal for a Council Regulation modifying Regulation (EC) 3059/95 opening and providing for the administration of Community tariff quota for certain agricultural and industrial products. Objective : To ensure an adequate supply for Community processing-industries. Method of calculation : Description Variation on Quantities (Unit) Variation on price (Ecus/unit) Eals 0 1,3-dichlorobcnzcne Glass granulate Chun rosin Silicium slices Mulyral Fell tips + 3000 T + 70 T 50 000 1 400 000 1 0 f 140 000 000 pieces 0 + 1583 0 + 32,5 3,5 0 0 Variation on Quota duty (%) 0 0 Variation on normal Duty rate -1,2 + 6,3 0 + 5 6,9 0 - 1,1 Assessed variation on Duty loss against the preceding Quota period (Ecus) -335 + 299 187 + 16 177 + 81 250 + 96 600 0 163 9X2 Total loss of duty against the preceding Quota period : 556 861 Ecu Fight against fraude : The provisions concerning the management of tariff quotas stipulate the necessary measures to assure prevention and protection against fraude and irrégularités. £ ISSN 0254-1475 COM(96) 176 final DOCUMENTS EN 02 03 Catalogue number : CB-CO-96-185-EN-C ISBN 92-78-03043-0 Office for Official Publications of the European Communities L-2985 Luxembourg 6

Commission Regulation (EC) No 745/96 of 24 April 1996 laying down detailed rules for the application of Council Regulation (EC) No 1469/95 on measures to be taken with regard to certain beneficiaries of operations financed by the Guarantee Section of the EAGGF

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L_1996102EN. 01001501. xml 25. 4. 1996    EN Official Journal of the European Communities L 102/15 COMMISSION REGULATION (EC) No 745/96 of 24 April 1996 laying down detailed rules for the application of Council Regulation (EC) No 1469/95 on measures to be taken with regard to certain beneficiaries of operations financed by the Guarantee Section of the EAGGF THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 1469/95 of 22 June 1995 on measures to be taken with regard to certain beneficiaries of operations financed by the Guarantee Section of the EAGGF (1), and in particular Article 5 thereof, Whereas Regulation (EC) No 1469/95 introduces a Community system allowing all the competent authorities of the Member States and the Commission to identify, as quickly as possible, operators presenting, in the light of experience acquired with them as regards the proper execution of their previous obligations, a risk of non-reliability, in connection with tendering procedures, the grant of export refunds or sales at reduced prices of intervention products; whereas application of the system is restricted to operators who have deliberately or as a result of serious negligence committed an irregularity prejudicial to Community funds or who are suspected on solid grounds of having done so; whereas, on that basis, there must be determined, in the light of the seriousness of the offence and depending on whether it has been established or suspected, a series of varied measures ranging from tighter controls to the exclusion of the operators concerned from taking part in operations to be determined when their fraudulent actions are established; Whereas certain of the rules to be adopted for the implementation of the said system may, particularly with regard to the definition of irregularities in accordance with Article 1 (3) of Regulation (EC) No 1469/95, with regard to the determination of operators within the meaning of the second indent of Article 5 of that Regulation and with regard to the rules on the limitation period, henceforth refer to the pertinent horizontal provisions of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (2); whereas, with regard to the further specifications to be made regarding cases of founded suspicion of an irregularity requiring application of the system, it is necessary to define the ‘preliminary administrative or judicial report’ within the meaning of point (b) of Article 1 (2) of Regulation (EC) No 1469/95; whereas, however, the Member States should apply their relevant national rules to determine whether the irregularity has been committed or attempted, deliberately or through gross negligence; Whereas, in order to ensure the proper functioning of the system and without prejudice to the Member States' obligation to prevent and prosecute all irregularities, the application of this system should be restricted to cases of irregularities of a certain magnitude; whereas, in order to apply the measures to be taken in the event of suspected or established irregularities as uniformly as possible, the scope of such measures and the criteria for their duration should be fixed; Whereas rules governing the content and follow-up of notifications made under Regulation (EC) No 1469/95 must be adopted, including provisions for immediately removing from the current closed system of confidential identification and notification those operators who are no longer suspected on solid grounds of having committed an irregularity or with respect to whom the duration of application of the measure or measures within the meaning of Article 3 (1) of Regulation (EC) No 1469/95 has expired; Whereas, lastly, in accordance with the third indent of Article 5 of Regulation (EC) No 1469/95, it is necessary to determine the conditions under which operators may avoid the suspension of payments by lodging a security in cases where none of the advance payment arrangements referred to in Article 18 of Commission Regulation (EEC) No 2220/85 of 22 July 1985 laying down common detailed rules for the application of the system of securities for agricultural products (3), as last amended by Regulation (EEC) No 3403/93 (4), apply, Whereas information exchanged as provided for in the system introduced by Regulation (EC) No 1469/95 concerns mainly natural persons; whereas the system is subject therefore to the rules for the protection of fundamental rights and freedoms contained in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (5), and, mutatis mutandis, in the provisions laid down to that end relating to mutual assistance in customs and agricultural matters; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Committee of the European Agricultural Guidance and Guarantee Fund (EAGGF), HAS ADOPTED THIS REGULATION: Chapter I:   Definitions Article 1 1. For the purposes of Regulation (EC) No 1469/95, ‘irregularity’, within the meaning of point (a) of Article 1 (2) thereof, shall mean any infringement of a provision of Community law, in the fields referred to in Article 1 (1) of that Regulation, that is the result of an act or omission by an economic operator which is harmful to or may be harmful to the EAGGF Guarantee Section. 2. The ‘preliminary administrative or judicial report’ within the meaning of point (b) of Article 1 (2) of Regulation (EC) No 1469/95 shall mean the first written assessment, even if only internal, by a competent administrative or judicial authority, concluding on the basis of concrete facts that an irregularity has been committed, deliberately or through gross negligence, without prejudice to the possibility of this conclusion being revised or withdrawn subsequently on the basis of developments in the administrative or judicial procedure. 3. For the purposes of this Regulation: (a) ‘operators A’ means the operators referred to in point (a) of Article 1 (2) of Regulation (EC) No 1469/95; and (b) ‘operators B’ means the operators referred to in point (b) of Article 1 (2) of that Regulation. When applying the rules introduced by Regulation (EC) No 1469/95, it shall be specified in all instances whether an operator A or an operator B is concerned. 4. For the purposes of Article 1 (2), Article 3 (1) and Article 4 (1) of Regulation (EC) No 1469/95, as well as for the purposes of the provisions of this Regulation, operators A or operators B, as the case may be, shall include persons who, within the meaning of Article 7 of Regulation (EC, Euratom) No 2988/95, have participated in committing an irregularity or who are under a duty to take responsibility for an irregularity or to ensure that it is not committed. 5. Member States shall apply their relevant national legislation to determine whether the irregularity has been committed or attempted, deliberately or through gross negligence. Chapter II:   Scope Article 2 1. Without prejudice to the obligation laid down in Article 8 (1) of Regulation (EEC) No 729/70 of the Council (6) for Member States to prevent and prosecute any irregularity, Regulation (EC) No 1469/95 shall apply only to cases of irregularity which concern or would concern, alone or in combination with other irregularities committed by the same operator over a period of one year, an amount exceeding ECU 100 000. 2. The period of one year referred to in paragraph 1 shall start to run on the date on which the first irregularity was committed. Article 3 1. Where the measure taken in respect of an operator A or of an operator B is the one referred to in point (a) of Article 3 (1) of Regulation (EC) No 1469/95, that measure shall, except in exceptional and duly substantiated cases, apply to the operations which the operator concerned carries out in any of the fields covered by Article 1 (1) of that Regulation. 2. The measure referred to in point (c) of Article 3 (1) of Regulation (EC) No 1469/95 shall apply only to the same field within the meaning of Article 1 (1) of that Regulation and to the same product sector as that in which the irregularity committed or attempted has been established. 3. In the case of the measure referred to in point (b) of Article 3 (1) of Regulation (EC) No 1469/95, the competent authorities of the Member States shall assess each individual case and determine the field or fields and product sectors concerned, taking due account of the real risks of possible further irregularities, and in particular: — the stage of the inquiry being held, depending on whether an operator A or operator B is concerned, — the volume of his operations within the EAGGF field, — the amount of Community funds involved in the suspected or established irregularity, — the seriousness of the irregularity, according to whether it has been committed or attempted, deliberately or through gross negligence. 4. The period of application of the measure or measures to be taken shall be determined on the basis of the criteria laid down in paragraph 3. As regards the measure referred to in point (c) of Article 3 (1) of Regulation (EC) No 1469/95, the period of application is a minimum of six months, except in duly substantiated exceptional cases, and a maximum of five years. Article 4 Where the Commission itself awards contracts, it may choose not to take account of any applicant who has been notified to it as an operator A by a Member State. The exclusion of an operator thus decided upon by the Commission shall be subject to the same rules as those applicable to the measure referred to in point (c) of Article 3 (1) of Regulation (EC) No 1469/95 decided on by a Member State. As regards the operator's prior hearing, the Commission shall give him the opportunity of making any comments he considers useful within a maximum period of two months. Chapter III:   Contents and follow-up of mutual notifications Article 5 1. Each Member State shall designate a single competent authority to make and receive notifications within the meaning of paragraph 2. The said authority shall transmit its notifications to the Commission, which will transmit them to the competent authorities of the other Member States. 2. The notifications exchanged in accordance with paragraph 1 shall be confidential and shall cover the following points: — they shall identify the natural or legal persons within the meaning of Article 1 (4) of this Regulation in respect of whom one or more of the measures under Article 3 (1) of Regulation (EC) No 1469/95 have been taken, specifying whether the operators concerned are A or B, — they shall give a brief indication of the concrete facts which led to the measure(s), specifying the current state of the inquiry where this has not yet been completed, — they shall specify the measure(s) taken by the Member State concerned, — they shall provide references to any notifications which may have been made already under Council Regulation (EEC) No 1468/81 (7), Council Regulation (EEC) No 595/91 (8) or Regulation (EC) No 1469/95. The Commission shall agree with the Member States a standard form for these notifications to be used by the competent authorities. 3. Each notification shall be made as soon as possible. It shall be supplemented by the competent authority which has made it when, with a view to the application of Article 6, the Commission or the competent authority of another Member State, through the Commission, requests additional information or where new significant facts or changes need to be notified. Article 6 Once a Member State and the Commission have received a notification within the meaning of Article 5 (2), they shall decide as soon as possible upon the measures to be applied in relation to the operator or operators concerned in respect of those of his or their operations coming under their respective responsibility, taking account of the criteria laid down in Article 3. Member States shall, in accordance with Article 5, notify the Commission of the steps they have taken. The Commission shall inform the Member State which made the initial notification. Article 7 1. Operators B shall be eliminated from the identification and notification system and the measures applied to them shall be discontinued as soon as the first evaluation referred to in Article 1 (2) proves to be unfounded. 2. When a Member State informs the Commission that a natural or legal person whose name had previously been notified to it under Article 5 (1) has proved, upon further investigation, not to have been implicated in the irregularity, the Commission shall without delay relay this fact to the other Member States, which shall in their turn immediately inform those to whom they had notified these personal data under Regulation (EC) No 1469/95. That person shall then no longer be treated as a person implicated in the irregularity on the basis of the first notification. 3. Any operator shall be eliminated from the system of identification and notification at the end of the period of application of the measure concerned within the meaning of Article 3 (1) of Regulation (EC) No 1469/95. Chapter IV:   Final arrangements Article 8 1. The exclusion measure referred to in point (c) of Article 3 (1) of Regulation (EC) No 1469/95 may not be applied to irregularities committed before the entry into force of that Regulation. 2. The measure referred to in paragraph 1 may be applied only within a period of four years from the time when the irregularity in question was committed. The other provisions on the limitation period in Article 3 (1) of Regulation (EC, Euratom) No 2988/95 shall also apply. Article 9 1. Where the measure referred to in point (b) of Article 3 (1) of Regulation (EC) No 1469/95 is taken and none of the advance payment arrangements referred to in Article 18 of Regulation (EEC) No 2220/85 is applied, Member States shall be authorized to pay out the suspended payment once a security of an equivalent amount plus 15 % has been lodged. 2. The security shall be declared forfeit to the EAGGF Guarantee Section when, for the operation concerned, the irregularity has been established by means of a definitive administrative or judicial decision within the meaning of point (a) of Article 1 (2) of Regulation (EC) No 1469/95. It shall, moreover, remain forfeit if the suspended payment is found not to be due for reasons other than the existence of an irregularity. Where neither of these reasons for forfeiting the security are present, it shall be released immediately for the operation in question. 3. The provisions of Regulation (EEC) No 2220/85 shall apply to the security referred to in paragraph 1, which shall be regarded as a security on an advance payment within the meaning of Title IV of that Regulation. Article 10 1. For the purposes of Regulation (EC) No 1469/95, Member States shall take all appropriate additional steps: (a) to ensure good internal coordination between the authorities concerned and, in particular, to provide rapid information to the authorities responsible for applying the preventive measures adopted; and (b) to establish direct and effective cooperation between the authority which they make specifically responsible for this matter under Article 5 (1) of this Regulation and the Commission. 2. Before 1 October 1996, Member States shall notify to the Commission the steps they have taken under paragraph 1. Article 11 1. All appropriate technical and organizational measures necessary to maintain the security of the identification and notification system shall be taken by the Member States and the Commission, each in respect of the part of the system which concerns it. The aim of the measures shall, in particular, be to prevent any unauthorized person from obtaining access to data or data media or to installations used for the processing of data. 2. Member States and the Commission shall regard the identification and notification system as a system for processing personal data and shall ensure the proper application of the personal data-protection provisions referred to in the fifth subparagrah of Article 4 (2) of Regulation (EC) No 1469/95 and in Directive 95/46/EC. 3. For the part of the system which concerns it, each Member State and the Commission shall be responsible, in accordance with national laws, regulations and procedures or equivalent Community provisions, for any injury caused to a person through the unlawful use of personal information under the system, in particular where the injury was caused as a result of the Member State or the Commission providing inaccurate data or entering inaccurate data into the system contrary to this Regulation. 4. The Commission shall publish in the Official Journal of the European Communities a notice concerning the introduction of the identification and notification system. Article 12 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. It shall apply from 1 July 1996. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 24 April 1996. For the Commission Franz FISCHLER Member of the Commission (1)  OJ No L 145, 29. 6. 1995, p. 1. (2)  OJ No L 312, 23. 12. 1995, p. 1. (3)  OJ No L 205, 3. 8. 1985, p. 5. (4)  OJ No L 310, 14. 12. 1993, p. 4. (5)  OJ No L 281, 23. 11. 1995, p. 31. (6)  OJ No L 94, 28. 4. 1970, p. 13. (7)  OJ No L 144, 2. 6. 1981, p. 1. (8)  OJ No L 67, 14. 3. 1991, p. 11

Proposal for a Council Decision on the provision of loan guarantees for investments carried out by SMEs creating employment

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COMMISSION OF THE EUROPEAN COMMUNITIES it * it it Brussels, 10. 04. 1996 COM(96) 155 final 96/0107 (CNS) ELISE (European Loan Insurance Scheme for Employment) Reinforcing confidence through renewed investment and employment creation Proposal for a COUNCIL DECISION on the provision of loan guarantees for investments carried out by SMEs creating employment (presented by the Commission) EXJHLÂN ATGRMïMfiMORANDII M A INTRODUCTION In its report presented to the Madrid European Council0', the Commission referred to the widespread recognition within the EU that small and medium-sized enterprises are one of the key sectors the European Union. Both the Community and the Member States at national, regional and local level, already try to unlock the potential of SMEs through an array of policy measures and support schemes. for generating employment opportunities and growth in Available evidence clearly shows that SMEs, particularly at the smaller end, now play a key role in terms of growth and that these firms moreover generate an above average share of new jobs. Due to a number of basic market and policy imperfections in a number of areas (regulatory environment, labour market, access to new technologies, product and services market, access to financing, etc. ), their full potential for growth and employment creation is however not properly realized. B ACCESS TO THE FINANCIAL MARKET SMEs are much more dependent on internal sources of funds (e. g. own capital, retained profits, etc. ) than the larger ones, and typically face a difficult financial environment. Bank lending constitutes the predominant form of external funding for these firms. However, many firms experience serious difficulties in getting access to sources of long- term lending in order to finance their investments and to expand their activities. This problem is of particular relevance for small and medium-sized enterprises, as banks consider that the credit risks applying to these companies are high (failure rates indeed exceed those applying to larger companies), notably also because these enterprises are often under-capitalized They are, moreover, often unable to provide adequate collateral or other forms of loan security required by banks. This situation is exacerbated in the case of transnational investments, as banks are reluctant for a variety of reasons to finance cross-border operations. The small and medium-sized firms, which manage to get access to sources of loan funding, will generally end up paying higher interest rates than the ones charged to large companies. These impediments have a significant adverse impact on their development and thus on their potential for growth and for job creation. C RELEVANCE OF LOAN GU AR AN TEES Loan guarantees constitute a powerful and cost-effective tool to help overcome these obstacles, both by facilitating the access to sources of lending and by bringing down the level of borrowing costs. Following the establishment of the European Investment Fund (EIF) on 14 June 1994 (see section D below), the Community is endowed with a specialized institution for the extension of loan guarantees, notably in favour of SMEs. For operations involving SMEs, the Fund operates in an indirect manner i. e. through financial intermediaries, while the loan guarantees are not extended on an individual basis, but to portfolios of loans. The appraisal of the individual loan applications h carried out by financial intermediaries; these institutions remain exposed to a certain share of the credit risk of the loan (in general 50%) in order to ensure the quality of their appraisal work. fh Small and mediurn-si/ed enterprises, a dynamic source of employment, growth and the the European Union. Report competitiveness m European Commission to the Madrid European Council. Brussels, December 1995. presented by 2 As the EIF operates on a commercial basis, it charges guarantee premiums in order to cover the risks taken on, as well as its operational costs. By covering the cost of the EIF guarantee premiums through the budget, the Community will ensure that these guarantees are provided to the beneficiaries at no cost. As the budgetary cost of the guarantee premiums is relatively modest in comparison with the corresponding volume of guaranteed loans (which themselves cover part of the cost of the associated investments), a significant leverage effect can be obtained with limited budgetary resources. These financial interventions benefiting enterprises must be coherent with the principles of Community State aid policy. Eligibility criteria regarding beneficiary enterprises will be in compliance with Commission Recommendation C(96) 261 final. This guarantee approach has also been adopted in the framework of the "Growth and Environment" pilot project, where enterprises carrying out investments producing environmental benefits get access to EIF loan guarantees at no cost. It should be noted that the loan guarantees extended by the Fund do not create any contingent liabilities upon the Community budget, as any claims resulting from calls being made upon the guarantees will be honoured by the Fund. D. SUMMARY DESCRIPTION OF THE EIF The creation of the EIF was decided at the European Council in Edinburgh. The Fund has an authorized capital of ECU 2 billion, of which 30% has been subscribed by the Community and 40% by the LIB An important number of financial institutions (currently 78), representing all Member States of the European Union, constitute the third part of the Fund's shareholder base. The Fund has been formally established on 14 June 1994 and is located in Luxembourg. The activities of the EIF are focused on two target areas of Community interest, namely trans-European networks (TENs) and small and medium-sized enterprises (SMEs). The Fund is currently providing loan guarantees in both areas of activity, while its Statute also allows for the provision of equity, subject to a favourable decision by the Fund's General Meeting in June 1996. The total amount of operations approved by the EIF since inauguration amounts to approximately ECU 1. 5 billion, of which about 10% concerns SMEs; a further amount of SME operations is under appraisal. In addition, the Fund is currently preparing the signature of contracts corresponding to about ECU 0. 5 billion in the framework of the "Growth and Environment" scheme. E DESCRIPTION OF THE PROPOSED COMMUNITY SCHEME While SMEs, and particularly small firms, are at a disadvantage to obtain bank funding, they are also the biggest creators of jobs. The annexed Decision on the establishment of a guarantee scheme, which the Council is invited to adopt, will effectively encourage investment programmes by these companies when linked to employment creation The scheme will have a double impact as it will not only facilitate access to bank funding, but also reduce the interest rates charged to the borrowers. The benefit of the loan guarantee scheme will be restricted to SMEs, and particularly small enterprises, while only investment projects involving the creation of employment will be eligible. The guarantees provided by the EIF will in general cover 50% of the amount of the loan, while transnational investments (such as the creation of a production, research or distribution facility in another Member State, or the creation of a joint venture) will enjoy priority access to the scheme and benefit from guarantee cover up to 75% of the loan size. The scheme will be implemented by the EIF, while the loans will be extended by a network of financial intermediaries throughout the European Union. The Commission and the Fund will ensure that the network of intermediaries is sufficiently broad to ensure that wjvth©<seheme operates on a fully competitive basis rn the interest ôf SMEs. As a starting base, this network will include banks operating as intermediaries in the framework of the EIB's global lending programme. The conditions applying to the Bank's lending ensure that the loans are used for productive investments and for suitable projects. Within this network, priority will, moreover, be given to financial institutions with particular experience and interest in SME lending. Other financial institutions with the necessary qualifications (e. g. guarantee institutions) will also have the possibility to join the network and become involved in the scheme. The Fund will sign framework agreements with these financial intermediaries. The detailed terms and conditions applying to this new scheme will be set out in a cooperation agreement, to be signed between the Commission and the EIF. The conditions relative to the creation of employment will be largely inspired by the ones which apply to the SME facility. F FINANCING AND EVALUATION The proposed Council decision is for an initial scheme, lasting 24 months at most from the date of its adoption, which will be financed entirely by ECU 25 million entered in the 1996 budget on the "Employment and Growth for Europe" budget line (B5-322). This requires the prior adoption of an SAB for this line. The aforementioned amount of budgetary support will allow for EIF guarantees covering a total loan portfolio of ECU 1 000 million. The budgetary appropriations destined to cover the cost of the guarantee premiums will be transferred directly to the Fund and into a special Community account. Neither the financial intermediaries nor the final beneficiaries will therefore receive Community funds in a direct manner. The Commission will report on the implementation of this scheme to the budget authority and will provide an overall evaluation of the functioning and impact of the scheme within 18 months at most from the date of its adoption. On this basis, the Commission will decide whether to propose to the legislative authority an extension of the scheme. Proposal for a COUNCIL DECISION on the provision of loan guarantees for investments carried out by SMEs creating employment THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof; Having regard to the proposal from the Commission(,); Having regard to the opinion of the European Parliament^; Whereas the European Council, meeting in Brussels on 10 and 11 December 1993, adopted the White Paper on Growth, Competitiveness and Employment, as the basis for action by the Community and its Member States, supporting the development of SMEs the as a key element of White Paper, in particular Chapter 2 thereof, emphasized the importance of SMEs for the competitiveness of European industry; and whereas specific attention has been drawn to the need to improve access to sources of financing and credit; in the Community; whereas increased competitiveness Whereas the Commission presented a report to the European Council in Madrid on 15 and 16 December 1995, entitled "SMEs: a dynamic source of employment, growth and competitiveness in the European Union", in which in Chapter HID, the Commission put forward a number of concrete action proposals as regards improved access of SMEs to appropriate sources of funding; Whereas the Presidency Conclusions of the European Council in Madrid referred, in relation to SME policy, to the need to "improve the financial environment for them by means of better access to capital markets and encourage development of the European Investment Fund function with regard to SMEs"; Whereas, on 14 June 1993, the Council adopted Decision 93/379/EECw, relative to a multi-annual programme of Community actions; whereas, on 20 March 1996, the Commission adopted a proposal for a third multi-annual programme for enterprises, in particular SMEs, in the European Union(4); and whereas this Decision should be complementary with these programmes, and should constitute part of the Integrated Programme in favour of SMEs and craftsmanship; Whereas, on 22 November 1993, the Council adopted a resolution on the reinforcement of the competitiveness of enterprises, notably small and medium-sized enterprises and craftmanship, and the development of employment^; Whereas the present Recommendation [C(96) 261 final]; initiative should be in compliance with Commission ( i) (2) O) M) (?) O J No OJNo 0. 1 No L 161, 2. 7. 1993, p. 68 OJ No OJ No C 326, 3. 12. 1993, p. 1. Whereas bank lending constitutes an important, if not predominant, form of external funding for small and medium-sized enterprises; whereas such enterprises experience particular difficulties when trying to obtain access to sources of loan finance, because of the fact that credit risks are perceived to be higher than for loans granted to larger companies, and because such enterprises are often unable to provide sufficient collateral or other forms of loan security; whereas interest rates charged to such enterprises are generally higher than those applying to larger borrowers; and whereas the particular difficulties of financing innovative and new technology investments should be noted; Whereas loan guarantees constitute a cost-effective instrument to facilitate access to loans and moreover lower the interest rates applying to these loans; whereas such guarantees should facilitate and stimulate investments by the beneficiary enterprises and should be extended exclusively in those cases where the loans and investments lead to the creation of employment; and whereas both material and immaterial investments should be eligible under the scheme; Whereas investments with a transnational character deserve special attention in view of the fact that the impediments towards gaining access to sources of loan finance are exacerbated in comparison with other forms of investment; Whereas the European Investment Fund (EIF) was set up in June 1994 to contribute to the pursuit of Community objectives by stimulating investment in trans-European networks and small and medium-sized enterprises; and whereas the Community has become a member of the Fund by virtue of Council Decision 94/375/EO"1; Whereas the Fund is empowered to issue loan guarantees according to its Statute; and whereas the cost of the guarantee premiums corresponding to these loan guarantees can either be borne by the beneficiary of the loan guarantee, or alternatively by a third party, notably by the Community; Whereas the payment of the guarantee premium by the Community implies that the loan guarantees are provided at no cost to the final beneficiary, and whereas the credit risks associated with these loan guarantees are not borne by the Community budget, but by the EIF; and whereas a significant leverage effect can be achieved with a limited volume of budgetary resources; Whereas the EIF has indicated its willingness to participate in the implementation of this Decision; Whereas the EIF and the Commission will enter into a cooperation agreement on the implementation of this Decision; whereas the European Investment Bank (EIB) will be closely involved in the implementation of this Decision; and whereas the loans guaranteed by the EIF will be made available throughout the Community by a network of financial intermediaries; Whereas the budgetary resources necessary for the payment of the premiums will be paid out directly to the EIF on a special Community account; Whereas the loan guarantees are to be made available throughout the Community and be implemented as quickly as possible; Whereas the Treaty does not provide powers others than those of Article 235 for the adoption of this Decision, (6t OJ No L 173, 7. 7. 1994, p. 12. HAS DECIDED AS FOLLOWS: Article 1 The Community shall provide subsidies for the purpose of paying the cost of the guarantee premiums linked to loan guarantees extended by the EIF on a volume of ECU 1 000 million of loans, subject to the availability of appropriations written into the Community budget. Only loans for investment projects involving the creation of employment, and extended to small and medium-sized enterprises, shall be eligible. Particular priority shall be given to small enterprises. The guarantees shall apply during the whole life of the loans and shall in general cover 50% of the size of the loans. They shall be extended by the EIF under the usual terms and conditions applying to its guarantee operations. For investments with a transnational character, the cover rate may reach up to 75% of the size of the loans. Article 2 The scheme shall operate for an initial period of up to 24 months from the date of its adoption. The scheme shall be administered by the EIF on behalf of the Community, exercising the same diligence as for operations carried out from its own resources. The detailed terms and conditions for implementing this Decision, notably as regards the monitoring of employment creation, shall be laid down in a cooperation agreement between the Commission and the EIF. Article 3 The Commission shall inform the European Parliament and the Council on the implementation of this Decision. The Commission shall, notably on the basis of the information made available by the EIF, and within 18 months at most from the date of its adoption, provide an evaluation on the overall utilization of the scheme and its impact on the creation of employment and on investment, notably for the purpose of assessing possible future action beyond the initial period. Done at Brussels, For the Council The President FINANCIAL STATEMENT 1. TITLE OF OPERATION ELISE (European Loan Insurance Scheme for Employment). 2. BUDGET HEADING INVOLVED B 5 - 3 2 2. 3. LEGAL BASIS Article 235. 4. DESCRIPTION OF OPERATION 4. 1 General objective: Facilitate the access of small enterprises to sources of loan finance, through the provision of loan guarantees extended by the EIF (European Investment Fund). Only enterprises creating additional employment will be eligible. 4. 2 Period covered: 1996. 5. CLASSIFICATION OF EXPENDITURE 5. 1 NDC 5. 2 DA. 6. TYPE OF EXPENDITURE OR REVENUES The expenditure will take the form of subsidies destined to cover the cost of the guarantee premiums, which are charged by the EIF for the extension of loan guarantees to the beneficiary enterprises on a loan volume of ECU 1 billion, extended by qualified financial intermediaries. The loan guarantees will be made available to the beneficiaries at no cost, as the cost of the guarantee premiums will be borne by the Community budget. 7. FINANCIAL IMPACT 7. 1 Method of calculating total cost Total cost is estimated at ECU 25 million (taking account of the fact that the subsidies concerned will be transferred to the Fund on a present value basis). This cost figure notably (management, administration, control, etc. ) of the Fund, promotion costs and the costs related to an independent evaluation of this action. includes all operational costs 7. 2 Distribution of costs (in current appropriations) Budget 1996 TOTAL Subsidies (guarantee premiums) \iC[l 25. 0 million HCll 25. 0 million 7. 3 Indicative schedule of appropriations 7. 3. 1 Schedule for proposed new action Appropriations for commitments Appropriations for payments | 1996 25. 0 25. 0 TOTAL 25. 0 25. 0 | (current appropriations; in ECU million) 8. ANTI-FRAUD MEASURES The appraisal, monitoring and administration of the loans will be carried out by qualified financial intermediaries and subject to certain contractual conditions imposed by the EIF. The intermediaries have an interest in the successful conclusion of the lending operation as they will cover the remaining part of the credit risk on the loans. As regards the creation of employment, an administrative follow-up mechanism will be implemented by the Commission and the EIF in order to verify that the necessary conditions have been complied with by the beneficiaries. 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 9. 1 Specific objectives The proposed operation will foster and accelerate the implementation of investment programmes by SMEs because the loan guarantees will facilitate and enhance the access of these companies to loan finance. The loan guarantees will, moreover, lower the interest rates applying to these loans The proposed action will be specifically targeted towards the creation of additional investment programmes employment. In addition, the underlying investments will strengthen the competitivenes and profitability prospects of these enterprises and contribute to economic growth. leading to Target population: small and medium-sized enterprises creating employment. Particular priority will be given to small enterprises. 9. 2 Justification of the action incentive By facilitating the access of SMEs, and particularly small enterprises, to sources of bank lending, and by reducing the cost of this lending, an important to consider additional investments, specifically when linked to the creation of jobs. Renewed impetus in the field of productive investment, notably by such firms, contributes to the reinforcement of growth perspectives within the European Union and the creation of extra jobs. to these companies is provided is higher and/or available collateral investments, particularly by SMEs, has been Choice of modalities: the usefulness of loan guarantees as a stimulator of extensively demonstrated in the past at various levels. Loan guarantees are extremely relevant as such companies typically face difficulties to attract sufficient funding because of the fact that the perceived credit risk loan guarantees will be extended by the EIF, which has been set up to further objectives of Community interest, notably in the area of the financing of TENs (trans-European networks) and SMEs. The Community is a shareholder of the Fund, owning 30% of subscribed capital, while the EIB owns a further 40% of the subscribed capital. This offers the advantage of channelling Community aid through a well-established institution, familiar with Community rules procedures and closely linked to the European Investment Bank. insufficient. The 9. 3 Monitoring and evaluation of the operation The following elements will be considered when evaluating the overall effectiveness of the proposed action: the overall amount of employment created in the framework of the present initiative; the overall take-up of loans under this initiative; the aggregate volume of investments realized in the context of the present action. The budget authority will be informed of the impact of this initiative. Possible extensions of the action will be examined in the light of the results achieved and the evaluation of the initiative, which will be transmitted to the budgetary authority within 18 months at most from the date of its adoption. 10. ADMINISTRATIVE EXPENDITURE The proposed operation will not involve any increase in the number of Commission staff or administrative expenditure. 10 ISSN 0254-1475 COM(96) 155 final DOCUMENTS EN 08 10 04 Catalogue number : CB-CO-96-179-EN-C ISBN 92-78-02845-2 Office for Official Publications of the European Communities L-2985 Luxembourg 11

Amended proposal for a Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community

http://publications.europa.eu/resource/cellar/e207efcd-69f5-4180-aabc-d125d94a77a4

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 22. 04. 19% COM(96) 182 final 95/0121 (SYN) 95/0122 (SYN) 95/0123 (SYN) Amended proposal for a Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community 95/0121 (SYN) Amended proposal for a Council Regulation (EC) amending Council Regulation (EEQ No 1101/89 on structural improvements in inland waterway transport 95/0122 (SYN) Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway 95/0123 (SYN) (presented by the Commission pursuant to Article 189 a (2) of the riC-Treaty) Amended proposals relating to the common policy on the organization of the inland waterway transport market and supporting measures EXPLANATORY MEMORANDUM At its plenary part-session of 13 February 1996 the European Parliament approved, subject to several amendments, the following proposals'" presented by the Commission in the framework of a Communication on a common policy on the organization of the inland waterway transport market and supporting measures: I. II. Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community; Council Regulation (EC) amending Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport; III. Council Regulation (EC) amending Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway. With regard to proposal I the Commission has accepted the amendments concerning recital 4a (new) and the first subparagraph of Article 10(1), since they reinforce and update the original text. With regard to proposal II the Commission has accepted the amendments concerning recital 2, recital 4, Article 1 and Article 2, which provide for the possibility of a scrapping operation after 1995 for an additional period of four years until 1999 inclusive, and which create a legal basis for a contribution from the Community budget to the restructuring operation for a further year compared with the Commission proposal. The Commission recognizes that the large-scale scrapping scheme could run until 1999, the eve of full liberalization of the market, while maintaining its objective to reduce overcapacity by scrapping 15% of the total loading tonnage. In this context, the contribution from the Community budget to co-finance the scheme could be extended by one year until 1999. In addition, in order to avoid any budgetary problems at the end of 1996, it would indeed be preferable if the Regulation entered into force on the actual day of its publication. (i) OJ C 318, 29. 11. 1995, p. 8. With regard to proposal III the Commission has accepted the amendments concerning the third and fifth paragraph of Article 1, as they are in line with the philosophy of these aids and extend by six months the period for the Commission proposal to be presented to the Council on expiry of the arrangements. The Commission therefore amends its proposals as follows: I. Amended proposal fora Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community 95/0121 (SYN) Original proposal Amended proposal Recital 4a (new) Whereas the Member States adopt accompanying social measures to assist their close carriers who businesses; down Article 10(1) 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1996. They shall forthwith inform the Commission thereof. 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1997. They shall forthwith inform the Commission thereof. these When Member States adopt provisions, shall contain a these reference to this Directive or shall be accompanied by such reference at the time of their publication. The procedure for such references shall be adopted by the Member States. these When Member States adopt provisions, shall contain a these reference to this Directive or shall be accompanied by such reference at the time of their publication. The procedure for such references shall be adopted by the Member States. II Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport Recital 2 (EEC) Whereas Council Regulation No 1101/89 provides for the possibility of Community financing for 1995 to 1998; whereas the procedure for 1996, 1997 and 1998 has to be determined; still (EEC) Whereas Council Regulation No 1101/89 provides for the possibility of Community financing for 1995, and whereas Community financing should also be possible in the years immediately following that year up to and including 1999: Recital 4 in Whereas public contributions must be the granted annually, contributions made by trade; whereas measures are scheduled for a period of three years from 1996 to 1998; whereas they must be assessed annually; line with the in Whereas public contributions must be the granted annually, contributions made by trade; whereas measures are scheduled for a period of four years from 1996 to 1999; whereas they must be assessed annually; line with the Article 1 Article 4a(l) of Regulation (EEC) No 1101/89, as amended on 5 December 1995, reads as follows: "For the years 1995. 1996. 1997, 1998 and 1999 the funds referred to in Article 3 may be resourced by means of financial the Community. " contributions from The following paragraphs are added to Article 4(a) (EEC) No 1101/89: of Regulation The following paragraphs are added to Article 4(a) (EEC) No 1101/89: of Regulation "4. Financial contributions from the Community for 1996, 1997 and 1998 than double the shall not be more contributions from the trade. ^3. The annual amount of financial contributions from the Community for 1996, 1997, 1998 and 1999 shall not be more than double the contributions from the trade. to those from 5. The Member States in question shall jointly make available from their funds similar amounts the Community for the years mentioned in paragraph 4. The proportionate share of each Member State concerned shall be calculated against the size of its active fleet as compared with the Member shall be States. These determined by in conjunction with the authorities of the various scrapping funds. amounts the Commission 6. At the beginning of each year during the scrapping operations for 1996 to 1998, the Commission shall lay down, the as part of procedures for scrapping for the year in progress as a function of available finances, market developments and liberalization measures taken. " this Regulation, the structural 4. The Member States in question shall^ for the period mentioned in paragraph 3, make available from their funds amounts that are sufficient when used together those from the Community to with achieve reorganization envisaged. The proportionate share of each Member State concerned shall be calculated against the size of its active fleet as compared with the Member be States. These in determined by conjunction with the authorities of the various scrapping funds. amounts shall the Commission to in paragraph 3 5. At the beginning of each year during the scrapping operations for the period referred the Commission shall lay down, as part of this Regulation, for scrapping for the year in progress as a function of available finances, market liberalization and developments measures taken. " the procedures Article 2 This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. This Regulation shall be binding in its entirety and directly applicable in all Member States. III. Amended proposal for a Council Regulation (EO amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway 95/0123 (SYN) Article 1 (No change to the first two paragraphs) on I he The beneficiaries of this aid shall undertake to provide new or additional tonnage transport inland waterway, to be determined with the competent authorities of the Member States, for a period of five years. In the event this undertaking the aid shall be recovered by the competent authority. honour failure of to on the tonnage this aid The beneficiaries of shall undertake to provide new or additional transport inland waterway, to be determined with the competent authorities of the Member States, for a period of five years. In the event this undertaking, all or part of the aid may be recovered by the competent authority. honour failure of to No later than 31 July 1999 the Council shall decide, on a proposal from the Commission and under the conditions set out subsequent arrangements or, where appropriate, on those the conditions arrangements. the Treaty, on terminating for in No later than 31 December 1999 the Council shall decide, on a proposal from the the Commission conditions set out in the Treaty, on subsequent arrangements or, where for appropriate, on terminating those arrangements. the conditions under and ISSN 0254-1475 COM(96) 182 final DOCUMENTS EN 07 Catalogue number : CB-CO-96-190-EN-C ISBN 92-78-03098-8 Office for Official Publications of the European Communities L-2985 Luxembourg

Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway

http://publications.europa.eu/resource/cellar/c773faf9-4652-4498-a7ee-c0e945ef6499

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 22. 04. 19% COM(96) 182 final 95/0121 (SYN) 95/0122 (SYN) 95/0123 (SYN) Amended proposal for a Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community 95/0121 (SYN) Amended proposal for a Council Regulation (EC) amending Council Regulation (EEQ No 1101/89 on structural improvements in inland waterway transport 95/0122 (SYN) Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway 95/0123 (SYN) (presented by the Commission pursuant to Article 189 a (2) of the riC-Treaty) Amended proposals relating to the common policy on the organization of the inland waterway transport market and supporting measures EXPLANATORY MEMORANDUM At its plenary part-session of 13 February 1996 the European Parliament approved, subject to several amendments, the following proposals'" presented by the Commission in the framework of a Communication on a common policy on the organization of the inland waterway transport market and supporting measures: I. II. Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community; Council Regulation (EC) amending Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport; III. Council Regulation (EC) amending Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway. With regard to proposal I the Commission has accepted the amendments concerning recital 4a (new) and the first subparagraph of Article 10(1), since they reinforce and update the original text. With regard to proposal II the Commission has accepted the amendments concerning recital 2, recital 4, Article 1 and Article 2, which provide for the possibility of a scrapping operation after 1995 for an additional period of four years until 1999 inclusive, and which create a legal basis for a contribution from the Community budget to the restructuring operation for a further year compared with the Commission proposal. The Commission recognizes that the large-scale scrapping scheme could run until 1999, the eve of full liberalization of the market, while maintaining its objective to reduce overcapacity by scrapping 15% of the total loading tonnage. In this context, the contribution from the Community budget to co-finance the scheme could be extended by one year until 1999. In addition, in order to avoid any budgetary problems at the end of 1996, it would indeed be preferable if the Regulation entered into force on the actual day of its publication. (i) OJ C 318, 29. 11. 1995, p. 8. With regard to proposal III the Commission has accepted the amendments concerning the third and fifth paragraph of Article 1, as they are in line with the philosophy of these aids and extend by six months the period for the Commission proposal to be presented to the Council on expiry of the arrangements. The Commission therefore amends its proposals as follows: I. Amended proposal fora Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community 95/0121 (SYN) Original proposal Amended proposal Recital 4a (new) Whereas the Member States adopt accompanying social measures to assist their close carriers who businesses; down Article 10(1) 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1996. They shall forthwith inform the Commission thereof. 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1997. They shall forthwith inform the Commission thereof. these When Member States adopt provisions, shall contain a these reference to this Directive or shall be accompanied by such reference at the time of their publication. The procedure for such references shall be adopted by the Member States. these When Member States adopt provisions, shall contain a these reference to this Directive or shall be accompanied by such reference at the time of their publication. The procedure for such references shall be adopted by the Member States. II Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport Recital 2 (EEC) Whereas Council Regulation No 1101/89 provides for the possibility of Community financing for 1995 to 1998; whereas the procedure for 1996, 1997 and 1998 has to be determined; still (EEC) Whereas Council Regulation No 1101/89 provides for the possibility of Community financing for 1995, and whereas Community financing should also be possible in the years immediately following that year up to and including 1999: Recital 4 in Whereas public contributions must be the granted annually, contributions made by trade; whereas measures are scheduled for a period of three years from 1996 to 1998; whereas they must be assessed annually; line with the in Whereas public contributions must be the granted annually, contributions made by trade; whereas measures are scheduled for a period of four years from 1996 to 1999; whereas they must be assessed annually; line with the Article 1 Article 4a(l) of Regulation (EEC) No 1101/89, as amended on 5 December 1995, reads as follows: "For the years 1995. 1996. 1997, 1998 and 1999 the funds referred to in Article 3 may be resourced by means of financial the Community. " contributions from The following paragraphs are added to Article 4(a) (EEC) No 1101/89: of Regulation The following paragraphs are added to Article 4(a) (EEC) No 1101/89: of Regulation "4. Financial contributions from the Community for 1996, 1997 and 1998 than double the shall not be more contributions from the trade. ^3. The annual amount of financial contributions from the Community for 1996, 1997, 1998 and 1999 shall not be more than double the contributions from the trade. to those from 5. The Member States in question shall jointly make available from their funds similar amounts the Community for the years mentioned in paragraph 4. The proportionate share of each Member State concerned shall be calculated against the size of its active fleet as compared with the Member shall be States. These determined by in conjunction with the authorities of the various scrapping funds. amounts the Commission 6. At the beginning of each year during the scrapping operations for 1996 to 1998, the Commission shall lay down, the as part of procedures for scrapping for the year in progress as a function of available finances, market developments and liberalization measures taken. " this Regulation, the structural 4. The Member States in question shall^ for the period mentioned in paragraph 3, make available from their funds amounts that are sufficient when used together those from the Community to with achieve reorganization envisaged. The proportionate share of each Member State concerned shall be calculated against the size of its active fleet as compared with the Member be States. These in determined by conjunction with the authorities of the various scrapping funds. amounts shall the Commission to in paragraph 3 5. At the beginning of each year during the scrapping operations for the period referred the Commission shall lay down, as part of this Regulation, for scrapping for the year in progress as a function of available finances, market liberalization and developments measures taken. " the procedures Article 2 This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. This Regulation shall be binding in its entirety and directly applicable in all Member States. III. Amended proposal for a Council Regulation (EO amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway 95/0123 (SYN) Article 1 (No change to the first two paragraphs) on I he The beneficiaries of this aid shall undertake to provide new or additional tonnage transport inland waterway, to be determined with the competent authorities of the Member States, for a period of five years. In the event this undertaking the aid shall be recovered by the competent authority. honour failure of to on the tonnage this aid The beneficiaries of shall undertake to provide new or additional transport inland waterway, to be determined with the competent authorities of the Member States, for a period of five years. In the event this undertaking, all or part of the aid may be recovered by the competent authority. honour failure of to No later than 31 July 1999 the Council shall decide, on a proposal from the Commission and under the conditions set out subsequent arrangements or, where appropriate, on those the conditions arrangements. the Treaty, on terminating for in No later than 31 December 1999 the Council shall decide, on a proposal from the the Commission conditions set out in the Treaty, on subsequent arrangements or, where for appropriate, on terminating those arrangements. the conditions under and ISSN 0254-1475 COM(96) 182 final DOCUMENTS EN 07 Catalogue number : CB-CO-96-190-EN-C ISBN 92-78-03098-8 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) amending Council Regulation (EC) No. 3077/95 laying down, for 1996, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of the Faroe Islands

http://publications.europa.eu/resource/cellar/6b1188ef-2d13-4f8c-983e-4905d0c48820

eng

iz it û it** *ir* COMMISSION OF THE EUROPEAN COMMUNITIES it ir ir Brussels, 22. 04. 1996 COM(96) 180 final Proposal for a COUNCIL REGl'I-ATION (I CJ amending Council Regulation (EC) No. 3077/95 laying down, for 1996, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of the Faroe Islands (presented by the Commission) EXPLANATORY MEMORANDUM The Community, under Council Regulation (EC) No. 3077/95, has allocated to the Faroe Islands a quota for mackerel in Community waters. Following a decision to reduce the mackerel TAC for biological reasons, the Community and the Faroe Islands have held consultations which resulted in an agreement to reduce the Parties' quotas for mackerel in the other Party's zone. As a result, the Parties agreed to reduce the Faroese catch quota for mackerel in Community waters from 5,890 tonnes to 3,930 tonnes. It is, therefore, proposed to amend the above Council Regulation accordingly. i Proposal for a COUNCIL REGULATION (EC) amending Council Regulation (EC) No. 3077/95 laying down, for 1996, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of the Faroe Islands THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No. 3760/92 of 20 December 1992 establishing a Community system for fisheries and aquaculture (1), and in particular Article 8 (4) thereof, Having regard to the proposal from the Commission, Whereas Council Regulation (EC) No. 3077/95 (2) allocates, for 1996, certain catch quotas to vessels flying the flag of the Faroe Islands in Community waters; Whereas a catch quota of 5,890 tonnes of mackerel was allocated to the Faroe Islands in ICES Divisions Via, Vile, f and h for 1996. Whereas this quota has to be reduced in order to reflect the reduction in the mackerel TAC for these areas; Whereas, in accordance with the procedure provided for in Article 2 of the Agreement on fisheries between the European Community, of the one part, and the Government of Denmark and the Home Government of the Faroe Islands, of the other part (3), the Parties have had further consultations concerning on their reciprocal fishing rights for 1996; Whereas these consultations have been concluded and, as a result, the above mentioned catch quota allocated to the Faroe Islands has been reduced; Whereas it is for the Council to lay down the specific conditions under which such catches must be taken, (i) (2) (3) O J N o L 3 8 9, 31. 12. 1992, p. 1. OJ No L 330, 30. 12. 1995, p. 54 OJ No L 226, 29. 8. 1980, p. 12. HAS ADOPTED THIS REGULATION: Article 1 In Annex I to Council Regulation (EC) No. 3077/95, the figures relating to mackerel in ICES Divisions Via, Vile, f and h are hereby replaced by those set out in the Annex to this Regulation. This Regulation shall enter into force the day after its publication in the Official Journal. 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 lV ANNEX I Faroese catch quotas for 1996 Quota for Faroese vessels fishing in the Community zone. „ ^ Mackerel Fishing zone: ICES sub-area/division Via (1), Vile, f, h Quantity (tonnes) 3,930 (2) North of 56'30' N. Of which 1,000 tonnes may be fished from 1 October to 31 December 1996 in Community waters in ICES Division IVa. b ISSN 0254-1475 COM(96) 180 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-189-EN-C ISBN 92-78-03087-2 Office for Official Publications of the European Communities L 2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) amending Council Regulation (EC) No. 3078/95 allocating, for 1996, certain catch quotas between Member States for vessels fishing in Faroese waters

http://publications.europa.eu/resource/cellar/aa0bcacb-d5dd-4844-a06e-b4d8a4cb6a09

eng

COMMISSION OF THE EUROPEAN COMMUNITIES •sV * fV •it *$* Brussels, 22. 04. 1996 ('OM((>6)l7X final Proposal lor a ( ()X !. N(_ J J J i i i Ol I A [J O N_X(. Q amending Council Regulation (EC) No. 3078/95 allocating, for 1996, certain catch quotas between Member States for vessels fishing in Faroese waters (presented by the Com mission) EXPLANATORY MEMORANDUM The Community, under Council Regulation (EC) No. 3078/95, allocated to Member States catch possibilities for mackerel in Faroese waters. Following a decision to reduce the mackerel TAC for biological reasons, the Community and the Faroe Islands have held consultations which resulted in an agreement to reduce the Parties' quotas for mackerel in the other Party's zone. As a result, the Parties agreed to reduce the Community catch quota for mackerel in Faroese waters from 4,910 tonnes to 3,270 tonnes. It is, therefore, proposed to amend the above Council Regulation accordingly. 3L Proposal for a COUNCIL REGULATION (EC) No /96 of. 1996 amending Council Regulation (EC) No. 3078/95 allocating, for 1996, certain catch quotas between Member States for vessels fishing in Faroese waters THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No. 3760/92 of 20 December 1992 establishing a Community system for fisheries and aquaculture (1), and in particular Article 8 (4) thereof, Having regard to the proposal from the Commission, Whereas Council Regulation (EC) No. 3078/95 (2) allocates, for 1995, certain catch quotas between Member States for vessels fishing in Faroese waters; Whereas a catch quota of 4,910 tonnes of mackerel was allocated to the Community in ICES Division Vb for 1996. Whereas this quota has to be reduced in order to reflect the reduction in the mackerel TAC for that area; Whereas, in accordance with the procedure provided for in Article 2 of the Agreement on Fisheries between the European Community, of the one part, and the Government of Denmark and the Home Rule Government of the Faroe Islands, of the other part(3\ the Parties have had further consultations on their reciprocal fishing rights for 1996; Whereas these consultations have been concluded and, as a result, the above mentioned catch quota allocated to the Community has been reduced; Whereas, to ensure efficient management of the catch possibilities available, they should be allocated among Member States as quotas in accordance with Article 8 of Council Regulation (EC) No. 3760/92, m i2) 0) OJ No L 389, 31. 12. 1992, p. 1. GJ No L 330. 3®. 12. 1995, p. 62 QJ No L 226, 29 J. 1980, p. 12. HAS ADOPTED THIS REGULATION: Article 1 In Annex I to Council Regulation (EC) No. 3078/95, the figures relating to mackerel in ICES Division Vb are hereby replaced by those set out in the Annex to this Regulation. This Regulation shall enter into force the day after its publication in the Official Journal. 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 V ANNEX Allocation of Community catch quotas in Faroese waters for 1996, as referred to in Article 1 (in metric tonnes, iresh round weight) Species ICES Division Community catch quotas Quota allocated to Member States Mackerel Vb 3,270 Denmark 3,270 Ç ISSN 0254-1475 COM(96) 178 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-187-EN-C ISBN 92-78-03065-1 Office for Official Publications of the European Communities L-2985 Luxembourg

Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport

http://publications.europa.eu/resource/cellar/562cc492-206a-42a0-8f02-9e21fe22c57d

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 22. 04. 19% COM(96) 182 final 95/0121 (SYN) 95/0122 (SYN) 95/0123 (SYN) Amended proposal for a Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community 95/0121 (SYN) Amended proposal for a Council Regulation (EC) amending Council Regulation (EEQ No 1101/89 on structural improvements in inland waterway transport 95/0122 (SYN) Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway 95/0123 (SYN) (presented by the Commission pursuant to Article 189 a (2) of the riC-Treaty) Amended proposals relating to the common policy on the organization of the inland waterway transport market and supporting measures EXPLANATORY MEMORANDUM At its plenary part-session of 13 February 1996 the European Parliament approved, subject to several amendments, the following proposals'" presented by the Commission in the framework of a Communication on a common policy on the organization of the inland waterway transport market and supporting measures: I. II. Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community; Council Regulation (EC) amending Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport; III. Council Regulation (EC) amending Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway. With regard to proposal I the Commission has accepted the amendments concerning recital 4a (new) and the first subparagraph of Article 10(1), since they reinforce and update the original text. With regard to proposal II the Commission has accepted the amendments concerning recital 2, recital 4, Article 1 and Article 2, which provide for the possibility of a scrapping operation after 1995 for an additional period of four years until 1999 inclusive, and which create a legal basis for a contribution from the Community budget to the restructuring operation for a further year compared with the Commission proposal. The Commission recognizes that the large-scale scrapping scheme could run until 1999, the eve of full liberalization of the market, while maintaining its objective to reduce overcapacity by scrapping 15% of the total loading tonnage. In this context, the contribution from the Community budget to co-finance the scheme could be extended by one year until 1999. In addition, in order to avoid any budgetary problems at the end of 1996, it would indeed be preferable if the Regulation entered into force on the actual day of its publication. (i) OJ C 318, 29. 11. 1995, p. 8. With regard to proposal III the Commission has accepted the amendments concerning the third and fifth paragraph of Article 1, as they are in line with the philosophy of these aids and extend by six months the period for the Commission proposal to be presented to the Council on expiry of the arrangements. The Commission therefore amends its proposals as follows: I. Amended proposal fora Council Directive on the systems of chartering and pricing in national and international inland waterway transport in the Community 95/0121 (SYN) Original proposal Amended proposal Recital 4a (new) Whereas the Member States adopt accompanying social measures to assist their close carriers who businesses; down Article 10(1) 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1996. They shall forthwith inform the Commission thereof. 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 January 1997. They shall forthwith inform the Commission thereof. these When Member States adopt provisions, shall contain a these reference to this Directive or shall be accompanied by such reference at the time of their publication. The procedure for such references shall be adopted by the Member States. these When Member States adopt provisions, shall contain a these reference to this Directive or shall be accompanied by such reference at the time of their publication. The procedure for such references shall be adopted by the Member States. II Amended proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport Recital 2 (EEC) Whereas Council Regulation No 1101/89 provides for the possibility of Community financing for 1995 to 1998; whereas the procedure for 1996, 1997 and 1998 has to be determined; still (EEC) Whereas Council Regulation No 1101/89 provides for the possibility of Community financing for 1995, and whereas Community financing should also be possible in the years immediately following that year up to and including 1999: Recital 4 in Whereas public contributions must be the granted annually, contributions made by trade; whereas measures are scheduled for a period of three years from 1996 to 1998; whereas they must be assessed annually; line with the in Whereas public contributions must be the granted annually, contributions made by trade; whereas measures are scheduled for a period of four years from 1996 to 1999; whereas they must be assessed annually; line with the Article 1 Article 4a(l) of Regulation (EEC) No 1101/89, as amended on 5 December 1995, reads as follows: "For the years 1995. 1996. 1997, 1998 and 1999 the funds referred to in Article 3 may be resourced by means of financial the Community. " contributions from The following paragraphs are added to Article 4(a) (EEC) No 1101/89: of Regulation The following paragraphs are added to Article 4(a) (EEC) No 1101/89: of Regulation "4. Financial contributions from the Community for 1996, 1997 and 1998 than double the shall not be more contributions from the trade. ^3. The annual amount of financial contributions from the Community for 1996, 1997, 1998 and 1999 shall not be more than double the contributions from the trade. to those from 5. The Member States in question shall jointly make available from their funds similar amounts the Community for the years mentioned in paragraph 4. The proportionate share of each Member State concerned shall be calculated against the size of its active fleet as compared with the Member shall be States. These determined by in conjunction with the authorities of the various scrapping funds. amounts the Commission 6. At the beginning of each year during the scrapping operations for 1996 to 1998, the Commission shall lay down, the as part of procedures for scrapping for the year in progress as a function of available finances, market developments and liberalization measures taken. " this Regulation, the structural 4. The Member States in question shall^ for the period mentioned in paragraph 3, make available from their funds amounts that are sufficient when used together those from the Community to with achieve reorganization envisaged. The proportionate share of each Member State concerned shall be calculated against the size of its active fleet as compared with the Member be States. These in determined by conjunction with the authorities of the various scrapping funds. amounts shall the Commission to in paragraph 3 5. At the beginning of each year during the scrapping operations for the period referred the Commission shall lay down, as part of this Regulation, for scrapping for the year in progress as a function of available finances, market liberalization and developments measures taken. " the procedures Article 2 This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities. This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. This Regulation shall be binding in its entirety and directly applicable in all Member States. III. Amended proposal for a Council Regulation (EO amending Council Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway 95/0123 (SYN) Article 1 (No change to the first two paragraphs) on I he The beneficiaries of this aid shall undertake to provide new or additional tonnage transport inland waterway, to be determined with the competent authorities of the Member States, for a period of five years. In the event this undertaking the aid shall be recovered by the competent authority. honour failure of to on the tonnage this aid The beneficiaries of shall undertake to provide new or additional transport inland waterway, to be determined with the competent authorities of the Member States, for a period of five years. In the event this undertaking, all or part of the aid may be recovered by the competent authority. honour failure of to No later than 31 July 1999 the Council shall decide, on a proposal from the Commission and under the conditions set out subsequent arrangements or, where appropriate, on those the conditions arrangements. the Treaty, on terminating for in No later than 31 December 1999 the Council shall decide, on a proposal from the the Commission conditions set out in the Treaty, on subsequent arrangements or, where for appropriate, on terminating those arrangements. the conditions under and ISSN 0254-1475 COM(96) 182 final DOCUMENTS EN 07 Catalogue number : CB-CO-96-190-EN-C ISBN 92-78-03098-8 Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) laying down common marketing standards for certain fishery products

http://publications.europa.eu/resource/cellar/8f391baf-b5bb-4e87-9953-da7962786fe0

eng

ir -it COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 19. 04. 1996 COM(96) 157 final Proposal for a COUNCIL REGULATION (EC) laying down common marketing standards for certain fishery products (presented by the Commission) EXPLANATORY MEMORANDUM The Council, acting in accordance with Article 2 of Régulât, ion (EEC) No 3759/92 on the common organization of the market in fishery and aquaculture products, has adopted common market inn standards as follows: Regulation (EEC) No 103/76, which lays down standards applicable to certain fishery products for 3!) species of fish and one species of cephalopod presented fresh or chilled; Regulation (EEC) No 104/76, which adopts standards for four species of crustaceans presented live, fresh, chilled or cooked. These Regulations have been amended, added to and adjusted many- times since they were first adopted. It is again necessary for a number of technical amendments to bo- made in order to bring the standards into line with changes that have occurred in production, markets and business practice: by establishing freshness ratings distinguished by product group, which will make grading easier through the use of simpler, more appropriate freshness criteria; by altering the sizes1 of certain products as a result of changes in production conditions or demand. Advantage should be taken of the opportunity afforded by these new amendments to include in the rules in question a number of improvements and new provisions that have become essential in terms both of form and substance: » In order to ensure that the rules are clear, are properly applied by those for whom they are intended, and to make controls easier, all these provisions should above all be revised into a single legal instrument; secondly, the Commission proposes strengthening the effectiveness of marketing standards with the aim of improving product quality; in view of consumers' increasing and totally legitimate demands in terms of product quality and freshness, and the difficulty of securing satisfactory price for products, it is difficult to imagine public funding continuing to be made available for withdrawals of categories of products the market no long wants. The proposal compensation and support under Articles 12, 12a, 14 and 15 of Regulation (EEC) No 3759/92 for products graded in freshness category B. is therefore to discontinue- -i To make the preparatory work in the Council easier, changes to sizes in Annex II of the proposal are shown in italics. I Admittedly, this measure, if it is to be relevant, will have to be prolonged when the prices are fixed, by differentiating systematically between prices for Extra and A grades and providing higher support for Extra grade products. Finally, in an altogether different sphere, it is proposed indicating more clearly that precedence must be given to technical conservation measures, i. e. minimum biological sizes, over minimum commercial sizes, where there is a threat that these two types of provisions may be in conflict on account of the different measurement units they apply. Annex II therefore contains a reminder of any minimum biological sizes which are in force for the products in. question while the principle itself is set out expressly in the body of the instrument. Proposal for a Council Regulation (EC) No /96 of 1996 laying down common marketing standards for certain fishery products THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 3759/92 of 17 December 1992 on the common organization of the market in fishery and aquaculture products1, as last amended by Regulation (EC) No 3318/942, and in particular Article 2(3) thereof Having regard to the proposal from the Commission, Whereas common marketing standards were laid down for certain species of fish by Regulation (EEC) No 103/76 of 19 January 19763, and for certain species of crustaceans by Regulation (EEC) No 104/76 of 19 January 19764; whereas these Regulations have been amended several times since their adoption, most recently by Regulations (EEC) No 1935/935 and (EC) No 1300/956; whereas far-reaching new amendments must now be made to them in order to reflect market developments and changes in trade practices; whereas it is therefore necessary to revise these provisions entirely, in a single legal instrument, to ensure that they are clear and can be properly applied; whereas Regulations (EEC) Nos 103/76 and 104/76 should consequently be replaced; OJ No L 388, 31. 12. 1992, p. 1. OJ No L 350, 31. 12. 1994, p. 15. OJ No L 20, 28. 1. 1976, p. 29. OJ No L 20. 28. 1. 1976, p. 35. OJ No L 176, 20. 7. 1993, p. 1. OJ No L 126, 9. 6. 1995, p. 3. Whereas the principal aims of the common marketing standards for fishery products are to improve product quality and thus make marketing easier to the benefit of both producers and consumers; whereas since fishery products are unprocessed and are marketed fresh or chilled, their quality is determined largely by their freshness, which is assessed on the basis of objective criteria by organoleptic examination; whereas if batches of fishery products are to be uniformly fresh, they must consist of products of the same species, from the same fishing grounds and the same vessel only; Whereas a small but adequate number of freshness categories should be established based on appropriate ratings for individual product groups; whereas, however, in view of the need to support quality products, not all freshness categories should be permitted to qualify for the intervention mechanisms introduced as part of the market organization arrangements; Whereas the common marketing standards have the aim also of defining uniform trade characteristics for the products in question across the entire Community market in order to prevent distortions of competition and, secondly, to enable the market organization price arrangements to be applied uniformly; whereas to that end' there should be a requirement that fishery products be graded on the basis of size categories determined according to weight or, in some individual cases, according to size; Whereas the common marketing standards apply when all the products concerned, of Community origin or from third countries, intended for human consumption, are being sold for the first time on Community territory; whereas the standards apply without prejudice to health rules or rules adopted as part of stock conservation measures; whereas it is especially important to recall the primary importance, in all circumstances, of any minimum biological sizes in force, as against the minimum sizes determined for fishery products by the common marketing standards; Whereas the application of the common marketing standards to products coming from third countries means that additional information must be shown on packaging; whereas this information need not be shown, however, where the products are brought into the Community by vessels flying the flag of a third country under the same conditions as Community catches; Whereas, in view of normal practice in most Member States, it is advisable that the industry should grade fishery products for freshness and size; whereas, with a view in particular to assessing freshness on the basis of organoleptic criteria, provision should be made for the collaboration of experts appointed for this purpose b> the trade organizations concerned; <3 Whereas, in order to keep each other informed, each Member State should supply the other Member States and the Commission with a list of the names and addresses of the experts and trade organizations concerned, HAS ADOPTED THIS REGULATION: A- GENERAL PROVISIONS 1. This Regulation lays down, for certain fishery products, common marketing standards as provided for in Article 2 of Regulation (EEC) No 3759/92, hereinafter called the 'basic Regulation'. Article 1 2. For the purpose of this Regulation: a) 'marketing' means the first offer for sale and/or the first sale, on Community territory, for human consumption; b) 'lot' means a quantity of fishery products of a given species which has been subjected to the same treatment and is from the same fishing grounds and the same vessel; c) 'fishing grounds' is the customary name given by the fishing industry to the place in which catches have been taken. 3. The provisions of this Regulation relating to the freshness categories for fishery products shall apply without prejudice to the requirements of Directive 91/493/EEC of 22 July 1991 laying down the health conditions for the production and the placing on the market of fishery products7. OJ No 1. 268, 24. 9. 1991, p. 15. - Directive amended by Directive 95 71 EC o( 22. 12. 1995. (OJ No L 332, 30. 12. 1995, p. 40. ) L fishery products as specified in Article 3. of Community origin or from third countries, may be marketed only if they meet the requirements of this Regulation. Article 2 This Regulation shall not. however, apply to small quantities of products disposed of directly to retailers or consumers by inshore fishermen. Detailed rules for the application of this Article shall be adopted in accordance with the procedure laid down in Article 32 of the basic Regulation. Common marketing standards are hereby laid for the following products: Article 3 (a) Saltwater fish falling under CN code 0302: Plaice (Plcwonectes platessa) Albacorc or longfinned tuna {Thunnus alalunga) Blue fin tuna Bigeye tuna (Thunnus thymus) (Thunnus or Parathunnus obesus) Herring of the species Clupea harengus Cod of the species (jadus morhua Sardine of the species Sardina pilchardus Haddock Coal fish Pollack (Mclanogrammus acglefinus) (Pollachius virens) (Pollachius pollachius) Mackerel of the species Scomber scomhrus Mackerel ol the species Scomber japonicus Horse mackerel (Trachurus spp. ) Dogfish {Sc/ualus acanlhias and Scyliorhinus spp. ) Red fish (Se basics spp. ) W h i t i ng (. YIerlangius mcrlangus) Blue whiting (Micromesislius poulassou or Gadus poutassou) L i ng (Molva spp. ) - Anchovy (Engraulis spp. ) - Hake of the species Merluccius merluccius - Megrim - Ray's bream - Monkfish - Dab (Lepidorhombus spp. ) (Brama spp. ) (Lophius spp. ) (JLimanda limanda) - Lemon sole (Microstomus kitt) - Pouting {Trisopterus luscus), and poor cod/Mediterranean cod (Trisopterus minutus) - Bogue - Picarel - Conger -Gurnard -Mullet - Skate (Boops boops) (Maena smarts) (Conger conger) (Trigla spp. ) (Mugil spp. ) (Raja spp. ) - Common flounder (Platichthys flesus) - Sole (Solea spp. ) - Scabbardfish (Lepidopus caudatus and Aphanopus carbo) (b) Crustaceans falling under CN code 0306: Shrimps (Crangon crangon) and prawns (Pandalus borealis) Edible crabs (Cancer pagurus) Norway lobsters (Nephrops norvegicus) presented live, fresh or chilled, or cooked by steaming or by boiling in water. (c) Cephalopods falling under CN code 0307: Cuttlefish (Sepia officinalis and Rossia macrosoma). 2. The marketing standards referred to in paragraph 1 shall comprise: (a) freshness categories, and (b) size categories. « B. FRESHNESS CATEGORIES 1. The freshness category of each lot shall be determined on the basis of the freshness of the product and a number of additional requirements. Article 4 Freshness shall be defined by reference to the special scales for different types of products set out in Annex I to this Regulation. 2. On the basis of the scales referred to in paragraph 2, products as specified in Article 3 shall be classified by lot in one of the following freshness categories: a) b) Extra, A or B in the case of fish, cephalopods and Norway lobster Extra or A in the case of shrimps. However, live Norway lobsters shall be classified in category E. 3. Crab as specified in Article 3 shall not be subject to specific freshness standards. However, only whole crabs, excluding berried females or soft-shelled crabs, may be marketed. 1. Each lot must contain products of the same degree of freshness. A small lot need not, however, be of uniform freshness; if it is not, the lot shall be placed in the lowest freshness category represented therein. Article 5 2. The freshness category must be clearly and indelibly marked, in characters which are at least 5 cm high, on labels affixed to the lot. Article 6 1. Fish, cephalopods and Norway lobster as specified in Article 3 placed by lot in category B shall be ineligible in so far as that lot is concerned for the financial assistance granted in respect of withdrawal as provided for in Articles 12, 12a, 14 and 15 of the basic Regulation. 2. Fish in freshness category Extra must be free from pressure marks, injuries, blemishes and bad discolouration. 3. Fish in freshness category A must be free from blemishes and bad discolouration. A very small proportion with slight pressure marks and superficial injuries shall be tolerated. 4. When products are being classified by freshness category, without prejudice to the health rules applicable, the presence of parasites and their possible effect on the quality of the product shall also be taken into consideration, allowance being made for the type of product and its presentation. 5. Detailed rules for the application of this Article shall be adopted, where necessary, in accordance with the procedure laid down in Article 32 of the basic Regulation. C. SIZE CATEGORIES 1. Fishery products as specified in Article 3 shall be sized by weight or by number per kilogramme. Shrimps and crabs, however, shall be graded in size categories by width of shell. Article 7 2. The minimum sizes established by this Regulation, in accordance with the scale set out in Annex II, shall apply without prejudice to the minimum lengths required under Regulations: (EEC) No 1866/86 of 12 June 1986 laying down certain technical measures for the conservation of fishery resources in the waters of the Baltic Sea, the Belts and the Sound8; (EEC) No 3094/86 of 7 October 1986 laying down certain technical measures for the conservation of fishery resources9; (EC) No 1626/94 of 27 June 1994 laying down certain technical measures for the conservation of fishery resources in the Mediterranean10. For the purposes of control by the competent authorities, the minimum biological sizes to be observed in any event are shown in Annex II where they apply to the species covered by the marketing standards. Article 8 OJ No L 162, 18. 6. 1986, p. 1. - Regulation last amended by Regulation (EC) No 2250/95 (OJ No L 230, 27. 9. 1995, p. 1. ). OJ No L 288, 11. 10. 1986, p. 1. - Regulation last amended by Regulation (EC) No 3071/95, 22. 12. 1995 (OJ No L 329, 30. 12. 1995, p. 14. ) O J No L 171, 6. 7. 1994, p. 1. 10 4o 1. Lots shall be placed in size categories in accordance with the scale set out in Annex II. 2. Each lot must contain products of the same size. A small lot need not, however, be of uniform size; if it is not, the lot shall be placed in the lowest size category represented therein. 3. The size category and presentation must be clearly and indelibly marked, in characters which are at least 5 cm high, on labels affixed to the lot. The net weight in kilogrammes shall be clearly and legibly marked on each lot. Where lots are put up for sale in standard boxes, the net weight need not be shown if the contents of the box are shown when weighed prior to being put up for sale to correspond to the presumed contents. 4. Detailed rules for the application of this Article, in particular as regards the method of weighing and the determination of a variation in the net weight, above or below that marked or presumed, permitted for each lot, shall be adopted in accordance with the procedure laid down in Article 32 of the basic Regulation. Article 9 Pelagic species may be graded in the different categories of freshness and size on the basis of a system of sampling. This system must ensure that the freshness and size of the products contained in the lot are as uniform as possible. Detailed rules for the application of this Article, in particular for determining the number of samples to be taken, the weight or volume of fish in each sample, and the methods for assessing the grading and verifying the weight of lots offered for sale shall be adopted in accordance with the procedure laid down in Article 32 of the basic Regulation. In order to ensure local or regional supplies of shrimps and crabs for certain coastal zones of the Community, exemptions from the minimum sizes specified for these products in Annex II may be adopted. Article 10 The zones in question shall be determined and the corresponding marketing sizes adopted in accordance with procedure laid down in Article 32 of the basic Regulation. M D. PRODUCTS FROM THIRD COUNTRIES 1. Without prejudice to Article 2(1), products as specified in Article 3 imported from third countries may be marketed only if they are presented in packages on which the following information is clearly and Article 11 legibly marked: country of origin, printed in roman letters at least 20 mm high; scientific name of product and its trade name; presentation; freshness and size categories; net weight in kg of products in the package; date of grading and date of dispatch; name and address of consignor. 2. However, products as specified in Article 3 landed in a Community port direct from the fishing grounds from vessels flying the flag of a third country and intended for marketing shall be subject to the same provisions as are applicable to Community catches. E. FINAL PROVISIONS The fishing industry shall grade fishery products for freshness and size in collaboration with experts designated for that purpose by the trade organizations concerned. Article 12 Article 13 Each Member State shall provide the other Member States and the Commission, not later than one month before this Regulation enters into force, with a list of the names and addresses of the experts and trade organizations referred to in Article 12. The other Member States and the Commission shall be informed of any amendments to this list. Council Regulations (EEC) Nos 103/76 and 104/76 are hereby repealed. References to those Regulations shall be understood to apply to this Regulation. Article 14 42 This Regulation shall enter into force on 1 January 1997. Article IS This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council Ah ANNEX I FRESHNESS RATINGS The ratings established in this Annex apply to the following products or groups of products, by reference to appraisal criteria specific to each of them A. Whitefish Haddock, cod, saithe, pollack, redfish, whiting, blue whiting, ling, hake, Ray's bream, monkfish, pouting and poor cod, bogue, picarel, conger, gurnard, mullet, plaice, megrim, sole, dab, lemon sole, flounder, scabbard fish B. Bluefish Albacore or longfinned tuna, bluefm tuna, bigeye tuna, herring, sardines, mackerel, horse mackerel, anchovy C. Selachii Dogfish, skate D. Cephalopods Cuttlefish E. Crustaceans 1. Shrimps 2. Norway lobster /!4 A. WHITEFISH CRITERIA FRESHNESS CATEGORY1 Extra A B Skin Bright, iridescent Pigmentation bright but Pigmentation in the pigmentation (save for not lustrous; slight process of becoming redfish) or opalescent; discolouration. discoloured and dull. no discolouration. Skin mucus Aqueous, transparent. Milky. Yellowish grey, slightly speckled. Eye Convex (bulging); Flat; pupil slightly Slightly concave; grey black, bright pupil ; opaque; opalescent pupil; opaque transparent cornea. cornea. discoloured cornea. Gills Dark or bright red; Red or pink; slightly Brown/grey becoming transparent mucus. opaque mucus. discoloured; thidk, opaque mucus. Peritoneum Smooth; bright; Slightly dull; difficult Speckled; comes away (in gutted fish) difficult to detach from to detach from flesh. easily from flesh. flesh. Smell of gills and Fresh; seaweedy; No smell, neutral smell Fermented; slightly abdominal cavity seafood. or slightly sweetish. sour. - whitefish other than plaice - Plaice Fresh oily; metallic; Oily; seaweedy or Oily; fermented, peppery; earthy smell. slightly sweetish. musty, slightly rancid. In the case of monkfish without head, grading will be made on the basis of the headings applicable thereto. 45 B BLUEFISH CRITERIA FRESHNESS CATEGORY Extra A B Skin Bright pigmentation, Loss of lustre and Dull, lustreless, insipid bright, shining shine; duller colours; colours; skin creased iridescent colours; clear less difference between when fish curved. distinction between dorsal and ventral dorsal and ventral surfaces. surfaces. Skin mucus Aqueous, transparent. Milky, slightly Brownish brownish Consistency of flesh Very firm, rigid. Fairly rigid, firm. Slightly soft Gill covers Silvery. Silvery, slightly red or Brownish and brown. extensive seepage of blood from vessels. Eye Convex, bulging; blue- Less convex to flat; Flat to slightly black bright pupil, slightly veiled pupil, concave; veiled transparent 'eyelid'. veiled 'eyelid'. crystalline lens; blood seepage around eye (spectacles). Gills Uniformly bright red to Less bright colour, Becoming discoloured, purple. paler at edges. mucus more plentiful. Smell of gills Fresh seaweed; Thin or odourless, Slightly sulphureous pungent; iodine; sweetish fishoil or mud. fatty smell, rancid metallic. bacon cuttings or rotten fruit. /*> C. SELACHII CRITERIA FRESHNESS CATEGORY Extra A B Eye Convex, very bright Convex to flat; clear Flat to concave; and iridescent; small green having lost its slightly yellowish, dull pupils brightness and iridescence, oval pupils Appearance In rigor mortis or Beyond rigor stage; no Thick mucus in mouth partially in rigor; small mucus on skin and and on gill openings; quantity of clear mucus especially in mouth and slightly flattened jaw present on skin gill openings Smell Fresh, sea smell No smell or slight Ammonia smell; sour musty but not an ammonia smell 4} D. CEPHALOPODS CRITERIA FRESHNESS CATEGORY Extra A B Bright pigmentation, Dull pigmentation ; Discoloured; easily skin sticks to flesh. skin sticks to flesh. detached from flesh. Very firm; pearly Firm; chalky white. Slightly soft; pinky white. white or slightly yellowing. Resistant to removal. Resistant to removal. More easily removed. Fresh; seaweed. Slight or no smell. Ink smell. Skin Flesh Tentacles Smell 4 E. CRUSTACEANS (1) Shrimps CRITERIA FRESHNESS CATEGORY Extra A Minimum - surface of shell : moist and shiny; The same as for Extra category requirements - shrimps must fall out separately when transferred from one container to another; - flesh must be free from any foreign odour; - shrimps must be free from sand, mucus and other foreign bodies; Appearance of very incurred; incurved; shrimp with - shrimps: bright brownish-red verging on grey; - slightly washed-out reddish- shell pectoral part of shell predominantly light in brown colour; pectoral part of colour shell predominantly dark - pink with possibility of start of - deep-water prawn: uniformly pink blackening of céphalothorax Condition of - shells easily with technically unavoidable losses - shells less easily with small flesh during and of flesh after shelling - firm but not tough; losses of flesh; - less firm, slightly tough Fragments occasional fragments of shrimp allowed small quantity of fragments of shrimp allowed M (2) Norway lobster CRITERIA FRESHNESS CATEGORY EXTRA A B Shell Pale pink or pink to Pale pink or pink to Slight discoloration; orange-red orange-red; some black spots and No black spots. greyish colour, particularly on shell and between tail segments Eye and gills Shiny black eyes; pink Eyes dull and Gills dark grey or gills. grey/black; gills some greenish colour greyish. on dorsal surface of shell. Smell Characteristic mild Loss of characteristic Slightly sour. shellfish smell. shellfish smell. No ammonia smell. Flesh (tail) Translucent and blue in No longer translucent Opaque and dull in colour tending towards but not discoloured. appearance. white. o fc ANNEX II SIZE CATEGORIES Scale of weights Minimum sizes to be observed in the conditions laid down in the Regulations referred to in Article 7 Species Herring (Clupea harengus) Size 1 2 3 4 Kg/fish(1) 0,25 and over 0,125 to 0,25 0,085 to 0,125 0,05 to 0,085 Baltic, north of 59°30' Sardines (Sardina pilchardus Mediterranean Spotted dogfish (Scyliorhinus spp. ) Piked dogfish (Squalus acanthias Redfish (Sebastes spp. ) Cod (Gadus morhua) Saithe (Pollachius virens) Haddock (Melanogrammus aeglefinus) Whiting (Merlangius merlangus) 5 1 2 3 4 1 2 3 1 2 3 1 2 3 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 0,031 to 0,05 0,067 and over 0,042 to 0,067 0,032 to 0,042 0,015 to 0,032 0,011 to 0,032 2 and over 1 to 2 0,5 to 1 2,2 and over 1 to 2,2 0,5 to 1 2 and over 0,6 to 2 0,35 to 0,6 7 and over 4 to 7 2 to 4 1 to 2 0,3 to 1 5 and over 3 to 5 1,5 to 3 0,3 to 1,5 1 and over 0,57 to 1 0,37 to 0,57 0,17 to 0,37 0,5 and over 0,35 to 0,5 0,25 to 0,35 0,11 to 0,25 Number of fish/kg(2) 4 or less 5 to 8 9 to 11 12 to 20 20 to 32 15 or less 16 to 24 25 to 32 33 to 67 33 to 91 - - - - - - Region 1 2 3 Geographical area ICES Vb (EC zone) (a) (b) Minimum size 20 cm 20 cm 18 cm 20 cm not yet determined - - - 35 cm 35 cm 30 cm 35 cm 30 cm 35 cm 35 cm 30 cm 35 cm 30 cm 30 cm 30 cm 27 cm 30 cm 27 cm 23 cm 23 cm 23 cm 1 2 3 Baltic 1 2 3 Baltic 1 2 3 1 2 3 (a) (b) South of 59°30'N (a) (b) South of 59°30'N ICES Vb (EC zone) (a) (b) (a) (b) (1 ) The categories of weights include fish from the lower limit up to, but excluding, the upper limit. (2) For mackerel of both species, number of fish / 25kg. (a) Except Skagerrak and Kattegat (b) Skagerrak and Kattegat n Scale of weights Minimum sizes to be observed in the conditions laid down in the Regulations referred to in Article 7 Species Ling (Molva spp. ) Mackerel of the species Scomber scombrus Mediterranean Size 1 2 3 4 1 2 3 Kg/fish(1) 5 and over 3 to 5 1,5 to 3 less than 1,5 0,5 and over 0,2 to 0,5 0,1 to 0,2 0,08 to 0,2 Mackerel of the species Scomber japonicus Anchovy (Engraulis spp. ) Plaice (Pleuronectes platessa) Hake (Merluccius merluccius) Mediterranean Megrim (Lepidorhombus spp. ) Mediterranean Ray's bream (Brama spp. ) Monkfish (Lophius spp. ) whole, gutted 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 1 2 3 4 5 0,5 and over 0,25 to 0,5 0,14 to 0,25 0,05 to 0,14 0,033 and over 0,020 to 0,033 0,012 to 0,020 0,008 to 0,012 0,6 and over 0,4 to 0,6 0,3 to 0,4 0,15 to 0,3 2,5 and over 1,2 to 2,5 0,6 to 1,2 0,28 to 0,6 0,2 to 0,28 0,15 to 0,28 0,45 and over 0,25 to 0,45 0,20 to 0,25 0,11 to 0,20 0,05 to 0,20 0,8 and over 0,2 to 0,8 8 and over 4 to 8 2 to 4 1 to 2 0,5 to 1 Number of fish/kg(2) - 50 or less 51 to 125 126 to 250 126 to 325 - 30 or less 31 to 50 51 to 83 84 to 125 - - - - - Region 1 2 Geographical area Minimum size (a) (b) not yet fixed 63 cm 20 cm 20 cm 30 cm 20 cm 20 cm 18 cm - 12 cm 10 cm 9 cm 25 cm 25 cm 27 cm 27 cm 25 cm 25 cm 21 cm 18 cm 30 cm 30 cm 30 cm 27 cm 20 cm 25 cm 25 cm 25 cm 20 cm - not yet fixed not yet fixed 30 cm except North Sea North Sea Mediterranean except ICES IXa) ICES IXa) Mediterranean (a) (b) North Sea subdivisions 22 to 25 subdivisions 26 to 28 subdivisions 29 ] South of 59°30'N (a) (b) Mediterranean (a) (b) (a) (b) Mediterranean 3 1 2 3 5 3 3 1 2 3 Baltic 1 2 3 1 2 3 1 2 3 21 Minimum sizes to be observed in the conditions laid down in the Regulations referred to in Article 7 Number of fish/kg(2) Region Geographical area Minimum size - - - - - - 7 or less 8 to 14 15 to 25 26 to 30 Scale of weights Size 1 2 3 4 5 1 2 Kg/fish(1) 4 and over 2 to 4 1 to 2 0,5 to 1 0,25 to 0,5 0,25 and over 0,13 to 0,25 0,6 and over 0,35 to 0,6 0,18 to 0,35 4 and over 1,5 to 4 70 and over 50 to 70 25 to 50 10 to 25 6,4 to 10 10 and over 3,2 to 10 5 and over 3 to 5 1,5 to 3 0,3 to 1,5 - Species Monkfish (Lophius spp. ) head removed Dab (Limanda limanda) Lemon sole (Microstomus kitt) Albacore or long-finned tuna (Thunnus alalunga) Blue-fin tuna (Thunnus thynnus) Big-eye tuna (Thunnus obesus) Pollack (Pollachius pollachius) Blue whiting (Micromesistius poutassou ou Gadus poutassou) Pouting (Trisopterus luscus and Poor cod (Trisopterus minutus) Bogue (Boops boops) Picarel (Maena sararis) 1 2 3 1 2 1 2 3 4 5 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 1 2 3 0,4 and over 0,25 to 0,4 0,125 to 0,25 0,05 to 0,125 - - - 5 or less 6 to 31 32 to 70 20 or less 21 to 40 41 to 90 1 2 3 1 2 3 1 2 3 3 (a) (b) North Sea (a) (b) - 15 cm 15 cm 23 cm 23 cm 23 cm 25 cm 25 cm 25 cm 25 cm - Mediterranean 70 cm ou 6,4 kg (a) (b) - 30 cm 30 cm - not yet fixed - - Scale of weights Minimum sizes to be observed in the conditions laid down in the Regulations referred to in Article 7 Species Conger eel (Conger conger) Size 1 2 3 Kg/fish(1) 7 and over 5 to 7 0,5 to 5 Gurnard (Trigla spp. ) Tub gurnard Other Gurnard Horse mackerel (Trachurus spp. ) Mullet (Mugil spp. ) Skate (Raja spp. ) Skate (wings) Flounder (Platichthys Flesus) Sole (Solea spp. ) Frostfish (Lepidopus caudatus) 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 1 2 1 2 3 4 5 6 7 1 2 3 4 1 and over 0,5 to 1 0,35 to 0,5 0,2 to 0,35 less than 0,2 1 and over 0,5 to 1 0,35 to 0,5 0,25 to 0,35 0,2 to 0,25 0,6 and over 0,4 to 0,6 0,2 to 0,4 0,08 to 0,2 0,02 to 0,08 1 and over 0,5 to 1 0,2 to 0,5 0,1 to 0,2 5 and over 3 to 5 1 to 3 0,3 to 1 3 and over 0,5 to 3 over 0,3 0,2 to 0,3 inclusive 0,8 and over 0,6 to 0,8 0,4 to 0,6 0,3 to 0,4 0,2 to 0,3 0,16 to 0,2 0,12 to 0,16 3 and over 2 to 3 1 to 2 0,5 to 1 Region 1 2 3 1 2 3 5 1 2 3 1 2 3 Baltic 1 2 3 Number of fish/kg(2) - - - - - - - - - Geographical area Minimum size (a) (b) Mediterranean (a) (b) Mediterranean (a) (b) subdivisions 22 to 25 subdivisions 26 to 28 subdivisions 29 and 32 South of 59r30'N (a) (b) Mediterranean 58 cm 58 cm - - 15 cm 15 cm 15 cm 15 cm 12 cm 20 cm 20 cm 16 cm - 24 cm 24 cm 24 cm 24 cm 25 cm 21 cm 18 cm 24 cm 24 cm 24 cm 24 cm 20 cm Scale of weights Size 1 2 Kg/fish(1) 3 and over 0,5 to 3 Minimum sizes to be observed in the conditions laid down in the Regulations referred to in Article 7 Number of fish/kg(2) Region Geographical area Minimum size Species Black scabbardfish (Aphanopus carbo) Cuttlefish (Sepia officinalis and Rossia macrosoma) Norway lobster (Nephrops norvegicus Lobster tails 1 2 3 1 2 3 4 1 2 3 4 0,5 and over 0,3 to 0,5 0,1 to 0,3 - 20 and less 21 to 30 31 to 40 over 40 60 and less 61 to 120 121 to 180 over 180 Skagerrak and Kattegat except Scotland Irish Sea [ICES Via) and Vila)], Skagerrak and Kattegat Western Scotland and Irish Sea [ICES Via) and Vila)] 2 2 2 3 Mediterranean 2 Skagerrak and Kattegat except Western Scotland, Irish Sea [ICES Via) and Vila)], Skagerrak and Kattegat Western Scotland and Irish Sea [ICES Via) and Vila)] 2 2 3 Crangonid shrimps (Crangon crangon) Pandahd shrimps (Pandalus borealis) fresh or chilled Pandahd shrimps boiled or steamed Edible crab (Cancer pagurus) One size One size 1 2 1 2 6,7 mm and over (3) - 250 and less - 160 and less 161 to 250 16 cm and over(4) 13to 16cm(4)| (*) Length of shell (**) Overall length (3) Width of shell (4) Width of shell at the widest point 15 - 40 mm (*) 130mm(**) 25 mm (*) 85 mm (**) 20 mm (*) 70 mm (**) 20 mm (*) 70 mm (**) 20 mm (*) 70 mm (**) 72 mm 46 mm 37 mm 37 mm - - - ISSN 0254-1475 COM(96) 157 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-169-EN-C ISBN 92-78-02624-7 Office for Official Publications of the European Communities L-2985 Luxembourg

OPINION OF THE COMMISSION pursuant to Article 189 b (2) (d) of the EC Treaty, on the European Parliament' s amendments to the Council' s common position regarding the proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON CROSS-BORDER CREDIT TRANSFERS

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COMMISSION OF THE EUROPEAN COMMUNITIES. ** * -tfr Brussels, 19. 04 19% COM(%) 172 linal- 94/0242 (COD) OPINION OF THE COMMISSION pursuant to Article 189 b (2) (d) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON CROSS-BORDER CREDIT TRANSFERS AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 189 a (2) of the EC Treaty OPINION OF THE COMMISSION pursuant to Article 189(b)(2)(d) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a E U R O P E AN P A R L I A M E NT A ND C O U N C IL D I R E C T I VE ON C R O S S - B O R D ER C R E D IT T R A N S F E RS I. STAGE REACHED IN THE PROCEDURE (a) On 18 November 1994, the Commission adopted a proposal for a European Parliament and Council Directive1 on cross-border credit transfers. This was sent to the Council by letter dated 18 November 1994. The Council subsequently forwarded this text to the European Parliament, to the European Monetary Institute and the Economic and Social Committee. In January 1995, it began its own examination of the proposal. (b) The European Monetary Institute (EMI) rendered its opinion on the Commission proposal on 20 March 1995. The Economic and Social Committee adopted its opinion at its sitting on 1st June 19952. (c) The European Parliament adopted the legislative resolution embodying opinion on the Commission proposal at its sitting on 19 May 19953. its (d) On 6 June 1995, the Commission adopted an amended proposal4 in the light of the consultations of Parliament, the European Monetary Institute and the Economic and Social Committee. It was sent to Council by letter of 7 June 1995. (e) On 4 December 1995 the Council adopted the common position5. It introduced a number of amendments to the Commission's amended proposal; in particular it rejected 3 out of the 19 amendments inserted in the amended proposal. (f) In the plenary session of 14 December 1995, the President of the Parliament announced receipt of the Common Position. (g) On 13 March 1996, the European Parliament adopted unanimously 14 amendments to the Common Position6. In accordance with the procedure described in Article 189g(2)(d) of the EC Treaty, the Commission has to deliver an opinion on these amendments. 1 OJ No C 360, 17. 12. 1994, p. 13. 2 OJ No C 236, 11. 09. 1995, p. 1. 3 OJ No C 151, 19. 06. 1995, p. 370. 4 OJ No C 199, 03. 08. 1995, p. 16. 5 OJ No C 353, 30. 12. 1995, p. 52. 6 Text not yet published in the Official Journal. A II. POSITION TAKEN BY THE COMMISSION REPRESENTATIVE AT THE PLENARY SI TUNC. The European Parliament proposed 14 amendments to the text of the Common Position of the Council. The Commission representative accepted amendments 1, 2, 3, 4, 5, 6, 7, 8, 9, 11 and 14 practically as they stand. Furthermore, the Commission accepted amendments 10 and 12 partially or subject to modifications. The Commission representative did not accept one amendment, i. e. amendment n° 13. III. T HE COMMISSION OPINION ON AMENDMENT N° 13 VOTED BY THE EUROPEAN PARLIAMENT Amendment n°13, introducing a new paragraph 2 to Article 10 of the Common Position of the Council The purpose of the amendment is twofold : • • to state that access to redress and complaints procedures shall occur where a complaint has not been remedied or a decision has not been taken on it by the institution concerned within four weeks after the first complaint: to ensure that a list of addresses be available at all institutions carrying out cross- border credit transfers. As to the first, the Commission considers that a harmonised maximum deadline would not suit customers' needs for rapid redress under the different articles and might also be in conflict with similar deadlines contained in other provisions of the Directive, e. g. that in Article 8. As to the second, it is already satisfied by a similar requirement under the penultimate indent of Article 3. For the reasons outlined* the Commission cannot accept this amendment Common Position of the Council Amendment by Parliament (Amendment 13) Article 10(2) (new) 2* If a complaint has not been remedied or a decision has not been taken on it the first within four weeks after complaint. may approach one of the complaint and redress offices to be set up for this purpose, existing use procedures where available. complainants or may A list of addresses of such offices shall be available at all institutions carrying out credit cross-border transfers under this Directive. Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON CROSS-BORDER CREDIT TRANSFERS (presented by the Commission pursuant to Article 189a(2) of the EC Treaty Amended proposal for a EUROPEAN P A R L I A M E NT AND C O U N C IL DIKKCTIVI ON C R O S S - B O R D ER C R E D IT T R A N S F E RS Amendment n°l concerning Recital n°2 of the Common Position The amendment aims to insert a spécifie reference to the definitive Commission Notice on the application of the HC competition rules to cross-border credit transfer systems7, a draft of which had been issued alongside the Commission's initial proposal for a European Parliament and Council Directive on cross-border credit transfers. The insertion aims to highlight the fact that, in conformity with the Commission's Notice, greater competition in the market for cross-border credit transfers should lead to improved services and reduced prices. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 1) Recital 2 (2) Whereas it is of for individuals small paramount importance and and businesses, especially medium-sized enterprises, to be able to make credit rapidly, reliably and cheaply from one part of the Community to another; whereas greater competition in the market for cross-border credit transfers should and to lead reduced prices; improved transfers services transfers (2) Whereas it is essential for individuals and businesses, especially small and medium-sized enterprises, to be able to make credit rapidly, reliably and cheaply from one part of the Community to another; whereas, in conformity with the Commission Notice on the application of the EC competition to cross-border credit transfers, greater competition in the market for cross-border credit transfers should lead to improved services and reduced prices; rules OJ No C 251, 27. 09. 1995, p. 3. S 2. Amendment n°2 to Recital n° 7 of the Common Position of the Council Recital n°7 relates to the scope of application of the Directive. Therefore, this amendment needs to be considered in conjunction with amendment n°5 to Article 1 of the Common Position. As such, it points to an enlargement of the Directive's application, by establishing that transfers of an amount less than ECU 50. 000 are covered. This amendment is in keeping with the Commission's fundamental conviction that as high a threshold would better serve the objective of creating a fully functioning Internal Market for cross-border credit transfer services. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 2) Recital 7 (7) Whereas, in line with the objectives set out in the second recital, this Directive should apply to any credit transfer of an amount less than ECU 25. 000: whereas that amount should be increased to ECU 30. 000 two after implementation Directive; the for years dale. final this (7) Whereas, in line with the objectives set out in recital 2, this Directive should apply to any credit transfer of an amount of less than ECU 50. 000: whereas institutions should be under an obligation to refund in the case of a non-completed transfer; é Amendment n °3 concerning Recital n° 11 of the Common Position of the Council This recital relates to Article 8 of the Common Position on the refund of non- completed cross-border credit transfers and must therefore be read in conjunction therewith (and amendments n" 8 and 9 thereto). It aims to increase the minimum level of the refund to the amount of ECU 20. 000, thus improving the customer's situation; the increase is however deemed not to have a prejudicial effect on solvency requirements. Therefore the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 3) Recital 11 (11) Whereas be there refund should whereas an obligation upon institutions to refund in the event of non-execution of a transfer; credit the imposes a to obligation contingent institutions liability on which might, in the absence of a limit, have a prejudicial effect on the solvency requirement; whereas that obligation to refund should therefore be applicable to ECU 10. 000: (11) Whereas be there should failure a the event of an obligation upon institutions to refund a to in successfully credit complete transfer; whereas the obligation to refund imposes a contingent liability on institutions which might, in the a absence of any solvency prejudicial effect that requirements; obligation to refund should therefore be applicable to ECU 20. 000; on whereas limit, have ? 4. Amendment n° 4 concerning Recital n° 14a (new) of the Common Position of the Council This new recital relates to Article 10 on the settlement of disputes and, being intended as a match to the proposed amendment n° 12 to that Article, should be read in conjunction therewith. It aims to clarify in more detail the scope of Member States' responsibility to ensure that adequate and appropriate procedures exist to deal with customer's complaints relating to areas covered by the Directive. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 4) Recital 14a (new) (Ha) Whereas adequate and appropriate complaints and redress procedures relating to the areas covered by this Directive should be available the customer better to afford protection. existing procedures where available. using 5. Amendment n° 5 to Article 1 of the Common Position of the Council Amendment n° 5 relates to the scope of application of the Directive. It points to an enlargement of the Directive's application, by establishing that transfers of an amount less than ECU 50. 000 are covered. This amendment is in keeping with the Commission's fundamental conviction that as high a threshold would better serve the objective of creating a fully functioning the Internal Market Commission accepts this amendment. for cross-border credit services. Therefore, transfer Common Position of the Council Amendment by Parliament (Amendment 5) Article 1 1. The provisions of this Directive shall apply to cross-border credit transfers ordered by persons other than those covered by Article 2(a), (b) and (c) and executed by credit institutions and other institutions. 1. The provisions of this Directive shall apply to cross-border credit transfers in the currencies of the Member the States and equivalent of ECU 50. 000 ordered by persons other than those referred to in Article 2(a), (b) and (c) and executed by credit institutions and other institutions. the ECU up to Until two years after the date of Deleted. implementation of this Directive, this Directive shall apply to cross-border credit transfers in the currencies of the Member States and in ECUs of amounts less than ECU 25. 000. After that date, this Directive shall apply to cross-border credit transfers in the currencies of the Member States and in ECUs of amounts than ECU 30. 000. less 5 6. Amendment n° 6 to Article 3 of the Common Position of the Council This amendment relates to Article 3 on prior information on conditions for cross- border credit transfers. While most articles of the Directive refer to obligations falling directly on institutions, Article 3 lays down obligations on Member States. Coherently with the Commission's initial and amended proposals, the amendment aims to streamline the text of the Common Position, by setting out that the transparency requirements of Article 3 fall directly on institutions. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 6) Article 3, introduction Member States shall ensure that institutions make available to their actual and prospective customers in writing, including where appropriate by electronic means, and in a readily comprehensible form, information on for cross-border credit conditions transfers. This shall information include at least : The institution shall make available their actual and prospective to including in writing, customers electronic where appropriate by means, readily and comprehensible form, information on for cross-border credit conditions transfers. This shall information include at least : in a s* 7. Amendment n° 7 to Article 4 of the Common Position of the Council This amendment relates to Article 4 on information subsequent to a cross-border credit transfer While most articles of the Directive refer to obligations falling directly on institutions, Article 4 lays down obligations on Member States. Coherently with the Commission's initial and amended proposals, the amendment aims to streamline the text of the Common Position, by setting out that the transparency requirements of Article 4 fall directly on institutions. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 7) Article 4, introduction Member States shall ensure that institutions supply their customers, unless the latter expressly forgo this, subsequent to the execution or receipt of a cross-border credit transfer, with in writing, clear including where by electronic means, and in a readily comprehensive This information shall include at least : information appropriate form. The their institution shall supply customers, unless the latter expressly forgo this, subsequent to the execution or receipt of a cross-border credit transfer, with clear in writing, including where appropriate by electronic means, and in a readily comprehensive This information shall include at least : information form. S* 8. Amendment n° 8 to Article 8(1), first sub-paragraph of the Common Position of the Council Amendment n° 8 relates to Article 8(1) of the Common Position on the refund of non-completed cross-border credit transfers. It aims to increase the minimum level of the refund to the amount of ECU 20. 000, thus improving the customer's situation; the increase is however deemed not to have a prejudicial effect on solvency requirements. Therefore the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 8) Article 8(1), first subparagraph, introduction 1. of If, after a cross-border credit transfer 1 order has been accepted by the originator's institution, the relevant to the amounts are not credited account beneficiary's the institution, without prejudice to any other claim which may be made, the originator's institution shall credit the originator up to ECU 10. 000. with the amount of the cross-border credit transfer plus : If, after a cross-border credit transfer order has been accepted by the originator's institution, the relevant amounts are not, for any reason, the account of credited the to beneficiary's institution, without prejudice to any other claim which the originator's may be made, institution shall credit the originator up to ECU 20. 000. with the amount of the cross-border credit transfer plus : > * *- 9. Amendment n° 9 to Article 8(2) of the Common Position of the Council Amendment n° 9 relates to Article 8(2) of the Common Position on the refund of non-completed cross-border credit transfers because of non-execution by an intermediary institution chosen by the beneficiary's institution. In coherence with amendment n° 8, its aim is to set the minimum level of the refund at ECU 20. 000. In the absence of this amendment, Article 8(2) would not contemplate any explicit limitation on the level of the refund. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 9) Article 8(2) 2. By way of if derogation from paragraph 1, the cross-border credit transfer was not completed because of its non-execution by an intermediary institution chosen by the beneficiary's institution, the latter institution shall be obliged to make the the amount of the transfer available to the beneficiary. funds corresponding to 2. By way of if derogation from paragraph 1, the cross-border credit transfer was not completed because of its non-execution by an intermediary institution chosen by the beneficiary's institution, the latter institution shall be obliged to make available to the beneficiary the funds up to ECU 20. 000. 15 10. Amendment n° 10 to Article 8(3), second sub-paragraph of the Common Position of the Council Amendment n° 10 relates to Article 8(3) which deals with situations where the inability to successfully execute a transfer is attributable to defective customer information or to a mistake by an intermediary institution chosen explicitly by (he originator. The amendment aims to specify that when the institution succeeds in recovering the funds and thereby in refunding the originator, it is not obliged to refund the charges and interest accruing and may deduct the costs arising from the recovery if proved. Save for the terms "if proved", the amendment is in line with both the text of the Common Position and the Commission's thinking, according the originator's institution should not be held responsible for its customers' mistakes. On the other hand, the terms "if proved" would require the institution concerned to justify deducting costs for the recovery of funds. to which Therefore, except for and subject to the elimination of the terms "if proved". the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 10) Article 8(3), second subparagraph by the amount the has been Where recovered originator's institution, it shall credit it to the originator subject to any deduction of costs arising from the recovery. by the amount the has been Where recovered originator's institution, it shall credit it to the originator. The institutions are not obliged in this ease to refund the charges and interests accruing, and can deduct the costs arising from the recovery if proved. Text of Parliament's amendment as modified by the amount the been has Where recovered originator's institution, it shall credit it to the originator. The institutions are not the obliged in this case to refund charges and interests accruing, and can deduct the costs arising from the recovery. yiH 11. Amendment n° 11, introducing a new Article 8(3a) to the Common Position of the Council Amendment n° 11 aims to lay down explicitly an option for Member States and/or institutions to provide for a refund for amounts exceeding the minimum level set out in Article 8, paragraphs 1 and 2. The Commission is of the opinion that this amendment provides useful clarification as to the extent of Member States' and institutions' rights under the Directive. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 11) Article 8(3 a) (new) 2& Without prejudice to paragraphs 1 and 2, Member States and/or institutions which participate in the execution of cross-border transfers may provide that refunds be made of a non-completed cross-border credit transfer, where the amount exceeds ECU 20. 000. JÎ 12. Amendment n° 12 to Article 10 of the Common Position of the Council This amendment aims to better qualify the scope of Member States' responsibility to ensure that adequate and appropriate procedures exist to deal with customers' complaints relating to the areas covered by the Directive. On the other hand, the Commission is of the opinion that drafting adjustments to the text of the amendment may be necessary, to ensure consistency with the terminology of the Common Position. The amendment may be redrafted as indicated below: Therefore, subject to such modification, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 12) Article 10 Member States shall ensure that there are L Member States shall ensure that there adequate and effective means for the appropriate are settlement of possible disputes between an complaints and redress procedures originator and his institution or between a relating to the areas covered by this beneficiary and his institution. Directive available the customer better protection, using existing procedures where available. to afford adequate and Text of Parliament's amendment as modified "Member States shall ensure that there are adequate and effective means for the settlement of disputes ils between institution, using existing procedures where appropriate. " customer and a yfé 14. Amendment n° 14 relating to Article 11, first sub-paragraph of the Common Position of the Council Amendment n° 14 aims to reduce the deadline for implementation of the Directive to 18 months alter the date the Directive enters into force. This amendment is in keeping with the Commission's objective of ensuring that the Directive the Commission accepts this amendment. implemented within a reasonably short time. Therefore, is Common Position of the Council Amendment by Parliament (Amendment 14) Article 11(1), first subparagraph laws, regulations Member States shall bring into force and the administrative provisions necessary to comply with this Directive by. * at the latest. They shall forthwith inform the Commission thereof. laws, regulations Member States shall bring into force and the administrative provisions necessary to comply with this Directive by. * at the latest. They shall forthwith inform the Commission thereof. * Thirty months after the date this Directive enters into force. * Eighteen months after the date this Directive enters into force. ^ ISSN 0254-1475 COM(96) 172 final DOCUMENTS EN 09 10 Catalogue number : CB-CO-96-182-EN-C ISBN 92-78-03010-4 Office for Official Publications of the European Communities L-2985 Luxembourg ji

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - ILLICIT TRAFFICKING IN NUCLEAR MATERIALS AND RADIOACTIVE SUBSTANCES- Implementation of the guidelines laid down in the communication from Commission of 7 September 1994 (COM (94) 383) and in the conclusions of the Essen European Council

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 19. 04. 1996 COM(96)171 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT ILLICIT TRAFFICKING IN NUCLEAR MATERIALS AND RADIOACTIVE SUBSTANCES Implementation of the guidelines laid down in the communication from Commission of 7 September 1994 (COM(94)383) and in the conclusions of the Essen European Council ILLICIT TRAFFICKING IN NUCLEAR MATERIALS AND RADIOACTIVE SUBSTANCES Implementation of the guidelines laid down in the communication from Commission of 7 September 1994 (COM(94)383) and in the conclusions of the Essen European Council Table of contents Introduction I. Nuclear trafficking in 1995 II. Controls on nuclear materials III. Radioprotection aspects IV. Customs cooperation Conclusions Annex 1 Cooperation with the republics of the former USSR under the existing contractual framework Annex 2 Cooperation in the field of safeguards (Safeguards Directorate) Annex 3 Cooperation in the framework of Technical Assistance yl INTRODUCTION On 7 September 1994 the Commission adopted a communication to the Council and Parliament on the subject of the illegal trade in radioactive substances and nuclear materials (COM(94)383). In it the Commission proposed that the EUs response focus on: (i) (ii) (iii) improving the operating conditions in the nuclear sectors of the countries concerned (cooperation under the aegis of Tacis, the Moscow-based International Science and Technology Centre and the Euratom Safeguards Directorate); dialogue and cooperation with the countries concerned under the various agreements and in the context of the common external and security policy; greater cooperation within the EU (customs cooperation and tighter checks, cooperation in the context of justice and home affairs policy, and coordination of industrial assistance). This issue was given high priority under the German Presidency. Five Council working parties plus the embassies of the countries concerned were mobilized to prepare a report for the Essen European Council, which declared its concern about the smuggling of nuclear material and approved a number of measures and guidelines aimed at tackling the problem. It asked the Commission and the Member States to step up cooperation in this field and to give the countries of origin and of transit effective support for their efforts on the ground. It also asked all states that had not yet done so to place sensitive civilian materials (plutonium and enriched uranium) under international control. The Commission and the Member States have continued work since the summit, liaising with the International Atomic Energy Agency (IAEA) and other relevant bodies. These efforts are spurred by the common interest of the European Union, the Central and Eastern European and former Soviet countries in this issue, and take the form of cooperation based on specific projects within an overall framework. The European Parliament has displayed an unflagging interest in the issue of illicit trafFicking. MEPS have supported the Commission's initiatives by taking part in conferences and making visits. Budgetary resources have been allocated for operations in the Central and Eastern European and former Soviet countries. This paper describes what has been done by way of follow-up to the Commission's communication of September 1994 and the conclusions of (he Essen Summit I NUCLEAR TRAFFICKING IN 1995 Few cases of nuclear trafficking have come to light since publication of the Commission's communication of September 1994 but illegal imports of radioactive steel scrap and of illegally dumped radioactive sources are on the increase, as are cases involving trafficking of radioactive substances, blackmail attempts and hoaxes. The Commission's data bank currently contains 33 reported nuclear-related cases, most of them in Germany. The Commission has been led to understand, however, through inter-institutional channels, that this list is not exhaustive. A few cases have not yet been formally notified to the Commission, as they should have been under the Euratom Treaty. The probable reasons for this are: a lack of awareness of this specific provision of the Treaty on the part of those making seizures; a concern to maintain confidentiality so that inquiries still under way will not be jeopardized; 1 6>> a desire of judicial authorities to prevent interference by the executive in cases still before the courts. The Commission has become aware of this state of affairs only recently and, in an attempt to remedy the situation, has embarked on an information campaign among the Member States to encourage them to adopt a procedure for declaring cases in accordance with the requirements and time-limits laid down in the Regulations, while receiving an assurance of the necessary confidentiality. And while the number of new such cases is apparently dwindling in the EU and Europe generally, the most noteworthy case so far was discovered in December 1994 by the Czech police, who arrested smugglers in possession of nearly three kilos of uranium oxide with an isotope content of high strategic value (uranium 235) close on 87%. Military quality is usually at the 93% mark. An important distinction must be drawn between the legal frameworks governing the materials in question, namely (simplifying somewhat) between: nuclear materials, which are materials subject to safeguaids under the Euratom Treaty, the IAEA or the Nuclear Non-Proliferation Treaty (NFI) because they pose a risk - great or small, depending on the material - of direct or indirect military use: these materials (e. g. plutonium and highly-enriched uranium) are very dangerous and could lead to nuclear proliferation as well as contamination; radioactive substances, which are not subject to safeguaids: the risk of irradiation derives from the radiation emitted by the substance but the substance itself cannot be used as a fuel in its present state. IL 1. CONTROL ON NUCLEAR MATERIALS Common foreign and security policy The EU has sounded out non-member countries on this issue, notably in connection with the implementation of the joint action on the preparation of the 1995 conference on the review and extension of the Non-Proliferation Treaty, including the appeal to all states that had not yet done so to place sensitive materials for civilian use (plutonium and enriched uranium) under international control. In follow-up to this joint action, the EU is focusing its diplomatic efforts on the objective of achieving universal application of the NPT and strengthening the international system of nuclear safeguards (the IAEA's 93+2 programme). 2. Safeguards Directorate Since the end of 1994 the Safeguards Directorate has been trying to establish links with other bodies working on the problem with the aim of exchanging information and creating synergy. In practical terms, there have been few confiscations of nuclear materials since the Munich airport case and it has not proved necessary to send inspectors. Its administrative workload has been heavy, however. The Directorate is responsible for transmitting all information to the national authorities and the Joint Research Centre in good time. Furthermore, in respect of materials seized and stored, it must also ensure that all Chapter VII requirements of the Euratom Treaty, which are incumbent on any holder of nuclear materials, are complied with. 3. Cooperation between non-member countries and the Safeguards Directorate The September 1994 communication described the programme of cooperation between Safeguards Directorate and the Russian Federation set up at the end of 1992. The short-term aim of this cooperation was to devise, set up and run a modem system of nuclear material accountancy and control. Parliament approved an allocation of ECU 1. 8 million under this heading (B4-2001) for 1995. This programme has fitted in very well with other projects run by Community, national and industrial bodies. The initial phase was successfully completed at the end of 1994 and focused on: training Russian experts in accounting, supervision and control of materials for Russians; inspection exercises in real on-site conditions; courses on the use of measuring instruments and computers. These basic activities continued in 1995, complemented by intensive training courses (two months) for groups of four or five in Luxembourg. Larger-scale projects are also being implemented: Russian specialists and Euratom inspectors join forces as a team to achieve a specific goal in respect of selected groups of installations or areas of Russia chosen by the Russians. These activities and the main projects under way are described in Annex 2. One operation is particularly noteworthy since it was a "first": in November 1995 a team of Euratom inspectors was invited to join a Russian team to carry out, not an exercise, but a real inspection of two installations in the Dimitrovgrad region. It gave rise to an extremely fruitful exchange of know- how. 4. Role of the Joint Research Centre Since 1994 the JRC in the form of its Institute for Transuranium Elements (ITU) has made a number of contributions to efforts to combat trafficking in nuclear materials: (a) It confirmed its role as a laboratory for analysing the materials seized, in particular by: the isotopic analysis of the materials seized at Munich airport; the comparative analysis of highly enriched uranium seized in Prague and Landshut; the analysis of uranium seized at Mannheim; the analysis of suspect radioactive substances for the German authorities and for the Italian authorities. A number of courts have called on its expertise, the most significant instances being the Munich, Landshut, Konstanz and Bôblingen cases but there were also six others in Germany. The German authorities have asked the ITU to organize a seminar to inform the federal and Land authorities about the handling and analysis of substances liable to be smuggled. The same authorities (Bundesloiminalamt and the Bundesamt fur Strahlenschutz) have called on the ITUs expertise to design preventive measures to deal with the packets of nuclear materials associated with chemical explosives and in particular to study procedures to track these packets. It is currently working on appropriate techniques to do this. It is continuing work on setting up a data bank on the characteristics of nuclear materials. With the Commission's help, Russian specialists will come to the ITU to provide information on the fuel cycle and so maximize its effectiveness. An international technical working party on nuclear trafficking (set up on the margins of the P8) has decided to launch a round robin test to improve methods of identifying the origin of the materials seized and has drawn up a work programme for stepping up cooperation, especially as regards to the measures to be taken in situ when such materials (b) (c) (d) (e) (f) are found. The Community and some member and non-member countries are involved in the working party, which last met in Karlsruhe on 1 February 1996. 5. Technical assistance cooperation The Commission explained in its communication of September 1994 that it had decided to use some Phare and Tacis funds to finance technical assistance in support of the efforts of the countries' concerned to improve controls on nuclear materials. This decision, confirmed in 1995, won the unanimous support of the Member States at the meeting of the Phare-Tacis Management Committee. Details of the projects can be found in Annex 3. (a) (b) (c) (d) In accordance with the conclusions of the Essen Summit, the priority for Community aid has been training in the framework of the Russian Methodological and Training Centre (RMTC) of Obninsk, the setting-up of which was officially announced by the Russian authorities in March 1995. A detailed study of the RMTC course specifications is being drawn up with financing from the 1994 Tacis budget and terms of reference have been agreed by the JRC, the Ministry of Atomic Energy (MINATOM), the federal inspectorate (Gosatomnadzor) and those in charge of the Tacis programme. But without waiting for the conclusions of this study the first round of invitations of tender to fill five posts was launched on the basis of a feasibility study and the first courses were given early this year. More ambitious invitations to industry to tender for the instruments needed by the RMTC will be published as soon as the detailed study is concluded. The JRC is acting as overall project leader, in close liaison with the appointed Russian counterparts. This project is conceived in a very different perspective from the courses and seminars organised in the CIS and Central and Eastern European countries by the EU, the IAEA and other partners to serve more immediate goals. The RMTC should be seen as a longer-term project to set up infrastructure that will enable the Russians, and perhaps other countries, to assume responsibility for nuclear materials accountancy and control themselves. If the Russian authorities and operators are to provide effective accountancy and control of nuclear materials at the basic installation level, a great deal of equipment will be needed that can only be designed and produced by Russian industry. To this end, a detailed study of the possibilities will be undertaken shortly. The bulk of the work will be done by the Russians themselves but the study itself will be carried out in the framework of tripartite Russia-EU-US cooperation with a view to drawing on the results of the "Lab to Lab" agreements with the Americans. A detailed study will be carried out on the setting-up of a metrology centre for MINATOM and an analysis centre for GOSATOMNADZOR on the lines of the European centres (IRMM, ITU and JRC). These two centres will be housed in the premises of the Moscow Institute of Inorganic Materials. The ITU's know-how will be made available to the Phare programme so that the authorities and laboratories of the Central and Eastern European countries can be given advice on the handling, treatment and analysis of errant nuclear materials. Specific requests for such help have been received from the Hungarian and Czech authorities. The terms of reference for technical assistance to these two countries under the Phare programme have been agreed. The Bulgarian, Polish and Ukrainian authorities have also expressed great interest in such assistance. The Phare-Tacis management committee approved it in principle in September 1995. 6. International Science and Technology Center The Moscow Centre for Science and Technology has been up and running since March 1994. Its purpose is to convert the skills of armament specialists for use in non-military purposes. The Centre draws up, approves, finances and supervises scientific and technical projects for pacific purposes, first and foremost for Russian institutions and installations but also in the former Soviet republics, should these countries express interest. The Centre's projects may concern measures for the physical protection and accounting of fissile materials that draw on the know-how of scientists of the former Soviet Union. One of the most interesting projects (cf annexe 3) is one to combat illicit trafficking in nuclear materials: the TOMSK/40 project concerns system design for safeguarding nuclear materials utilized at complex nuclear facilities (cost USD 815 000) and involves the development of a new approach to safeguards in a reprocessing plant. The JRC is working with the Los Alamos National Lab and JAERI of Japan in a group responsible for the technical coordination of the Centre's project 40. This covers: appropriate techniques for destructive and non-destructive measures; interaction between the accountancy system for installation materials and the regional control authority; the planning of inspections and evaluation of their effectiveness. The JRC is also providing assistance for a project in Kazakhstan to set up a complete prototype storage facility at Baikal 1 that will include surveillance and physical protection and an NMAC system. A centre similar to the ICST (USTC) has been set up in Ukraine by Canada, Sweden, the US and Ukraine. It began work in May last year. Its Western partners have contributed some USD 14 million (the US 10 million, Canada 5 million and Sweden 1. 5 million). The EU is planning to contribute an amount yet to be decided (ECU 3 to 5 million). 7. Cooperation from EU Member States All operations are the subject of detailed and regular consultations between the Member States and the Commission. The aid provided by some Member States since 1992 has mainly consisted in the organization of seminars and exchanges of experts with the former Soviet countries. More concrete projects are also starting up, examples being the direct cooperation between a reprocessing plant in the UK (BNFL) and one in Russia (Mayak RT-1) and between French (EDF) and Russian (Rosatomenergo) nuclear power stations. Sweden, Finland and Germany have concentrated their efforts in the Ukraine, Kazakhstan and the Baltic states, and in particular the development of a local accountancy system for nuclear materials. Finland, which has a 1200 km border with Russia, maintains close contacts with Russian federal and regional authorities so that it can constantly monitor the risks and strengthen border controls, both by helping the Russians and by developing its own installations. 8. Cooperation with the United States A new Euratom-US Department of Energy agreement to cooperate on nuclear guarantees R&D was signed on 6 January 1995 by Mr Contzen of the Commission on behalf of Euratom and Mr Keliher for the DOE. The agreement provides for "scientific coordination of both parties in efforts to transfer nuclear safeguard technologies to other countries, upon their request, in order to improve the effectiveness of their national safeguards systems". Talks with the DOE and representatives of major laboratories showed that the Americans are keen to work closely with the Community and ensure that efforts are complementary, so avoiding overlaps and optimizing the use made of limited financial resources. The study on what can be offered by MINATOM and Russian industry is a good example of this. Cooperation will now extend to training where there will true interaction between separate projects: use of safeguards in a plant converting uranium and producing fuel; development of instruments for measuring, identifying and maintaining surveillance of nuclear materials; training operators and inspectors; close technical cooperation concerning analysis procedures, reference materials and new methods of defining suspect consignments. m. RAPIOFROTECIION ASPECTS Smuggling and other illegal or uncontrolled activities with radioactive susbtances or nuclear material imposes considerable danger to the public and the environment. Most of the radioactive contraband that has been confiscated or detected by Member States authorities were radioactive sources, substances for industrial or medical use and contaminated metal scrap. Since the competent authorities of the Member States recognized the1 seriousness of the dangers arising from illicit nuclear traffic, many efforts are being made in order to attack the problem. Many of these activities are executed in close cooperation with the Commission. 1. Legal initiatives Basic Safety Standards: the performance of an effective combat against the illicit nuclear trade is much depending on the legal situation in the Union, in Member States as well as in third countries. The Member States subsume trading with radioactive substances in different legislations and consequently violations are prosecuted and punished differently. In the Central European and Eastern countries and countries of the CIS, most of the national legislations are in transitory situations, changing from old soviet-law to individual national legislation. Within the EU, this unequal legal consideration of trading in radioactive substances may change when the new Basic Safety Standards will be in force. It enlarges the field of application of European radiation protection legislation. The new Article 2 includes import and export into and from the EU. It provides the advantage that national regulations in relation to import into the EU of radioactive substances may be harmonized. The Commission has invited Member States authorities to a meeting in July 1996 in order to discuss possibilities to reach this objective. Consequently, it will be more difficult for professional dealers to find pathways through different European legislation in order to establish networks for illegal trading in radioactive substances. Furthermore, Article 45 of the Basic Safety Standards Directive at present in force provides that Member States shall stipulate measures to be taken by the competent authorities with respect to health of the population and in particular of groups of the population who are liable to receive a dose in excess of the limits. Directive on Information of the Public: complementary to Article 45 of the Basic Safety Standards, the Council enacted a Directive on the information of the public in the event of a radiological emergency. As defined by Article 2 of this Directive, illicit trade and trafficking in radioactive susbstances and nuclear material is not directly considered as a situation where a nuclear emergency requires the Member States to take special initiatives and actions in order to safeguard the health of the population. This Directive will undergo revision when the new Basic Safety Standards will be adopted by the Council. The Commission will take this opportunity to discuss to what extent illicit trade should be covered by this Directive. 2. Cooperation with international organizations The EU cooperates with the IAEA inter alia on ways of detecting radioactive substances at borders, and sends information to the IAEA database listing seizures of such substances worldwide. The IAEA has worked well as a clearing house for this purpose, and the Commission for its part has often been instrumental in advancing the work there. Participants have on a number of occasions expressed enthusiasm for the results, which can be summarized as follows: exchange of information on initiatives under way in related fields; organization of joint activities including seminars, information packages, drafting of procedures to be followed in the event of problems; creation of an informal network of contacts accessible at any time. The last-mentioned is of particular importance given that a notable feature of the discussions and meetings dealing with nuclear frafficking is the sheer range of participants involved, from many different walks of life. Apart from police and other representatives dealing with these issues as a matter of course there may be spokesmen representing corporate interests concerned with protection of employees or of their particular sector. Representatives of the WCO (World Customs Organization), IATA (International Air Transport Association), the ICAO (International Civil Aviation Organization), IFALPA (International Federation of Air Line Pilots Associations), the EVIO (International Maritime Organization), INTERPOL, EUROPOL and the UPU (Universal Postal Union) may be seated round a table with the UN, the IAEA and the Commission. IV. CUSTOMS COOPERATION 1. (a) (b) On 22 November 1994 the Directors-General of Customs approved a twin-track action programme drawn up by the Commission involving tighter controls at the external frontier and measures to combat actual trafficking. A number of steps have subsequently been taken: At a meeting on 9 and 10 February 1995 the Community's Deputy Directors-General of Customs approved a draft paper on general risk analysis guidelines and called for the emphasis to be placed on application of these techniques to nuclear materials. A section on sensitive products, including nuclear materials, is accordingly to be added to the guidelines and the plan is ultimately, in liaison with the other Commission departments concerned, to draw up risk analysis sheets for this among other fields. As part of the MATTHEUS Programme the Commission organized a seminar in Vienna (23- 25 October 1995) on the radiological aspects of nuclear trafficking. This was attended by over 90 participants from EU countries, 15 Central and East European countries and the CIS, and provided an opportunity to draw the attention of all concerned to the issue of radioprotection; it is to be followed up by special training courses for customs officals from EU Member States and the Central European countries concerned. These will take place over the next few months in Member States sharing borders with East European countries. Already the Commission has collaborated with the Finnish Centre for Radiation and Nuclear Safety to hold two courses for a total of 50 customs officers, and similar courses are to be run shortly by the Austrian and French authorities. Plans are also being discussed for similar projects in the UK, Denmark and Italy. The aim of these courses, which deal with the use of measuring equipment for the detection of radioactive substances and other nuclear materials, is to upgrade the skills of customs officers responsible for controls at the frontiers. (c) Customs have been invited to make greater use of the SCENT/CIS electronic mail network which links the Commission and 350 terminals throughout the Community and allows the direct real-time exchange of operational information on known or suspected cases of trafficking. 7 2. 3. 4. 5. V. 1. The Commission is also preparing a brochure for customs departments which will provide officials directly with practical information for use in suspicious cases. The Commission's technical assistance to CIS countries under the Tacis programme includes measures to control nuclear trafficking. It has already supplied detection equipment (eight radiation testers to Kazakhstan and five to Ukraine) and plans further operations of this type. Under the Phare programme the Commission approved a programme in November to facilitate transit which incorporates technical assistance for the prevention of nuclear traffficking. Requirements in this and other fields are currently being assessed. The customs mutual assistance protocols to the various agreements concluded by the Community (alone or jointly with the Member States) with non-member (e. g. Central/East European and CIS) countries provide the authorities in the contracting parties with a basis for administrative cooperation in the fight against trafficking of nuclear materials and radioactive substances. Since the entry into force of the interim agreements with Russia and Ukraine on 1 February, the protocols can be used for cooperation with those countries on matters covered by the Euratom Treaty. The Commission is negotiating customs cooperation agreements with the Community's main trading partners (the United States and Canada) which include mutual assistance clauses covering the areas governed by Community provisions, including matters coming under the Euratom Treaty. It also cooperates with the United States in this field, inter alia on training for relevant officials, in the context of regular bilateral contacts on customs matters. JUSTICE AND HOME AFFAIRS As proposed in the report on illicit traffic in radioactive substances and nuclear material presented to the European Council of Essen in December 1994, the mandate of the Europol Drugs Unit (Europol's forerunner until the ratification of the Europol Convention) was extended to illicit trafficking in radioactive and nuclear substances by a Joint Action of the Council in March 1995. The EDU has held a workshop of law enforcement officials from Member States in which seizures have been made and has organised a European Conference on illicit trafficking with experts from the MS, the Commission and International Organisations on 26/27 October 1995. At this Conference, the experts recommended several projects for the EDU by which the cooperation and exchange of information among Member States can be improved (creation of an immediate notification system on seizures, installation of a EU Law Enforcement Database, updated list of competent national agencies, quaterly EU situation Report, threat assessment analysis, comparative study of national legal instruments, equipment review). When the Europol Convention does come into force, illicit trafficking in nuclear and radioactive sustances continues to be one of Europol's important objectives. According to Article 2 § 2 Europol shall initially act to prevent and combat unlawful trafficking in nuclear and radioactive susbstances. As set out in the annex to the Convention "crime connected with nuclear and/or radioactive materials" means the criminal offences listed in Article 7 (1) of the Convention on the Physical Protection of Nuclear Material of 1980 and relating to the nuclear and/or radioactive materials defined in Article 197 of the Euratom Treaty and Directive 80/836 Euratom of 15 July 1980. Further work among Member States in the third pillar in 1995 related to a first evaluation of a questionnaire on details about the fight against illicit trafficking which had been distributed by the German Presidency. It shows differences with regard to the threat assessement in general, the existence of permanently installed technical equipment at land borders, seaports and airports as well with regard to bilateral agreements with the CEEC and the CIS. The proposals for possible actions within the EU, as agreed by the Steering Group II and endorsed 2. by K4 Committee in November 1994, have partly been examined and endorsed by the European Conference of the Europol Drug Unit. The Italian Presidency wishes to organize during the first semester of 1996 a seminar on the illicit traffic of nuclear material and radioactives susbtances in the framework of customs cooperation under Title VI of the TEU. With regard to the cooperation with third States, the Justice and Home Affairs Ministers of the EU and the CEEC met for a Conference on Combatting Drug Crime and organized Crime in Europe in September 1994 in Berlin. They declared to develop the cooperation inter alia in the fight against crimes involving radioactive and nuclear material and agreed to examine certain means of cooperation as preparation of joint situation assessment, cooperation with regard to the protection of radioactive and nuclear stocks, the setting up of coordinated reporting channels and mutual assistance of the prosecuting authorities. In June 1995, a seminar of the EU Member Sates and the CEEC on police cooperation to combat drugs and organised crime was held as part of the structured dialogue which specified methods of cooperation in different fields of organised crime, including illicit trafficking of radioactive and nuclear material. In the field of judicial cooperation in criminal matters, the Justice and Home Affairs Ministers of the EU and the CEEC agreed at its meeting on 25 September 1995 on an action programme to fight international organised crime which underlines, amongst other things, the need to sign and ratify the 1980 Convention on the Physical protection of Nuclear Material as well as the appropriateness of the criminalization of the theft and trafficking in radioactive and nuclear material not covered by the 1980 Convention. With regard to the relations of the EU with Russia, combatting illicit trafficking in nuclear and radioactive substances was identified by the K4 Committee as one of the matters which should be fostered according to the Conclusions of the General Affairs Council of November 1995. CONCLUSIONS The Commission considers that the activities described above to a certain extent fulfil the mandate given it by the Essen European Council. In some areas the EUs work and decision-making needs to be taken further and speeded up, in conjunction with non-EC partners. The Commission is ready to present the necessary proposals and will continue the work already well under way. It also considers that these activities represent a substantial degree of implementation by the EU of the programme of action against nuclear trafficking adopted at the Moscow Nuclear Summit, to whose preparation the EU contributed. In the field of cooperation on justice and home affairs the Commission will work closely with the EDU and international organizations to make a constructive contribution to Member State initiatives implementing the Essen conclusions. COOPERATION WITH THE REPUBLICS OF THE FORMER USSR UNDER THE EXISTING CONTRACTUAL FRAMEWORK Annex 1 Partnership agreement with Russia Article 84 of the Agreement signed on 26 June 1994 deals with cooperation on the prevention of illicit activities. This is based on two-way consultations and close interaction; technical and administrative assistance is also provided. Implementation of cooperation activities under this article is deteirnined by specialist Council working parties. An agreement with Russia covering trade in nuclear materials is expected to be concluded by January next year and this might incorporate provision for measures to prevent nuclear trafficking. Partnership agreement with Belarus The agreement signed on 6 March 1995 contains a clause (Article 79) specifically on nuclear trafficking which reads as follows: "The parties agree on the necessity to make efforts to cooperate, within the framework of their respective powers and competences, in order to combat nuclear smuggling. Cooperation in this area should include exchange of information, technical support for analysing and identifying the material, administrative and technical assistance for the installation of efficient customs control. Further cooperation in this field could be identified as need arises. " Agreements have also been concluded with Ukraine, Moldova, Kyigyzstan and Kazakhstan. The first three make no mention of the prevention of illicit activities but the agreement with Kazakhstan incorporates a clause providing for cooperation in this field, i. e. the same as Article 84 of the agreement with Russia. The agreements with Georgia, Amienia (initialled 15 December 1995) and with Azeibaijan (initialled 18 December 1995) also contain provision for certain aspects of prevention of illicit activities. All the partnership and cooperation agreements provide: either for an agreement on trade in nuclear products (Ukraine, Kazakhstan, Kyrgyzstan and Uzbekistan, or for the possibility of such an agreement if necessary, failing which the Euratom Treaty applies (Belarus, Moldova, Georgia, Armenia, Azerbaijan). 10 Annex 2 CO-OPERATION IN THE FIELD OF SAFEGUARDS Introduction 1. The co-operation between Euratom and the Russian Federation in the field of safeguards was initiated in 1992 and formalised in 1993. Member States of the European Union, the European Parliament and the Commission realised that immediate efforts were required to cooperate in the field of nuclear safeguards with CIS (Commonwealth of Independent States) republics, including, notably, the Russian Federation. The objectives were: • • • To upgrade the nuclear materials accountancy and control system in CIS republics to the same standards as those maintained in countries which have substantial nuclear programmes. To help to ensure that such a system would comply with the safeguards requirements of the International Atomic Energy Agency (IAEA) and; As a consequence, to contribute to the non-proliferation of nuclear materials and to the minimisation of hazards to the public through the illicit transfer of nuclear materials. 2. Due to the need to make optimum use of the limited resources, a first phase of co operation with the Russian Federation was carried out during 1993 and 1994, following the provision of funds by the European Parliament under budget line B4-200T. A meticulous co-ordination structure - i. e. project-oriented - was agreed with the Russian authorities that proved efficient in respect of transparency, documentation of the results, project management and resource allocation. 3. The permanent participants in this co-operation are: • • • Gosatomnadzor (GAN) - the Russian federal inspectorate; the Ministry of Atomic Energy of Russia (Minatom) which is the major nuclear operator in Russia; the Euratom Safeguards Directorate (DCS), DG XVII-E, and the Community's Joint Research Centre (JRC). Moreover, right from the start, participation and support were requested and obtained from Member State authorities and, notably, from operators of nuclear installations in the European Union. Without this support the training activities performed during the first phase would have remained largely academic. 4. A first phase of the co-operation - essentially related to training and the elaboration and discussion of concepts and approaches - was completed at the end of 1994; three application projects (see below) were initiated as a second phase of the co-operation in 1995, in parallel with continuation of seminars and training activities. Results of the first phase 5. The actions carried out in 1993 and 1994 may be subdivided as follows: • • • • Training and familiarisation; Nuclear materials control system design; Seminars; Inspection exercises. 11 The objectives of these actions were to familiarise the Russian participants with the preparation, execution and evaluation/conclusion of inspections as carried out by Euratom. In December 1994 the experience gained was evaluated during a workshop. The main conclusions were that inspection activities or exercises provided essential 'on the job' training and that they should be expanded to further types of installations. 6. The cost of the first phase of the Euratom - Russian Federation co-operation in safeguards amounted to 1. 5 Mo ECU. This expenditure was financed from the budget line, made available by the European Parliament. The Second Phase of the Co-operation 7. After completion of the first phase of the Euratom - Russian Federation co-operation in safeguards, the Russian side officially proposed four major projects/1) all relating to the practical implementation of Nuclear Material Accountancy and Control (NMAC) in Russia, based on the results of the first phase described earlier. One of the projects had to be abandoned. Three are pursued with success. These projects, usually coded MENS, PROCS and CISNER-project, are described in some detail later in the document. The Russian side has outlined on record the vital importance of all these projects, their appreciation of the work performed and the usefulness of the results achieved, which they described as very significant and essential. 8. 9. The idea underlying the applications projects was that the Russian experts would achieve the design of relevant systems, concepts and approaches through day-to-day contacts, discussions and co-operation with the corresponding Euratom staff, while the necessary design tools (e. g. computers, documentation) and infrastructure would be made available by the Commission. Further projects have been added to this list during the meeting of the Joint Co-ordination Group (JCG) in December 1995. Amongst these, it is envisaged to prepare a further "Physical Inventory-Taking and Verification Project (PITV)" in complex nuclear facilities. This project is proposed to include: • The utilisation of Euratom experience in methodological aspects for the development of the methods and procedures at the selected installations; • The practical execution of physical inventory-takings and verification; • Testing of Euratom safeguards equipment and instruments during the practical part of the project; • Training in nuclear material accounting and physical inventory-taking of the plant personnel at the research centre. 10. The total cost is evaluated to be some six million ECU, of which the Euratom contribution is estimated at about 3 MECU for 1996 and was about 1. 8 Mo ECU for 1995; the Russian side is expected to contribute at least the same amount but mainly in terms of manpower. Conclusions and Recommendations 11. From the first 3 years of the Euratom - Russian Federation co-operation in the field of safeguards it may be concluded that: • The training and design phase was completed by the end of 1994. (1> Later reduced to 3 due to difficulties of access to data for Gosatomnadzor inspectors. 12 The second-project oriented-phase must be encouraged and pursued because it appears to be the best means to introduce effective modern nuclear material accountancy and control be involving a maximum of executive staff from the beginning. The results are encouraging and their value has been officially recognised by the Russian partners as significant and essential; Some practical problems are, however, impeding faster progress: the language barrier, the obtaining of visas for Russian experts at short notice, problems of logistics such as transport of instruments to Russia, limited manpower resources. Euratom safeguards has also benefited from this co-operation, as DCS staff were required to reflect on and to describe Euratom safeguards to outsiders who professionally reviewed its methodology and practices. The funds made available by Parliament were sufficient. DETAILED INFORMATION ON THE ONGOING PROJECTS 1. MINATOM CENTRALISED INFORMATION SYSTEM (the NUNS project) 1. 1. Project description The MINS project (MINATOM Computerised NMAC Information System) was established jointly between Minatom, the main operator of the Russian Federation and the Euratom Safeguards Directorate. It comprises the study, design, specification, realisation and implementation of a centralised and computerised information system for Minatom. It was decided that MINS should concentrate at first on a centralised headquarters system, linked to computerised work places at two nuclear power plants, at one Low Enriched Uranium (LEU) fuel fabrication plant and at the controlling operator organisations). The outcome of the project should provide Minatom with a solid informatics and accountancy platform, which must enable the various users to gain experience with a computerised system and which the responsible Russian organisations can subsequently extend to a comprehensive computerised NMAC system for the entire fuel cycle in the Russian Federation. The general objectives of the MINS project can be summarised as follows: development of a regulatory framework and accompanying document improvement of the centralised information (headquarters) system improvement of the NMAC system at facility level (computerised work stations) MTNS includes the following features: high system reliability, optimum use of modern technology for fast and secure information transmission and processing, extensive database for storage and management of NMAC data. Given the scope of the project, the following organisations participate: MINATOM, the Ministry of Atomic Energy of the Russian Federation, which is the requesting Authority and eventually responsible for the implementation; TSNIIAtominforrn, which is a large research and information handling institute depending from Minatom; a specially created section of Atominform has been entrusted to carry out the majority of the work involved in MINS; 13 • ROSENERGOATOM a public organisation ('operator organisation') grouping and supervising most of the RF nuclear power plants; • TVEL, the public organisation ('operator organisation') to which belongs the LEU fuel fabrication plant at Novosibirsk; • VNHA, scientific research institute for automation; • VNIINM, scientific research institute for inorganic materials; • GOSATOMNADZOR, me RF federal safeguards Authority; • EURATOM, the partner providing information and expertise. 1. 2 Project evolution and status The MINS project was started officially in September 1994. The period from September 1994 to July 1995 allowed both sides to get to know each other's working methods, to organise fact finding missions and to establish a preliminary work schedule. The current project team comprises 21 team members (7 from Euratom) plus an additional 10 to 15 specialists on the Russian side who get involved depending on specific tasks to be carried out. The project is expected to be completed by the end of 1999. As a result of intensive periods of information exchange, the Russian experts issued a substantial number of technical notes including a detailed feasibility report. The system's architecture had been drawn up and relevant documents have been translated and discussed in technical meetings. Today the project has arrived at a turning point: the nuclear power plants to be included in MTNs were chosen to be Kalilnin (WWER1000) and Smolensk (RBMK 1000). The fuel fabrication plant will be the LEU plant at Novosibirsk. Each will be equipped with appropriate computerized workstations. Also the operator organisation ROSENERGOATOM, controlling the nuclear power plants and the central MINATOM office itself will receive appropriate workstations. With the initial analysis and feasibility completed, the focus is now on equipment acquisition and installation, specific training and preparation for the programming of the database management system. A first delivery of equipment is reasonably expected for mid 1996. 2. PHYSICAL INVENTORY TAKING PROCEDURES: the PROC project 2. 1. Project description The PROC project was established between Minatom. Gosatomnadzor and the Euratom Safeguards Directorate for the development of joint recommendations on Physical Inventory Taking (PIT) PROCedures at WWER-1000 Nuclear Power Plants and a LEU Fuel Fabrication Plant. The intention was to cover the whole range of activities relating to physical inventory taking: accounting system arrangements, records audit, documentation, physical preparation, organisation. 2. 2. Project evolution and status The project work started in July 1994 and was finalised in February 1996. • The specific plants chosen for the exercise were the Kalinin WWER-1000 Nuclear Power Plant and the NOVOSIBIRSK LEU Fuel Fabrication Plant. Technical information about plant operations, material accounting arrangements and, in particular, on physical inventory 14 procedures has been provided by the operators. Both plants have been visited by the project team to review the information provided and examine the materials accounting and physical inventory arrangements. • The second stage was the production of the documents. Euratom provided general recommendations on physical inventory taking and this was translated into Russian, discussed and agreed. Following this Euratom produced two documents providing recommendations on physical inventory taking in Nuclear Power Plants and in LEU Fuel Fabrication Plants. Finally the operator (Minatom), on the basis of the agreed guideline documents, produced specific PIT procedures for the Kalinin and Novosibirsk plants, including operational preparation, inventory methods, evaluation etc. • It was agreed that the 5 documents produced in the project ( each available in English and Russian) would be implemented in the following project (PITV - full PIT exercises followed by physical inventory verification (PIV) by Gosatomnadzor). The documents may then be reviewed in the light of experience. 3. PHYSICAL INVENTORY TAKING AND VERIFICATION: the PITV Project 3. 1. Project description This PITV project is a follow-up project of the PROC project. It will offer the opportunity to apply, test and evaluate in practice the documents produced during the PROC and PITV projects. Therefore all three organisations involved are very interested in the results of this project. The PITV project was established between Mnatom. Gosatomnadzor f GAN) and the Euratom Safeguards Directorate (ESP) for two consecutive Physical Inventory Takings (PIT) with Euratom participation at Kalinin Nuclear Power Plant (NPP) and Novosibirsk LEU fabrication plant based on the recommendations and procedures produced during the above referred to PROC project, and Physical Inventory Verifications (PIV) performed by GAN according to PIV recommendations and procedures to be developed during this project. The intention is to apply, test and if necessary revise the recommendations and procedures for PITs produced during the previous PROC project and to develop recommendations and procedures for PIVs. To cover a complete Material Balance Period (MBP) two consecutive PITs will be performed at Kalinin NPP and the Novosibirsk LEU fabrication plant followed by PIVs performed by GAN after the second PITs. 3. 2. Project evolution and status 3. 2. 1. The project has just started with a preliminary meeting between the three above- mentioned organisations in February 1996 in Luxembourg and is expected to be finalised in 1998. 3. 2. 2. The initial PITs at the two installations chosen will be performed probably towards the end of 1996. 3. 2. 3. The second PITs closing the MBPs are planned for the end of 1997, followed by the PIVs performed by GAN. Use of measurement instrumentation and computers will be considered for PITs and PIVs. 15 4. COMPUTERISED NUCLEAR MATERIAL ACCOUNTING: the CISNER Project 4. 1. Project description The CISNERproject was established jointly between Gosatomnadzor (GAN). the Russian federal control agency, and the Euratom Safeguards Directorate for the development and implementation of a computerised nuclear material accounting and Control Information System for the North- European Region of Gosatomnadzor (GAN). The system to be developed will be a multi-level nuclear material accounting and control system involving all the levels of information flow from the plant operator, over the local GAN inspector, the GAN field office up to the GAN Regional Headquarters in St. Petersburg. The system will have following features and characteristics : rapid transmission and processing of information, high reliability of the information transmitted and processed, high system reliability, reduction of routine work to a minimum, creation and maintenance of a database for nuclear material accounting and control in the North European Region of GAN and the development of computerised tools to optimise decision making. 4. 2. Project evolution and status The actual project work started in November 1994 and is expected to be finalised in December 1997. The project started with the analysis of the existing nuclear material accountancy and control systems in the installations which are part of the project. Visits to the installations were made: these have shown that in most of the cases some form of local nuclear material systems existed and in some cases were being updated to include, eventually, requirements for international safeguards. The visits also revealed that the actual inspection work of Gosatomnadzor is limited to accountancy and consistency checks. Physical verifications are marginal as no safeguards equipment, e. g. NDA instruments, seals or surveillance systems, is available. It was therefore decided to enlarge the CISNER project to include the procurement and installation of the safeguards instrumentation necessary to control the plants and training of the Gosatomnadzor inspectors in the use of the equipment. In parallel the work on the development of the computerised data handling and treatment system started. The data flow related to nuclear material accountancy and control involve the installations themselves, the local Gosatomnadzor inspector, the Gosatomnadzor field offices in Sosnovy Bor, Murmansk, Severodinsk, Kurchatov and Desnogorsk and the North European District Directorate of St. Petersburg. In order to divide the project into manageable items, a pilot project was defined involving one nuclear power plant and all levels of communication from the plant operator, via the local and field offices of Gosatomnadzor, to the main regional Gosatomnadzor office of St. Petersburg. The pilot project has been defined in detail, hardware and software procurement and development is under way. It is expected that the first equipment will be delivered by mid 96. After successful testing of the pilot system, the system will be expanded to the other installations of the project based on a priority list defined by Gosatomnadzor. 16 Projects implemented or under preparation in the framework of Phare and Tacis Annex 3 L Co-operation with the Russian Federation on illicit trafficking Co-operation in design and development of a data base system for the identification of nuclear material of unknown origin Partner : Non Organic Chemistry Institute, Moscow a) b) c) d) e) Objective : definition of characteristic parameters of nuclear material used in the countries of the FSU. establishment of characteristics of processes and production facilities (reprocessing, fuel fabrication, reactors, enrichment plants) for individual plants in the FSU. selection of materials which should be further characterized and kept in an archive at ITU for reference purposes. completion of the ITU data base with general data from the former COMECON states and a more detailed data base at the Non-Organic Chemistry Institute. elaboration of a consultation scheme to analyse and interprète analytical results by means of the data bases at ITU and the Non-Organic Chemistry Institute. IL Cooperation with the Russian Federation on the up-grading of the safeguaids and Nuclear Material Accountability and Control (NMAQ system II-l. Review of Needs As explained in the previous Communication, the knowledge and assessment of the detailed technical needs for the creation of a NMAC system is fundamental for the effectiveness of the co-operation with the Russian Federation in establishing a technical infrastructure. Therefore, the Commission proceeded with a re-assessment of these needs in close cooperation with the Russian authorities, MINATOM and GAN, taking into account the specificity and the extent of the nuclear fuel cycle to be safeguarded and the type of safeguards system that will be applied: at the facility level: each nuclear facility must have a detailed nuclear material accountancy system for all the nuclear material that is received, shipped, processed or stored. Accurate measurements and the uncertainty of these measurements are required. Needs: a study defining the specificity of NMAC for the different parts of the fuel cycle has to be performed. Training, regulatory aspects and the establishment of facility specific rules are very important at the initial stage of implementation of the new safeguards system. Furthermore, needs: for each type of facility, appropriate material balance and statistical accountancy evaluation procedures, as well as a list of the most appropriate instruments and measurement systems has to be established. The necessary technical support and training have to be provided for this purpose. at the authority level: the inspectors have to verify, in an independent way, the declarations made by the individual plant operators. Needs: this implies training of inspectors and facility personnel in charge of accounting and indépendant analytical capabilities, as well as a computerised data base for the collection, the retrieval and the analysis of the accountancy data and for the collection of the inspectors findings. Measurement techniques adapted to each type of plant and the respective proper instrumentation has to be made available for inspections. a) b) 17 II-2. Education Training and Development of Safeguards Methodologies As mentionned in § n. -5. a) of the document, the Russian Federation has decided in March, 1995 to create the "Russian Safeguards Methodological and Training Centre", called RMTC, at the Institute of Physics and Power Engineering (IPPE) at Obninsk in the Kaluga Region, near Moscow. The RMTC will be mainly oriented towards the training of inspectors and of plant operators depending from MINATOM and other organisations. The Centre will be realized modifying existing premises, already licenced for the use of bulk quantities of nuclear materials (U, Pu). The structures will consist of class rooms for theoretical lessons and of laboratories where hands-on training will be given on nuclear materials measurements. Instruments will be provided through Commission (TACIS) support, as well as nuclear material standards and reference materials. The education and training programme is made-up of basic courses that will be common for techniques) as well as inspectors and plant operators (Principles of NMA&C, verification specific courses for separatly operator or inspectors, regarding NMA or inspection procedures. A study is now being performed by the JRC, IPPE (MINATOM) and GAN to determine the detailed technical specifications for each of the course modules (taking account of the quite new Russian legislation), the required training facilities, the instrumentation, the reference materials and data evaluation capabilities. For the first phase of the implementation of the training centre, the JRC and IPPE are now co operating, in the framework of the TACIS programme, to create five training courses, addressing specific evaluation and measurement techniques of interest both to plant operators and inspectors. The first courses for trainers will be organised in the near future at the JRC, Ispra. The first training courses at IPPE, Obninsk, are expected to start in June 1996. Furthermore, upon special request by GAN, measurement techniques oriented courses and physical inventory verification exercises have been and will be organised at the JRC. These courses will be transferred to Obninsk, when the RMTC will be fully operational. The RMTC is also very important as a forum and a meeting point between plant operators and inspectors. They would, through discussions and common seminars, understand their respective obligations and how these can be complied with given the present state of the Russian nuclear industry. An R&D programme on safeguards concepts and methodologies is also expected to be put in place as the RMTC develops. II-3. Generic Scientific and Technical Support As the Commission stressed in its previous Communication, the setting up of a fully reliable safeguards and NMAC system needs specific installations for operators and/or inspectors. The modalities for the establishment of these installations are still under discussion with the Russian authorities. The main lines, as well as the location have already been agreed and a mission of Commission experts is expected in Russia soon in order to elaborate with Russian specialists the terms of reference for these projects. The purpose of the proposed cooperation is the provision of consultancy to GAN and MINATOM, the exchange of practical experience. It is also envisaged to provide some instrumentation but this will depend on the availability of relevant equipment in Russian laboratories. n. 3. 1. Metrological Centre for Measurements of Nuclear Materials In co-operation with experts of different laboratories, it should: 18 a) define the state of the practice for routine applications of different measurement techniques applied to nuclear materials, b) provide a basis for a quality control programme to regularly monitor the measurement capabilities in different facilities and in analytical laboratories. n. 3. 2. Safeguards Analytical Capabilities The samples taken by safeguards inspectors need to be analysed with a high level of accuracy by destructive analysis techniques and in some specific cases also by non-destructive assay methods. GAN has expressed a great interest in establishing the technical capabilities and required infrastructure to implement various approaches, according to the specific needs. Furthermore, the independent analysis of "vagabonding,, material is also a requirement gaining an increasing interest. ÏÏ. 3. 3. Instrument Development and Procurement Very few instruments are used at present in Russian nuclear facilities for the implementation of NMAC system. However, several laboratories in the Russian Federation have a large experience in the development of instrumentation for process and quality control in production facilities and nuclear measurements for sensitive equipment in research centres. The purpose of the co-operation between Russian and European R&D laboratories and industry is to: review the existing technologies available and evaluate their possible use or adaptation to NMAC purposes, a) b) define specific projects aiming at the development of new instruments suited to the implementation of NMAC. On the basis of the results obtained, relations should be established between the Russian industry or production laboratories and European industry, in order to develop an industrial production of instrumentation in Russia. EL Co-operation with Phare countries on illicit frafieking IH-1. FONSAFE fForensic Nuclear Analysis for Safeguards) Project with Hungary Partner : Hungarian Atomic Energy Commission Objective : a) improve the capacities for analysis of nuclear material seized in Hungary particularly in the field of NDA measurements of the nuclide concentrations of U and Pu and NDA determination of the matrix. b) organise intercomparisons of NDA measurements and equipment. c) extend the data base at ITU by all the related data and results of measurements made accessible by the Institute of Isotopes, which is responsible for the identification and measurement of nuclear material seized in Hungary. establish a procedure to assist Hungary - upon request - in the measurements of the seized nuclear material and in the definition of its origin and intended use including: - measurements in ITU on sub samples provided by Hungary or on the seized material itself, in case of Pu, with the understanding that the remaining material will be shipped back to Hungary, - common analysis and interpretation of the results based on the ITU database. receive a Hungarian expert for about a month, who will study the experience acquired in the above field. d) e) m-2. FONSAFE Project with the Czech Republic Partner : State Office for Nuclear Safety of the Czech Republic Objective : 19 A. In the beginning, a supplementary analysis of nuclear material seized in the Czech Republic will be performed at ITU. For efficient transfer of know-how and experience, two Czech experts are to be involved in the following activities for twice three months and once six months: 1) shipment of a sample of the highy-enriched uranium (HEU) material seized in Prague from November 1994 to June 1995 to ITU for extended analyses covering radionuclide and chemical impurities; evaluation of analytical data for revelation of the possible origin of the material; 2) 3) development of selected parts of a relational database system for nuclear material at ITU. B. In the second phase the contractor and his experts will assist NRI in the following tasks: 1) upgrading of laboratory equipment of Central Analytical Laboratory in order to improve the in- house analytical capabilities; analysis of HEU reference materials from the former Soviet Union. 2) C. One or two workshops with Czech and EU representatives are to be organized to exchange experience in the area of treatment and analysis of nuclear material. ffl-3. Other FONSAFE Projects Similar but country - specific projects are in preparation for Bulgaria and Ukraine (more emphasis on assistance in on-site handling and identification of radioactive materials by NDA). Furthermore, the other Phare countries have expressed their interest for similar collaboration. IV. Co-operation in the framework of the ISTC IV-1. ISTC project 40 Project Purpose: to develop an upgraded approach for safeguarding complex & sensitive nuclear fuel cycle facilities at Tomsk 7. a) Expected Results of the Project will consist of: development of regulatory criteria applicable for nuclear material accountancy at specific types of fuel cycle facilities, based on feasibility studies for measurement systems development, application of inspectorate field equipment, application of containment and surveillance measures; b) development of regulatory requirements for inspection procedures and scope; c) development of a model approach for nuclear material data transmission and data treatment in regional supervising office; The Russian participants are coming from GAN, Minatom, the Tomsk 7 Chemical Plant and several institutes. ISTC project K-57 IV-2. Creation of system for storage, operative control and physical protection of nuclear materials and ampoule sources of ionizing radiation (ASIR) on "Baikal-1" stand complex meeting the international requirements of radioactive materials control and accounting. Partner : Kazakhstan Institute of Atomic Energy of the National Nuclear Center of the Republic of The main objectives of the project are focused on the development of the technology for storing, operative control and physical protection of nuclear materials and ASIR as well as on the development and implementation of systems of control, accounting and physical protection for nuclear materials and ampoule sources of ionizing radiation stored on the "Baikal-1" Stand Complex 20 ISSN 0254-1475 COM(96) 171 final DOCUMENTS EN 12 05 14 Catalogue number : CB-CO-96-181-EN-C ISBN 92-78-02999-8 Office for Official Publications of the European Communities L-2985 Luxembourg SLA

Proposal for a COUNCIL DECISION on the conclusion of an Agreement in the form of an exchange of letters between the European Community and the Arab Republic of Egypt on the adjustment of the regime for imports into the European Community of oranges originating in and imported from Egypt

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COMMISSION OF THE EUROPEAN COMMUNITIES * -sir Brussels, 19. 04. 19% COM(96) 85 final 96/0054 (ACC) Proposal for a COUNCIL DECISION on the conclusion of an Agreement in the form of an exchange of letters between the European Community and the Arab Republic of Egypt on the adjustment of the regime for imports into the European Community of oranges originating in and imported from Egypt (presented by the Commission) Explanatory Memorandum Following the agreements concluded during the Uruguay Round of the GATT negotiations, some changes have been made to the legislation on imports into the Community of oranges as from 1 December 1995. An additional specific duty is now levied on imports of oranges between the period from December to May, a period during which the reference price system previously applied. A shipment can be exempted from this specific duty may haveif a given entry price a negative effect on the is complied with. This new regime Community's traditional imports from Egypt. Article 22 of the Cooperation Agreement between the European Economic Community and the Republic of Egypt provides for adjustments to the Agreement when changes are introduced by the Community in the current rules. Egypt has requested the introduction of changes in the Cooperation Agreement in order to permit the continuation of its traditional exports of oranges. Negotiations have been held with Egypt and an agreement has been reached which enables the concessions previously granted to be maintained. The arrangement provides a special entry price for 8,000 tonnes of Egyptian oranges during the period from December to May. This quantity corresponds to Egyptian traditional exports to the Community during that period. This special entry price is equal to that agreed with Morocco and Israel. (See Council Regulation (EC) No 3057/95 of 22. 12. 1995, OJ No L326/3). The provisions of this Agreement shall commence on 1st December 1996. This Agreement is contained in an exchange of letters (attached) which the Commission herewith recommends to the Council for adoption. a Proposai for a COUNCIL DFCISTON on the conclusion of an Agreement in the form of an exchange of letters between the European Community and the Arab Republi : of Egypt on the adjustment of'rh- regime for import:; into the European Community of oranges originating in and imported from Egypt THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 113 in conjunction with the first sentence of Article 228 (2) thereof, Having regard to the proposal from the Commission, Whereas, in the context of the Uruguay Round of multilateral trade negotiations the import regime for oranges has been changed; Whereas, this new regime may have a negative effect on the Community's traditional imports from Eygpt; Whereas Article 22 of the Cooperation Agreement between the European Economic Community and the Arab Republic of Egypt1 provides that, where the existing rules are modified, the Community may amend the regime set out in the Agreement for the products concerned; Whereas the Community has agreed with Egypt that, pending the conclusion of a new Euro-Mediterranean Agreement, the said regime will be adjusted on the basis of an Agreement in the form of an exchange of letters; Whereas this Agreement should now be approved; HAS DECIDED AS FOLLOWS: Article 1 The Agreement in the form of an exchange of letters between the European Community and the Arab Republic of Egypt on the adjustment of the regime for imports into the European Community of oranges originating in and imported from Egypt is hereby approved on behalf of the European Community. The text of the Agreement is attached to this Decision. OJ No L 266 of 27. 9. 1978, p. 1 3 Arlicit? 2 The President of the Council is hereby authorized to designate the person empowered to sign the Agreement so as to bind the Community. Article 3 If necessary, the Commission shall adopt detailed rules for the application of this Decision, in accordance with the procedure laid down in Article 33 of Regulation (EEC) No 1035/722, as last amended by Regulation (EC) No 1363/95. 3 Done at Brussels, 1996 For the Council The President 2 OJ No L 118 of 20. 5. 1972, p. 1 3 OJ No L 132 of 16. 6. 1995, p. 8 AGREEMENT in the form of an exchange of letters between the European Community and the Arab Republic of Egypt concerning the import regime in the Community of oranges from Egypt Letter from the Community Sir I have the honour to refer to the consultations held between the Egyptian authorities and the services of the European Commission on the implementation of the new WTO commitments following the Uruguay Round. The aim of these consultations was to grant to Egypt, pending the conclusion of the Euro-Mediterranean Agreement and according to Article 22 of the Cooperation Agreement, preferences equivalent to those provided for in the Cooperation Agreement between the European Economic Community and the Arab Republic of Egypt. It has been agreed that for fresh oranges falling within the code ex 080510 : 1. From 1 December to 31 May and for a maximum quantity of 8,000 tonnes, the entry price level from which specific duties will be reduced to zero shall be Ecu 273 Ecu/tonne. 2. This agreed entry price shall be reduced in the same proportion and at the same pace as the entry prices bound within the WTO. 3. If the entry price of a particular lot is 2%, 4%, 6% or 8r. below the agreed entry price, the specific customs duty shall be 2%, 4%, 6% or 8% of the agreed entry price as appropriate. 4. If the entry price of a particular lot is below 92% of the agreed entry price, the specific customs duty bound within the WTO shall apply. This Agreement shall enter into force upon signature of both parties. It shall be applicable as from 1 December 1996. I should be grateful if you would kindly inform me whether your government is in agreement with the above. Please accept, the assurance of my highest consideration For the Council of the European Union 5" AGREEMENT in the form of an exchange of letters between the European Community and the Arab Republic of Egypt concerning the import regime in the Community of oranges from Egypt Letter from the Arab Republic of Egypt Sir I have the honour to acknowledge receipt of your letter of today's date which reads as follows; "I have the honour to refer to the consultations held between the Egyptian authorities and the services of the European Commission on the implementation of the new WTO commitments following the Uruguay Round. The aim of these consultations was to grant to Egypt, pending the conclusion of the Euro-Mediterranean Agreement and according to Article 22 oL the Cooperation Agreement, preferences equivalent to those provided for in the Cooperation Agreement between the European Economic Community and the Arab Republic of Egypt. It has been agreed that for fresh oranges falling within the code ex 080510 : 1. From 1 December to 31 May and for a maximum quantity of 8,000 tonnes the entry price level from which specilic duties will be reduced to zero shall be Ecu 273 Ecu/tonne. 2. This agreed entry price shall be reduced in the same proportion and at the same pace as the entry prices bound with the WTO. 3. If the entry price of a particular lot is 2%, 4%, 6% or 8% below the agreed entry price, the specific customs duty shall be 2%, 4%, 6% or 8% of the agreed entry price as appropriate. 4. If the entry price of a particular lot is below 92% of the agreed entry price, the specific customs duty bound within the WTO shall apply. This Agreement shall enter into force upon signature of both parties. It shall be applicable as from 1 December 1996. I should be grateful if you would kindly inform mo whether your qovernement is in agreement: with t ho above. 1. Please accept the assurance of my highest consideration" I have the honour to confirm that my Government is in agreement with the contents of your letter. Please accept the assurance of my consideration For the Government of the Arab Republic of Egypt 6 ISSN 0254-1475 COM(96) 85 final DOCUMENTS EN 02 11 03 Catalogue number : CB-CO-96-093-EN-C ISBN 92-78-01193-2 Office for Official Publications of the European Communities L-2985 Luxembourg Y

Proposal for a COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee

http://publications.europa.eu/resource/cellar/94ce4d65-a8fd-4ddb-b454-bd0b3d448f92

eng

*" "it COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 19. 04. 1996 COM(%) 167 linal Proposal for a COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee (presented by the Commission) EXPLANATORY MEMORANDUM Subject: Replacement of new members and alternate members of the European Social Fund Committee for the period up to 22 October 1998 1. 2. 3. 4. 5. Article 17 of Council Regulation (EEC) No 2052/88 of 24 June 1988, as most recently amended by Council Regulation (EEC) No 3193/94 of 19 December 1994, on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments, states that the Commission shall be assisted in respect of Objectives 3 and 4 by a Committee pursuant to Article 124 of the Treaty. The provisions relating to the organisation and tasks of this Committee are laid down in the implementing regulations, principally in Article 28 of Council Regulation (EEC) No 4253/88, as amended by Council Regulation (EEC) No 3193/94 of 19 December 1994, concerning coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments. The said Article provides that the Committee shall be composed of two government representatives, two representatives of the workers' organisations and two representatives of the employers' organisations from each Member State. The members and alternates are appointed by the Council, acting on a proposal from the Commission, for a period of three years. The Council decided, on 23 October 1995, to appoint the members and alternate members of the European Social Fund Committee, on a proposal from the Commission, for the period from 23 October 1995 to 22 October 1998. Following the resignation of a member and an alternate member, the Commission is presenting to the Council this proposal for a Decision replacing those members for the period up to 22 October 1998. PROPOSAL FOR A COUNCIL DECISION replacing members and alternate members of the European Social Fund Committee THE COUNCIL OF THE EUROPEAN UNION, Having regard to the proposal from the Commission, Whereas the Council, on 23 October 1995, acting on a proposal from the Commission, decided to appoint the members and alternate members of the European Social Fund Committee1 for the period up to 22 October 1998; Whereas one member's seat (employers' representative) has become vacant following the resignation of Ms Deborah France (United Kingdom); Whereas, therefore, it is necessary to amend the said Decision, HAS DECIDED AS FOLLOWS: The Decision of 23 October 1995 is amended as follows: Article 1 1. In Article 1, II a), the member representing United Kingdom employers, Ms D. France, is replaced by Ms N. Whitlock. Artic1e2 The appointment referred to in Article 1 shall be published, for information, in the Official Journal of the European Communities. Done at Brussels For the Council The President 1 OJ No C 296, 10. 11. 1995. ISSN 0254-1475 COM(96) 167 final DOCUMENTS EN 01 Catalogue number : CB-CO-96-178-EN-C ISBN 92-78-02834-7 Office for Official Publications of the European Communities L-2985 Luxembourg

Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON CROSS-BORDER CREDIT TRANSFERS

http://publications.europa.eu/resource/cellar/6c60a8ed-e9f7-4ad6-b367-7a31383ac11a

eng

COMMISSION OF THE EUROPEAN COMMUNITIES. ** * -tfr Brussels, 19. 04 19% COM(%) 172 linal- 94/0242 (COD) OPINION OF THE COMMISSION pursuant to Article 189 b (2) (d) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON CROSS-BORDER CREDIT TRANSFERS AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 189 a (2) of the EC Treaty OPINION OF THE COMMISSION pursuant to Article 189(b)(2)(d) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a E U R O P E AN P A R L I A M E NT A ND C O U N C IL D I R E C T I VE ON C R O S S - B O R D ER C R E D IT T R A N S F E RS I. STAGE REACHED IN THE PROCEDURE (a) On 18 November 1994, the Commission adopted a proposal for a European Parliament and Council Directive1 on cross-border credit transfers. This was sent to the Council by letter dated 18 November 1994. The Council subsequently forwarded this text to the European Parliament, to the European Monetary Institute and the Economic and Social Committee. In January 1995, it began its own examination of the proposal. (b) The European Monetary Institute (EMI) rendered its opinion on the Commission proposal on 20 March 1995. The Economic and Social Committee adopted its opinion at its sitting on 1st June 19952. (c) The European Parliament adopted the legislative resolution embodying opinion on the Commission proposal at its sitting on 19 May 19953. its (d) On 6 June 1995, the Commission adopted an amended proposal4 in the light of the consultations of Parliament, the European Monetary Institute and the Economic and Social Committee. It was sent to Council by letter of 7 June 1995. (e) On 4 December 1995 the Council adopted the common position5. It introduced a number of amendments to the Commission's amended proposal; in particular it rejected 3 out of the 19 amendments inserted in the amended proposal. (f) In the plenary session of 14 December 1995, the President of the Parliament announced receipt of the Common Position. (g) On 13 March 1996, the European Parliament adopted unanimously 14 amendments to the Common Position6. In accordance with the procedure described in Article 189g(2)(d) of the EC Treaty, the Commission has to deliver an opinion on these amendments. 1 OJ No C 360, 17. 12. 1994, p. 13. 2 OJ No C 236, 11. 09. 1995, p. 1. 3 OJ No C 151, 19. 06. 1995, p. 370. 4 OJ No C 199, 03. 08. 1995, p. 16. 5 OJ No C 353, 30. 12. 1995, p. 52. 6 Text not yet published in the Official Journal. A II. POSITION TAKEN BY THE COMMISSION REPRESENTATIVE AT THE PLENARY SI TUNC. The European Parliament proposed 14 amendments to the text of the Common Position of the Council. The Commission representative accepted amendments 1, 2, 3, 4, 5, 6, 7, 8, 9, 11 and 14 practically as they stand. Furthermore, the Commission accepted amendments 10 and 12 partially or subject to modifications. The Commission representative did not accept one amendment, i. e. amendment n° 13. III. T HE COMMISSION OPINION ON AMENDMENT N° 13 VOTED BY THE EUROPEAN PARLIAMENT Amendment n°13, introducing a new paragraph 2 to Article 10 of the Common Position of the Council The purpose of the amendment is twofold : • • to state that access to redress and complaints procedures shall occur where a complaint has not been remedied or a decision has not been taken on it by the institution concerned within four weeks after the first complaint: to ensure that a list of addresses be available at all institutions carrying out cross- border credit transfers. As to the first, the Commission considers that a harmonised maximum deadline would not suit customers' needs for rapid redress under the different articles and might also be in conflict with similar deadlines contained in other provisions of the Directive, e. g. that in Article 8. As to the second, it is already satisfied by a similar requirement under the penultimate indent of Article 3. For the reasons outlined* the Commission cannot accept this amendment Common Position of the Council Amendment by Parliament (Amendment 13) Article 10(2) (new) 2* If a complaint has not been remedied or a decision has not been taken on it the first within four weeks after complaint. may approach one of the complaint and redress offices to be set up for this purpose, existing use procedures where available. complainants or may A list of addresses of such offices shall be available at all institutions carrying out credit cross-border transfers under this Directive. Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE ON CROSS-BORDER CREDIT TRANSFERS (presented by the Commission pursuant to Article 189a(2) of the EC Treaty Amended proposal for a EUROPEAN P A R L I A M E NT AND C O U N C IL DIKKCTIVI ON C R O S S - B O R D ER C R E D IT T R A N S F E RS Amendment n°l concerning Recital n°2 of the Common Position The amendment aims to insert a spécifie reference to the definitive Commission Notice on the application of the HC competition rules to cross-border credit transfer systems7, a draft of which had been issued alongside the Commission's initial proposal for a European Parliament and Council Directive on cross-border credit transfers. The insertion aims to highlight the fact that, in conformity with the Commission's Notice, greater competition in the market for cross-border credit transfers should lead to improved services and reduced prices. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 1) Recital 2 (2) Whereas it is of for individuals small paramount importance and and businesses, especially medium-sized enterprises, to be able to make credit rapidly, reliably and cheaply from one part of the Community to another; whereas greater competition in the market for cross-border credit transfers should and to lead reduced prices; improved transfers services transfers (2) Whereas it is essential for individuals and businesses, especially small and medium-sized enterprises, to be able to make credit rapidly, reliably and cheaply from one part of the Community to another; whereas, in conformity with the Commission Notice on the application of the EC competition to cross-border credit transfers, greater competition in the market for cross-border credit transfers should lead to improved services and reduced prices; rules OJ No C 251, 27. 09. 1995, p. 3. S 2. Amendment n°2 to Recital n° 7 of the Common Position of the Council Recital n°7 relates to the scope of application of the Directive. Therefore, this amendment needs to be considered in conjunction with amendment n°5 to Article 1 of the Common Position. As such, it points to an enlargement of the Directive's application, by establishing that transfers of an amount less than ECU 50. 000 are covered. This amendment is in keeping with the Commission's fundamental conviction that as high a threshold would better serve the objective of creating a fully functioning Internal Market for cross-border credit transfer services. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 2) Recital 7 (7) Whereas, in line with the objectives set out in the second recital, this Directive should apply to any credit transfer of an amount less than ECU 25. 000: whereas that amount should be increased to ECU 30. 000 two after implementation Directive; the for years dale. final this (7) Whereas, in line with the objectives set out in recital 2, this Directive should apply to any credit transfer of an amount of less than ECU 50. 000: whereas institutions should be under an obligation to refund in the case of a non-completed transfer; é Amendment n °3 concerning Recital n° 11 of the Common Position of the Council This recital relates to Article 8 of the Common Position on the refund of non- completed cross-border credit transfers and must therefore be read in conjunction therewith (and amendments n" 8 and 9 thereto). It aims to increase the minimum level of the refund to the amount of ECU 20. 000, thus improving the customer's situation; the increase is however deemed not to have a prejudicial effect on solvency requirements. Therefore the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 3) Recital 11 (11) Whereas be there refund should whereas an obligation upon institutions to refund in the event of non-execution of a transfer; credit the imposes a to obligation contingent institutions liability on which might, in the absence of a limit, have a prejudicial effect on the solvency requirement; whereas that obligation to refund should therefore be applicable to ECU 10. 000: (11) Whereas be there should failure a the event of an obligation upon institutions to refund a to in successfully credit complete transfer; whereas the obligation to refund imposes a contingent liability on institutions which might, in the a absence of any solvency prejudicial effect that requirements; obligation to refund should therefore be applicable to ECU 20. 000; on whereas limit, have ? 4. Amendment n° 4 concerning Recital n° 14a (new) of the Common Position of the Council This new recital relates to Article 10 on the settlement of disputes and, being intended as a match to the proposed amendment n° 12 to that Article, should be read in conjunction therewith. It aims to clarify in more detail the scope of Member States' responsibility to ensure that adequate and appropriate procedures exist to deal with customer's complaints relating to areas covered by the Directive. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 4) Recital 14a (new) (Ha) Whereas adequate and appropriate complaints and redress procedures relating to the areas covered by this Directive should be available the customer better to afford protection. existing procedures where available. using 5. Amendment n° 5 to Article 1 of the Common Position of the Council Amendment n° 5 relates to the scope of application of the Directive. It points to an enlargement of the Directive's application, by establishing that transfers of an amount less than ECU 50. 000 are covered. This amendment is in keeping with the Commission's fundamental conviction that as high a threshold would better serve the objective of creating a fully functioning the Internal Market Commission accepts this amendment. for cross-border credit services. Therefore, transfer Common Position of the Council Amendment by Parliament (Amendment 5) Article 1 1. The provisions of this Directive shall apply to cross-border credit transfers ordered by persons other than those covered by Article 2(a), (b) and (c) and executed by credit institutions and other institutions. 1. The provisions of this Directive shall apply to cross-border credit transfers in the currencies of the Member the States and equivalent of ECU 50. 000 ordered by persons other than those referred to in Article 2(a), (b) and (c) and executed by credit institutions and other institutions. the ECU up to Until two years after the date of Deleted. implementation of this Directive, this Directive shall apply to cross-border credit transfers in the currencies of the Member States and in ECUs of amounts less than ECU 25. 000. After that date, this Directive shall apply to cross-border credit transfers in the currencies of the Member States and in ECUs of amounts than ECU 30. 000. less 5 6. Amendment n° 6 to Article 3 of the Common Position of the Council This amendment relates to Article 3 on prior information on conditions for cross- border credit transfers. While most articles of the Directive refer to obligations falling directly on institutions, Article 3 lays down obligations on Member States. Coherently with the Commission's initial and amended proposals, the amendment aims to streamline the text of the Common Position, by setting out that the transparency requirements of Article 3 fall directly on institutions. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 6) Article 3, introduction Member States shall ensure that institutions make available to their actual and prospective customers in writing, including where appropriate by electronic means, and in a readily comprehensible form, information on for cross-border credit conditions transfers. This shall information include at least : The institution shall make available their actual and prospective to including in writing, customers electronic where appropriate by means, readily and comprehensible form, information on for cross-border credit conditions transfers. This shall information include at least : in a s* 7. Amendment n° 7 to Article 4 of the Common Position of the Council This amendment relates to Article 4 on information subsequent to a cross-border credit transfer While most articles of the Directive refer to obligations falling directly on institutions, Article 4 lays down obligations on Member States. Coherently with the Commission's initial and amended proposals, the amendment aims to streamline the text of the Common Position, by setting out that the transparency requirements of Article 4 fall directly on institutions. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 7) Article 4, introduction Member States shall ensure that institutions supply their customers, unless the latter expressly forgo this, subsequent to the execution or receipt of a cross-border credit transfer, with in writing, clear including where by electronic means, and in a readily comprehensive This information shall include at least : information appropriate form. The their institution shall supply customers, unless the latter expressly forgo this, subsequent to the execution or receipt of a cross-border credit transfer, with clear in writing, including where appropriate by electronic means, and in a readily comprehensive This information shall include at least : information form. S* 8. Amendment n° 8 to Article 8(1), first sub-paragraph of the Common Position of the Council Amendment n° 8 relates to Article 8(1) of the Common Position on the refund of non-completed cross-border credit transfers. It aims to increase the minimum level of the refund to the amount of ECU 20. 000, thus improving the customer's situation; the increase is however deemed not to have a prejudicial effect on solvency requirements. Therefore the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 8) Article 8(1), first subparagraph, introduction 1. of If, after a cross-border credit transfer 1 order has been accepted by the originator's institution, the relevant to the amounts are not credited account beneficiary's the institution, without prejudice to any other claim which may be made, the originator's institution shall credit the originator up to ECU 10. 000. with the amount of the cross-border credit transfer plus : If, after a cross-border credit transfer order has been accepted by the originator's institution, the relevant amounts are not, for any reason, the account of credited the to beneficiary's institution, without prejudice to any other claim which the originator's may be made, institution shall credit the originator up to ECU 20. 000. with the amount of the cross-border credit transfer plus : > * *- 9. Amendment n° 9 to Article 8(2) of the Common Position of the Council Amendment n° 9 relates to Article 8(2) of the Common Position on the refund of non-completed cross-border credit transfers because of non-execution by an intermediary institution chosen by the beneficiary's institution. In coherence with amendment n° 8, its aim is to set the minimum level of the refund at ECU 20. 000. In the absence of this amendment, Article 8(2) would not contemplate any explicit limitation on the level of the refund. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 9) Article 8(2) 2. By way of if derogation from paragraph 1, the cross-border credit transfer was not completed because of its non-execution by an intermediary institution chosen by the beneficiary's institution, the latter institution shall be obliged to make the the amount of the transfer available to the beneficiary. funds corresponding to 2. By way of if derogation from paragraph 1, the cross-border credit transfer was not completed because of its non-execution by an intermediary institution chosen by the beneficiary's institution, the latter institution shall be obliged to make available to the beneficiary the funds up to ECU 20. 000. 15 10. Amendment n° 10 to Article 8(3), second sub-paragraph of the Common Position of the Council Amendment n° 10 relates to Article 8(3) which deals with situations where the inability to successfully execute a transfer is attributable to defective customer information or to a mistake by an intermediary institution chosen explicitly by (he originator. The amendment aims to specify that when the institution succeeds in recovering the funds and thereby in refunding the originator, it is not obliged to refund the charges and interest accruing and may deduct the costs arising from the recovery if proved. Save for the terms "if proved", the amendment is in line with both the text of the Common Position and the Commission's thinking, according the originator's institution should not be held responsible for its customers' mistakes. On the other hand, the terms "if proved" would require the institution concerned to justify deducting costs for the recovery of funds. to which Therefore, except for and subject to the elimination of the terms "if proved". the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 10) Article 8(3), second subparagraph by the amount the has been Where recovered originator's institution, it shall credit it to the originator subject to any deduction of costs arising from the recovery. by the amount the has been Where recovered originator's institution, it shall credit it to the originator. The institutions are not obliged in this ease to refund the charges and interests accruing, and can deduct the costs arising from the recovery if proved. Text of Parliament's amendment as modified by the amount the been has Where recovered originator's institution, it shall credit it to the originator. The institutions are not the obliged in this case to refund charges and interests accruing, and can deduct the costs arising from the recovery. yiH 11. Amendment n° 11, introducing a new Article 8(3a) to the Common Position of the Council Amendment n° 11 aims to lay down explicitly an option for Member States and/or institutions to provide for a refund for amounts exceeding the minimum level set out in Article 8, paragraphs 1 and 2. The Commission is of the opinion that this amendment provides useful clarification as to the extent of Member States' and institutions' rights under the Directive. Therefore, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 11) Article 8(3 a) (new) 2& Without prejudice to paragraphs 1 and 2, Member States and/or institutions which participate in the execution of cross-border transfers may provide that refunds be made of a non-completed cross-border credit transfer, where the amount exceeds ECU 20. 000. JÎ 12. Amendment n° 12 to Article 10 of the Common Position of the Council This amendment aims to better qualify the scope of Member States' responsibility to ensure that adequate and appropriate procedures exist to deal with customers' complaints relating to the areas covered by the Directive. On the other hand, the Commission is of the opinion that drafting adjustments to the text of the amendment may be necessary, to ensure consistency with the terminology of the Common Position. The amendment may be redrafted as indicated below: Therefore, subject to such modification, the Commission accepts this amendment. Common Position of the Council Amendment by Parliament (Amendment 12) Article 10 Member States shall ensure that there are L Member States shall ensure that there adequate and effective means for the appropriate are settlement of possible disputes between an complaints and redress procedures originator and his institution or between a relating to the areas covered by this beneficiary and his institution. Directive available the customer better protection, using existing procedures where available. to afford adequate and Text of Parliament's amendment as modified "Member States shall ensure that there are adequate and effective means for the settlement of disputes ils between institution, using existing procedures where appropriate. " customer and a yfé 14. Amendment n° 14 relating to Article 11, first sub-paragraph of the Common Position of the Council Amendment n° 14 aims to reduce the deadline for implementation of the Directive to 18 months alter the date the Directive enters into force. This amendment is in keeping with the Commission's objective of ensuring that the Directive the Commission accepts this amendment. implemented within a reasonably short time. Therefore, is Common Position of the Council Amendment by Parliament (Amendment 14) Article 11(1), first subparagraph laws, regulations Member States shall bring into force and the administrative provisions necessary to comply with this Directive by. * at the latest. They shall forthwith inform the Commission thereof. laws, regulations Member States shall bring into force and the administrative provisions necessary to comply with this Directive by. * at the latest. They shall forthwith inform the Commission thereof. * Thirty months after the date this Directive enters into force. * Eighteen months after the date this Directive enters into force. ^ ISSN 0254-1475 COM(96) 172 final DOCUMENTS EN 09 10 Catalogue number : CB-CO-96-182-EN-C ISBN 92-78-03010-4 Office for Official Publications of the European Communities L-2985 Luxembourg ji

Amended proposal for a COUNCIL DIRECTIVE ON THE APPROXIMATION OF THE LAWS OF THE MEMBER STATES RELATING TO ROADWORTHINESS TESTS FOR MOTOR VEHICLES AND THEIR TRAILERS

http://publications.europa.eu/resource/cellar/ffecb9d2-8eab-430d-9c79-a3ee3cc28da3

eng

COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 18. 04 1996 COM(96) 159 final 95/0226 (SYN) Amended proposal for a COUNCIL DIRECTIVE ON THE APPROXIMATION OF THE LAWS OF THE MEMBER STATES RELATING TO ROADWORTHINESS TESTS FOR MOTOR VEHICLES AND THEIR TRAILERS (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) EXPLANATORY MEMORANDUM On 8 September 1995, the Commission sent to the Council a proposal for a Directive on the approximation of the laws of the Member States relating to roadworthiness tests for motor vehicles and their trailers (COM(95)415 final - 95/0226 (SYN)). On 22 November 19951, the Economic and Social Committee adopted its opinion which is supportive of all the objectives of the proposed Directive (consolidation with amendments, in particular the proposal for the testing of speed limitation devices). On 29 February 19962, the European Parliament approved the proposal at its first reading. The Commission accepted three of the seven requests. Furthermore, the Commission could not accept the other amendments proposed by the Parliament for the following reasons : Amendment which adds a recital la : makes reference to the Parliament's resolution on codification and the Inter-institutional Agreement on the accelerated working method for official codification. As this proposal's main purpose lies in the inclusion of speed limiter testing, the Commission cannot accept the recital which suggests that only codification is the main reason for the proposal. OJ No C 39 of 12. 02. 1996, p. 24. OJ N* C -2 Amendment which adds a recital 32a : wants the Commission to study the feasibility of extending roadworthiness tests to two and three-wheeled vehicles. The Commission saw no reason to carry out such a feasibility study as it was already prepared to accept another amendment aiming at extension of the scope of the directive to two and three-wheeled vehicles. However, this amendment was rejected in the Plenary. Amendment to Annex I. point 5 : requests to increase the minimum frequency of testing of light commercial vehicles and passenger cars from a first test after the vehicles are four years old and thereafter every two years (4,2,2,2) to a first test after they are three years old and then every year thereafter (3,1,1,1). The Commission cannot accept an increase in the testing of light commercial vehicles and passenger cars because some Member States are still, with major efforts, in the process of implementation of the minimum frequency testing scheme provided for by the Directive. However, the Directive setting only a minimum testing scheme, several other Member States already carry out tests at a higher frequency than that provided for by the Directive. Amendment to Annex II. point 8. 2. : introduces a cold start petrol emission test for pre catalyst cars and vans. This is not acceptable as cold start testing is not included in the vehicle's original approval and so the roadworthiness test could not be more severe in relation to what the vehicle was originally designed to meet. B. The Commission therefore amends its proposal as follows: Amendment n° 1 adds a new recital (12a) to ensure that testing is 'conducted methodically and to a high standard'. 3- Amendment n° 2 adds a new recital (12b) to call on the Commission to report on the 'practical application of this Directive'. Amendment n* 3 modifies article 2 of the proposal in the sense that it provides the obligation for Member States to establish authorization and control systems that ensure an acceptable quality standard for testing centres, particularly where they have the dual role of roadworthiness testing and repair. -4 Amended proposal for a COUNCIL DIRECTIVE ON THE APPROXIMATION OF THE LAWS OF THE MEMBER STATES RELATING TO ROADWORTHINESS TESTS FOR MOTOR VEHICLES AND THEIR TRAILERS The proposal from the Commission forming the subject of document COM(95)415 final 95/0226 (SYN)1 is hereby amended as follows : Initial text proposed by the Commission Amended text Amendment n° 1 Recital 12a (new) Whereas each Member State must ensure, within its own area of jurisdiction, that roadworthiness tests are conducted methodically and to a high standard; Initial text proposed by the Commission Amended text Amendment n° 2 Recital 12b (new) Whereas the Commission must monitor the practical application of this directive and report to the European Parliament and the Council at regular interval on its findings; OJ N* C 5 - Initial text proposed by the Commission Amended text Amendment n° 3 Article 2 Roadworthiness tests within the Roadworthiness tests within the meaning of this Directive shall be meaning of this Directive shall be carried out by the State or by bodies or carried out by the State, or by public establishments designated and directly organizations entrusted with the task, supervised by the State. or by bodies or establishments designated and directly supervised by the State, including duly authorized private bodies. In particular, when establishments designated as vehicle testing centres also operate as motor vehicle repair workshops, the Member States shall ensure the objectivity and high quality of vehicle testing. Remainder unchanged Done at Brussels For the Council 6- ISSN 0254-1475 COM(96) 159 final DOCUMENTS EN 06 07 Catalogue number : CB-CO-96-171-EN-C ISBN 92-78-02646-8 Office for Official Publications of the European Communities L-2985 Luxembourg '•?

1st REPORT ON THE CONSIDERATION OF CULTURAL ASPECTS IN EUROPEAN COMMUNITY ACTION

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 17. 04. 1996 COM(96) 160 final 1st REPORT ON THE CONSIDERATION OF CULTURAL ASPECTS IN EUROPEAN COMMUNITY ACTION (presented by the Commission) GENERAL INTRODUCTION In the preamble to the Treaty on European Union, signed in Maastricht on 7 February 1992, the High Contracting Parties expressed their resolve "to mark a new stage in the process of European integration undertaken with the establishment of the European communities. creating an ever closer union among the peoples of Europe. " This asserted wish to associate the peoples of Europe more closely with the process of European integration is reflected, in particular, in the creation of European citizenship ("citizenship of the Union is hereby established") and in the explicit inclusion of new areas within the jurisdiction of the Community (education, youth, culture, public health, consumer protection, etc. ). European union, the principal elements of which have been linked historically to economic and commercial activities, is thus required to deepen, over a wider basis, which is likely to increase citizens' involvement and reinforce the sense of belonging to the European Union, whilst respecting the diversity of the national and regional traditions and cultures involved. In this respect, cultural action has a major role to play. The following may be mentioned as being some of the changes brought in by the Treaty on European Union in relation to Culture: - Article 3 EC (p), which includes as one of the objectives of Community action: "a contribution to education and training of quality and to the flowering of the cultures of the Member States". - Article 92§3(d), which stipulates that the following may be regarded as compatible with the common market: "aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Community to an extent that is contrary to the common interest". - Title IX, Article 128, which provides a specific basis for the accomplishment of encouragement actions intended, while respecting national and regional diversity and at the same time bringing the common cultural heritage to the fore, to support and supplement actions in Member States in the areas specified. The establishment by the Treaty on European Union of a legal basis specific to culture signifies that Community action with regard to culture will henceforth be of a permanent nature and become an acknowledged branch of Community activity. Article 128 of the Treaty establishing the European Community as amended by 1. the Treaty on European Union Title IX, Article 128, of the Treaty on European Union was studied in depth within the context of the Commission's Communication to the European Parliament and to the Council of the European Union (COM(94) 356, of 27. 07. 94): "European Community action to promote Culture ". This Communication served as a framework for the Commission's adoption of three action programmes: "Kaleidoscope", devoted to artistic and cultural activities, "Ariane", devoted to books and reading, and "Raphael", devoted to cultural heritage. This Communication examined the following: 1/ The aims of cultural action, namely the contribution to the flowering of the cultures of introduction - page 1 k Member States, while respecting their national and regional diversity and, particularly, bringing the common cultural heritage to the fore, the encouragement of European cultural creativity, and cultural cooperation with third countries and international organisations. 2/ Areas of intervention: knowledge and dissemination of the culture and history of the European peoples; conservation of heritage, cultural exchanges, and artistic and literary creativity. 3/ Procedures for Community intervention. On the basis of the principles of subsidiarity and complementarity, intervention consists of measures to encourage cooperation between the Member States in the areas of intervention in question. Article 128 cannot serve as a legal basis for actions to harmonize the laws of the Member States. It must be emphasized that this provision introduced by the Treaty on European Union in no way affects the underlying basis of a number of legislative harmonisation documents relating to other objectives but which include a cultural dimension or have an impact in the cultural field. Consequently, the Community's capability to pursue and reinforce its action in respect of tasks assigned to it under the Treaty is not affected. The Treaty on European Union has given supplementary powers to the Community - it has not taken any away - and specifies that such harmonisation (or encouragement) initiatives must henceforth take cultural aspects into account under the terms of Article 128, Paragraph 4. 4/ The decision-making procedure adopted is that referred to in Article 189 B (co-decision), in consultation with the Regional Committee, the Council acting unanimously throughout this procedure. 2. Consideration of cultural aspects (Article 128, Paragraph 4) Article 128, Paragraph 4, stipulates that "The Community shall take cultural aspects into account in its action under other provisions of this Treaty". This is an essential provision, introduced into the Treaty by the High Contracting Parties, which reflects their desire to make Culture one of the major objectives of the Union. In effect, this provision gives expression to the European Community's obligation to consider the cultural objective in all aspects of its activity. Article 128§4 makes this consideration of "cultural aspects" a requirement which is all the more important given that such aspects remain very largely within the jurisdiction of the Member States, the latter being fully entitled to define their objectives and policies on this subject. Article 128 §4 thus increases the need for the Community legislator to reconcile the Treaty's various objectives when adopting a measure, and this requirement has certainly been implemented during the Community's history, with considerations specific to cultural policies being given due regard in the drawing-up of Community texts, for example those founding a common policy or providing the means for establishing and operating the internal market. However, with the entry into force of the Treaty on European Union, this requirement becomes compulsory and systematic, in respect of both legislative texts and common policies. In order to gauge the reality and the implications of the provisions of Article 128§4, as well as the prospects these offer for development of the Community's cultural action, the Commission announced,in the above mentioned Communication, that a report would be drawn introduction - page 2 Ih up on the cultural dimension of Community policies, this report being intended for distribution to the Parliament, Council and Committee of Regions. Moreover, the Commission had also announced that internal measures would be finalised, enabling cultural requirements to be taken into account when defining and implementing Community policies with implications for the field of culture. This report, therefore, does not relate to the Comm-unity's cultural actions based on Article 128, namely the Kaleidoscope programme (artistic events),, which entered into force in March 1996, the Ariane programme (books and reading) and the Raphael programme (heritage) currently being studied by the institutions. 3. Methodology of the report on 128§4 An examination of the way in which the various Community policies and texts have taken or take cultural aspects into account (the subject of this report) naturally depends on how Culture is defined. In point of fact, the concept of Culture is a nebulous one which can vary from one school of thought to another, from one society to another and from one era to another. It may include the Fine Arts, literature, etc. , but may also include all types of knowledge and features which characterise a society and make it possible to understand the world. A cultural area is "a space within which the association of certain cultural features is dominant" (F. Braudel). This approach can be seen again in the definition of Culture formulated at Unesco's world conference on cultural policies: "culture consists of all distinctive, spiritual and material, intellectual and emotional features which characterise a society or social group" (Mexico 1982). The scope of this definition gives a good impression of the problems involved in drawing up this report since, on this basis, the entire European structure, the Treaties themselves and all the texts they have generated may be regarded as cultural expression and works. On the contrary, to restrict "cultural aspects" to only the traditional components of what it has been agreed to term "cultural policy" (heritage, the live arts, literature, etc. ) might mean that important parameters involved in the formation of cultures are disregarded. Given that it is not for an institution to define the content of the concept of culture, this report (which cannot claim to be exhaustive) has adopted a pragmatic approach and, within the limits inherent in this approach, seeks to answer the following four questions: - Which Community texts and policies have taken and take cultural matters into account, which ones have had and may have an impact in cultural areas, and which have acquired a cultural dimension? - In texts or policies of the above type, how have the objectives pursued and objectives of a cultural nature been reconciled? To what extent have cultural aspects been taken into account? - Have the guidelines implemented and decisions taken at Community level consolidated, adversely affected or weakened cultural-policy guidelines and decisions implemented and taken at regional or national level? introduction - page 3 / - What forthcoming deadlines are there which particularly require "cultural aspects" to be taken into account? Having set the scene, this report examines the ways and means of responding to the new tasks assigned to the Community by the Treaty on European Union within the cultural field, particularly by proposing a way of taking cultural aspects into account when drawing up texts and defining and implementing policies which may have an impact in the cultural field, while respecting subsidiarity and the cultural diversities of the Member States. introduction - page 4 O Id REPORT ON THE CONSIDERATION OF CULTURAL ASPECTS IN EUROPEAN COMMUNITY ACTION (Article 128. 4 of the EC Treaty) I. CULTURE AND THE SINGLE MARKET - REGULATORY ASPECTS Chapter I: FREEDOM OF MOVEMENT AND PROFESSIONALS IN THE CULTURAL SECTOR COPYRIGHT Chapter II: Chapter III: TAXATION Chapter IV: COMPETITION POLICY Chapter V: MOVEMENT OF CULTURAL ASSETS Chapter VI: TRADITIONAL AND REGIONAL AGRICULTURAL PRODUCE Chapter VII: CULTURE IN THE JUDGMENTS OF THE COURT OF JUSTICE II. CULTURE IN THE COMMUNITY'S INTERNAL POLICIES Chapter I : CULTURE, COHESION AND BALANCED REGIONAL DEVELOPMENT 1. 2. 3. Culture and regional programmes Objective 1 regions • Objective 2 regions • • Objective 5 regions Community initiative programmes with a regional and cultural aim Article 10 of the ERDF rules Chapter II : CULTURE, SOCIAL AND HUMAN RESOURCES POLICY 1. 2. Culture - employment and social cohesion Culture and human resources introduction - page 5 l-e Chapter III : CULTURE AND ADVANCED TECHNOLOGIES 1. 2. Advanced Information and Communication Technologies Content industry and information market Chapter IV : CULTURE AND OTHER INTERNAL POLICIES 1. 2. 3. 4. 5. 6. Environment and culture Tourism and culture Research and culture Small and Medium Enterprises and culture Social economics and culture Community action to promote European town-twinning III. AUDIOVISUAL POLICY Chapter I : REGULATORY ASPECTS Chapter II : SUPPORT ACTIONS IV. CULTURE IN COMMUNITY FOREIGN RELATIONS Chapter I : Chapter II : COMMERCIAL POLICY EXTERNAL COOPERATION ACTIONS V. CONCLUSIONS introduction - page 6 PART I : CULTURE AND THE SINGLE MARKET - REGULATORY ASPECTS This part is an examination of how cultural aspects are taken into account in drawing up Community law, its aim being to analyse how the Community has reconciled the Union's general objectives with cultural considerations which may sometimes be out of step with the legal obligations deriving from implementation of the Treaty. The priority of this examination has been to tackle topics directly affecting the cultural sector in the principal areas of Community law: the four fundamental liberties of the Treaty: freedom of movement of people, goods, services and capital, copyright, taxation, competition policy, the movement of cultural assets. Consideration has been given to derived Community law texts and the possible role of the decisions of the Court of Justice in the preparation of these texts has been clarified. Moreover, it was thought useful to conduct a census of the principal judgments showing how the Court has arbitrated in the various cases which have included a cultural dimension. Each chapter in this part includes an evaluation of the degree of consideration given to cultural aspects and an indication of the principal points of convergence in the future, when such considerations will be necessary. In effect, it should be emphasized that virtually all the texts and judgments examined relate to the time before the introduction of Article 128 into the Treaty on European Union. Chapter I : FREEDOM OF MOVEMENT AND PROFESSIONALS IN THE CULTURAL SECTOR Chapter II : COPYRIGHT Chapter III : TAXATION Chapter IV : COMPETITION POLICY Chapter V : MOVEMENT OF CULTURAL ASSETS Chapter VI : TRADITIONAL AND REGIONAL AGRICULTURAL PRODUCE Chapter VII : CULTURE IN THE JUDGMENTS OF THE COURT OF JUSTICE CHAPTER I: FREEDOM OF MOVEMENT AND PROFESSIONALS IN THE CULTURAL SECTOR Community citizens are free to move between Member States or to stay in a Member State other than that in which they reside. In particular, this right of abode allows any Community citizen1 to seek and carry on paid or unpaid work, regardless of the field of activity envisaged. Professionals in the cultural sector receive full benefit from the fundamental Community principle of the freedom of movement of people. 1/ * The principles Freedom of movement for workers (Article 48 et seq. of the EC Treaty Freedom of movement of workers, referred to in Article 48 of the EC Treaty, entails the abolition of any discrimination based on nationality as regards employment, remuneration and other conditions of work. However, for reasons of public order, public safety and public health, certain limitations are possible. Moreover, the legislator has included a reservation concerning employment in the public service (Art. 48. 4). The Court of Justice of the European Communities has had the occasion to express an opinion on the notion of employment in the public service and regarded this exception as concerning only employment which includes direct or indirect participation in "the exercise of public power" or functions whose object is "to safeguard the general interests of the State" or of public authorities2. In the wake of this judgment, a number of Member States amended their regulations relating to the conditions of access to employment in the public service. The sectors in the cultural field which have been most affected by this liberalisation are radio/television and state education. * Freedom of movement of self-employed persons: the right of establishment (Art. 52 et seq. of the EC Treaty) and the freedom to provide services (Art. 59 et seq. of the EC Treaty) The right of establishment presupposes the setting-up of a professional establishment, by way of principal or secondary activity, in a Member State other than the state of residence, in order to carry on a non-remunerated activity in that state. The freedom to provide services presupposes the simple provision of a service for remuneration without the setting-up of a professional establishment of a permanent or long- term type. 'Any person holding the nationality of one of the Member States 2Two judgments of 17. 12. 80 and 26. 5. 82, Commission c/Belgium part I - page 1 Just like the freedom of movement of workers, the right of establishment and the freedom to provide services may be restricted for reasons of public order, public safety and public health and do not, directly and specifically, include activities involved in the exercise of official- authority powers. The Court of Justice has also interpreted in a restrictive manner the exception deriving from the exercise of official-authority power by distinguishing the notion of activity from the notion of profession. Thus, the notion of participation in the exercise of official-authority power cannot constitute an obstacle to access to a profession as a whole3. Whether persons are self-employed or not, the laws of the Member States must first guarantee equality of treatment, i. e. they must prohibit any discrimination on the basis of nationality. Moreover, restrictions which can be applied without distinction are also incompatible with these fundamental liberties recognised by the Treaty if they are not justified by a pressing reason of general interest which does not receive equivalent treatment in the country of establishment of the operator, if they are unsuitable for achieving the objective pursued and if they are excessive vis-à-vis the required objective (namely, if they can be replaced by less restricting measures). Among the restrictions which are justified by objective considerations motivated by the general interest, certain imperatives have been recognised by the Court4. 2/ Flanking measures The freedom of movement of self-employed persons or workers would not be fully operational were it not accompanied by the following complementary measures: mutual recognition of qualifications; coordination of laws, regulations and administrative provisions relating to access to and the carrying-on of activities of self-employed persons; coordination of the laws, regulations and administrative provisions relating to social security. A number of sector-specific directives were adopted but they related essentially to the medical and paramedical professions. In relation to the non-medical professions and of interest to the cultural sector is the following: - the directive dated 10. 6. 855, relating to architects and "referring to the mutual recognition of diplomas, certificates and other qualifications in the field of architecture and including measures intended to facilitate the exercising of the right 3M Reyners" judgment of the Court of Justice of the European Communities, dated 21. 6. 74 4 See Chapter VII, pages 24 to 27. OJECC223, 21. 8. 85 part I - page 2 5 of establishment and of the freedom to provide services". Subsequently, the Community institutions decided to dispense with the case-by-case method, replacing this with a general recognition system. To this end, two directives were adopted: the first one, dated 21. 12. 88 (in force from 1. 1. 91), aims to institute a system for recognition of diplomas from higher education whose duration is equal or equivalent to at least three years; the second, adopted on 24. 7. 92 (in force since 18. 6. 94), relates to studies lasting less than three years and to certificates of professional competence and certificates of competence issued within the context of secondary, general or vocational education. These two directives have come into being only in the absence of a sector-specific directive and their aim is to facilitate the carrying-on of all professional activities which are subject, in the host state, to the possession of a qualification, i. e. the regulated professions. This system is based on the principle of mutual trust. However, if major discrepancies between training systems exist (in respect of content and duration), the host state may impose compensation measures, either an adaptation stage or an aptitude test. In February 1996, the Commission approved a report on the operation of the general system for recognition of higher-education diplomas, for the period 1991-94, in which it notes that this new system is operating satisfactorily. In the cultural sector, in the vast majority of cases, the regulated professions are covered by the general system of recognition. In France, for example, auctioneers, as a regulated profession, are covered by the general system of recognition. To this end, a directive dated 21. 12. 90 abolished the nationality condition. As regards social security, a Community regulation dated 14. 6. 71, supplemented by a regulation dated 2. 6. 83, coordinates the various national systems which are applicable to self- employed persons or workers moving about within the Community. The Community regulation excludes "social and medical assistance" which is reserved for nationals. Cultural workers and artists moving within the Community are entirely covered by these regulations. % + Of. $ j)e + Given these various factors, it can be seen that the Community is constantly striving to make the freedom of movement of persons carrying on an economic activity fully effective and that this is applied satisfactorily to professionals involved in the cultural field. Nevertheless, certain problems specific to such professionals have led Culture Ministers to consider the special context in which cultural professions are pursued, going so far as to evoke the idea of an artists' statute. Although the vast majority of Member States have indicated their interest as regards the situation of the artistic professions (direct taxation, social situation, etc. ), they have insisted on the fact that they regarded these matters as falling under the part I - page 3 6 jurisdiction of the Member States and, at this stage, saw no justification for Community action, particularly on the grounds of the principle of subsidiarity6. Within the general context of freedom of movement, the Commission has set up a "high-level working group on the freedom of movement of persons", whose task is to draw up a report, before the end of 1996, on all the problems (legal, administrative and practical) encountered by citizens in the exercise of their right to work and establishment in another Member State. On the basis, particularly, of Article 128 §4, it will certainly pay great attention to the problems which appear to be of specific interest to the cultural sector. Informal Antwerp Council, 19 and 20 September 1993 part I - page 4 7 CHAPTER II: COPYRIGHT AND RELATED RIGHTS There are both economic and cultural aspects to copyright, the former relating to the author's right to derive a financial advantage from the economic exploitation of his work, and the latter relating to the fact that they promote intellectual and artistic creation. Generally speaking, copyright is defined as an exclusive right to exploit a literary, musical or artistic work and is made up of prerogatives of a patrimonial and moral nature. In terms of patrimony, the copyright holder essentially benefits from two prerogatives: authorising the representation (direct communication to the public) or the reproduction of his work (physical embodiment of the work via any process). The author also benefits from prerogatives pertaining to moral rights, such as the right to oppose any distortion of his work or the right to claim authorship of it, which are justified by the fact that the work is a reflection of the author's personality. Related rights are rights similar to those of copyright which aim to protect certain artistic professions where a creative activity in the strict sense of the term is not pursued (such as interpreting or performing artists, record producers and broadcasting bodies). The emergence of new technologies and the achievement of the internal market in 1992 have spurred the Community into action in this field. 1. Community acts The Community's work in this field began with the adoption, in 1988, of a Green Paper on copyright and the technological challenge7 (which was essentially an economic analysis) but above all with the adoption, in 1990, of a working plan8 in which the Commission defines a new approach incorporating the dual cultural and economic nature of copyright. This new approach emphasizes, in particular, that any harmonisation of copyright and related rights must take place on the basis of an increased level of protection, owing to the fact that they are essential to cultural creativity and the fact that their protection makes it possible to guarantee maintenance and development of creativity in the interests of authors, the cultural industries, consumers and the community as a whole. The Community, in effect, tended to strengthen copyright protection and other rights (upward harmonisation). It should be emphasized that sensitivities specific to the cultural field led the Commission to embark on a number of consultations with professional circles before any harmonisation proposal. 7COM(88) 172 final, 7. 6. 1 Following up the Green Paper, Commission working plan in the field of copyright and related rights. COM(90)584 final, dated 17. 1. 91 part I - page 5 8 Up to the present time, a number of directives aimed not only at a high and effective level of protection, but also offering a legal framework favourable to the development of intellectual and artistic creativity, have been adopted. Currently, these directives form the first basic layer of measures defining a high degree of protection, at Community level, in the field of copyright and related rights. The directives adopted are as follows: 1. Directive relating to the legal protection of computer programmes, dated 14. 5. 919 The aim of this directive is to grant copyright protection to computer programs, in any form, as literary works. It defines those who should benefit from the protected article, the exclusive rights of the protected persons to authorise or prohibit certain acts, and the duration of protection (a duration of 50 years increased to 70 years by the "duration" directive mentioned below). 2. Directive relating to the right to hire and to lend and to certain rights similar to copyright in the field of intellectual property, dated 19. 11. 9210 This directive provides, on the one hand, for the exclusive rights to hire and to lend works protected by copyright, for certain groups of titleholders (authors, interpreting or performing artistes, record producers and film producers) and, on the other hand, rights of embodiment, reproduction, distribution, broadcasting and communication to the public in the field of protection of related rights. 3. Directive relating to the coordination of certain rules in respect of copyright and rights related to copyright which are applicable to satellite broadcasting and cable retransmission, dated 27. 9. 93n In the field of intellectual property, this directive supplements the directive dated 3. 10. 89 ("Television without Frontiers")12 and aims to harmonise the legal framework of the single audiovisual area by, on the one hand, establishing the principle of the contractual acquisition of satellite communication rights in a single place and, on the other hand, that of collective management for the negotiation of cable retransmission rights. 9 91/250 OJEC L 122/42, of 17 May 1991 10 92/100/EEC. OJEC No. L 346/61, dated 27. 11. 92 11 93/83/EEC. OJEC No. L 248/15, dated 6. 10. 93 12 Directive 89/552/EEC aimed at the coordination of certain laws, regulations and administrative provisions of the Member States which relate to the carrying-on of TV broadcasting activities. OJEC No. L 298, dated 17. 10. 89 part I - page 6 9 4. Directive relating to the harmonisation of the duration of protection of copyright and certain related rights, dated 29. 10. 93'3 This directive harmonises the duration of copyright protection over a period of 70 years after the author's death or 70 years after the work has been lawfully made accessible to the public. The duration of protection for related rights is 50 years after the operative event. 5. Proposal for a directive relating to the legal protection of databases This proposal was the subject of a joint Council position on 10. 7. 95 and aims to harmonise the copyright applicable to databases of any type (electronic or non electronic). It also establishes a new economic right (right sui generis) to protect the financial and professional investment of a database manufacturer, thereby giving him the opportunity to prevent the unauthorised extraction and/or re-use of all or of a substantial part of the contents of the database. 2. Evolution The Commission is pursuing its work on other topics related to intellectual property and mentioned in its 1991 "Work Programme" {cf. supra), such as the private copying of sound and audiovisual works, the right to follow property, reproduction, collective management and, finally, moral rights. Moreover, on 19. 7. 95, the Commission adopted a Green Paper14 on copyright and related rights in the Information Society so as to generate general consideration of whether, in this context, further legislative initiatives are required in the following fields: - applicable law - exhaustion of rights - the right of reproduction - communication to the public - dissemination and digital broadcasting rights - moral rights - the exploitation of rights - systems for identifying and protecting works In the light of these various developments, it can be seen that Community action, within the context of the internal market, in the field of copyright and related rights, has not been to the detriment of cultural interests but, on the contrary, has guaranteed a high and effective degree of protection for intellectual and artistic creation. As regards topics still to be tackled, the Community will endeavour, as it has done hitherto, to maintain this high level of protection. 13 93/98/EEC. OJEC No. L 290/9, dated 24. 11. 93 14 COM (95) 382 final part I - page 7 10 CHAPTER III : TAXATION The achievement of the single market and the abolition of intra-Community taxation and customs barriers that this involved have led the Community to substantially modify the turnover taxation rules applicable to intra-Community acquisitions and to bring the rates of VAT and excise duty in force in each Member State more into alignment. On 1 January 1993, the Community established a transitional stage intended to bring indirect taxes into line15. This stage makes it possible to move towards progressive convergence of rates of VAT and excise duty in force in the various Member States. To this end, on 19 October 199216, the Community adopted a directive amending Directive 77/38817. In accordance with this text, the Member States may have recourse to only two categories of rates, a reduced rate which may not be less than 5% and a normal rate which may not be less than 15%18. This directive also provides for temporary exemption from the general system and a list of goods and services to which a reduced rate may be applied. For taxable persons, the transitional system thus set up maintains the principle of taxation of goods in the country of consumption whilst permitting the abolition of border controls. As regards the definitive taxation system, which should be based on the principle of taxation in the country of origin, the Commission will submit its basic ideas for the establishment of the definitive system, together with a possible timetable for its implementation during 1996. 1. Community acts A - Cultural goods and services are liable to VAT. It should be emphasized that the European legislator has given Member States the facility to apply the reduced rate of VAT (to the majority of these goods and services), in order, in particular, to promote artistic and intellectual creativity and access to culture. The reduced rate of VAT is thus applicable to: 15ECOFIN Council, dated 18. 12. 89 "'Directive 92/77/EEC OJEC No. L 384/47, dated 31. 10. 92, relating to VAT simplification measures 17Sixth Council directive, dated 17. 5. 77, OJEC No. L145/1, of 13. 6. 77, relating to the harmonisation of the laws of the Member States relating to turnover taxes 18The Commission has recently submitted a proposal for a directive amending Directive 77/388/EEC relating to the common VAT system (level of the normal rate). This proposal makes provision for keeping the normal rate of VAT within the following band: minimum rate of 15% and maximum rate of 25%. part I - page 8 11 - books and magazines - copyright and related rights - cultural events and exhibitions - cinema, museum, concert-hall and theatre tickets - television services (public fee, subscription) On the other hand, the normal rate of VAT applies to other cultural goods and services, such as: - records, - audio cassettes, - video cassettes, - CD Roms and CDIs and also - conservation and restoration work on monuments. Finally, provision has been made for a number of exemptions up to 1997 for those States which, on 1 January 1991, were applying rates below the reduced rate of VAT: Belgium : rate of 0% for daily papers and periodicals, Denmark : 0% rate for daily papers, Ireland : 0% rate for books, France : 2. 1% rate on some printed matter and books, United Kingdom : 0% rate on books, daily papers and periodicals. B - On 14 February 1994, the Council supplemented this mechanism with a directive relating to secondhand goods, works of art, antiques and collections. This directive, which came into force on 1 January 1995, relates to goods which are the subject of multiple transactions and which, given that at each stage of the transaction they generate fiscal revenue, could give rise to a risk of dual taxation between Member States. The essential elements of this new system may be summarised as follows: 1. 2. 3. Private sales are not subject to VAT. For professionals, the principle of taxation is that VAT is charged on the vendor's margin (difference between the price at which the vendor bought the goods and the price at which he resells them), in order to avoid cumulative taxation. Sales at public auctions organised by auctioneers benefit from the same provisions. The rate of VAT on the resale margin is the normal rate of the Member State in question (at least 15%). In the case of sales made directly by the artists or their heirs, a reduced rate may be applied and is that of the Member State in question (at least 5%). As regards applicable taxation rates, the following factors have been taken into account: part I - page 9 12 the cultural interest: certain goods or services of special cultural interest can benefit from the reduced rate of VAT. The Member States can apply the reduced rate particularly to works of art, collections or antiques. By way of temporary derogation (up to 30. 6. 99), the United Kingdom can apply a specific rate of 2. 5% to certain of these imports. The risks of part of the art market moving to third countries: modifications in the levels of taxes and charges applied in the Community should not, in effect, lead to certain transactions moving to third countries nor to distortions in treatment between imports and operations within the Community. increased third-country competition: any modification of the level of taxes and charges applied in the Community risks giving rise to a flight of transactions towards third countries owing to the great sensitivity of the art market and the high unit price of the goods exchanged; competition between the Member States: not all the Member States have the same system for taxing works of art, for example the United Kingdom has a special system enabling it to exempt imported works of art, antiques and collections from VAT provided they were produced before 1973. 2. The current debate Establishing the Community's indirect taxation system has taken account, apparently, of the specific cultural nature of certain goods and services by giving all the Member States the possibility of applying a reduced rate. As regards sales of records, cassettes, CD ROM and CDI, European professional circles (video and multimedia publishers, record producers, etc. ) argue in favour of including these goods in the list of goods and services which are able to benefit from the reduced rate, for the following reasons: - the application of different rates (5 and 15% minima) between, on the one hand, cinema and television and, on the other hand, video, creates distortion of competition to the detriment of video, although these are simply different methods of transmitting the same films or programmes; - video and multimedia supports are new means of dissemination and access to culture which should be encouraged. Professional circles are therefore asking the Community to expand the list of "reduced rates" to cover video cassettes, multimedia supports and disks, with a view to establishing the definitive of VAT system. Currently, the majority of the Member States appear unwilling to approve such a reduction in the rate of VAT. To date, the Commission has received formal notification of only two requests for revision along such lines. Since the application of a reduced rate of VAT is part I - page 10 13 optional, it should be emphasized that any expansion of the field of application of the reduced rate risks leading to a multiplication of the differences between the laws of the Member States and, consequently, giving rise to considerable deflection of trade. Moreover, delimitation in the area of indirect taxation of goods and services likely to benefit from a reduced rate can be envisaged only on the basis of one of the following criteria: - either the actual nature of the goods or services, in which case the applicable rate is independent of the cultural nature of the goods or services (the case of books nowadays illustrates this question of arbitration between the reduced rate and the normal rate); - or the cultural content of the goods or services, which then requires differences in treatment to come into operation within one and the same category of goods and services, to the detriment of the simplicity of the taxation system. Moreover, the distinction between cultural activity and leisure activity is particularly difficult to establish. Finally, if the principle of neutrality of the tax on the various dissemination means and supports has effectively to be guaranteed, its application presupposes that identical provisions will be applied to identical situations. As regards conservation and restoration work on monuments, owing to their importance in dissemination and providing access to culture for the European citizen, a reduced rate has also been requested by non-governmental organisations active in the heritage field. However, given the nature and the character of these items, it is noted that the existence of different rates in the various Member States does not appear significantly to disrupt the functioning of the internal market (no risks of deflection of trade)19. The Commission's report on the application of reduced rates, for the initial years of implementation of the 1992 directive, concluded that, at the moment, there was no distortion of competition nor deflection of trade to justify adding cultural goods and/or services to the reduced-rate list20. 19 At the Council of Culture Ministers (informal meeting at Wiirtzburg, 1993), the Ministers had an initial exchange of views on this question. 20 Commission report to the Council in accordance with Articles 12§4 and 28§2. g, of the Sixth VAT Directive (COM (94) 584). part I - page 11 4 CHAPTER IV: COMPETITION POLICY Competition policy plays a significant role in promoting harmonious development of economic activities, continuous and balanced expansion, increased stability and accelerated improvement in the standard of living in the Community. Therefore, it contributes to guaranteeing the efficient functioning of the internal market, while promoting the protection of consumers, workers and employers. This policy includes: - rules applying to undertakings (Articles 85 et seq. of the Treaty): the following are therefore prohibited - on the one hand, all agreements between undertakings, and asociations of undertakings, which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market and, on the other hand, any abuse of a dominant position (Article 86). Nevertheless, under certain very specific conditions, the Treaty makes provision for an exception to this principle of prohibition by authorising certain agreements between undertakings21. Moreover, it should be recalled that,on 21. 12. 89, the Council adopted a regulation (4069/89) relating to the monitoring of regrouping operations between companies. Under this regulation, the Commission was empowered to monitor "Community-wide" regrouping operations. According to Article 3 thereof, regrouping is understood to mean "the possibility of exerting a decisive influence on the activity of a company" (mergers, etc. ). - rules applying to the States and particularly to aids granted by the States (Articles 92 et seq. of the Treaty): the following are regarded as incompatible with the common market - aids which would affect trade between the States and which distort or threaten to distort competition by favouring certain firms or certain products. However, the principle of incompatibility of State aids with the internal market is far from being absolute. Article 92, in effect, makes provision for types of aid which are compatible or may be regarded as compatible with the common market. Article 128§4 notes a specific point of correspondence with Article 92§3d insofar as the latter makes provision for the following to be regarded as compatible with the common market, namely "aid intended to promote culture and the conservation of heritage when it does not adversely affect the conditions of trade and competition within the Community to an extent detrimental to the common interest". 2'Article 85. 3 of the Treaty makes provision for an exemption to be granted in the case of agreements which fulfil the following four conditions: - if they contribute to improving production or distribution, - if they promote technical or economic progress, - if they allow consumers a fair share of the resulting benefit, - if they do not impose restrictions which are not indispensable to the attainment of the objectives of the agreement. part I - page 12 15 If cultural goods and services exhibit special features which are recognized as such, the cultural sector, in its economic aspects, is subject to the rules of competition as are the other sectors. It is therefore necessary, for this sector also, to guarantee that competition is not distorted and that the provision of aid out of proportion to the cultural aims pursued is avoided. The Commission's competition policy has taken into account and continues to take into account features specific to the field of culture. In this context, this policy makes it possible to provide suitable support for the cultural actions of the Member States. In effect, the Commission has a record of having authorised State aids intended to promote culture and heritage conservation, while ensuring compliance with the fundamental rules of the internal market and of competition. 1/ Rules of competition applying to undertakings In the cultural field, these rules of competition relate more particularly to the publishing and audiovisual sector. A/The publishing sector 1. The current situation As regards books and, more particularly, conventional systems for fixing book prices, the Commission has always striven to adopt a pragmatic attitude in cases submitted to it, given the specific nature of books and owing to the introduction into the Treaty of the new Article 128, referring to culture. However, the Commission must be vigilant and ensure that the rules of the Treaty, and particularly Article 85, are complied with. To date, the Commission has been advised of four exemption requests and has refused two (VBVB/VBBB and NBA cases). The first decision was confirmed by the Court of Justice and the second was confirmed as regards aspect 85. 1 (ban on understandings), but rejected as regards the application of Article 85. 3 (exemption). In the other cases and again in the NBA case, the Commission, which has to carry out an economic and legal analysis, is still studying the possibility of whether or not to grant an exemption. Moreover, it should be remembered that the legislative systems for fixing book prices are subject to the rules relating to the free movement of goods (Article 30 et seq. ). To date, only two Member States (France and Spain) have drawn up a regulation of this type. Although the Spanish regulation has not proved to be incompatible with Community law, the French regulation has had to be modified in order to conform to Community rules. 2. The current debate Within a Community context subject to much debate, in which publishers, booksellers, readers/consumers appear divided, the Commission, after in-depth analysis of the general problem of book prices, arrived at the conclusion that it is currently inappropriate to submit a proposal on the restrction of book prices. Moreover, it pointed out that, culturally speaking, the question of book prices is only one factor to be taken into account in seeking and part I - page 13 16 implementing a global policy in favour of books and reading. Such a policy must be aimed both at encouraging a wide readership, based on a diversified supply, the guarantee of genuine access to culture, as well as supporting creation and maintaining a productive publishing sector. In addition, the dynamic nature of the book sector also depends on other factors, such as promotion, education, training, regional development measures, etc. B/ The audiovisual sector Articles 85 and 86 of the Treaty were not designed to protect pluralism in the media or any other objective of a cultural nature. However, the Commission has been skilful in using the legal instruments at its disposal as regards competition to indirectly guarantee the maintenance of market competition structures and to contribute to the diversity of the programmes offered to the public. A few cases can be used to illustrate the Commission's desire to monitor strict application of the rules of competition while taking account, particularly, of their effects on pluralism: *The MSG Media Service in which the Commission prohibited the setting-up of a joint venture between major groups such as Bertelsmann and Deutsche Bundespost Telekom, on the basis that such a joint venture would have the result of cutting off access to the German pay-TV market and thus limit access to the market for rival suppliers; T he case of Nordic Satellite Distribution in which a comparable result was obtained by means of a refusal on the part of the Commission; *the Holland Media Group (HMG) in which the Commission required the parties (in particular RTL4 and RTL5, as well as the VERONICA channel) to seek appropriate measures to guarantee that the Dutch market would remain open to rival suppliers. The Commission also gave a ruling in its communication of 21. 2. 90 on the importance given to respect for pluralism in the media sector. Therefore, it was stated that Community audiovisual policy must also aim to ensure that the development of the audiovisual sector does not take place to the detriment of pluralism but, on the contrary, that it makes a contribution to strengthening the latter by favouring, in particular, the diversity of the programmes offered to the public. However, respect for pluralism has not been the sole preoccupation in this area, since the Commission has also handed down several decisions stating that access to major events, including cultural events, must be ensured in order to guarantee public access to information. Therefore, by way of example, the MGM/UA case may be mentioned, in which the Commission examined whether, on the basis of Articles 85 and 86 of the Treaty, the exclusive rights granted were or were not excessive in this sphere. However, this consideration of cultural aspects is limited owing to the nature of the rules of competition. It is thus unlikely that protection of a cultural objective can, on its own, constitute the basis for an individual exemption. However, it should be noted that other criteria not expressly mentioned in Article 85-3 have already been taken into account by the Commission, namely the social criterion in the case of the restructuring of cartels in crisis (eg. part I - page 14 17 decisions relating to the agreement on synthetic fibres 89/340) or, more recently, in connection with environmental protection. It is not, therefore, totally out of the question that cultural criteria may, in the future, be directly considered by the Commission, although the principal objective of the internal market will not be questioned. 11/ Policy relating to State subsidies in the cultural field A/ Aid to the cultural sector The present situation The Commission has adopted a series of decisions clarifying its position as regards subsidies to culture. Thus, the promotion of cultural diversity has been accepted as justification for the support granted, particularly to the plastic arts and book exports. Generally speaking, aid to the cultural sector poses virtually no problem from the competition- policy standpoint. However, the Commission has had to oppose such aid, not on account of its nature but because the conditions under which it has been granted are often contrary to the fundamental principles of the European Community. This was the case, for example, with aid systems contravening the fundamental principle of non-discrimination on the basis of nationality, decreed in new Article 6 of the TEU, citizens of the Member States having, in effect, to benefit from the same treatment as those from the country granting the aid. For example, the Commission has rejected a condition imposed by the German government, under which the producer of a film receiving aid must be a German citizen or a person from a German culture. The current debate As a result of the inclusion of Article 128 in the Treaty and the provision relating to aid to culture (Art. 92. 3. d), and in order to provide further clarifications, the Commission has begun to consider the possibility of adopting guidelines in the field. On this basis, certain types of aid granted to activities which do not distort competition and do not significantly affect trade between Member States (theatres, art galleries, etc. ) could be authorised without restriction insofar as they are offered to all the potential beneficiaries in the Member State in question. B/ Aid to the audiovisual sector Television and film production subsidies The Member States promote the development of their audiovisual industries in various ways, particularly through direct grants for specific film productions, tax incentives for investment in companies in this sector, funding of training and support for film festivals. Such measures are generally consistent, as regards their objectives, with the Community's own audiovisual policy, which seeks, inter alia, to promote the competitiveness of the European programmes industry. Support measures may be local, regional or national. Insofar as they do not distort competition part I - page 15 18 or affect trade between Member States to any significant extent, Article 92 of the Treaty establishing the European Community, which provides rules for aid granted by States, does not apply and the Commission has no cause to intervene. However, as economic players on the relevant market frequently find themselves in competition, certain aid measures for the film and television production sectors may have an appreciable effect on competition and trade between Member States. Already in the past, the promotion of cultural diversity has been accepted by the Commission as a justification for state aid to the film industry and the production of television programmes, provided the aid did not cause undue distortion of competition. The Treaty on European Union, in Article 3 (p), provides that "The Community shall contribute to the flowering of the cultures of the Member States". In application of this principle, Article 92 (3) (d) was included in the EC Treaty together with Article 128. However, this does not necessarily imply a fundamental shift in policy. Article 92 (3) provides that aid to promote culture and heritage conservation, where such aid does not affect trading conditions and competition in the Community to an extent that is contrary to the common interest, may be regarded as compatible with the common market. The Commission had already taken such consideration into account when assessing aid in this sector. In its future assessment of state aid to the audiovisual sector, the Commission will continue to seek a balance between the requirements of cultural and heritage promotion, the openness of trade and competition in the single market and the need to avoid undue distortions. Funding of public service broadcasters Under the rules of state aid, the specific question of the funding of public service broadcasters has been submitted to the Commission by private broadcasters from France, Spain and Portugal. The complaints are that public funding of public broadcasters through consumer levies, direct subsidies or periodic capital injections confer unfair advantages on them. The issue is of great importance and interest throughout the Community. The Commission has asked external consultants to study the balance between the funding of public broadcasters by the State. The Commission will consider the cases pending in the light of this study (which also includes the new Member States). Guidelines To further clarify its policy in this field the Commission is currently working on guidelines on state aid for culture, the arts and the audiovisual sector in which it confirms its favourable approach to aid for television programmes and film production, including videos and musical recordings, as long as the aid is shown to be necessary for the promotion and/or the preservation of European culture and is proportional to these goals. Moreover, the Commission will verify that there is no discrimination on grounds of nationality between nationals of Member States of the European Union and no impediments to the free flow of goods, services, people and ideas throughout the European Union. Where cultural considerations are paramount, the Commission will adopt a favourable approach to support of cultural heritage by means of subsidies for the distribution of television programmes, videos, etc. The Commission believes that public service broadcasters have a part I - page 16 19 crucial role to play in the promotion of regional, national and European cultures and the flowering of Europe's audiovisual industry. The Commission is conscious that the function of the public service is to supply the population with information, education, culture and entertainment as well as sports. The Commission is in favour of the development of both public- service and commercial broadcasters. It will seek to strike the right balance to attain this dual objective. Conclusions Article 92 (3)(d) takes specific account of cultural objectives. The European film and television programme production and distribution industries represent an important pat of the European cultural landscape. The promotion of cultural diversity is accepted by the Commission as a justification for state aid to the film industry and the production of television programmes, provided the aid does not cause undue distortions of competition. CHAPTER V : CULTURAL ASSETS IN THE INTERNAL MARKET Freedom of movement, a fundamental principle of the EC Treaty and a condition for the achievement of the Single Market, also relates to cultural assets. The provisions relating to this subject in the Treaty (and particularly Arts. 9, 10, 12 et seq. - customs duties - and Articles 30 to 34 - quantitative restrictions, etc. ) are thus applicable to them. Nevertheless, the principle of the free movement of cultural assets must be reconciled with the legitimate protection of our countries' cultural heritage and, more particularly, of their national treasures. Also, in Article 36 of the Treaty, provision is made for the Member States to be able to avoid the provisions of Arts. 30 to 34 by adopting or maintaining prohibitions, restrictions or measures having equivalent effect on the import, export or transit within the Community of national treasures having an artistic, historic or archaelogical value22. Article 36 is an exception to the principle of freedom of movement provided by the provisions of the article and must therefore be interpreted severely. Within the limits set by Community law, each Member State is, in principle, empowered to determine the requirements intended to ensure the objectives referred to in Article 36, in this case the definition of national treasures on its territory. It may do this in the manner it has chosen and according to its scale of values, provided this scale is set at a reasonable level and is of such a nature as to reconcile protection of heritage and freedom of movement. 22 It should be noted that a provision similar to Art. 36 is provided in the rule which, since 1970, has established a common system in the Community regarding exports to third countries (rule 2609/69, Art. 11). Thus, the exception provided in Art. 36 in respect of intra-Community trade also applies to exports to third countries. These restrictions on trade do not conflict with the GATT rules (Art. 20, same reference to national treasures). part I - page 17 The power given to the Member States under Art. 36, however, is not arbitrary. It must take into account the major principles enumerated by Community law for its application, which is controlled by the Community institutions. I. Problems relating to the definition of the notion of national treasures and cultural assets The notion of national treasures is not easy to define and it is difficult, at the moment, to pinpoint common criteria for determining the scope of this notion. The laws and practices of the Member States are an ill-matched assortment, this fact being explained by divergent interests and cultural traditions. It is possible to distinguish two major trends in the interpretation of the notion of national treasure: An extensive interpretation applying to countries which export cultural assets and which have a rich heritage of which there is rarely a comprehensive record; A restrictive interpretation applying to countries which import cultural assets and are poorer in terms of heritage, and where the major art markets are usually located. The difficulty involved in defining the setting of the notion of cultural assets, gives rise to a problem when determining, in an international or Community context, the scope and extent of reciprocal obligations between countries aimed at cooperation with a view to protecting such assets23. II. Community flanking measures relating to cultural assets and achievement of the single market The achievement of the single market required the abolition, from 1 January 1993, of all intra- Community border controls, an obligation to which there is no exception, regardless of the product in question. Also, regarding cultural assets, the Member States retain, on the one hand, by virtue of and within the limits of Article 36, the right to define their national treasures and, on the other hand, the possibility of taking the necessary measures to ensure protection of such treasures. However, they may no longer have recourse to internal border controls to guarantee the effectiveness of these measures. 23 This problem has been a stumbling block in negotiations on the principal texts or conventions aimed at cooperation regarding the protection of assets or the prevention of illegal trade (1970: Unesco Convention relating to the measures to be taken to prevent the importation, exportation and illegal transfer of ownership of cultural assets. 1985: Council of Europe - European Convention on offences relating to cultural assets. 1980 and following years: Unidroit work on stolen or illegally exported cultural assets. 1995: Unidroit Convention on the international return of stolen or illegally exported cultural assets. part I - page 18 21 In this context, the Community has thus chosen to take measures to prevent the abolition of frontiers from having an adverse effect on the protection of national treasures. In effect, effective protection of the "national treasures" of the 12, subsequently 15, Member States requires, within the single market (without internal border controls), each Member State to make a contribution to the protection of the national treasures of the other states. In this connection, it is essential for each Member State to control the export of national treasures outside the Community, not only its own treasures but also those belonging to other Member States and which could initially be on its territory owing to the abolition of internal border controls. Such is the objective of the rule relating to the export of cultural assets. No. 3911 of 9. 12. 92. Moreover, although the concept of a common Community heritage does not exist at this stage, the fact that a cultural asset is located in one Member State and not in another remains a determining factor. The Member States want a guarantee that cultural assets which rank as national treasures and which have been illegally removed from their territory will be returned, and it is the objective of the second Community flanking measure after 1 January 1993 (the directive relating to the return of cultural assets which have illegally left the territory of a Member State, No. 1993/7/EEC of 15 March 1993) that the Member State on whose territory the asset is located should ensure its return to the territory of the country from which it was illegally removed. The "return" directive aims to permit the restoration, to its territory, of the heritage of a Member State by creating, between the countries of the Union, by means of an appeal through the Courts, an obligation to return assets. The field and conditions of application of this obligation are delimited in precise terms. In the absence of an agreement on a mechanism of "mutual recognition" of the definitions of national treasure, the approach adopted in these two instruments has been to create, between the Member States, mutual, but at this stage limited, obligations to guarantee Community protection for a common core of cultural assets. Such protection is in addition to the existing, and thus divergent, internal protection measures subsisting after 1992 but whose efficacy is regarded as diminished on account of the abolition of internal border controls. This is to ensure a satisfactory degree of protection at Community level for this common core (which is likely to cover most if not all national treasures), while respecting the fundamental principles of freedom of movement and security of transactions. This "core" has been defined in the joint annex to the above mentioned rule and directive. Among the vast number of assets, the annex draws up a list of common categories of cultural assets determined in conjunction with experts (criteria: nature of the asset, age, value), this list constituting a definition of the categories of assets to which the Member States are currently prepared to extend the scope of their obligations in order to cooperate with a view to protecting their respective heritage. Therefore it does not define national treasures within the meaning of Art. 36, a definition which remains the prerogative of the Member States. Cultural assets which rank as national treasures could in this way escape the field covered by the joint annex to the directive and the rule. Although the context of the annex to the two instruments (the list of categories of assets) is part I - page 19 22 common both to the rule and to the directive, the field of application is not exactly identical. Thus, in the customs field, all the cultural assets cited in the annex (whether ranked as national treasures or not) are covered by the obligation to submit an export licence in support of the SAD24. In effect, the quality or otherwise of national treasures and of cultural assets covered by the annex is not a relevant control criterion for the customs authorities. Other differences of detail may be mentioned, particularly those relating to the exception provided for archaeological assets of minor importance. On the other hand, the return action provided for in the directive is initiated only in respect of assets which rank as national treasures within the meaning of Article 36 and not in respect of all cultural assets in the annex's categories. The physical field of application of the directive is thus precisely delimited. The agreement on the greater or lesser extent of the annex's categories was at the centre of the debate. The result is a political compromise which may, by its very nature, be improved upon. The political sensitivity of the subject has led our institutions to lay down that any modification of the annex should be subject to the procedure provided in Art. 100A of the Treaty. III. How the debate currently stands 1. Existing Community measures (rule and directive) The Commission will use the national reports provided by the Member States as the basis for the first triennial report, which it will submit as required by these two instruments, in order to take stock of the problems encountered and of the need, if any, to adapt these two measures. Moreover, the Commission, without awaiting the abovementioned triennial report, has been led to submit a proposal for a modification on a specific point: that of the classification of water-colour and gouache works in the joint annex to the rule and the directive (19. 10. 95, COM (95) 479 final). 2. Administrative cooperation in respect of cultural assets outside the specific context of the rule and the directive Cultural assets were recently included in the IDA programme (telematic network between administrations) which was approved in November 1995 (Council decision 95/468/EC) and aims to facilitate exchanges of information between administrations. Moreover, within the framework of the 4th outline research programme, the Commission is cofinancing a project entitled GRASP, the objective of which is to develop cooperation between the police forces of the 15 Member States using a telematic system for recording lost or stolen objects. 24 SAD : Single administrative document part I - page 20 '46 Cooperation in respect of illegal trade within the context of internal lawsuits (police cooperation. III pillar) The topic of police cooperation in the field of illegal trade in works of art is dealt with in this specific context. 3. Cooperation between cultural administrations and other competent authorities in the Member States Generally speaking, development of cooperation between cultural administrations and other competent authorities in the Member States at Community level is the way forward in protecting cultural assets which rank as national treasures in the Union. Given that this is a highly complex subject, it is important to avoid any duplication and to arrange for existing Community tools and measures to be put to full use. On the basis of the instruments progressively set up and of evaluations of their functioning (cf. triennial report), it may be possible progressively to identify any new requirements in terms of administrative cooperation. In compliance with the principle of subsidiarity and of the jurisdiction granted to it by the Treaty, the Community will endeavour to encourage and supplement the efforts undertaken by the competent authorities of the Member States and, in particular, cultural administrations, in order to give the optimum response to these requirements and to succeed in providing, at a future date, optimum protection of the Union's cultural heritage. part I - page 21 24 CHAPTER VI : TRADITIONAL AND REGIONAL AGRICULTURAL PRODUCE The provisions of the Treaty relating to agriculture, and the Common Agricultural Policy (CAP) in particular, do not relate to cultural aspects. Nevertheless, agricultural activities do have an inherent cultural nature, given that agriculture has been one of the driving forces of civilisation for thousands of years. Agriculture has also influenced the regional development, landscapes and environment of Europe in general. The European Community must ensure respect for the cultural diversity of the Member States and their regions. In Europe, local or regional savoir-faire has generated a very wide variety of traditional products which are part of the cultural identity of the locality or region from which they originate. The achievement of the single market has made it possible to offer such produce a wider market, but the Community has had to intervene to guarantee the protection of the local identity of these products. In this sense, it is possible to state that, in the agricultural sphere, the Community has taken account of cultural aspects in its control action. Two initiatives have been involved in working towards the preservation of traditional agricultural produce or products linked to a geographical origin: the regulation (No. 2081/92) relating to the protection of geographical ascriptions and registered designations of origin for agricultural products and foodstuffs; the regulation (No. 2082/92) relating to attestations of the specific nature of agricultural products and foodstuffs. The two regulations have a joint objective: on the one hand, to highlight the specific nature of certain products in terms of the traditional manner in which they are manufactured or of their origin and, on the other hand, to protect the consumer from unfair practices and infringe ments. Owing to the homogeneity of the protection systems in the Member States, regulation 2081/92 gives definitions which are essential in the field of geographical names. It distinguishes those geographical ascriptions and registered designations of origin which denote products which are closely associated with the region whose name they bear. Regulation 2089/92 aims to enhance the typical and traditional character of products by means of an attestation as to their specific qualities. The cultural impact of these texts thus lies in the enhancement of a locality and in the protection of local savoir-faire or of a traditional method of manufacture. Mention should also be made of the creation, in November 1994, of a logo specifically designed for agricultural produce from ultraperipheral regions (French overseas départements, part I - page 22 25 Canary Islands, the Azores and Madeira), with the intention of promoting high-quality agricultural produce which are specific to these regions. Moreover, there are significant cultural aspects involved in several CAP-supported sectors. For example the cultivation of the olive tree and the production of olive oil are an integral part of the Mediterranean regions' cultural heritage. It should also be noted that the European Commission's proposals regarding reform of the joint organisation of the wine market (COM 94-117) takes the importance of this sector into account in environmental and cultural terms, while respecting the diversity and the traditions of wine production in the European Union. Moreover, in the context of flanking measures for the 1992 reform of the CAP, EEC Regulation No. 2078/92 relates to agricultural production measures which are compatible with the conditions required for the protection and preservation of the rural environment. Programmes which have been the subject of an agreement with the Member States within the context of this measure may include significant cultural aspects, i. e. the conservation of traditional and historical landscapes. The programme for the Bolzano alpine region (Italy), for example, is aimed at encouraging extensive pasture land and the preservation of alpine cultivation methods. The measures include a subsidy for the preservation of traditional landscapes. In the United Kingdom, the "Country Stewardship Scheme" is one of the measures which have been approved in the context of EEC Regulation 2078/92, and it aims to preserve, maintain or restore specific types of landscape with a particular natural beauty, diversity of fauna and/or historical or leisure value, with reference to practices for maintaining traditional agricultural production methods. part I - page 23 26 CHAPTER VII : CULTURE IN THE JUDGMENTS OF THE COURT OF JUSTICE I AN ANALYSIS OF THE COURT'S DECISIONS With regards to the exceptions to the freedom of movements of goods, persons and the freedom to provide services, the Court of Justice makes a very clear distinction between discriminatory and non-discriminatory measures. Discriminatory measures are not compatible with Community law unless they can find an derogatory disposition as in Articles 36,56, and 66. However, an examination of the decisions of the Court reveals that the latter, in a restrictive interpretation of Articles 36, 48 (Paragraph 3), 56 and 66 of the Treaty, appreciably limits any consideration of the notion of cultural interest under the heading of public order25. In effect, the Court adopts a strict definition of the notion of public order since recourse to this justification presupposes, according to the Court, "the existence of a serious threat affecting a fundamental interest of society26". Moreover, even when the basic conditions set forth by this judgment are fulfilled, the Court imposes a strict proportionality condition since, "as an exception to a fundamental principle of the Treaty, Article 56 must be interpreted in such a way that its effects are limited to what is necessary for the protection of the interests it aims to guarantee". This restrictive approach allows one to assume that the Court will reject any justification of a cultural nature based on the notion of public order. Nevertheless, a degree of protection has been recognised in respect of specific cultural features through judicial law-making based on pressing reasons of general interest as regards solely non-discriminatory measures based on nationality. In this way, the Court's decision in the field of the free movement of services bears witness to this openness to cultural policy objectives which are not fundamentally discriminatory. In its "Mediawet27" judgments, the Court acknowledged "that a cultural policy" may constitute a pressing reason of general interest justifying a restriction of the freedom to provide services and the "upholding of the pluralist freedom of expression of the various social, cultural, religious and philosophical components in a country". Similarly, it is permissible to consider the special nature of certain provisions of services "Judgment dated 16. 12. 92 Commission c/Belgium, 211/91 26 Judgement dated 27. 10. 77 Bouchereau, 30/77 "Judgment dated 25. 07. 91, Mediawet, 353/89 and 288/89. part I - pagj M 5) involving specific requirements in order to guarantee the protection of an artist28. In the so-called "Tour Guide29" cases, "the preservation and enhancement of the national artistic and historical heritage" were acknowledged as pressing reasons of general interest capable of justifying a restriction on the free movement of services. Also in the field of the freedom of movement of workers, the Court was again sensitive to the specific needs involved in seeking to preserve cultural identity. This may be illustrated by the Groener30 judgment in which it replied that "the provisions of the Treaty do not oppose the adoption of a policy to defend and promote the language of a Member State which is both the national language and the first official language". Finally, the Court's same desire to preserve cultural diversity may be seen in the field of the free movement of goods. Therefore, in the Cinéthèque judgment31, the Court decided that a national system which, "with a view to encouraging the creation of cinematographic works without distinction of origin, aims to restrict dissemination of these works to performances in cinemas for a limited initial period", is pursuing an objective which is justified under Community law. Similarly in the B & Q32 judgement, concerning "Sunday closure" of the shops, the Court of Justice confirmed that the Member States had the choice to implement this right, whilst taking into account the regional and national socio-cultural particularities, as well as respecting the demands derived from Community law. This pressing reason may be described, to take up the conclusions of Advocate-General Van Gerven in the C-17/9233 case, generally speaking, as "the protection, development and dissemination of the cultural heritage specific to a Member State or to a region of a Member State in a "pluralist" context and as an "component of a cultural heritage common to the Member States". However, the Court has clearly placed a number of restrictions on such recognition. Therefore, it has established that pressing reasons of this type cannot justify curbs which are unsuitable for achieving the objective pursued or go beyond what is objectively necessary to attain the required goal. 28Judgment dated 18. 01. 79, Van Wesemael, 110/78 ^Judgment dated 26. 02. 91, Tour Guides, 154/89 ^Judgment dated 28. 11. 89 Groener, 379/87 31Judgment dated 11. 07. 85, Cinéthèque, 60 and 61/84 ^Judgment dated 16. 12. 92, B & Q, 169/91 33Judgement dated 04. 05. 93, Fédicine/Spain, 17/92 part I - page 25 28 The Court has also limited the scope of these pressing reasons insofar as there must be disparities between the Member States which are not regulated or are insufficiently regulated by a harmonisation measure or by the application of the principle of mutual recognition. Moreover, it has clearly indicated that culture cannot be used as a disguise for economic protectionism vis-à-vis the other Member States. Therefore, by way of example, the Commission/Belgium judgment dated 16. 12. 9234 may be mentioned. In this, the Court rejects the cultural considerations invoked by the Belgian government insofar as they "actually aim to reduce effective competition on domestic companies, in order to preserve the advertising income of the latter". However, this restrictive approach does not preclude the Court being able to accept the existence of the secondary economic effects of such regulations, as it has already done in the health sector in the "Omroep Organisatie35" case, in which it is accepted that a "national regulation justified by objective circumstances in response to the needs of the interests in question may make it possible, in addition, to achieve further objectives of an economic nature". It is thus not the Court's intention to deny the fact that the promotion of cultural objectives is often dependent on economic factors, but it seeks, rather, to prevent the Member States from using this notion essentially for economic policy ends. The balance of these decisions is thus more in the sense of an evaluation of the "principal/secondary" effects of a national cultural measure. As regards the latter limit, namely the non-discriminatory nature of the measure, the decisions, as apparently confirmed by a whole series of judgments (for example, the Mediawet judgments, and the Commission/Belgium judgment), appear a priori very strict. However, the Court will probably have to clarify its decisions on this point. Finally, it should be noted that most of these judgments were handed down while the Maastricht Treaty and, more particularly, its Article 128, were not yet in force. This is thus only judicial law-making on the part of the Court which had to hand down a decision, despite the absence of a specific legal basis, on the cultural motives of the Member States. Since the significance of the principle of cultural diversity has been acknowledged in the Treaty on European Union, the question now is how this new provision will be able to be reflected in the decisions. The first judgments (Piageme judgment and Bosman judgment36), in which Article 128 was invoked, clearly demonstrate that the Court intends there to be no discussion of its traditional law-making practice and has made reference to the fact that this tradition should not be used "Judgement dated 16. 12. 92, Commission/Belgium, 211/91 "Judgement dated 06. 10. 87, Omroep Organisatie Nertsvooedderfabriek, 118/86 "Judgement dated 12. 10. 95, Piageme, 85/94 Judgement dated 15. 12. 95, Bosman, 415/93 part I - page 26 29 by the Member States to circumvent an existing Community regulation. Therefore, it also arises from these judgments that Article 128 can in no way influence the scope of the fundamental liberties recognised by the Treaty nor the jurisdiction which the Community may have under the terms of other provisions of the Treaty. The only obligation lies, in Paragraph 4 of Article 128, in the need to take account of the cultural aspects of its action. As in the field of the environment, the Court will have to clarify the scope of this obligation. part I - page 27 30 IL CULTURE IN THE SUPPORT ACTIONS UNDERTAKEN BY THE COMMUNITY Chapter I : CULTURE, COHESION AND BALANCED REGIONAL DEVELOPMENT 1. Culture and regional programmes • Objective 1 regions • Objective 2 regions • Objective 5b regions 2. Community initiative programmes with a regional aim and culture 3. Article 10 of the ERDF rules Chapter II : CULTURE, SOCIAL POLICY AND HUMAN RESOURCES 1. Culture, employment and social cohesion 2. Culture and human resources Chapter III : CULTURE AND ADVANCED INFORMATION AND COMMUNICATION TECHNOLOGIES 1. Advanced Information and Communication Technologies • Communication Technologies and Culture • Telematics Applications and Culture • Information Technologies and Culture 2. Content Industry and Information Market • Telecommunication Networks and Culture • Information Market and Culture Chapter IV : CULTURE AND OTHER INTERNAL POLICIES 1. Environment and culture 2. Tourism and culture 3. Research and culture 4. Small and Medium Enterprises 5. Social economics and culture 6. Community action to promote European town-twinning part II - page i 31 PART II : CULTURE AND THE COMMUNITY'S INTERNAL POLICIES Part II aims to identify the various activities undertaken by the Commission which have a cultural dimension to them, either directly or indirectly. This "review" will, for the first time, play a part in providing an overall view of the Community's commitment to cultural matters. It aims to bring out the experience acquired, to make actions which already exist more effective and also to determine the fields in which the Community would be capable of improving its approach by developing better synergy between the actions being implemented. An analysis of the cultural component in Community policies will centre around the following four areas of action: I. II. III. IV. Culture, cohesion and balanced regional development Culture, social policy and human resources Culture and advanced technologies Culture and other internal policies (environment, tourism, research, SMEs) CHAPTER I : CULTURE, COHESION AND BALANCED REGIONAL DEVELOPMENT The social and economic cohesion policy launched on the basis of Article 130A et seq. of the EC Treaty to permit balanced development within the Single European Market is now, with over 30% of the Community budget, one of the European Union's major policies. Financed out of Community structural funds, it is to enable underprivileged regions to reduce the development gap separating them from the developed regions. Action covered by the Community structural funds (European Regional Development Fund, European Social Fund, EAGGF-Guidance, IFOP) concentrates on three priority areas: aid to regions which are lagging behind in development (objective 1), aid for the reconversion of regions affected by industrial development (objective 2), aid for the preservation and development of sensitive rural areas (objective 5b) An additional area of concentration (known as "objective 6") has supplemented this mechanism since the most recent expansion of the Union and it relates to the aid given to the Nordic regions which have a low population density. All these objectives account for 80% of cohesion policy credits (which represent 165 billion ECUs for the 1994-1999 period), favouring geographical areas which are eligible for the structural fund action. Three principal types of programmes can be distinguished: operational programmes implemented in the form of a partnership between the European Commission, the States and the regions (90% of structural funds) "Community initiatives" (9%), conducted at the initiative of the Commission part II - page 1 O ^ "innovative actions" (1%) These programmes are aimed at economic and social development and relate to the cultural sphere insofar as cultural activities may be involved in a policy for enhancing regional or local resources and an economic development strategy. They represent potential employment sources. For the last few years, the trend has been for an increase in the intensity of these activities, which has been linked, above all, to socio-economic changes, to the significance of policies for developing heritage and the craft sphere, and motivation of the local social fabric. I. Cultural and regional programmes A) Aid to regions which are lagging behind in terms of development (objective 1) concerns regions whose gross domestic product is less than 75% of the Community average. It accounts for 96 billion ECUs for the 1994-99 period (+ 166 million ECUs for Austria for the period between 1995 and 1999). The areas which are eligible in objective 1 terms were selected by the Council of the European Union in 1993 and they cover 27% of the Union's population. The actions financed within this framework were presented by national governments as an integral part of a development strategy and were later negotiated and adopted by the European Commission. Support from the Commission for the regional development operations of each Member State is the subject of a "single programming document". This document comprises the objectives and the strategic areas of concentration of the structural fund action for the zones in question. The Member States then propose operational programmes to the Commission, with a view to defining objectives. These operational programmes specify the objectives, the nature and the financing of the actions implemented. An examination of the 75 operational programmes adopted for the 1994-99 period reveals that 11 of them include subsidiary programmes which expressly refer to interventions in the cultural field (culture, heritage, arts). It should not be concluded that the 64 other operational programmes include no action of a cultural nature. What is meant is merely that, in these operational programmes, the arts or heritage are not adopted as objectives or identified means of regional development. The 11 operational programmes which include, amongst other operations, interventions of a cultural nature represent 12. 5%> of the budget for the 75 operational programmes as a whole. By way of illustration, the Commission has adopted an operational programme to develop the islands in the north of the Aegean Sea, which comprises five principal rural areas of concentration development, human first "tourism development" area provides for the encouragement of alternative tourism activities transport and (watersports, telecommunication, and enhancement of the islands' cultural and archaeological the consolidation of means of (tourism, agricultural and local development). The industrial activities, for example), resources and part II - page 2 33 heritage. This area accounts for 38 million ECUs in Community credits, i. e. 18% of the credits allocated by the Community to implementing this operational programme. Within the context of these operational programmes there is a wide variety of actions relating to the cultural field. Some of them are aimed at the direct financing of cultural facilities (creation of cultural centres or theatres, for example, in rural areas). Others consist of flanking measures for enhancing heritage assets (development of open spaces or pedestrianised areas around sites or monuments, sign-posting, etc. ) or local savoir-faire (production and sale of traditional crafts). B) Aid for reconversion of regions affected by industrial decline (objective 2) concerns regions with an industrial tradition where levels of unemployment and industrial employment are above the European average. These regions cover some 17% of the population of the Union and are to receive 15. 3 billion ECUs over the current structural fund programming period, supplemented by 444 million ECUs in aid for the period from 1995 to 1996 for the 3 new Member States of the Union. The principal objective of aid for the reconversion of these regions is to develop economic activities which will create jobs. In outline, in this context, the "cultural dimension" relates to three principal areas: - culture as a component of employment and training; - the remodelling of the "natural" environment which is thus, in this case, not posed as a problem of conservation/enhancement of the pre-existing situation in terms of "heritage" (industrial wasteland, etc. ); - rehabilitation of buildings, be these places of work (industrial buildings, factories, etc. ) or dwellings (workers' housing estates, etc. ). 1. The example of the Lowry Centre: - This is the construction of a cultural centre for the visual arts (Greater Manchester, Lancashire and Cheshire region) at a provisional total cost of 71. 8 million ECUs, 12. 1 million ECUs of which is a Community contribution (± 17%). The anticipated effects of this project are the creation of approximately 6,500 jobs in the sectors of commerce, tourism and leisure. In addition to the fact that the centre will attract professionals (performers in shows, concerts, etc. ), it is anticipated that the centre will receive approximately 700,000 visitors each year. This project will be implemented on the basis of a partnership associating professionals in the field of commerce, from the world of the arts, from a university, from continuing-education bodies, from the tourism industry and environmental agencies. This project includes the development of local infrastructures (access roads, tram systems, inland waterways) and the improvement of water quality. 2. The example of Basse-Normandie : - Two employment basins (Cherbourg and Caen) are eligible under objective 2 for the period from 1994 to 1996 (Community contribution of 57. 8 million ECUs). The Cherbourg basin has already benefited from the intervention of structural funds in the case of objective 2, between 1989 and 1993, and from the Community's RENAVAL initiative programme. In 1993, the Cherbourg basin benefited from the KONVER initiative. - These two employment basins thus receive aid aimed at supporting strategies which are differentiated in terms of the assets of each area: in Caen, the objective is to halt the industrial decline caused by the closure of the steelworks and, in Cherbourg, the aim is to increase the diversification of subcontracting activities which were highly dependent part II - page 3 34 on the nuclear and shipbuilding sectors. In both cases, the role of the basins as ports must be built up. - To this end, three priority areas have been defined: Area 1 : Support for regional undertakings and for the training of the workforce (common area) - (13. 72 million ECUs); Area 2 : Reindustrialisation of the Caen basin (25. 92 million ECUs), subarea 2. 3 ("Diversification of economic activity") of which is aimed at "collective actions to promote the craft sphere and services [. ]. Setting-up of tourist facilities and enhancement of the cultural and architectural heritage with a view to increasing the number of tourists attracted to the Caen area". (2. 59 million ECUs, i. e. 10%). Area 3 : Continuation of reconversion of the Cherbourg employment basin (17. 53 million ECUs), subarea 3-5 ("Touristic diversification of the employment basin") of which is aimed at "lodging structures, the naval complex, pleasure facilities, the cultural heritage" : (7. 0 million ECUs, i. e. ± 40%). On the basis of a study of approximately twenty objective 2 regions, representing a quarter of the total amount allocated to the eligible regions, of which the above two examples are an illustration, it is possible to estimate the share for the 3 areas which, to varying degrees, include a "cultural dimension", at some 14%. A detailed analysis of the actions which correspond to this 14% reveals that approximately only one third concern interventions of a cultural nature. The other two thirds represent measures aimed at integration, and the development of industrial zones and sites with only a tenuous link to the cultural field. Thus, the share of objective 2 financing intended for cultural or culturally oriented operations may be estimated at approximately 4% of total financing. 3) Aid for the preservation and development of fragile rural areas (objective 5b) concerns those regions which are covered by two of the following criteria: a high level of agricultural employment, low agricultural income and low population density. These regions cover 8% of the Union's population and will receive 7 billion ECUs in aid up to 1999. The splitting of objective 5 into two distinct subgroups, namely area a) which relates to the adaptation of agricultural and fisheries structures, and area b) which relates to rural areas, reflects the trend for greater distinction between the concepts of rural and agricultural, and is also reflected in the evolution of Community policies. In parallel, a diagnosis centred on the reduction in the agricultural population (which called for a policy to combat the drift to the towns) has been progressively replaced by the idea of a risk of "desertification" in certain regions, this calling for a more global policy to combat the abandonment of areas of territory and being based on endogenous development factors. One of the consequences of this evolution has been the extension of the "cultural" role into rural development, both in the field of analysis and in specific projects. In this connection, it should be noted that, even if the EAGGF-Guarantee finances, albeit very marginally given the size of the amounts in question, a number of (non-regionalised) actions to promote certain agricultural products such as olive oil, it is essentially the EAGGF- Guidance (particularly on the basis of its Article 8) which, together with the other two structural funds (ESF and ERDF), plays a part in the implementation of projects which include a cultural dimension within the context of objective 5b zones. 5) part II - page 4 35 A study of the distribution of Community allocations in respect of "objective 5b" to each priority development area reveals that, for the 1994-99 period, 7. 9% of credits have been allocated to local development and to village renewal (i. e. 532. 8 million ECUs at current 1994-95 prices) and 12. 3% (831. 3 million ECUs) have been allocated to tourism, areas which include cultural-type measures. Out of this total, which is of the order of 227 million ECUs per annum, only a part is allocated to "cultural" matters, this latter aspect also covering specific conceptual approaches other than those referred to previously. Actions which may directly or indirectly be described as cultural include: - In the "tourism" area there are explicit references to heritage or cultural elements such as, for example, "the restoration of canals", "enhancement of culture and rural heritage", and "tourist schemes, local studies, regional promotion". - In environmental terms, there are projects relating to "enhancement and protection of natural spaces" or "the management of space", "the development of landscapes" and "the safeguarding and management of fauna and flora, rehabilitation and management of biotops, protection of aquative environments". - Finally, cultural aspects are present under the heading of the improvement of lifestyle, such as "the rehabilitation and enhancement of buildings", "the improvement of facilities and village renovation" or "the development and requalification of urban sites". Given the great diversity of the cases in point (the regions eligible under objective 5b represent approximately 1/3 of Community territory), it is difficult to give an idea of the precise impact of such financing. In this connection, it would be interesting in the future to define a number of test zones which have opted to concentrate on "cultural" matters as a factor in balanced regional development. In effect, despite their diverse physical conditions (climate, etc. ), types of land use, but also their diverse wealth of heritage, these regions have in common the fact that they have space and can thus exploit this "resource" by developing new usage assets with a high development potential, such as "green tourism", "nature circuits", "parks and nature reserves", etc. , which are all opportunities for enhancing what has come to be called the natural heritage. Beyond this, further "identifying" assets are being consolidated - these may be based on linguistic factors, lifestyles, architecture, etc. - around which artistic or cultural creations may develop. The cultural dimension in policies promoting sustainable development in vulnerable rural areas should be given greater weight, since it may be a privileged means in the implementation of alternative activities and in the development of investment to create local jobs. This approach may also constitute a response to the increasingly present concern to protect the environment. II. COMMUNITY INITIATIVE PROGRAMMES WITH A REGIONAL AIM AND CULTURE CIPs (Community Initiative Programmes) are specific instruments of structural policy which the Commission proposes to the Member States on its own initiative. It represents 9% of the structural funds (i. e. 13. 45 billion ECUs for the period 1994-99). Thirteen initiatives have therefore been adopted for the 1994-99 period, 8 of which come under a balanced regional development approach. part II - page 5 36 These initiatives are a contribution to the achievement of the major objectives of structural policies for 1994-99. 1) Aid for transborder cooperation (INTERREG ID is a programme allocated 1. 9 billion ECUs for the 1994-99 period. From 1989-93, culture appears to have been of minor importance in transborder cooperation (both inside and outside), the major part of funds having been allocated to "heavy" infrastruc tures works. However, some of the initiatives financed within this context include aspects to which culture is applicable: • The Spain/Portugal programme (1990-93) concerned over half Portuguese territory and a portion of the Spanish regions of Galicia, Castilla and Leon, Extremadura and Andalucia, i. e. approximately 6 million people. The Community allocated 410. 82 million ECUs (out of a total cost of 592. 83 million ECUs). The principal areas of concentration were the improvement of communications (76. 4% of the allocation), the strengthening of links between towns and the coordinated manafiement of natural, cultural and environmental riches. The development of nature parks and reserves was financed under this latter heading. • The Belgian (West Flanders)/France(Nord-Pas-de-Calais)programme, conducted between 1991 and 1993 (28. 33 million ECUs which included an EC contribution of 13. 87 million ECUs), included a large proportion (40. 2%) being allocated to "enhancement of the tourist heritage", this being closely linked to environmental aspects (20. 6%) such as the effort to combat erosion of coastal dunes. Within the context of the projects adopted, campaign to promote Flemish lace may, for example, which draw their inspiration from a transborder strategy, a be noted. For the 1994-99 programming period, we can estimate that the cultural dimension will probably represent only 1% of the total allocation, i. e. approximately 3 million ECUs per annum. These amounts are to finance actions linked to forms of "cultural cooperation" or arising from the promotion of "tourism and agro-tourism", or "rural development". 2) Aid to the ultraperipheral regions (REGIS II) aims to enable these zones to participate fully in transnational cooperation networks. This programme is allocated 600 million ECUs for the 1994-99 period. The regions concerned (Guadeloupe, Guyana, Martinique and Réunion in the case of the French overseas territories, the Azores and Madeira in the case of Portugal, and the Canary Islands in the case of Spain) must submit their applications for assistance in the form of operational programmes or global subsidies. The measures eligible under REGIS II centre around 5 principal areas. "Tourism", under "diversification of economic activities", covers "investment aid linked to the development of a "discovery" tourism outside areas frequented by tourists, such development being better integrated into the local fabric and not endangering biologically fragile zones (e. g. self-catering accommodation, family-run hotels, tourism development linked to the creation or to the development of natural parks, forest and tropical river circuits, hiking routes and the enhancement of buildings and local cultures). The aid allocated under the REGIS initiative can be granted only for investments linked to the development of "discovery" tourism which includes enhancement of buildings and local part II - page 6 37 cultures. This is thus not a cultural action expressly based on enhancement of these highly specific cultures. 3) The LEADER II programme ("Links between rural economy development actions") is aimed essentially (90%) at objective 1 and objective 5b regions. This initiative follows on from the LEADER I programme (1991-93) and has been allocated 1,400 million ECUs for the period 1994 to 1999, 900 million ECUs of which are for objective 1 regions. Emphasis is placed on the innovative and demonstrative nature of the rural development actions, the latter being implemented either by "Local Action Groups" (LAG, already defined in LEADER I) or by more institutional players (local communities, chambers of commerce or of agriculture, etc. ) around a set of local development topics. The SPARC (South Pembrokeshire Partnership for Action with Rural Communities, "Local Action Group" under the LEADER I programme) project is an example of an initiative aimed at redeveloping a rural region in South Wales on the basis of essentially cultural assets. The region is very underprivileged, its standard of living being 70% below the Community average. The principle of this project is to encourage the entire population to take action on "what should be done", enabling each of the 35 communities present to make progress towards achievements which concern them all. The first vector for these cultural initiatives was the redevelopment of all footpaths linking these villages, i. e. almost 80 kilometres of paths. Under this first initiative, rehabilitation of the rural landscape was what was really at stake. All the villages began to take an interest in the renovation of their own heritage, the maintenance of rural properties, ancient buildings and rural equipment. A number of monuments benefited from this action: a medieval hospice (Llangollen Medieval Hospice), an ancient brewery, etc. Moreover, an annual festival was launched, devoted to the staging of Welsh cultural works. This first initiative was followed by another, the protection of the Welsh language. However, this protection is not sought for its own sake, the intention being to generate better knowledge of local society. Thus, 300 projects were started up, the sum being approximately £2. 5 million, of which one fifth was financed by the LEADER I programme. Nearly 3,000 people offered their services as volunteers to run these associations and, subsequently, the projects undertaken. These initiatives, particularly when based on cultural elements, have changed the logic behind regional development in a rural area, which is increasingly centred on the "quality of life" and the active participation of the local population. It is thus in this connection that the LEADER II initiative includes the promotion of regional identities (including linguistic aspects), the preservation and enhancement of cultural heritage and the organisation of cultural activities. 4) Community initiatives promoting the reconversion of single-industry areas The European enterprise, which, at its inception, was based on the iron and steel and coal sectors, progressively moved away from the sector-specific approach until the sectors which largely formed the basis for European industrial development entered into crisis in the 1980s. At the Community's initiative, therefore, aid was set up for the reconversion of those regions most affected by the crisis in the "traditional" sectors, with the RESIDER I programme in 1988 (reconversion of iron and steel zones), the RECHARI programme in 1989 (coal-mining areas), the RETEX programme in 1992 (textiles/clothing), the KONVER programme in 1993 (military and defence activities), and, finally, the PESCA programme in 1994 (fisheries sector). part II - page 7 38 These programmes were adopted on dates which were staggered over time and thus do not cover the same programming periods and benefit from different overall budgets : • After RESIDER I (1988-93), a new programme (RESIDER II, allocated 500 million ECUs) was adopted for 6 years (1994-99) • RECHAR I (1989-93) was followed by RECHAR 11 (1994-97, 500 million ECUs) • RETEX, adopted initially for 2 years (1992-93) has been extended up to 1999 (500 million ECUs) • military reconversion projects undertaken at the request of the European Parliament in 1991 (PERIFERA I) and 1992 (PERIFERAII) resulted in KONVER, initially implemented for one year (1993) and then extended on a multiannual basis up to the end of 1997 (500 million ECUs) • PESCA was adopted in 1994 for 5 years with an allocation of 250 million ECUs. These Community initiatives are centred on a common objective which is the economic reconversion of these zones through the diversification of activities. Therefore, the types of measures eligible relate, on the one hand, to the revitalisation of the local economic fabric, particularly the promotion of new activities developed by the SMEs, and, on the other hand, to the adaptation of the labour force through aid to training and employment. Besides these two main areas of concentration, it may be noted that the most long-standing Community initiatives have seen an expansion of the measures which are eligible, particularly in connection with the environment and tourism. It is in these two latter areas that it is possible to discern actions which include a cultural dimension. In RESIDER II (6 types of eligible measures) and in RECHAR II (7 types of eligible measures) and, to a lesser extent, KONVER (9 types of eligible measures), there are 2 measures which include a cultural dimension, namely "rehabilitation of the environment and economic reallocation of ancient industrial buildings" and "promotion of tourism, particularly industrial tourism". In the case of RETEX, a single measure concerns "the development of industrial wastelands and the reconversion of disused factories, aid for the treatment of liquid effluent and other industrial waste products, and technical assistance for the institution of less polluting processes". Finally, one of the PESCA subsidiary measures targets "the development of ports and investments for new activities (tourism, crafts)". Once again, these are the elements already included in the aid granted under the terms of objective 2, perhaps supplemented by the fact that it is easier, here, to discern the relative absence of heritage conservation/preservation actions forming part of a flanking policy for these changes: in this connection, it could be imagined (for example in the fisheries sector) that "the virtually global chronic overcapacity of the fleets" which "forces a significant number of fishing vessels to be laid up1 is compatible with aid aimed at the preserva tion/conservation/enhancement of ancient trades, boats, navigational or fishing instruments, etc. " 'Community initiative relating to the restructuring of the fisheries sector - (PESCA) - 94/C180/01 part II - page 8 39 Finally, the share of aid allocated to the various eligible measures having (totally or partially) a cultural dimension appears to represent only a relatively small amount (of the order of 5 million ECUs/ year, i. e. 1. 15%) of these Community initiatives insofar as all the other measures involve high levels of spending (infrastructures, community amenities, construction of new buildings, etc. ). III. ARTICLE 10 OF THE ERDF RULES Besides structural fund interventions to promote programmes submitted by the Member States and Community initiative programmes, the ERDF, through Article 10, finances innovative pilot projects and studies to either directly or indirectly promote transfers of knowledge. This article is thus a financial instrument of the regional policies2 which, for the 1995-99 period, allocates its fund of 395 million ECUs to the following four priorities: 1. Internal and external inter-regional cooperation (180 million ECUs) 2. Innovative regional development actions (90 million ECUs), with 3 areas of concentration: Mobilisation of local endogenous potential Technological and telematic development (information society) Economic development and culture 3. Urban policy (80 million ECUs) 4. Regional development (45 million ECUs) A large number of projects may include cultural or culturally oriented actions, such as inter regional cooperation action or urban pilot projects. As regards actions in the urban area, these were initiated during the 1989-93 period when 32 urban pilot projects were co-financed at Community level, for a figure of 101 million ECUs. One of the 4 topics was "the revitalisation of historical centres". The example of Lisbon: the development of this project is based on technical studies financed under Article 10 of the ERDF. The objective of this project is the economic revitalisation of two historic districts of the city. The "Livramento Rampart" project includes the creation of a belvedere, a museum and craft workshops. The second initiative includes the renovation of the Pancas Palha Palace, a building in a state of advanced decay which will be home to a new centre for non-profit- making cultural and scientific bodies. One of these institutions will serve as a permanent monitoring centre for urban and regional studies. On this occasion, construction techniques to improve the strength of buildings and their ability to withstand earthquakes will also be tested. A Community subsidy of 5. 665 million ECUs is provided for this project, the Pancas Palha Palace section of which has already been completed. In addition to the renovation of historical monuments and the development of cultural activities, the anticipated result is an increase in local commercial and industrial activities. Inter-regional cooperation actions conducted under Article 10 of the ERDF have concentrated on two programmes: RECITE (48 million ECUs, 36 inter-regional cooperation networks within the Union since 1990) and OVERTURE/ECOS, which were launched in 1991 (external Provided by Council Rule (EEC) No. 2052/88, relating to the aims of funds having a structural objective part II - page 9 40 decentralised cooperation programmes, 20 million ECUs each and 250 projects financed). Within the context of European cooperation networks, the only project with a strong cultural connection is that on "Tourism in the Mediterranean" which, on the basis of the observation of a degree of decline in tourism in Mediterranean Europe, proposes to tackle this situation by building up water-sports-related tourism and cultural and rural tourism. The Community contribution to this project is 1 million ECUs (out of a total cost of 1. 3 million ECUs). In the case of water-sports-related tourism, the project is endeavouring to improve the 540 "small and medium-sized" marinas which have been listed, particularly through the creation of inter-regional circuits offered to tourists as "packages", but also through the development of inter-regional groupings using modern telematic and computing means enabling them to improve the operating conditions and promotion of this type of tourism. As for rural and cultural tourism, little-known historical or cultural sites are to be improved in conjunction with inland areas which are often omitted from tourist brochures. Still within the context of inter-regional cooperation actions, the PACTE programme (outside Article 10 of the ERDF) was launched in 1990 by the European Parliament. Initially composed of two distinct programmes, which were grouped together in 1994, PACTE has enabled regional communities to embark upon transnational cooperation through an exchange of experience involving at least 3 communities or bodies in different Member States. 1) The project conducted in 1992-93 in the "culture and development" field by the Aude Council (F), in partnership with the towns of Mytilini (GR), Anos Siros (GR), Torroella de Montgri (E) and Bologna (I), brought together communities which had lived through the phenomenon of heresy in the Middle Ages. Meetings related to methodologies drawn up to make use of the historical, natural or cultural heritage as an element in a region's economic development. The overall development experience of the Cathar region (Aude) served as a frame of reference for the exchange. By means of this example, the other partners were able to see how far it was possible to go in using heritage as an economic development tool. The partners envisaged the twinning of their towns, the launching of joint actions aimed at exchanging skills and technical assistance in fields as diverse as the environment, historical research and product labelling. 2) Still in the field of "culture and development", the "TV REGIO - Audiovisual regional television area in Europe" project (1994-95), conducted by Midland TV (UK) brought a large number of partners together: Alsace (F), Piemonte (I), Rheinland Pfalz (D), Bornholm (DK), Norte (P), Valencia (E), Madrid (E), Cataluna (E), Lisboa and Vale de Tejo (P), Copenhagen (DK) and North Holland (NL). This project, which brings together researchers and professionals in the mass-media sphere from many countries, is making it possible to set up a unique network of exchanges of programmes and ideas between the European regions with a view to making coproductions: transborder newspapers and magazines, documentaries, musical broadcasts. This network led to the production of a directory of regional television stations, a coproduction catalogue and newsletters. A training programme for journalists and a databank of regional broadcasts are currently being studied. This project is making it possible to give practical embodiment to inter-regional cooperation in a particularly innovative field. "Culture and economic development" is still on the fringes when it comes to fields of inter regional cooperation, currently standing at around 2%, far behind the other cooperation topics such as "public administration and regional management" (22%) or "economic development, employment and assistance for SMEs" (23%). part II - page 10 4 For the programming period from 1995-99, Article 10 of the ERDF regulation provides for the possibility of a maximum Community contribution of 600,000 ECUs per project, for financing culturally oriented economic development inter-regional cooperation pilot projects. A total amount of 15 million ECUs is provided over this period for financing this pilot action. The objective of these projects is "to strengthen economic and social cohesion by contributing to the establishment of networks between the regions and towns of the Union, on the basis of culture and the enhancement of regional and local cultural heritage, with a view to inter regional cooperation and economic development". (,) The areas of cooperation covered are (list not exhaustive): - historical and architectural heritage (urban, archaeological, religious, military, naval, etc. ) - industrial heritage (textiles, iron and steel, etc. ) - craft heritage (artistic trades, traditional trades, savoir-faire, etc. ) In total, besides the specifically cultural area which accounts for 15 million ECUs, the share for culture of the four priorities of Article 10 of the ERDF accounts for slightly more than 2 million ECUs per annum (instead of 1 million ECUs for the previous period). Under these conditions, it would appear that the definition of a specifically cultural field in innovative regional development actions is a significant leap forward in both qualitative and quantitative terms, since the relative share of culture in these actions as a whole would increase from approximately 0. 5% to some 6%. (1) = Call for proposals for networks of regional and local authorities wishing to launch joint culturally oriented economic development inter-regional cooperation pilot projects under the terms of Article 10 of the ERDF - (95/38) part II - page 11 2 CHAPTER II : CULTURE, SOCIAL POLICY AND HUMAN RESOURCES A structured and coherent action on the part of the Union must make a contribution to restoring a high level of employment, which is one of the objectives of the Treaty. Unemployment actually affects the foundation of our societies: in the Union, it affects nearly 20 million people, particularly the young. Owing to socio-economic changes, lifestyles and styles of consumption, assets which, in Europe, generate a particularly rich and diversified heritage, cultural activities represent an important source of jobs which should be exploited. JL CULTURE, EMPLOYMENT AND SOCIAL COHESION In addition to interventions under territorial objectives 1, 2 and 5b under the terms of which the ESF finances training actions in the field of culture, the economic and social cohesion policy is also implemented through ESF interventions under objectives 3 and 4. These are supplemented by the Community's two EMPLOI and ADAPT iniatives and, as regards innovative actions, Article 6 of the ESF's regulation. By means of the tests listed below, such interventions deal with or often include cultural aspects which by improving the human resources involved, make it possible to offset the risk of marginalisation. ' Objective 3 aims to combat long-term unemployment, facilitate the entry of young people into the world of work and integrate those at risk of exclusion into the labour market. Objective 4 aims to help workers adapt to industrial change and developments in production systems. Such objectives account for 14 billion ECUs in the current 1994-99 programme. With a budget of 1. 4 billion ECUs, the Community's EMPLOI initiative is made up of three parts intended, together, to solve problems of exclusion on marginalisation in relation to the labour market. The EMPLOI/NO W part supports the development of approaches and instruments which are both innovative and effective in terms of the vocational training and integration of women. The EMPLOI/HORIZON part encourages the professional integration of disabled people and the underprivileged, to combat economic and social exclusion. The EMPLOI/YOUTHSTART part supports projects to promote the entry into the world of work of young people without vocational qualifications, particularly those threatened with long-term unemployment and progressive exclusion from active society. The Community's ADAPT interconnected objectives: initiative also receives 1. 4 billion ECUs and has four to help workers adapt to industrial change to help businesses increase their level of competitiveness to prevent unemployment by improving workers' qualifications to facilitate the creation of new jobs and the implementation of new activities. part II - page 12 43 Those who benefit from the ADAPT initiative are mainly workers affected by industrial changes (those in work, those threatened with unemployment, those who have just lost their job in the wake of a business reorganisation, etc. ). reintegration policies During the 1989-93 period, the Community actively contributed to the setting-up of socio- professional long-term unemployed, unqualified youngsters, migrants and disabled people. One of the characteristics of actions implemented over these five years is that culture occupies a significant place in the vocational training actions. favouring underprivileged groups, the This training may be aimed at young people who have already selected a direction in connection with cultural matters. Example 1 - Training actions in the field of the enhancement of historical and artistic heritage in Italy Actions of this type have increased in number in Italy, in different regions, particularly during 1993. Many young people have a qualification in the cultural field but experience difficulties in entering the world of work. The training actions which have been set up favour an economic and productive approach on the part of the artistic trades and relate to various spheres (publishing, museums, music, architectural restoration, etc. ). The cultural dimension proves to be a valuable and motivating experience for the trainees. The following may be mentioned among the initiatives which receive support: - in Umbria, there is a course on restoring ancient books and training for operators working in museums. The placement rate is of the order of 100%; - in Tuscany and in Emilia-Romagna, a range of training courses relating to the field of music, musical restoration (soundtracks of old films) and the theatre. The placement rate is approximately 80% in Tuscany; - finally, in Venetia, where there is a great need for conservation of the artistic heritage, there are courses for technicians in architectural restoration. The placement rate is of the order of 80%. In most cases, trainees on the above courses have found employment, either in public undertakings, or in private companies organising such courses or, most frequently, in cooperatives. Example 2 - The Belfort area, the ESF and the professional integration of young artists European "training nurseries" offer young artists the means for carrying out research and creative work over a 3- to 9-month period. In addition to the physical facilities made available to them by the host town, such artists receive a grant from the "training nursery" association to enable them to complete their project and embark on a professional and cultural integration approach through their practical artistic work. On the one hand, artists from the same discipline but of different nationalities exchange their experiences and different public-encounter actions are organised around the works produced (exhibitions, catalogues, publications, shows). In 1993, the ESF supported this mechanism which promotes the professional integration of creative young people. Other experiences supported by the European Social Fund (ESF) have a cultural dimension to them, not because they relate to artist training, but because expected results come under activities in cultural fields. These training courses are therefore aimed at young people who have problems in entering the job market owing to their lack of initial training/qualifications. Example - The Escuelas-Talleres ("School-Workshops")and the Casas de Oficios ("Trade Centres") The Escuelas-Talleres and the Casas de Oficios are public programmes managed by the National Employment Institute. The actions are intended for young people who have yet to finish their elementary education, something which prevents them from acquiring a vocational training. The training courses alternate theoretical apprenticeship and work experience and incorporate advice and part II - page 13 44 guidance phases. Over a period of from 1 to 3 years, students receive training in public projects and in areas which have been identified as potential sources of employment by the White Paper on growth, competitiveness and employment, such as the rehabilitation of artistic, historical, cultural and urban heritage, environmental conservation (garden maintenance) and apprenticeship in craft trades. The public bodies involved in these programmes in some cases taken on student workers from these school- workshops or trade centres, for work or services they manage. This type of programme has already been implemented in other Member States under another name and could be applied throughout the Community. Example- Construction of the "Batavia", a 16th century vessel, to integrate the unqualified, unemployed youngsters into the world of work (NL) This project, financed under Objective 3, aimed to integrate unemployed youngsters into the world of work and employed about 50 apprentices a year between 1990 and 1995. They were organised into small groups led by a qualified worker. The work, mostly carpentry, enabled some 350 participants to obtain a qualification from their training course, with 224 of them going on to get jobs. A third cultural dimension in social policies is that of culture as a privileged means of expression and affirmation for people in difficulty and thus as an aid to their integration, particularly into the labour market. Example - The Blvth dramatic arts centre: developing the talents of the long-term unemployed The project was aimed at creating an innovative concept combining practical training and expert individual evaluation, to respond to specific, long-term needs. Those involved were given the basic skills they lacked to enable them, subsequently, to embark on another training course. Those running the project therefore took on people over 25 years of age who had been unemployed for longer than 17 months and whose special training needs had been recognised. Within the context of this training, participants had to take part in a group activity of community interest, in this case the preparation of a theatrical show, a type of work which was intended to develop their self- confidence, motivation and spirit of initiative, to perfect skills already acquired and to generate interest in acquiring further skills. Files were compiled by the participants during their training course, using methods adapted to their specific requirements, these files then being submitted for recognition to the Royal Society of Arts (RSA). The second lesson gained from an analysis of the 1989-93 period is that culture has proved to be a promising sector in terms of job creation, and is thus well regarded in sectors acknowledged as potential sources of employment. The difficulty lies in understanding the impact of culture on employment: we must therefore supply the cultural statistics. Firstly, in relation to the production and dissemination of cultural statistics in each of the countries of the European Union, and the routes towards alignment which can be detected at European level, an exploratory study has been carried out which clarifies, on the basis of three principal methodological conventions, the field adopted for the definition of culture, the sources on which an evaluation of this field could be based, and the expected method of validation of these results. As regards the definition of the cultural field, the following categories have been adopted, according to the UNESCO classification: Cultural heritage Printed works and literature Music and the entertainment arts part II - page 14 Visual arts Audio and audiovisual media Socio-cultural activities The abundance of data available in most countries made it essential to define better those which could be adopted for long-term consideration at European-Union level. At this stage, therefore, those sources which were both national and recurrent in nature, and available, were listed. The results were validated by direct contact with the principal national collectors, on the basis of using the information submitted to them with a view to establishing a Community framework for reflection concentrating on three topics: - assessment of public finances allocated to culture - evaluation of the importance, in terms of employment, of the cultural sector and of its components - knowledge of cultural practices Secondly, greater knowledge of the importance of culture in Community policies is required, particularly on the basis of the "employment" and "free time" (of households) surveys conducted by Eurostat, and also the more systematic use of the data contained in the projects submitted within the context of the structural funds or of the Community employment initiatives. There is therefore a need to develop and refine the tools for evaluating the cultural dimension' in Community social policies based on the fact that the sector of leisure activities, art and culture in general nowadays probably employs as many people as the automobile industry and more than the clothing and footwear production sector ("Employment in Europe", report 1994). Beyond existing employment, the Union has already embarked on active research, listing 17 "beacon sectors" of activity with greatest employment potential, including enhancement of cultural heritage, local cultural development and the audiovisual field, in respect of which it has instigated innovative actions (under Article 10 of the ERDF, cf Chapter I of this part). The aim of this series of innovative actions is twofold: to promote the drawing-up of local strategies or, preferably, supralocal strategies, and then pilot projects to support job creation based on local initiative. These actions will be based on an integrated development approach and on priority areas of action selected from the 17 sectors picked out by the "White Paper". At Community level, they are supplemented by more specific actions designed exclusively with the long-term unemployed in mind. - An integrated development approach This relates to implementing an action, to promote employment based on local initiative, which is integrated both in terms of instruments and in terms of partners. This integrated approach must be supported by a wide partnership base encompassing the principal government players and also the community sector and the private sector. - Fields of action These were selected from the "White Paper" and all relate to improving the quality of life. part II - page 15 4B They can be presented in the form of three subgroups: 1) - 2) - 3) - people-linked employment, including local audiovisual and cultural services; lifestyle-linked employment, including new forms of tourism; environment-linked employment, including the protection and maintenance of natural areas. Eligible actions are necessarily organised into two continuous phases: - the drawing-up of regional or local strategies to support the creation of jobs based on local initiative (duration: 8 months), - pilot projects to support the structuring of a supply of services (duration: 16 months). During this period, the selected participants also evaluate and publicise their actions. Within the context of the active employment policies recommended by the "growth, competitiveness, employment" White Paper, encouragement for local development and employment initiatives (OJEC 265/3, 12. 10. 95) is undeniably an interesting component from the standpoint of cost/benefit analysis. On the basis of the macroeconomic evaluation of the job-creation potential carried out in the case of three countries in the Union (France, United Kingdom and Germany), it is possible to assert that such a policy, which includes an obvious cultural dimension, is of such a type as to lead to an annual increase in employment in Europe of from 140,000 to 400,000 jobs, which is some 40% of the target for increasing growth in employment set by the White Paper in order to halve the present level of unemployment by the year 2000. In the context of work to identify new areas of employment growth, the Community, in collaboration with the principal players concerned, implementing or financing several analysis and experience-exchange activities concentrating on the relationship between employment and culture. The following may be mentioned by way of example: under the LEDA (local employment development action) programme, the organisation of "subject workshops" on new employment opportunities in the cultural sector research/action on the economic impact and their contribution to employment in festival cities, to include 13 festivals in 5 Member States (Thessalonika and Heraklion in Greece; Spoleto, Pesaro and Turin in Italy; Wexford in Ireland; Edinburgh and Manchester in the UK; Avignon, Lorient and Bourges in France; and Graz and • Salzburg in Austria) research/action on the economic impact and contribution to employment in museums (NEMUS), involving museum administrators from 20 towns and cities or regions in 7 Member States a study of the potential for creating "cultural" jobs in Southern Europe support for the "Making Must Work" conference organised with the Europodays scheme, meeting in May 1996 and involving 150 companies from all over the Union support for the "international cultural employment" project which is aimed at promoting the mobility of cultural workers support for the organisation of seminars devoted to the economics of culture (Perugia 1995, Temple Bar - Dublin 1994, Liverpool Institute of Performing Arts 1994, etc. ) Finally, it should be noted that the Community provides financial support (235,000 ECUs in 1995), together with the HELIOS II programme to help the disabled, for activities undertaken by disabled European artists in the cultural field. part II - page 16 47 2, CULTURE AND HUMAN RESOURCES Although vocational training was included in the Treaty of Rome, it was the Maastricht Treaty which brought education within the jurisdiction of the European Union. The intervention of the Community in the field of vocational training developed during the 1980s with the launching of cooperation programmes between universities and between training institutes. In 1993, the Commission's white paper on growth, competitiveness and employment highlighted the importance of the role played by education and training in transforming economic growth into jobs. This topic was then taken up in the White Paper on education and training drawn up by the Commission in 1995 (COM (95) 590, "Teach and learn - towards the cognitive society"). In order better to fulfil its role, the Union has, since 1995, reorganised and rationalised its education and training programmes, grouping them together principally under three programmes: "Socrates" (education) and "Leonardo" (vocational training) and "Youth of Europe". The Socrates programme Covering the period from 1995 to 1999 and allocated an overall budget of 850 million ECUs, this programme is based on the experience gained through ERASMUS, LINGUA and various previous pilot actions. It covers all levels of education, from pre-school to higher education, language learning, distance teaching and adult training as well as the promotion of exchanges of information and experiences in the field of education. Since culture and its diversity are essential components of educational content, culture underlies the majority of actions covered by the programme. Its overall objective is to develop the European educational dimension in order to strengthen the feeling of European citizenship, relying on the cultural heritage of each Member State. This is reflected as much in the promotion of better knowledge of foreign languages, to promote the development of the intercultural dimension of teaching, improvement cooperation between firms, and the mobility of students and teachers, as in encouragement for the academic recognition of diplomas and periods of study, the promotion of exchanges of information and experiences, etc. "Erasmus " and the intercultural dimension of education in higher education The "Erasmus" action (1995 budget : 120 million ECUs), which relates to higher education, encourages, above all, the mobility of students and teachers by awarding them grants and providing them with adequate linguistic preparation. It also supports university cooperation projects in fields of common interest, known as "thematic networks". The cultural dimension of an initiative of this type, although present at all levels of activities undertaken, is difficult to isolate and quantify. In particular, it is a function of the participation of students and teachers originating from the cultural sector, who have the opportunity to complete their part II - page 17 48 training in foreign universities, improve their linguistic knowledge and, finally, to put this "European added value" to good use in cultural circles in their countries of origin. The, cultural nature of such an action also results from an openness to and awareness of the various European cultures it plays a part in establishing. Example - Polyphonia (European musical network) : 12 musicology faculties and European conservatoires have been organised into a cooperative network to promote the mobility of the students and teachers (intensive joint programmes and degree courses). This network resulted in the formation of a chamber orchestra and a brass ensemble. "Comenius" and cooperation in the field of preschool, primary and secondary education The aim of "Comenius" is to promote the European and intercultural dimension at pre-school and school level, and it includes a series of actions to stimulate cooperation between schools, to contribute to the development of professionalism amongst teachers and thereby to improve the quality of schoolteaching in various European countries. This action may support projects based on a cultural topic regarded as a unifying factor and a basis for reflection for networks of schools from very different backgrounds. Examples from the pre-launch phase of the Comenius action: Example 1 - Meithal Initial training of teachers and the European dimension since 1990, the Meithal network (Gaelic for "working together") brings together teachers and future teachers, from 12 teaching establishments and 8 countries in the Union, for one month, on a specific topic (in 1984, "Art in Europe"). The objective is to stimulate exchanges and consideration of the European dimension in the initial training of teachers. Example 2 - How to live together in Europe Developed between 1992 and 1994, within the context of the pre-Socrates multilateral school partnership pilot action, the "How to live together in Europe - Le forme della convivenza in Europa" project was coordinated by a secondary school in Palermo (Italy) and accomplished through a network made up of establishments in Austria, France, Germany, the United Kingdom, the Netherlands and Spain. The project had a multidisciplinary approach and teachers from several fields were brought together within teaching units to take part in a reflection on subjects as varied as history, philosophy, literature, sociology, anthropology, science, art, etc. The project contributed to an evaluation of the awareness of a common cultural heritage, of research into cultural roots, and of the understanding of relationships between national history and the history of other countries in Europe and the world. Example 3 - The school adopts a monument Launched in 1992 by an Italian foundation and coordinated at European level by the Pegasus Foundation, this project (supported by the European Union) resulted in the creation of a network of over 350 schools from 12 towns in the Union, the working topic being architectural heritage. Each participating school symbolically adopts a monument in its particular town, integrates its detailed study into its programme (also making use of new multimedia technologies), organises guided visits, compiles information, etc. , in close collaboration with the local authorities and with those responsible for managing monuments and sites. The project also makes provision for transnational cooperative activities which include the publication of a monthly bulletin, meetings between teachers' and students' representatives from participating schools, inter- school student exchanges, etc. Moreover, the Comenius action aims to support integration and equality of opportunity for the children of migrant workers, people pursuing itinerant occupations, travellers and gypsies. In this case, support for projects promoting greater awareness of linguistic and cultural part II - page 18 4<> diversity and wealth must make a contribution to the fight against exclusion from society, racism and xenophobia. This is the same approach as that adopted by projects supported under "intercultural education". Such projects aim to help students identify the factors which unite and differentiate humanity through a comparative study of different cultures and develop a critical and comprehensive view of cultural diversity. The cultural dimension of the transverse measures of Socrates : Lingua, Arion, etc. A cultural dimension strongly linked, as in the case of the other actions, to the notions of exchange between educational systems and between different cultural spheres also characterises the transverse measures provided under Socrates. However, it is difficult to define it in precise terms and even more difficult to quantify it. This is the case of action to promote language learning (LINGUA), which implements a series of measures to improve knowledge of an increasing number of European languages. The priority given to the least spoken and least taught languages helps them survive and contributes to the cultural enrichment of the Union. Actions organised to promote the exchange of information and experiences and, particularly, action relating to questions of joint interest concerning education policy, or the European educational information network (EURYDICE), may, logically, refer to educational aspects in the cultural field. Recognition of diplomas awarded and of education received in other countries (to which end NARIC (the network of national centres for information on the academic recognition of diplomas) works) is relevant to cultural and other studies. One of the principal objectives of the "Adult Education" action is to disseminate knowledge of cultures, traditions and different European languages by supporting pilot projects offered by networks of institutions and organisations from at least three Member States. In the case of this action, it has been possible to estimate that, out of the budget of 3 million ECUs allocated to the action for 1995, 29% was used to support culturally oriented projects. Education meets culture: the Community initiative in the field of education and artistic training This Community initiative, launched in 1994, aims to promote transnational cooperative activities between educational and artistic-training establishments in the European Union. Aimed, above all, at post-secondary level, it is an attempt to give a higher profile to artistic subjects which are not always regarded on very important in educational programmes. The initiative covers the organisation of a series of educational activities in all artistic fields, ranging from the audiovisual sphere (cinema, photography, video art, etc. ), dance and design (graphic arts, textiles and furniture), to the fine arts (painting and sculpture), music (both classical and popular) and theatre. During the preparatory phase, in 1994, the Commission financed 61 demonstration projects covering all the areas mentioned. In 1995, 52 projects were selected and financed, costing a total of 700,000 ECUs. Example 1. Granite, wood, bronze part II - page 19 This project consists of a transnational refresher course on which fine arts students and young artists attend courses given by professional artists skilled in the techniques of sculpture in granite, bronze and wood. The relationship between the three materials is explored as is the relationship between the Member States taking part, which provide different types of training. By mixing the materials during the session, the teachers and students have to work together and exchange experiences and methods, thereby adopting new approaches to sculpture. A document published at the end of the project encourages better cooperation at European level between schools and sculpture workshops. The project, which is coordinated by a Scottish sculpture workshop, also encompasses workshops in Ireland and Sweden. Example 2. The establishment of a "common structure" for higher artistic studies within the European Union Coordinated by the University of La Laguna de Tenerife and run with the participation of the Regional School of Fine Arts and Applied Arts of Toulouse and the Antwerp Higher National Institute and Royal Academy for the Fine Arts, this project aims to conduct research into the current position of fine-arts insti tutes in the European Union and their social role as regards job creation in relation to qualifications. A document will be prepared on the various qualifications and diplomas in the field of the fine arts in the European Union. The project's final objective is to create a structure common to all the Member States and which will be capable of identifying students' needs in terms of their preparation for professional life and the transfer of their skills to other Member States. The projects selected in 1994 and 1995 reveal the diversity of approach to education in the artistic fields, this being a response to the various areas of concentration suggested by the action itself: reinforcement of transnational cooperative activities between teaching and artistic-training establishments in the European Union, increasing the mobility of students and teachers, supporting initiatives which promote the dissemination of information and the production of modules, special courses or experiences, and encouragement for international workshops and seminars which bring a European dimension to teaching of the arts. Often multidisciplinary in character, many of them also make use of the new information and communication technologies. Moreover, they demonstrate considerable socio-economic dynamism. The Leonardo da Vinci programme and the cultural dimension of vocational training This programme which, like Socrates, covers the period from 1995 to 1999, has been allocated an overall budget of 620 million ECUs. With the aim of rationalisation, it covers previous Community vocational training programmes, particularly FORCE (continuing education), PETRA (initial training), Comett (university/business cooperation) and Eurotecnet (promotion of qualifications linked to technological innovation). It supports pilot projects, placement/exchange programmes, surveys and analyses conducted within the context of transnational partnerships in order, particularly, to promote an improvement in and better awareness of both national vocational training systems and actions led by firms (including university/business cooperation). This programme has a very wide field of research and can therefore encourage cultural projects to develop the training of professionals or refresher courses for them in the artistic and craft sector. Example 1. Continuing education in the artistic ceramics sector Coordinated by a Spanish association of businesses which are active in the field of ceramics, this project aims to create a system of continuing vocational education courses in order to remedy major shortfalls in the training of craftsmen and entrepreneurs, particularly as regards the use of new technologies. The activities carried on in this context are aimed at classifying trades according to their levels, at studying the technological content of each trade, and at preparing courses which are adapted to said content and to part II - page 20 rz 5J specific training requirements in order, finally, to try out the solutions arrived at in practice. Other projects aim to generate methodological reflection at European level on a profession which is linked to the artistic sector, in order to improve its functioning and effectiveness. Example 2. Museum professionals - the gap between education and profession This project aims to reduce the gap between the traditional training of museum professionals and the specific needs of such institutions. This ranges from opening up a dialogue between the various university museology departments and organisations representing museum professionals. This exchange should result in an analysis of existing training systems which may promote the establishment of new teaching methodologies better adapted to the requirements of the sector. In specific terms, the project will be run in the form of a number of seminars which will tackle tfie various aspects of the problem. A joint publication will mark the end of this initiative, the results of which will also be published in bulletins, reviews and seminars in the countries taking part. Coordinated by a Swedish body, the project has brought together partners in Denmark, the Netherlands and the United Kingdom. The programme "Youth for Europe" Allocated a budget of 105 MioECU, for the period 1995-1999, this programme aims to promote the development of exchanges between young people and initiatives for the young. In a general manner cultural themes are a source of predilection for communication and exchanges amongst young people. Art can become a catalyst of energy, an awareness tool, and help in the development and insertion into society. "Youth for Europe" has, with this perpespective in mind, supported several initiatives such as : Graffitt : project involving the organizationof exchanges and meetings, as well as exhibitions on graffittis and the publication of certain works (hip hop culture. ). Music for Youth : the development of recording studios and the exchange of recordings between the youngs of Europe. Action to promote regional or minority languages and cultures In accordance with the wishes of the EP, the Commission has, since 1983, managed an action to promote and safeguard regional or minority languages and cultures. The 1996 budget is 4 million ECUs. The action aim's principally to encourage the development of initiatives in the fields of education, culture and information and to stimulate cooperation between all those working to preserve and promote such languages and cultures, to improve information exchange and the transfer of experience, to systematise, improve or promote the teaching of regional or minority languages throughout the educational system, from kindergarten to adult training. The projects which have been approved cover a vast range of educational and cultural activities, such as the teaching of these languages at all levels, teacher and adult training, publications for children and adults, standardisation of language and work on terminology, conferences and seminars, cultural events, video film production, radio and TV broadcasts. Example 1 - Languages of Europe part II - page 21 52 Launched in 1994 by the TIDOC group in Barcelona, this project has made it possible to set up a graphic database of languages spoken in Europe. The data, in Catalan, English and French, and on disk, are an interesting multilingual teaching aid in the form of a game for children aged from 10 to 15. Example 2 - Celtic Film Festival The "International Celtic Film Festival" is a very important cultural event for the languages and cultures of Scotland, Brittany, Ireland, Wales and Cornwall. The 16th event took place in Fort William (April 1995) with the participation of film and television producers and representiatives from professional associations in the field. The festival also included colloquia, seminars and prizes awarded for the best films. Example 3 - Maritxu Berritsu Radio programme for Basque-speaking children in France and Spain. Broadcast last one hour each day and are prepared in collaboration with primary-school teachers and pupils to help children develop their ability to communicate in Basque. part II - page 22 5-f CHAPTER III : CULTURE AND ADVANCED TECHNOLOGIES This chapter examines the different Community programmes that present an interaction between the sectors of advanced communication technologies and information market and that of culture. Some examples of pilot projects or major initiatives which apply advanced technologies to the cultural sector are then highlighted. Where possible, examples related to the museums field have been selected, in order to demonstrate what is done in only one of the many fields within the cultural sector. Furthermore, because museums and galleries collections are a privileged field for the application of the multi-media resources, and they provide a good illustration of the benefits that can result from the integration of the cultural dimension into advanced technologies projects. At the same time, museums consider that information and communication tool to foster cooperation among them and the possibility of using advanced technologies for better fulfilling their specific missions. technologies provide an unparalleled I. INFORMATION AND COMMUNICATION ADVANCED TECHNOLOGIES The Research and Development and Advanced Technologies sector is one of the major areas of the Union's activities and expenditure. Its objective is to strengthen the technological bases of European industry and to favour the development of its international competitiveness. These activities are led within the Fourth Framework Programme (12,700 MECU budget covering the period 1994-1998), which gives strong consideration to coherence between research and technological development (RTD) policy and economic and social cohesion. The main thrust is the use of science and technology to strengthen the competitive position of European industry, and to improve the quality of life in Europe. RTD policy is of major importance to the cultural sector, notably concerning the support to areas such as museums and libraries. The introduction of advanced technologies to the cultural sector is vital for future development in the dissemination and application of information and communication technologies. The following programmes stimulate and support research and development in the cultural sector, as well as promoting greater cooperation between European cultural organisations. 1. Communication Technologies and Culture Dealing with the integration of communications, the RACE (Research and Development in Advanced Communications Technologies in Europe) Programme was carried out in two phases: RACE I (1988-1992) and RACE II (1992-1995), with a total Community financial contribution of 1. 103 MECU (representing less than 50% of the overall effort estimated at 2. 500 MECU). The objective was to develop the conditions which will make it possible to Europeans a variety of services in telecommunications of better quality and least cost and to endow Europe with a strong and competitive telecommunication sector on a world level. With regard to the application of advanced telecommunications in the cultural field in the RACE programmes, and in particular to the movable cultural heritage, two projects that took part II - page 23 54 place with the support of these programmes can be highlighted. (1) Within RACE I: the EMN (European Museums Network) project which, concentrated on data-base aspects, developed a full digital multi-media alpha-system following the client-server concept. It was installed in 8 museums and their staff built a common multi-media data pool of 800 museum objects, each of them representing a multi-media data-document including a great number of related multi-media documents. One application was an authoring tool allowing the museum staff to edit and compose their own multi-media documents. The second application was a presentation system for lay museum visitors which allows them to navigate from objects which are led by keywords representing the visitors individual associations and impressions. This project was developed between 1989 and 1992 and received total Community contribution of 5 MECU. (2) Within RACE II: the RAMA (Remote Access to Museum Archives) project, developed between 1992-1995 and supported with a Community contribution of 8. 6 MECU, aimed at facilitating a far reaching use of databases and banks of images to be accessible to museums, which will be inter-connected with this system, and offering pilot remote broadband access services using museum archives as sources. RAMA enables European museums to organise their archives electronically, to offer new multi-media presentation facilities for their own (and other museums) exhibits and to make this information available remotely. The expected impact of the RAMA project is the building of a museum network that is allows remote access to museum archives for use by researchers, publishers, schools and scientists at the international level. Artwork selection will thus be done electronically to an increased amount of museum-multi-media information. At present, the RACE Programmes have been superseded by the ACTS (Advanced Communications Technologies and Services) Programme, which benefits of a budgetary allocation of 671 MECU for the period 1995-1999. ACTS represents the European Union's significant effort to support precompetitive Research and Technological Development (RTD) in the field of telecommunications in the Fourth Framework Programme of research and development (1994-1998). The implementation of the ACTS Programme is a vital step in the development of an Information Society in Europe. Advances in telecommunications are now one of the major driving forces of change. Telecommunications is important as an industry sector in itself but also as an essential infrastructure for other services, including culture. For telecommunications to achieve its full potential there is a need to provide a stable and predictable framework in which the many (and sometimes competing) sector actors can assume their roles in a constructive and non- controversial manner. In addition to the communications operators, service providers and equipment industry, the content owners, the users and their applications are significant players infrastructure and services. The in communications system is evolving from a mere passive conduit of data to being an integral part of an intelligent and active process of adding value to information, which implies a significant qualitative change. the development of telecommunications the part II - page 24 55 However, telecommunications developments are not just of economic importance. There are cultural and social implications to be taken into consideration. Communications technology has to mature from concentrating on quantitative improvements (more bits for less money) to supporting qualitative improvements (quality of communication) and improved relevance (communicating with the right partner or obtaining the relevant and correct service or information). One of the benefits of the Information Society will be easier access to cultural information, in particular multi-media data of human cultural achievements. A stronger co-operation will be needed to accelerate the digitisation of cultural heritage and to develop coherent technical and organisational systems for storage and access. Full inter-operability of the diverse systems for access presently in use by different people and in different places will not be easy to achieve. Co-operation will influence the development of consensus on protection of intellectual property, author's rights and the management and preservation of cultural and linguistic diversity. The objective is to maximise the benefit of integration, of new developments, establishing a concertation mechanism and building synergy's with other related domains and services with cross-sector interaction as a major focus point. The main goal now is to establish the necessary guidelines and determine the priorities and actions to ensure: (1) Targets for digitisation of information on collections, multi-media; (2) Targets for interpretation of multi-media communications and access systems; (3) Targets for compilations/digitisation of records of the heritage of fragile and endangered minorities: (4) Targets for accessibility in libraries, schools, universities and public services; (5) Targets for interaction with this multi-media data. (6) Targets for guidelines IPR, copyrights, billing, etc. 2. Telematics applications and culture The telematics Applications Programme (TAP) is one of the Information and Communication Technologies (ICT) Specific Programmes of the Fourth Framework Programme (1994-1998). In this context, the aim of the action developed in the Information Engineering Sector is to permit easier and more selective access and better usability of information in all its forms through the application of telematics based methods and systems, focusing on information content. It thus targets case of access, usability, and multi-media content. This new budget area disposes of a current budget of 37 MECU out of the c. 900 MECU of the total TAP budget for the above mentioned period. The key priorities under the present action are the following: focus on meeting user requirements (user-centred design, user requirements, and user involvement in the design process); cost-effect integration into user-friendly systems of tools and methods used at different stages in the information chain; improving the value and usability of information (design of form and content, part II - page 25 56 finding information, using it in the users local environment); management of multi-media information (focus on repositories of not-textual information). This action is founded on a commercial view of the world and is demand driven rather than technology driven, the approach involves pilot applications which integrate the three main links in the information chain (electronic publishing, focused on creators and creativity; information dissemination, focused on distribution and market facilitation; and information retrieval, focused on users and usability), which identify a series of well defined research tasks, and which involve real-life trails with significant number of users who are implicated through the development process. Under these conditions, the development of a project with a clear cultural dimension is being co-financed: AQUARELLE - Sharing Cultural Heritage through Multi-media Telematics. The objective of this project, due to commence early in 1996, is to demonstrate a distributed multi-media information system, offering access to inter-related reference multi-media documents, standardised notices, still and moving images, describing the cultural heritage: paintings, sculptures, monuments, musical instruments, historical furniture, etc. All the information bases, managed and fed by local entities and national authorities in charge of digitising and indexing the cultural heritage, and by private agencies and publishers, will be connected in a consistent and inter-operable network, thus offering the user a transparent access and a global vision of the European heritage. The primary users of the target system are professionals: museum curators, researchers, public administrators in charge of indexing, archiving, and security of the cultural heritage, commercial publishers creating art information products (e. g. : books, CDs, virtual exhibitions), art historians, fine art companies and exhibition organisers. The project aims at providing to these users world-wide distribution of information with multi-lingual support, secured access and IPR protection, advanced authoring tools to create hypermedia "folders" linking relevant information assets, and powerful facilities for on-line resource discovery. The success of this project will depend on the ability to master the right interaction between the many sectors actors and partners within the consortium involved in the project: research organisations, cultural organisations and associations, publishers and private asset-holders, usability evaluation specialists, and project management and coordination organisation. technology companies, information With regard to the Administrations Sector, in the Telematics Applications Programme, this action calls for the fostering of co-operation between community and non-profit organisations across borders, to facilitate the cultural policies of the EU and facilitate better integration into the coordination, planning and implementation process, and to address the need for a mechanism for European cultural and tourism opportunities to be made available to individual citizens. part II - page 26 In this area, the cultural field and, in particular, the museum sector is of special interest. European museums and galleries are world leaders in the cultural field. Over 15,000 in numbers, they are visited by over 500 million people each year including many from other parts of Europe as well as numerous overseas visitors, thus making an important economic contribution as well as their cultural role, both directly and via educators and writers. However, much of their collections cannot be shown due to lack of space and resources. Moreover, many more people could benefit from more widespread access including those in remote areas as well as severely disabled people and those who regard museums and galleries as "not for them". The opportunities for these institutions to be a major resource in the coming Information Society are becoming increasingly well recognised. Also, this provides an opportunity for them to secure additional sources of revenue to replace reducing governmental support and a number of EC and international projects have already been launched but are threatened by well-funded, aggressive US projects. Among Administrations Sector, is worthwhile mentioning. the MAGNETS project, supported these, in the framework of the TAP, The MAGNETS (Museums & Galleries New Technology Study, formally RJNASCIMENTO & EMMA) project aims to provide an in-depth study concerning: user requirements, selected critical market and technology issues on an international survey of the needs and experiences of museums. The results will facilitate future EC projects and 'visions' for museums and galleries en route to the Information Society. This study will contribute to an improved basis for a cultural systems programme and project planning and control at European, national and regional levels across Europe. It will provide a clear synthesis of what their needs and requirements are, of what is possible and available, a panorama of existing solutions and perspectives. And it will contribute to a better understanding of what is involved in the dissemination of information on museums collections and the access to already available information on the cultural heritage. With particular attention to the visual arts, archaeology and history fields it can serve as inspiration to other fields. The results should also be of direct benefit to a wide range of museums and galleries as well as the responsible Public Administrations. The MAGNETS project will be carried out by a leading French Association of 40 museums with an image database on the 20th century of 100,000 art objects, VIDEOMUSEUM, together with a 'Cultural SME' itself product of one of the EC's first cultural systems projects, VASARI Enterprises. The estimated cost of this project is 2. 5 MECU. Moreover, the Telematics Applications Programmes deals with R&D in its libraries sector, aiming at facilitating access to the wealth of knowledge held in libraries throughout the European Union. Topics covered include networking, cataloguing, resource discovery, imaging, multimedia, distance learning, standards and copyright. part II - page 27 58 Following some preparatory actions (1986-1990) with a budget of 5 MECU, the Libraries Programme started within the Third Framework Programme (1990-1994) with a budgetary allocation of 25 MECU. Partnerships have been fostered between libraries (60%) and SMEs, research institutes and universities (30%). Encouraging project results are emerging in the areas of networking technology, image systems and hypertext, and the creation of machine- readable catalogues. Prototypes for new library services are being developed, such as those for sound and image archives. Within the Fourth Framework Programme (1994-1998), with a budget of 30 MECU, Telematics for Libraries is more clearly focused on networking. The workplan develops an extension to the rest of the networked information universe, in which libraries can act as intermediaries to knowledge discovery. The centrepiece is the integration of previous results into coherent interconnected and open services. Libraries are cultural institutions that, as they develop the networked access and delivery services, which underpin the programme, their historical and cultural materials will increasingly be integrated into their electronic services. A number of the projects selected address culturally relevant materials in the domains of fine arts, art history, historical manuscripts and historical bibliography (foe example projects such as, VAN EYCK, ELISE, HISTORIA, BAMBI, INCIPIT, etc). implementing the TASK FORCE "educational software and Within the framework of multimedia", certain programmes, especially the "Telematics Aplications Programmes", see an increase in the reinforcement of their activities in the cultural field. 3. Information Technologies and Culture In the Second (1987-1990) and Third (1. 532 MECU budget for 1990-1994) Framework Programmes, the ESPRIT (European Specific Programme for Research and Development in Information Technologies) Programmes followed a technology-push policy aimed at a growing Information Technology industry. ESPRIT cultural related projects accounted for 19. 6 MECU for the period 1987-1994. The new focus of Information Technology RTD under the Fourth Framework Programme (budget of 2. 035 MECU for the period 1994-1998, of which 8. 5 MECU represent the community funding as at 15 January 1996 for cultural related projects) is the emerging information infrastructure, which will provide the basis of the global information society of the future. The programme is in consequence to a greater extent led by the needs of users and the market, and will imply a greater concern for cultural related projects. The overall objective is to contribute to the healthy growth of the information infrastructure so as to improve the competitiveness of all industry in Europe, not just the IT industry, and to help enhance the quality of life. The programme emphasises easier of access to information, to services and technologies for companies, administrations, and individual citizens. Activities stress use and usability of technologies, and best practice. part II - page 28 5: A number of information technologies are relevant to cultural actors such as museums, galleries and audiovisual creators. As an example, the design of cultural packages can take advantage of advanced techniques such as flat panel displays, virtual reality and simulation which are now available with execution times that allow interactivity with the designer. The cost for running these applications are becoming acceptable even to small and medium enterprises. ESPRIT includes a number of tasks where pilot projects can be started. Museums and galleries are encouraged to participate to develop applications which are relevant to them. As regards multi-media techniques, there is a particular concern with issues such as "intellectual property ownership". Attempts toward the development of a consensus on standards has resulted in an increased coordination among the different actors involved. In the same way, museums and galleries as well as other cultural actors are encouraged to bring their contribution. The following examples are projects developed in this context and supported by ESPRIT programmes: VASARI (Visual Arts Systems for Archiving and Retrieval of Images). This project, that was led by Brameur (UK) between 1989 and 1992, had as main objective to develop a very high definition, accurate colour, acquisition system and associated imaging software for paintings in the museums. It clearly demonstrated the feasibility and the benefits of high resolution and high quality digital image processing techniques for the visual arts image. (EC funding of 2. 1 MECU for an overall budget of 3. 66 MECU. ) MARC (Methodology for Arts Reproduction in Colour). Led by Thomson (F) between 1992 and 1995, this project aimed at developing an integrated system for digital acquisition, the storage and the handling of colourimetric high definition images of painting for publishing purposes. The project was driven by the need for maintaining public awareness of art images as well as by business opportunities appertaining to the printing of art images. High quality catalogues showing paintings of different European museums will be produced from paintings acquired and handled through digital approach. MARC makes use of experience gained in VASARI and is, in effect, an extension of VASARI to the publishing world. (EC funding of 2. 08 MECU for an overall budget of 5. 232 MECU. ) MUSA (Use of Multi-media for Protecting Europe's Cultural Heritage). Using the results developed in ESPRIT in the area of digital imaging and multi-media technology, the aim of MUSA (1992-1994) was to provide the multi-media publishing industry with direct access to high quality images and data about visual arts from museums, including the visualisation of 3-D models of reconstructed objects; and give museums new means (including new sources of revenue) for the conservation and dissemination of works of art. MUSA gives museums the means to provide publishers an electronic catalogue containing images and texts, with the text formatted into records describing paintings or other works of art. (EC funding 1. 4 MECU for an overall budget of 2. 5 MECU. ) 3D - MSC (Multi-media Support Centre) - A multi-media support centre that will part II - page 29 60 provide in 3D (three dimension) scanning technologies to museums and other institutions. This two-year project is still under negotiation following the third ESPRIT call. All these are examples where museums have the opportunity to draw upon and utilise new technology for their own use. IL CONTENT INDUSTRY AND INFORMATION MARKET Information and communication advanced technologies provide unparalleled tools to foster co operation amongst cultural organisations. At the same time, cultural content owners have a major part to play in the services and products to be provided in the Information Society. Increasingly their wealth of riches are being sought after to provide on-line 'content' for the emerging 'information super-highways' or off-line 'content' for the 'electronic information market' to both improve quality of life and generate revenues. 1. Telecommunication Networks and Culture The implementation of the trans-European networks, and in particular telecommunication networks, will open the European market to the new applications and services which are the ground upon which the Information Society should develop. They are an essential condition not only for the establishment of the Information Society in Europe and in the world, but also for the operation of the Single Market, the realisation of the objectives of safeguarding and promoting Europe's future prosperity and creating new jobs, as well as the strengthening of the economic and social cohesion in the Union. The Community budgetary forecast for trans- European telecommunication networks is 30 MECU in 1996, 35 MECU in 1997, 77 MECU in 1998 and 114 MECU in 1999. Application projects of common interest have been identified in 10 specific domains of the trans-European telecommunication networks for a call for proposals to be launched in March 1996. Each project is proposed by a consortium of sector actors and interested parties who intends to deploy an application, primarily of collective interest. Among them, one is devoted to the trans-European access to Europe's cultural heritage. Trans-European access to Europe's cultural heritage Network access to museum and galleries offers both easier access to Europe's heritage and new revenue for its preservation and display from access and re-use fees. Europe's museums and galleries hold the richest collection of objects and art anywhere in the world, but much is not accessible to scholars and the public because of lack of space and resources. The development of a trans-European framework for electronic network access is therefore of enormous cultural and commercial importance. part II - page 30 61 The objective of this project is to establish a technical, operation and commercial basis for trans-European electronic access to Europe's cultural heritage. Initial feasibility assessments will be expected to address technical feasibility; the compatibility of a framework with the public mission of participating galleries and museums; the interests and requirements of schools, universities and the general public; and the viability of market management and structures for collection and re-distribution of access fees to museums and galleries. The feasibility assessments will be expected to be completed within 1 year, and to be followed by pilot implementation in most European Union Member States within the 2nd year, for further market deployment. The participating organisations will be expected to develop guidelines for good practice in electronic access to cultural heritage. 2. Information Market and Culture The Commission has carried out a number of initiatives to improve the accessibility of information at the European level, in particular, through the IMPACT (Information Marketing Policy Actions) Programme, concerning the creation of an internal market on the information services and the strengthening of the competitiveness of the European information service industry. It encourages publishers and other actors to enter the electronic information market to produce information products (educational and entertainment oriented) on the exploitation and protection of the European cultural heritage and culture in general to a wide public including schools. The cultural objective is to provide pan-European information and services to help ensure a strong European activity in the digital exploitation of public sector owned cultural assets in order to expand popular interest and the market for cultural goods. Narrow collaboration with asset holders (such as museums, etc. ), publishers and multi-media producers is required. Concerned with promoting cultural issues into the information market, the first IMPACT Programme, with a budget of 36 MECU for the period 1989-1990, co-financed the development of a project with a specific cultural dimension: The NARCISSE (Network of Art Research Computer Images Systems in Europe) project that produced a high resolution image bank of reference documents of art treasures of Europe's museums. It was led by the Laboratoire des Recherche des Musées de France (F). Building on the experience gained from NARCISSE, IMPACT 2 (with a 64 MECU budget for the 1991-1995 period) has supported the development of 22 projects to establish Interactive Multi-media Information Systems for the production of DC-ROMs and CD-Is. Out of these 22 interactive multi-media projects, nine (with a budget of nearly 2 MECU) relate to culture and the arts, having a considerable effect on the raising awareness of cultural heritage and contemporary heritage. Among them, we can part II - page 31 62 highlight the following: Via Lucis - Museums for Community: Via Lucis is a CD-I which introduces the spectacular world of the baroque through a rich collection of still and moving images, and scholarly resources. Museum of London - Journeys through 19th Century London: CD-ROM draws on the extensive collections of the Museum of London to combine over 1,000 images with original audio recordings and some of the first moving footage ever filmed. The Genesis of European Art - the Flemish Contribution: This CD-ROM looks primarily at paintings and drawings by Flemish artists between the 14th and 17th centuries, and the influence of their work on Europe's artistic heritage. The Gothic Cathedrals of Europe: This is the first title in a project series called 'Monumenta', of electronic publications which explore Europe's architectural heritage. With moving footage and photographs, users can study architectural detail of 35 cathedrals. All the above projects developed hard and software for new multi-media products, which can be used not only to raise the awareness of the public, but also as educational and training tools for the general or a specialised public. Currently, INFO 2000, which supersedes the IMPACT Programmes, is a Community programme proposed by the Commission which aims at stimulating the development and use of multi-media information content. With a proposed budget of 65 MÈCU for the period 1996-1999, its objective is to encourage Europe's content providers to develop new multi media products and services and to stimulate user demand for these products and services. The importance of multi-media content has been recognised in a number of fora. In particular, the Industry Council of 6/7 November 1995 invited the Commission to pursue initiatives that contribute to the advancement of the information content industry in view of the need to dispense content and services to the whole of industry. The central theme of INFO 2000 is the development of a European information content industry capable of competing on a global scale and able to satisfy the needs of Europe's enterprises and citizens for information content leading, on the one hand, to economic growth, competitiveness and employment, and, on the other hand, to individual professional, social and cultural development. In the Cultural Heritage area the aim is to stimulate the economic exploitation of Europe's cultural heritage through the implementation of new multi-media information services. Projects will create new multi-media information content and make it accessible on-line or off-line. Services developed should utilise a delivery mechanism that is widely available and appropriate to the purpose. They must also exhibit a high quality of data content in order to fully validate the technology application being demonstrated. part II - page 32 63 The projects should aim at developing innovative products of an educational or edutainment nature which increase understanding of cultural assets. They should also contribute to the establishment of a European information multi-media content industry, for example by information service development, networking demonstrating advances in multi-media experience, using communications networks. In particular, projects are sought that share and make available digitised data resources that can be re-used by the electronic publishing industry for the development of value-added products and services. CONCLUSIONS The place of culture within the advanced technologies environment is still limited but increasing and above all promising. This is clearly a developing field where technological development (the container) is ready for incorporating a cultural dimension (the content), since culture is a privileged field for the application of advanced technologies. The next step is to enable cultural organisations to use information and communication technologies to fulfil their specific missions. For that, their active involvement is crucial to undertaking the challenge that is needed, for instance, to convert our cultural heritage into electronic form. There is a concern to accelerate this development because the challenges are not only European but also internationals, such as the Pilot Project on Multi-media Access to World Cultural Heritage of the G7 Conference of February 1995 on the Information Society, coordinated by the Italian and French Ministries of Culture. The pressing need to collaborate together is growing because the cultural and technological players, being of different nature, have approaches and needs that are complementary. The demands of the cultural actors ought to be integrated at the beginning of the process, in order to develop applications that are adapted to the content and to address the appropriate purposes to the users, enhancing coherence in favour of efficiency. Otherwise, there is a risk for a dispersion of actions with duplication and gaps. This cooperation between the cultural and technological sectors can already be seen within the Community's policies; where a synergy has been developed among those concerned, notably with the museums field. Acting as a catalyser, the role of the Union is to create the framework where the cultural world (content owners) can collaborate together with industrial and commercial interests (information and hardware industries, as well as telecommunication operators and so on). Assuring the implication of all the players concerned, partnerships between private and public sectors are then easily envisaged. The main actors of these implied sectors well represented are now able to jointly put into perspective their action, specify their goals to attain in the field of museums and advanced technologies, and set up a clear strategy. Integrating all the previous experiences and results, the main objective is to consolidate a solid base at the European level through a coherent approach. At least the three benefits described here can result from the integration of the cultural dimension into advanced technologies in the field of museums: part II - page 33 64 (a) (b) (c) The museums will be more stimulated to cooperate in this area and will therefore accelerate the digitisation of their collections; The global value of the projects will be increased by the balance between high cultural quality on the one hand and technological quality and socio economic effects on the other; The expertise and creativity of the museum community will be better employed to achieve the goal of giving the Information Society a visible cultural dimension. The field of museums and galleries seems to be the most developed one in taking into account the cultural dimension in the advance technologies. However, important efforts are also being made in the field of libraries and archives. Other fields in the cultural sector, with a non negligible potential, such as non-movable heritage, theatre, music and dance, etc. are still to be developed. part II - page 34 65 CHAPTER IV : CULTURE AND OTHER INTERNAL POLICIES 1. Culture and environment In 1972, the Community was invited for the first time to implement, without delay, a common policy for the protection of the environment and consumers. The following year, the first Environmental Action Programme was instituted, to be followed by three other programmes. In 1987, with the adoption of the Single European Act and, more recently, with the Treaty on European Union (Title XVI, Article 130 r, s, t), protection of the environment has been recognised as an integral part of Union policy and of its objectives. The fifth Environmental Action Programme, adopted in February 1993 for a period of eight years, is entitled "Towards sustainable development". Its objective is no longer to restrict environmental protection with corrective actions, but to reconcile it with necessary economic growth. This integrated and long-term view of environmental problems underlies the various initiatives currently being implemented by the Commission. The Financial Instrument for the Environment (LIFE) Since 1984, the Community has had at its disposal a series of financial instruments enabling it to implement its environmental policy (1984-91): Community Actions for the Environment - Biotopes). The most recent of these, entitled "The Financial Instrument for the Environment" (LIFE), was adopted in May 1992 for an initial 3-year period (1993-95), with a global budget of some 400 million ECUs. The programme was organised to cover several priority fields, the two principal ones being the promotion of moderate development and of the quality of the environment (LIFE- Environment, representing approximately 40% of available resources), and the protec tion of habitats and of nature (LIFE-Nature, totalling approximately 45% of resources). This latter field has seen the development of actions for financing incentive projects which are included under the implementation of Council Directive 92/43/EEC, relating to the conservation of natural habitats, fauna and wild flora (Habitats Directive), as well as Council Directive 79/409/EEC, on the conservation of wild birds (Birds Directive). LIFE-Nature, relating essentially to the safeguarding of natural heritage and biodiversity, stems from an understanding of culture which is different from that adopted by this report, specified by Article 128 of the Treaty. Environment and culture The "Environment" part of the LIFE instrument, on the other hand, finances projects which more specifically include a cultural dimension, and includes the following priorities: part II - page 35 66 - actions whose aim is to design and develop models for integrating the environment into regional development and management and into socio-economic activities. This priority is shared between rural development and sustainable tourism; - actions for improving the quality of the environment in urban areas, both in central and outlying regions. Of the projects receiving support within the context of rural development, there are many which relate to the enhancement or the restoration of "historical" landscapes and which acquire their cultural dimension owing to the interaction between this natural environment and its inhabitants, as well as to the tourism-related opportunities which they play a part in creating. By way of example, mention may be made of the production and improvement of plant essential oils from the maquis, with a view to preserving the Mediterranean landscape. The aim, here, is economic, ecological and tourism-based (Sicily, Italy). However, this is a fairly marginal definition of culture compared with that which this report is endeavouring to determine within the various policies. On the other hand, under the terms of the action to promote sustainable tourism, it is possible to identify a number of projects whose cultural content is more directly linked to the field defined by Article 128 of the Treaty. The project entitled "Development and enhancement of the Carnac megalithic sites" (Brittany, France), launched in July 1994 for a period of 54 months, aims to rehabilitate and restore the archaeological site and its natural environment. Intensive visiting of the site, which is concentrated over a short season and a small area, tends to wear away the grassed area, leading to leaching and progressive erosion of the soil, accompanied by exposure of the rocky base, which threatens to loosen the standing stones. The project aims to adapt the conditions for visits by combining all ecological, heritage and tourist constraints and data to form an integrated approach which can be reproduced in other similar European cases. Out of a total of 15,164,634 ECUs, some 1. 68% (254,614 ECUs) have been provided by LIFE. The priority area devoted to improving the quality of the environment in urban areas includes projects aimed at the sustainable management of access and of the quality of the environment at important tourist sites. The project entitled "Public access to the historic commercial centre of Kos lower town" (Greece) is spread over a period of 20 months, beginning in November 1995. Its aim is to improve the quality of the environment in the centre of the town and to improve access and the movement of visitors in the historic and commercial districts. Among the many measures (mostly of a town-planning nature) to be implemented to achieve these objectives, we should highlight development of the environs of ancient monuments. LIFE is supporting the project to the extent of 232,439 ECUs out of a global budget of 826,960 ECUs (28. 11%). By taking the environment into account in the wide sense, both in terms of its natural aspects and those aspects transformed by human, rural or urban action, together with the very different problems posed by these environments, LIFE-Environment possesses a considerable cultural dimension. It can contribute directly, as the examples quoted demonstrate, to the management and sustainable development of sites which may be regarded as "cultural landcapes" (archaeological or historical, urban or vernacular sites, landscapes marked by human activity, etc. ). part II - page 36 6 » r- Cultural aspects of LIFE-Environment Budgets in thousands of ECUs Member State or LIFE priority Total cost of projects having a cultural aspect LIFE participation in "cultural" projects % of "cultural" projects m LIFE credits In the case of 1992 and 1993, the participation of LIFE in "cultural" projects is an estimate LIFE 92 LIFE 93 A15 A17 TOTALS A15 A17 TOTALS LIFE 94 Belgium Germany Greece Spain France Ireland Italy Portugal United Kingdom Other countries A1S1 A152 TOTALS LIFE 95 Belgium Germany Greece Spain France Italy Portugal United Kingdom Other countries AI7 TOTALS 2763 2392 5155 5227 3159 8386 513 713 1464 1361 2111 680 1015 903 1459 0 4715 5504 10219 935 290 720 1180 915 342 80 616 0 5078 5078 9 0% 8 0% 1 9% 9 0% 8 0% 14 V. 21 % 1 0% 3 3% 2 9% 3 0% 2 6% 1 6% 5 2% 21 % 0% 8 6% 100% 19 % 2 6% 4% 2 2% 25 % 1 4% 5% 7% 1 2% 0% 81 % 11 % 1202 1445 3230 4271 19112 1507 2305 2049 2932 0 11181 26872 38053 2079 579 1813 4840 2226 824 212 1871 0 14444 14444 TOTAL 92-95 28838 15 % part II - page 37 68 A few figures By considering, for the years 1994 and 1995, the "sustainable tourism" priority as a whole and a large proportion of the "rural development" and "improvement of the quality of the environment in urban areas" priorities (search for the "cultural" character, according to the project titles), it is possible to advance a tentative estimate of the amount of LIFE-Environment credits used to support projects with a cultural aspect. For 1994, out of a global budget of 53,085,000 ECUs, the participation of LIFE in projects of this type is approximately 10,219,000 ECUs, i. e. 19%. For 1995, out of a total amount of 48,147,000 ECUs, it represented some 5,078,000 ECUs, i. e. 11%. The 1992 and 1993 figures are the result of an extrapolation for these years of percentages derived from an analysis for 1994 and 1995. Thus, for 1992, an amount of 5,155,000 ECUs was committed out of a global budget of 27,038,000 ECUs for "cultural" projects, equivalent to 19%. In 1993, expenditure in this field was 8,386,000 ECUs out of a budget of 58,517,000 ECUs, i. e. 14%. Consequently, over the 1992-95 period, it is possible to estimate, approximately, that the percentage of credits spent on supporting cultural-type projects is 15% of the global LIFE-Environment budget. The "Sustainable towns"project and the balanced management of the urban environment The "Sustainable towns" project, launched by the Commission in 1993, is an example of the cultural approach which may be developed under the terms of policies to promote the environment. Managed by a group of urban-environment experts and supported by a vast network of representatives from the Member States, urban and local administrations, social partners, organisations operating in the environmental field, bodies specialising in urban management, and the Commission's services, this project's aim is to promote in-depth consideration of the sustainable development of European urban complexes and, in the long term, to promote the achievement of specific projects in this field. The result of initial work was published, in 1994, in a report entitled "Sustainable towns", an update of which is expected in 1996. In the part dealing with "Balanced planning of land use", a chapter is devoted to the safeguarding of cultural heritage. This problem is analysed in the light of three priority factors: the quality of the urban environment as reflected in the cultural and natural heritage of European towns; tourism and leisure activities; and the impact of the latter on cultural heritage and on the quality of the urban environment. The report proposes a series of measures to tackle development and urban improvement, the restoration of historic buildings, the aesthetic quality of new structures and their integration into the older fabric, etc. In conclusion The activities implemented under environmental policy include a considerable cultural component, particularly if one takes into account the environment as modified by interaction between man and nature. However, it should be pointed out, in a global view of the environment, that the various dimensions which define it are closely interlinked and that the cultural dimension can be identified and quantified accurately only with difficulty. Moreover, the line dividing the cultural and natural universe part II - page 38 6i» which characterises the environment remains blurred and varies greatly according to one's point of view. In this context, the more specifically ecological meaning of environment (developed by LIFE-Nature) has not been considered in this chapter although it represents the most significant part of Community action in this sphere. On the other hand, a more specifically "cultural" dimension is provided by those projects involving intervention in respect of architectural heritage which is regarded as a significant component of the environment, both urban and rural, and as an essen tial element in the quality of life. Architectural heritage is more or less directly influenced by human factors (population density, sociology, economics and culture), physical factors (traffic, density, morphology, materials, functions) and environmental factors (pollution, conservation and sustainable management) which must be dealt with in a global manner. Taking these problems simultaneously into account in policies to promote the environment, R&DT, regional policy, tourism and culture will, by developing already existing or new synergies, enable the Union to implement an integrated policy which responds to the current imperatives of land management and the safeguarding of the cultural heritage. 2. Tourism and culture The direct initiatives implemented by the Community in the area of tourism are covered by Council Decision No. 92/421/EEC which stipulates that: "the Community's action is aimed at highlighting the importance of cultural heritage for tourism and at promoting greater knowledge of the cultures, traditions and ways of life of Europeans". 1 This decision thus expressly emphasizes the close link between tourism and culture and, more particularly, tourism and cultural heritage. These two elements have, in effect, become the two areas which complement and are virtually inseparable from a vast current of cultural awareness and redefinition. At the same time, cultural tourism is, in terms of openness and exchange, a factor of paramount importance for the development of the idea of European citizenship and has increasingly important economic and social consequences for many countries in the Union. According to the principle of "subsidiarity" which governs Community action, the development and management of tourism are, above all, within the jurisdiction of the Member States which have the opportunity to enhance the wealth of their respective cultures. The Community's role in this respect is to give tourism-based initiatives a European dimension by supporting, in particular, the exchange of information, savoir-faire and good practices through transnational projects. 'For an analysis of all Community actions relating to tourism, see Document COM (96) 29 final, of 5. 2. 96 part II - page 39 70 The "multiannual Community action plan in the field of tourism " and cultural tourism Therefore, the Commission developed a "multiannual Community action plan in the field of tourism", covering the period from 1993 to 1995, and allocated an overall budget of 18 million ECUs. A significant number of projects supported within this context are of a cultural nature, particularly: a) Support for initiatives aimed at drawing up new European, tourism-oriented cultural routes, in collaboration with the national, regional and local authorities of the Member States and at publicising them in brochures and other publications or multimedia tools. (Call for proposals 93/C 128/09 OJEC C128 of 8/5/93, p. 7) b) Incentives to and aids in using European networks which permit the exchange of experiences between tour operators and cultural institutions, amongst other things for the enhancement of heritage. (Call for proposals 94/C 122/07 OJEC C122 of 4/5/94, p. 9) - "European cities of art", implemented by the Federation of Tourism Offices of European Cities (1994-95), aims to establish a European network of 31 cities of art and history located in 11 countries in the EU, through cooperation between tourism's professional and cultural institutions, both in the public and private sector. Emphasis will be placed on urban tourism which has been made more functional and attractive through the development of tour "packages" and appropriate information and marketing tools, particularly using computers and new technologies. - "European cities within reach" is a project drawn up by the Royal National Institute for the Blind (1993/94/95) which aims to produce publications in Braille presenting the heritage of a number of European cities to a visually-handicapped audience. Specially arranged cultural circuits will also be developed, or extended where these already exist. In the wake of the 1993 work programme, 18 projects were achieved in 1994, these being aimed at developing new cultural tourism routes. The Community's contribution was 1,200,000 ECUs. For 1994, out of a total of 21 tourism projects supported by the Commission and achieved during the 1994-95 period, 11 were of a cultural type. Their objective was to stimulate the exchange of experience between tour operators and cultural institutions, each project setting up a cultural network. The projects chosen reflect a number of trends arising from different cultural objectives ranging from enhancement of architectural heritage, in order to promote the spirit of discovery for the greatest number of tourists, to a more social approach, such as the promotion of ethnic minority culture through the establishment of tourist itineraries, or the production of publications in Braille on the heritage of European cities intended for the visually handicapped (example cited above). Out of a total Community location of 6,566,400 ECUs, 1,093,863 ECUs were used to support these cultural-type projects (i. e. 16. 66%). part II - page 40 ?t To conclude The relationship between tourism and culture is undeniable and, given this fact, Community action in this field cannot but have a significant added value. Cultural tourism is a sphere which, logically, has great cultural potential, but also economic and social potential. Enhancement of the cultural heritage for tourist purposes can help to safeguard assets and develop the region in question. However, this may also be a double- edged sword: the opening-up of historical sites or museums to an uncontrolled flow of tourists, together with the developments which result from this, may represent a serious threat to the integrity and long-term preservation of this cultural heritage. In this connection and with a view to increased Union action in the field of tourism, it is essential, in collaboration with the cultural sector, to take account of public expectations but also, and above all, of the imperatives of conservation and balanced management of cultural heritage. This includes, inter alia, better management of flows of visitors informing tourists and making both them and the inhabitants of the localities receiving the tourists more aware. 3. Culture and research The Community programmes conducted in the field of research are covered by the 4th Research Outline Programme (1994-98), allocated an overall budget of 12. 7 billion ECUs. Science and technology are an integral part of culture, as a major source of knowledge and new practices, and also utilise and reflect the values and view of the world of the groups in which they develop. The Union's technological development and research policy as a whole thus has an undeniable cultural dimension. It reinforces the position of science and technology in European culture by stimulating the expression of European culture(s) in this field. The cultural dimension of technological development and research policy is explicit in the case of the following major categories of action: A) Union actions in the field of relations between science and culture: This action has a dual objective: To stimulate, on a European scale, reflection on and debate about science and technology. The principal instrument used for this purpose is the "European Science and Technology Forum", a framework for studies and conferences on historical, social and ethical cultural aspects of science and technology in Europe (budget: approx. 800,000 ECUs per annum). Set up in 1994, the Forum is the framework for 4 or 5 projects each year. The Forum's action is supplemented by the publication of a quarterly review. "Euroscientia Forum", which aims to expand reflection and debate on science and technology in Europe beyond the participants in the Forum's conferences and the subjects dealt with there. To stimulate on a European scale, knowledge and understanding of science and part II - page 41 79 technology on the part of the public. The principal instrument used for this purpose is the "European Scientific and Technological Culture Week" (budget: 1 million ECUs per annum). Organised each autumn since 1993, this initiative serves as a framework for a variety of projects (open days, special TV programmes, conferences, exhibitions, animation projects, etc. ) aimed at familiarising the public with science and technology in their European dimension (European scientific and technological cooperation, science and technology in other European countries). Twenty to thirty projects of this type are prepared each year in collaboration with bodies from the various countries. B) Union actions in the field of RDT to protect and conserve European heritage 1. The "Environment"programme: research and technology in the service of cultural- heritage conservation It was in 1986 that the Community began ongoing support for research projects with a cultural dimension through its "Environment" programme. This programme's general aim is to expand and reinforce research activities which are currently in progress by supporting transnational and multidisciplinary projects aimed at reconciling environmental improvement and the quality of life with industrial development. Since then, this programme has gone through four stages of activity, each including a specifically cultural part: "Environmental protection 1. "The effects of atmospheric pollution on buildings and historical monuments" (1986-90). 2. "Protection and conservation of European cultural heritage" (STEP Programme - 1989 - 92). 3. conservation of European cultural heritage" (ENVIRONMENT Programme - 1991-94). 4. and (ENVIRONMENT AND CLIMATE Programme - 1995 - 98). rehabilitating European cultural heritage" for protecting "Technologies and As these titles expressly indicate, the cultural dimension of these activities is linked to the close relationship maintained between scientific research and technological development on the one hand and conservation of the cultural, domestic and movable/non-movable heritageon the other. Ranging from the intrinsic qualities of deterioration (behaviour of materials towards external factors) or the extrinsic causes {inter alia climatic and environmental factors), to protective and conservation measures, the projects supported in this context relate to extremely varied problems which have in common recourse to research and up-to-date technological methods in order to achieve a cultural objective. One example is the project run by a network of several Italian, Belgian, Spanish, Portuguese and Greek universities and centres, together with Malta and Romania, the project being entitled "Marine spray and polluted atmosphere as factors of damage to monuments in the Mediterranean coastal environment", which lasted 36 months and was launched on 1 January 1993. part II - page 42 73 The project aims to conduct a scientific study into the climatic and environmental influences on the process of ageing and the problems of degradation of the stone from which the monuments in the Mediterranean regions of southern Europe are built, with special attention being given to the cumulative action of sea salt and atmospheric pollutants. The second objective concerns the development of a study methodology to evaluate the characteristics of the stones which might enhance understanding of the phenomena of ageing. This could provide a basis for the development of the most appropriate conservation techniques. This project was supported by the Commission to the extent of 1,200,000 ECUs. Projects supported within the context of this programme are conducted by universities, research centres or specialised SMEs. They last for 2 or 3 years and have to have a European dimension (participation on the part of several countries), demonstrate a high scientific content, an innovative approach and optimum potential exploitation of the results. Over the last three periods of activity of the programme (1986-90, 1989-92 and 1991-94), some 130 of the principal European research laboratories and institutes have submitted and completed projects in the field of conservation of cultural heritage. The programme also includes preparatory and flanking measures to promote the use and dissemination of the research results. Such measures include conferences, workshops devoted to specific topics (eg. the conservation of brick masonry, Louvain, October 1994), the setting- up of network-type working groups, and the publication of reports presenting the most significant projects supported within the context of the programme, as well as the "European Cultural Heritage Newsletter on Research". For the 1990 - 94 period, out of a global budget of 315 million ECUs, the amounts allocated to the completion of 18 cultural-type projects totalled approximately 11 million ECUs, i. e. 3. 5%, amounting to an annual figure of approximately 2. 2 million ECUs. 2. "Environment and climate" : 1995-98 The current programme, entitled "Environment and Climate", relates to the period from 1995 to 1998. That part devoted to research into the protection and conservation of cultural heritage has the following general objectives: - Better knowledge of the causes and mechanisms involved in the deterioration caused by environmental factors, together with an evaluation of the risk factors linked to improper use of technologies (eg. heating, air-conditioning, new building materials, etc. ) and to mass tourism. - Promotion of the development and application of methods and technologies emphasizing an evaluation of their limits, advantages and appropriate application within the context of the causes, mechanisms and effects of and treatment for environmental degradation. - A contribution to the setting-up of a scientific conservation database. This programme has been allocated a global budget of 566. 5 million ECUs and it is reasonable to imagine that at least the same percentage as in the previous period (3. 5%) will be set aside to finance projects with a cultural content. This would correspond to an estimated minimum amount of approximately 20 million ECUs for the 1994-98 period, corresponding to an annual figure of approximately 4 million ECUs. part II - page 43 7 4 Contribution of the measures and analyses 3. to the conservation of cultural heritage: the "Standardisation, Measurement and Test" programme (1994-98) Further initiatives currently being developed within the framework of the 4th PCR include measures capable of exerting a degree of influence on the cultural sector and, in particular, in relation to heritage. The "Standardisation, Measurement and Test" programme (1994-98) aims, in general terms, to develop a harmonised system of reliable and reproducible measurements and analyses to improve the competitiveness of European industry. Topic III of the programme, which relates to "Measurements in the service of society", is intended to encourage research which contributes to an improvement in individuals' health and safety and environmental quality (including the safeguarding of European cultural heritage). This context includes the development of new instruments and systems of measurement for qualifying parameters which affect the conservation and maintenance of cultural assets and defining the damage caused, a methodology for evaluating the effectiveness of the treatments and products used in activities linked to conservation, sampling techniques, and methodologies for establishing the origin and composition of articles. This programme has been allocated a global budget of 184 million ECUs. It can be estimated that approximately 4 million ECUs will be spent on activities of a cultural nature. The annual amount of such expenditure would consequently be in the region of 800,000 ECUs. 4. The INNOVA TION programme The INNOVATION programme covers pilot projects aimed at understanding and integrating the social and, a fortiori, cultural dimension into its action to develop an environment favorable to the dissemination of scientific and technical experience in European society and, more generally, to promote a European "innovation culture". The systematic dissemination of good practices and methodologies enabling society's players to take part in the various innovation processes, which are common in some countries in the Union and lacking or rare in others, creates important synergies and helps to reinforce European cohesion. The conditions for success of these actions to transfer savoir-faire have been analysed and amply tried out in the field (more than 500 experts from various fields, municipal representatives and residents from about 15 towns and cities took part), in the case of a specific methodology developed in Denmark and now being used in some 10 European towns and cities before the project has even been completed (European Awareness Scenario Workshops (EASW) Initiative). The effectiveness of this approach is confirmed by the support expressed by such diverse networks and organisations as the Council of Communes and Regions of Europe, Eurocities, the Campaign for Sustainable Towns and Cities, coordinated by DG XI D, the United Nations Environment Programme and other groups working as part of more informal networks. part II - page 44 ( ;> On this basis, a series of similar projects exploring new topics brought to the fore by the advent of the Information Society (health and quality of life, mobility and access, ageing society, etc. ) and new methodologies or better practices will be launched in the near future after an open call for proposals (budget: approx. 2 million ECUs). C. Other Union actions The cultural dimension is present in a portion of the Union's action in supporting the training and mobility of researchers. It is more difficult to quantify the budget allocated to activities of a cultural nature within other programmes or actions linked to RDT. The programme entitled "Training and mobility of researchers" (1994 - 98) is aimed, in accordance with the White Paper on competitiveness, growth and employment, at promoting the mobility of researchers and the creation of continent-wide research networks. This objective is pursued through the granting of research bursaries, enabling European researchers to attend training courses lasting from 3 months to 3 years, outside their country of origin, and through the organisation of research networks intended to promote meetings, experience, the exchange of results, etc. The programme also includes flanking measures, such as the organisation of Euroconferences and other scientific meetings, training courses and summer courses. The cultural dimension of this programme is obviously linked to the participation of researchers from the humanities and social sciences. This programme, in effect, includes projects with a strong cultural dimension (history of science, cultural anthropology, archaeology, sociology of values, language studies, etc. ). Amongst other initiatives linked to RDT which do not have a cultural dimension but which may exert a degree of influence in the cultural field is the programme entitled "Technology Stimulation Measures for Small and Medium Size Enterprises" (1994-98, granted a budget of 700 million ECUs). This programme, which aims to encourage the participation of SMEs in Community RDT programmes, can assist SMEs wishing to implement new technological means in the sectors of art and cultural heritage. Conclusion With the three goals of consideration of the cultural aspects of science and technology, support for research in the service of European heritage, and research into social problems with a strong cultural component, recent years have seen the advance of the cultural dimension of the Union's technological development and research policy. This evolution should be continued in the years to come, within the limits of the objectives of research policy as established in the Treaty. part II - page 45 /r> Links with the "ENVIRONMENT R&D PROGRAMME" (A) science and research sector (B) total funds for actions (C) actions with a cul tural dimension (D) funds to actions with a cultural dimension percentage of total funds to actions with a cultural dimension Environment programme 315 MECU 18 11 MECU 3. 5 L i st of Research P r o j e c ts on Environmental P r o t e c t i on and Conservation of t he European c u l t u r al Heritage funded under t he Environment R&D Programme (1990-94) Coordinator Partners Title of project Syremont Spa (Italy) Greece, Spain, Italy, France Institut fur Instandhaltung GmbH (Germany) UK, Greece, Netherlands English Heritage (UK) UK, Ireland, UK Gifford & Partners Ltd. , UK Germany, Portugal, UK Birkbeck College, UK Netherlands, Italy Study of the microstructural decay of lithoid monuments caused by environ mental factors, using newly developed radar-aided methods Soil-archive classification at Euro pean excavation sites in terms of environmental impact and conservabil- ity of cultural heritage Wood protection : understanding the relationship between deathwatch-beetle wood-decay fungi and timber ageing in European historic buildings in order to develop alternatives to current harmful and ineffective treatments Re-treatment of consolidated stone façades ERA : Environmental Research for art conservation Royal Danish Academy of Fine Arts (Denmark) France, Belgium, UK Deterioration and conservation of vegetable tanned leather EC contribution (ECU) duration (months) 600,000 30 518,000 24 500,000 36 164,000 580,000 480,000 24 36 24 part II - page 46 Middlesex University, UK Portugal, Austria, UK Particulate pollution and stone damage University of Patras, Greece Italy, Spain University of Manchester, UK Denmark Deposition of gases and particles and their corrosive effect on articles of cultural & artistic value inside museums Development of improved conservation techniques for archaeological iron Carl von Ossietzky Universitat Oldenburg (Germany) Italy, Spain Biological and mineralogical reactions of Mediterranean monuments TNO, Bouw (Netherlands) Belgium, Italy Katholieke Universiteit Leuven (Belgium) Netherlands, Italy, Germany Fraunhofer Institut fur Silicatforschung Wurzburg (Germany) Fraunhofer Institut fur Silicatforschung Wurzburg (Germany) UK, Portugal Performance of surface treatments for the conservation of brick masonry Expert system for evaluation of deter ioration of ancient brick masonry on historic buildings Assessment and monitoring of the environment of cultural property UK, Denmark, Romania, Czech Republic New conservation methods for outdoor bronze sculptures Universiteit Ghent (Belgium) Spain, Belgium, Ger many, Italy Interactive physical weathering and bioreceptivity study on building stones monitored by CT X-ray tomography Community of Mediterranean Universities (Italy) Spain, Greece, Portugal, Belgium, Germany, Italy, Malta Marine spray and polluted atmosphere as factors of damage to monuments in the Mediterranean coastal environment Universita degli Studi di Trieste (Italy) France, Italy Non-destructive testing to evalute diagnostic methods and reinforcement techniques applied to historic buildings 471,000 280,000 300,000 116,000 410,000 600,000 900,000 714,000 600,000 1,200,000 660,000 24 24 24 24 24 30 36 24 30 36 36 Université Paris Val-de- Marne (France) Italy, Switzerland, France Surface alterations of monuments: experimental and modelling approach 250,000 27 part II - page 47 4. SMEs. commerce and culture Production within small and medium-size enterprises, the craft sector commerce and distribution are the subject of a number of Community support actions within the context of the multiannual programme for businesses and the SMEs (1994-96). This programme, which aims, inter alia, to modernise commerce and distribution and emphasizes the role of commerce in local development, carries out actions which, indirectly, have a cultural dimension, particularly on the grounds of the encouragement they offer to artistic and craft activities. Three initiatives are worthy of mention in this connection. The first, entitled "Support for seminars, conferences and studies", receiving a global budget of 300,000 ECUs, is used to support non-profit-making actions of interest to commerce and distribution. These conferences and seminars may have a cultural nature. In 1994, a conference was organised on "The future of small retailers and services in rural areas", which analysed the role played by commerce in the survival of rural communities and in halting the drift towards the towns and cities. In 1996, a seminar will be held at Empoli, Italy, on the socio-economic impact of commerce on historic urban centres in various Member States, with particular reference to tourism. The second initiative consists of Commission support for and participation in the conference on artistic trades organised in June 1994, in London, by the British Crafts Council. CRAFT - Finally, at the second European craft and small businesses conference, held in Berlin on 26 and 27 September 1994, debate also touched on artistic trades and, in particular, on a European value for the artistic trades. The Commissiion is prepared to sponsor such an initiative, to be launched by representatives from the private sector. This initiative would aim to provide recognition to craftsmen, to improve the knowledge, profile and representative nature of crafts and to consolidate the concept in its European context. A prize will be awarded for confirmed craft talent, with a second prize to encourage young craftsmen to enter the field. The field of small and medium-size enterprises and, in particular, those which are active in the artistic and craft sectors, in the safeguarding of cultural heritage or in new technologies applied to these subjects, represents a significant cultural dimension but one which is difficult to identify and to evaluate within current Community policy. Union action in this field which is particularly strong in economic and social terms may, if consolidated, make a significant contribution on the one hand to the safeguarding and redevelopment of traditional trends and, on the other hand, to the emergence of new cultural skills. 5. The social economy and culture Foundations are among the principal players in cultural action and we can estimate that they invest some 152 million ECUs in this area in Europe. At least 150 foundations3 are active in this sphere, either by means of support given to cultural events or by staging them 3 See "Cultural Funding in Europe", European Foundation Centre, 1995 part II - page 48 7 9 directly. As groups of volunteers acting together to achieve a common objective, cooperatives and associations are often used as tools to organise cultural activities. They are particularly active in implementing an integrated approach to culture, by means of extending cultural horizons to underprivileged groups (the poor, minority ethnic communities). Work to establish European statutes for coooperatives, mutual-type groups and associations, together with other priorities in the social economy working programme, facilitates trans-European cultural action. Culture is a growing source of competitive advantages for Europe. It is thus timely that social economy organisations should be actively pursuing vocational training in the field of culture, for example ESF-supported training projects in the field of music, the theatre and comedy. Sometimes, these actions are part of multi-functional projects to restore urban centres. Some projects supported within the framework of the Commission's multiannual programme (1994 to 1996) for cooperatives, mutual-type groups and foundations in the Community have a cultural dimension. The programme's budget is now around 2. 5 million ECUs/year, a small proportion of this being used to support cultural activities. 6. Community action to promote European town-twinning This action is to encourage closer links between towns and villages in Europe through town-twinning. To date, some 15,000 towns and cities have taken part. Community financial support targets mainly small villages and towns in underprivileged peripheral regions and develops multilateral exchanges and joint action programmes. Such activities may relate to or include culture and cultural heritage. The budget allocated to this action for 1995 was 3. 5 million ECUs, with 7. 5 million for 1996. About 10% of the overall budget for the action will probably go to support activities of a cultural type. part II - page 49 80 PART III : AUDIOVISUAL POLICY The development of the European Union's audiovisual policy is a response to two basic objectives: setting-up and ensuring the functioning of a genuine European area for audiovisual services; implementing a strategy to reinforce the European programme industry. These two objectives, linked to the development of the market and to industrial policy, are being pursued by taking full account of the cultural dimension of the audiovisual sector, and can be seen both in terms of the regulatory framework governing the European audiovisual area and in the various support initiatives. 1. FIRST OBJECTIVE - A EUROPEAN AREA FOR AUDIOVISUAL SERVICES - (REGULATORY ASPECTS) The "Television without frontiers"1 directive, adopted by the Council in 1989, is the cornerstone of the regulatory framework for the European area in respect of audiovisual services. Its principal objective is to permit the free circulation of television broadcasts in the European Union and thereby encourage the development of transnational services. It is consequently based on Articles 57(2) and 66 of the EC Treaty. This free circulation is based on a double principle of unity of the applicable law and of freedom to receive broadcasts: each broadcaster may be subject to the laws of only the single Member State under whose jurisdiction he falls (or is established) and must comply with a minimum of common rules in so-called "coordinated" areas. the Member States must not impede the reception or retransmission on their territory of broadcasts originating from other Member States for reasons falling under the jurisdiction of the coordinated fields. The method used is thus that of the coordination of national rules where that is necessary, so that the disparities between them can no longer constitute legal obstacles to the free circulation of televised broadcasts. Free circulation is the principal objective of the directive and it takes into account other objectives such as the protection of consumers and minors, the promotion of the European audiovisual industries, the protection of public health, etc. The coordinated fields include the definition of criteria whereby a broadcaster is deemed to fall within the jurisdiction of a Member State, televisual and sponsored advertising (advertising volumes and message content), the protection of minors, the right of reply and a specific factor devoted to the promotion of the production and distribution of audiovisual programmes. Council Directive No. 89/552/EEC, of 3 October 1989, relating to the coordination of certain laws, regulations and administrative provisions of the Member States relating to the pursuit of televisual broadcasting activities. OJEC L 298, dated 17. 10. 89 part III - page 1 81 This chapter contains a structural rule aimed at reinforcing independent production and a rule aimed at guaranteeing that most of the work disseminated by European broadcasters is European. This latter rule has an obvious cultural dimension in that it ensures minimum representation of national and European cultures on European screens The basic framework provided by the "Television without frontiers" directive is supplemented in various other fields to ensure effective free circulation of the services by other legal instruments within which the cultural dimension of the audiovisual sector is also taken into account. * "Television without frontiers" directive within the context of transborder broadcasts. The so-called "Satellite cable copyright" directive2 supplemented, in 1993, the In addition, the Green Paper on the legal protection of encripted services3 provides, * for consultation by interested parties, an analysis of questions connected with the pirating of pay-TV audiovisual services and, thus, indirectly, of audiovisual works. In particular, it is of the opinion that a regulatory action, at Community level, aimed at establishing an equivalent level of protection in all the Member States could prove to be necessary in order to supplement the regulatory framework of the European audiovisual area set up by the "Tele vision without frontiers" and "Satellite cable" directives. * Admittedly, in other areas connected with broadcasting, the Member States retain the right to legislate in respect of Community law. In these areas, the application of Article 59 of the Treaty, which provides for the abolition of obstacles to the freedom to provide services, makes it possible to prevent new violations of the European audiovisual area. However, its application in the audiovisual sector also takes account of specific cultural features: in particular, it has recognised the possibility that the Member States have to maintain certain national measures relating to linguistic policy {cf. Chapter I - Culture and Community case law). * Finally, the satisfactory functioning of a European audiovisual area presupposes the maintenance of an open market and effective competition. In the field of State aid, the new possibilities offered by Article 9293)(d) of the Maastricht Treaty must, however, be fully exploited. The audiovisual sector is facing rapid change, both in technological and economic terms, and such changes can be seen, particularly, in the development of new types of audiovisual services on each side of the traditional frontier between broadcasting and telecommunications. At a time when clusters of satellite and pay-TV channels are beginning to become firmly established in the European audiovisual landscape, the digital broadcasting revolution makes Directive 93/83/EEC, relating to the coordination of certain copyright and similar rules applicable to satellite broadcasting and retransmission by cable Doc. COM(96) 76 final part III - page 2 82 it possible to perceive a multiplication of the programme supply and the development of services such as "pay-per-view" or "video on demand". Similarly, by virtue of progress made in digital compression, telecommunications networks are becoming suitable supports for the dissemination of images and the development of new interactive multimedia services. Given these various developments, maintaining the basic principles of the European audiovisual area presupposes both certain adaptations of existing rules and forward-looking reflection on the framework which is likely to enhance the development of new services. All these new factors take due account of the sector's cultural dimension. Beyond a limited review of the "Television without frontiers" directive, such forward-looking reflection will be part of the framework of a Green Paper on the new audiovisual services, to be finalised during 1996. 2. SECOND OBJECTIVE - REINFORCING THE EUROPEAN PROGRAMME INDUSTRY - (SUPPORT ACTIONS) Although strong in the terms of the wealth and the diversity of its heritage, the European cinematographic and televisual programme industry has revealed its structural weaknesses in the face of the increase in competition on international markets. The strengthening of this industry and the desire to make it more competitive have, right from the outset, been a fundamental objective of Community audiovisual policy. Beyond the industrial dimension of this objective, there is clearly a strong cultural dimension. Cinematographic and televisual programmes are goods unlike any others: as privileged vectors of culture, they retain their specific nature amid the new types of audiovisual product which are currently multiplying; as living witnesses of the traditions and of the identity of each country, they merit encouragement; only a strong European industry will be able to guarantee both the diversity of programmes and an increase in the international influence of European cultures. Given the position of the image of our society, much is at stake in cultural terms. Over the years, the diagnosis has been refined and Community support instruments have been developed. The principal support instruments, namely the MEDIA Programmes4 and the Action Plan for The MEDIA Programme was set up by Council Decision 90/685 EEC, of 21 December 1990, relating to the implementation of an action programme to encourage the development of the European audiovisual industry (MEDIA 1991-95). This programme was reshaped into a MEDIA II programme based on two Council Decisions, firstly No. 95/563/EC, relating to a programme to encourage the development and the dissemination of European audiovisual works (MEDIA II - Development and dissemination) (1996-2000) and, secondly, No. 95/564/ EC, relating to a training programme for professionals in the European audiovisual programme industry (MEDIA II - training) (1996-2000). part III - page 3 8li E u r o p e5, in T e l v i s i on A d v a n c ed 235 EC, effectively supplement efforts made at national level. To comply with the principle of subsidiarity, they relate to structural objectives having a direct and indirect impact both on the production of European works and on their circulation in the Member States. Similarly, the European guarantee fund for the audiovisual sphere, as proposed by the Commission6, is aimed at creating a financial instrument capable of mobilising investment in the European audiovisual programme industry. A r t i c le b a s ed b o th on This innovative instrument is intended to supplement the action of the MEDIA II programme by intervening directly at audiovisual production level. This will make it possible to improve, in a more efficient manner, the financing of European works capable of benefiting from pan-European and worldwide expansion. Given that their principal objective is to promote the development of the programme industry, MEDIA II and the guarantee fund are based on Article 130 (industry) of the EC Treaty. However, these instruments, just like the action plan, take full account of the cultural aspects of the industrial sector they intend to promote, as is the intention of Article 128, Paragraph 4. Moreover, under the terms of the "European Audiovisual Dimension", the support given to prices and festivals traditionally makes it possible to provide financial support for audiovisual festivals, particularly cinema, by programming quality European works at a time when commercial cinemas are putting on essentially American films. This action, developed since 1992, has a threefold objective which is not without importance from the cultural standpoint: it enables European works to be promoted; it favours their circulation and their distribution (whereas, in the case of each Member State, only a very small part of nationally-produced films is the subject of programming in other Member States); it facilitates mutual awareness of national film industries, thereby contributing to the enrichment of cultural exchanges. The interest in this action on the part of professionals working in the field of cinema, as witnessed by the recent creation of the "European Cinema Festival Coordinating Committee", stems from the fact that, in addition to providing financial support, it enriches their programming outside the constraints imposed by distributors and provides a "label" enhancing the allocation of national and regional aid as well as commemoration of the Centenary of the Cinema in 1996 in some Member States. 5 6 Council Decision 93/424/EEC, of 22. 7. 93, establishing an action plan to introduce advanced television services in Europe. OJEC No. L 196, of 5. 8. 93 Proposal for a Council Decision instituting the European guarantee fund to encourage film and televisual production. Doc. COM(95) 546 final, of 14. 11. 95 part III - page 4 84 CONCLUSION The instruments of audiovisual policy constitute, to a certain extent, a model for consideration of cultural aspects by the Community in the actions it takes under the terms of other provi sions of the Treaty, as required by Article 128, Paragraph 4. This consideration was already effective before the 1993 entry into force of the Treaty on European Union and of its provisions relating to culture (the "Television without frontiers" directive had been adopted in 1989 and the MEDIA I programme in 1990) and there is no reason a fortiori for it to be any less important today. This model should serve as an approach in other fields. In effect, if it is clear that the principal objective of the "Television without frontiers" directive (free circulation) and of the MEDIA II programme (development of the audiovisual industry) are not those listed in Article 128, Paragraph 2, and that they are, consequently, justly based on other provisions of the Treaty, it is also clear that it is precisely in such cases that Paragraph 4 of Article 128 should be applied. Through the various Community initiatives developed under the terms of audiovisual policy, the European Union makes an undeniable contribution to maintaining and expanding the influence of European cultures, while respecting their diversity. The industrial and market logic underlying this action in accordance with the rules of the Treaty have not prevented consideration of the dual (economic and cultural) nature of the audiovisual sector. On the contrary, the cultural dimension of this policy tends to be reinforced within the framework of new initiatives. Thus, the Commission will take care, in particular, to exploit the various synergies which are emerging between cultural action and audiovisual policy to promote multimedia development. part III - page 5 Sf: PART IV : CULTURE IN THE COMMUNITY'S EXTERNAL RELATIONSHIPS CHAPTER I : EXTERNAL COOPERATION ACTIONS International cultural cooperation has taken on increased importance worldwide and the cultural dimension is now a component of international relations and foreign policy, thereby supplementing political and economic dimensions. This evolution has also been seen in the European Community. Article 128§3 of the Treaty establishing the European Communities in effect requires the Community and the Member States to promote (cultural) cooperation with third countries. On the basis of Lomé III (1986-90) and on the basis of Article 131 §3 of the EC Treaty, the Community has included a reference to culture in the various types of agreement it concludes with third countries. In most cases, reference is made to culture particularly because the Community is not seen only as an economic power. Such was the case with the Latin American countries (cooperation agreements). In the wake of the changes which occurred in Europe in the late 1980s, this process has been accentuated through agreements with countries in central and eastern Europe (European and cooperation agreements), with the New Independent States (cooperation and partnership agreements) and, recently, with the Mediterranean policy (Euro-Mediterranean agreements). The agreements concluded between the Community and third countries which refer to culture have thus multiplied since 1986, being characterised by a wide variety of formulae which are the result of the various frameworks within which they were negotiated. Under the terms of Community cultural cooperation with third countries and international organisations, six categories of agreements can be distinguished: 1. Cultural cooperation with ACP countries. The Lomé IV Convention, signed in 1991, mobilising a budget of 14. 6 billion ECUs for 1996 - 2000, includes an article (139) devoted to cultural cooperation. Within the context of this Convention, about 45% of the 70 National Indicative Programmes for ACP countries actually lead to a formal recognition of the cultural sector as a specific field of cooperation. In the framework of the Lome Convention, the European Commission has, so far, financed around 250 cultural programmes with an amount of over 62 mio ECU. Nearly a third of the cultural programmes financed are linked to the audiovisual sector (90 actions), either by their financial participation to films -nearly 60-, or by their support for broadcasting, training, or at cinema festivals. In this sense the European Union has become the first sponsor for Africa and efficiently contributes to reinforcing its image as a promoter of culture vis-à-vis a large african and european public. part IV - page 1 The other important chapter has been the support for highly significant cultural manifestations such as, the "Marché des Arts du Spectacle Africain d'Abidjan", the "Biennale de Dakar", the musical festival of Austral Africa and the big cultural exhibition AFRICA 95 which took place in England As for the other financed operations, emphasis should be given to the accent placed on safeguarding and enhancing cultural heritage. The European Commission has financed several actions in this field, firstly to promote the ACP countries' physical heritage, but not neglecting the non-physical component of cultural heritage, so vital to the identity of the ACP countries, such as the safeguarding of the oral tradition, and support for local languages and traditional music. 2. In certain cases, the agreements concluded by the Community and the Member States are committed to the openness of Community cultural programmes: - The agreement on the European Economic Area (Iceland, Norway, Liechtenstein) - Association agreements with countries in central and eastern Europe (Poland, Hungary, Czech Republic, Slovak Republic, Romania, Bulgaria, Estonia, Latvia, Lithuania, Slovenia (signed), Albania (draft directives for a new cooperation agreement in preparation)) - Association agreements with Cyprus and Malta (openness is envisaged in the text of the "Kaleidoscope", "Ariane" and "Raphael" programmes) - Euro-Mediterranean association agreements with Tunisia and Morocco. The openness of the programmes is also provided for in the association agreements being negotiated with the Lebanon and Egypt. In this respect, it should be emphasized that the Barcelona Declaration of 27/28 November 1995 introduced a multilateral dimension into cultural relations with Mediterranean countries. Thus, "the participants recognise that the traditions of culture and civilisation on both sides of the Mediterranean, dialogue between these cultures and human, scientific and technological exchanges are an essential component in promoting alignment and understanding between their peoples and in improving mutual perception". Following the Barcelona Conference, a euro-mediterranean conference, with a cultural heritage theme, is scheduled to take place in Bologna the 22/23rd of April 1996. Third countries participate in the Community cultural programmes "on the basis of supplementary credits to be supplied according to procedures to be agreed with these countries" (Art. 4 of the Kaleidoscope decision and the Ariane decision). More specifically, the participation of Ireland, Norway and Liechtenstein is regulated by the EEE (European Economic Area) agreement and, in the case of the countries in central and eastern Europe, by additional protocols to the European agreements. 3. According to the EEE agreement, Ireland, Norway and Liechtenstein: - will have access to programmes covered by the agreement, including cultural programmes, through a joint-committee decision; - at the level of the Committees which assist the Commission in the implementation of the programmes, will have the same rights and obligations as the Member States; part IV - page 2 n - will contribute financially to the programmes in proportion to the level of their GDP. 4. The additional protocols to the European agreements, in accordance with the conclusions of the Copenhagen European Council (21-22 June 1993), have adapted the conditions for Ireland, Norway and Liechtenstein to the specific conditions of coun tries in central and eastern Europe and to their limited possibilities in terms of financing. Therefore, under the terms of these protocols: - the Council of Association instigated by the European agreement will set the terms and conditions for participation by the country concerned in Community programmes; - the contribution from the country concerned to financing the programme is calcu lated on the priniple of this country being responsible for the costs of its participation; - if appropriate, the Community may decide, on a case-by-case basis, to supplement this contribution. 5. In other cases, provision has been made to develop more general cultural cooperation, implementation and monitoring of which will have to be provided by the joint commissions or committees responsible for managing these agreements: - Cooperation and partnership agreements with the New Independent States (Russia, Ukraine, Belarus, Moldavia, Kazakhstan, Kyrgystan, and Georgia, and Armenia, Azerbaïdjan and Uzbekistan being negotiated)) - Cooperation agreements with Latin America (Chile, Mexico, Uruguay, Brazil, Paraguay), Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) and the Andean Pact (Bolivia, Colombia, Ecuador, Peru, Venezuela), Mercosur and partial states - Cooperation agreements with Asian countries (India, Macao, Sri Lanka and South Korea (being negotiated)) - Cooperation agreements including an evolutive clause, making it possible to extend the areas of cooperation referred to in the agreement to other subjects. For example, Article 15§2 of the agreement signed with Vietnam provides: "Within the framework of this Agreement, either of the Parties may put forward suggestions for expanding the scope of the cooperation, taking into account the experience gained in its application". Save for certain exceptions, for example MED-MEDIA, for the Mediterranean (5 million ECUs, 1994-95) and the "Cross-Cultural Project" with India (30 million ECUs over 5 years), Community cultural cooperation with third countries has no specific financing and thus cannot develop in a structured manner, continuing to depend entirely on the vicissitudes of external policy. 6. The joint Declarations signed, within the framework of political cooperation, between the European Community and certain developed countries (United States, Canada and Japan) also include a cultural aspect without specific budgetary provision. It should also be emphasized that there is frequent recourse to culture as an element part IV - page 3 in the "public relations" of the Community with respect to the outside (support for ad-hoc cultural events, for example, orchestra tours, concerts, etc. ) which serve to back up some political initiative undertaken within the framework of external relations. Given the nature of this type of intervention, these actions are also covered essentially by Community external policy. Finally, often evoked but rarely stated precisely, the Community and the Member States are given a mandate (Art. 128§3) to cooperate with the other international bodies active in the field of culture, particularly the Council of Europe and Unesco. Such cooperation with international organisations, in terms of technical coperation (participation in meetings of mutual interest and exchanges of information), is not new. The relationship between the Council of Europe and the European Community is based on an exchange of letters of 16 June 1987 concerning consolidation and intensification of cooperation, the periodic organisation of high-level meetings of officials from the secretariat of the Council of Europe and the Commission, inter alia, in the field of culture. Although 112 states are linked to the Community by agreements containing cultural clauses, the Community currently has no effective coordination and organisational system nor any appropriate budget for taking on this major aspect of Community policy. The current trend in the Community, particularly given the origin of sources of financing (to the degree that these are provided), is to make a distinction between the countries called upon to participate in Community cultural programmes on the one hand, and the other third countries on the other hand. It should be recalled that, at a national level, culture ministers and foreign ministers have responsibilities and a specific budget for the development of external cultural cooperation. From a political standpoint, they act very differently. Although the respective responsibilities of these authorities are difficult to determine, the principle of this dual competence is rarely questioned. This duality of competence is again found at Community level. part IV - page 4 8*\ CHAPTER II : COMMERCIAL POLICY 1. Community commercial policy is based on Articles 110 to 115 of the Treaty. Whenever commercial issues were discussed on a Community level in the past, cultural issues were traditionally examined only when they had a clear economic and commercial impact. The most publicised and recent evocation of culture remains the negotiation of the present GATS Agreement. Inside the E. U. this gave rise to lengthy debates on whether a "cultural exception" should be sought. This issue remained unresolved right to the end and our partners in the negotiations have clearly refused to accept the principle and its use in the audiovisual sector. 2. The outcome of the GATS Agreement has been clear in the sense that there is no "cultural exception" in the WTO legal framework or recognition of the "cultural specificity" of audiovisual services. Nonetheless, the fact that no commitments were made by the E. U. and its Member States leaves them a wide degree of freedom in safeguarding cultural objectives and policies. 3. On the other hand, two of the MFN exemptions in audiovisual field submitted by the E. U. have a strong cultural dimension. The first concerns measures which define works of European origin in such a way as to extend national treatment of broadcasting or the like to audiovisual works which meet certain linguistic and origin criteria regarding access to broad casting or similar forms of transmission and originate from countries which parties to the Council of Europe Convention on Transfrontier Television or European countries with whom an agreement may be concluded. The justification is the promotion of cultural values and the achievement of linguistic policy objectives. The second MFN exemption concerns the production and distribution of cinematographic works and TV programmes and covers government-to-government framework agreements on co-production of audiovisual works on which national treatment is conferred in particular in relation to distribution and access to funding. Again the aim of this exemption is to promote cultural links between the countries concerned. This constitutes a certain basis to build on, provided that there is no discernible protectionism behind the use of the cultural argument. It must be noted, nonetheless, that the GATS Agreement specifies that these exemptions should in principle not exceed a period of ten years and that, at any rate, they shall be subject to negotiation in subsequent rounds. A major test will come when the negotiations on subsidies - Article XV - start (although no time frame for these negotiations has been set, it is probable that discussions could start in the next few months). It is essential that the E. U. be solidly behind the need to defend subsidies in the audiovisual and cultural sectors which although they do not have a great impact on commercial relations financially are of a great importance in our multicultural Europe. It is essential that preparatory ground work be done if the future negotiations are to be more successful than the GATS negotiations in achieving the cultural objectives of the E. U. and its Member States. 4. The evolution of technology, the advent of the Information Society with multimedia products with significant cultural content, the ever-increasing development and ensuing commercialisation of what is generally called "cultural industries and services" will, in the near future, call for greater account to be taken of culture -in its different aspects - in commercial negotiations whenever appropriate. part IV - page 5 %b PART V : CONCLUSIONS The Commission's review of consideration for cultural aspects in Community action has led to two observations: The first observation is that the Court's decisions and legislative acts have, in many cases, had to reconcile achievement of the objectives of the Treaty with the specific objectives of cultural policies. Initiatives taken at Community level or the decisions of the Court of Justice have made it possible to consolidate the concepts which, in several fields, govern the organisation of cultural activities both internally and externally. This demonstration is particularly striking in the field of copyright or the promotion of audiovisual works. In other sectors, this reconciliation has proved more difficult, owing to the economic and commercial nature of the cultural activities in question. It has been necessary to strike a bargain between the provisions of the Treaty and cultural objectives, and although this bar gaining has led to a degree of consideration of the cultural aspects, these have not received the priority treatment which may be accorded to them in certain Member States (for example in respect of book prices, taxation of certain cultural goods and services, or the field of competition). The second observation is that a great majority of the policies and actions implemented by the Community now include a cultural dimension or have an impact on certain cultural fields. This "investment" in the cultural field has taken place progressively in step with the importance given to policies backing up achievement of the single market: economic and social cohesion, environment, research and technology, social policy, in particular. Thus, the cultural aspects of actions taken by the Community or of the policies implemented by it are many. It must also be clarified that this report is no more than a partial account of this consideration for cultural aspects. Awareness of actions deriving from Community intervention but implemented in a highly decentralised manner can be no more than imperfect in the absence of major studies into their impact at regional or even local level. Such studies, however, would provide only supplementary information on a phenomenon which can be perceived in terms of the principal trends and understanding of which will make it possible to draw lessons from it, to be interpreted in terms of future political action. 1. Initial lessons: 1. The cultural aspects of the various support policies conducted by the Community are many, important and varied. Most Community policies have a cultural dimension, interact on the cultural field and mobilise players in the cultural sector. Considerable means exist. 2. Although considerable means are devoted to cultural activities or activities with a cultural dimension, the operations implemented are not, or are rarely, covered by a specific policy which is a response to the tasks assigned to the Community in the cultural field. They do not correspond to a cultural project and have few or no Community cultural objectives. 3. Since the Treaty on European Union gives specific areas of jurisdiction to the Community in the cultural field, it is henceforth responsible for reconciling objectives which are specific part V - page 1 a\ to support policies and objectives of a cultural nature. This implies, on the one hand, that the objectives and means of Community cultural policy are specified beforehand and, on the other hand, that these objectives and means are incorporated early in the definition and implementation of the Community policies concerned. Cultural policy includes encouragement actions conducted on the basis of Article 128, and the actions taken and the policies conducted on other legal bases which have to consider cultural aspects. 2. Objectives and means of a Community cultural policy The Community cultural policy implemented on the basis, particularly, of Article 3 EC p) and of Title IX of the Treaty cannot be confused with cultural policies conducted by the States, regions and other decentralised institutions. It corresponds to specific tasks allocated to the European Community. Cultural policy forms part of the European enterprise and, in this respect, is an integration factor within an "ever closer union between the peoples of Europe" (preamble of the Treaty). In this respect, cultural policy must make a contribution to strengthening and to expanding the influence of the "European model of society built on a set of values common to all European societies" (Opinion of the Commission on convening the 1996 Intergovernmental Conference). Owing to its richness of character and its diversity, culture is a major component part of this European model of society. Community action must promote the preservation and enrichment of that which goes to make up the cultural and linguistic identities and realities of the peoples of Europe. It must allow strengthening of citizens' feeling of belonging to one and the same Community. This was the desire expressed in Madrid (December 1995) at the meeting of Heads of State and of Government : "The European Council reaffirms the importance of cultural action in encouraging a Community dimension in the cultures of all the Member States making up the Union". There are three particularly important lines of action here: enhancement of the cultural roots and currents which are common to Europeans and which have played a part and still play a part in forming the cultural identities and realities of peoples of Europe. Culture is one of the ways in which a society expresses itself and is also the result of exchanges and confrontations between societies. There are few philosophical, scientific or artistic trends in Europe without a transnational dimension. Community cultural policy must permit the enrichment of these exchanges but also ensure respect for the cultural identities and capabilities for expression and creation of each people. a cultural action making it possible to promote the emergence of permanent networks between the cultural operators in the various countries and offering them the means for setting up long-lasting cooperation actions which have a high profile amongst citizens. priorities would be defined by the Community to ensure et increase the convergence of the support actions concerned. The advantage of this method would be to offer greater consistency between intervention actions in the field of culture and to avoid part V - page 2 Rl. creating the impression of piecemeal support which is to the fore when examining some of the actions undertaken. Finally, outside the European Union, Community cultural policy must promote an expansion in the cultural influence of European people and of the European model of society. If it constitutes an integration factor within the Union, for the outside it represents an instrument of cooperation which must be used to promote dialogue between cultures. 3. Recommendations concerning consideration of cultural objectives in Community action The entry into force of the Treaty on European Union now requires the institutions of the Union to take cultural aspects of Community action into account. This report will enable them to appreciate the extent of this obligation and will promote reflection on and action towards the development of Community cultural policy on the basis of the objectives and means defined above. It demonstrates that, on the basis of the same means, cultural aspirations can be achieved at European level if there is the political will to coordinate such means. The desire is to make the citizen once again the centre of the European enterprise and here is a privileged field of action at a time when the Union is eager to embark on further decisive stages in the economic and monetary sphere. For its part, the European Commission will take the internal measures necessary for: the proposals for acts of derived law that it will have to refer to the Parliament and the Council, and its decisions, to be compatible with the objectives of cultural policy; in the definition and implementation of support policies, the objectives and the means of each instrument having an effect on the cultural field to be consistent with the objectives and the means of Community cultural policy. To this end, the Commission will draw its inspiration from provisions being implemented in other fields, such as the operational measures adopted to ensure the incorporation of the environment in the Community policies. part V - page 3 °i} ISSN 0254-1475 COM(96) 160 final DOCUMENTS EN 16 Catalogue number : CB-C0-96-183-EN-C ISBN 92-78-03021-X Office for Official Publications of the European Communities L-2985 Luxembourg

Proposal for a COUNCIL REGULATION (EC) laying down for 1996 certain conservation and management measures for fishery resources in the Convention Area as defined in the Convention on Future Multilateral Co-operation in the North-East Atlantic

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COMMISSION OF THE EUROPEAN COMMUNITIES •* a A Brussels, 17. 04. 1996 COM(96) 162 final Proposal for a CX>!. !M. lL. JiikCjLJJ^lI<_)_N_(!. iD laying down for 1996 certain conservation and management measures for fishery resources in the Convention Area as defined in the Convention on Future Multilateral Co-operation in the North-East Atlantic (presented by the Commission) EXPLANATORY MEMORANDUM During many years, the question of the regulation of oceanic-type redfish formed the subject matter of protracted discussions within the North-East Atlantic Fisheries Commission (NEAFC). At an Extraordinary Meeting from 19 to 21 March 1996, NEAFC was now able to adopt a recommendation of conservation and management measures for thai fish stock for 1996. That recommendation was adopted by a qualified majority of the Contracting Parties of NEAFC, including the Community. The recommended measures consist in a total allowable catch (TAC) of 153,000 tonnes which covers oceanic-type redfish in its entire area of distribution and which is allocated among the Contracting Parties concerned. Within this TAC, a share of 23,000 tonnes has become available to the Community. Furthermore, Denmark (on behalf of the Faroe Islands and Greenland) committed itself to transfer to the Community a further 4,000 tonnes. This results in a total 27,000 tonnes of oceanic-type redfish available to the Community in 1996. As this recommendation has been adopted with the full support of the Community, the Commission now proposes its full implementing at Community level. In order to enhance the impact of the measures recommended by NEAFC and to ensure that Community fishing vessels can carry out their operations in economically appropriate conditions, it is also proposed to share out the Community share of oceanic-type redfish between the Member States concerned in application of the traditional "relative stability" criteria with an appropriate reference period of five years which reflects duly the twofold reality of the past catch records and the current fishing patterns. £ Proposal for a COUNCIL REGULATION (EC) No /96 of 1996 laying down for 1996 certain conservation and management measures for fishery resources in the Convention Area as defined in the Convention on Future Multilateral Co-operation in the North-East Atlantic THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No. 3760/92 of 20 December 1992 estbalishing a Community system for fisheries and aquaculture (,), and in particular Article 8 (4) thereof, Having regard to the proposal from the Commission, Whereas the Community has signed the United Nations Convention on the Law of the Sea, which contains principles and rules relating to the conservation and management of the living resources within the exclusive economic zones of the coastal States and on the high seas; Whereas the Convention on Multilateral Co-operation in the North-East Atlantic, hereafter referred to as the "NEAFC Convention", was approved by the Council in Decision 81/608/EEC of 13 July 1981 (2) and entered into force on 17 March 1982; Whereas the NEAFC Convention establishes a suitable framework for multilateral co operation in the rational conservation and the optimum utilization of the fishery resources of the Convention Area as defined therein; Whereas the North-East Atlantic Fisheries Commission adopted on 21 March 1996 a recommendation limiting the catches of redfish in the Convention Area for 1996; whereas it is appropriate that this recommendation be implemented by the Community; Whereas, in accordance with Article 8 of Regulation (EEC) No. 3760/92, it falls to the Council to establish for each fishery or group of fisheries the total allowable catch (TAC) and the share available to the Community and to allocate the share available to the Community among the Member States; (1) <2> O. J. No. L 389, 31. 12. 1992, p. 1 O. J. No. L 227, 12. 8. 1981, p. 21 Whereas the fishing activities covered by this Regulation are subject to the control measures provided for in Council Regulation (EEC) No. 2847/93 establishing a control system applicable to the common fisheries policy (3); HAS ADOPTED THIS REGULATION: Article 1 Catches in 1996 of redfish by Community fishing vessels shall be limited to the quotas set out in the Annex. All catches by Community fishing vessels of redfish prior to the adoption of this Regulation shall be counted against the quotas set out in the Annex. Article 2 This regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirely and directly applicable in all Member States. Done at Brussels, 1996 For the Council The President (3) O. J. No. L261, 20. 10. 1993, p. 1 U ANNEX Stock Member State 1996 quota Species Geographical area Redfish (Sebastes mentella, oceanic-type) (l) ICES XIV/XII/V (2) Austria Belgium Denmark Finland Germany Greece France Ireland Italy Luxembourg the Netherlands Portugal Spain Sweden the United Kingdom EC total 21,422 853 5 2,846 1,874 27,000 (3) (,) (2) (3) Fished with pelagic trawls, excluding discards but including the fish above as well as below the acoustic layer Community fishing waters and areas beyond fisheries jurisdiction of the other coastal States Includes a transfer of 4,000 tonnes from Denmark (on behalf of the Faroe Islands and Greenland) <T ISSN 0254-1475 COM(96) 162 final DOCUMENTS EN 11 03 Catalogue number : CB-CO-96-175-EN-C ISBN 92-78-02680-8 Office for Official Publications of the European Communities L-2985 Luxembourg 6

JOINT RESEARCH CENTRE - 1995 ANNUAL REPORT

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COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 17. 04. 1996 COM(96)158 final JOINT RESEARCH CENTRE 1995 ANNUAL REPORT (Presented by the Commission) FOREWORD Following Article 7 of the Council Decision of 15 December 1994, adopting a specific programme for research and technological development, including demonstration, to be carried out for the European Community, on the one hand, by the Joint Research Center (JRC) and, on the other, by means of activities within the framework of a competitive approach and intended for scientific and technical support to Community policies (1995 to 1998) (94/918/EC); Article 7 of the Council Decision of 15 December 1994, adopting a specific programme of research and technological development, including demonstration, to be implemented by the Joint Research Centre for the European Atomic Energy Community (1995 to 1998) (94/919/Euratom); Article 5 of the Council Decision of 29 April 1992, adopting a supplementary research programme to be implemented by the Joint Research Centre for the European Atomic Energy Community (92/275/Euratom) during the period 1992-1995; it is foreseen that an annual report on the implementation of the activities of the JRC will be transmitted by the Commission to the Council, the European Parliament and the Economic and Social Committee. In fulfilment of this requirement, the enclosed document reports on JRC activities in 1995, and at the the reporting on Community RTD (Research and same time constitutes a contribution Technological Development) activities required by Article 130P of the EC Treaty. to This annual report is accompanied by the comments of the Board of Governors. OBSERVATIONS BY THE BOARD OF GOVERNORS ON THE JRC ANNUAL REPORT 1995 1995 - THE FIRST YEAR UNDER MODIFIED ROLE 1995 was a significant year for t he JRC. This was t he year where t he m o d i f i ed role of t he JRC, as agreed w i th t he Council, t he Parliament and the Commission in 1994, t o ok effect. This m o d i f i ed role f or t he JRC called f or a w i d er spectrum of competitive activities t h an was t he case in the past, and f r om 1995 onwards t he JRC could participate in C o m m u n i ty programmes on an equal basis w i th its national Dartners f r om research and industry. As witnessed by t he present report, t he JRC responded in a -v/namic way to this n ew challenge and in the case of t he shared cost action programmes, obtainec n the c o m p e t i t i on promising results t o g e t h er w i th its partners t h r o u g h o ut t he M e m b er Sta:es of t he European Union and other countries associated w i th t he It is programmes. Good results were also o b t a i n ed f or t he other modes of competitive activities. n o t e w o r t hy t h a t, in spite of the new modes introduced in 1995, the JRC kept up t he pace w i th w o rk for t h i rd parties in comparison w i th previous years. In this new situation, preliminary targets were set f or participation in competitive activities in 1995 and the Board notes w i th satisfaction t h at overall, these targets were exceeded. Competitive activities is only one facet of the JRC w o r k, another being its institutional research and scientific and technical support to t he Union's sectorial policies, notably e n v i r o n m e n t, energy, agriculture and industry. The Board appreciates the continuing concern of the JRC to respond positively to t he requirements of customers. For the research activities t h e re is a w e l c o me drive towards producing useful results f or the benefit of industry and society. The r e p o rt highlights examples of this and the Board w i ll continue to urge the Centre to pursue t he necessary t r e nd towards a f u r t h er o u t p u t - o r i e n t ed JRC w i th an increased scope for the commercialisation of its t he research results. Based on f r e q u e nt evaluations of the JRC, t he Board feels satisfied w i th generally high quality of the JRC w o rk and its increasing relevance to t he needs of t he European Union's policies. The Board already noted last year its expectations f or the developments f or the JRC f r om 1995 onwards. A m o n g st the measures the Board has taken to strengthen its f o l l o w - up on t he JRC activities in more detail t he JRC institutes. Continuing efforts are being made to introduce performance parameters a nd quality assessment. its Sub-Committees, a l l o w i ng to f o l l ow is a restructuring of EVALUATIONS OF THE JRC In its guidance of the JRC t h r o u g h o ut the year the Board has d r a wn on the recommendations f r om the evaluations of the JRC and its Institutes by external, independent, experts available at t he e nd of the previous 1992-1994 programme period. f u ll set of recommendations f r om this exercise and recognises the JRC's m a n a g e m e nt efforts in w o r k i ng to to implement administrative and staff policy matters have not yet been i m p l e m e n t ed f or reasons beyond t he control of the JRC. recommendations particularly t h e m, while noting t h at some useful The Board has reviewed related t he RULES GOVERNING THE JRC - STAFF ISSUES The Board continues to press for the JRC to be a l l o w ed to operate fully in a w ay t h at enables it to achieve the change in w o r k i ng methods envisaged by the Council Conclusions of A p r il 1994. This may call for a f u r t h er evolution of the rules and regulations g o v e r n i ng its activities, possibly involving an e v o l u t i on of its status w i t h in the Commission. This should also lead to an increased flexibility in budgetary and financial matters combined w i th the n o t ed progress on t he financial management systems. The Board has presented its points of view on these i m p o r t a nt matters to t he Commissioner f or Research, Mrs. Edith Cresson. Towards the end of t he year it was i n f o r m ed of t he the Commission and other i m m i n e nt plans organizational cha es planned. Thus as a first step, the JRC will be given status as a separate Directorate Gênerai , rom early 1996 (Decided on 16 January/T996). larger a u t o n o my w i t h in the JRC a. 'or giving The Board has also discussed staff policy issues w i th the Commissioner and expects to f o l l ow t he implications f or the JRC under the new policy of the Commission on staff under the research b u d g et of t he Union. Like the staff of many other European research institutes, the JRC has an age distribution w h i ch w i ll result in many vacancies in the coming f ew years. Five senior posts as Institute Director became vacant in 1995 and four of these were filled, f o l l o w i ng appointments by the Commission u p on advice f r om the Board, while a f i f th post is still to be filled. The Board welcomes the f o ur n ew Directors w ho joined the JRC in mid-1995. DISSEMINATION OF INFORMATION ON THE JRC The m o d i f i ed role of the JRC requires a more intense dissemination of i n f o r m a t i on on JRC activities to all interested parties at a national level. As a contribution to this, in 1995 Members of t he Board, t o g e t h er w i th the JRC, arranged for a continuation of the series of JRC Information Days and presentations of JRC activities t h r o u g h o ut the Member States w i th t he aim of fostering f u r t h er collaboration between national research laboratories, universities, industry and the JRC. To attain proper coordination between the JRC research activities and other related research activities under the Community Framework Programmes, Members of the Board have participated w i th JRC representatives in meetings of the Community Programme Committees. These exchanges of views as prescribed in the Council decisions on the JRC programmes should be intensified and encompass all relevant programme activities in 1996. STRATEGY The f u l f i l m e nt of the JRC's mission of performing customer-driven research of t he highest quality and integrity in support of Community policies, calls for a clear long-term strategy for t he JRC and its Institutes. The Board agreed in late 1995 on an updated JRC strategy and has conducted discussions on the underlying Institute strategies as a guide for the Centre in its current and f u t u re activities. One of the measures envisaged in the 1995 strategy document is more extensive use of performance indicators to assist the development of the JRC. INSTITUTE FOR PROSPECTIVE TECHNOLOGICAL STUDIES (IPTS) In its observations on the 1994 Annual Report, the Board m e n t i o n ed the new location of this institute in Seville and the w o rk planned. It is pleased to record the n ew w o rk p r o g r a m me f or IPTS, d e f i n ed the inauguration of the important Technological Watch function by the Commissioner, Mrs. Edith Cresson, in the presence of the Chairman of the Board, w ho emphasised the collaboration IPTS has established t h r o u g h o ut the Member States and w i th the European Parliament. the Commission. Moreover, in 1995 and endorsed by t he Board appreciates HIGH FLUX REACTOR 1995 was the last year of the supplementary EURATOM programme for the High Flux Reactor (HFR) at Petten (NL). T h r o u g h o ut the year discussions have taken place at all levels on the f u t u re of the HFR reactor and its proposed new multi-annual programme to begin in 1996. This has involved a complete overhaul of the management of the facility and an intensive drive towards a more direct commercial use of a considerable part of its capacity w i th the ensuing improvement in efficiency and economy. A CKNO WLEDGEMENTS The Board welcomes the several contacts it has had during the year w i th the Commissioner for Research, Mrs. Edith Cresson and looks f o r w a rd to further discussions on the development of JRC strategy. At the same t i me the Board expresses its appreciation for the hard w o rk of the Director General, his Directors and the entire JRC staff in addressing the challenges facing t h e m. JOINT RESEARCH CENTRE 1995 ANNUAL REPORT Report of the Commission TABLE OF CONTENTS 1. THE JOINT RESEARCH CENTRE IN 1995 1. 1 INSTITUTIONAL ACTIVITIES: JRC SPECIFIC RESEARCH PROGRAMMES 1. 1. 1 Institutional Research Activities 1. 1. 2 Institutional Scientific and Technical Support f or C o m m u n i ty Policies 1. 2 COMPETITIVE ACTIVITIES Participation in shared cost actions Competitive scientific and technical support activities Other competitive activities outside the Framework Programmes Third Party W o rk HFR Supplementary Programme 1. 3 INFORMATION DAYS - PUBLICATIONS AND CONFERENCES 1. 4 HUMAN RESOURCES 1. 5 FINANCES 2. ACTIVITIES OF THE JRC INSTITUTES IN 1995 2. 1 THE INSTITUTE FOR REFERENCE MATERIALS AND MEASUREMENTS 2. 2 THE INSTITUTE FOR TRANSURANIUM ELEMENTS 2. 3 THE INSTITUTE FOR ADVANCED MATERIALS 2. 4 THE INSTITUTE FOR SYSTEMS ENGINEERING AND INFORMATICS 2. 5 THE ENVIRONMENT INSTITUTE 2. 6 THE INSTITUTE FOR REMOTE SENSING APPLICATIONS 2. 7 THE INSTITUTE FOR SAFETY TECHNOLOGY 2. 8 THE INSTITUTE FOR PROSPECTIVE TECHNOLOGICAL STUDIES Annex 1 Annex 2 8 10 10 14 18 18 18 18 18 19 19 20 22 23 23 26 28 31 35 38 41 44 46 48 JRC Annual Report 1995 THE JOINT RESEARCH CENTRE The Joint Research Centre the European U n i o n. It is is the corporate research laboratory of established by t he European Commission w i th headquarters in Brussels. Five separate sites, located in Belgium, Germany, Italy, t he Netherlands and Spain, house eight d i f f e r e nt institutes, each w i th its o wn focus of expertise. These institutes are: IRMM The Institute for Reference Materials and Measurements GEEL (B) ITU The Institute for Transuranium Elements KARLSRUHE (D) 1AM The Institute for Advanced Materials PETTEN (NL) and ISPRA (I) ISEI The Institute for Systems Engineering and Informatics ISPRA (I) El The Environment Institute IRSA The Institute for Remote Sensing Applications 1ST The Institute for Safety Technology ISPRA (I) ISPRA (I) ISPRA (I) IPTS The Institute for Prospective Technological Studies SEVILLE (E) The mission of the JRC is to p r o m o te and carry o ut customer-driven research of the highest quality and integrity in support of Community policies. The Joint Research Centre, being an integral part of the Community research and technological d e v e l o p m e nt system, contributes to Community research policy, particularly in those sectors in which it has special, if not unique, skills and in areas where its neutrality is essential f or scientific and technical support f or Community policies. These institutional activities are p e r f o r m ed in executing the JRC specific programmes decided by t he Council and f u n d ed by t he European Union budget. Furthermore the JRC is increasingly engaged in competitive activities participating: on a competitive basis, w i th industry, research organisations and universities w i t h in the M e m b er States or associated t he Framework countries, Programmes, and offering its services against payment to various customers. including shared cost actions under in Community programmes, The statutory staff, comprising officials and temporary agents of t he JRC, was 1. 786 at the end of 1995. To this n u m b er one must add 319 scientists w ho were active in the Centre and w e re paid by the JRC under various hosting schemes. The global credits committed by the JRC in 1995 were slightly lower t h an 258 Mioecu. This A n n u al Report is intended to give a general overview of JRC activities in 1995. Readers may f i nd more details in t he A n n u al Reports of the eight institutes. The JRC also publishes numerous scientific reports, presents papers to conferences and in scientific journals (all these is published yearly), a nd organises reports are referred to workshops, seminars and conferences to disseminate its scientific o u t p u t. in the Publication Bulletin which 1. THE JOINT RESEARCH CENTRE IN 1995 8 1995 A SIGNIFICANT YEAR to for research, in 1994, to decisions on Programmes in 1995 was t he first year of a new approach for the JRC. This had been d e f i n ed by the Council of the European U n i o n, the European Parliament in discussions and the European Commission the led, w h i ch Community Framework technological activities development and demonstration and to subsequent decisions on t he specific research t he Framework i m p l e m e nt programmes Programmes. These t wo JRC specific, include 1995-1998, research programmes, one for the EC (European Community) and the other for the Energy EAEC Community). the Council In c o n f o r m i ty w i th conclusions of 26 A p r il 1994 on the role of the JRC, in institutional activities as well as competitive institutional activities, f o r m er covering research and institutional technical support to C o m m u n i ty policies. The in competitive activities shared-cost actions the Framework Programmes, competitive support measures for Commission services responsible f or the various Union policies, competitive activities outside the Community Framework Programmes and contractual w o rk p e r f o r m ed for outside t h i rd parties. include participation under in 1995 has engaged the Centre (European the and scientific Atomic in which establishing industry and a p p o i n t ed for t he year Commission the 1995 was, moreover, launched newly bonds initiatives this between frame the Commissioner for research, Mrs. E. for Cresson, strongly emphasised f u r t h er research commercialisation of results and for improved communication of JRC activities. the need JRC research. W i t h in better Finally, 1995 also saw the enlargement of the Eur'opean Union. The three n ew Member States (Austria, Finland and Sweden) had already participated in 1994 in JRC activities under the EEA (European Economic Area) Agreement. This f r a m e w o rk a l l o w ed for the continuation, in Iceland, the JRC collaboration w i th 1995, of Liechtenstein and Norway. INSTITUTIONAL ACTIVITIES The JRC institutional of objectives the activities contributed to Framework t he 4th and Technologies Industrial Material Programme for t he EC and t he EAEC Framework Programmes via t he lines of I n f o r m a t i on and ( I n f o r m a t i on Communications Technologies Technologies), Technologies, (Industrial Measurements Environment (Environment and Climate), Life Sciences and Fisheries, Technologies including agro-industry, technologies, forestry and rural development), Non-nuclear Energy, Targeted Socio-Economic Research, Thermonuclear Nuclear Fission Safety and Fusion. (Agriculture Testing), f o od and and NEW CHALLENGES: COMPETITIVE ACTIVITIES than 300 proposals w e re made Following extensive preparations b e g un in 1994, the JRC responded to the challenge set by the new opportunities opened up in 1995 f or competitive activities. Together w i th partners f r om industry, research centres and universities t h r o u g h o ut the Union and associated countries, more in response to the first call f or proposals under the new Framework Programmes, w i th a success rate of 28%. The JRC also presented proposals for competitive support activities and for Community programmes outside t he Frame work Programmes, notably PHARE and TACIS, where contracts were w on f or nuclear safety work the Central and Eastern European countries, Russia and other Newly Independent States (NIS). in Taking up these n ew opportunities- required the JRC. They were intensive marketing by legal, financial, made possible by a series of budgetary and administrative decisions by the (Council, Parliament, Community Commission). These t he necessary amendments to the Financial Regulation f or the European Union in b u d g e t, September 1995. decided on institutions included Contractual w o rk p e r f o r m ed f or external t h i rd parties was also notable and n ew contracts signed during 1995 a m o u n t ed to w e ll above 18 Mioecu. VISITS BY THE COMMISSIONER On 20 July 1995 Commissioner Mrs. E. Cresson, made her first visit to the JRC, starting w i th the Institutes at Ispra, f o l l o w ed by a visit to ITU in Karlsruhe in September and IPTS in Seville in December, w h e re Mrs. Cresson inaugurated t he JRC Annual Report 1995 f u n c t i on of technological w a t ch new the Institute1- In her address to the personnel d u r i ng these visits, she encouraged t he JRC to continue its mission f or Research and Technological Development in Europe. She o u t l i n ed t he views of the Commission on t he contributions to be made by t he JRC to the policies of t he Union and on to e n g a g e m e nt in competitive activities. collaboration w i th M e m b er States on JRC activities in general and stimulating in particular those aimed at and concrete research conducted at a n a t i o n al or regional of Union level. JRC availability in s u p p o rt policies was f u r t h er publicised by i n f o r m a t i on activities directed to o t h er Commission services, including a Newsletter and t a r g e t ed seminars. industry STRATEGY The p r o g r a m me period 1995-1998 w i ll see t he JRC, on the one hand build on experience acquired f r om the previous p r o g r a m me period and on the other, meet the challenges t h at changing w o r ld continuously rapidly and markets impose on European Industry and t he n ew demands facing the European U n i o n, w i th an emphasis on t he commercialisation of research results of value to industry a nd society. the JRC organises a To this end, each year number a nd of seminars at its five sites in Europe. The n u m b er the of visitors shows the constant interest of scientific community to t he contributions research and development made by t he JRC. conferences, workshops in In order to consolidate t he n ew approach of t he JRC as prescribed by t he Council, t he Parliament and the Commission, the Board of Governors and t he JRC management have, d u r i ng t he year, discussed strategies f or t he e i g ht institutes and the JRC as a w h o l e, leading to an emphasis on customer-driven, high quality research of real utility f or the European Union, executed in an efficient way w i th a flexible responsiveness to changing market needs. JRC activities have t he effect of creating links between teams in Member States situated at technological d i f f e r e nt levels of scientific a nd development. They rein to forcing cohesion b e t w e en laboratories and research institutes in all the C o m m u n i ty regions. thus c o n t r i b u te in forces on t he areas of In 1995 t he Commission announced t h at it had established several industrial task new-generation research aircraft, m u l t i m e d ia educational software, the car of t o m o r r o w, vaccines and viral diseases, the trains and f u t u r e, railway systems of intermodal transport, m a r i t i me systems of the friendly water f u t u re and environmentally technologies. JRC staff have participated in most of these task forces a n d, in parallel, the reorientations JRC m a n a g e m e nt has planned w i t h in the JRC institutional research areas, in order to match research to t he n ew priorities set by the Commission. t he NEW DIRECTORS During the year, f o ur n ew Directors of JRC Institutes, namely ISEI, El, IRSA and I A M, took up the their posts, after a p p o i n t m e nt by Commission acting on the advice of the Board of Governors. COMMUNICATION INITIATIVES Links b e t w e en the JRC and industry, research centres and universities were also reinforced t h r o u gh t he organisation of I n f o r m a t i on Days in London, Athens, Copenhagen, Milan and Vienna, on the the Institutes were Board of Governors. The new presented, w h i le workshops o u t l i n ed perspectives Likewise, members of JRC m a n a g e m e nt and staff have the given a number of seminars t h r o u g h o ut initiative of Members of collaboration. for JRC Annual Report 1995 1. 1 INSTITUTIONAL ACTIVITIES: JRC SPECIFIC RESEARCH PROGRAMMES task of the JRC in 1995 was to The major contribute to the implementation of the JRC specific programmes under the Communities' Framework Programmes in their first year of existence. This c o n t r i b u t i on was carried out research activities and t h r o u gh technical t h r o u gh support activities the Commission. institutional institutional scientific and the services of for 1. 1. 1 Institutional Research Activities 1995, institutional In accounted f or 7 3% of the JRC's activities; f o l l o w i ng Programme lines: research they are carried out under activities institutional the • The Industrial p r o g r a m me Technologies and Materials Technologies is carried out by the Institute for Advanced Materials (IAM) and encompassed on advanced materials, on surface engineering, on new ecofriendly materials and on Non the Destructive Evaluation inspection structural components. research projects techniques industrial for of • The Measurements Institute and Testing programme encompassed research projects on reference measurements and materials, carried out by for Reference Materials and the Measurements the and the reliability of structures, assessment of carried o ut by for Safety Technology (1ST). Institute (IRMM); the on • The Environment of projects programme and Climate consisted on research atmospheric, soil, water and waste pollution, executed by the Environment Institute (Ei); on the gradual setting up of the Centre for Earth Observation a décentrai,. ?d European data information system,and on applications of remote sensing for techniques, carried out by the Institute Remote Sensing Applications (IRSA); and on industrial hazards carried out by the Institute the for Safety Technology and Institute Informatics (ISEI) for Systems Engineering (1ST) and by m a n a g e m e nt and • The Non-Nuclear programme consisted of to related materials f or clean technologies, carried out research projects Energy 10 the Institute by for Advanced Materials (IAM), and to standardisation of photovoltaic for devices, carried out by Systems Engineering and Informatics (ISEI). institute the • The Nuclear the Institute Fission Safety f r om studies on p r o g r a m me encompassed a number of research activities reactor safety, ranging carried o ut by f or Safety Technology (1ST), by the Institute f or Systems the Engineering and Informatics (ISEI) and Institute for Advanced Materials (IAM), to research activities on nuclear safeguards and fissile materials management, executed by the Institute for Safety Technology (1ST), the and Institute Informatics f or Transuranium Elements (ITU). ITU carried o ut research on nuclear fuels and actinides. for Systems Engineering (ISEI), and Institute the • The Controlled Thermonuclear (Technology and Safety) Institute Institute Fusion is programme f or Safety carried o ut by the f or Systems Technology (1ST), the Engineering and Informatics (iSEI), and t he Institute for Advanced Materials (IAM). • The for the includes Targeted Prospective Socio-Economic the activities of Science f u n c t i on (IPTS). The essential Research and programme and Technology Observatory the prospective w o rk Technological Institute t he Studies available Institute is consultants, contributions experts, research organisations and in Member States and w h en possible in t h i rd countries, in order to analyse, process and integrate t h em impartially and in d e p th and, more importantly, to distil clear trends or needs for action in a usable f o rm f or decision makers. to from institutes role of harvest the to t he While Part t wo of this document reports on the evolution in 1995 of these research activities, Institute by Institute, some salient results are illustrate h ow in order highlighted here JRC institutional to research enables to acquire develop scientific knowledge and specific to make a valuable contribution to the advance of science, to provide scientific evaluations, to spread k n ow h ow and expertise in areas w h e re n ew innovative applications could be of interest to coordinate scientific cooperation t h r o u g h o ut Europe and sometimes, to develop European scientific networks centred on its o wn facilities. installations in order JRC Annual Report 1995 11 • Novel activities, making valuable contribu the to science and technology tions benefit of European industry: for fibre infiltration demonstrated reinforcement properties the A new composite material, made of a silicon long silicon reinforced with nitride matrix carbide fibres, has been elaborated at IAM Petten, using a liquid technique followed by sintering. An investigation of its the mechanical effectiveness of in increasing both the strength and toughness of the otherwise brittle silicon nitride matrix, due largely to the formation of weak interphase bounding (the SiC fibres are precoated with a 400 nm thick layer of pyrolitic carbon). Figure 1 illustrates the typical stress-displacement curves the composites with and without an for fabricated with interphase; coated better performance than the one elaborated with uncoated fibres. This new composite is a first- temperature rate applications of structural components in a number of advanced industrial applications, such as gas turbines. the composite exhibits candidate a much fibres high for A project for the synthesis of carbon nitride, a new product, has been set up within a network. its thermal, optical, mechanical functional characteristics The multiple aims of the project were: to assess the and tribological properties of the material and to evaluate for industrial use in optical applications, magnetic storage, hard disk techniques and advanced mechanical components. The network has aroused the interest of 22 research institutes and 11 industrial partners from 9 different countries. The experimental contribution of the the IRMM will be material by nuclear techniques. The IRMM will perform the analysis of materials layers for the light elements (H, B, C, N, £>) using charged particle beams of the 7 MV Van de Graaff accelerator. Nuclear reaction analysis of carbon and nitrogen by (d,p) reactions as well as Rutherford backscattering will be performed. the characterisation of • The JRC has exploited spin-offs its in areas where a new from research activities Community policy could be emerging: the European Commission, For example, together with is the Member States, currently strengthening its policy on natural risks, in particular on the monitoring and prevention of floods. Flooding is a major threat in many regions of Europe, both north SiC/StjN4 composite I 0. 2 0. 3 Displacement (mm) 0. 4 0. 6 Flexure load-displacement curve* of S i^ reinforced with SiC fibre withoot coating and with Carbon Pyrolytic coating*. "Courtesy of UNERA (F Fig. 1 - Stress-displacement curves JRC Annual Report 1995 and south, and involves river basins that need m o n i t o r i ng in more than one country. The exchange of prevention and m o n i t o r i ng k n o w l e d ge a m o ng Member States could thus be beneficial, even for events such as flash floods w h i ch have only local consequences. remote sensing IRSA initiated a u n i f o rm land cover data base obtained w i th techniques f r om most of Europe. Harmonised digital terrain models can be obtained w i th a sampling scheme of 20 by 20 m spatially and 6-7 m in elevation t h r o u gh optical sensors using such microwave sensors are being developed in order to reach a higher degree of accuracy. as SPOT. New techniques in of the IRSA hydrology Specific projects carried out for specific users have also allowed to develop an hydrological modelling. A expertise project called WETLANDS has improved our understanding of catchments (research conducted in 1995 on t wo test sites, in England and in Greece, b o th local organisations), in collaboration w i th and our ability to assess the impact of major proposed changes (such as river diversion or reservoir building) or to develop water management strategies. Another project, for a consortium of HYDRE, developed Mediterranean to study the evolution and hydric stress of the vegetation. regions, allowed IRSA importance for as i n f o r m a t i on on land cover is of Geocoded for upstream runoff, as prime vulnerability downstream well assessment. In mountaineous areas, forests can slow r u n o ff by a factor of 10 as compared to bare soil. Modelling runoff using land cover i n f o r m a t i on is important for advance w a r n i ng of floods d u r i ng risk periods and for assessing m i t i g a t i on measures. It can also be i m p o r t a nt in deciding on agricultural policies of f a l l ow (set-aside) or afforestation which have indirect consequences on floods. Institute The f or Remote Sensing Applica tions (IRSA) is in the process of setting up a scientific and technical support capacity for emerging Community policies concerning floods, thanks to its in-house expertise and the benefit of o n g o i ng institutional research. • to Institutional research activities also fostered spin-offs Two significant examples in the field of surface Institute f or Advanced engineering at the Materials: applications. specific 12 In the f r a m e w o rk of a Eureka project led by IAM (IPACERC project), t he development of a new processing technique f or p r o d u c t i on of multi layer coatings has greatiy increased (up to erosion. These to 500 times) resistance in coatings will have applications t he aeronautics field, particularly in helicopter engines. Surface engineering technology was applied successfully f i e l d, w i th in t he biomaterials three major achievements: i m p r o v e m e nt of the integration of prostheses in living tissues (hip, teeth) due to biocompatible coatings; reduction of wear of hip prostheses by surface engineering of mobile parts of joints; control of the p r o l i f e r a t i on of bacteria on the prosthesis disinfectant elements on the surface of t he prosthesis. These activities are conducted in conjunction w i th several medical in France and in Germany. incorporating Institutes Italy, by in t wo These institutional research can lead to tions useful to industry and society. examples illustrate h ow applica • the JRC Institutional to research enabled spread a w eb of scientific cooperation all over Europe. Indeed, t h r o u gh bilateral or multilateral cooperation, the JRC has set up more than 800 connections w i th various partners, mainly w i t h in t he European Union but also the USA and Japan. This is illustrated in Figure 2. in other European countries, the main factors enabling • Finally, its institutional research has been one to of develop networks centred on its o wn facilities. A vivid example field of earthquake can be f o u nd engineering: European scientific the JRC in the terms. In spite of i m p o r t a nt advances in earthquake engineering and seismic design over the last t wo decades, recent seismic events in Europe (e. g. in Greece and Italy ) have shown h ow vulnerable developed societies still are to t he effects of earthquakes, b o th in h u m an and at economic decreasing this vulnerability w h i c h, to a large extent, depends on the seismic response of structures is thus clearly needed. High level expertise in seismic design of structures has long been available in t he European Union, as have been f or earthquake testing of structures, in particular shaking tables. specialised Research facilities aimed JRC Annual Report 1995 13 UWWNngdom 11 A% 47% Belgium qm Denraik 2Û% Friand Poriigal 2£% Ndheriands 55% LuxBTbounj 0. 1% Qenrany 18. 4% Fig. 2 - Distribution of JRC Cooperation by Country to was research in 1992 of facility at given W i th the setting up in 1989, at the initiative of the JRC, of the European Association of Structural Mechanics Laboratories and the the ELSA subsequent o p e n i ng Ispra, a new reaction w a ll earthquake dimension engineering and co-ordinated Community-wide projects in seismic design of structures were set up a r o u nd the new facility. At present, more in Member States are involved w i th the JRC in a major p r o g r a m me of pre-normative research, in the provisional European standards for designing civil engineering structures in seismic areas. t h an 20 specialised of Eurocode laboratories and w e ll Europe, support (EC8), in 8 initiative of DG research project covers III Established at the (Industry) of the Commission and w i th the advice of the CEN experts in charge of EC8, those priority the topics w h i ch have to be addressed in order to improve the proposed European seismic design rules, and addresses new aspects of insufficiently engineering earthquake covered in the current, provisional version of the code. For the practical i m p l e m e n t a t i on of this the institutional activity at ELSA is a key element i m p l e m e n t a t i on of validation allowing C o m m u n i t y - w i de project, the JRC Annual Report 1995 experiments on large - and f u ll - scale models of buildings and bridges. f r om recently, However, equally i m p o r t a nt is the significant support which has been o b t a i n e d, firstly, from the Human Capital and M o b i l i ty (HCM) programme a n d, more the new Commission p r o g r a m me on Training (TMR). This and Mobility of Researchers support, added to ELSA's o wn institutional f u n d i n g, has made it possible to set up t wo research networks, g r o u p i ng respectively 18 and 11 European laboratories w i th the ELSA t he JRC. Moreover, substantial facility of funding has also been o b t a i n ed the "Large installations" chapter of HCM and TMR to let researchers to have access to a consortium of shaking tables (NTUA, Athens; ISMES, Bergamo; University of Bristol; LNEC, Lisbon; CEA, Saclay) a nd to the ELSA reaction wall. f r om to In addition in support of t he projects Eurocode 8, organisations f r om t he Member States grouped w i th t he JRC in t he European Mechanics Association of Laboratories are participating j o i n t ly w i th in shared cost actions, the ELSA t he competitive f or Commission and w o rk t h i rd parties. Industry is involved in research actions aimed Structural activities support team f or 14 Insbtntional Research Activities CompeàuVeSuppoit Activities Training and Mobility ofReseardxers (TMR) Programme Shared-Cost Actions Third-Bsxty Work HCQBQ^tf ELSA- Laboratory StruccoralM tetanies & E arthquake Engro rtring •"-*- EASML European Association of Structural Mechanics Laboratories (Universities & National Labs) Basic Research in Structural Network in support of Eurocode 8 Brrte / Euram Environment Inco-Copernjcus Research and Qualified ion Projej - Training of Young Researchers • Support to Industry, National/Regional Authorities - U se of N ew Materials à Construction Technologies Fig. 3 - European Collaboration in 1995 around the ELSA Facility validating developing and technologies and better new at introducing construction new materials w i th durability properties f or new constructions as well as for repair and strengthening purposes. Figure 3 shows European collaboration engineering around the ELSA facility. the operation on in 1995 of earthquake 1. 1. 2 Institutional Scientific and Technical Support for Community Policies The JRC provided, Scientific and Technical Support to Union Policies at the request of the relevant Commission services, in conformity w i th the Council Decisions of 15 December 1994 (which a d o p t ed the actual specific programmes the JRC). These Scientific and Technical of activities accounted the JRC's Institutional activities. for 27% of The support activities are customer driven, in f u l f i l m e nt of impartial and neutral scientific and technical requirements arising f r om E. C. directives, decisions of the Commission and thé Council, or obligations stemming the Euratom Treaty. f r om The effective customer/contractor b e t w e en requesting the relationship the services of Commission and t he JRC Institutes is expressed in inter-DG collaboration agreements. the elaboration and signing of General m o n i t o r i ng of such JRC services to the other Directorates General of t he Commission has been exercised by an official inter-DG Committee, established by a Commission decision. This group met twice in 1995, w i th a high attendance. Its role is t w o f o l d: m o n i t o r i ng the w o rk p e r f o r m e d, so as to ensure a smooth, mutual exchange of the i n f o r m a t i on on these activities (over 100 abstracts related to support activities were communicated in 1995 to all DGs), and planning activities the f o l l o w i ng year, t a k i ng into account priorities, new requests and b u d g et limitations. f or related to lines: These Scientific and Technical Support activities were f o l l o w i ng Framework programme Environment Fisheries, Targeted Socio-Economic and Nuclear Safety and Safeguards. Technologies, and Research and Climate, Agriculture t he Information Table 1 shows t he d i s t r i b u t i on of this support between the JRC Institutes and the Framework Programme lines. The three main JRC support activities are: JRC Annual Report 1995 1. JRC Support for the Environmental Policy, which accounts for 46% of the scientific and technical support budget, provides DG XI with scientific and technical assistance for the Table 1 - JRC Institutional S&T Support Activities Institutes I R MM ITU I AM ISEI El IRSA 1ST IPTS Framework Programme Lines Information Technologies Safety and Reliability of Systems Environment and Climate European Reference L a b o r a t o ry f or A ir Pollution (ERLAP) European Chemicals Bureau (ECB) European Centre f or t he V a l i d a t i on of A l t e r n a t i ve Methods (ECVAM) Support to t he European E n v i r o n m e nt Agency (EEA) Quality C o n t r ol of Consumer Products (Consumer Protection) A l p i ne Observatory Industrial Reliability: M a j or Hazards B i o t e c h n o l o gy Safety Foodstuff Analysis in S u p p o rt of Industrial Policy European C o m m u n i ty Pharmaceutical I n f o r m a t i on N e t w o rk (ECPHIN) M e t h o d o l o g i es f or UCLAF Agriculture and Fisheries Remote Sensing f or A g r i c u l t u re A n i m al I d e n t i f i c a t i on European Office f or W i n e, A l c o h ol and Spirit Drinks (BEVABS) Reference M e a s u r e m e n ts and Materials for Quality Control of Foodstuffs Targeted Socio-Economic Research Prospective T e c h n o l o g i c al Studies Nuclear Fission Safety European N e t w o r ks on C o m p o n e nt A g e i ng and Inspection Techniques Euratom Safeguards S u p p o r t: General Euratom Safeguards S u p p o r t: On-Site laboratories and ECSAM IAEA Safeguards S u p p o rt • • • • JRC Annual Report 1995 • • • • • • • • • • • • • • • • • • • • • • • • of the nuclear legislation i m p l e m e n t a t i on on cherriical pollutants, atmospheric p o l l u t i o n, w a t er q u a l i t y, chemical waste, industrial risks and inter-DG safety. collaboration agreement the period 1995-1998 was signed in December 1995. This w o rk is p a rt of the 5th EC A c t i on Programme in t he field of the Environment, and includes: The f or which (ERLAP) Pollution - The European Reference Laboratory for Air was particularly active in the harmonisation of current EC Directives on air p o l l u t i o n, in the organisation of Quality Assurance the Control new d e v e l o p m e nt m o n i t o r i ng techniques. programmes and and validation in of to - The European Tracer Experiment (ETEX), the capability of aimed at verifying atmospheric modellers the forecast evolution of a cloud of an atmospheric time. ETEX was co- p o l l u t a nt the W o r ld sponsored Meteorological Organisation (WMO) and the International Atomic Energy Agency (IAEA). real EC, the by in - The European Chemicals Bureau is n ow handling all the w h i ch and scientific required tasks n o t i f i c a t i on of new chemicals, of assessment classification e x p o r t / i m p o rt chemicals chemicals. and control. existing and of testing methods labelling (ECB), technical the for risk the chemicals, and dangerous for for identifying - The European Centre f or the Validation of Alternative Methods (ECVAM), which, in collaboration w i th its advisory Committee, has d e f i n ed criteria the Centre's priorities. Activities included pre- validation of non-animal test protocols, vaccine potency and safety testing, and integrated in toxicity testing studies which focussed on metabolism-mediated toxicity, and on in- in blood for tests vitro f o r m i ng tissues. teratogenicity approaches alternative - The European Technical Office for Medicinal Products, established at El after a M e m o r a n d um of Understanding was signed b e t w e en the European Agency for the Evaluation of Medicinal Products and the Joint Research Centre. This office is established in both London and Ispra and is part of t he European Technical Office f or Medicinal Products (ETOMEP) Unit of the 16 the JRC; Institute of Environment it is dedicated to the d e v e l o p m e nt of technical i m p l e m e n t a t i on systems necessary f or the of on legislation European medicinal products. Union in - The Major Accident Hazards Bureau, the t he Bureau in "Seveso" Directive. The support of activity of t he resulted preparation of a second report on lessons learned the f r om accidents n o t i f i ed Commission; in t he distribution of a pilot data base of t he Documentation Centre on Industrial Competent to Risk Authorities; and in substantial progress made by the w o r k i ng groups established to produce guidance f or safety reports and safety m a n a g e m e nt systems. t he to - Support f or methodologies (UCLAF). the of for E. U. a n t i f r a ud policy elaboration - Support services t he Alpine related Observatory (Alpine Convention), initiated in 1995. to The JRC also offers institutional support to the European Environment Agency (EEA- Council Regulation 1210/90). 2. JRC Support for t he Common Agricultural Policy, accounts f or 16. 5% of t he Scientific and Technical Support budget. The inter-DG collaboration agreement the period 1995-1998 was signed on 17July 1995. The research the work areas: f o l l o w i ng is mainly for in - application of remote sensing to the aim of agricultural statistics, w i th demonstrating and developing methodologies integrate w h i ch remote sensing data i n to t he collection of crop statistics acreage and agricultural production in the EC. the m o n i t o r i ng of can f or - m o n i t o r i ng and control of t he Common and Policy: Agricultural sensing development of n ew techniques improved a l l o w i ng monitoring and control of the Common Agricultural Policy. research remote for - implementation of Community w i ne sector legislation t h r o u gh t he operation of the "European Office for W i n e, Alcohol and Spirit Drinks" (BEVABS); some 4000 EU NMR (Nuclear Magnetic Resonance) w i ne JRC Annual Report 1995 17 - data have been validated to be stored in the pertinent data bank. research and development methods improved for identification in order to prevent fraud. new animal of - quality control of foodstuffs, by supplying certified reference materials, by providing suitable analytical procedures and by supplying and/or coordinating laboratory intercomparisons. 3. JRC Support support programme DG for Nuclear Safeguards IAEA (Euratom Safeguards DG XVII, I) Safeguards the scientific and accounts for 32% of inter-DG technical support budget. The collaboration agreement the period 1995-1998 is expected to be signed early in 1996. for Most of the work undertaken deals with the following tasks: - training of inspectors, harmonisation of in- inspection service nuclear safeguards practices, providing state of the art reference analyses of equipment and nuclear materials samples; - design of on-site for safeguards analysis at reprocessing plants such as Sellafield and La Hague; routine analysis of nuclear materials samples; laboratories examination of the purchase and testing of major the construction of two analytical boxes and the training of analysts; equipment including - work on non destructive assay, sealing and identification surveillance safeguards techniques, equipment, data information treatment, health physics and training. techniques, of testing Other Support activities deal with: institutional Scientific and Technical Safety and reliability of informatics systems Foodstuff analysis in support of the Industrial Policy of Quality (Consumer Protection) control consumer products Techniques components in support of DG XI and DG XVII. inspecting ageing nuclear for Table 1 of Annex 1 shows how these support activities are customer driven, in fulfilment of impartial and neutral scientific and technical from E. C. directives, requirements arising decisions of the Commission and the Council, or obligations stemming from the Euratom Treaty. Progress made in these programmes is reported in more detail in Chapter 2, dedicated to the activities of the individual JRC Institutes JRC Annual Report 1995 1. 2 COMPETITIVE ACTIVITIES. -. to f r om JRC specialised for in 1988, of Work The i n t r o d u c t i o n, back Third Parties, where t he JRC carried out research on a contractual basis for external clients, was m e a nt to provide a measure of the relevance of t he JRC's w o rk and its competitive technology position, to enhance the f l ow of transfer the let to t he end users, and industry and research communities European facilities and benefit competences. This was the first step in opening the JRC up to c o m p e t i t i o n. The discussions in the European Parliament the Council and leading the Fourth the EURATOM Framework Programme and Framework Programme emphasised the need for the JRC to pursue and reinforce its move towards a more competitive approach on the customer/contractor basis relationship as stated in the Council Conclusions on the role of t he JRC in April 1994. the decisions on genuine of to a As noted by the Council, t he implementation of implied several measures and its conclusions decisions on financial and legal, budgetary, administrative matters which, ideally, should have been in force f r om 1 January 1995. The main decision concerned the modification of the Financial Regulation. This always involves the Council a decision, and was only achieved in September 1995. lengthy procedure, prior to It is intended t h at this transition be introduced the global JRC gradually; around 20% of budget should be earned t h r o u gh competitive activities. As of the 1st of January, activities included: competitive 1995-1998 1995, JRC f or - Participation in shared cost actions, where the JRC, in association w i th partners in the the Member States, submits proposals context of call for proposals, or contributes to proposals submitted by other laboratories under the Framework Programmes; in under t he Fourth - Competitive scientific and technical support activities Framework Programme, where the JRC may respond to Commission specific Directorates-General which are allocated on a competitive basis context of invitations to tender; requests f r om the in - Other competitive activities outside Framework Programmes, where the the JRC 18 to participate (alone or in a consortium arrangement) will be able in various actions sponsored by t he Community (e. g. PHARE, TACIS, assistance to developing countries, in t he context of a competitive etc. ) and approach, will seek Community f u n d i ng in relation to those actions; - Research under contract, the original Third Party Work mode of o p e r a t i on m e n t i o n ed above, n ow part of the overall JRC compe titive portfolio. for this surge preparations A l t h o u gh in competitive activities had already started early in 1994, 1995 has been for the JRC a year of learning f r om experience: learning to cope w i th new administrative and legal issues, learning to redeploy creatively its resources and personnel to face the competitive challenge, and adapting to a external environment. The JRC Institutes have shown a highly motivated, flexible and keen response to the competitive approach, stimulated by an internal task force on competitive activities. internal totally n ew and As far as JRC participation in shared cost actions is concerned, the JRC t o g e t h er w i th partners in the Member States submitted a total of 338 project proposals in response to the first calls for proposals f r om 15 specific Programmes; by December, 1995 the Commission had accepted 95 of those proposals for f u n d i n g, b r i n g i ng the financial overall success outcome to calculate precisely due to the o n g o i ng contract negotiations on several outstanding projects, will be in excess of 10. 5 Mioecu. It is i m p o r t a nt here t he proposal activity and the subsequent evaluation results have revealed to its f u ll extent the relevance of the JRC's work and the European industrial and research communities. to 28%. The the JRC, a l t h o u gh d i f f i c u lt to underline h ow b o th its deep roots rate for in the area of competitive scientific and In technical support activities, of t he 128 Mioecu earmarked w i t h in the 4th FWP for f u n d i ng this the 4-year period, 26. 5 Mioecu activity over t he to were made available Commission early in 1995, b ut only 20 MioEcu have been c o m m i t t ed in 1995. Of these, the JRC to w in a b o ut 11. 9 Institutes have managed in a Mioecu of contracts, either alone or consortium arrangement. t he services of activities competitive the outside Other like TACIS, PHARE, Framework Programmes etc. , have seen a g o od 1995 level of activity on In this highly the part of the JRC institutes. JRC Annual Report 1995 19 competitive sector of the market, the JRC has w on a r o u nd 2. 3 Mioecu. The record f or Third Party w o rk shows, for 1995, new contracts (obtained on the market at large) in excess of 18 Mioecu. Considered the context of t he outstanding e f f o rt on the other fronts, this represents a remarkable hold on the previous positions. (Third Party w o rk earned in 1994 a m o u n t ed to 18 Mioecu). in Table 2 provides a summary of the amounts for competitive activities: earned in 1995 Table 2 - Competitive activities A m o u n ts earned in 1995 (Mioecu) Earned during 1995 Inscribed as 1995 credits (*) Shared Cost Actions Competitive Support Competitive Activities outside t he FWP 10. 8 11. 9 2. 3 Third Party W o rk 18. 5 TOTAL 43. 5 3. 9 4. 8 1. 3 18. 5 28. 5 (*) The balance, w i il be, after conclusion of procedures, inscribed as 1996 credits. HFR Supplementary Pogramme (HFR) at Petten the operation of The High Flux Reactor is operated by the Commission in accordance w i th the Euratom/Netherlands agreement of 25 July 1961. On 29 A p r il 1992, t he Council adopted a four-year supplementary research programme to be i m p l e m e n t ed by the Joint Research Centre the European Atomic Energy Community for (1992-1995) concerning the High Flux Reactor (HFR) at Petten. Under the supplementary p r o g r a m me which was drawing to a close on 31 December 1995, the activities of the HFR were essentially the outcome of co o p e r a t i on b e t w e en t wo partners, Germany and the Netherlands, w h i ch provided its financing. steadily A d d i t i o n al increased, came f r om external contracts. It is intended to pursue the operation of HFR under a n ew supplementary programme, which w o u ld see an even greater p r o p o r t i on of income coming f r om t i,n industrial sector and a drastic reduction in cos f i n a n c i n g, which has JRC Annual Report 1995 1. 3 JRC INFORMATION DAYS - PUBLICATIONS AND CONFERENCES to closer increase b e t w e en collaboration t he awareness of The new approach to the JRC activities calls f or a industry, research centers a nd universities in t he M e m b er States and the JRC. In order to stimulate this and t he JRC, Information Days have been organised at t he initiative of Members of t he Board of Governors in London, Athens, Copenhagen, Milan and Vienna. JRC members have presented the Centre and in parallel workshops representing t he f or n ew Institutes have f o u nd grounds t he participants. These collaboration w i th i n f o r m a t i on days have thus supplemented t he numerous presentations of t he JRC given to to national the sites, visits made visitors to t he JRC at representations of laboratories, specialised fairs and exhibitions, d i s t r i b u t i on of JRC literature, etc. The JRC offers a vast array of publications on f r om papers and scientific matters ranging articles conference papers, EUR reports and reviews. in scientific magazines, In 1995 the JRC published in t o t al a r o u nd 1. 000 papers and is their d i s t r i b u t i on by shown in Table 3. Institute The detailed list of JRC publications is published each year in the "Publications B u l l e t i n ". The last issue, No. 15, published in March 1995, gives all publications in 1994. Most of these publications are available u p on request to the Public Relations,Unit, Ispra. addition above In mentioned Bulletin lists all patents o b t a i n ed by the JRC. There were 26 patents g r a n t ed in 1995. publications, t he to In 1995 in Europe. the JRC organises a n u m b er of Each year conferences, workshops and seminars at its five sites there w e re 9 conferences, 94 international workshops and meetings and 135 visits to t he various sites. The resulting visitors t o t al of more t h an 11. 000 shows the constant the scientific community to the contributions in research and development made by the JRC. interest of Table 3 - JRC Publications in 1995 Institute EUR Reports Conf. Papers Articles Published Provis. Total General M a n a g e m e nt Institute f or Reference Materials and Measurements Institute f or Transuranium Elements Institute f or Advanced Materials Inst, for Systems Engineering and Informatics Environment Institue Institute for Remote Sensing Applications Institute for Safety Technology Institute for Prospective Technological Studies Total 5 5 2 16 14 22 17 19 17 117 1 66 96 136 115 129 111 114 4 772 1 40 15 49 26 37 23 16 1 7 111 113 201 155 188 ] 151 149 22 208 1097 1. 4 HUMAN RESOURCES The JRC statutory staff is made up of officials and temporary agents, including b o th scientific- technical and administrative staff. By the end of December 1995 t he statutory staff numbered 1. 786 agents, compared w i th 1. 845 in December 1994. Table 4 gives the d i s t r i b u t i on of statutory staff in 1995. Table 4 - Distribution of statutory staff as of December 1995 Institute Directorate General Programmes Directorate Resources Coordination - Scientific & Technical Support Ispra Institute for Reference Materials and Measurements Institute for Transuranium Elements Institute for Advanced Materials Institute for Systems Engineering and Informatics Environment Institute Institute for Remote Sensing Applications Institute for Safety Technology Institute for Prospective Technological Studies JRC seconded staff Total Staff 25 13 347 169 194 250 187 219 101 246 26 9 1. 786 * JRC Annual Report 1995 21 In addition to statutory staff, 319 scientists are also active in the JRC under various hosting schemes: Table 5 gives the distribution, by Institute, of these scientists, working at the JRC at the end of December 1995. senior scientists hosted as visiting scientists; national experts seconded Member States, scientific work; to to participate the JRC by in selected post-doctoral students fellowships. scientists and post-gratuate through a programme of trained In addition about 20 scientists each year come from a third country assisted by a grant within the framework of a Commission agreement with their countries or with the International Atomic Energy Agency (IAEA). Besides the above mentioned scientists, several senior scientists and about 150 trainees work at the JRC Institutes at no cost to the EU budget, in general for short periods of time. Table 5 - Visiting scientists, seconded experts, grantholders as of December 1995 Institutes Visiting Scientists Seconded Experts Post- Doctoral Scientists Post- Graduate Students Total Institute f or Reference Materials and Measurements Institute f or Transuranium Elements Institute f or Advanced Materials Institute f or Systems Engineering and Informatics Environment Institute Institute f or Remote Sensing Applications Institute f or Safety Technology Institute f or Prospective Technological Studies 2 2 4 1 5 7 4 2 2 - - 2 4 5 - - 16 16 36 14 32 26 17 21 17 8 10 15 15 34 17 13 26 51 44 60 50 34 8 18 Total 27 13 151 128 319 JRC Annual Report 1995 1. 5 FINANCES budget The as (commitments implemented by the JRC in 1995 is given in Table 6. credits) Table 6 -1995 Budget implementation in Mioecu (Commitments Credits) Institutional activities EC Specific Programme 152. 761 EAEA Specific Programme 75. 301 Subtotal 228. 062 Competitive activities Participation in shared cost actions Competitive Scientific and Technical Support activities Participation in Community activities outside the FWP 0. 027 0. 045 Work for third parties 10. 460 Subtotal 10. 532 HFR Reactor 18. 548 Total 257. 142 22 To these commitment credits one must add 0. 564 Mioecu of credits carried over from the 1994 Budget for the execution of contracts related to research on the environment and on remote sensing from space, authorised in March 1995 (SEC(95) 400 final). Total JRC committed amounted to slightly lower than 258 Mioecu: financial resources the execution of (Research for programmes support activities Commission) for the and JRC specific Institutional the the services of in the framework of shared for the execution of JRC competitive activities the EU budget within (participation actions, competitive support activities for the services of in other the Commission, JRC participation Community activities, contributions from the Dutch and German governments the operation of the HFR and from JRC customers for the execution of work at their request. cost for It should be underlined that the figures in Table 6 refer to expenditure on work performed by the JRC in 1995. Shared cost actions and technical support competitive scientific and activities, as well as participation in other Community activities, were new types of JRC activity in 1995. In most cases contracts were only entered into at the end of 1995. Asa result, only limited work was carried out during that year. Figures on contracts entered into during 1995 are provided in Table 2. JRC Annual Report 1995 2. ACTIVITIES OF THE JRC INSTITUTES IN 1995 2. 1 THE INSTITUTE FOR REFERENCE MATERIALS AND MEASUREMENTS In t he level. 1995, IRMM promotes European The standards, reference materials and methodologies at t he European Institute i m p l e m e n t ed its specific programme under t he heading of Measurements and Testing and c o n t r i b u t ed to t he Framework Programme line IRMM Industrial Technologies. Early in 1995, t o ok over responsibility f or managing the BCR's reference (Community Reference Bureau) materials: stability control, distribution, sales administration and recertification of exhausted batches. storage, includes this to related policies, is engaged in support activities for IRMM nuclear Community safeguards, the safety and quality control of consumer reference measurements and materials for quality control It also provides services and of reference materials to various customers f r om the European Member States. foodstuffs. products, and A. Institutional Activities Institutional Research Activities the and the Measurements One of t he objectives of t he w o rk at the IRMM, Testing w i t h in p r o g r a m m e, is harmonisation and standard isation in analytical measurements. To this end the available measurements expertise and the Institute refined analytical techniques of have been applied to prepare, characterise and certify high quality reference materials for b o th nuclear and appropriate non-nuclear fields, to coordinated establishing be analytical measurement system at European ievel. W i t h in this f r a m e w o r k, responsibility for the management of reference materials under testing the standards, measurement and programme (formerly BCR) has been taken over by IRMM. used for a to included attempts Research on biological and environmental isolate and materials stabilise chloroplast material suitable f or the bio-assay of pesticide traces in drinking w a t er research was pursued on control. Analytical by characterisation m e t a l l o t h i o n e in electrochemistry and liquid chromatography, and on heavy metal traces of environmental or bio-medical relevance. The m o d e rn Ultra Clean the sub- Chemical Laboratory was used f or JRC Annual Report 1995 boiling preparation of batches of high purity water and of acids f or h i gh accuracy analytical w o r k. The IRMM also c o n t r i b u t ed to the i m p r o v e m e nt of t he n e u t r on interaction standards data sets (which serve to d e t e r m i n e, inter alia, partial cross-sections) as collected in the High Priority Request List by t he NEA W o r k i ng Party on Evaluation C o o p e r a t i o n, under t he auspices of the NEA Nuclear Science Committee and in collaboration w i th IAEA. For quality control certified activation analysis collaboration w i th (Belgium). reference materials, in the preparation of neutron a facility was set up in t he SCK/CEN at Mol The proceedings of t he International M u l t i p le Group Users' Workshop were published. Analysis UHACreiurhhhed * ^%V ^ \X N* V. }8MM*s electron linear accelerator' DNÀ<$ with hs unique high energy-resoiution potential «as refurbished from September 7394 to Apr# W9$- The neutron measure?* zt\tbe mertt programme was resumed accelerator m^ <ofUboraitofi^tth\ CEA. scientists m the fields of matron capture an& transmission experiments. Measurements if the totai and radiative capture cross+sections of $$Fc m the /QW resonance region were started m collaboration with the CEA afj Sac/ay (France), low energy resonance,,!**] uranium and uranium oxide was studied'àt low temperatures in order to investigate soiid state effects on resonance shapes/fa collaboration w/tfc the CFA at Çadàrache,. (France). " -; ',",>/' Work related to nuclear matters included, inter alia, the supply of targets f or n e u t r on cross- section measurements, fission fragment studies and other applications; t he preparation and characterisation of 10B reference layers to be used flux measurement; t he setting up of an improved electrodeposition m e t h od f or the preparation of the layers; d e t e r m i n a t i on of uranium in e n v i r o n m e n t al samples. t h in uranium a nd p l u t o n i um accuracy neutron high in the LINAC, high energy resolution Also at measurements of the inelastic scattering cross- section of iron were made using a 60 m f l i g ht path. The spontaneous fission processes of isotopes and of 252rf have been p l u t o n i um f u r t h er investigated. At the 7 MV van de Graaff accelerator, neutron inelastic scattering was measured on natural m o l y b d e n u m. In collaboration w i th KFA Julien (Germany), cross-sections f or various activation reactions w e re measured chromium isotopes. Improved experiments to determine the cross-sections 235u(n,f) and H(n,n) have been initiated. reference ratio of the on In radionuclide metrology, an intercomparison of computer codes used for the analysis of 239pu/240pu alpha particle spectra has been pursued. Ultralow-background (3 spectrometry was used to characterise human bones for low radionuclide underground laboratory of HADES (High Activity Disposal Experimental Site) at Mol in a to obtain a natural matrix European e f f o rt limits reference material. Similarly, detection for biological matrix were determined. (Belgium) content 2iopb the in in a the materials projects setups research experimental t wo For complementary for hydrogen p r o f i l i ng have been installed at the 7 MV van de Graaff. At the 3. 5 MV van de Graaff machine, the stopping power for helium ions and protons of polyimide and VYNS (trade name of co polymer) foils has been d e t e r m i n e d, as well as the uniformity of trace metals on filters for an aerosol reference material. chloride/vinyl acetate vinyl Institutional Support Activities IRMM's support activities in 1995 were mainly related to Nuclear Safeguards, on request from DG I (External Relations), for the International Atomic Energy Agency (IAEA) and DG XVII (Energy, Euratom Safeguards Directorate). Non- nuclear certified reference materials were also prepared for other DGs. IRMM acted in general as a Commission laboratory offering scientific/technical support to services which do not dispose of their o wn measurement back-up. W o rk on dried nitrate or metallic spike material large was continued reprocessing and isotopic reference materials were p l u t o n i um IAEA. Low prepared on behalf of DG chemical concentrations w o rk in IRMM's ultra clean chemical laboratory. improve safety at uranium implied meticulous to plants, I for and for IRMM provided DG XVII w i th solutions detector calibration needed in non-destructive assays of uranium and p l u t o n i u m. Certified reference materials of soils, sediments and foodstuffs were prepared f or DG III (Internal Market) and DG VI (Agriculture), f or quality control to assist enforcement of European legislation. These activities were c o m p l e m e n t ed by providing suitable analytical procedures and by laboratory intercomparisons. For DG VI, new activities were initiated on selenium speciation a nd sugar analysis. Cosmetics analyses and a product safety data bank were under development f or DG XXIV (Consumer Policy). initiating a n d / or coordinating B. Competitive Activities Shared-Cost Actions of its field competence, has In contributed in 1995 to 8 SCA proposals, 3 of which have been accepted so far; these deal w i t h: IRMM • • the design, production and certification of sets of synthetic polymer reference materials consisting of a polyolefinic base material doped w i th heavy elements Cd, Cr, Hg and Pb at t wo different concentration levels; the preparation and certification of calibrant solutions and fly ash samples f or measure polychlorodibenzo-p-dioxins ments (PCDD) and polychlorodibenzofurans (PCDF) contaminations in emissions at levels of 0. 1 n g / m3; of • the preparation and characterisation of catalytic converters w i th respect to Pt, Rh, Zr and Ce. Work for third parties IRMM services and reference materials are available on a commercial basis. As IRMM n ow manages the BCR's reference materials, these are also being made commercially available f or non-nuclear applications. (IMEP) interest International Measurement Evaluation The in a is arousing Programme g r o w i ng number of laboratories. The most recent IMEP round on trace elements in w a t er 28 attracted European countries. Evaluation Interlaboratory Programme quality control exercise, recently b r o u g ht t o g e t h er 20 Regular Measurement (REIMEP), an external laboratories about The 250 in JRC Annual Report 1995 laboratories worldwide in rounds on uranium oxide powder and two uranyl nitrate solutions. The supply of nuclear samples to external customers, in particular for reactor neutron dosimetry, was continued. Four new neutron dosimetry reactor pressure vessel surveillance (titanium metal and three Al-Co alloys) have been prepared. reference materials for 25 _£. • ffy Ash Reference Materials and Synthetic PBtymzrHeference Materials One of the successful Shared<ost Action proposais dealt with the preparation and cer&tKation of solutions and fly ash reference materials^ for measurements of dïoxùte or furane compounds =at hw concentration levels. A proposai related to tôe design, production #nd certification of two consumable synthetic poiymer reference materiafs doped with Heavy elements at two concentration levels? has been launched with a view to promoting envlronmentai protection and supporting the European polymer the materiafs development, production control and quality management industry In JRC Annual Report 1995 2. 2 THE INSTITUTE FOR TRANSURANIUM ELEMENTS fuel cycle. The t he nuclear ITU performs activities in the field of t he safety of Institute contributed to t he Framework Programme line particular Nuclear Fission Safety w i th the emphasis on nuclear fuel cycle. Other research themes were the safety of nuclear the measurement and modelling of f u el properties, and the characterisation of spent fuel w i th a view to its long term storage. the safety of actinides t h r o u gh fuels, in a ITU also provided scientific and technical support f or Community policies in the area of in on-site Nuclear Fission Safety, mainly La Hague laboratories IAEA (Euratom Safeguards) and the (International Atomic Energy Agency). In in several contracts at addition, it is engaged the request of various customers. at Sellafield and for A. Institutional Activities to fuels" part of the p r o g r a m m e; the Commission's ITU performs its activities under the "Safety of nuclear it contributes sectorial policies on "Safeguards" and "Fissile Material M a n a g e m e n t ", and t h r o u gh development of instruments, analytical services and expertise, and direct in field measurement support. techniques and research Institutional Research Activities in research been of obtained uranium-based is Fuel Cycle Safety: Basic actinide being carried out to elucidate t he electronic structure of actinide elements and their interest for chemistry and solid-state physics. Important the have results heavy- understanding f e r m i on w i th (Pu). Other n e p t u n i um themes light/solids interactions; neutron experiments w i th Np compounds and neutron inelastic scattering, to better understand electron interactions in the 5f and 3d electron shells; X-ray synchrotron experiments on uranium oxide single crystals and help understand magnetic behaviour. superconductors (Np) and p l u t o n i um theory of arsenide uranium crystals, include doped the to ITU fuel, the area of safety nuclear is In measuring and modelling fuel properties and fuel/cladding interactions in order to be able, in a f ew years, to design very high burn-up MOX (mixed U- Pu oxide) fuel pins t h at w o u ld be as reliable as present-day uranium fuel. Fission product release f r om irradiated fuel as used in 26 t he PHEBUS reactor safety p r o g r a m me was measured up to complete e v a p o r a t i on of t he fuel. The TRANSURANUS code was successfully used to describe high burn-up p h e n o m e na (rim effect). For t he t he use of high resolution electron microscopy clearly revealed the subgrain dislocation t he boundary f o r m a t i on of t he rim-structure. f o r m a t i on as the in UO2 and first step t i m e, lines first in the EFTTRA t he m i t i g a t i on of (Transmutation and Burning In the area of long-lived actinides and fission products, in order to help f u r t h er minimise the radiotoxicity of spent f u el and highly active waste, ITU collaborates w i th industry leading national laboratories, nuclear to prepare and Member State authorities samples for fuel irradiation, t r a n s m u t a t i on and recovery of actinides f or example, t e c h n e t i um (Tc) samples for irradiation, pins w i th high Pu and Np content and a Pu-cerium inert matrix (Experimental based pin w i t h in Feasibility of Targets for Transmutation) and TRABANT of Actinides in Triox) programmes. The feasibility fuel of targets w i th 20% Am (americium) and 20% Np was demonstrated. Extraction c h r o m a t o g r a p hy was investigated for t he separation of U and Pu f r om such fuels. A patent application was made for a method b u r n i ng weapon-grade Pu in a Light Water Reactor w i th high p r o l i f e r a t i on carried resistance. Studies were on the physical and fabrication procedures and chemical properties of inert matrix materials f or the transmutation of actinides. Pellets of mixed f u el pins w i th oxide reference material and and fuel metallic characterised. recovering actinides fabricated irradiated been have f r om o ut long In the area of spent fuel characterisation w i th a t oo term storage, analyses were per f o r m ed to provide reactor operators, t he f u el cycle industry and licensing authorities w i th t he necessary, relevant safety data, including those on radiotoxicity. For instance, t he leaching and corrosion behaviour of natural uranium oxide and irradiated high burn-up f u el was investi gated using solutions simulating g r o u n d w a t er to and salt brine, w i th a t t e n t i on paid the mechanisms and kinetics of leaching. The structure of oxidised layers on leached uranium the Rutherford oxide was determined by backscattering/channeling The irradiated high porosity in burn-up detail. in the outer rim of fuel was quantitatively analysed techniques. Institutional Support Activities In support of the energy policy (DG XVII), in t he "Safeguards and Fissile Materials area of JRC Annual Report 1995 and on-site tested. laboratories In a d d i t i o n, M a n a g e m e n t ", were designed f or safeguards analysis at reprocessing plants such as Sellafield and Cap de la Hague, and major analytical e q u i p m e nt such as robots, titrators, alpha- spectrometers, non-destructive devices and detectors, was measurement purchased t wo analytical boxes were constructed, analysts were trained and routine analyses of nuclear material samples w e re p e r f o r m e d. Some other examples a performance evaluation of the MGA m e t h od f or K-edge and ( M u l t i p le Group Analysis) n e u t r o n - g a m ma a counting comparison of p l u t o n i um assay techniques; a detailed evaluation of correlation isotope t he d e t e r m i n a t i on of Pu-242; techniques f or measurements samples technology f or safeguards samples w i th trace amounts of radionuclides in soils, vegetation and sediments f r om contaminated areas. applications; preparation activities: support 1995 and of provided ITU staff in-site support significant As before, t he Safeguards to analytical fuel in reprocessing Directorate fabrication plants. The characterisation of vagabonding nuclear materials was continued whenever necessary. and in Analysis of Environmental Samples 1 During 1995 the corner-stone was iaid for this the new ARTiNA laboratory*. With laboratory fully operational, the Institute can provide ultra sensitive analysis of radio- isotope traces for the identification of undeclared nuclear activities. This capability will be used for safeguards applications. TheAKTMA laboratory consists of a cfass 100 clean laboratory for sample preparation and pre-treatment and a range of highly sensitive equipment for the measurement of a range of radioisotopes which are "indica tors44 for clandestine nuclear activities, ITU has asked laboratory of the IAEA for environmental samples and has already participated in test campaigns for the analysis of bulk sampfes andparticles. to become a network B. Competitive Activities Shared-Cost Actions 8 proposals (made w i th EU partners) for Nuclear accepted in 1995. The projects concern: • evaluation of p a r t i t i o n i ng and transmutation the p r o g r a m me were Fission Safety strategies JRC Annual Report 1995 • n ew p a r t i t i o n i ng techniques • impact of accelerator based technologres on nuclear fission safety t h o r i um cycles as a nuclear waste manage ment o p t i on revaporisation tests on samples f r om PHEBUS FP • • • source term f or performance assessment of spent fuel as a waste f o rm • supporting nuclear data f or advanced MOX • fuels j o i nt experiment on A m e r i c i um t i on transmuta These Cost-Shared Actions w i ll c o n t r i b u te a b o ut 1 Mioecu. Competitive Support for Community Policies Following a call f or t e n d er f r om DG XIII, ITU has t o g e t h er w i th o t h er partners, a submitted, project on "Enhanced Gas Cleaning by Infra- Sonic Particle A g g l o m e r a t i on and D e p o s i t i o n ". The project was accepted at t he end of 1995; the Institute's share is a b o ut 0. 1 Mioecu. Work for Third Parties As in previous years, t he Institute has carried o ut w o rk for t h i rd parties, w i th major contracts in the areas of post irradiation e x a m i n a t i on of irradiated fuels, f a b r i c a t i on a nd characterisa tion of fuels for t r a n s m u t a t i o n, and examina tion of high b u r n - up u r a n i um oxide and mixed oxide fuels f or d i f f e r e nt customers. During 1995, n ew contracts w o r th a b o ut 2. 1 Mioecu have been signed, w h i le w o rk f r om previous contracts c o n t i n u e d. Other Competitive Activities f o l l o w i ng The TACIS/PHARE during 1995: offers s u b m i t t ed programmes w e re to t he accepted • Measurement of radionuclide release reactor debris samples f r om (TACIS- Chernobyl Ukraine) • Transfer of TRANSURANUS authorities (PHARE-Bulgaria) t he Bulgarian t he to nuclear safety code licensing A study proposal, concerning t he establishment of a data bank on nuclear materials t he f r a m e w o rk of illicit t r a f f i c k i n g, was accepted by DG I. The contract w i ll p e r m it collaboration f or 12 w i th months. The overall scope of t he approved projects is a b o ut 0. 6 Mioecu. t wo Russian experts at ITU in 2. 3 THE INSTITUTE FOR ADVANCED MATERIALS to Institute contributed IAM performs research on advanced materials. The t he Framework lines "Industrial Technologies and Programme Materials Technologies" and "Measurements and Testing", w i th an emphasis on standards and for applications, development of new improved component integrity and materials for clean technologies and fusion materials. IAM also contributed to the Framework Programme lines, Non-nuclear Energy, Nuclear Fission Safety and Controlled Thermo-nuclear Fusion. structural coatings, It also operated in 1995 the High Flux Reactor (HFR) f or t he Dutch and German authorities and was engaged in w o rk on a contractual basis for industry. zo neutron scattering, j o i n i ng of ceramics and brittle materials. Also, activities linked w i th i n f o r m a t i on technologies: h i gh temperature materials data bases; the I n f o r m a t i on Centre on Materials Activities. typical The end-users production and aeronautics industries. are t he energy sensors, chemical of New Improved "Development and resistance Coatings": wear a nd corrosion f a t i g ue improvement, resistance, superhard surfaces and biome dical applications; new composite materials, w i th an emphasis on fibre composites, and electrophoretic processing of ceramic matrix composites. Exploratory research projects laser spallation included testing m e t h o d o l o gy and h i gh temperature superconductors. interfaces in A. Institutional Activities Institutional Research Activities The typical end-users are in m a n u f a c t u r i ng industry, the car industry, aeronautics and electronics. the industrial W i t h in Materials Technologies programme, activities p e r f o r m ed approximately into four clusters: and research in 1995 can be sorted Technologies The £W£KA 1PACERC Project their components. hard erosion conditionsr Helicopter engines are usually submitted extremely to rapid failures of engme manufacturer loped a new deposited showing an improvement 500 compared already available. apply this coating to be protected to leading The Turbomeca has deve coating Deposition, by a factor of over coatings to is contplexshapes engine. to the very in a helicopter by Physical Vacuum to conventional hard The new challenge type of multilayer the Déposition designed the JRC has proposed, m the Accordingly, frame of a EUREKA project, development of a new Induction Pfasma Assisted Chemical machine Vapor specially application, for Plasma Chemical Vapor Deposition will allow Induction deposition low will plasma Chemical ensure good process homogeneity, which is an absolute must in this case. temperatures. Vapor Déposition (f-PACVD) this at • "Standards f or Applications" area: research on mechanical performances of materials, testing, corrosion, components' integrity • A new f or line IAM w i ll be support f or industry t h r o u gh t he provision of informa t i on and prenormative k n o w - h ow on eco- friendly materials, materials studies and an ECO materials database. Research w o rk was done on coatings incineration and coatings waste machining in m a n u f a c t u r i ng technologies. for for dry The end-users are the waste management industry, in industry and manufac particular, t u r i ng industry. the the car industry and, recycling • Two projects focused on "Structural Compo nent Integrity": application and qualification of non-destructive evaluation (NDE) techni ques to assess defective a n d / or deteriorating industrial components; NDE and testing of structural components. are mostly The end-users energy production industry, b o th conventional and nuclear, and the transport industry including aeronautics, rail and car manufacturers. t he W i t h in the Non-Nuclear Energy p r o g r a m m e, a n ew topic was introduced in 1995: "Materials f or Clean Technologies". T wo projects were carried o u t: microstructural engineering and ceramic catalyst support, b o th focusing on automotive catalytic converters. The potential industry, b ut also energy users are producters using conventional f u el sources. the car JRC Annual Report 1995 The %&tropean Preswm Rès&tàh&wtcft&PERQ equipment tfèJ&topean Pressure ZqutpmehtXesearch Cotmtit (£Pê8C} is an association of industries^ hboratorieSrengmeeHn^ asso- &fpQ& trfwh&t is to pfamote. European L*©0per*tn(& research in the domain of \pœ&vœ equipment &£HÇ & concerned ,wth research end development proof ems linked to construction end in-service activities, ft deals with all types of pressure equipment nuclearequipmentexdudéd. £p$?c eds as 4 clearing-house to define and coordinate the research programmes end exchange^ experience. It has an important rofe In the dissemination of the resoHs ofresear<h to industry, andworks in close contact with the Commission of the European Communities with regard to shared+costactlon proposals and support to CfflandDGtlL i JinCIAM Petten is the operating agent In the international domain tbeïe are plans to cooperate mth the American Pressure Vessel Council and the Japanese Pressure Vessel Council the Nuclear Safety and Safeguards Within the section on programme, and specifically reactor safety, IAM is the operating agent for the already established European networks dealing with "Nuclear Components and Inspec tion". Projects in operation include an experi mental study on ageing, degradation of steel properties and subsequent annealing, and the Networks Reference Laboratory. of focused on the design of Within the Controlled Thermonuclear Fusion fusion the development programme, technology the International Experimental Thermonuclear Reactor (ITER). The IAM contributed to this effort and supported ITER'S technological needs through its selection and characterisation of adapted materials. IAM also participated in the European the development of low activation materials. In parallel, irradiation experiments were perform ed in the HFR in support of NET/ITER. term programme longer for Institutional Support Activities Projects with the same range of scientific content as above were carried out in support of DG XI (Environment) through the European networks AMES, ENIQ and NESC, and DG XVII (Energy). An information and management transfer structure was set up to improve the technology transfer process. The European Network for Inspection Qualification { ENIQ) me Steering committee of €NfQ. in which the £tt nuclear power plant operators are the voting members, has approved e reference methodology for inspection qualification. Thh methodology has aroused greet interest from industry in its field and is considered of prime importance for future development B. Competitive Activities Shared-Cost Actions IAM took part in 49 proposals, of which 17 have been accepted so far. 9 of these will have immediate funding. The distribution of pro posals among to Brite/Euram, 6 to Standard Measurement and Testing, 4 to Nuclear Fission Safety, 2 to Biomed-2, 1 to Environment and Climate, 1 to Esprit, 1 to Training and Mobility of Researchers and 1 to Joule. the programmes is: 33 Competitive Support for Community Policies Two successful proposals were made to the Valorisation programme of DG XIII (Tele communications, Industries and Information Innovation). The first deals with an "Autono mous Solar System", the second with neural network techniques for non-destructive evalua tion (NDE) applications. This last proposal is a joint venture of both IAM and ISEI. Work for Third Parties New contracts signed in 1995 deal with the following topics: PC based High Temperature Materials Data Base Software, Non Destructive Evaluation Techniques, Aero-engine compo nents, coatings, corrosion studies on advanced materials for power generation. The overall turnover was comparable to last year's. JRC Annual Report 1995 Other Competitive Activities IAM is a partner in a PHARE consortium dealing with the installation of a qualification system for in-service inspection of Nuclear Power Plants in the Czech Republic. IAM is also a partner in proposals made to TACIS in the fields of NDE, inspection and materials ageing. High Flux Reactor (HFR) The High Flux Reactor at Petten continued its operation in 1995 and its utilisation reached about 75%» of the practical limits. The HFR its leadership as a noticeably strengthened supplier of radioisotopes for the radiopharma industry: nearly 65% of European ceutical took place at HFR. The recent production 30 launching of the on-site molybdenum factory will further enhance HFR's role as a key facility for nuclear medicine, vital for millions of patients. The HFR also maintained its role as irradiation test bed for the Fusion community: six new first wall structural materials experiments on (mainly martensitic steels) and plasma facing components have started. The irradiation embrittlement project, part of the European (Ageing of Materials and Network AMES launched. A new Evaluation Studies), was experiment the started series was transmutation of actinides and fission products to reduce the long term radiological impact of high the European collaboration EFTTRA (Experimental Feasibility of Targets for TRAnsmutation). level waste, as part of on JRC Annual Report 1995 il 2. 4 THE INSTITUTE FOR SYSTEMS ENGINEERING AND INFORMATICS understanding f r om a w i de range of sources and perspectives. A set of criteria f or " g o od practice" in t he field is n ow being developed. to on ISEI Fission research performs t he Framework Programme systems The engineering and informatics. It contributed in 1995 lines Environment and Climate, Non-nuclear Energy, Controlled Safety Nuclear Thermonuclear Fusion, carrying o ut research on methodologies f or environmental management and assessment of environmental quality, on solar energy by photovoltaics, on fission reactor safety and fissile material control as well as on fusion reactor operational safety. and scientific and ISEI provided In a d d i t i o n, technical support f or Community policies: in the field of the environment, a m o ng others on industrial safety and t he reliability of systems including biosafety; in the field of agriculture, on animal in the energy sector, on nuclear safeguards for the Euratom safeguards and is also the currently engaged in w o rk carried out at the request of external customers. identification; and IAEA. ISEI for A. Institutional Activities research on Institute carries o ut the The reliability and performance of complex systems; on socio-technical systems and risk manage ment; on expert systems; on parallel comput ing; on data bases; and it operates a major computer and n e t w o rk facility. Areas of include: aviation safety, human expertise factors, non-nuclear energies, fissile materials safeguard, industrial safety, environ mental emergency planning. assessment fusion, and risk Institutional Research Activities W i t h in programme, ISEI contributed to studies on: Environment and the Climate • for "Global C h a n g e ": an on-line information service called "European Wide Service Ex change" the (EWSE) was developed Centre for Earth Observation (CEO). Other contributions include software engineering, user interface, quality assurance, satellite image compression techniques and network support. A p i l ot study related to a specific decision maker and the availability of data t h r o u gh EWSE was carried out. • The " I n t e g r a t ed Assessment of Environ mental Quality" approach: aims to provide decision makers w i th alternative options for i n f o r m a t i on and action, via a synthesis of JRC Annual Report 1995 EMEKA-AOAGE for AOAGE is a EUREKA project between french and Portuguese companies and the JHC-JSEL The aim of the project is to develop. a decision-support system integrated environmental management. Its principal objective is to provide a thorough assess ment of aftermtive decisions related to environmental matters. The main features of the project are: the development of a distributed information system networking various sources of information represented by the stakeholders concerned with the decision process; the integration and fusion the of different integration of diverse perspectives including environmental constralntSr socio-economlcal factors and technical issues; a highly inter* active system for information updating: and navigation, as well as scenario testing. The project (S scheduled over a three-year period. information; types of • refined and a promising "Innovative Environmental Technologies": the application of decision s u p p o rt systems has been n ew m e t h od based on object-oriented p r o g r a m ming has been i m p l e m e n t e d, w h i ch w i ll also f or external be of use clients. project " A d a g e ", which aims to develop a decision support system f or comprehensive environ mental m a n a g e m e nt via the t h o r o u gh assess ment of alternative decisions. in o n g o i ng w o rk the EUREKA ISEI j o i n ed W i t h in the f o l l o w i ng activities were p e r f o r m e d: the Non-Nuclear Energy p r o g r a m m e, • Photovoltaic: using a climatically c o n t r o l l ed solar simulator, irradiation was carried o ut at various temperatures to study t he effects of light-induced d e g r a d a t i on on amorphous silicon modules. Results have been leading to a revision of the CEC ESTI 701 specification. An analysis of the spread in the character isation results for W o r ld Photovoltaic Scale samples (WPVS) has also been p e r f o r m e d. W i t h in the Nuclear Fission Safety p r o g r a m m e, w o rk was carried o ut o n: • Nuclear fission safety and reactor safety: a launched on benchmark exercise has been expert safety assessment (PSA), level 2. A questionnaire has in probabilistic j u d g m e nt institutions (research been distributed to a n e t w o rk of more than 50 European labora tories, regulators, industries, etc. ). The first phase, parameter estimation, also involves the f or Safety Technology (1ST), whose facility FARO has been adopted as a reference experiment. Institute Smart Composite Materials interest The The use of fibre optics in transducer systems for measurement of physical parameters has recently attracted much possibility of embedding optical transducers into new composite materials has boosted research in the field of smart materiafs which allow real time structural monitoring from inside the structure itself In continuous fibre composites materials, the proper positioning of the reinforcement allows the material to host optical fibres without an increase of the notch factor. Along this line of research, a smart composite material laminate was produced at ISEI (24 ply graphlte/epoxy beam and Michefson based fibre optic strain transducers embedded in it) and tested. results compared tests were to Both static and dynamic performed and theoretical predictions and to strain values measured by conventional strain gauges bonded to the external surface of the laminate; the correspondence was very good, particularly in the dynamic response. Results supplied by the embedded sensing net of fibres confirmed its diagnostic capability and allowed the planning of future research steps the The and research activities surveillance • Several types of activity have been carried- on Nuclear out w i t h in remote on Safeguards. included: verification distributed surveillance systems based on smart digital cameras and industrial field bus; remote control of a robotic arm for simple manipulation tasks; and the application of new compact laser range finders. In the field of international remote m o n i t o r i ng systems, various image compression and encryption over public communications networks were tested. methods digital for The LaSCo (Laboratory for Surveillance and Containment) has been equipped w i th test ing e q u i p m e nt f or electromagnetic studies, to check the compliance of instruments w i th the new European legislation in this area. 32 The SILab (Seals and Identification Tech niques Laboratory) has successfully helped develop specific ultrasonic boards and soft ware to be used in the next generation of ultrasonic sealing systems at JRC Ispra. f or ITU A design study was p e r f o r m ed in collabora t i on w i th t he establishment at Obninsk of the "Russian Methodological and f i e ld of nuclear Training Centre" t he safeguards. This study has conclusion of a TACIS contract. the led to in • Research activities to Controlled Thermonuclear Fusion have been focused on ITER (International Thermonuclear Experi mental Reactor) as follows : related t he ROBERTINO Remote h a n d l i n g: computer simulation and t he tests on facility of the maintenance by remote operation of blanket the inside reactor have been completed. components placed Safety studies: the mechanical integrity of the vacuum vessel of the reactor and blanket components under plasma disruptions has been transient anal yses after a reactor accident have been pursued. investigated. Thermal Institutional Support Activities • For and technical in support of UCLAF, requirement process; t he services of study the Commission Secretariat General, projects w e re scientific completed the Commission a n t i f r a ud service: a study of they UCLAF's customers and require; t he a of investigative information resources; and an exploratory data analysis of f r a ud case data. New projects are under way: a feasibility study f or IRENE 95 (the integrated i n f o r m a t i on m a n a g e m e nt system of the UCLAF); pattern recognition in databases of f r a ud cases; estimating t he rates of commission vs detection/communication case of information flows across all sectors. harmonising inventory f r a u d; f r a ud an • Support III (Industry) to DG to included a and contribution Communications Technologies p r o g r a m me t h r o u gh R&D projects, industrial workshops, seminars and conferences (SAFECOMP 95). I n f o r m a t i on the • Support to DG VI (Agriculture): research, development and performance tests were carried o ut for the new methods of JRC Annual Report 1995 33 their measurement systems, identification of animals by means of tags and the framework of a major (antifraud) European animal tagging project. in • Support (Environment): for to DG XI the memorandum of understanding the the Major Accident Hazard creation of Bureau in support of the "Seveso" Directive has been implemented. This Bureau, linked mainly to national authorities and industry, operates a Major Accident Reporting System (MARS) and a Community Documentation Centre for Industrial Risk (CDCIR). to DG XI and subsequently In 1995 the Bureau dealt with the production of reports on lessons learned from accidents notified to the Commission, with distribution of a data base on accidents as well as with coordination of technical groups on safety reports and management systems. The Bureau also organised a seminar on the the Seveso Directive, implementation of "Accident Emergency Response". Scenarios and the field of safe applications of In biotechnology, a high level EU-US meeting took place in June, dealing with field tests of genetically modified organisms. • In support of the Nuclear Safety Unit of DG XI, a first version of the European earthquake catalogue has been prepared and its further development is under consideration. • Support to provided information the EURATOM Safeguards Directorate, DG XVII (Energy): ISEI contributed to the fulfilment of Treaty requirements in the following areas: sealing identification techniques, surveillance and of safeguards equip techniques, testing ments, data and treatment, health physics and training. A new system for the automatic recorded surveillance images has been developed. A remote monitoring link between the JRC Ispra and the EURATOM Safeguards Directo rate in Luxembourg has been installed. A contribution to long-term energy scenarios, including the evolution of the nuclear energy industry, has been considered. reviewing of • Technical support is provided the EURATOM Safeguards Directorate and IAEA for the procurement and measurement of several hundred ultrasonic sealing bolts, installed on spent fuel transport and storage to JRC Annual Report 1995 containers at a European fuel reprocessing plant. B. Competitive Activities Shared-Cost Actions lines: advanced ISEI has been selected for 17 projects under the following communication technologies & services (ACTS); environment and climate; industrial and materials techno III); non-nuclear energy logies (BRITE-EURAM (JOULE R&D); nuclear fission safety; technology validation and technology transfer; telematics; training and mobility of researchers (TMR). Competitive Support for Community Policies ISEI has been selected for 36 projects launched by various DGs, namely: three projects from the Secretariat General, Antifraud Unit; three from DG lll-F on High Performance Computering Networks; two from DG XI on Environmental problems; twelve from DG Xlll-D on Technology transfer; thirteen from DG XVII on solar and rational use of energy; three from EUROSTAT on neural networks and other applications to statistical problems. The effective work will begin early in 1996. Work for Third Parties is in a vast taking part, Four institutes from the JRC (ISEI, 1ST, IRSA and El) are together with 79 departments from the universities of Catania, Messina and Palermo, regional development project for Sicily which started in December 1994. ISEI was granted the general management and technical leadership of the project. A first six months report has been sent in July 1995 to the Sicily Region, and the second one in preparation. Results have been achieved in all major sub-projects. They deal with: a decision support system for water supply management; winter and summer campaigns for NO2 monitoring with 300 detectors in Catania, Messina and Palermo; a mobile unit the reliability of erosion of the soil; safety and installations; chemical and petrochemical optical for an historic building in Palermo with 3-D representation and structural analysis; sampling the Sicilian population for an analysis of trace elements in human body tissues. to measure pollution and inspection methods Three new contracts have been established on risk analysis and information to the public. A project to analyse the causes and consequences of stress at work in air traffic control has been 34 carried, out for the Consiglio Nazionale delle RicercKé (Italy). Other Competitive Activities The European Solar Test installation has landed 10 new contracts, 8 for photovoltaic module qualification testing and 2 for reference device calibrations. In a contract with PNC Japan (Power Reactor and Nuclear Fuel Development Corporation), good results have been obtained with new and ultrasonic equipment instruments, for among associated compact other the sealing of plutonium things, transport containers at the PNC facility at Tokai Mura. identification Portable equipment has been provided to IAEA for volume/mass determination in large tanks in bulk handling facilities. the A design study is being performed for establishment at Obninsk of the Russian Methodological and Training Centre, in the field of nuclear safeguards. It has led to the conclusion of a TACIS contract. Two 1994 actions in the Copernicus programme have started. JRC Annual Report 1995 35 2. 5 THE ENVIRONMENT INSTITUTE to research c o n t r i b u t ed the Framework El lines "Environment and Climate" Programme and "Life Sciences and Technologies". The emphasis of El's research was on global change, e. g. biogenic emissions a nd aerosols, and on the m a n a g e m e nt of soil and g r o u n d w a t er pollution sources, t o g e t h er w i th contributions in the field of t he w o r k i ng e n v i r o n m e n t, such as indoor air quality and trace metals impact on human health in t he EU. A large p a rt of t he Institute's w o rk has been devoted to support activities f or Community policies: e n v i r o n m e n t al policies, the agricultu ral policy, quality control of medicinal products and quality c o n t r ol of foodstuffs. A. l n s t i t u t i o n al Activities The Environment Institute is actively involved in the research programmes, Environment and Climate, and Life Sciences and Technologies. The respective proportions of R&D activities vs. support for t he Commission's sectoral policies are approximately 30 and 70 percent. Institutional Research Activities • in of (Biogenic tropospheric the M e d i t e r r a n e an Understanding ozone the "Climate C h a n g e ": (an f o r m a t i on i m p o r t a nt greenhouse gas) and its impact on atmospheric p o l l u t i on is of major importance region. The BEMA for project the Emissions intends to assess the Mediterranean Area) role of plant biogenic emissions in that area and is being developed at El, in collaboration w i th 17 European laboratories, under JRC coordination. T wo major research campaigns were led in 1995, focused on citrus fields near natural Valencia and (Spain) vegetation near Montpellier (France). El participated also in the EUPHORE project to build outdoor photochemical reactor, completed in 1995 at CEAM (Centro de Estudios Ambientales del Mediterraneo) in Valencia, Spain. exploit large and the on a Field models. The role of natural and anthropogenic aerosols in t he m i t i g a t i on of the greenhouse effect was investigated, b o th in the field and on involved characterising t he aerosol p o l l u t i on drifting f r om t he European continent, in preparation for the 1997 campaign of the ACE-2 (Aerosol Characterisation Experiment-2), in which over 40 European and US laboratories will participate. studies JRC Annual Report 1995 Laboratory experiments w e re also b e g u n, to investigate isotopic effects on t he uptake by soils of methane, gas. Analytical techniques a nd sampling devices are field developed being measurements on N20 a nd CH4. a greenhouse also f or Aerosols and Climate Project The Project aims at understanding the chemical and physical processes leading to aerosols in both the clean and antbropo- genkally influenced marine environment These aerosols are thought to have an important effect on the Earth's radiative balance and climate. The programme combines modelling, field work and laboratory studies, in collaboration with other European and international research teams. Most aerosols effectively scatter sun light back into spacer leading to a cooling of the Earth. A study has been undertaken into the role of black carbon (BC) aerosols Sn the global radiative balance. Black carbon is the main light-absorbing aerosol and would thus enhance greenhouse warming/BC is mamfy emitted by fossil fuel burning and by biomass burning. A major aspect of the Project is the study of aerosol dynamics of sulfate aerosofst Le* the study of formation and growth processes that determine the size distribution of Éhêsé aerosols* The basic mechanisms of aerosol formation are studied in the laboratory. A facility, unique in Europe, has been built m which SO2 is photochemkafly transformed Into sulfuric acid, which subsequently nucleates and grows to form a sulfate aerosoL • " P o l l u t i o n ": W o rk on the m a n a g e m e nt of soil and g r o u n d w a t er p o l l u t i on sources was include catchment areas. The scaled up to land use evaluation of several alternative the management strategies should a l l ow identification of in an agricultural ecosystem. critical subareas The MITO project aims, inter alia, to m o n i t or algal blooms in t he M e d i t e r r a n e an sea. The f l ow fast, performance cytometers was tested to detect, enumerate and characterise p h y t o p l a n c t on populations at t he cellular level. This w i ll lead easy-to-use in order of to a real-time monitoring system which quantifies the algal species responsible for red and green tides. Test materials were prepared (AQUACON project) for laboratory performance tests for waste (sewage sludge) and soil analysis, waste water analysis and the determination of metals in surface waters. The European Collaborative Action (ECA) on "Indoor Air Quality and its Impact on Man" now involves 15 countries, and El participates in its management and scientific secretariat. Research activities have included experiments on human exposure to volatile organic compounds (VOCs), for the first time in a 30 m* test chamber (Indoortron). A study of the impact of ad-/desorption phenomena, and the scaling up of small to large test chamber experiments have also been carried out. AutomaticMeasurementofPollutants The continuous automatic measurement of pollutants h very important for two reasansi in order, to follow conh&ntmtion variations over certain time periods,, and in order to understand pat&wiàr phenomena, such, es the identification of the source of the actual potfutantfs}. Until recently no instrument existed with such an automatic capability to measuret for examplet formaldehydez e very harmful and widespread pollutant used widely In industry, The gap has now been filled at the Environment institute, where a device for the automatic sampling and analysis of formaldehyde, heavier aldehydes and ketones, has been set up. This instrument can operate unattended for one week, carrying out sampling and analysis of ambient air every î$ minutes. A very interesting feature of this instrument is that it can be used for the monitoring of different pollutants. Negotiations are underway with a company for the commercial production of the monitor, which has received much attention at two exhibitions: HELECO *95 in Athens and RICH '95 in Milan, for body tissues human Establishing baseline values for trace metals in clinical, epidemiological and toxicological assessment studies, and studying the impact of trace the health of EU human metals on populations living/working environment, are the objectives of the EURO TERVIHT project. Prenormative research was carried out on exposure impact on health. their in j »o Attempts were made to further understand the biochemical mechanisms of trace metal toxicity at identifying low exposure, by critical organs and molecular targets, with impact on the potential emphasis on cardiovascular, repro immunological and ductive systems, which might show up later in life. Institutional Support Activities in issues of In 1995, El has been involved concern to Directorate General XI (Environ ment), DG I!! (Industry), DG VI (Agriculture) and DG XXIV (Consumer policy), and has organised a large number of relevant meetings, workshops and task forces. The European Reference Laboratory for Air Pollution (ERLAP) has been particularly active in the harmonisation of current EU directives on air pollution, organising Quality Assurance Control prrçrrammes and developing and techniques. validating >ew monitoring intercomparison Activities ("round the development and validation of diffusive sampling techniques for measuring benzene and ozone in The air. field roDin") exercises, as well as ir,. uded ETEX, the European Tracer Experiment, aims at selecting atmospheric models able to forecast the evolution of a pollutant cloud in real time. Several thousand previously collected air samples were analysed at El via a special chromatographic technique. Results show that only a few diffusion models, even when coupled with meteorological models, are accurate enough the pollutant cloud's evoiu-ion. ETEX was co-sponsored by the EC, the World Meteorological Organization (WMO) and the International Atomic Energy Agency (IAEA). to describe "Risk Assessment The European Chemicals Bureau (ECB) has become fully operative 9 months ahead of schedule. It is now handling all the technical and scientific tasks required of the Commission for the notification of new chemicals in the areas of "Classification and Labelling", "Testing Methods" of Existing Chemicals" and "Export/import of Certain Dangerous Chemicals" (Directives 67/548/EEC (EEC) and 92/32/EEC; Council- Regulations 2455/92 and (EEC) 793/93). A second phase of data collection for the Council Regulation on the Risk Assessment of Existing Chemicals was concluded, data was transmitted to competent authorities in the Member States, and a public (International Uniform version of IUCLID JRC Annual Report 1995 37 Chemicals Database) (excluding confidential data files), was made available on CD-ROM to the industry a nd general public. B. Competitive Activities Shared-Cost Actions f or Methods the Validation of The European Centre Alternative (ECVAM), Testing inaugurated in October 1994, has defined its its advisory Committee. priority criteria w i th Studies have been t he pre- launched on testing protocols, validation of non-animal testing, and vaccine potency and toxicity integrated alternative approaches testing, on metabolism-mediated toxicity and on in v i t ro tests for teratogenicity in b l o o d - f o r m i ng tissues. focusing safety in 22 proposals have been accepted so far. The majority of these concern t he Environment a nd Climate Programme, covering a w i de range of t he o n g o i ng JRC activities closely related to Research Programme. However, projects w i t h in t he Standard, Measurement a nd Testing, t he Telematics Applications a nd t he Nuclear Fission Safety programmes have been approved as w e l l. Competitive Support for Community Policies f or t e n d er issued by El has answered calls 11 several DGs of proposals have been selected f u n d i n g, w h i ch may reasonably be expected to start early in 1996. The topics covered include: t he Commission, a nd f or • Prenormative research, standardised as w e ll foodstuffs as special analytical methods f or analysis (DG III); • Information a nd c o m m u n i c a t i on w i t h in Medicinal Evaluation Agency (DG III); f r a m e w o rk of systems t he European the • Development of analytical f or dairy products (DG VI); m e t h o d o l o g i es • Support to CORDIS i n f o r m a t i on system (DG XIII); • Analytical procedures f or custom c o n t r ol of special products, a nd f or products classified according to t h e ir chemical composition (for DGXXI). Work for Third Parties A series of activities has been p e r f o r m e d, mainly to provide local and regional authorities w i th appropriate t he m a n a g e m e nt of surface bodies of w a t e r, toxic waste p o l l u t i on problems p o l l u t i on m o n i t o r i ng techniques. tools and f or air of feasibility collaboration w i th The the European E n v i r o n m e nt Agency's Topic Centres on Air Quality (RIVM, NL) and on Inland Waters (Water Research Centre, UK) has been explored, preliminary activities (mainly on Air Quality M o n i t o r i n g, A l p i ne Observatory, Inland Waters, Contaminated Sites and Mobile Laboratories) having been carried out. established at El after for Medicinal A European Technical Office Products was a M e m o r a n d um of Understanding was signed the the European Agency between Evaluation of Medicinal Products and the Joint Research Centre. This office is n ow called the ETOMEP Unit of t he Environment Institute of the JRC, a nd is dedicated to the development of technical the i m p l e m e n t a t i on of European Union legislation on medicinal products. necessary systems for for Other w o rk carried o ut by El included analytical work related to w i n e, f o od and cosmetics, and preparatory w o rk in support of the Ecological Directive f or surface bodies of water. JRC Annual Report 1995 2. 6 THE INSTITUTE FOR REMOTE SENSING APPLICATIONS vegetation parameters, such as seasonality or fire on a continental a n d, ultimately, global scale. 38 IRSA performs The research activities on applications of remote sensing and contributed to the Framework Programme line Environment and Climate w i th its specific activities on the (CEO), remote Centre sensing and advanced Earth observation techniques. f or Earth Observation and m o n i t o r i n g, techniques Through t he use of satellite Earth observation data scientific it also provides support f or agricultural statistics. i m p o r t a nt A. Institutional Activities Institutional Research Activities is fields IRSA's i m p o r t a nt R&D the One of exploitation of satellite data f or the mapping of land cover and land degradation in Europe and in the w o r l d, and for the m o n i t o r i ng of bush and forest fires, under the research programme, Environment and Climate. IRSA is also develop ing and validating capabilities remote detection, e. g. , of oil slicks or antipersonnel landmines. for research involved " p a t h f i n d er phase" The Centre f or Earth Observation (CEO) project its completed in 1995. T h r o u g h o ut t he year t he project ran a number of studies and workshops aimed at defining a final CEO concept and at establishing a design and i m p l e m e n t a t i on plan for the coming years. This and in-house future Earth consultation w i th present and observation data users and service providers t h r o u g h o ut t he European Union (EU) and the European Economic Area (EEA). The CEO project w o r k ed in close collaboration w i th a Pathfinder Phase steering committee, consisting of experts countries, f r om all EU and EEA nominated by the Board of Governors. The work was done in cooperation w i th European and global partners, including the European Space Agency (ESA), EUMETSAT, the European Environment Agency (EEA), the United States' and NASA Atmospheric A d m i n i s t r a t i on (NOAA), and the National Space Development Agency (NASDA) of Japan. The concept should the p r o m o t i on of access to Earth observation data to scientific, commercial and and services governmental customers. and National Océanographie include t he state M o n i t o r i ng terrestrial creation of v e g e t a t i on maps, which b o th cover change and cover v e g e t a t i on land and of the indicate functional evolution involved Forestmformatxon System t$9$ sew the completion of the forest information from Remote Sensing {FIRS} projects Pfenning Phase in cooperation with consortia: '-. of organisations from France, Germany, Swedenr " the Czech Republic, Russia, Poland, Spalnt Ireland and Finland. The major objective of the project is to contribute to the development of a Unified information System, European Forest providing both production related and environmental forest information. In 1995 the project developed a régionalisation and final stratMication of European forest the unified ecosystems and European Forest Nomenclature System > finalised Using a ten year archive of satellite images, land cover maps and daily fire counts w e re prepared for Africa, and the same w o rk has begun for receiving South-East Asia. Portable stations satellite data were also used in Central Africa and Madagascar to map and m o n i t or bushfires, as part of local and regional environmental management programmes. Data o b t a i n ed f r om instruments on the European remote sensing satellites ERS-1 and ERS-2 are being evaluated as aids to measurement of burned areas. A database describing the entire tropical forest belt was interfaced w i th remote sensing data to provide the Tropical Forest I n f o r m a t i on System, which will be produced as an interactive CD-ROM f or general dissemination. to detection of fire scars and in land use changes The mapping of land d e g r a d a t i on linked to fire, the soil erosion and Mediterranean Member States of t he EU, and the m o n i t o r i ng of forests on a pan-European scale under the FIRS project (Forest I n f o r m a t i on f r om Remote Sensing) were associated w i th fundamental research on image understanding techniques, which will facilitate t he use of data f r om future European space borne sensors. The bidirectional reflectance properties of the to Earth's surface have been studied radiation advanced models surface the next interactions, to help processing generation algorithms and in exploiting data f r om f u t u re high performance sensors. of in d e v e l o p i ng satellite thanks image of JRC Annual Report 1995 33 for information the study of Satellite; based observations of sea surface temperatures and ocean colour over large areas the provided marine biosphere. Image interpretation, data processing and the use of dynamic models were developed as means of assessing biomass production and carbon dioxide exchange by phytoplankton, ocean thermal dynamics, and the implications of both on the global climate system. The use of Earth observation data archives was coupled with new approaches to data management and analysis, and to strategy development for processing data from new sensors. Neural networks and virtual reality systems were tested as means of extracting information from future multidimensional data sets. In the European Airborne Remote Sensing Capability (EARSEC), tests on sensors and the the Synthetic Aperture Radar development of geophysical processor were finalised. The validation of EARSEC focused on developing oil routing slick detection at sea and ship applications. defined experiments Advanced the European Microwave Signature Laboratory (EMSL) user group included in 1995 test series on "The scattering properties of non-vegetated soils" and "Imaging techniques". by Plastic antipersonnel land mines are numerous in some heavily populated regions of the world, and detection of these dangerous objects is a high risk, yet vital, operation. In addition to the humanitarian threat, these objects can be seen as an environmental threat as their presence prohibits effective land use in 'contaminated' areas. A 1995 report based on EMSL results the in evaluated possible capacity objects manufactured from plastics by the application of for instance, remote sensing devices on land based vehicles or remote controlled flying platforms. improvements dangerous techniques using, remote sensing detect low to Institutional Support • Support for the European Environment Agency (EEA) focused on the creation of in EEA's collaboration European organisations active in the field of Earth observation. Land Cover Topic Centre, various with • Support for DG VI (Agriculture) consisted in to the application of remote sensing JRC Annual Report 1995 agricultural statistics, with the aim of developing and demonstrating method ologies for integrating remote sensing data the into monitoring of crop acreage and agricultural production the EU (Council Decision 94/753/EC No. L299 of 22. 11. 1994). the collection of statistics for in project (MARS) includes information The Monitoring of Agriculture with Remote Sensing two components. Firstly, MARS STAT, involving research on the development of an advanced agricultural system which the various methods of crop integrates the production monitoring developed by project, the MARS of development for production agricultural techniques non European Union monitoring in the development of new countries, and techniques Europe's for monitoring the land, using data agricultural European remote sensing satellites ERS-1 and 2. Secondly, MARS CAP, which deals with the verification of farmers' land use declarations, as governed by the Common Agricultural Policy. to individual Member States. For MARS STAT, IRSA provided both technical support and a research programme, and for MARS CAP, technical support centred on quality control, and training and assistance for Member States' personnel and national companies. In 1995 MARS CAP devolved from B. Competitive Activities Shared-Cost Actions IRSA submitted 40 proposals, together with national partners, on a range of specific scientific subjects, of which 10 have been accepted. A proposal on imaging spectroscopy was also made, under the programme Training and Mobility of Researchers. If it is successful, IRSA will host 20 post-doctoral researchers over the next three years. Competitive Support for Community Policies IRSA answered calls for tender issued by several the Commission. Proposals were DGs of accepted in a number of key areas. For example: • Application of the MARS project for wine and olive production modelling (for DG VI); • An operational tropical forest monitoring programme, submitted by the Monitoring of Tropical Vegetation Unit (for DG XI); • Two, joint bids with ISEI dealing with neural to EUROSTAT network applications, one land use concerning neural networks for classification, the other to DG III for the benchmarking of neural network systems. environmental resource inventories and marine pollution monitoring. Other Competitive Activities 40 Work for Third Parties Five contracts were carried out for customers in Belgium, France and Italy, on topics ranging regional from microwave measurements to A four year multi-country project for rapid environmental and agricultural monitoring and the PHARE statistics was accepted programme. Another the development of systems for crop assessment and monitoring in Russia, was accepted by TACIS. by project, on JRC Annual Report 1995 41 2. 7 -ÇJ-IE INSTITUTE FOR SAFETY TECHNOLOGY Research on Safety Technology, p e r f o r m ed at 1ST, c o n t r i b u t ed to the Framework Programme lines Measurement and Testing, Environment and Climate, Nuclear Fission Safety, and Controlled Thermonuclear Fusion. The overall mission of 1ST research c o n t r i b u t i ng to safe civil engineering structures, nuclear reactors, fusion tests as w e ll as relating chemical to industries and p o w er utilities. to p e r f o rm particular problems t he of is The Institute is also engaged in several support activities related to Community policies in t he field of energy, the area of Nuclear in Safeguards (Euratom Safeguards and IAEA). A. Institutional Activities for Under t he Nuclear Fission Safety programme the IST's investigations deal essentially w i th d e f i n i ng safe o p e r a t i on conditions for industrial installations and research, existing or planned. In particular, the Nuclear Safety and Safeguards p r o g r a m me covers a major part of IST's activity. Major support is provided to the Euratom Safeguards Directorate of DG XVII and of DG I for International Atomic Energy Agency (IAEA). IST's support activity is generally closely blended w i th institutional research. the New results w e re obtained f r om an i m p o r t a nt corium melt experiment on melt quenching in the TERMOS experiment simulated an in-vessel situation d u r i ng a severe accident. test vessel. The fuel/coolant first version of the COMETA code interactions The calculating completed and is used for routine pre- and post- test calculations of the FARO tests. External users include IKE, ENEA, and the University of fuel breakup Wisconsin. model into the code. for is n ow introduced IKE the thermohydraulic behaviour The experimental programme on the STORM in June 1995. The advanced facility started i n s t r u m e n t a t i on f or characterising aerosols was validated. The in the mixing vessel and the deposition in pipes of Sn-aerosols under thermohydraulic tests w i th pre tested (four conditions w e re calculations, analysis, and post-tests calcula tions). The d o c u m e n t a t i on of is nearly complete. The 4th and 5th meetings of the i n t e r n a t i o n al STORM user g r o up were held in March and December. Five sets of aerosol problems are proposed-as benchmarks for codes varying these tests JRC Annual Report 1995 currently used f or m o d e l l i ng thermohydraulics a nd aerosol physics in nuclear plants. Large t he discrepancies have been h i g h l i g h t ed results f or t u r b u l e nt aerosol deposition a nd resuspension as calculated by various codes. To improve and assess these mathematical models, reliable measured f or data comparison purposes. needed are in interpret W o rk j o i n t ly in support of Phebus FP was p e r f o r m ed by a team of 1ST analysts a nd on-site the staff at CEA Cadarache (F), to w e a l th of on-line and post-test measurements available f r om a first test (late 1993) w i th lightly irradiated f u e l, and to prepare f or t he next test w i th irradiated fuel. The first test yielded some unexpected results, such as t he advanced state of degradation of low t he deposition in t he experimental circuit, and t he persistence of gaseous radioactive iodine in the containment vessel. rods, fuel the New and updated models w e re a d d ed to t he ESTER (European Source Term Research Code) system. A new, extended version of ESTER was formally released at a User Group meeting in October. An extensive v a l i d a t i on was carried o ut w i th the User Group. f or MTR Non destructive testing instruments are being developed: a new PIN m o n i t or n ow used in Mol (Belgium); a scanner f u el plate inspection at Romans sur Isère (France); a new gamma detection device f u el elements stored under w a t e r; and a new Plutonium u n a t t e n d ed scrap m o n i t o r. An system for safeguarding l ow enriched U installa tions includes specific software and a novel n e u t r on collar. c o n t r ol to the Controlled Thermonuclear Fusion Under p r o g r a m m e, 1ST participated to t he w o r l d - w i de development of fusion t e c h n o l o gy focused on t he design of the International Thermonuclear Experimental Reactor (ITER). The overall system testing for the ETHEL t r i t i um safety laboratory was completed. The various laboratory systems were tested and t he necessary d o c u m e n t a t i on prepared t he necessary cold commissioning phase prior to nuclear tests w i th t r i t i u m. The Fifth Topical M e e t i ng on Tritium Technology was hosted and t he proceedings were published t he Fusion Technology Journal. to carry o ut in R&D activity focused on fusion materials, waste studies, t r i t i um control approaches and n ew measurement techniques. 1ST hosted a n u m b er t he of t he behaviour of t r i t i u m, e. g. on i n b u i l d i ng characteristics, experiments on reduction of t r i t i a t ed water on regenerable h ot iron beds, and t he performance of a t r i t i um gas m o n i t or based on scintillation principles. W i t h in characterising continued o n: ETHEL, w o rk t r i t i um recycling and outgassing f r om potential reactor first wall materials under gaseous studying conditions; large the techniques; and measuring d e t r i t i a t i on performance of various permeation barriers. An and experimental conditioning activated/ fusion wastes is being assembled. f or d e t r i t i a t i ng t r i t i a t ed solid fusion scale plant the Measurements and Testing W o rk under programme concentrated on assessing t he reliability of structures. Major pseudodynamic tests were p e r f o r m ed in t he ELSA facility on a frame under large composite steel/concrete in conditions simulating severe earthquakes, support f u r t h er improvement of Eurocode 8 (which applies to the design of civil engineering structures in seismic areas) and Eurocode 4. The dynamic properties of materials and critical structural components w e re studied in t he LDTF facility, mainly in collaboration w i th industry. validation and the of of civil complete prediction and results, on Tools were developed to simulate the seismic engineering behavior in structures. Significant progress was made comparison model w i th the behaviour of experimental reinforced concrete masonry beam-to-column joints. A f u ll d o c u m e n t a t i on set (manuals and model description reports) has been large computer code for transient dynamic analysis of general 3D coupled fluid-structure systems, developed in collaboration w i th CEA (France). for PLEXIS-3C, a infills, and of completed for tools tests as industrial Facilities and calculation reliability research w i t h in t he Environment and Climate p r o g r a m me became fully operational. The FIRES facility was used for, amongst other things, compiex polymerization a service to the chemical industry. Control system development was supported and experimen tally verified, in collaboration w i th TU Stuttgart (Germany), to demonstrate Kalman filter based the application of neural control and n e t w o rk c o n t r ol algorithms. V e n t i ng tests were to performed h o r i z o n t al simulate and in heat exchangers. The DRACULA situations facility produced reference data f or the design of emergency pressure relief systems in large plants. vessel discharge the COLUMBUS facility for in The first commercial version of t he RELIEF code relief design was for emergency pressure 42 completed, including industrial verification. It combines complex modelling w i th extreme user friendliness. test, a plant In an application manager was able to install the s o f t w a re on his PC and to simulate various v e n t i ng scenarios f or his plant in less t h an t wo hours. software advanced f or simulation The d e t o n a t i o n / d e f l a g r a t i on m o d e l i n g, REACFLOW, was released in a 2D version. New software modelling of the f u r t h er dispersion of heavy gas releases was developed. two-phase f l ow a nd for Institutional Support Activities f or in PERLA to safeguards the way of support activities In t he harmonisation of in-service nuclear safeguards training courses w e re inspection practices, given inspectors, including Russian inspectors and operators and industrial experts, and in-field support was given to safeguards inspectors d u r i ng physical inventory verifications (PIV). State of t he art equipment and reference analyses of nuclear materials samples were also provided. Non destructive assays were also p e r f o r m e d. B. Competitive Activities Shared-Cost Actions Fission Nuclear 18 out of 52 proposals were successful. They refer to the BRITE p r o g r a m m e, the Environment the ESPRIT HPCN and Climate p r o g r a m m e, programme, Safety the the Technology Transfer programme and programme. ELSA, t he European Laboratory f or Structural Assessment, has been recognised as a Large-Scale Facility for European users w i t h in the Training and Mobility of Researchers programme. A 12 research European organisations has been approved f or research in support of Eurocode 8. n e t w o rk of Competitive Support for Community Policies 1ST has answered calls f or tender f r om several Directorates-General. Some proposals are at an in particular, advanced stage of discussion, support f or the d e v e l o p m e nt of EUROCODE 8 for DG III. Work for Third Parties f r om 1ST by various requested Work was associations. authorities industries, the of include Developments response of plain and concrete structures to impulsive loading. M a j or contracts simulation reinforced and JRC Annual Report 1995 Sizeable marketing on advancing new competitive activities and promoting the results achieved on industrial reliability. focused efforts displayed 1ST activities were three exhibitions: the Loss Prevention Symposium in Antwerp, INCHEM 95 in Tokyo, and RICH in Milan. Initial sales and third party contracts point to a successful and positive trend for the future. at 43 were also signed with the USNRC, for severe accident; studies with FARO, and with the Portuguese General Directorate for Monuments (DGEMN) for an experimental investigation of the structural reliability of the monastery Sâo Vicente de Fora in Lisbon FARO The high-pressure melt trenching test series m FAHOx using up to 1:0 kg molten coriumt weresutce$sfullycondjd!edin Î93S. fatewiens in severe important results were * 'biamed concerning Fuel+tootant in accident scenarios forlr}hr Water Reactors, inpatticular; All tests showed consitfarzbte melt breakup end quenching in w&xr; Mean debris size ranged from 3. 5 to 5 rstn:. This shows the debris bed should be coolabfe by water. Early themal load structures was found tv tye mild. Steam explosions did not octur* to debris collecting JRC Annual Report 1995 2. 8 THE INSTITUTE FOR PROSPECTIVE TECHNOLOGICAL STUDIES Institute c o n t r i b u t ed The role of IPTS is to be constantly aware of all relevant, significant and outstanding scientific and technological events and trends in Europe, particularly those t h at call f or action at EU level. t he Framework The line, Targeted Socio-Economic Programme IPTS are: Research. The essential tasks of to to analyse, harvest available i n f o r m a t i o n; to process and identify clear for decision makers. impartially; and trends or calls for action i n t e g r a te to it The main current tasks at IPTS are setting up the European Science and Technology Observatory (ESTO), technological prospective studies. carrying and o ut A. Institutional Activities IPTS moved to Seville in 1994 and under the Targeted Socio-Economic Research line of the Fourth Framework Programme was given a reinforced objective and corresponding human and financial resources. A large part of 1995 has thus been devoted to the preparation of an is operational w o rk plan. The general purpose to harvest available contributions f r om experts, consultants, and institutes in t he Member States where possible, to also in t h i rd countries, to be able rapidly analyse, process and integrate t h em impartially and in d e p th and, even more importantly, to distil clear trends or calls for action in a form usable by decision-makers. organisations research IPTS's activities and A l t h o u gh resources are formally b r o k en into specific research on the one hand, and support of EU policies on the other, all projects address directly or indirectly the and understanding. Unavoidably, the distinction between types of activities may be t wo somewhat blurred. knowledge public need the for Institutional Research Activities The Observatory at IPTS forms an integral part of the Institute's w o rk and is currently focused on selected fields, but a n e t w o rk of similar organisations o p e r a t i ng at national is being set up to extend its range and to satisfy the much broader f u n c t i on of a truly European Science and Technology Observatory. All interested partners share t he responsibility of carrying o ut a "technology w a t c h" as a joint venture. The function has technology watch been designed to support decision making and level 44 is complemented by specific in-depth prospect ive analyses aimed at shedding the interface between scientific & technical aspects, on the one hand, the economy & society, on t he other. l i g ht on is one of Since employment t he major preoccupations of EU institutions and society, t he driving force behind all of IPTS' activities is the compound n o t i on "Technology-Competi tiveness-Employment" (TCE). field In 1995, IPTS u n d e r t o ok prospective studies on specific subjects related either to a technology (e. g. biotechnology), a individual mobility) or a cross-cutting issue or aspect. For instance, w o rk regional dimension more specifically, the Mediterranean area was carried out, w i t h in t he f r a m e w o rk of integrated development and specific b o th sectors (renewable energies, w a t er problems). relevant (e. g. t he to Institutional Support Activities recycling Prospective technological studies on materials, chemical energy feedstock f r om municipal recovery plastics waste, in 1994 on behalf of DG XI launched f o ur preliminary (Environment), surveys: resulted and in • current projects on mechanical recycling of municipal plastics waste; • current legislative activity in plastics waste management; • current projects on plastics recycling by chemolysis; • current projects on energy recovery f r om municipal plastics waste. in 1995 and Three new families of energy technologies were studied t he series of prospective analyses launched in 1994 for DG XVII (Energy): photovoltaics, CO2 disposal and storage biological sequestration. technologies, and CO2 joined A new update of t he report on Climate Change Research and Policy (Forward Studies Unit and DG XVII) covers t he m o n i t o r i ng and assessment of recent research results on climate sensitivity, w i th emphasis on past climate changes and on modelling as well as a synthesis of t he results of the Climate Change Convention in Berlin, in 1995. JRC Annual Report 1995 ai Two new case studies for the "Business and the Environment" series have been completed for the Forward Studies Unit, one on "Waste Minimisation", the other on "Cleaner Techno logies in an SME". This series is designed to give an accurate measure of some aspects of competitiveness and employment in companies eager to respond to environmental pressures. cooperation with In the context of work carried out for DG XVI (Regional Policy), the Japanese agency NISTEP has continued, aimed at comparing the European and Japanese experiences in regional development from an RTD policy perspective. This project will be completed in 1996. to response In the STOA requests (Scientific and Technical Option Assessment) panel of the European Parliament, IPTS has launched the three following projects: from "The role of biotechnology in the competi tiveness of the European pharmaceutical legal and industry": Scientific, economic, social considerations are to be reviewed in comparing the EU position with its major competitors. The project provides a factual overview of R&D and innovation efforts in the pharmaceutical sector, and a prospective description of the priorities in research for new drugs and prospects and the expectations for new medical therapies. The expected socio-economic benefits of new drugs in the context of European health care systems are analysed. • • • to are issues Its objectives "The Car of The Future, the Future of the Car": Key issues for future transport systems are linked to achieving sustainable condi from an environments, social and tions economic point of view. The project focuses technological, social and economic on individual aspects of related mobility. to develop strategies for solving the conflict between demand for mass individual mobility on the one hand, and ecological pressure, safety problems and congestion on the other hand. Its first stage concentrates on technological aspects such as new engine concepts, with focus on zero-emission/e-cars and the related potential energy storage systems, light recycling aspects and weight materials, telematics for increased road use efficiency. The results are presented in a set of reports. Socio-economic-political aspects are also dealt with, e. g. driver behaviour/mentality and acceptance problems related to various technological options. THE KtiPORT m mum I MS Fig. 4 - The Monthly Report of IPTS the rapid development of "Multimedia Information Superhigh-ways": The project focuses mainly on issues arising from these technologies and the services they provide, such as access devices, pricing/billing to users, priority systems, interconnection and interoperability issues, contents and security first report also deals with concerns, etc. A on the and direct innovative employment: as with most technologies, a loss of jobs will be felt in the short term while in the medium/long term, the economic per formance will have positive effects. This entails recycling the labour force, the costs of which are, at this stage, difficult to estimate. individual Aspects aspects such as exclusion or changes in human relations are also discussed. increased general to social and indirect effects linked B. Competitive Activities the first time IPTS has entered the For competitive market for research contracts. Its proposals relate mainly to non-nuclear energy (5 proposals submitted, 3 funded), agro-food, the environment, international cooperation on water resources, and biomass (for various Mediterranean programmes managed by DG I B). Most of the work will be carried out in 1996. JRC Annual Report 1995 JRC INSTITUTIONAL SUPPORT ACTIVITIES Table 1 of Annex 1 INSTITUTIONAL SUPPORT ACTIVITIES DECISIONS, DIRECTIVES, REGULATIONS OF THE COUNCIL AND COMMUNICATIONS OF THE COMMISSION TO THE COUNCIL AND EUROPEAN PARLIAMENT ON INSTITUTIONAL SUPPORT ACTIVITIES OF THE JRC Environment and Climate European Reference Laboratory for Air Pollution (ERLAP) European Chemicals Bureau (ECB) European Centre for the Validation of Alternative Methods (ECVAM) Supportto the European Environment Agency (EEA) Work in support of Directives 80/779 EEC, 89/427 EEC, 82/884 EEC, 85/203 EEC and 92/72 EEC Communication from the Commission to the Council and European Parliament (93/C1 /02), OJ No. C1 /3 of 5. 01. 1993 on the European Chemicals Bureau (ECB). Work in support of Directives 67/548 EEC, 92/32 EEC Communication from the Commission to the Council and European Parliament SEC(91 ) 1794 final of 29. 10. 1991. Establishment of a European Center for the Validation of Alternative Methods (ECVAM). Work in support of Directive 86/609 EEC Council Regulation (EEC) No. 1210/90 of 7. 5. 1990 on the creation of the European Environmental Agency (OJ No. L120/1, 11. 5. 1990) (see in particular Article 15 and Annex A Cooperation with the JRC) European Community Pharmaceutical Information Network (ECPHIN) Work in support of Directives 93/39 EEC, 93/40 EEC and Council Regulations 93/2309 EEC and EEC 2377/90 Quality Control of Consumer Products (Consumer Protection) Industrial Reliability. Major Hazards Biotechnology Safety On Cosmetics: 6th modification of Regulation EC/76/768 on Safety of Products: General Safety Directive 92/59/EEC of 29. 6. 1994 Communication from the Commission to the Council and European Parliament; Work in support of Directive 82/501 EEC Methodologies for UCLAF Agriculture and Fisheries Remote Sensing for Agriculture Decision of the Council of 14. 11. 1994 on Remote Sensing applications to Agricultural Statistics for the period 1994-1998 (94/753 / EEC, OJ No. L299/27, 22. 11. 1994) o INSTITUTIONAL SUPPORT ACTIVITIES DECISIONS, DIRECTIVES, REGULATIONS OF THE COUNCIL AND COMMUNICATIONS OF THE COMMISSION TO THE COUNCIL AND EUROPEAN PARLIAMENT ON INSTITUTIONAL SUPPORT ACTIVITIES OF THE JRC Animal Identification European Office for Wine, Alcohol and Spirit Drinks (BEVABS) Reference Measurements and Materials for Quality Control of Foodstuffs Nuclear Safety and Safeguards Euratom Safeguards Support: General Euratom Safeguards Support: On-Site laboratories and ECSAM IAEA Safeguards Support Communication from the Commission to the Council and European Parliament (COM(93)360/3). Work in support of Council Regulations (EEC) No. 2048/89, 2348/91 and 2347/91 and Commission Regulation No. 2676/90 Communication from the Commission to the Council and European Parliament of 24. 3. 1992 (SEC (92)515 final, concerning the Commission Decision on on-site laboratories, for the period 1991-1996 (see in particular Art. 16 Cooperation with the JRC) Communication from the Commission to the Council and European Parliament COM(94)383 final, of 7. 9. 1994 concerning the illicit circulation of radioactive material Communication from the Commission to the Council COM (80) 681 final, concerning an Agreement in the form of an Exchange of Letters between the International Atomic Energy Agency on the one hand and the Commission on behalf of the European Atomic Energy Community, on the other, on cooperation in the field of research and development in Safeguards HO Annex 2 GLOSSARY OF ACRONYMS AND ABBREVIATIONS ADAGE Aide à la Décision A m é n a g e m e nt Gestion de l'Environnement AQUACON Analytical Quality Control ARTINA Analysis of Radioisotope Traces f or the Identification of Nuclear Actinides BRITE-EURAM Basic Research in Industrial Technologies f or Europe- European Research on Advanced Materials CEA CEN Commissariat à l'Energie A t o m i q ue (Paris - France) Comité Européen de Normalisation CORDIS Community Research and Development I n f o r m a t i on Service ELSA ENIC European Laboratory f or Structural Assessment European Network f or Inspections Qualification ESPRIT-HPCN European Strategic Programme f or Research and Development in Information ESTI European Solar Test Installation EURATOM European A t o m ic Energy Community EUREKA European Research Coordination Agency EUROSTAT European Statistical Office FWP Framework Programme IPACERC Induction Plasma Assisted CVD of Erosion Resistant Coatings JOULE Joint Opportunities for Unconventional or Long-Term Energy Supply MITO NASA NEA NESC Microphyte Toxins National Aeronautics and Space Administration Nuclear Energy Agency (Paris - France) European Network for Evaluating Steel Components NET/ITER Next European Torus / International Thermonuclear Experimental Reactor PHARE Poland - Hungary: Assistance f or Economic Restructuring PHEBUS French Test Reactor (Cadarache - France) RIVM Rijksinstituut voor Volksgezondheid en Milieu (The Netherlands) ROBERTINO Facility for the Blanket Handling Device Development in 1:3 Scale SCK/CEN SPOT TACIS Studiecentrumm voor Kernenergie/Centre d'Etudes Nucléaires ( M o l- Belgium) Système Probatoire pour l'Observation de la Terre Technical Assistance to the C o m m o n w e a l th of Independent States and Georgia THERMIE Technologies Européennes pour la Maîtrise de l'Energie USNRC United States Nuclear Regulatory Commission ISSN 0254-1475 COM(96) 158 final DOCUMENTS EN 01 15 Catalogue number : CB-CO-96-170-EN-C ISBN 92-78-02635-2 Office for Official Publications of the European Communities L-2985 Luxembourg «i

Proposal for a COUNCIL REGULATION (EC) amending, for the second time, Regulation (EC) No. 3090/95 laying down for 1996 certain conservation and management measures for fishery resources in the Regulatory Area as defined in the Convention on Future Multilateral Cooperation in the North West Atlantic Fisheries

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COMMISSION OH THE EUROPEAN COMMUNITIES Brussels, 16. 04. 1996 COM(96) 161 final Proposal for a COUNCIL REGULATION (EC) amending, for the second time, Regulation (EC) No. 3090/95 laying down for 1996 certain conservation and management measures for fishery resources in the Regulatory Area as defined in the Convention on Future Multilateral Cooperation in the North West Atlantic Fisheries (presented by the Commission) EXPLANATORY MEMORANDUM Regulation (EC) No. 3090/95 established, for 1996, Community catch quotas for different fishery resources in the NAFO (Northwest Atlantic Fisheries Organization) Regulatory Area. While most of these catch quotas are allocated to Member States in the said Regulation, in the case of Atlantic redfish in NAFO zone 3M, the Community catch quota of 4,030 tonnes is unallocated. The allocation to the Member States should be based on the relative stability criteria - historical performance, losses in third country waters and dependence on fisheries of the regions concerned. As far as the historical performance is concerned, a period of 5 years is deemed to provide an adequate balance between the past catch records and the current fishing patterns. These criteria have been used for the allocation of Greenland halibut in the NAFO Regulatory Area for 1996. The present proposal establishes an allocation of this quota among Member States, in order to ensure coherence and consistency among different quotas for different stocks in the NAFO Regulatory Area. The Council is requested to adopt this proposal. L Proposal for a COUNCIL REGULATION (EC) No 196 of 1996 amending, for the second time, Regulation (EC) No. 3090/95 laying down for 1996 certain conservation and management measures for fishery resources in the Regulatory Area as defined in the Convention on Future Multilateral Cooperation in the North West Atlantic Fisheries THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard toCouncil Regulation (EEC) No. 3760/92 of 20 December 1992 establishing a Community system for fisheries and aquaculture(1), and in particular Article 8 (4) thereof, Having regard to the proposal from the Commission, Whereas Regulation (EC) No. 3090/95 (2) as amended by Regulation (EC) No down, inter alia, fishing quotas for Member States in the Regulatory Area for 1996; /96 (3) lays Whereas in order to ensure full coherence and consistency between different measures concerning the limitation of catches on different stocks of the same species, it is necessary to allocate, among Member States, the Community catch quota of Atlantic redfish in NAFO zone 3M; Whereas Regulation (EC) No. 3090/95 should therefore be amended for the second time; HAS ADOPTED THIS REGULATION: Regulation (EC) No. 3090/95 is hereby amended as follows: Article 1 The Annex to this Regulation shall replace the corresponding section of the Annex to Regulation (EC) No. 3090/95. (1> m w O. J. L 389, 31. 12. 1992, p. 1. O. J. L 330, 30. 12. 95, p. 108. O. J. L p. Article 2 This regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels,. 1996 For the Council The President k ANNEX Stock Geographical région Species Member State 1996 quota (tonnes) Zone Atlantic redfish North West Atlantic NAFO 3M Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom ^ Austria Finland Sweden Available for Member States 1,332 204 2,494 EC total 4,030 5 ISSN 0254-1475 COM(96) 161 final DOCUMENTS EN 11 03 Catalogue number : CB-CO-96-174-EN-C ISBN 92-78-02669-7 Office for Official Publications of the European Communities L-2985 Luxembourg G

Proposal for a COUNCIL REGULATION (EC) on the implementation of the concessions set out in Schedule CXL drawn up in the wake of the conclusion of the GATT XXIV.6 negociations

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COMMISSION OF THE EUROPEAN COMMUNITIES te ti te te Brussels, 16. 04. 1996 COM(96)164 final 96/0108 (ACC) Proposal for a COUNCIL REGULATION (EC) on the implementation of the concessions set out in Schedule CXL drawn up in the wake of the conclusion of the GATT XXIV. 6 negotiations (presented by the Commission) EXPLANATORY MEMORANDUM In the wake of the accession of Austria, Finland and Sweden, the Community concluded Agreements with certain third countries concerning the conclusion of negotiations under GATT Article XXIV. 6. Those Agreements provide inter alia for certain Community commitments in the field of agriculture. Pursuant to those Agreements, the Commission drew up a new Schedule CXL (European Communities), applicable to the customs territory of the Community as constituted at 1 January 1995 to replace Schedule LXXX (European Communities) in the Annex to the Marrakesh Protocol to the GATT, 1994. In the meantime that Schedule was forwarded to the World Trade Organization. The commitments covered by the new Schedule relate inter alia to the adjustment of quantities which may be imported into the Community under existing tariff import quotas and the opening of several new quotas. It ensues that those arrangements, and in particular those applicable from 1 January 1996, must become operational as soon as possible. This proposal accordingly calls on the Council to authorize the Commission to take the measures necessary for in accordance with the management committee procedure. In addition, the proposal provides that the introduction of any amendments to the abovementioned Schedule which the Council may authorize must also be decided the sake of simplification and in particular in accordance with Regulation (EC) No 774/94. in accordance with that procedure for its implementation, OJ No 334, 30. 12. 1995, pp. 25 and 38. Council Regulation (EC) No 774/94 of 29 March 1994 opening and providing for the administration of certain Community tariff quotas for high-quality beef, and for pigmeat, poultrymeat, wheat and meslin, and brans, sharps and other residues (OJ No L 91, 8. 4. 1994 p. 1). Last amended by Commission Regulation (EC) No 2198/95 of 18 September 1995 (OJ No L 221, 19. 9. 1995, p. 3). 3L COUNCIL REGULATION (EC) No. 796 of on the implementation of the concessions set out in Schedule CXL drawn up in the wake of the conclusion of the GATT XXIV. 6 negotiations THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof, Having regard to the proposal from the Commission, Whereas, in the wake of the accession of Austria, Finland and Sweden, the Community concluded Agreements with certain third countries concerning the conclusion of the negotiations under GATT Article XXIV. 6 ; whereas those Agreements provide inter alia for certain Community commitments in the Held of agriculture; whereas, pursuant to those Agreements, the Commission has drawn up a new schedule ('XL (European Communities), applicable to the customs territory of the Community as constituted at 1 January 1995, to replace Schedule LXXX (European Communities) in the Annex to the Marrakesh Protocol to the GATT, 1994; whereas that Schedule has been forwarded to the World Trade Organization; whereas the commitments set out in the abovementioned Schedule and in particular the commitments applicable from 1 January 1996, must be implemented at the earliest opportunity; whereas, as a consequence, the Council should authorize the Commission to take the requisite measures in accordance with the management committee procedure; whereas, for the sake of simplification, provision should also be made for the same procedure to be used to introduce such amendments to the abovementioned Schedule as the Council may authorize, HAS ADOPTED THIS REGULATION: 1 OJ No L 334, 30. 12. 1995, pp. 25 and 38. Article 1 1. At the earliest opportunity, the Commission shall adopt the measures required for the implementation in agriculture of the concessions set out in Schedule CXL (European Communities) forwarded to the World Trade Organization and applying to the customs territory of the Community as constituted at 1 January 1995. Such measures shall be adopted in accordance with the procedure provided for in Article 23 of Council Regulation (EEC) No 1766/92 of 30 June 1992 on the common organization of the market in cereals , the corresponding provisions of the other Regulations on the common organization of the markets and, as regards products covered by CN code 0701 90 51, in Article 33 of Council Regulation (EC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables3, 2. Should the Council authorize any amendment to the list referred to in paragraph 1, the resulting measures shall subsequently be adopted in accordance with the procedure referred to in that paragraph. Article 2 This Regulation shall enter into force on day of its publication in the Official Journal of the European Communities. It shall apply from 1 January 1996. This Regulation shall be binding in its entirety and directly applicable in ;ill Member States. Done at Brussels, For the Council OJ No L 181, 1. 7. 1992, p. 21. Last amended by Regulation (EC) No 1863/95 of 17 July 1995 (OJ No L 179, 29. 7. 1995, p. 1. ) OJ No L 118, 20. 5. 1972. Last amended by Regulation (EC) No 1363/95 of 15 June 1995 (OJ No L 260, 16. 6. 1995, p. 8/> W ISSN 0254-1475 COM(96) 164 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-177-EN-C ISBN 92-78-02823-1 Office for Official Publications of the European Communities L-2985 Luxembourg tT