L 5842 Official Journal of the European Union 28.2.2006 COUNCIL REGULATION (EC) No 320/2006 of 20 February 2006 establishing a temporary scheme for the restructuring of the sugar industry in the Community and amending Regulation (EC) No 1290/2005 on the financing of the common agricultural policy THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Commu- nity, and in particular Article 36 and the third subparagraph of Article 37(2) thereof, Having regard to the proposal from the Commission, Having regard to the Opinion from the European Parliament (?), Having regard to the Opinion from the European Economic and Social Committee (2), Whereas: (1) Due to developments within the Community and at inter- national level, the sugar industry in the Community is faced with structural problems which could seriously put at stake the competitiveness and even the viability of the industry as a whole. These problems cannot be addressed effectively by using the market management instruments as provided for in the common market organisation for sugar. To bring the Community system of sugar produc- tion and trading in line with international requirements and ensure its competitiveness in the future it is necessary to launch a profound restructuring process leading to a sig- nificant reduction of unprofitable production capacity in the Community. To this end, as a precondition for the implementation of a functioning new common market organisation for sugar a separate and autonomous tempo- rary scheme for the restructuring of the sugar industry in the Community should be established. Under this scheme quotas should be reduced in a manner that takes account of the legitimate interests of the sugar industry, sugar beet, cane and chicory growers and consumers in the Community. (2) A temporary restructuring fund should be set up in order to finance the restructuring measures for the Community sugar industry. For reasons of sound financial management the fund should form part of the Guarantee Section of the EAGGF and thus be governed by the procedures and mechanisms of Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (%) and, as from 1 January 2007, of the European (') Opinion delivered on 19 January 2006 (not yet published in the Offi- cial Journal). (%) Opinion delivered on 26 October 2005 (not yet published in the Offi- cial Journal). (}) OJ L 160, 26.6.1999, p. 103. Regulation as repealed by Regulation (EC) No 1290/2005 (O] L 209, 11.8.2005, p. 1). Agricultural Guarantee Fund set up by Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (4. Owing to the fact that outermost regions are currently the object of development programmes aimed at improving their competitiveness in raw sugar production and also produce raw cane sugar in competition with third coun- tries, which are not subject to the temporary restructuring amount, undertakings in the outermost regions should not fall under the scope of this Regulation. The restructuring measures provided for by this Regulation should be financed by raising temporary amounts from those sugar, isoglucose and inulin syrup producers which will eventually benefit from the restructuring process. As this amount falls outside the scope of the charges tradition- ally known in the framework of the common market organisation for sugar, the proceeds resulting from its col- lection should be considered as ‘assigned revenue’ as pro- vided for by Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regula- tion applicable to the general budget of the European Communities (%). An important economic incentive for sugar undertakings with the lowest productivity to give up their quota produc- tion in the form of an adequate restructuring aid should be introduced. To this effect, a restructuring aid should be set up that creates an incentive to abandon sugar quota pro- duction and renounce the quotas concerned, at the same time allowing to take into due account the respect of social and environmental commitments linked to the abandon- ing of production. The aid should be available during four marketing years with the aim to reduce production to the extent necessary to reach a balanced market situation in the Community. To support sugar beet, cane and chicory growers that have to give up production due to the closure of factories they had supplied previously, a part of the restructuring aid should be made available to these growers as well as to machinery contractors that have worked for these growers in order to compensate for losses resulting from these clo- sures and in particular the loss of value of investments in specialised machinery. (4 OJ L 209, 11.8.2005, p. 1. (5) OJ L 248, 16.9.2002, p. 1.