21. 5. 98 Official Journal of the European Communities L 151/21 COMMISSION REGULATION (EC) No 1055/98 of 20 May 1998 amending Regulation (EC) No 2020/97 introducing preventive distillation as provided for in Article 38 of Council Regulation (EEC) No 822/87 for the 1997/98 wine year THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 822/87 of 16 March 1987 on the common organisation of the market in wine ('), as last amended by Regulation (EC) No 2087/97 (3, and in particular Article 38(5) thereof, Whereas Commission Regulation (EC) No 2020/97 (%) introduces preventive distillation as provided for in Article 38 of Regulation (EEC) No 822/87; whereas Article 1(4) of that Regulation allows the Member States to approve contracts or declarations as soon as they are submitted, for a quantity not exceeding half of the quantity specified in each contract or declaration; Whereas under Article 8(1) of Council Regulation (EEC) No 2046/89 (%), as last amended by Regulation (EC) No 2468/96 (°), distillers may apply for an advance payment equal to the amount of the aid provided they have lodged a security; whereas the possibility of distilling not more than half the total quantity of wine specified in contracts and declarations immediately after approval as referred to in Article 1(4) of Regulation (EC) No 2020/97, introduced to speed up preventive distillation for the current wine year, may engender financial difficulties for distillers, who are unable to reclaim the security until the contracts have been fully performed; whereas, therefore, the provision introduced to facilitate preventive distillation could jeopardise the proper functioning of distillation opera- tions because the money for the security, which would normally be released on performance of a contract and which could then be used to perform other contracts, can be tied up throughout the period of performance of the contracts, thereby requiring distillers to invest consid- erably larger sums; whereas this situation should be rem- edied by separating the parts of the contracts and declara- tions approved under Articles 1(4) and 1(6) of Regulation (EC) No 2020/97, respectively, with a view to applying the provisions on the advance of the aid and the security; () OJ L 84, 27. 3. 1987, p. 1. () OJ L 292, 25. 10. 1997, p. 1. () OJ L 284, 16. 10. 1997, p. 39. () OF L 202, 14. 7. 1989, p. 14. () OJ L 335, 24. 12. 1996, p. 7. Whereas the distillation contracts or declarations had to be signed by 29 January 1998 at the latest; Whereas the preventive distillation as introduced, while having significant results, has nevertheless missed some wines that are unsuitable for the market and which ad- versely affect it; whereas, under the circumstances, these wines should be withdrawn from the market by reintrodu- cing preventive distillation for a limited volume restricted to table wine with a view to improving in this manner the quality of the wines that should remain on the market; whereas distillation should be reintroduced only in those regions which have not distilled the quality allocated to them; Whereas, in the interests of efficiency, preventive distilla- tion should be reintroduced only for wine producers who have already signed distillation contracts or declarations; whereas in addition, in certain regions distillation should be reintroduced only for wine producers who have signed such contracts for a substantial part of the maximum quantity provided for in Article 1(1) of Regulation (EC) No 2020/97 and who wish to distil additional quantities; Whereas, where the overall quantity applied for by region exceeds the quantities provided for, the Member States must apply a single rate of reduction for all new contracts submitted; Whereas, with a view to the sound management of the quantities in question, it is necessary to derogate from certain provisions of Commission Regulation (EEC) No 2721/88 of 31 August 1998 laying down detailed rules for voluntary distillation as provided for in Articles 38, 41 and 42 of Regulation (EEC) No 822/87(), as last amended by Regulation (EEC) No 2181/91 (), and to provide that the quantities applied for in the contracts and declarations may be reduced; Whereas, to improve the effectiveness of the measure, distillation should take place over a short time scale, and the Member States should be permitted to impose more restrictive measures, in particular the introduction of a security to accompany the submission of the contract or declaration; () OJ L 241, 1. 9. 1988, p. 88. () OJ L 202, 25. 7. 1991, p. 16.