30.6.2001 Official Journal of the European Communities L178/63 COMMISSION REGULATION (EC) No 1265/2001 of 27 June 2001 laying down detailed rules for the application of Council Regulation (EC) No 1260/2001 as regards granting the production refund on certain sugar products used in the chemical industry THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 1260/2001 of 19 June on the common organisation of the markets in the sugar sector ('), and in particular Article 7(5) thereof, Whereas: 1) Under Article 7(3) of Regulation (EC) No 1260/2001 it has been decided to grant production refunds on sugar, unprocessed isoglucose and sugar syrups covered by that Regulation and also chemically pure fructose (laevulose) falling within CN code 1702 50 00 as an intermediate product used in the manufacture of certain products of the chemical industry. Arrangements similar to those for white sugar used by the chemical industry should be laid down for unpro- cessed isoglucose. Where clearly defined intermediate products are, on the one hand, obtained in the Community directly from a basic product excluding any product covered by another production refund scheme and are, on the other hand, used for the manufacture of a chemical listed in Annex I to this Regulation, provision should be made for the possibility of granting a production refund on those intermediate products. That possibility must apply even where the intermediate products are used in a Member State other than that in which they were manufactured. To that end, it should be laid down, on the one hand, that the production refund is to be granted for the basic product having served for the manufacture of the quantity of intermediate product used as indicated above and, on the other, that the refund is to be determined using the same yield coefficients as those established for calculating the export refunds on the same intermediate products. Application of the production refund arrangements to intermediate products requires that those products be defined and that an appropriate verification system be implemented. Such verification, by way of prior approval should cover both the stage of the manufacture of the intermediate product and that of processing into the final chemical product, to ensure that the basic product as defined is actually used for the manufacture of a chemical product listed in Annex I to this Regula- (1) See page 1 of this Official Journal. ( ( ) ) 0] 0] tion and that any duplicate payment of the production refund is avoided. Sugar can be used as a basic product by the chemical industry in the same way as starch products. A harmon- ious development should therefore be assured for the use of these basic products. To that end provision should be made for the application of a production refund system that takes account of both the price for sugar on the Community market and the movement of world sugar prices. The arrangements applicable to sugar products used for the manufacture of chemical products are designed to promote, on the one hand, the development of the use of sugar products by the chemical industry and, on the other, the development of biotechnology on the basis of those basic products, by aligning prices on the world market price for sugar. With that in view, the system provides for the progressive application of the principle of establishing production refunds by reference to the world price and the Community price for sugar, with a standard amount of EUR 6,45 per 100 kilograms to be added to the world price. The standard amount corre- sponds to the forwarding costs for exporting Community sugar, including a flat-rate element intended in particular to avoid the sale of sugar at a price lower than the world market price which, by nature, is very volatile. The experience gained from the operation of the said arrangements shows the need for, on the one hand, placing the Community chemical industry that uses sugar products under conditions comparable to those valid for the chemical industry that obtains its supplies from the world sugar market and, on the other hand, opening up the non-food outlets even further to the Community industry producing sugar products. To that end the arrangements should be maintained, applying in full the exclusive reference to the world and Community markets for sugar. Raw sugar and syrups with a high degree of purity, calculated in accordance with Article 1(5) of Commis- sion Regulation (EEC) No 1443/82 of 8 June 1982 laying down detailed rules for the application of the quota system in the sugar sector (%), as last amended by Regulation (EC) No 392/94 (*), should also qualify for the production refunds if used in the chemical industry. 158, 9.6.1982, p. 17. 53, 24.2.1994, p. 7. =