THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 2201/96 of 28 October 1996 on the common organisation of the markets in processed fruit and vegetable products ( 1 ), as last amended by Regulation (EC) No 2199/97 ( 2 ) and in particular Article 7(5) thereof,

Having regard to Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables ( 3 ), as amended by Regulation (EC) No 1257/1999 ( 4 ), and in particular Article 48 thereof,

(1)

Whereas Article 7 of Regulation (EC) No 2201/96 introduced an aid scheme for specialised areas for growing certain varieties of grapes for drying and specified that the aid was to be paid when the grapes had been harvested and dried for processing; whereas, therefore, detailed rules for the application of the said scheme should be laid down;

(2)

Whereas under Article 7(3) of Regulation (EEC) No 2201/96 the maximum guaranteed area under grapes cultivated and harvested in the Community for drying for processing which, if exceeded, will entail a reduction in the aid for the following marketing year should be determined; whereas the said maximum area takes account of the average area cultivated in the Community in the 1987/88, 1988/89 and 1989/90 marketing years;

(3)

Whereas the purpose of the scheme is to support and structure the dried grapes industry and ensure the necessary degree of specialisation to that end; whereas, therefore, only those areas producing fresh grapes for the production of dried grapes are eligible for the aid and whereas the aid is paid when the entire production of fresh grapes obtained from the areas for which aid is applied for has been dried for the production of dried grapes;

(4)

Whereas the diversion of any of the fresh grapes, before drying, to other destinations must be excluded; whereas the destination of the product can be assured by means of a contract between the producer and the processor concluded before the fresh grapes are harvested for whatever destination and relating to the areas for which the aid will be applied for; whereas the administration and control of this system can be effective if a computerised data base is established and the producer organisations are involved in the conclusion and management of contracts for their members;

(5)

Whereas, moreover, in order to attain the requisite degree of specialisation and prevent abuses, the aid must be granted to areas which have been adequately tended; whereas fixing a minimum yield to be observed and taking into account the characteristics of each variety while, nonetheless, making allowance for exceptions linked to exceptional conditions that may influence yields regardless of the care taken by the producer should ensure that this requirement is met;

(6)

Whereas, in order to adapt the quality of supply to demand, payment of the aid should be made conditional on obtaining a product meeting minimum quality characteristics; whereas, as regards the processed product, for the sake of simplification, the minimum characteristics and tolerances allowed should be those contained in the UN/ECE standard recommended by the Working Party on standardisation of perishable produce and quality development of the United Nations Economic Commission for Europe; whereas, to ensure that a quality product is obtained, to be registered in the database, producers and processors should be required to have an adequate infrastructure enabling them to obtain, respectively, a raw material and a finished product of the desired quality; whereas, to preserve the quality of the raw material and check its destination, the producer should be required to deliver the unprocessed dried grapes to the processor within a certain time limit;

(7)

Whereas it should be laid down that Member States' checks are to cover a percentage of the applications for registration in the database, of the information contained in contracts and of aid applications and that irregularities are to be penalised; whereas, for the system of checks to be effective it must apply, on the one hand, to the areas cultivated and, on the other, to the quantities harvested and delivered under contracts;

(8)	Whereas, as regards establishing the computerised database, a time limit of three years should be allowed; whereas to enable producers and processors to adapt to the new requirements, certain transitional measures should be put in place;

(9)

Whereas the provisions of this Regulation replace, with adjustments deemed appropriate in the light of experience gained, those of Commission Regulations (EEC) No 2911/90 of 9 October 1990 laying down detailed rules of application for aid for the production of certain varieties of grapes for drying ( 5 ), as last amended by Regulation (EC) No 2614/95 ( 6 ), and (EEC) No 2347/84 of 31 July 1984 on dried grapes eligible for production aid ( 7 ), as last amended by Regulation (EC) No 2550/98 ( 8 ); whereas, therefore, the said Regulations should be repealed;

(10)	Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Processed Fruit and Vegetable Products,

HAS ADOPTED THIS REGULATION:

(a) ‘specialised plots’ means areas planted with vines of the sultana, black Corinth (korinthiaki) and muscatel varieties, the total output of fresh grapes harvested being dried for processing into products falling within CN code ex08 06 20;

(b) ‘producer organisations’ means producer organisations as referred to in Articles 11 and 13 of Regulation (EC) No 2200/96 or groups that have been granted preliminary recognition under Article 14 of that Regulation; such organisations take the place of their members for all operations relating to the administration of the system of aid for the cultivation of dried grapes;

(c) ‘individual producers’ means producers who are not members of a producer organisation for the purpose of cultivating grapes for the production of dried grapes;

(d) ‘processor’ means any processing undertaking which manufactures products falling within the CN code given in (a) above, with appropriate facilities for storing and processing the dried grapes on the holding (unprocessed dried grapes);

(e) ‘contracts’ means processing contracts which are binding on individual producers or producer organisations and processors.

(a) which have been entered in the database;

(b) which have been entirely cultivated and harvested and the dried production of which (unprocessed dried grapes) has been delivered to a processor under contract;

(c) which produce a minimum yield equivalent to at least the following quantities:

(d) the production of fresh grapes and unprocessed dried grapes from which has been sorted in accordance with the national provisions referred to in paragraph 4;

(e) which produce unprocessed dried grapes meeting the minimum requirements set out in Annex I.

— where vines of the sultana and muscatel varieties have been infected with phylloxera, the minimum yield required shall be equivalent to 1 900 kilograms of unprocessed dried grapes during the five marketing years following the entry into effect of this Regulation;

— where vines of the muscatel variety have been infected with phylloxera, the minimum yield required shall be equivalent to 300 kilograms of unprocessed dried grapes during the five marketing years following the entry into effect of this Regulation,

— in the case of vineyards replanted less than five years ago, Member States may establish a lower minimum yield and shall notify the Commission thereof,

— in the case of plots damaged by natural disasters, the Member States shall reduce the quantities referred to in paragraph 2(c) by the percentage of loss certified by the insurance agencies; for damage not insured, the Member States shall determine the percentage reduction in minimum yield for the affected regions and shall notify the Commission thereof,

— where grapes are grown organically in accordance with Community rules, the Member States may set a lower minimum yield and shall notify the Commission thereof.

(a) in the case of individual producers and producer organisations:

(b) in the case of processors:

— introduce additional requirements in order to make the checks easier,

— restrict application of paragraph 2 to new producers and to those who have changes to declare to their most recent notification under the second subparagraph of paragraph 2.

— the database numbers of the contracting parties,

— particulars of the areas to which they relate, broken down by plot and by variety, using the same references as those used for entry in the database; the area and its breakdown by plot may not differ from or exceed the areas and plots notified under the first indent of Article 4(2)(a); they may be smaller,

— an estimate of the quantity of dried product (unprocessed dried grapes) that will be obtained, indicating the foreseeable average yield of the plots under the same variety or, in the case of the sultana and muscatel varieties, the same category,

— the price to be paid, broken down where applicable by variety and/or quality; an undertaking to pay the price by bank or postal transfer,

— a requirement that the individual producer or producer organisation is to deliver to the processor, in stackable plastic boxes, immediately following drying, the total harvested quantity of dried crop obtained on the areas covered by the contract, less the quantities eliminated during sorting; however, contracts drawn up with producer organisations may stipulate that the dried product is to be stored by the producer organisation in stackable plastic boxes and that deliveries to the processor shall be spread over the marketing year. The producer organisation shall undertake to ensure satisfactory storage conditions for preserving the quality of the dried product,

— an obligation on the processor to take over and store, in stackable plastic boxes under appropriate conditions, all deliveries of unprocessed dried grapes which meet the minimum quality requirements set out in Annex I;

— the compensation provided for if either contracting party fails to fulfil its contractual obligations, particularly as regards payment of the price and the obligation to deliver and take delivery of the entire quantity obtained from the plots covered by the contract.

— the date and time of commencement of unloading,

— the identification number of the contract covering the batch,

— the gross and net weight of the batch,

— compliance of the batch with the minimum requirements set.

— the database number(s) and the specialised areas) to which the application relates, using the same references as those referred to in the first indent of Article 4(2)(a),

— the identification number(s) of the corresponding contract(s) or a copy or copies thereof,

— the identification number(s) of the certificate(s) of delivery or a copy or copies thereof,

— the quantity of unprocessed dried grapes produced and the yield per hectare,

— a declaration that the entire quantity of grapes grown on the areas for which aid is requested has been dried and delivered to the processor(s), less quantities eliminated during sorting.

1.1. administrative checks on 100 % of communications, contracts and aid applications. Such checks shall relate to both the identification of the applicant and the characteristics of the plots. They shall consist of computerised cross-checks between wine-sector declarations and those of other sectors qualifying for area aid and declarations from previous years by the same applicant;

1.2. annual on-the spot checks on:

(a) in the case of area discrepancies, paragraph 4 below shall apply by analogy;

(b) in the case of significant discrepancies in the available infrastructure, the names of individual producers or producer organisations shall be removed from the database for the duration of the marketing year concerned; they shall be reinstated not earlier than the following marketing year on condition that they provide evidence of having put in place the appropriate facilities and/or equipment.

(a) in the case of significant discrepancies in the available infrastructure, the financial penalty shall be equivalent to the amount of aid corresponding to the quantities processed during the marketing year concerned; in addition, the names of the processors shall be removed from the database for the marketing year in question; they shall be reinstated not earlier than the following marketing year on condition that they provide evidence of having put in place the appropriate facilities;

(b) in the case of failure to fulfil commitments, in particular concerning the quality of the finished product, including the product eliminated by sorting and/or the keeping of detailed accounts, the penalty shall be equivalent to the amount of aid corresponding to the quantities processed during the marketing year concerned.

(a) where an individual producer or producer organisation fails to comply, in particular, with the obligation to deliver laid down in the fourth indent of Article 5(1), the aid shall not be paid or, if it has been paid already, shall be recovered in accordance with Article 14 of Commission Regulation (EEC) No 3887/92 ( 12 );

(b) where processors have not agreed to take over the unprocessed dried grapes delivered under contract, a financial penalty shall be imposed equivalent to the aid amount corresponding to the areas concerned.

(a) where the area actually determined is found to be greater than the area for which aid is requested, the aid amount shall be calculated on the basis of the area shown in the aid application.

If, on the other hand, the area actually determined during a check is found to be smaller than that for which aid is requested, the aid amount shall be calculated on the basis of the area actually determined minus, except in cases of force majeure, twice the excess established where this is greater than 3 % or 0.2 hectares but not more than 20 % of the area determined. Producer organisations shall reimburse the undue payment plus interest calculated in accordance with paragraph 3(a).

Where the excess found exceeds 20 % of the area determined, no per hectare aid shall be granted or, where aid has been paid already, it shall be recovered in accordance with Article 14 of Regulation (EEC) No 3887/92.

However, in the case of a false declaration made deliberately or through serious negligence:

The above reductions, shall not be applied if, in determining the area, individual producers or producer organisations can show that they have correctly taken as a basis the information accepted by the competent authority.

For the purposes of this paragraph, ‘area determined’ means that for which all the prescribed conditions have been met;

(b) if it is found that the minimum yield has not been complied with, the names of the individual producer or producer organisation and, where applicable, the processor involved shall be removed from the database for the duration of the marketing year in question and the following marketing year;

(c) if it is found that the yield obtained, while greater than the minimum yield, is nevertheless smaller than the average yield estimated by the national authority for the geographical area concerned, the check shall be extended to cover quantities sold by the individual producer or producer organisation on the market in fresh grapes or for winemaking. If this check and the check on the state of the vineyard reveal that all the quantities harvested on the plots for which aid is requested have not been dried, the aid shall be reduced in proportion to the percentage of the quantities deflected. No aid shall be paid if the quantities deflected account for more than 30 % of those obtained. Where there is no proof of the quantities actually produced on the plots concerned, the deflected quantities shall be equal to the difference between the quantities given in the aid application and the quantities calculated by applying the average yield established by the authorities by geographical area and by variety.

— the last subparagraph of Article 6(3) in the case of significant irregularities found in a region or part of a region,

— the first subparagraph of Article 6(7) for determining the area of parcels,

— the first subparagraph of Article 8(1) in the case of late submission of the application for registration in the database and/or the aid application,

— Article 11 for cases of force majeure and cases where the penalties applicable are not imposed,

— Article 12 as regards the report on the inspection visit;

— Article 13 as regards refusal of the farmer to receive an inspection visit,

— Article 14 as regards the rules for reimbursement of undue payments,

— Article 15.

(a) before 1 October, on the basis of the information contained in the database and contracts:

(b) before 31 January:

(c) before 1 September:

(a) the Member States may decide that in the 1999/2000 marketing year, forms of producer association existing before the entry into force of this Regulation take the place of their members for all operations relating to the administration of the system of aid for the cultivation of dried grapes if they submit an application for preliminary recognition in accordance with Article 14 of Regulation (EC) No 2200/96 before 15 September 1999;

(b) applications for registration in the database as referred to in Article 4( l ) shall be admissible if the applicants, whether individual producers, producer organisations or processors, undertake to fulfil the conditions for their registration in the database, and in particular those concerning conditions of drying, storage and processing before the start of the 2001/02 marketing year;

(c) the contracts referred to in Article 5 shall be signed between producers or producer organisations and processors who have lodged an application for registration in the database before the contracts are concluded; contracts for the 1999/2000, 2000/01 and 2001/02 marketing years shall be concluded by 1 November 1999, 1 September 2000 and 30 September 2001 respectively;

(d) the obligation to deliver and store unprocessed dried grapes in stackable plastic boxes shall apply fully from the 2002/03 marketing year.

However, for individual producers, producer organisations and processors who have benefited from the measures provided for in Council Regulation (EC) No 399/94 ( 13 ) this obligation shall apply to:

(e) The time limit for delivery referred to in Article 6(l) for the 1999/2000 marketing year shall be 31 December 1999. Until the start of the 2001/02 marketing year processors may entrust the storage of the quantities they are unable to store themselves to individual producers or producer organisations;

(f) The provisions of the second subparagraph of Article 9(4)(a) and of Article 9(4)(c) shall apply from the 2002/03 marketing year.

2.1. The dried grapes must be:

2.2. The dried grapes must also:

2.3. The condition of the dried grapes must be such as to enable them