Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 2262/84 laying down special measures in respect of olive oil
COMMISSION OF THE EUROPEAN COMMUNITIES •it •it * * Brussels, 12. 11. 1996 COM(96) 571 final 96/0275 (CNS ) Proposal for a COUNCIL REGULATION ŒO amending Regulation (EEC) No 2262/84 laying down special measures in respect of olive oil (presented by the Commission) EXPLANATORY MEMORANDUM 1. The proper application of the Community regulations on olive oil required the setting-up of inspection agencies responsible for overseeing compliance with regulatory obligations in the Member States producing olive oil. Council Regulation (EEC) No 2262/84, as amended by Regulation (EEC) No 593/92, provides that 50% of the actual expenditure of the agencies is to be covered by the general budget of the Communities for a period of five years from 1 November 1992 and that before 1 January 1997 the Council, acting by a qualified majority on a proposal from the Commission, is to decide on a method for financing the expenditure in question from the 1997/98 marketing year. 3. The proposed method involves maintaining the Community contribution to agencies' expenditure for one year at the 50 % rate. The financial impact on the Community budget is estimated at ECU 12. 1 million in total over the 1997 and 1998 financial years. In view of the fact that a draft reform of the MO for olive oil is currently under examination, before 1 October 1997 the Commission will consider the need to continue part-financing the agencies after the 1997/98 marketing year. Z Proposal for a COUNCIL REGULATION (EC) No amending Regulation (EEC) No 2262/84 laying down special measures in respect of olive oil THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof, I laving regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, Whereas, in accordance with Article 1(5) of Council Regulation (EEC) No 2262/84 of 17 July 19841, as last amended by Regulation (EEC) No 593/922, the Council, acting by a qualified majority on a proposal from the Commission, is to adopt before 1 January 1997 the method for financing actual expenditure of agencies as from the 1997/98 marketing year; Whereas work customarily entrusted to the agencies must be carried out during the 1997/98 marketing year; whereas, as a consequence, provision should be made for a Community contribution to the agencies' expenditure for that period in order to ensure they can operate effectively and in accordance with the rules within the framework of the administrative autonomy provided for in Regulation (EEC) No 2262/84, HAS ADOPTED THIS REGULATION: 1 2 OJNo L 208, 3. 8. 1984, p. 12. O J N oL 64, 10. 3. 1992, p. 1. 3 Article 1 The last two subparagraphs of Article 1(5) of Regulation (EEC) No 2262/84 are hereby replaced by the following: "50% of the agency's actual expenditure for the 1997/98 marketing year shall be covered by the general budget of the European Communities. Before 1 October 1997, the Commission shall consider the need to maintain the Community contribution to the agency's expenditure and, where appropriate, shall present a proposal to the Council. In accordance with the procedure provided for in Article 43(2) of the Treaty, the Council shall decide before 1 January 1998 on any financing of the expenditure in question. " Article 2 This Regulation shall enter into force on the seventh day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Council The President V FINANCIAL STATEMENT Item B2 - 511 - Inspection in agriculture 1. TITLE OF OPERATION Council Regulation (EC) amending Regulation (EEC) No 2262/84 laying down special measures in respect olive of oil (extension of Community part-financing of olive oil agencies for one year). 2. BUDGET HEADING(S) INVOLVED B 2- 511 3. LEGAL BASIS Article 43 of the Treaty establishing the EC. Council Regulation (EEC) No 2262/84, as last amended by Regulation (EEC) No 593/92. 4. DESCRIPTION OF OPERATION 4. 1. General objective To extend for one year the duration of the financial contribution from the general budget of the European Union to actual expenditure of the four inspection agencies in order to ensure they operate normally and to enhance their administrative autonomy. 4. 2. Period covered: one year In view of the fact that a draft reform of the MO for olive oil is currently under examination, the continuation of Community part-financing of the agencies is introduced. Before 1 October 1997 the depends on when the reform Commission will consider the need to continue the Community contribution to the agencies' expenditure. 5. CLASSIFICATION OF EXPENDITURE OR REVENUE 5. 1. NCE 5. 2. DA S 6 TYPE OF EXPENDITURE OR REVENUE Subsidy for joint financing (50%) with other sources in the public and/or private sector; the Community contribution is provided on the basis of a work programme and a forecast budget which the agencies submit to the Commission each year (see point 9. 1 for description of type of expenditure). 7. FINANCIAL IMPACT 7. 1. Method of calculating total cost of operation (ECU million): drawn up on the basis of previous utilization. Italy 6. 5, Spain 2. 4, Greece 2. 3, Portugal 0. 9. 7. 2. Itemized breakdown of cost CA (ECU million at current prices) n+ 1 n + 2 n +3 n + 4 Breakdown Part-financing of expenditure incurred by agencies Total Budget year n (1997) 12. 1 12. 1 7. 3. Indicative schedule of commitment/payment appropriations n + 5 and subsequent years Total 12. 1 12. 1 CA (ECU million) Budget year n (1997) n+ 1 n + 2 n + 3 n + 4 n + 5 and subsequent years Commitment appropriations 12. 1 Payment appropriations Year n (1997) n + 1 (1998 n + 2 N + 3 N + 4 N + 5 and subsequent years Total 3. 1 9. 0 12. 1 € Total 12. 1 3. 1 9. 0 12. 1 8. FRAUD PREVENTION MEASURES The agencies regularly submit work programmes. In addition, financial statements give rise to regular monitoring by the Commission; the financial situation at the end of the year is considered by the Commission, which takes a decision on the amount representing actual expenditure of the agencies to be granted to the Member States concerned. 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 9. 1. Specific and quantifiable objectives; target population - Specific objectives: links with general objective The types of expenditure covered by the operation are as follows: Staff costs: Expenditure on staff recruited for work directly connected with the introduction of the system of controls covering olive oil; staff costs, which account for the most important item of expenditure, comprise both wages and salaries and social welfare contributions payable by the employer as well as expenditure on training. Control structure: Printing of registers and forms and preparation of the latter; equipment for taking samples of olive oil stored; costs of disseminating information to farmers. Operating expenditure: travelling and subsistence expenses, rental of premises and upkeep, insurance, miscellaneous office expenses (data processing). - Target population The recipients of the Community financial contribution are the four agencies in the Member States concerned (I, E, GR and P) with responsibility for monitoring aid to olive oil. The expenditure is paid directly to the agency; payments take place at the beginning of each quarter and take account of the liquidity position. 9. 2. Grounds for the operation Need for Community budget contribution having regard in particular to the principle of subsidiarity. Financing of the agencies is justified by the need to protect the Community's financial interests and also to meet the requirements of the Member States concerned for whom the introduction of a system of specific controls constitutes a high, additional budget burden. - Choices of ways and means Advantages over possible alternatives (comparative advantages) The Community financial assistance provides support for the agencies and also gives them some independence vis-à-vis the various national inspection authorities. Explanatory reference to similar Community or national operations The system of agencies co-financed by the Commission and the Member State is peculiar to the olive oil industry; the operation involves the application of a system of controls which is totally new. No comparison with other operations administered nationally can be made. Spin-of and multiplier effects expected The Community financial contribution represents substantially less than 1% of the aid paid to the olive oil industry but allows an effective system of controls to function with its indisputable deterrent effect. The part-financing of the agencies is therefore fully worthwhile, in view of the fact in particular that the administrative structures of the producer Member States are not sufficiently adapted to carrying out the controls provided for by the Community regulations. In addition, the controls conducted by the agencies have pointed to many irregularities and at times even to fraud. Main factors of uncertainty which could affect the specific results of the operation. The main factors of uncertainty are related to the technical difficulties which the Member States may encounter in complying with the regulations. 9. 3 Monitoring and evaluation of the operation Performance indicators selected With the view to ensuring the proper application in particular of Community aid for olive oil, the agencies conduct checks entrusted to them in accordance with the Community regulations, record irregularities observed following such checks and inform the Commission staff and the competent authorities of the Member State concerned thereof. § On the basis of results obtained in recent years and of checks conducted by Commission agents, positive conclusions may be drawn regarding the way the agencies operate. While it is indisputable that in the first few years, the agencies have encountered difficulties of all sorts, their work has gradually had an effect on national authorities. Nowadays it is possible to claim that the four agencies have competent staff experienced in monitoring the various measures connected with olive oil. Nevertheless, the results of the agencies' work cannot be evaluated solely in terms of figures (checks conducted, proposed penalties, aid recovered, fines collected, etc. ). It is reasonable to think that by virtue of the very existence of the agencies, the temptation or the possibility of conducting fraudulent operations is reduced, a dissuasive effect which is very difficult to gauge. Details and frequency of planned evaluations The agencies' activities have been monitored very closely by the Commission staff, the latter regularly assess the performance of the agencies and include the results of their work in the EAGGF report each year. The present measure extends the part-financing of the agencies for the 1997/98 marketing year. An assessment of the situation will be made during 1997 and will take account in particular of progress in the reform of the MO for olive oil to decide on any further extension. Assessment of the results obtained In view of the difficulties peculiar to the sector, the agencies appear to play an indispensable part in controls. Controls carried out are used both by the Commission and by the various national authorities. For these reasons the method of financing them should be extended for the 1997/98 marketing year. 3 ISSN 0254-1475 COM(96) 571 final DOCUMENTS EN 03 Catalogue number : CB-CO-96-571-EN-C ISBN 92-78-11446-4 Office for Official Publications of the European Communities L-2985 Luxembourg