26.9.2006 Official Journal of the European Union L 265/1 | (Acts whose publication is obligatory) COUNCIL REGULATION (EC) No 1405/2006 of 18 September 2006 laying down specific measures for agriculture in favour of the smaller Aegean islands and amending Regulation (EC) No 1782/2003 THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Articles 36 and 37 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, Whereas: The particular geographical situation of some of the Aegean islands imposes additional transport costs in supplying products which are essential for human consumption, for processing or as agricultural inputs. In addition, objective factors arising as a result of insu- larity and remoteness impose further constraints on economic operators and producers in those Aegean islands that severely handicap their activities. In certain cases, operators and producers suffer from double insu- larity. Those handicaps can be alleviated by lowering the price of those products. It is therefore appropriate to introduce specific supply arrangements to guarantee supply to the Aegean islands and compensate for the additional costs arising from their remoteness, insularity and distant location. The problems experienced by the Aegean islands are accentuated by the small size of the islands. In order to guarantee the effectiveness of the measures envisaged, such measures should only apply to islands known as the ‘smaller islands’. Community policy to assist local production in the smaller Aegean islands as established by Council Regu- lation (EEC) No 2019/93 of 19 July 1993 introducing specific measures for the smaller Aegean islands concerning certain agricultural products (') has involved (') OJ L 184, 27.7.1993, p. 1. Regulation as last amended by Regu- lation (EC) No 1782/2003 (O] L 270, 21.10.2003, p. 1). a multitude of products and measures for their production, marketing or processing. Those measures have proved effective and have ensured that agricultural activities have been maintained and developed. The Community should continue to support the production lines, which are a key factor in the environmental, social and economic equilibrium of the smaller Aegean islands. Experience has shown that, as in the case of rural devel- opment policy, closer partnership with the local autho- rities can help to address the particular issues affecting the islands concerned in a more targeted way. Support for local production should thus continue to be granted through a general programme at the most appropriate geographical level, and this programme should be submitted to the Commission by Greece. In order to achieve the goal of lowering prices in the smaller Aegean islands and mitigating the additional costs of their remoteness, insularity and distant location, while maintaining the competitiveness of Community products, aid should be granted for the supply of Community products to the smaller Aegean islands. Such aid should take account of the additional cost of transport to the smaller Aegean islands and, in the case of agricultural inputs and products intended for processing, the additional costs of insularity and distant location. Since the quantities covered by the specific supply arrangements are limited to the supply requirements of the smaller Aegean islands, those arrangements do not impair the proper functioning of the internal market. Nor should the economic advantages of the specific supply arrangements result in the diversion of trade in the products concerned. The dispatch or export of those products from the smaller Aegean islands should therefore be prohibited. However, dispatch or exportation of those products should be authorised where the advantage resulting from the specific supply arrangements is reimbursed or, in the case of processed products, to permit regional trade. Account should also be taken of exports to third countries and exports of processed products corresponding to traditional exports should be authorised accordingly. Moreover, the restriction should not apply to the traditional dispatching of processed products. For the sake of clarity, this Regu- lation should specify the reference period for defining traditionally exported or dispatched quantities.