CELEX: 51988PC0125(01)
Language: en
Date: 1988-03-04
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING REGULATION ( EEC ) NO 822/87 ON THE COMMON ORGANIZATION OF THE MARKET IN WINE

15. 4. 88                               Official Journal of the European Communities                             No C 100/9
                                                               II
                                                       (Preparatory Acts)
                                                  COMMISSION
              Proposals for Council Regulations (EEC) amending the common organization of the market in
                                                              wine
                       (ACTION TAKEN PURSUANT TO THE EUROPEAN COUNCIL IN BRUSSELS)
                                                      COM(88) 125 final
                               (Submitted by the Commission to the Council on 3 March 1'.
                                                         (88/C 100/10)
                                                                I
              Proposal for a Council Regulation (EEC) amending Regulation (EEC) No 822/87 on the
                                         common organization of the market in wine
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                           Whereas to that end it should be laid down that,
                                                                   progressively by the beginning of the 1990/91 wine year,
Having regard to the Treaty establishing the European              the price should be fixed, using for quantities of table
Economic Community, and in particular Article 43                   wine exceeding 10 % of normal utilization, a
thereof,                                                           progressively lower percentage of the guide price;
Having regard to the Act of Accession of Spain and
                                                                   Whereas the arrangements provided for in this Regu-
Portugal, and in particular Article 89 (2) thereof,
                                                                   lation amend the Community rules in force and
                                                                   accordingly require the rules in Article 122 (2) of the Act
Having regard to the proposal from the Commission,                 of Accession to be amended, whereas it should be
                                                                   provided that the Commission fix for Spain a rate of
Having regard       to   the   opinion   of   the  European        progressive alignment on the ratio existing between the
Parliament,                                                        guide prices and those to be fixed for compulsory distil-
                                                                   lation for the 1988/89 and 1989/90 wine years for the
Having regard to the opinion of the Economic and                   Community of Ten;
Social Committee,
                                                                   Whereas, in order to preserve the necessary balance
Whereas Article 39 of Council Regulation (EEC) No                  between prices under the various compulsory distillation
822/87 of 16 March 1987 on the common organization                 schemes, the price for the distillation of the by-products
of the market in wine ( l ), as last amended by Regulation         of wine-making should also be progressively reduced, as
(EEC) No 3992/87 (2), provides for compulsory distil-              should that for the distillation of wines referred to in
lation to establish balance on the table wine market;              Article 36 of Regulation (EEC) No 822/87,
Whereas the price applicable at present to table wine
delivered for compulsory distillation is 50 % of the guide         HAS ADOPTED THIS REGULATION:
price up to a volume of 12,5 million hi and 40 % for
further quantities;
                                                                                            Article 1
Whereas the degree of support thus granted does not                Regulation (EEC) No 822/87 is hereby amended as
sufficiently discourage the production of wine not suiting         follows:
market requirements and consequently hinders disposal
of the major structural surplus in the sector; whereas
                                                                   1. In Article 35:
therefore that degree of support should be reduced;
                                                                       — the following paragraph 5.a) is added:
(') OJ No L 84, 27. 3. 1987, p. 1.                                        '5.a) From 1990/91 the buying-in price of grape
O OJ No L 377, 31. 12. 1987, p. 20.                                             marc, wine lees and any wine delivered for
 ---pagebreak--- No C 100/10                             Official Journal of the European Communities                                   15. 4. 88
              distillation shall be 20 % of the guide price                   forward estimate referred to in Article 31, it
              for table wine of type A I for the marketing                    shall be equal to 50 % of the guide price fixed
              year concerned. For 1988/89 and 1989/90                         for the wine year in question, for each of the
              the buying-in price shall be fixed, in                          types of table wine,
              accordance with the procedure provided for                  — where the total quantity for distillation is more
              in Article 83, in such a way as to ensure a                     than 10 % of normal utilization as referred to
              smooth transition between the percentage of                     in the first indent, it shall be equal to the
              the guide price applying for 1987/88 and the
                                                                              percentage of the guide price of each of the
              percentage applying from 1990/91.'
                                                                              types of table wine fixed for the wine year in
   — the second indent of paragraph 7 is deleted.                             question, given by the weighted average of the
                                                                              percentage referred to in the first indent
2. The first subparagraph of Article 36 (3) is replaced by                    applied to the quantity corresponding to 10 %
   the following:                                                             of normal utilization and zero for quantities
                                                                              exceeding that volume.
   '3.    The buying-in price for wine delivered          for
   distillation under paragraphs 1 and 2 shall be:                        For the 1988/89 and 1989/90 wine years:
   — for 1987/88, 50 %                                                    — the 50 % of the guide price shall apply to the
   — for 1990/91, 25 %                                                        quantity referred to in the first subparagraph,
                                                                          — where the total quantity to be distilled is more
   of the guide price for table wine of type A I fixed for                    than that referred to above, the percentage of
   the wine year concerned.                                                   the guide price to be used for determining the
   For 1988/89 and 1989/90 the buying-in price shall be                       purchase price shall be fixed in accordance
   fixed, in accordance with the procedure provided for                       with the procedure laid down in Article 83, in
   in Article 83, in such a way as to ensure a smooth                         such a way as to ensure a smooth transition
   transition between the percentages referred to above.'                     between the percentages of the guide price
                                                                              applying for the 1987/88 and 1990/91 wine
3. In Article 39:                                                             years respectively.
   — the third subparagraph of paragraph 4 is replaced                    The purchase price to be paid by distillers to
       by the following:                                                  producers for quantities delivered for compulsory
                                                                          distillation in excess of those delivered for
       'That percentage shall be obtained from a
                                                                          preventive distillation may not be less than the
       progressive scale based on the yield per hectare,
                                                                          price provided for in the preceding subparagraphs.
       may vary between regions according to yields
                                                                          It shall also apply to wine in a close economic
       obtained in the past.
                                                                          relationship with each type of table wine.'
       It may be nil for yields which do not exceed, for
       the wine year in question, 70 % of the average
                                                                                             Article 2
       yield of table wine for the region. It may also be
       nil for producers whose yields per hectare are less         By way of derogation from Article 122 (2) of the Act of
       than a level to be determined.                              Accession, the purchase price for the 1988/89 and
       It may exceed 80 % only for yields which, for the           1989/90 wine years shall be fixed for Spain, in
       wine year concerned, are more than 200 % of the             accordance with the procedure laid down in Article 83,
       average yield of table wine for the region.'                in line with a rate of progressive alignment on the
                                                                   purchase price fixed pursuant to Article 1 (2).
   — Paragraph 6 is replaced by the following:
       'From 1990/91 the purchase price for table wines                                      Article 3
       delivered for compulsory distillation shall be fixed
        according to the quantities to be distilled and:           This Regulation shall enter into force on 1 September
                                                                   1988.
       — where the total quantity for distillation does
            not exceed 10 % of normal utilization for the          This Regulation shall be binding in its entirety and
            wine year concerned as determined in the               directly applicable in all Member States.
 ---pagebreak---  15. 4. 88                            Official Journal of the European Communities                           No C 100/11
                                                             II
              Proposal for a Council Regulation (EEC) on the granting, for the 1988/89 to 1995/96 wine
                       years, of permanent abandonment premiums in respect of areas under vines
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                         Whereas, to enable the payment of abandonment
                                                                 premiums to be properly administered, deadlines should
                                                                 be set for the submission of applications and conditions
Having regard to the Treaty establishing the European            to be complied with by the applicant should also be laid
Economic Community, and in particular Articles 42 and            down;
43 thereof,
                                                                 Whereas the abandonment of vineyards by growers who
Having regard to the proposal from the Commission,               are members of cooperative organizations jointly
                                                                 processing grapes harvested by their members may
                                                                 reduce the quantities of grapes delivered and thereby
Having regard      to   the   opinion  of   the  European        increase processing costs; whereas such negative effects
Parliament,                                                      should be compensated; whereas, bearing in mind the
                                                                 differences which exist in vine-growing structures within
                                                                 the Community, any compensation scheme should be
Having regard to the opinion of the Economic and                 adopted by the Member State;
Social Committee,
                                                                Whereas, as a matter of fairness, growers implementing
Whereas the steadily increasing imbalance on the market          this scheme and thus contributing to the effort to restore
in wine is such that action must be taken on a scale and         lasting sound conditions on the market should enjoy a
of an effectiveness to bring production, in the medium           reduction in, ranging as far as exemption from, their
term, definitively back to the level of demand;                  contribution to the scheme for compulsory distillation of
                                                                 table wines referred to in Article 39 of Council Regu-
Whereas experience gained in the reduction of vine-              lation (EEC) No 822/87 (3), as last amended by Regu-
growing potential, in particular under Council Regu-             lation (EEC) No 3992/87 (4); whereas a reasonable
lation (EEC) No 777/85 of 26 March 1985 on the                   arrangement would be for this reduction to be
granting, for the 1985/86 to 1989/90 wine years, of             proportionate to the area grubbed up, and it would also
permanent abandonment premiums in respect of certain             seem reasonable to require, for the grant of such benefit,
areas under vines ('), as amended by Regulation (EEC)           that the reduction in the relevant producer's vine-
No 3775/85 (2), shows that the effort made must be              growing potential should represent at least 100 hi;
stepped up; whereas, in particular, the facility for aban-
donment of vine-growing areas must be extended
                                                                Whereas the utilization of areas released following the
without delay to all classes of areas under vines;
                                                                abandonment of vine-growing should be limited in order
                                                                to avoid disturbance of the market for other agricultural
Whereas an incentive should be given to the aban-               products;
donment of vine-growing areas through the grant,
during the next eight wine years, of premiums in
amounts to be varied on the basis of the productivity of        Whereas the permanent abandonment premium serves
the areas concerned, covering the cost of the grubbing-         the interests of the Community and is designed to
up operations, the loss of replanting rights and the loss       achieve the objectives laid down in Article 39 (1) (a) of
of future income;                                               the Treaty;
Whereas, in the cases of producers who definitively             Whereas, in order to ensure maximum effectiveness for
abandon farming, the measure may be made more                   the proposed measure, it is necessary to fix time-limits
attractive if provision is made to replace the single            for the payment of premiums to the recipients, and to
premium scheme by a system of annual premiums;                  provide for the possibility of advances being paid against
                                                                 a security and for payment by the European Agricultural
                                                                 Guidance and Guarantee Fund (EAGGF) to Member
Whereas a reduction in the number of vine-growing                States of advances corresponding to the Community
holdings will enable the dispersion of supply on the            contribution, while ensuring that the payment of
market to be limited and market management to be                premiums and the final EAGGF contribution are subject
simplified; whereas there should therefore be a futher          to grubbing up being carried out under the conditions
incentive for vine-growers abandoning the whole of their        laid down,
holdings;
(') OJ No L 88, 28. 3. 1985, p. 8.                              (') OJ No L 84, 27. 3. 1987, p. 1.
(2) OJ No L 362, 31. 12. 1985, p. 39.                           (4) OJ No L 377, 31. 12. 1987, p. 20.
 ---pagebreak--- No C 100/12                                 Official Journal of the European Communities                                    15. 4. 88
HAS ADOPTED THIS REGULATION:                                           areas the use of land released for the production of agri-
                                                                       cultural products particularly suited to the conditions of
                                                                       the said areas for which there is no risk of structural
                             Article 1                                 overproduction in the Community.
1.      Vine-growers cultivating areas under vines:
                                                                                                  Article 2
(a) for the production of:
                                                                       1.    The amount of the premium per hectare is hereby
      — wine,                                                          fixed as follows:
      — table grapes,
      — grapes for drying,                                             (a) for areas of not less than 10 ares but not more than
                                                                            25 ares planted with wine-grape varieties and consti-
                                                                            tuting the entire vineyard area of the holding
                                                                            concerned: 3 600 ECU;
(b) used as root-stock nurseries planted with root-stock
      varieties listed in the classification of vine varieties,        (b) for areas of more than 25 ares planted with wine-
                                                                            grape varieties:
      — shall, during the 1988/89 to 1995/96 wine years,                   — 1 200 ECU if the average yield per hectare of the
           on application and as provided for in this Regu-                     said areas is not more than 20 hi,
           lation for the permanent abandonment of vine-                   — 4 200 ECU if the average yield per hectare of the
           growing, qualify for:                                                said areas is more than 20 hi but not more than
           — a permanent abandonment premium,                                   50 hi,
           — preferential arrangements as regards distil-                  — 6 000 ECU if the average yield per hectare of the
               lation.                                                          said areas is more than 50 hi but not more than
                                                                                90 hi,
2.      The grant of the permanent abandonment                             — 7 800 ECU if the yield per hectare of the said
premiums shall entail for the grower forfeiture of                              areas is more than 90 hi but not more than
replanting rights in respect of the area for which the                          130 hi,
premium is granted.                                                        — 9 600 ECU if the yield per hectare of the said
                                                                                areas is more than 130 hi but not more than
That same area may only be afforested or used for non-                          160 hi,
agricultural purposes.
                                                                           — 10 200 ECU if the yield per hectare of the said
                                                                                areas is more than 160 hi;
The Member States shall take all appropriate action to
ensure that the land is kept in good heart. They shall lay
down provisions needed for land management with a                      (c) for areas planted with varieties classified in the
view to protecting the environment and natural                              administrative unit concerned either as table grapes
resources.                                                                  or as both table and wine grapes:
                                                                           — 10 800 ECU in the case of large-grape varieties,
The Member States may authorize, in respect of some or                          trained by the pergola method, contained in a list
all of their territory, use of farm land set aside:                             to be drawn up,
(a) for grazing, provided:                                                 — 8 400 ECU in the case of varieties other than
                                                                                those referred to in the first indent trained by the
      — that a maximum stocking density per hectare of
                                                                                pergola method,
           grazing land, to be determined, is complied with;
                                                                           — 7 200 ECU in the case of the varieties referred to
      — that fodder produced on the holding is not
                                                                                in the first indent trained by a method other than
           marketed;
                                                                                the pergola method,
(b) for the production of lentils, chick peas and vetch.                    — 6 000 ECU in the case of varieties other than
                                                                                those referred to in the first indent trained by a
The Member States' authorization provided for in the                            method other than the pergola method;
preceding subparagraph is restricted to three years from
. . . ('). Before expiry of this deadline, the Commission              (d) for areas for the production of wine for making wine
shall lay before the Council a report on the application                    spirits of designated origin in the Charentes region:
of the authorization.                                                       7 200 ECU;
In addition, at the request of the Member State                        (e) for areas planted with varieties classified in the
concerned, the Commission may, in accordance with the                       administrative unit concerned as dried-grape varieties
procedure laid down in Article 83 of Regulation (EEC)                       or as both dried-grape and other varieties: 7 200
No 822/87, permit them to authorize in demarcated                           ECU;
(') Date of entry into force of the Regulation.                        (f) for areas used as root-stock nurseries: 6 000 ECU.
 ---pagebreak---  15. 4. 88                             Official Journal of the European Communities                            No C 100/13
2.     The amounts specified in paragraph 1, with the             3.    The premium shall be granted only if the applicant:
exception of the amount referred to in paragraph 1 (a),
shall be increased by 600 ECU per hectare if the areas            — has, in accordance with national laws and on
concerned constitute the entire vineyard area cultivated              submission of his application, the right to continue
by the applicant.                                                     cultivation of the relevant land for a period of 15
                                                                      years,
3.     The yield per hectare of the grubbed-up area               — produces, where he does not meet the condition
referred to in paragraph 1 (b) shall be calculated on the             specified in the first indent, a written undertaking
basis of the average yield declared for the recipient's               from the owner of the land that he will guarantee
holding and an on-the-spot assessment, carried out by                 that the obligations referred to in paragraph 2 are
the competent body of the Member State concerned                      complied with or that he will himself comply with
prior to grubbing-up, of the productive capacity of the               them.
wine-growing area to be grubbed up.
                                                                  If, after the grant of the premium and in the course of
4.     As regards Spain, the premiums provided for in             the period referred to in the first indent of the first
paragraph 1 and the amounts referred to in paragraph 2            subparagraph, all or part of the holding passes to
shall be fixed in accordance with the procedure laid              another party, the recipient of the premium or his
down in Article 83 of Regulation (EEC) No 822/87 so               assignees shall remain responsible for the performance by
that the difference between the amounts referred to in            the successor of the undertaking entered into by the
Article 2 (la) of Regulation (EEC) No 777/85 and those            recipient of the premium or his assignees unless:
in paragraphs 1 and 2 is reduced successively by one
third in the 1988/89 and 1989/90 wine years, the                  — the successor enters into such an undertaking on his
Community level applying in that Member State from                    own account for the remainder of the period,
the 1990/91 wine year. As regards Portugal, the
premiums provided for in paragraphs 1 and 2 shall apply               or
from the beginning of the second stage.
                                                                  — the owner has given the undertaking provided for in
                                                                      the second indent of the first subparagraph.
                          Article 3
                                                                  4.    The Member States may bring forward the dates
The following shall not qualify for the permanent aban-
                                                                  referred to in the first subparagraph of paragraph 1 and
donment premium:
                                                                  the first indent of paragraph 2.
(a) areas under vines located on holdings which total 25
     ares or less, with the exception of holdings of not                                    Article 5
     less than 10 ares where the areas constitute the entire
                                                                  1.    For the grant of the permanent abandonment
     vineyard area of the holding concerned;
                                                                  premium, mixed cultivation areas shall be expressed as
                                                                  specialized cultivation areas on the basis of the
(b) areas under vines in respect of which infringements           conversion factor usually used for the vine-growing area
     of Community or national provisions regarding                concerned.
     planting have been ascertained since 1976;
                                                                  2.    The amount of the permanent abandonment
(c) areas under vines which are no longer tended;
                                                                  premium shall be paid no later than the end of the
                                                                  calendar year following that in which the application for
(d) areas on which vines were planted after the entry
                                                                  the premium was submitted, provided the application has
     into force of this Regulation.
                                                                  furnished proof that grubbing up has in fact taken place.
                                                                  At his request, the premium shall be paid in advance to
                          Article 4                               the producer, provided the latter has put up a security to
                                                                  be determined.
 1.    Applications for premiums must be submitted to the
departments appointed by the Member States before 31
December of each wine year.                                                                 Article 6
                                                                  1.    The Member States may provide that, for vine-
Applications relating to areas under wine grapes shall be         growers who are members of a wine cooperative or other
accompanied by an official declaration stating the yield          association of vine-growers, the premiums provided for
per hectare calculated in accordance with Article 2 (3).          in Article 2 (1) shall be reduced by up to 15 %. In such
                                                                  case, the sums corresponding to this reduction shall be
2.     The grant of the premium shall be subject to a             paid to the cooperatives or associations in question.
written declaration in which the applicant undertakes to
grub up the vines on the areas in respect of which the            2.    Without prejudice to paragraph 1, Member States
premium has been applied for or to have them grubbed              may provide for measures comprising national compen-
up by 15 May of the year following that in which the              sation for wine cooperatives and other associations of
application is submitted.                                         vine-growers who furnish proof that:
 ---pagebreak--- No C 100/14                            Official Journal of the European Communities                                15. 4. 88
— they have had to reduce their activity as at result of          of an eligible maximum amount not exceeding 1 350
    the lower level of deliveries from their members              ECU/ha. This premium shall exclude, in respect of areas
    following the grant of the permanent abandonment              under vines, the supplementary premium per hectare
    premium,                                                      referred to in the second indent of Article 3 (1) of
                                                                  Council Regulation (EEC) No 0000/00.
— the area cultivated by their members has been
    reduced by at least 10 % compared with that
    cultivated during the 1987/88 wine year.                                               Article 10
                                                                  1.    Member States shall verify that the undertakings
The amount of the national compensation may not
                                                                  referred to in Article 4 (2) (3) are being complied with.
exceed the losses due to the reduction in activity.
3.    Member States shall inform the Commission of any            2.    Member States shall inform the Commission of the
provisions they may adopt pursuant to this Article.               results of such verification.
                         Article 7                                                         Article 11
The Council, acting by a qualified majority on a                  The Commission shall take all action necessary to ensure
proposal from the Commission, may alter the amount of             that the operators concerned by the measures referred to
the premium.                                                      in this Regulation have full and detailed information.
                                                                  Such action must enable the producers to have
                                                                  knowledge of all factors needed in the assessment
                         Article 8                                leading to a decision whether or not to abandon some or
1.    Producers entitled to the premium as a result of            all of their vineyard.
permanently abandoning an area for the production of
table wine shall also qualify, at their request, for
                                                                                           Article 12
exemption from the obligation provided for in Article 39
of Regulation (EEC) No 822/87, which shall be:                    1.    The abandonment premium and the action referred
                                                                  to in Article 11 shall be deemed intervention within the
— total, where the holding has undergone a reduction              meaning of Article 3 of Regulation (EEC) No 729/70.
    in table wine production potential of more than
    50%;
                                                                  2.    The Guarantee Section of the European Agri-
— 20 %, where the reduction in potential is between 20            cultural Guidance and Guarantee Fund, hereinafter
    and 35 % ;                                                    referred to as 'the Fund' shall reimburse to the Member
                                                                  States 70 % of the expenditure borne pursuant to this
— 50 %, where the reduction in potential is more than             Regulation.
    35 and less than 50 %,
                                                                  3.    The Fund shall pay the Member States an advance
provided always that the reduction in potential is at least       on the basis of a notification of:
100 hi.
                                                                  — the areas for which applications for the granting of
The exemption provided for in the preceding
                                                                      the permanent abandonment premium had been
subparagraph shall not apply to the quantity resulting
                                                                      submitted before the deadline established in
from an increase, after the abandonment premium is                    accordance with Article 4,
granted, in vine-growing potential due to an increase in
yield and/or the area under vines.
                                                                  — an undertaking to pay the appropriations received
                                                                      from the Fund before the end of the same year to
2.    The percentage reduction in table wine production               recipients who meet the condition laid down in
potential shall be equal to the ratio between the quantity            Article 4 (2).
obtained by multiplying the yield determined in
accordance with Article 2 (3) by the area abandoned and
                                                                  That advance shall be equal to a maximum of 70 % of
average table wine production declared for the holding
                                                                  the premiums applied for.
during the three wine years preceding grubbing up.
                         Article 9                                                         Article 13
If the grower qualifies for the annual allowance referred          1.   Applications for contributions from the Fund shall
to in the first indent of Article 3 (1) of Council Regu-          be submitted by the Member States before 1 May of
lation (EEC) No 0000/00 establishing a Community                  each year.
scheme to encourage the cessation of farming, the
permanent abandonment premium referred to in Article              2.    The Commission shall take a decision on these
1 of this Regulation may be granted, at the request of            applications in accordance with the procedure laid down
the party concerned, in the form of an annual premium             in Article 7 (1) of Regulation (EEC) No 729/70.
 ---pagebreak---  15. 4. 88                              Official Journal of the European Communities                              No C 100/15
                          Article 14                                                        Article 16
 1.    The amount due by the Fund to the Member States             The Member States shall inform the Commission, as part
shall be fixed definitively after the introduction, each           of the communication referred to in Article 9 (1) of
year before 1 April, of a statement of the permanent               Regulation (EEC) No 822/87, during the marketing
abandonment premiums paid during the previous year to              years referred to in Article 1 (1), of the areas under vines
recipients.                                                        which have been permanently abandoned in return for
                                                                   the corresponding premium. The Commission shall take
2.    Advances not expended during the year in respect             account of this information in the report referred to in
of which they were received shall be deducted from sums            Article 9 (2) of Regulation (EEC) No 822/87.
to be paid in respect of the following year.
                                                                                            Article 17
3.     Detailed rules for the application of Articles 11 and       This Regulation shall not impede the granting of aid
12 and of this Article shall be adopted in accordance              provided for by national rules designed to achieve
with the procedure laid down in Article 13 of Regulation           objectives similar to those sought by this Regulation. The
(EEC) No 729/70.                                                   grant of such aid, with the exception of the compen-
                                                                   sation provided for in Article 6, shall be subject to review
                                                                   on the basis of Articles 92, 93 and 94 of the Treaty.
                          Article 15
                                                                                            Article 18
1.    Without prejudice to Article 8 of Regulation (EEC)
No 729/70, the Member States shall, in accordance with             Subject to special provisions, detailed rules for the appli-
their national laws, regulations and administrative                cation of this Regulation shall be adopted in accordance
provisions, take the necessary measures to recover the            with the procedure laid down in Article 83 of Regulation
amounts paid in cases where the undertakings referred to           (EEC) No 822/87.
in Article 4 are not complied with. They shall inform the
Commission of action taken in this connection and, in                                       Article 19
particular, shall periodically notify it of the state of
                                                                  The wine year 1989/90 referred to in the title, the first
administrative and judicial procedures relating thereto.
                                                                   subparagraph of Article 1(1) and Article 9 (2) of Regu-
                                                                   lation (EEC) No 777/85 is hereby replaced by that of
2.    The sums recovered shall be paid to the paying               1987/88.
agencies or departments and deducted by them from the
expenditure financed by the EAGGF in proportion to                                          Article 20
Community financing.
                                                                  This Regulation shall not apply to Portugal.
3.    The financial consequences of failure to recover                                      Article 21
amounts paid out shall be borne by the Community in
proportion to Community financing.                                This Regulation shall enter into force on the third day
                                                                  following its publication in the Official Journal of the
                                                                  European Communities.
4.    Detailed rules for the application of this Article
shall be adopted in accordance with the procedure laid            This Regulation shall be binding in its entirety and
down in Article 13 of Regulation (EEC) No 729/70.                 directly applicable in all Member States.