COMMISSION REGULATION (EC) No 1067/95 of 12 May 1995 amending Regulation (EEC) No 3478/92 laying down detailed rules for the application of the premium system for raw tobacco

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EEC) No 2075/92 of 30 June 1992 on the common organization of the market in raw tobacco (1), as last amended by Regulation (EC) No 711/95 (2), and in particular Articles 7 and 27 thereof,

Whereas Regulation (EEC) No 2075/92 lays down that, from the 1994 harvest on, Member States may pay the premium direct to the producers and that, starting with that same harvest, the producers may carry over their surplus production to the next harvest, up to a maximum of 10 % of the quota allocated to them; whereas that Regulation also provides for the introduction of a single system of production quotas from the 1995 harvest on, and for an option whereby Member States may pay advances on the premium to the producers; whereas Commission Regulation (EEC) No 3478/92 (3), as last amended by Regulation (EC) No 1958/94 (4), should be amended by laying down the detailed rules for these provisions;

Whereas the essential details of the cultivation contract need to be specified so that account is taken of cases where a Member State opts for direct payment of the premium to the producer;

Whereas, should producers carry over their surplus production to the following harvest, provision should be made whereby the competent bodies can check that, during the following harvest, those involved reduce their production by a corresponding amount so that the accumulated quotas for the two harvests in question are observed;

Whereas the final dates for concluding and registering the contracts should be fixed sufficiently early so that from the start of the harvest year, producers have a stable market outlet for their next harvest and processing undertakings are ensured of a regular supply; whereas, for the 1995 harvest, provision should be made for the Member States to defer these final dates;

Whereas producer groups in certain Member States undertake first processing themselves; whereas pursuant to Article 3 of Council Regulation (EEC) No 727/70 of 21 April 1970 on the common organization of the market in raw tobacco (5), as last amended by Regulation (EEC) No 860/92 (6), the system which had been established by that Regulation provided for the possibility of undertaking first processing on the basis of a cultivation declaration instead of a cultivation contract; whereas Regulation (EEC) No 2075/92 has replaced Regulation (EEC) No 727/70 but no longer provides for this possibility;

Whereas, because the absence of this facility created transitional difficulties in this sector and the short time lapse between the reform and its implementation made it difficult to abandon this trading practice in good time, Regulation (EEC) No 3478/92 had to be amended so that, while providing for strict and specific controls to prevent fraud, operators making use of this facility in the past might undertake first processing during the 1993 and 1994 harvests; whereas these provisions should be maintained for the 1995 harvest, while making specific provision for cases where additional quantities have been allocated pursuant to Article 11 (3) of Commission Regulation (EC) No 1066/95 (7);

Whereas the conditions governing the grant of advances to producers and the deduction of such advances from the premiums payable should be specified;

Whereas, pursuant to Article 20 (1) of Regulation (EEC) No 2075/92, Member States must decide upon the measures needed to ensure compliance with the Community provisions on raw tobacco; whereas, however, the control measures must satisfy certain requirements to ensure that their application is broadly uniform in the Member States;

Whereas, in accordance with points (a) and (c) of Article 5 of Regulation (EEC) No 2075/92, the grant of the premium is subject to the condition that the leaf tobacco comes from a specified production area and is delivered on the basis of a cultivation contract; whereas these conditions may be easily circumvented if there is no check to verify that the area declared on the contract has actually been cultivated with the variety indicated; whereas a minimum number of checks by the Member States on cultivated areas and the consequences when irregularities are discovered both need to be established; whereas, while complying with the principle of proportionality, those consequences must be sufficiently dissuasive to pervent false declarations;

Whereas, with a view to the prevention of fraud, the leaf tobacco must be placed under supervision the moment the producer delivers it to the first processing undertaking; whereas the tobacco must remain under supervision until processing and market preparation have taken place; whereas it is also necessary to check any leaf tobacco imported from third countries that undergoes first processing and market preparation in an undertaking also processing leaf tobacco of Community origin;

Whereas, to avoid any ambiguity, the meaning of the term 'delivery` must be specified;

Whereas, on account of the accession of Austria to the European Union, the production areas referred to in point (a) of Article 5 of Regulation (EEC) No 2075/92 should be specified for that Member State, together with the moisture contents referred to in Article 8 of Regulation (EEC) No 3478/92;

Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Tobacco,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EEC) No 3478/92 is amended as follows:

1. Article 2 is amended as follows:

(a) Paragraph 3 is replaced by the following:

'3. Cultivation contracts must include at least the following details:

(a) the parties to the contract;

(b) the reference to the quota statement of the producer;

(c) the variety of tobacco covered by the contract;

(d) the maximum quantity to be delivered;

(e) the exact location where the tobacco is produced (the production area as referred to in Article 1, province, municipality, identification of the parcel or place);

(f) the area of the parcel concerned, excluding service roads and enclosures;

(g) the purchase price, excluding the premium;

(h) the quality to which the price refers;

(i) the minimum quality requirements agreed;

(j) the period during which the purchase price is to be paid, which may not exceed one month from the date of delivery.

If the Member State has decided to pay the premiums to the producers through the intermediary of the first-processing undertakings, the cultivation contract must also include a commitment on the part of the processing undertaking to pay the producer, in addition to the price, an amount equal to the premium for the quantity covered by the contract and actually delivered.` (b) The followings paragraphs 5 and 6 are added:

'5. Pursuant to Article 10 (2) of Regulation (EEC) No 2075/92, the parties to a cultivation contract may increase, by means of a written amendment, the quantities initially specified in the contract, where the following conditions are met:

(a) the amendment specifies the producer's surplus production at the places and in the harvest covered by the contract, up to a maximum of 10 % of the quota allocated to the producer during that harvest;

(b) the amendment is submitted for registration to the competent authority before the date laid down in Article 9 (1).

The amendment referred to in the first subparagraph shall be registered by the competent authority once it has been verified that the producer did not carry over surpluses in the previous harvest.

6. Paragraph 5 and the first subparagraph of Article 9 (1) notwithstanding, Member States may deem the surplus production of a producer in the 1994 harvest eligible for the premium in respect of the 1995 harvest, up to a maximum of 10 % of the quota allocated to the producer during the 1994 harvest, where the following conditions are met:

(a) before 25 May 1995, the producer in question has declared in writing to the competent control body his intention to deliver the surplus from the 1994 harvest when making the harvest delivery for 1995, specifying the quantity of tobacco involved and its place of storage;

(b) the producer involved has concluded a cultivation contract for the 1995 harvest with a first-processing undertaking. The contract shall include:

- the agreement of the two parties to the delivery of the producer's 1994 harvest surplus during the 1995 harvest,

- specification of the quantity of tobacco involved,

- the reference to the cultivation certificate or quota statement for the 1994 harvest;

(c) a copy of the declaration referred to in (a) is attached to the cultivation contract concluded with the first processing undertaking for the 1995 harvest, when the contract is submitted for registration, in accordance with Article 3 (2).

The competent authorities for registering contracts shall check the accuracy of the information supplied in the declaration referred to in the first subparagraph, particular attention being paid to the contracts concluded and the quantities actually delivered by the producer in the previous harvest, and to observance of the accumulated quotas for the 1994 and 1995 harvests.` 2. Paragraphs 1 and 2 of Article 3 are replaced by the following:

'1. Cultivation contracts shall be concluded, except in cases of force majeure, by 31 March of the year of the harvest covered by the contract. However, that date shall be 15 May of the same year for contracts concluded as a result of the allocation of additional quantities pursuant to Article 11 (3) of Commission Regulation (EC) No 1066/95 (*).

For the 1995 harvest, Member States may allow contracts which were concluded by 30 June 1995, or before 12 August 1995 in the case of contracts concluded as a result of the allocation of additional quantities pursuant to Article 11 (3) of Regulation (EC) No 1066/95, to benefit from the premium.

2. Except in cases of force majeure, the cultivation contracts once concluded must be submitted for registration to the competent body at the latest five working days after the deadline laid down for concluding them. However, that date shall be 31 May of the year of the harvest in question for the registration of contracts concluded as a result of the allocation of additional quantities pursuant to Article 11 (3) of Regulation (EC) No 1066/95.

For the 1995 harvest, Member States may allow contracts which were submitted for registration by 7 July 1995, or before 25 August 1995 in the case of contracts concluded as a result of the allocation of additional quantities pursuant to Article 11 (3) of Regulation (EC) No 1066/95, to benefit from the premium.

` 3. Article 5 (a) is amended as follows:

(a) Paragraphs 1 and 2 are replaced by the following:

'1. Where a producer group regarded as a producer in accordance with the third indent of Article 2 of Regulation (EC) No 1066/95 carries out the first processing of tobacco, the cultivation contract shall, as a transitional measure, be replaced in respect of the 1995 harvest by a cultivation declaration to be submitted to the competent authorities of the Member State concerned, subject to the group's having presented such a declaration since the 1989 harvest or later and before 20 June 1992, in accordance with Article 3 (2) of Regulation (EEC) No 727/70.

For the 1995 harvest, Member States may allow cultivation declarations which have been submitted to the competent authorities by 30 June 1995, or before 12 August 1995 in the case of cultivation declarations made as a result of the allocation of additional quantities pursuant to Article 11 (3) of Regulation (EC) No 1066/95, to benefit from the premium.

2. The cultivation declaration must include at least the following details:

(a) the name of the group concerned and of its members,

(b) reference to the quota statements,

(c) the tobacco variety,

(d) the maximum quantity to be produced,

(e) the proportion of production that will undergo first processing by the group,

(f) the exact location where the tobacco is produced and undergoes first processing,

(g) the areas cultivated by the members of the group.` (b) Paragraph 4 is replaced by the following:

'4. The cultivation declaration shall be registered by the competent authority by 7 July 1995, after the information provided has been verified and taking account in particular of data on the production and processing of previous harvests. However, that date shall be 25 August 1995 for the registration of cultivation declarations made as a result of the allocation of additional quantities pursuant to Article 11 (3) of Regulation (EC) No 1066/95.` 4. Article 8 (1) is replaced by the following:

'1. The premium to be paid to the producer and the quantity to be set off against the production quota statement of the party concerned shall be calculated on the basis of the weight of leaf tobacco of the group of varieties concerned corresponding to the minimum quality required and taken over by the processing undertaking.

However, where the moisture content differs from the level laid down in Annex III for the variety concerned, the weight shall be adjusted for each percentage point of difference, up to a maximum of 4 % moisture.` 5. Article 9 is replaced by the following:

'Article 9 1. Except in cases of force majeure, the producer must deliver his entire production to the first processing undertaking by 15 May of the year following the year of harvest, failing which he shall lose his entitlement to the premium.

The delivery must be made either directly to the place where the tobacco will be processed or, if the Member State authorizes it, to an approved purchasing centre. The competent control body shall approve such purchasing centres which must have the appropriate facilities, weighing scales, instruments for determining moisture content and premises.

2. Each producer shall notify the competent control body, in writing and by 25 May, of the quantities of leaf tobacco not delivered to a first processing undertaking by 15 May, as well as the place where the tobacco is stored. The competent body shall take the necessary steps to ensure that any tobacco not delivered to a first processing undertaking by 15 May is not then declared as part of the subsequent harvest.

3. If the competent control body establishes the presence of tobacco which is not covered by the declaration referred to in paragraph 2, the quantity to be covered by the quota statement to which the producer is entitled for the following harvest shall be reduced by twice the quantity not declared.` 6. Article 10 is replaced by the following:

'Article 10 1. Member States shall decide whether to pay the premiums to the producers through the intermediary of the processing undertakings or directly.

Where appropriate, Member States shall notify the Commission of the names and addresses of the bodies which are responsible for paying out the premiums. The Commission shall publish the list of those bodies in the C series of the Official Journal of the European Communities.

2. The processing undertaking must pay the producer the amount equal to the premium within one month of delivery.

Payment of either the amount referred to in the first subparagraph or of the purchase price by the processing undertaking or by a producer group may be made only by bank or post office transfer.

3. Where a Member State has decided to pay the premiums direct to the producers, the relevant amount shall be paid on the basis of a provisional control certificate issued by the competent control body certifying the delivery. The time limit laid down in paragraph 2 shall apply for the payment of this amount.` 7. Article 11 is replaced by the following:

'Article 11 The premium shall be paid to the producer in the currency of the Member State where the tobacco is produced.` 8. Article 12 is replaced by the following:

'Article 12 1. Where a Member State decides to pay the premiums to the producers through the processing undertakings, it shall reimburse the amount of the premiums paid by the processing undertakings in question, in accordance with paragraphs 2 and 3.

2. The premiums paid to the producers shall be reimbursed to the processing undertakings, on application, on the basis of a control certificate issued by the competent bodies after verification of all the deliveries from a given harvest to that processing undertaking for the group of varieties in question, as specified in Article 17.

The certificate referred to in the first subparagraph must be supplied by 31 December of the year following the year of harvest.

3. Applications for reimbursement of the premiums paid to the producers must include, for each delivery, harvest and group of varieties, at least the following information:

(a) the date of the cultivation contract relating to the delivery concerned, the date of registration of the contract and the official number given to it;

(b) the group of tobacco varieties delivered;

(c) the name of the vendor;

(d) the quantity of tobacco delivered;

(e) the date on which delivery was made;

(f) the place where delivery was made;

(g) the purchase price or prices paid, with particulars of the qualities to which the prices refer;

(h) proof of payment to the producer of an amount equal to the premium;

(i) the original of the quota statement issued to the producer.` 9. Article 13 is replaced by the following:

'Article 13 1. Where a Member State decides to pay the premiums to the producers through the processing undertakings, it shall apply a system of advances on premiums for the processing undertakings concerned, in accordance with paragraphs 2 to 5.

2. The Member State shall pay processing undertakings, on application, an advance on the premiums to be paid to the producers, on the basis of a statement of premiums payable, prepared by the competent control body. This statement shall be issued on the basis of the cultivation contracts concluded by the processing undertaking and the deliveries actually made or planned.

Where, within six weeks from the date of receipt, advances have not been used by processing undertakings for the payment of premiums to producers or reimbursed to the Member State, interest shall be payable on the amount still available at a rate to be determined by the Member State. The interest shall be calculated from the date the advance was received, and booked to the European Guidance and Guarantee Fund (EAGGF).

3. Payment of the advance shall be subject to the lodging of a security equal to the amount of the advance, plus 15 %.

4. Paragraph 5 notwithstanding, the security shall be released only on presentation of the certificate provided for in Article 12 (2). Where an advance has been paid, the security shall be forfeit in respect of the amount of the premiums for which the proof required for release has not been provided within the time limit laid down for issuing the certificate.

5. The security may be released in part upon presentation of a provisional control certificate issued by the competent control body certifying that:

(a) the quantity of tobacco in question has been taken over by the first processing undertaking;

(b) the quantity has been delivered under the quota statements allocated to the producers;

(c) the operations conform to the provisions in force;

(d) the amount equal to the premium has been paid to the producers entitled thereto in accordance with Article 10 (2).

Only 70 % of the amount covered by the provisional control certificate may be released. Member States shall establish any further conditions, notably the tobacco delivery periods or the minimum quantities in respect of which a provisional control certificate may be drawn up.` 10. Article 14 is replaced by the following:

'Article 14 1. Where a Member State decides to pay the premiums direct to the producers, it shall apply a system of advances on premiums for the producers, in accordance with paragraphs 2 to 8.

2. The advance referred to in paragraph 1 shall be paid, upon application by the producer, on the basis of a statement of eligibility for the advance, prepared by the competent control body.

3. The following documents must accompany the application for an advance:

(a) a copy of the cultivation contract concluded by the producer or, where appropriate, the cultivation declaration issued in his name;

(b) a copy of the quota statement issued to the producer and covered by the said cultivation contract or declaration;

(c) a written declaration from the producer concerned specifying the quantities of tobacco he is in a position to deliver during the current harvest.

4. The statement referred to in paragraph 2 shall be issued by the control body once the documents referred to in paragraph 3 are verified and the written declaration supplied by the producer is substantiated.

5. Payment of the advance, the maximum amount of which shall be 50 % of the premium payable to the producer, shall be subject to the lodging of a security equal to the amount of the advance, plus 15 %.

The advance shall be payable from 16 October of the year of harvest.

6. Where the advance is granted to a producer group but has not been paid to the members entitled or reimbursed to the Member State within six weeks of receipt, interest shall be payable on the amount still available at a rate to be determined by the Member State. The interest shall be calculated from the date the advance was received and booked to the European Guidance and Guarantee Fund (EAGGF).

7. The advance paid to a producer shall be deducted from the amount of the premium payable to the producer in accordance with Article 10 (3), starting from the first delivery made by the producer concerned.

The security lodged by the producer shall be released when the entire advance has been deducted from the premiums payable. However, the security may be released gradually as the advance is deducted, at a rate equal to 70 % of the amount of the advance which has been deducted.

If a producer fails to make the deliveries enabling full deduction of the advance from the premiums payable within the time limit laid down in Article 9 (1), the security lodged by him shall be forfeited at a rate equal to the amount of the advance not recovered.

8. Member States shall determine any further conditions governing the grant of the advances, and in particular the final date for lodging applications. A producer may not lodge an application for an advance once he has begun making deliveries.` 11. Article 15 is replaced by the following:

'Article 15 Commission Regulation (EEC) No 2220/85 (*) shall apply in the case of the securities to be lodged in accordance with Articles 13 and 14 of this Regulation, unless this Regulation provides otherwise.

` 12. Article 16 is replaced by the following:

'Article 16 1. Premiums shall be reimbursed or advanced by the Member State in which the tobacco was produced.

2. Where tobacco is processed in a Member State other than that in which it was produced, the processing Member State shall, after carrying out the necessary checks, provide the producer Member State with all the information needed to enable it to pay the premium or release the security.` 13. Article 17 is replaced by the following:

'Article 17 1. In so far as provisions like those contained herein have not yet been implemented at national level, Member States shall apply the provisions on checks and penalties laid down in paragraphs 2 to 8.

2. Member States shall establish a system of checks comprising the following:

(a) field checks;

(b) checks on deliveries of leaf tobacco;

(c) checks when the tobacco is first processed and packaged.

3. In the case of the field checks, Member States shall carry out unannounced, on-the-spot checks to verify the information given in the cultivation contracts or declarations and in particular the area and group of varieties cultivated.

For each processing undertaking, the checks shall cover at least 5 % of the individual growers covered by the contracts or declarations registered by group of varieties; the sample to be checked must be representative of the various amounts covered in the contracts or declarations.

If the checks reveal that the individual producer is not cultivating tobacco, he shall lose all entitlement to the premium for the current harvest and to a production quota for the following harvest.

If the checks show that the area actually cultivated falls short of the area declared by more than 10 %, the premium to be paid to the producer in question during the current harvest and any quota to be allocated to that same producer in the subsequent harvest shall be reduced by double the discrepancy found.

The penalties laid down in the third and fourth subparagraphs shall not apply to a producer or processor who notifies the competent bodies in writing of these discrepancies before the checks are undertaken.

If the checks cannot be carried out for reasons attributable to the producer the area shall, except in cases of force majeure, be considered uncultivated.

4. Each delivery must be authorized by the competent control body, which must have been informed in advance so that it could determine the date of delivery.

Each delivery must be checked by the competent control body. During a check, the competent control body must verify that it has authorized the delivery in advance.

If delivery is being made to an approved purchasing centre as provided for in the second subparagraph of Article 9 (1), unprocessed tobacco, once checked, may leave the purchasing centre solely for the purpose of being transferred to the processing plant. After checking, the tobacco must be collected in numbered consignments, the weight and moisture content of which are well defined. The transfer of the consignments to the processing plant must be authorized in writing by the competent control body, which must have been informed in advance so that it could accurately identify the means of transport used, the route, the time of departure and arrival and the tobacco consignments transported.

When the tobacco reaches the processing plant, the competent control body shall verify that the consignments checked in the purchasing centres are those actually delivered, most notably by weighing them.

The competent control body shall lay down any particular conditions it deems necessary for checking the operations.

If the competent control body finds that the unprocessed tobacco has not been delivered to the places provided for in the second subparagraph of Article 9 (1) or that the transporter conveying the tobacco consignments checked at the purchasing centre to the processing plant does not have authorization to effect transport as provided for in the second subparagraph of this paragraph, the processing undertaking which received the tobacco concerned must pay the Member State a sum of money equal to the premiums corresponding to the quantity of tobacco in question. This amount shall be booked to the European Agricultural Guidance and Guarantee Fund (EAGGF).

5. The checks carried out at the first processing and market preparation stage must enable verification of the quantities of leaf tobacco in each undertaking either produced in the Community, or originating in or coming from third countries, and placed under supervision and they must also ensure that the tobacco subjected to this supervision is not released therefrom before the first processing and market preparation operations are completed, and that no tobacco is submitted more than once for checking.

The checks shall include:

(a) placing the raw tobacco under supervision when it enters the place where processing will occur;

(b) an unannounced check for the processing undertaking's stocks;

(c) a check when the tobacco leaves the place in which it was under supervision, having undergone first processing and market preparation;

(d) all additional control measures that Member States deem necessary, particularly to ensure that no premium is paid for raw tobacco originating in or coming from third countries.

6. The checks referred to in paragraph 5 must be undertaken in the same place where the leaf tobacco is processed. Within a time limit to be determined by the Member State, the undertakings involved shall notify their competent bodies, in writing, of the places where processing will take place. Member States may stipulate, to this end, the information to be provided by the first processing undertakings to the competent bodies.

7. The processing undertakings shall allow the competent bodies access to the premises where the tobacco is processed and stored, and to the necessary data and documents for implementing this Regulation.

8. Member States shall provide mutual assistance where leaf tobacco is traded between them.` 14. The following paragraph is added to Article 17a:

'For the purposes of this Regulation, "delivery" means any operation which, in the course of the same day, involves a producer or a producer group handing over to a processing undertaking raw tobacco produced by him or by the members of the group, in his/its name and on his/its own account, under a cultivation contract concluded by him or it, or in his or its name.` 15. Annexes I and III are replaced by Annexes I and II to this Regulation.

Article 2

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities.

It shall apply from the 1995 harvest, except for points 1 (b) and 6 of Article 1, which shall apply from the 1994 harvest.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 12 May 1995.

For the Commission Franz FISCHLER Member of the Commission

(*) OJ No L 108, 13. 5. 1995, p. 5.

(1) OJ No L 215, 30. 7. 1992, p. 70.

(2) OJ No L 73, 1. 4. 1995, p. 13.

(3) OJ No L 351, 2. 12. 1992, p. 17.

(4) OJ No L 198, 30. 7. 1994, p. 91.

(5) OJ No L 94, 28. 4. 1970, p. 1.

(6) OJ No L 91, 7. 4. 1992, p. 1.

(7) See page 5 of this Official Journal.

(*) OJ No L 205, 3. 8. 1985, p. 5.

ANNEX I

'ANNEX I Recognized production areas >TABLE>

ANNEX II

'ANNEX III Moisture content referred to in Article 8 >TABLE>