CELEX: 51973PC0327
Language: en
Date: 1973-03-02
Title: Proposal for a REGULATION (EEC) OF THE COUNCIL concerning the importation of wine exported as "Cyprus sherry", originating in and coming from Cyprus, and the introduction of subsidies for similar wines produced in the Community as originally constituted and shipped to Ireland and the United Kingdom (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (73) 327
Vol. 1973/0052
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 ---pagebreak--- C 0 K M I S S I ON         0 ?   THE        EURO PEAS         COMMUNITIES
                                                                                 V
                                                         COM(73)327 final
                                                         Brussels , 2 March 1973
                                   Proposal for a
                         ■ REGULATION" ( ESC ) OF THE COUNCIL
         concerning the importation of wine exported as " Cyprus sherry",
         originating in and coming from Cyprus,' and the introduction of
         subsidies for similar wines produced in the Community as ori- .
         ginally constituted and shipped to Ireland and the United
        Kingdom                           "
                  ( submitted to the Council by the Commission)
        COM (73 ) 327 final
 ---pagebreak---                                                        COM(73 ) 327 final
                                '      1                                   '       ■
                            EXPLANATORY IEI'IORAITJDUM ■
  The Association Agreement with Cyprus makes provision for special import
 treatment to be accorded over a given period to wine exported as "Cyprus
  sherry". This wine constitutes a substantial proportion of Cypriot exports
 and the marketing of it is a vital element in the Cypriot economy . This
 special treatment., which is the subject of an exchange of letters annexed to
 the additional Protocol to the Agreement , was accorded "because of the
 Community " s concern to avoid disruption of traditional exports to Ireland
 and the United Kingdom when the reference price system becomes applicable
 in the new Member States on 1 February 1 973 • If the reference price were
 immediately applied to this wine , it would probably mean its exclusion from
 the British market on which competing products of better quality are available .
 However , to avoid perpetuating an arrangement which would in the long run
 prejudice the common organi zat ion of the market , notably because of the
 precedent that a definitive special arrangement         would inevitably create ,
 Cyprus must adopt provisions which will allow arrangements applicable to
                                   <5
"Cyprus sherry" to be aligned as quickly as possible on the arrangement s
generally applicable under the Community" s wine regulations .
This is why the special interim import treatment is being accorded on'
condition that Cyprus will , during the period specified , introduce and gradually
implement legislation on wine production which will correspond to existing
Community legislation in this field .
The Community is also concerned that there should be no disruption, during the
period in which " Cyprus sherry" enjoys special treatment , of normal trade
patterns and deliveries to the British and Irish markets of similar
Community wines .   For this reason the special treatment has "been restricted
(and this restriction has been incorporated in the exchange of letters ) to
the level of imports in previous years (200 000 hectolitres ). The Commission
also proposes the adoption of provisions which would permit of similar
Community wines being marketed in the countries concerned on the same
competitive basis as " Cyprus sherry'' .
 ---pagebreak---                                      - 2 -                COMC73 ) 32? final
If the legislation to "be .enacted by Cyprus before 1 September 1973 is found
to be in conformity with Community legislation, - it will be necessary, if the
agreement embodied in the abovementioned exchange of letters is to be
respected , to extend the validity of the special treatment so that it can
be applied to the 1974 harvest .
                    ■
In conclusion , the purpose of the attached proposal is to give force to the
provisions of the Agreement between the Community and Cyprus as these emerge
from the exchange of letters referred to above and to provide for the
possibility of subsidies being made available for shipments to Ireland and
the United Kingdom of Community wines which are similar to " Cyprus sherry".
 ---pagebreak---                                                     COMC73 ) 327 final
                                  COST
 1.  As has been indicated above , application of the reference price system
 would mean that , pursuant to Article 9(3 ) of Regulation (ESC ) No 816/70 , a
                          ■ *
 countervailing charge , amounting in this instance to about 50 u.a. /hl , would
have to be levied on " Cyprus sherry", thus virtually excluding it from British
and Irish markets .   Non-application to this wine of the countervailing
charge - an "agricultural levy" within the meaning of Article 2(a ) of the
Decision of 21 April 1970 on the replacement of financial contributions from
Member States by the Communit ie s' own re sources – would have little or no
effect on total receipts from application of the countervailing charge system
to wines .
                                   i
2.   The cost of the subsidies for Community wines which are similar to
" Cyprus sherry" will largely depend on the list referred to in Article 4
of the Proposal .   This will be drawn up by the Commission following
consultation with the Management Committee .     Judging by the estimates put
forward by national experts at meetings of the Council 's ad hoc Working Party
on Cyprus , the quantities of wine affected could be in the region of 800 hi .
Given the price difference referred to in Article 3 of the Proposal ,
expenditure over the period of application of the proposed Regulation
(viz . 1 February 1973 to 31 December 1973 ) would be of the order of 25 000 u.a .
Arrangements for financing this expenditure from Community sources will be
detailed in a further proposal to be submitted in due course .
 ---pagebreak---                                                   COM(73 ) 327-E final
                              '      t                          '
                                Proposal for a
                      ■ REGULATION (EEC ) OF THE COLWCIL
           concerning the importation of wine exported as " Cyprus sherry", .
           originating in and coming from Cyprus , and the introduction of
           subsidies for similar wines produced in the Community as
           originally constituted and shipped to Ireland and the
           United Kingdom
TIES 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 the exchange of letters referred to in Article 12 of the Protocol ^ ^
laying down certain provisions with regard to the Agreement establishing sin
association "between the European Economic Community and the Republic of
Cyprus following the accession of new Member States to the Community , signed
at Brussels on 19 December 1972 , makes provision for special interim
treatment of wine exported as " Cyprus sherry"; whereas this treatment involves
the non-application , under certain conditions , of countervailing charges
to imports of this wine into the Community, up to a maximum annual quota
of 200 000 hectolitres ;
Whereas the primary aim of this arrangement was to avoid a sudden disruption
of traditional exports of this wine to Ireland and the United Kingdom
following enlargement of the Community ; whereas , in the medium term , this
arrangement was designed , on the one hand , to allow Cyprus to introduce
legislation on vine production which would ensure that the wine in question
^0J No
 ---pagebreak---                                                  COM ( 73 ) 327-2 finai
 would Le produced under conditions .corresponding to those required by
 Community regulations for similar Community products and , on the other ,
to allow the Community to examine the classification of the wine in
question irith a view to reaching a decision on the definitive import
treatment to "be accorded to it ; whereas the Government of Cyprus has
undertaken to introduce the legislation specified above not later than
1 September 1973 ? -
Whereas , in these circumstances , imports of the wine in question should ,
until 31 October 1973 , be exempt from the countervailing charge provided
for in the first subparagraph of Article 9(3 ) of Council Regulation
 (ESC ) !TO 816/70-'' laying down additional provisions for the common
organization of the market in wine , as last amended by Regulation (EEC )
Eo 2680/72^^; whereas this period should be long enough to allow the
Community to establish whether or not the legislation enacted by Cyprus .
pursuant to the exchange of letters is in conformity with Community
legislation and , if it is , to extend the import treatment provided for
in this Regulation so that it can be applied to the 1974 harvest , due for *
marketing in the first half of 1 975 1
Whereas Ireland and the United Kingdom are the only Member States which
are traditional importers of this wine and whereas annual consumption on
these two markets is in the region of 200 000 hi ;
Whereas the figure to be taken into consideration must be related to the
period during which the special import treatment will apply, viz . 1 February 1973
to 31 December 1973 ; whereas a figure of 185 000 hi would therefore be
appropriate , this figure to include imports already effected on Nthe basis
of Commission Regulation (EEC) Eo              /73^" on interim measures
for the importation into the Community of wine exported as "Cyprus sherry"
originating in and coming from Cyprus :
                                 ν                                         •A
^OJ So L 99, 5 Kay 1970, p. 1 .
^ '0J Eb. L 289, 21 December 1972 , p.
^'0J Eo L
 ---pagebreak---                                    - 3 -           COM(73 ) 327-E final
 VJhereas exemption from the countervailing charge for wine exported , as
 " Cyprus sherry" should not have the effect of facilitating imports cf that
 wine into Ireland and the United Kingdom at the expense of similar wines produced
 in the Community as originally constituted ; whereas , in view of the
 difference between the prices of these similar wines in the Community and
 the import price of " Cyprus sherry", some of these Community wines could
"be ousted from the markets of these two new Member States by " Cyprus
 sherry"; whereas , to ensure that this exceptional treatment does not have
                k
the eifect 01 interfering with conditions of competition between wine
exported as " Cyprus sherry" and similar wines produced in the Community
as originally constituted on the markets of these two new Member States ,
provision should be made for the payment of a subsidy on shipments of
these latter wines to these two new Member States , this subsidy being based
on the difference on the markets of these States between the prices of
these wines ana the price of " Cyprus sherry"; whereas this subsidy should
be restricted to shipments to Ireland and the United Kingdom since , given
consumer preferences and the incidence of tariffs between the new Member
Sts.tes and between these States and the Community as originally constituted ,
it can be foreseen that wine imported from Cyprus will in fact be consumed
in Ireland and the United Kingdom ;
VJhereas these subsidies will be necessary for as long as the exceptional
measures for " Cyprus sherry" apply ;
HAS ADOPTED THIS REGULATION :
                                 Article 1
The countervailing charge provided for in the first subparagraph of
Article 9(3 ) of Regulation (EEC ) Bo 816/70 shall not be levied on imports
of wine exported as " Cyprus sherry" originating in and coming from Cyprus
up to a maximum of 185 000 hectolitres .   This figure includes quantities
 ---pagebreak---                                    - 4 -              COM(73 ) 327-3 final
                                       1
alrec.cy imported free of countervailing charge pursuant to Regulation
 Uc ) So             /73 .
                                  Article 2
1.   The maximum of 185 000 hi fixed in Article 1 shall "be divided into two
quotas , one of 1 400 hi for Ireland and one of 183 600 hi for the
United Kingdom ,                                               .     '
2.   liiese Keniber States shall guarantee importers of this product established
on their territory free access to the quotas allocated .
3«   The extent to which the quotas of the Member States have "been used up shall
be assessed on the be.sis of imports of the product in question under cover
of declarations that it has been released for consumption .
4.   These Member States shall inform the Commission at regular intervals of
imports from Cyprus actually set off against their quotas .
                                 Article 3
1.   Subsidies shall be granted in respect of shipments effected from
1 February 1973 to Ireland and the United Kingdom of wines produced in the
Community as originally constituted which are similar to the wine exported
as " Cyprus sherry".
2.  The subsidies referred to in paragraph 1 shall be calculated on the
basis of the difference , on the markets of the Member States referred to in
paragraph 1 , between the prices of these Community wines and the price of
wine exported as " Cyprus sherry".
 ---pagebreak---                                       - 5 -          COK(73 ) 327-E final
                                 Article 4
Detailed rules for the application of this Regulation , including the amount
 of the subsidy and the list of Community wines eligible for it , shall be
adopted in accordance with the procedure laid down in Article 7 of
Regulation !To 24 ^ on the progressive establishment of a common organization
of the market in wine .                                              >      ' ■
                              Article 5
The treatment provided for in this Regulation shall apply until 31 October 1973 .
However if , before 1 September 1973 , Cyprus enacts legislation on wine
production which is in conformity with Community rules applicable to products
similar to the product specified in Article 1 , the Council , acting in
accordance with the voting procedure laid down in Article 43(2 ) of the Treaty
on a proposal from the Commission , shall take all necessary steps to ensure that
this treatment is extended in accordance with the terms of the exchange of
letters annexed to the Protocol laying down certain provisions with regard to
the Agreement establishing an Association between the European     Economic
Community ana the Republic of Cyprus following the accession of new Member
States to the Community , signed at Brussels on 19 December 1972 .
                             Article 6
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 .
Bone at Brussels               19                         For the Council
^OJ Ko 30 , 20 April 1 962 , p. 989/62                    The President