CELEX: 51989PC0067
Language: en
Date: 1989-02-15
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 1785/81 on the common organization of the markets in the sugar sector (presented by the Commission)

ARCHIVES HISTORIQUES
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DOCUMENTS "COM"
COM (89) 67
Vol. 1989/0022
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                            COM(89 ) 67 final
                                           Brussels , 15 February 1989
                                                                       / '
                              Proposal for a
                         COUNCIL REGULATION ( EEC )
   amending Regulation ( EEC ) No 1785 / 81 on the common organization
                 of the markets in the sugar sector
                     ( presented by the Commission )
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 ---pagebreak---                                     EXPLANATORY MEMORANDUM
 1.   In adopting Regulation ( EEC ) No 2250 / 88 on 19 July 1988 the Council
      amended the basic regulation on sugar , Regulation ( EEC ) No 1785 / 81 , by
      inserting in Article 9 a paragraph 4b introducing a Community aid scheme
      for the preferential raw cane sugar refining industry which is to apply
     until the 1990 / 91 marketing year . The purpose of the aid in question ,
     amounting to ECU 0.08 / 100 kg , is to restore refiners' margins for
     preferential sugar which were affected by an earlier increase in
     April 1986 in the intervention price for raw sugar which was not followed
     by a subsequent adjustment of the intervention price for white sugar and ,
     secondly , to allow refiners to buy preferential raw sugar at the
     guaranteed price without incurring a reduction in their margins .
    The scheme provides also , in order to re-establish balance in the price
    conditions between preferential sugar and other Community raw sugars for
    refining , for the aid to be granted for the refining of raw cane sugar
    produced in the French overseas departments and raw sugar obtained from
    beet harvested in the Community which are refined into white sugar at the
    refineries defined in the third subparagraph of Article 9(4 ) of Regulation
     ( EEC ) No 1785 / 81 . The scheme does not apply to raw sugar imported at a
    reduced levy into Portugal for refining .
2.  The Commission believes that the introduction of this aid for the benefit
    solely of preferential sugar and sugar of Community origin is liable to
    upset the balance in the price conditions between the various raw sugars
    for refining in the Community and penalizes Portugal . It emphasizes that
    more than three quarters of supplies of Portuguese refineries each year
    consist of raw sugar imported into Portugal at a reduced levy and that
    this indicates clearly the effect of that sugar on the refineries'
    margins . The Commission considers that the main reason which favoured the
    extension of this aid to the refining of raw sugar of Community origin is
    equally valid in the case of the refining of raw sugar imported into
    Portugal under Article 303 of the Act of Accession . The Commission points
    out that the reduced levy , whose aim is to apply to imported raw sugar
    price conditions similar to those applied to other raw sugar of Community
    origin for refining , is calculated on the basis in particular of the
    intervention price for raw sugar . The increase , referred to in
    paragraph 1 , in the intervention price for raw sugar which was not
    reflected in that for white sugar has never been offset in so far as
    refiners' margins are concerned .
    Portuguese refineries have not passed on the effect on their margins to
    the price for white sugar in order to avoid the risk of no longer being
    competitive with imports of white sugar from other Member States .
 ---pagebreak---   In these  circumstances the Commission considers it necessary to propose
  that the  Council extend the benefit of this aid of ECU 0.08 / 100 kg
 provided   for in Article 9(4b ) of Regulation ( EEC ) No 1785 / 81 to the
 refining   of raw sugar imported into Portugal under Article 303 of the
 Treaty of Accession .
 The aid scheme provided for in Article 9(4b ) of Regulation ( EEC )
 No 1785 / 81 provides also that the Commission may , in accordance with the
 management committee procedure , alter the amount of ECU 0.08 / 100 kg both
 for preferential raw sugar and for raw sugar of Community origin ( French
 overseas departments and raw sugar obtained from beet ) " in the light of
 the amount of the storage levy fixed for that year and / or to take account
 of a change in refiners' margins which results from the price review for
 that marketing' year ".
The Commission" considers that , in order to be consistent , its proposal
must provide for this possibility of altering the aid to apply also to raw
sugar imported into Portugal under Article 303 of the Treaty of Accession .
Until now it has been acknowledged formally , in the case of other raw
sugar for refining in refineries , that any change in the storage levy
and / or intervention prices between one marketing year and the next can
bring about a change in refiners' margins and hence in the balance of the
price conditions for the raw sugars concerned . It would be consistent ,
therefore , to extend this possibility of altering the aid to the case of
raw sugar imported into Portugal , since the same causes produce the same
effect . The Commission believes , therefore , that in order to allow the
balances in question to be maintained , where appropriate , where changes
occur in the storage levy ( which has an indirect impact on refiners’
margins ) and / or as a result of the price review for a marketing year ,
provision should be made also for extending the possibility of altering
the aid .
This extension of the aid scheme provided for in Article 9(4b ) of
Regulation ( EEC ) No 1785 / 81 to sugar imported into Portugal under
Article 303 of the Treaty of Accession should , in the view of the
Commission , apply retrospectively with effect from 1 July 1988 so that the
sugar is on an equal footing with other raw sugar for refining , at least
from the 1988 / 89 marketing year , and so as to preclude during that
marketing year any difference in treatment for imported raw sugars
accordingly whether they were or were not refined prior to the entry into
force of this extension of the arrangements .
 ---pagebreak---                                         Proposai for a
                                  COUNCIL REGULATION ( EEC )
          amending Regulation ( EEC ) No 1785 / 81 on the common organization of
                              the markets in the sugar sector
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European Economic Community , and
 in particular Article 43 thereof ,
 Having regard to the proposal from the Commission ,
 Having regard to the opinion of the European Parliament ,
Whereas Portugal 's white sugar requirements have traditionally been met by the
 refining of imported raw sugar ; whereas to that end Article 303 of the Act of
Accession of Spain and         Portugal       lays down appropriate measures which
are to apply during the transitional period for ensuring the supply of raw
sugar to Portuguese refineries , drawing firstly on raw sugar imported from
certain ACP countries and raw sugar produced in the Community and secondly ,
where this is insufficient , raw sugar imported from third countries at a
reduced levy in order to bring its price to the level of the Community
intervention price for raw sugar ;
Whereas in the Joint Declaration attached to the Act of Accession on supplies
to the sugar refining industry in Portugal it is stated that the sugar in
question is to be supplied under price conditions similar to those for
preferential sugars ; whereas the arrangements for import at a reduced
levy enabled the sugar thus imported to comply with those conditions ;
 Whereas Article 9(4 b )     of Council Regulation ( EEC ) No 1785 / 81 ( 1 ), as last
amended by Regulation ( EEC ) No 2306 / 88 ( 2 ), introduces an aid scheme for the
refining of preferential raw sugar ;
( 1 ) 0J No L 177 ,  1 . 7.1981 , p . 4 .
( 2 ) 0J No L 201 , 27 . 7.1988 , p . 65 .
                                                                                       U­
 ---pagebreak---                                              2
 Whereas the implementation of an aid scheme for        refining       preferential
 raw sugar , which can be applied also to raw cane sugar produced in the French
 overseas departments and to raw sugar obtained from beet harvested in the
 Community where these are refined into white sugar in specific refineries ,
 creates an imbalance in the abovementioned price conditions which penalizes
 the Portuguese refineries , which obtain more than three-quarters of their
 total raw sugar supplies from imports effected at a reduced levy which do not
qualify for the aid scheme ; whereas in order to re-establish the balance ,
therefore , the scheme should be extended to the refining of sugar imported
into Portugal, under Article 303 of the Act of Accession ;       whereas ,
in order to preclude for the same marketing year any difference in treatment
between raw sugar imported and refined prior to the date of entry into force
of these arrangements for extending the aid scheme and sugar imported and
refined after that date , provisions should be made for the arrangements to
apply retroactively from the beginning of the 1988 / 89 marketing year ,
HAS ADOPTED THIS REGULATION :
                                        Article 1
Regulation ( EEC ) No 1785 / 81 is hereby amended as follows :
1.   The following paragraph is added        in Article 9 :
     "4c . During the 1988 / 89 to 1990 / 91 marketing years , adjustment aid shall
           be granted , as an intervention measure , to the refining industry in
           Portugal for raw sugar imported from third countries under
           Article 303 of the Act of Accession of Spain and Portugal and
           refined into white sugar in      Portugal .
           This aid . shall be granted only if the
           imported raw           sugar is refined into white sugar in the
           refineries referred to in the third subparagraph of paragraph 4 .
                                                                                    5
 ---pagebreak---                                          - 3 -
            This    adjustment       aid     may    be altered , for a given
           marketing year, in the light of the amount of the storage levy fixed
           for that year and / or to take account of a change in refiners'
           margins which results from the price review for that marketing year ."
 2.  The seventh indent of Article 9(6 ) is replaced by the following :
        the adjustments referred to in the fourth subparagraph of paragraph 4b
        and the third subparagraph of paragraph 4c ".
                                      Article 2
This Regulation shall enter into force on the third day following that of its
publication in the Official Journal of the European Communities .
It shall apply with effect from 1 July 1988 .
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                        For the Council
 ---pagebreak---             FINANCIAL                STATEMENT
                                                                   Date : 20 December 1988
   1 . Budget heading : 1119 : Other                   Appropriations : ECU 3 million
                                   intervention sugar
   2 . Title : Proposal for the amendment of Regulation ( EEC ) No 1785 / 81 on the common
                organization of the markets in the sugar sector
  3 . Legal basis : EEC Treaty - Article 43
  4 . Aims of project : To extend to sugar imported into Portugal under Article 303 of
                             the Act of Accession
                            - the benefit of the aid scheme for the refining of preferential
                               raw sugar ;
                            - the possibility of altering this aid in the light of changes
                               in refiners' margins resulting from the price review
                                                    period of :      current          : following
                                                    12 months : financial year : financial year
  5.     Financial implications                                  :     ( 1989 )      :    ( 1990 )
  5.0    Expenditure
         - charged to the EC budget
           ( refunds / intervention )                 1,4        :        1,7        :      1,4
                                                     m ecu ( B ):        m ecu ( B ) :    m ecu ( B )
 5.1     Receipts
         - own resources of the EC
           ( levies / cus toms duties )
        - national
                                                        91       :                   :
 5.0.1 Estimated expenditure                          1,4        :                   :
 5.1.1 Estimated receipts                            m ecu ( B ):                    :
 5.2 Method of calculation : Over 12 months :
       - extension of the scheme : 220 000 t x 0,8 ecu/ t x 1,105 = 194 500 ecu )            M ecu ( B )
       - alteration of the aid : 220 000 t a 5           ecu/ t x 1,105 = 1 215 500 ecu )     1,4
       Retrospective application to I July 1988 : 1,4 m ecu x 2,5 / 12 = 0,3 m ecu
 6.0 Can the project be financed from appropriations entered in the relevant chapter
       of the current budget ?                                                                   no ( 1 )
 6.1 Can the project be financed by transfer between chapters of the current budget ?
                                                                                           yes / no
.6.2 Is a supplementary budget necessary ?                                                 yes / no
 6.3 Will future budget appropriations be necessary ?                                      yes
Observations : ( 1 ) Account will be taken of the impact of this measure in the context
                         of the review of appropriation requirements for 1989