1.11.75 Official Journal of the European Communities No L 281/65 REGULATION (EEC) No 2744/75 OF THE COUNCIL of 29 October 1975 | on the import and export system for products processed from cereals and from rice THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community; ‘ Having regard to Council Regulation (EEC) No 2727/75 (1) of 29 October 1975 on the common organization of the market in cereals, and in particular Articles 14 (3), 16 (5), 17 and 23 (2) thereof; Having regard to Council Regulation No 359/67/ EEC () of 25 July 1967 on the common organization of the market in rice, as last amended by Council Regulation (EEC) No 668/75 (3), and in particular Articles 12 (3), 17 (5) and 18 thereof; Having regard to the proposal from the Commission; Whereas under Articles 14 (3) and 16 (5) of Regu- lation (EEC) No 2727/75 and Articles 12 (3) and 17 (5) of Regulation No 359/67/EEC rules should be adopted for the application of the system of levies and refunds applicable in trade with third countries in products processed from cereals and from rice, excluding compound feedingstuffs for which special rules have been laid down in Regu- lation (EEC) No 2743/75 (4); Whereas the variable component of the levy must correspond to the incidence on the prime costs of processed products of the levies on basic products; whereas that incidence may be calculated on the basis of the average of the levies applicable during a representative period to the quantity of the basic product deemed necessary for the manufacture of one unit of the processed product; (1) See page 1 of this Official Journal. (%) O] No 174, 31. 7. 1967, p. 1. (%) OJ No L 72, 20. 3. 1975, p. 18. () See page 60 of this Official Journal. Whereas in respect of products subject to the common organization of the market in cereals, but containing no cereals, the variable component should be calculated with reference to market conditions for products which are in competition with them; Whereas the fixed component of the levy must be designed to protect the processing industry; whereas that component should be determined on the basis of the most representative processing costs; [ Whereas, for some residues of processing, protection for the industry is already assured through the protection enjoyed by the main processed product; whereas in that case the fixed component can be equal to zero; Whereas the object of the refund should be to cover the difference between the prices of products within the Community and on the world market; whereas, for that purpose, criteria should be established for determining the refund essentially on the basis of prices of the basic products within and outside the Community and the outlets and conditions for the sale of processed products on the world market; Whereas provision should be made for granting, at the beginning of the marketing year, a refund which takes into account the actual cost of the supply of basic products in so far as they were purchased at the end of the previous marketing year at a higher price than that ruling for the product at the beginning of the new marketing year; Whereas, in addition to the system described above, the use of inward processing arrangements should be regulated in order to ensure a balance between the use of Community basic products in the manufacture of processed goods for export to third countries and the use of third country products brought in under inward processing arrangements;