CELEX: 51991PC0338
Language: en
Date: 1991-10-24
Title: Proposal for a COUNCIL REGULATION ( EEC ) concerning inter­branch organizations and agreements in the tobacco sector

COMMISSION OF THE EUROPEAN COMMUNITIES
                                         COM(91) 338 final
                                         Brussels, 24 October 1991
                       Proposal for a
                  COUNCIL REGULATION (EEC)
    concerning inter-branch organizations and agreements
                    in the tobacco sector
               (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                      2 -
                         EXPLANATORY MEMORANDUM
I.  In early November 1990 the Commission submitted to the Council a
    communication on inter-branch organizations and agreements In
    agriculture (Doc.SEC(90)562 final). That document sets out the
    Commission's thoughts on inter-branch organizations in the framework
    of the common agricultural policy. In the light of the Member
    States' reactions and of an analysis of actual economic needs, the
    Commission has undertaken to submit proposals by product groups.
    Furthermore, when the agricultural prices and related measures were
    adopted for the 1991/92 marketing year, the Council considered, as
    regards tobacco, that a system of inter-branch agreements providing
    in particular for the possibility of extending the rules of such
    agreements is vital to ensure sound management of the market in
    tobacco. In conclusion the Council called on the Commission to study
    the matter with the closest attention with a view to submitting a
    suitable proposal to It before 30 September.
II. The definition of rules for tobacco inter-branch organizations is an
    additional aspect of the reform of the market organization.
    Greater flexibility in the institutional instruments for market
    management must go hand in hand with the development of a flexible
    structure for consultation and cooperation between the various groups
    concerned with production, processing and marketing of tobacco. Such
     inter-branch cooperation is especially necessary if dispersion of
    supply is to be reduced, production curbed and quality
    diversification promoted the better to satisfy market requirements
    and consumer demand, in particular for less harmful varieties. Such
    action must also aim to encourage a qualitative improvement in
    varieties and in products marketed.
    The proposal thus defines the inter-branch arrangements which may
    contribute towards better operation of the market organization by
    achieving the abovementioned objectives.
    The proposal provides for the possibility of extending to non-members
     the rules adopted by inter-branch organizations. However, this
    possibility is strictly limited to certain particular measures which
     are of general Interest to the sector as a whole. They aim in effect
     to provide better knowledge of the market and its foreseeable trend
     and to define minimum standards regarding the quality of varieties
     and marketing conditions (packaging and presentation).
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II. While such inter-branch arrangements must be developed on the basis
    of the initiative of those In the trade themselves, It must also
    provide appreciable guarantees vis-à-vis Its members, other socio-
    economic groups concerned, including consumers, and the Community as
    a whole.
    A recognition procedure undertaken by the Member State in the
    territory where the inter-branch organization is established or by
    the Commission where the organization conducts measures at the inter-
    regional level in the territories of several Member States or at
    Community level must ensure that the organization is representative
    of the professional categories it groups and that it pursues
    objectives compatible with the operation of the market organization
    and complying with the general principles of Community law.
    A general obligation to give prior notice of agreements and concerted
    practices must permit the Commission to ensure that the
    organizations' activities comply with the conditions laid down by
    Community regulations and in particular do not affect intra-Community
    trade and competition significantly, or in a way which is out of
    proportion with the benefits which the continuation of their action
     is expected to achieve.
    The guarantees must be further reinforced in the case of a draft
    extension of the rules to non-members. A suitable publication of the
    draft must permit on the one hand all the socio-economic groups
    concerned, including organizations representing consumers, to defend
    their legitimate interests and on the other hand, the Member States
    concerned to submit their comments. Furthermore, a specific
    Commission decision must be taken on the basis of an in-depth
    examination of the grounds and of all the repercussions of the draft.
     In such a case the requirements regarding representativeness which
    organizations within the geographical scope of the extension are to
    meet must be made stricter. In any case, the extension must be
    refused where it results in particular in eliminating competition
    from a substantial part of the market or adversely affecting the
    freedom of trade and the operation of the market organization.
    The procedures laid down in this proposal must enable the objectives
     laid down for Inter-branch activities to be fulfilled and the
     legitimate interests of all the socio-economic groups concerned to be
    guaranteed.
    The proposal for a Regulation submitted to the Council has no
    financial impact.
 ---pagebreak---                                          4 -
                                 Proposal for a
                           COUNCIL REGULATION (EEC)
           concerning inter-branch organizations and agreements
                             in the tobacco sector
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
and in particular Articles 42 and 43 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
Whereas the medium- and long-term prospects for the Community and world
agricultural    markets    require     certain     instruments     of   the    common
agricultural   policy to be revised       in order to restore market balance;
whereas   such   adjustments,     directed     principally     at   increasing     the
flexibility   of  the market     support   instruments, require       the operators
concerned to change their economic behaviour to take better account of
the actual market situation;
Whereas    inter-branch     organizations      established      by    operators     as
 individuals  or   in groups,     and   representative    of    the   various    trade
categories   involved   in production,       processing    and   marketing    in   the
 tobacco sector are likely to contribute to better account being taken of
 the market   situation and     to encourage     changes    in economic    behaviour
 intended to improve knowledge and organization of production, processing
and   marketing;   whereas   some   of   their   activities     may   contribute    to
 improving market balance and so help achieve the objectives in Article 39
of   the  Treaty;   whereas    the   measures    which   may    constitute    such   a
contribution by inter-branch organizations should be defined;
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Whereas    in view of the above, it appears appropriate to grant specific
recognition       to    bodies    which     can     demonstrate     their     proven
representativeness at       regional,   Inter-regional   or  Community    level  and
which take positive action in pursuit of the objectives mentioned above;
whereas such recognition should be granted by the Member State or by the
Commission depending on the scope of the activities of the inter-branch
organization;
Whereas to support certain activities of inter-branch organizations which
are of particular      interest  in the light of the current rules concerning
the common organization of the market           in tobacco, provision should be
made   for   the   rules  adopted   by  an   inter-branch   organization    for  its
members to be extended, subject to certain conditions, to all non-member
producers and groups in one or more regions; whereas non-members should
also be made liable to pay all or part of the subscriptions Intended to
cover the non-administrative costs incurred in pursuing such activities;
whereas this procedure should be implemented           in a way which guarantees
the   rights of     the socio-economic groups concerned,        in particular    the
 rights of the consumer;
Whereas other activities of the recognized inter-branch organizations may
be of general economic or technical         interest for the tobacco sector and
so be of benefit        to all  persons active     in the branches     in question,
whether    or not    they are members of     the organization; whereas       in such
cases    it   appears   reasonable   to  make   non-members    liable   to  pay   the
subscriptions      intended  to cover    the costs, other     than   administrative
cost8, arising directly from performance of the activities In question;
Whereas, in order to ensure correct operation of the scheme, there should
be close cooperation between the Member States and the Commission, which
should    also have permanent     monitoring powers, particularly as regards
recognition of inter-branch organizations operating at regional or inter-
regional level and the agreements and concerted practices adopted by such
organizat ions;
 ---pagebreak---                                      - 6 -
Whereas there should be provision for publication, at the beginning of
each year, of a list of the organizations recognized during the previous
year, a list of the organizations whose recognition has been withdrawn
during the same period and the rules which have been extended with an
indication of their scope, for the information of the Member States and
other Interested parties,
HAS ADOPTED THIS REGULATION:
                                  Article 1
This Regulation lays down the conditions for the recognition and activity
of   inter-branch organizations operating      in the sector  covered by  the
common organization of the market in tobacco.
                                   Article 2
 Inter-branch organizations which:
 1. comprise   representatives  of   the   economic  activities  relating  to
    production of, processing of and trade in tobacco;
2. have been set up on the initiative of all or some of their constituent
    organizations or associations;
 3. are pursuing a number of the following activities at regional      level,
    in a number of Community regions or throughout the Community, taking
    account where appropriate of consumer interests:
    (a)      contributing  to enhanced coordination of the placing on the
             market of leaf or baled tobacco;
    (b)      preparing standard contracts compatible with Community rules;
    (c)      improving market intelligence and transparency;
    (d)      increasing value added, particularly by means of marketing and
             research  into new uses which do not pose a threat to public
             health;
 ---pagebreak---                                         - 7-
   (e)       redirecting    the   sector   towards   products    which   better   meet
            market and public health requirements;
   (f)       carrying out research      into methods permitting reduced use of
             plant   health   products and guaranteeing        product   quality   and
             soi I conservât ion;
   (g)       developing    methods    and   instruments    for    improving   product
             quality at the production and processing stages;
   (h)       certifying seed and seedling quality and monitoring product
             qua I Ity;
shall be recognized under this Regulation.
                                      Article 3
1. On    application,      Member     States    shall     recognize      inter-branch
   organizations established in their territory which:
   (a)       carry out their activities at regional or inter-regional level
            within the territory;
   (b)       show a degree of representativeness to be determined               in the
             light of the sphere of action and the branches represented;
            where an inter-branch organization is inter-regional In scope,
             it must provide proof of minimum representativeness in respect
             of each of the grouped branches, in each region covered;
   (c)       pursue a number of the activities referred to in Article 2(3);
             and
   (d)       do  not   themselves    undertake   the   production,    processing    or
            marketing of the products covered by the common organization
            of the market referred to in Article 1.
2. Prior   to recognition being granted, Member          States shall notify       the
   Commission of the      inter-branch organizations which have applied for
   recognition and provide all necessary         information on the branches of
   economic activity which they encompass, their representativeness, the
   activities     undertaken     and   any   other     information     required    for
   consideration of the application.
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   The Commission may oppose recognition within 60 days of notification
   by the Member State.
3. Member States shall withdraw recognition:
   (a)      if the conditions       laid down in this Regulation cease to be
            met ;
   (b)      if the Inter-branch organization contravenes one or more of
            the prohibitions listed in Article 7(3), without prejudice to
            criminal proceedings which may be brought under national law;
            or
   (c)       if the inter-branch organization fails in its obligation to
            make the notification required under Article 7(2).
Member States shall notify the Commission            immediately of decisions to
withdraw recognition.
                                      Article 4
1. On    application     the     Commission     shall     recognize     Inter-branch
   organizations which:
   (a)      carry   out   their   activities    throughout    or   in part   of   the
            territories     of   several   Member    States,   or   throughout    the
            Community;
    (b)     have been established under          the national     legislation of a
            Member State or under Community law; and
    (c)     satisfy the provisions of Article 3(1)(b), (c) and (d).
2. The Commission shall notify applications for recognition to the Member
   States    on   whose    territories     the    inter-branch    organization     is
   established and     in which    it carries out      its activities.     Following
   such notification, the Member States concerned shall have two months
   within which to make their comments.
   The Commission     shall    take a decision on       recognition within      three
   months of receiving the application and all necessary information.
 ---pagebreak---                                       - 9 -
3. The    Commission    shall  withdraw   recognition   of   the  organizations
    referred to in paragraph 1 in the circumstances referred to In Article
    3(3).
                                    Article 5
The Commission shall publish in the "C" series of the Official Journal of
the   European   Communities  the names of    the   inter-branch organizations
recognized, together with a statement of the economic sector or the area
in which they operate and the activities pursued within the meaning of
Article 2.    Withdrawals of recognition shall also be published.
                                    Article 6
Recognition of an inter-branch organization shall imply authorization for
 it to carry out the activities referred to in Article 2(3) subject to the
conditions laid down in this Regulation.
                                    Article 7
1. Notwithstanding Article 1 of Council Regulation No 26 1 , Article 85(1)
    of   the  Treaty   shall  not  apply   to  the   agreements  and   concerted
    practices    of   recognized   inter-branch    organizations   intended   to
     implement the measures referred to In Article 2(3).
2. Paragraph 1 shall not apply unless:
    -   the agreements and concerted practices have been notified to the
        Commission, and that
    -   within  three months of    receipt  of all   the details   required  the
        Commission has not found that the agreements or concerted practices
        are incompatible with Community rules.
The agreements and concerted practices may not be implemented until this
period has elapsed.
1   OJ No 30, 20.4.1962, p. 993/62.
 ---pagebreak---                                      - 10 -
3. Agreements and concerted practices which:
-  may   lead  to the partitioning     of markets    in any  form within    the
   Community;
-  may affect    the sound operation of     the common organization of      the
   market;
-  may   create distortions of     competition  which   are not  essential   in
   achieving the objectives of the common agricultural policy pursued by
   means of Inter-branch activity;
-  entail   the   fixing  of  prices or   quotas without    prejudice  to   the
   specific provisions of Community rules;
-  may create discrimination or eliminate competition         in respect of a
   substantial proportion of the products in question;
shall in any case be declared contrary to Community rules.
4. If, following expiry of the three-month period referred to           in the
   second indent of paragraph 2, the Commission finds that the conditions
   for applying     this Regulation have not been met,       it shall   take a
   decision declaring that Article 85(1) of the Treaty applies to the
   agreement or concerted practice In question.
   That decision shall not come       into effect earlier than the date of
   notification to the inter-branch organization concerned, unless that
   organization has given incorrect Information or abused the exemption
   provided for in paragraph 1.
                                   Article 8
1. Inter-branch     organizations   may   request   that   certain  of    their
   agreements or concerted practices be made binding for a limited period
   on individuals and groups In the economic sector concerned which are
   not members of the trade branches which they represent, in the areas
    In which the branches operate.
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   In order for their rules to be extended,              Inter-branch organizations
   must satisfy a level of representativeness to be determined. Where the
   proposed extension of the rules is of inter-regionai scope, the inter-
   branch   organizations must      prove     they   possess  a minimum     degree of
   representativeness,      in respect of each of the grouped branches, in
   each region covered.
2. The rules the extension of whose scope is requested must have been in
   force for at     least one year and must relate to one of the following
   object ives:
   (a)      knowledge of production and the market,
   (b)      definition of minimum quantities,
   (c)       the utilization     of cultivation       methods   compatible   with   the
            protection of the environment,
   (d)       the    definition    of     minimum      standards    of   packing     and
            présentât ion,
   (e)       the   certification    of    seed   and    seedling    quality   and   the
            monitoring of quality.
3. Extension of the rules shall be subject to approval by the Commission
    in accordance with the procedure laid down in Article 9.
                                     Article 9
1. In   the   case    of   rules   laid    down    by   inter-branch    organizations
   recognized by the Member States, the Member States shall publish, for
   the information of the socio-economic groups concerned, the agreements
   or concerted practices which         it is intended to extend to non-member
   individual    operators or groups        in a particular      region or group of
   regions.
   Those   concerned     shall  have   two    months    in which    to  submit    their
   comments.
 ---pagebreak---                                      - 12 -
2. At the end of the period referred to In the second subparagraph of
   paragraph 1 and prior to taking a decision, the Member States shall
   notify the Commission of the rules which they intend to make binding
   and   supply   all   appropriate     information.   Such  notification  shall
   include all the comments received following publication In accordance
   with paragraph 1 and an evaluation of the application for extension.
3. The Commission shall publish In the "C" series of the Official Journal
   of  the European Communities rules the extension of whose scope             is
   requested by inter-branch organizations which It has recognized under
   Article 4.    Following publication, the Member States and the socio-
   economic groups concerned shall         have two months   in which to submit
   their comments.
4. If the rules the extension of whose scope is requested are "technical
   rules"   within    the  meaning   of   Council  Directive  83/189/EEC1,   they
   shall be notified      to the Commission     in accordance with Article 8 of
   that Directive at the same time as the notification provided for In
   paragraph 2.
   Without prejudice to paragraph 5, where the conditions for delivery of
   a reasoned opinion under Article 9 of Directive 83/189/EEC are met,
   the Commission     shall   refuse to approve the rules the extension of
   whose scope has been requested.
5. The    Commission    shall   take    a   decision  within   three  months   of
   notification by the Member State in accordance with paragraph 2 and,
   where paragraph 3 applies, within five months of publication           in the
   Official   Journal of the European Communities of the application for
   extension of the scope of the rules.
   The Commission shall in any case take a negative decision if it finds
   that the extension:
   -   prevents competition in a substantial part of the common market;
1  OJ No L 109, 26.4.1983, p. 8.
 ---pagebreak---                                    - 13 -
   -   restricts freedom of trade;
   -   Jeopardizes  the objectives of the common agricultural      policy or
       those of any other Community rules.
6. The rules whose scope is extended shall be published in the Official
   Journal of the European Communities.
7. When, pursuant to this Article, rules are made binding on non-members
   of an inter-branch organization, the Member State or the Commission,
   as appropriate, may decide that    individuals or groups which are not
   members shall pay the organization all or part of the subscriptions
   paid by members, to the extent that such subscriptions are not used to
   cover   the administrative costs of applying    the rules or    concerted
   practices.
                                 Article 10
1. Where one or more of the activities referred to in paragraph 2 are
   pursued   by a recognized   inter-branch  organization and   are   in the
   general economic interest of those persons whose activities relate to
   one or more of     the products,  the Member   State which   has  granted
   recognition, or the Commission, where recognition has been granted
   under Article 4, may decide that individuals or groups which are not
   members of the organization but which benefit from those activities
   shall pay the organization all or part of the subscriptions paid by
   its members to the extent     that such subscriptions are    intended  to
   cover costs, other than administrative costs, directly     incurred as a
   result of pursuing the activities in question.
2. The activities referred   to in this Article shall relate to one or
   other of the following objectives:
   -  research to add value to the products, in particular through new
      uses which do not pose a threat to public health,
 ---pagebreak---                                    - 14 -
   -   studies to improve the quality of leaf or baled tobacco,
   -   research  into methods of cultivation permitting       reduced use of
       plant health products and guaranteeing conservation of the soil and
       the environment.
3. The Member States concerned shall notify the Commission of decisions
   which they intend to take under paragraph 1.      Such decisions may not
   take   effect   until  three months   have  elapsed   from    the  date  of
   notification to the Commission.     The Commission may within this time
    limit call for the rejection of all or part of the draft decision if
   the general economic interest relied upon does not appear to be well
   founded.
4. Where the activities of an inter-branch organization recognized by the
   Commission pursuant to Article 4 are in the general economic interest,
    the Commission shall notify its draft decision to the Member States
    concerned, who shall have two months from receipt In which to submit
    their comments.
                                 Article 11
Any   measure   by   the Member   States   or  the  Commission     imposing  a
subscription on individuals or groups which are not members of an inter-
branch organization shall be published      in the Official    Journal of the
European Communities.    The measure may not take effect until two months
have elapsed from the date of publication.
                                 Article n
Detailed rules for the application of this Regulation shall be adopted in
accordance with the procedure laid down in Article 23 of Regulation (EEC)
No [ex Reg. 727/70].
 ---pagebreak---                                  - 15 -
This Regulation shall be binding in its entirety and directly applicable
in all Member States.
Done at Brussels,                                 For the Council
                                                   The President
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(91) 338 final
                                                      DOCUMENTS
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                                                             ISBN 92-77-76608-5
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