Explanatory Memorandum to COM(2005)698 - Protection of geographical indications and designations of origin for agricultural products and foodstuffs

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1. As of 24 July 1993 Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs instituted a voluntary Community system of protection on Community territory for geographical indications and designations of origin. This voluntary system gives interested producers the possibility of protecting certain names by registering them. The protection provided by the system consists in reserving the use of these designations of origin and geographical indications for agricultural products and foodstuffs which have been produced and/or processed in the regions or places designated by these names, subject to specific conditions concerning their production/processing/preparation laid down by the producers.

2. The desire of operators to protect agricultural products and foodstuffs identifiable by their geographic origin had led some Member States to develop “registered designations of origin”. The objective of the Community scheme was to harmonise the disparate national approaches to food products other than wines and spirits — covered by other Community rules — thus assuring operators of fair competition, strong and effective protection against misuse and imitation of the names concerned and ultimately giving greater credibility to the products qualifying for a designation of origin or a geographical indication.

3. Since 1993, more than 700 names, designating inter alia over 150 cheeses, 160 meat and meat-based products, 150 fresh or processed fruits or vegetables and 80 types of olive oil, have been registered in this context. The Commission has also received over 300 further applications for the registration of names and/or amendments to specifications from Member States and third countries. These facts show that this voluntary scheme has been clearly welcomed in the Community. The definition of a common Community symbol has also helped consumers to start recognising the Community protection scheme concerned.

4. The procedure for registering new names originating in the Community comprises two stages. The first is carried out at national level by the authorities of the Member State where the geographical area concerned is located; the second, which is conducted at Community level by the Commission, involves an examination of the application in order to check that it meets the conditions laid down in the Regulation and an objection procedure under which, following publication of the main details of the application, any operator may object to the registration on the basis of specific criteria. Experience acquired in performing this procedure shows, on the one hand, that it can lead to an overlap of the work carried out by the Member States and the Commission; on the other hand, those two stages can entail the complex examination of sometimes very voluminous files, the structure and content of which of course vary widely from one application to another. Moreover, those two stages can entail the complex examination of sometimes very voluminous files, the structure and content of which of course vary widely from one application to another. In these circumstances, the procedures should be streamlined and the responsibilities of the different authorities involved in examining applications should be clarified in order to enhance the transparency of applications and the equality of treatment among applicants.

5. In addition, following the lodging of complaints WT/DS174 and WT/DS290 with the World Trade Organisation (WTO) by the United States and Australia respectively, the WTO Dispute Settlement Body (DSB) adopted on 20 April 2005 the Panel Reports on the European Communities - Protection of trademarks and geographical indications for agricultural products and foodstuffs. Those Reports conclude that Regulation (EEC) No 2081/92 is incompatible with Article 3:1 of the TRIPS Agreement and with Article III:4 of GATT 1947. The DSB based this finding on the reciprocity and equivalence conditions set out in Articles 12 et seq . of Regulation (EEC) No 2081/92, on the fact that the procedures for requesting registration and for objecting which apply to third countries require the involvement (examination and transmission) of third country governments, and on the existence of instructions requiring third-country governments to participate in checks. It is necessary to bring that Regulation into line with the TRIPS Agreement and GATT 1994 by the deadlines agreed with the other parties concerned.

6. A first amendment priority lies in defining more clearly the key information to be officially published prior to registration in order to permit, on the one hand, any operator to exercise his or her right of objection and, on the other, the authorities responsible for checking to guarantee ex officio protection for the names registered in each Member State. This information, which is contained in a single document, covers inter alia the actual name, a description of the product for verification, labelling and presentation purposes (including, in this respect, any packaging restrictions outside the area of origin and the justification for such restrictions), and proof of the link between the product and its geographical origin. A standardised, comprehensive presentation of those elements will make it possible to ensure greater homogeneity and equal treatment for applications, while guaranteeing that all the elements which are to be made fully transparent to operators located outside the defined area are mentioned.

7. A second amendment priority lies in defining more clearly the distribution of responsibilities between the Member States and the Commission in this area. For any application covering a specific Community area, the Member State is in fact obliged to ensure that the application meets the conditions of the Regulation. The existence of a subsequent examination by the Commission could not exempt the Member States from fulfilling their obligations in this connection. It should be specified that this responsibility includes the need to make public any plan by a Member State to transmit to the Commission a request which satisfies the conditions of the Regulation, so that any operators established on the territory of that State may exercise a right of objection which, according to the case law on the subject (order of 26 October 2000 delivered by the Court in Case C-447/98 Molkerei Grossbraunshain and Bene Nahrungsmittel v Commission ), they may not exercise at Community level.

8. The Commission's responsibilities consist in verifying by appropriate means that the conditions of this Regulation are satisfied before deciding whether or not to publish the elements mentioned above and, following the objection procedure, deciding whether or not to take a decision on whether to register or reject the application. If the information sent to the Commission within the “single document” appears to be insufficient, the Commission is entitled to ask the Member State to communicate any relevant complementary information, including a copy of the specifications.

9. Names corresponding to geographical areas in third countries have access to the Community scheme for the protection of geographical indications for agricultural products and foodstuffs. However, in accordance with Article 24:9 of the TRIPS Agreement, the Community scheme is open only to third-country geographical indications which are protected in their country of origin. In order to bring Community legislation into line, it is necessary to revoke the existing provisions in Regulation (EC) No 2081/92 on equivalence and reciprocity, as well as the provisions requiring action on the part of third-country governments. However, certain operators established in third countries and certain governments may voluntarily wish applications and/or objections to be transmitted to the Community through the agency of the relevant third-country authorities: this option should be mentioned for the benefit of third countries which might wish to use it on a voluntary basis.

10. Procedures can also be streamlined and rationalised, particularly as regards amendments to specifications, at the end of the objection procedure or after registration, and as regards cancellations and other possible measures in the event of a failure to respect the specifications. For reasons of simplification, account should also be taken of the Council Decision of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission as regards the registration, amendment or rejection of specific names: since this involves non-general measures implementing the common agricultural policy, recourse to a management procedure is justified.

11. It would also be desirable to enhance the credibility of the system. Firstly, by reinforcing the provisions on controls and including them clearly in the general framework established by Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules, it will be possible to reinforce application of the ex officio protection provided for in Article 13 of Regulation (EEC) No 2081/92. Respect for specifications by operators is also subject to control provisions, among which one amendment is aimed at compulsory accreditation for private control bodies. Such compulsory accreditation makes it possible to avoid any obligation on governments to appoint control bodies, while maintaining total equality of treatment between operators in the Member States and operators in third countries.

12. The requirement, in the case of Community names, that the labelling of products marketed under a registered name indicate both the Community markings ("protected designation of origin"/"PDO" and 'protected geographical indication'/"PGI") and the Community symbols associated with them also helps reinforce the credibility of the system.

13. Since the definition of 'geographical indication' given in Article 22 of the TRIPS Agreement may in some respects appear broader than the existing definition in Article 2(2)(b) of Regulation (EEC) No 2081/92, this proposal is also aimed at bringing those definitions closer together.

14. Broad consultations have taken place on the main thrust of these amendments. In particular, the subject was discussed in June 2005 within the Advisory Group on the quality of agricultural products, composed of representatives of producers, processors, traders, and consumer- and environmental-protection associations interested in questions relating to the quality of agricultural products.

15. The proposed measures have no impact on the general budget of the European Communities.