Article 1 1. The common organisation of the markets in flax and hemp grown for fibre shall comprise arrangements governing the internal market and trade with third countries. It shall apply to the following products:

NC code	Description
5301	Flax, raw or processed but not spun; flax tow and waste (including yarn waste and garnetted stock)
5302	True hemp (Cannabis sativa L.) raw or processed but not spun; tow and waste of true hemp (including yarn waste and garnetted stock)

2. For the purposes of this Regulation: (a)"farmer" shall mean a farmer as defined in Article 2(a) of Council Regulation (EC) No 1782/2003 + of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmersOJ L 270, 21.10.2003, p. 1.; (b)"authorised primary processor" shall mean a natural or legal person or a group of natural or legal persons, irrespective of its legal status under national law, or that of its members, that has been authorised by the competent authority of the Member State in the territory of which are located his or its facilities for producing flax or hemp fibre. 3. This Regulation shall apply without prejudice to the measures laid down in Article 52 of Regulation (EC) No 1782/2003 +.

TITLE I Internal market

Article 2 1. Aid for processing the straw of flax and hemp grown for fibre shall be introduced. The aid shall be granted to authorised primary processors on the basis of the quantity of fibre actually obtained from straw for which a sale/purchase contract has been concluded with a farmer. However: (a)in cases where the authorised primary processor and the farmer are one and the same person, the sale/purchase contract shall be replaced by a commitment by the party concerned to carry out the processing himself; (b)in cases where the farmer retains ownership of the straw which he is having processed under contract by an authorised primary processor and proves that he has placed the fibres obtained on the market, the aid shall be granted to the farmer. 2. No aid shall be paid to authorised primary processors or farmers who are found to have artificially created the conditions for receiving the aid, thereby enjoying an advantage that does not conform to the objectives of this scheme. 3. The amount of processing aid per tonne of fibre shall be fixed as follows: (a)for long flax fibre: EUR 100 for the 2001/2002 marketing year, EUR 160 for the 2002/2003 to 2007/2008 marketing years, EUR 200 from the 2008/2009 marketing year onwards, (b)for short flax fibre and hemp fibre containing not more than 7,5 % impurities and shives: EUR 90 for the 2001/2002 to 2007/2008 marketing years. However, for the 2001/2002 to 2007/2008 marketing years, the Member State may, with reference to traditional outlets, also decide to grant aid: for short flax fibre containing a percentage of impurities and shives of between 7,5 % and 15 %, for hemp fibre containing a percentage of impurities and shives of between 7,5 % and 25 %.In the cases provided for in the second subparagraph, the Member State shall grant the aid in respect of a quantity which amounts to not more than the quantity produced, on the basis of 7,5 % of impurities and shives. 4. The quantities of fibre eligible for aid shall be limited on the basis of the areas which were the subject of one of the contracts or commitments referred to in paragraph 1. The limits referred to in the first subparagraph shall be fixed by the Member States so as to comply with the national guaranteed quantities referred to in Article 3. 5. At the request of authorised primary processors, an advance shall be paid on the aid on the basis of the quantity of fibre obtained.

Article 3 1. A maximum guaranteed quantity of 80878 tonnes per marketing year shall be established for long flax fibre and apportioned among all the Member States as national guaranteed quantities. That quantity shall be apportioned as follows: 13800 tonnes for Belgium, 13 tonnes for Bulgaria, 1923 tonnes for the Czech Republic, 300 tonnes for Germany, 30 tonnes for Estonia, 50 tonnes for Spain, 55800 tonnes for France, 360 tonnes for Latvia, 2263 tonnes for Lithuania, 4800 tonnes for the Netherlands, 150 tonnes for Austria, 924 tonnes for Poland, 50 tonnes for Portugal, 42 tonnes for Romania, 73 tonnes for Slovakia, 200 tonnes for Finland, 50 tonnes for Sweden, 50 tonnes for the United Kingdom. 2. A maximum guaranteed quantity of 147265 tonnes per marketing year shall be established for short flax fibre and hemp fibre in respect of which aid may be granted. That quantity shall be apportioned in the form of: (a)national guaranteed quantities for the following Member States: 10350 tonnes for Belgium, 48 tonnes for Bulgaria, 2866 tonnes for the Czech Republic, 12800 tonnes for Germany, 42 tonnes for Estonia, 20000 tonnes for Spain, 61350 tonnes for France, 1313 tonnes for Latvia, 3463 tonnes for Lithuania, 2061 tonnes for Hungary, 5550 tonnes for the Netherlands, 2500 tonnes for Austria, 462 tonnes for Poland, 1750 tonnes for Portugal, 921 tonnes for Romania, 189 tonnes for Slovakia, 2250 tonnes for Finland, 2250 tonnes for Sweden, 12100 tonnes for the United Kingdom.However, the national guaranteed quantity fixed for Hungary concerns hemp fibre only. (b)5000 tonnes to be apportioned in national guaranteed quantities for each marketing year among Denmark, Greece, Ireland, Italy and Luxembourg. Such apportionment shall be determined on the basis of the areas which were the subject of one of the contracts or commitments referred to in Article 2(1). The national guaranteed quantities for short flax fibre and hemp fibre shall cease to apply from the 2008/2009 marketing year. 3. In cases where the fibre obtained in one Member State originates from straw produced in another Member State, the quantities of fibre concerned shall be offset against the national guaranteed quantity of the Member State in which the straw was harvested. The aid shall be paid by the Member State against whose national guaranteed quantity such an offset is made. 4. Member States which wish to do so may transfer between themselves, on a one-off basis and before 30 June 2001, part of their national guaranteed quantities referred to in paragraphs 1 or 2, adjusted if necessary in accordance with paragraph 5. In such cases, they shall inform the Commission, which will notify the other Member States accordingly 5. Each Member State may transfer part of its national guaranteed quantity as referred to in paragraph 1 to its national guaranteed quantity as referred to in paragraph 2 and vice versa. Transfers as referred to in the first subparagraph shall be carried out on the basis of an equivalence of one tonne of long flax fibre to 2,2 tonnes of short flax fibre and hemp fibre. Processing aid shall be granted only in respect of the quantities referred to in paragraphs 1 and 2, respectively, adjusted in accordance with the first two subparagraphs of this paragraph and paragraph 4.

Article 4 Until the 2007/2008 marketing year, additional aid shall be granted to the authorised primary processor in respect of areas under flax in zones I and II as described in the Annex and the straw production of which has been the subject of: a sale/purchase contract or a commitment as referred to in Article 2(1) and aid for processing into long fibre. The amount of additional aid shall be EUR 120 per hectare in zone I and EUR 50 per hectare in zone II.

TITLE II Trade with third countries

Article 5 1. This Article shall apply without prejudice to more restrictive provisions adopted by Member States in compliance with the Treaty and the obligations arising from the World Trade Organisation agreements on agriculture. 2. All imports of hemp from third countries shall be subject to the issue of a licence provided the following conditions are met: raw true hemp falling within CN code 53021000 must meet the conditions laid down in Article 52 of Regulation (EC) No 1782/2003, seeds of varieties of hemp falling within CN code 12079920 for sowing must be accompanied by proof that the tetrahydrocannabinol level does not exceed that fixed in accordance with Article 52 of Regulation (EC) No 1782/2003 , hemp seeds other than for sowing, falling within CN code 12079991 may be imported only by importers authorised by the Member State in order to ensure that such seeds are not intended for sowing. Imports into the Community of the products specified in the first and second indents shall be subject to checks to determine whether the terms of this Article have been complied with.

Article 6 Save as otherwise provided in this Regulation or in provisions adopted pursuant thereto, the following shall be prohibited in trade with third countries: the levying of any charge having equivalent effect to a customs duty, the application of any quantitative restriction or measure having equivalent effect.

Article 7 1. If, by reason of imports or exports, the Community market in one or more of the products listed in Article 1(1) is affected by, or is threatened with, serious disturbance likely to jeopardise the achievement of the objectives set out in Article 33 of the Treaty, appropriate measures may be applied in trade with third countries until such disturbance or threat thereof has ceased. The Council, acting by a qualified majority, on a proposal from the Commission, shall adopt general rules for the application of this paragraph and shall define the circumstances and limits within which Member States may adopt protective measures. 2. If the situation mentioned in paragraph 1 arises, the Commission shall, at the request of a Member State or on its own initiative, decide upon the necessary measures, which shall be communicated to the Member States and shall be immediately applicable. If the Commission receives a request from a Member State, it shall take a decision thereon within three working days following receipt of the request. 3. The Commission's decision may be referred to the Council by any Member State within three working days of the day on which it was notified. The Council shall meet without delay. It may, acting by a qualified majority, amend or repeal the measure in question within one month following the day on which it was referred to the Council. 4. This Article shall be applied having regard to the obligations arising from agreements concluded in accordance with Article 300(2) of the Treaty.

TITLE III General provisions

Article 8 Save as otherwise provided in this Regulation, Articles 87, 88 and 89 of the Treaty shall apply to the production of, and trade in, the products listed in Article 1(1) of this Regulation.

Article 9 The measures necessary for the implementation of this Regulation relating to the matters referred to below shall be adopted in accordance with the management procedure referred to in Article 10(2). These shall include, in particular: the conditions for authorisation of primary processors, the conditions to be met by approved primary processors as regards the sale/purchase contracts and commitments referred to in Article 2(1), the requirements to be complied with by farmers in the case referred to in Article 2(1)(b), the criteria to be met, firstly, by long flax fibre and, secondly, by short flax fibre and hemp fibre, the methods for calculating the quantities eligible for aid in the cases referred to in the second subparagraph of Article 2(3)(b), the conditions for the grant of aid and the advance payment, and in particular proof of the processing of straw, the conditions to be met for fixing the limits referred to in Article 2(4), the apportionment of the quantity of 5000 tonnes referred to in Article 3(2)(b), the conditions for transfer between the national guaranteed quantities referred to in Article 3(5), the conditions for the granting of additional aid referred to in Article 4. Such measures may also concern all the necessary inspection measures to protect the Community's financial interests against fraud and other irregularities.

Article 10 1. The Commission shall be assisted by the Management Committee for Natural Fibres (hereinafter called the "Committee"). 2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply. The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at one month. 3. The Committee may examine any question raised by its Chairman, either on the tatter's initiative or at the request of the representative of a Member State. 4. The Committee shall adopt its rules of procedure.

Article 11 Regulation (EC) No 1258/1999 and the provisions adopted in implementation thereof shall apply to the products listed in Article 1 (1) of this Regulation.

TITLE IV Transitional and final provisions

Article 12 1. For the 2000/2001 marketing year, the amounts of aid for flax and hemp produced in the Community shall be fixed not later than 31 October 2000 in accordance with the procedure laid down in Article 10(2). These amounts shall be determined by applying to the amounts in force for the 1999/2000 marketing year a coefficient equal to the ratio between average expenditure per hectare corresponding to EUR 88 million for all areas resulting from crop declarations, and average expenditure of EUR 721 per hectare estimated for the 1999/2000 marketing year. However, the amounts of aid for the 2000/2001 marketing year may not exceed those fixed for the 1999/2000 marketing year. 2. For the 2000/2001 marketing year, the amount to be withheld from the aid for flax for the financing of the measures promoting the use of flax fibre shall be fixed at EUR 0 per hectare. 3. The 2000/2001 marketing year shall end on 30 June 2001.

Article 13 Regulations (EEC) No 1308/70, (EEC) No 619/71, (EEC) No 620/71, (EEC) No 1172/71, (EEC) No 1430/82 and (EEC) No 2059/84 shall be repealed on 1 July 2001.

Article 14 The Commission shall adopt, in accordance with the procedure referred to in Article 10(2): the measures required to facilitate the transition from the arrangements laid down in Regulations (EEC) No 1308/70 and (EEC) No 619/71 to those established by this Regulation, the measures required to resolve specific practical problems. Such measures, if duly justified, may derogate from certain parts of this Regulation.

Article 15 1. Not later than 31 December 2003, the Commission shall submit a report to the European Parliament and the Council, if necessary accompanied by proposals, on production trends in the various Member States and the impact of the reform of the common organisation of the market on the outlets and economic viability of the sector. It shall also examine the maximum content of impurities and shives applicable to short flax fibre and hemp fibre. Should the need arise, the report shall serve as a basis for a re-apportionment of, and possible increase in, the national guaranteed quantities. In particular, the Commission shall take account of the level of production, processing capacity and outlets on the market. 2. In 2005 the Commission shall submit a report to the European Parliament and the Council on processing aid, if necessary accompanied by proposals. The report shall include an assessment of the impact of processing aid, in particular on the position of producers as regards areas sown and prices paid to them, market trends for textile fibres and the development of new products, the processing industry. The report shall indicate, in the light of alternative production, whether the industry is able to function with the guidelines laid down. It shall also examine the possibility of putting on to a permanent footing, beyond the 2005/2006 marketing year, processing aid per tonne of short flax fibre and hemp fibre and additional aid per hectare of flax, as referred to in Article 4. 3. The Commission shall submit a report to the European Parliament and the Council, if necessary accompanied by proposals, in sufficient time to allow the implementation of the proposed measures during the 2008/2009 marketing year. The report shall assess the impact of processing aid on producers, the processing industry and the market for textile fibres. It shall examine the possibility of extending processing aid for short flax fibre and hemp fibre and additional aid beyond the 2007/2008 marketing year, as well as the possibility of integrating this aid scheme in the general framework of support for farmers under the common agricultural policy laid down by Regulation (EC) No 1782/2003.

Article 16 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. Articles 1 to 11 shall apply from the 2001/2002 marketing year onwards. Regulations (EEC) No 1308/70 and (EEC) No 619/71 shall continue to be applied in relation to the 1998/1999, 1999/2000 and 2000/2001 marketing years.

This Regulation shall be binding in its entirety and directly applicable in all Member States. ANNEX ZONES ELIGIBLE FOR THE AID REFERRED TO IN ARTICLE 4 ZONE I 1.The territory of the Netherlands, 2.The following Belgian communes: Assenede, Beveren-Waas, Blankenberge, Bredene, Brugge, Damme, De Haan, De Panne, Diksmuide (except Vladslo and Woumen), Gistel, Jabbeke, Knokke-Heist, Koksijde, Lo-Reninge, Middelkerke, Nieuwport, Oostende, Oudenburg, Sint-Gillis-Waas (Meerdonk only), Sint-Laureins, Veurne and Zuienkerke. ZONE II 1.Areas of Belgium other than those included in Zone I. 2.The following areas of France: the department of Nord, the districts of Béthune, Lens, Calais, Saint-Omer and the canton of Marquise in the department of Pas-de-Calais, the districts of Saint-Quentin and Vervins in the department of Aisne, the district of Charleville-Mézières in the department of Ardennes.

Council Regulation (EC) No 1673/2000 of 27 July 2000 on the common organisation of the markets in flax and hemp grown for fibre