COUNCIL REGULATION (EEC)  N° 3774/85
of 20 December 1985
concerning certain national aids in the agricultural sector which  are incompatible with the common market but which the Portuguese Republic is authorized to maintain  on a transitional basis
THE COUNCIL OF THE EUROPEAN COMMUNITIES
,
Having regard to the Act of Accession of Spain and Portugal, and in particular Articles 247 and 258  thereof,
Having regard to the proposal from the Commission,
Whereas, under Article 247 of the Act of Accession, the Portuguese Republic is authorized to  maintain, on a transitional and, in principle, degressive basis, national aids the abolition of  which would not fail to have serious consequences both for producer and consumer prices; whereas a  list and the exact wording of the national aids which fulfil these conditions appear in the Annex,  together with their initial amounts;
Whereas, with respect to the rate of abolition and any scale of degressivity which should be fixed,  it appears appropriate either that the initial amount should be considered as maximum rates for a  first period and that, over a second period, these amounts should be reduced in equal annual  instalments, to be phased out completely at the end of the transitional period, or that the initial  amounts should be phased out in ten equal annual instalments;
Whereas, until 31 December 1990, national aid granted by the Portuguese Republic for products  which, pursuant to Article 259 of the Act of Accession, are subject to a transition by stages, are  subject to the special arrangements laid down in Article 265 (2) of that Act; whereas, pursuant to  Article 286 thereof, Article 247 applies to these products only as from 1 January 1991;
Whereas the Portuguese Republic may abolish the aids which are the subject of these transitional  measures at a more rapid rate than that set out in the Annex; whereas it is essential that, in this  event, the Portuguese Republic should inform the Commission of action taken; whereas a procedure  should be specified whereby other derogations may be made, should the need arise, from the  degressivity scale, pursuant to Article 247 (3) of the Act of Accession;
Whereas steps should be taken to ensure that national aid for the consumption of olive oil does not  create distortions as between products of different qualities, that it does not provide a benefit,  in addition to the export refund, for any quantities exported and that it is only granted after the  date on which a similar Community aid becomes applicable, up to the difference between the latter  aid and the maximum amount fixed for the national aid;
Whereas, pursuant to Article 247 (2) of the Act of Accession, equal access to the Portuguese market  must be ensured;whereas this Regulation should therefore be without prejudice to the adoption at a  later date, should the need arise, of specific procedures designed to ensure equality of access on  the Portuguese market for products imported from other Member States if the grant of one or more of  the aids referred to in this Regulation entails an actual modification on the Portuguese market of  the conditions of competition between imported and domestic products;
Whereas, pursuant to Article 2 (3) of the Treaty of Accession of Spain and Portugal, the  institutions of the Community may adopt before accession the measures referred to in Article 258 of  the Act of Accession, these measures entering into force only subject to, and on the date of, the  entry into force of that Treaty,
The national aids which are incompatible with the common market and  which the Portuguese Republic is authorized to maintain on a transitional basis are listed in the  Annex, with an indication of their rate of abolition.
The Portuguese Republic may abolish the aids referred to in Article 1 at a more rapid  rate than that set out in the Annex. It shall inform the Commission without delay of any action it  has taken.
The grant of aid for the consumption of olive oil shall be subject to the following  further conditions:
(a) it shall be granted, without distinction on grounds of quality, for all olive oil receiving  Community aid for the consumption of olive oil within the Community as constituted on 31 December  1985;
(b) the Portuguese Republic shall take whatever action is necessary to ensure that the aid does not  benefit quantities exported to another Member State or to third countries;
(c) from 1 January 1991, the maximum amount of aid shall be reduced by the amount of Community aid  for the consumption of olive oil applied in accordance with the second subparagraph of Article 293  (1) of the Act of Accession. The national aid shall be abolished if theCommunity aid is equal to or  greater than the maximum amount fixed for national aid.
The Portuguese Republic shall inform the Commission of any action taken to ensure that these  conditions are met.
Where the grant of one or more of the aids listed in the Annex entails an actual  modification on the Portuguese market of the conditions of competition between domestic products  and products imported from the other Member States, the Council shall, in accordance with the  procedure laid down in Article 234 (2) of the Act of Accession, adopt the specific procedures  required to ensure equality of access on the Portuguese market.
Detailed rules for the application of this Regulation together with the possible  derogations referred to in Article 247 (3) of the Act of Accession shall be adopted in accordance  with the procedure laid down in Article 38 of Regulation (EEC) N° 136/66/EEC of the Council of 22  September 1966 on the establishment of a common organization of the market in oils and fats (1) or,  as the case may be, in the corresponding Article of the other Regulations on the common  organization of agricultural markets.
This Regulation shall enter into force on 1 January 1986, subject to the entry into  force of the Treaty of Accession of Spain and Portugal.
This Regulation shall be binding in its entirety and directly applicable in all  Member States.