CELEX: 51988PC0431(01)
Language: en
Date: 1988-07-26
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ESTABLISHING A FINANCING FACILITY FOR IMPORTS OF FOOD PRODUCTS BY DEVELOPING COUNTRIES FROM THE EUROPEAN COMMUNITY

No C 299/8                              Official Journal of the European Communities                                 24. 11. 88
                                                               II
                                                       (Preparatory Acts)
                                                  COMMISSION
             Proposal for a Council Regulation (EEC) establishing a financing facility for imports of food
                             products by developing countries from the European Community
                                                      COM(88) 431 final
                               (Submitted by the Commission to the Council on 29 July 1988)
                                                         (88/C 299/06)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                           Whereas the conditions under which agricultural
                                                                   products are made available to developing countries
Having regard to the Treaty establishing the European              should be in conformity with the Food and Agriculture
Economic Community, and in particular Article 43                   Organization's (FAO) principles of surplus disposal;
thereof,                                                           whereas conformity with FAO principles will be ensured
                                                                   through the supply of food aid being facilitated by a
                                                                   credit to the importing country of more than three years
Having regard to the proposal from the Commission,                 duration together with a grant element of not less than
                                                                   35 % on terms equivalent to interest rates significantly
Having regard      to   the   opinion    of   the  European        below commercial rates, associated with the estab-
Parliament,                                                        lishment of usual marketing requirements (UMR);
                                                                   Whereas in order to meet the abovementioned
Whereas many developing countries face severe food                 objectives, the facility should consist of a grant element
deficits constituting a considerable burden on their               financed by the European Agricultural Guidance and
balance of payments and are engaged in adjustment                  Guarantee Fund (EAGGF), and a Community credit
policies requiring additional resources; whereas these             guarantee in order to ensure the availability of credit to
developing countries have asked the Community to make              the importing country;
available agricultural products on concessional terms;
whereas access to the use of a medium or long te,rm                Whereas it is necessary to provide that the facility shall
financing facility will help them to face their balance of         be made available for food exports at the request of the
payments difficulties and will provide support to their            government of the importing country or an agency
adjustment programmes;                                             thereof in the framework of an agreement between the
                                                                   Commission and the government of the country
Whereas such an instrument would be an important                   concerned; whereas it is necessary to provide that the
contribution to the Community's efforts to reduce                  facility shall be exclusively used for the purchase of food
structural imbalance between supply and demand in the              products originating in the Community,
market organizations suffering from surpluses;
                                                                   HAS ADOPTED THIS REGULATION:
Whereas the establishment of such a financing facility
thus fully meets the main objectives of the Community's
                                                                                              Article 1
export policy on agricultural products as well as of
internal market policy and constitutes therefore an                A financing facility, hereinafter referred to as 'the
instrument of the common agricultural policy;                      facility', is established to allow developing countries to
                                                                   import food products from the European Community
                                                                   under the conditions laid down in this Regulation.
Whereas the facility will also be an element of diversifi-
cation of export instruments in the framework of agri-
cultural policy;                                                                              TITLE I
Whereas the implementation of the financing facility has                                 General guidelines
to be consistent with the recipient country's own devel-
opment policy and with the development cooperation of                                         Article 2
the Community with the country concerned, and its use
should not harm the interests of other developing                  When deciding on the award of the facility referred to in
countries, in particular those exporting food products;            Article 1, particular consideration shall be given to the
 ---pagebreak--- 24. 11. 88                             Official Journal of the European Communities                             No C 299/9
following criteria without excluding other         pertinent      3.    The Commission shall take all measures necessary
considerations:                                                   to ensure that the facility is granted under conditions
                                                                  which are in conformity with the FAO principles of
(a) in so far as it concerns the countries to which the           surplus disposal.
    •facility is granted:
    — the overall economic situation of the country,                                        Article 5
     — their food import requirements,                            The award of the facility shall be made subject to     the
    — their balance of payments situation,                        conditions that the facility is used exclusively for   the
    — their own efforts in carrying out adjustment                purchase of agricultural products originating in       the
         policies,                                                Community, and that free competition shall              be
                                                                  guaranteed for supply of the products.
    — the impact on the agricultural exports of other
         developing countries;
                                                                                            Article 6
(b) in so far as it concerns the Community:                       The grant element under Article 4 (1) of this Regulation
    — the development of the Community's global                   shall be regarded as intervention measures designed to
         exports of food products and the general                 regulate the agricultural markets within the meaning of
         situation of the relevant markets,                       Article 3 (1) of Regulation (EEC) No 729/70.
    — the traditional imports of food products by the
         country concerned from the Community,
    — the preferential character of relations between the                                   TITLE II
         country concerned and the Community,
                                                                                           Procedures
    — the credit risk involved.
                                                                                            Article 7
                           Article 3                              The Commission, in accordance with the procedure laid
The products supplied under this facility shall be                down in Article 8 shall:
marketed in such a way so as not to disturb the local
market. The implementation of the facility shall be              — adopt the list of products for which the facility may
consistent with the beneficiary country's own devel-                  be awarded, on an annual or multiannual basis,
opment policy, in particular relating to the food and
agricultural sector, and with the Community's devel-              — decide on the award of the facility and the terms of
opment cooperation relations. The concessional element                such a facility,
of the funds resulting from the sale of the products shall
be used in support of agreed development programmes              — adopt as necessary the detailed           rules  for  the
and the implementation of adjustment policies.                        application of this Regulation.
                           Article 4                                                        Article 8
 1.   The facility awarded pursuant to the Regulation             Where reference is made to the procedure of this Article,
shall provide for a period of repayment of more than              the Commission shall be assisted by a committee of an
three years. A grant of not less than 35 %, of the total          advisory nature, composed of the representatives of the
cost, calculated in accordance with the practice followed         Member States and chaired by the representative of the
under the Organization for Economic Cooperation and               Commission.
Development (OECD) arrangement on export credits,
shall be made available by the Community for each                The representative of the Commission shall submit to the
operation. The balance may consist of a credit in favour          committee a draft of the measures to be taken. The
of the beneficiary country directly arranged by the               committee shall deliver its opinion on the draft, within a
Community on financial markets, and guaranted by the             time limit which the chairman may lay down according
Community itself.                                                to the urgency of the matter, if necessary by taking a
                                                                 vote.
2.    The facility shall be made available for food
imports by the government of the beneficiary country or          The opinion shall be recorded in the minutes. In
an agency thereof in the framework of an agreement               addition, each Member State shall have the right to ask
between the Commission and the government or                     to have its position recorded in the minutes.
government agency concerned. The abovementioned
agreement shall fix the terms of the facility. Its               The Commission shall take the utmost account of the
conclusion shall be subject to the presentation of a             opinion delivered by the committee. It shall inform the
commercial contract stipulating all the provisions relative      committee of the manner in which its opinion has been
to the delivery.                                                 taken into account.
 ---pagebreak--- No C 299/10                           Official Journal of the European Communities                            24. 11. 88
                       Article 9                                     products and the use of the funds corresponding to
                                                                     the grant element.
In accordance with the decisions taken under Article 7,
the Commission shall decide on:                                                           Article 10
— the conclusion of the agreement for the award of the           This Regulation shall enter into force on 1 January,
    facility,                                                    1989.
— all the appropriate measures to ensure the proper              This Regulation shall be binding in its entirety and
    implementation of the facility, the marketing of the         directly applicable in all Member States.