Explanatory Memorandum to COM(2013)106 - Trade arrangements applicable to certain goods resulting from the processing of agricultural products - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)106 - Trade arrangements applicable to certain goods resulting from the processing of agricultural products. |
|---|---|
| source | COM(2013)106  |
| date | 27-02-2013 |
1........... CONTEXT OF THE PROPOSAL................................................................................ 4
2........... RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS.................................................................................................................................... 10
3........... LEGAL ELEMENTS OF THE PROPOSAL............................................................... 10
4........... BUDGETARY IMPLICATION.................................................................................. 11
5........... ADDITIONAL INFORMATION............................................................................... 11
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products........................... 13
CHAPTER I SUBJECT MATTER, SCOPE AND DEFINITIONS........................................... 23
CHAPTER II IMPORTS OFPROCESSED AGRICULTURAL PRODUCTS........................... 24
SECTION I General provisions for imports................................................................................. 24
Subsection I Import duties on processed agricultural products...................................................... 24
Subsection II Import of ovalbumin and lactalbumin....................................................................... 25
SECTION II Preferential trade................................................................................................... 28
Subsection I Reduction of import duties....................................................................................... 28
Subsection II Tariff quotas.......................................................................................................... 30
SECTION III Safeguard measures.............................................................................................. 32
SECTION IV Inward processing................................................................................................ 33
CHAPTER III EXPORTS.......................................................................................................... 35
SECTION I Export refunds........................................................................................................ 35
Section II Refund certificates....................................................................................................... 38
Section III Other measures with regard to exports....................................................................... 41
CHAPTER IV MEASURES APPLYING TO BOTH IMPORTS AND EXPORTS................... 41
CHAPTER V DELEGATION OF POWER AND COMMITTEE PROCEDURE..................... 44
CHAPTER VI FINAL PROVISIONS....................................................................................... 45
ANNEX I.................................................................................................................................. 47
ANNEX II................................................................................................................................. 56
ANNEX III................................................................................................................................ 72
ANNEX IV................................................................................................................................ 74
ANNEX V................................................................................................................................. 76
ANNEX VI................................................................................................................................ 77
EXPLANATORY MEMORANDUM
Contents
Grounds for and objectives of the proposal
A. The purpose of the proposed Regulation (EU) of the Council and of the Parliament replacing the trade arrangements for Processed Agricultural Products/non-Annex I goods, currently laid down in Council Regulation (EC) No 1216/2009 of 30 November 2009 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products is:
· to align it with the legal obligation to differentiate between delegated and implementing powers of the Commission, introduced by Articles 290 and 291 of the Treaty on the Functioning of the European Union (TFEU).
· to align it with the Regulation of the European Parliament and of the Council No …/… [COM(2010) 799 final] establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products. This Regulation is the proposed single Common Market Organisation for agricultural products (sCMO) after its alignment to the legal requirements of the Lisbon Treaty concerning delegated and implementing powers of the Commission).
· to align it with the Regulation of the European Parliament and of the Council No …/… [COM(2011) 626 final] establishing a common organisation of the markets in agricultural products. This Regulation is the proposed single Common Market Organisation for agricultural products (sCMO) after its adaptation to the Common Agricultural Policy (CAP) towards 2020 and to the Multiannual Financial Framework (MFF) for 2014-2020.
· to align it with Council Regulation [COM(2011) 629 final] determining measures on fixing aids and refunds related to the common organisation of the markets in agricultural products
· to update the Annexes to the current Regulation (EC) No 1216/2009 and to integrate the Annexes I and II to implementing Regulation (EC) No 578/2010 in the basic act, taking into account that Regulation (EU) No …/… [COM(2011) 626 final] does not provide for an Annex replacing Annex XX to Regulation (EU) No 1234/2007.
· to align the common system of trade for ovalbumin and lactalbumin, actually laid down in Council Regulation (EC) No 614/2009 of 7 July 2009 on the common system of trade for ovalbumin and lactalbumin, to the Lisbon Treaty and its differentiation between delegated and implementing powers. For reasons of rationalisation, harmonisation and simplification, the common system of trade for ovalbumin and lactalbumin- processed agricultural products which are not included in Annex I to the Treaty and which do not fall under the single Common market organisation for agricultural products – is proposed to be integrated in the trade regime applicable to certain goods resulting from the processing of agricultural products, actually laid down in Regulation (EC) No 1216/2009.
· to simplify and update the current legal text which, although codified in 2009, has been in place since 1993 without major changes, improve its readability and its understandability and provide a more clear and solid legal basis for implementing rules. For reasons of clarity and simplification, overlaps with other legal texts such as Regulation (EEC) No 2913/1992 of 12 October 1992 establishing the Community Customs code i, Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff i and Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation)[7] have been removed.
· to create a solid legal framework for the management of the reduced import duties and import quotas as provided for by Free Trade Agreements (FTAs) and for the management of the export refund system and adapt the text to current practices in FTAs and export refunds.
B. The alignment to the Lisbon Treaty of the sCMO concerns the following point:
· the common organisation for agricultural markets and the trade regime for processed agricultural products contain similar provisions about the import or export regime for agricultural products and processed agricultural products respectively (such as by example: reduced import duties, additional import duties, import quotas, export refunds, export licenses/refund certificates, etc …). They also confer implementing power to the Commission concerning similar competences. Therefore, there should be a parallelism in the way both regulations are adapted to the Lisbon Treaty.
C. The adaptation to the options taken for the sCMO after 2013 in comparison to the current legal texts (Regulation (EC) No 1234/2007 and Regulation (EC) No 1216/2009) concerns the following:
· Annex XX of Council Regulation(EC) No 1234/2007 and Annex XVII of Regulation No …/… COM (2010) 799 final] provide for a list of processed goods that are eligible for the granting of export refunds on exportation of certain agricultural products used for their manufacturing. Regulation (EU) No …/… [COM(2011) 626 final] provides in article 133(1)b that export refunds may be granted for certain agricultural products to be exported in the form of processed goods in accordance with Regulation (EC) No 1216/2009. Therefore, this proposal establishes in Annex II the list of non-Annex I goods that are eligible for export refunds.
D. In order to maintain the statu-quo, the proposal contains the following Annexes:
Annex I is the list with processed agricultural products and replaces the current Annex II to Regulation (EC) No 1216/2009;
Annex II is the list with non-Annex I goods and replaces the current Annex II to Regulation (EC) No 578/2010 of 29 June 2010 on the implementation of Council Regulation (EC) No 1216/2009 as regards the system of granting export refunds for certain agricultural products exported in the form of goods not listed in Annex I to the Treaty, and the criteria for fixing the amount of such refunds[8] and replaces also the current Annex XX to Regulation (EC) No 1234/2007;
Annex III is the list with basic products used for the manufacture of non-Annex I goods and replaces the current Annex I to Regulation (EC) No 578/2010;
Annex IV is the list with processed agricultural products on which additional import duties may be levied and replaces the current Annex III to Regulation (EC) No 1216/2009;
Annex V is the list with agricultural products used for the manufacture of processed agricultural products and replaces the current Annex I to Regulation (EC) No 1216/2009.
E. Accordingly it is appropriate to repeal Regulations (EC) No 1216/2009 and (EC) No 614/2009.
General context
A. Delegated and implementing powers
Articles 290 and 291 of the Treaty on the Functioning of the European Union (TFEU) establish a clear distinction between on the one hand the powers delegated to the Commission to adopt non-legislative acts and, on the other, the powers conferred on the Commission to adopt implementing acts:
· Article 290 TFEU allows the legislator to delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of a legislative act. Legal acts adopted by the Commission by virtue of this Article are referred to in the terminology used by the Treaty as 'delegated acts' (Article 290(3)).
· Article 291 TFEU requires Member States to adopt all measures of national law necessary to implement legally binding Union acts. Those acts can confer implementing powers on the Commission where uniform conditions for implementing them are needed. Legal acts adopted by the Commission by virtue of this Article are referred to in the terminology used by the Treaty as 'implementing acts' (Article 291(4)).
The proposed alignment to the new requirements resulting from Articles 290 and 291 TFEU is based on a careful qualification of the existing Commission powers under Regulations (EC) No 1216/2009 and 614/2009 as 'delegated' or 'implementing' which was operated against the background of the implementing measures adopted by the Commission on the basis of its current powers.
Following this exercise, a draft proposal has been prepared. This project provides the Legislator with the power to define the essentials of the trade arrangements applicable to processed agricultural products/non-Annex I goods. The general guidelines for these arrangements and the general principles that underlie them are determined by the Legislator. For example, the general principles for reducing the agricultural part of the import duties, for the management of import quotas or for granting export refunds are fixed by the Legislator. Similarly, the Legislator lays down the principle of establishing a system of refund certificates, the fundamental elements of the rules for fixing export refund rates and the exchange of information.
Pursuant to Article 290 TFEU, the Legislator gives the Commission the power to complete or modify certain non-essential elements of a legislative act. A Commission delegated act may therefore determine the additional elements necessary for the proper functioning of the trade arrangements established by the Legislator. For example, the Commission shall adopt delegated acts in order to lay down the rights (to get refunds for the export of non-Annex I goods) and obligations (to apply for refunds on export of non-Annex I goods) derived from the issue of a refund certificate and, if necessary depending on the economic situation, to specify the cases where a guarantee is not required for the issuance of certificates. The Commission will also be given the power to adapt the annexes to the proposed Regulation to international agreements concluded or provisionally applied in accordance with Article 218 TFEU. Similarly, the Legislator delegates to the Commission the power to adopt appropriate rules in order to ensure the implementation of the Union’s preferential trade arrangements and international commitments and to avoid distortion of trade.
Member States in accordance with Article 291 TFEU are responsible for implementing the regime established by the Legislator. However, it is necessary to ensure uniform implementation of the scheme in the Member States. Therefore, the Legislator gives the Commission powers of implementation, in accordance with Article 291 TFEU as regards the uniform conditions for the implementation of the trade arrangements and a general framework of measures and procedures that Member States shall implement.
Those powers should be exercised in accordance with Regulation (EC) No 182/2011 of the European Parliament and the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers[9].
The examination procedure should be used for the adoption of the acts implementing this Regulation given that those acts relate to the CAP as referred to in point (ii) of Article 2(2)(b) of Regulation (EU) No 182/2011.
In order to ensure the efficiency and smooth functioning of the trade arrangements, powers should also be conferred on the Commission to carry out certain administrative or management tasks in respect of: fixing the representative prices and trigger volumes for the purposes of import duties and fixing the level of the additional import duty, limiting, rejecting or suspending the issuing of import licences for ovalbumin and lactalbumin, ensuring that the available quantities of tariff quota are not exceeded and that the unused quantities of a tariff quota are reallocated, the management of the process to guarantee that the quantities available under the inward processing regime without prior examination of the economic conditions are not exceeded and the technical measures of adjustment of the refund certificate system for keeping the expenditure within available budget limits
B. Council powers under Article 43 TFEU
Article 43 TFEU provides that 'the Council, on a proposal from the Commission, shall adopt measures on fixing prices, levies, aids and quantitative limitations. This provision forms an exception from Article 43 TFEU which requires the ordinary legislative procedure to be used 'to establish the common organisation of agricultural markets and the other provisions necessary for the pursuit of the objectives of the common agricultural policy". It also constitutes an exception from Article 207 TFEU which equally requires the ordinary legislative procedure to be used to “adopt the measures defining the framework for implementing the common commercial policy”.
As an exception, Article 43 TFEU needs therefore to be interpreted restrictively so as to ensure that the Legislator can exercise its legislative prerogatives under Article 43 and Article 207 TFEU. This includes the Legislator regulating the fundamental elements of the common agricultural policy and of the Common commercial policy and taking the political decisions that shape their structure, and determine their instruments and effects. Against this background the specific procedure laid down in Art. 43 TFEU should only be applied where an issue referred to in that provision does not form part of the fundamental policy decisions reserved to the Legislator under Article 43 and 207 TFEU. Therefore, where such an issue is inextricably linked with the political substance of the decisions to be taken by the Legislator, Article 43 TFEU should not be applied.
Consequently, the proposal is based on the following principles:
– The structural parameters and fundamental elements of the Common Agricultural Policy and the Common Commercial Policy may only be decided by the Legislator. For example, the export refund scheme for non-Annex I goods established by Regulation 1216/2009 and all its elements (refund certificates, small exporters reserve) should stay at the Legislator's level, as these elements are inextricably linked to the definition of the content of the scheme established by the Legislator and the boundaries of this regime.
– Measures on fixing prices, levies, aids and quantitative limitations as referred to in Article 43, which do not fall in the scope of Article 43 TFEU, shall be taken by the Council. For example, the general principles for the fixation of export refund rates should be determined by the Council under Article 43 TFEU. Against this background, it is proposed that measures on the fixing of refund rates as referred to in Article 43, which do not fall in the scope of Article 43 TFEU, shall be taken by the Council.
Article 43 TFEU is an autonomous basis for the adoption of legal acts by the Council. For fixing the refund rates Article 43 TFEU applies and in the interest of clarity, the Commission has adopted a separate proposal for a Council Regulation on fixing refunds which explicitly refers to that provision. The Commission has submitted that proposal, which is in common with that needed in the context of the adaptation of the single CMO Regulation (EC) No 1234/2007 to the Lisbon Treaty, in due course to the Council (COM(2011) 629 final[10]).
C. The Common Agricultural policy post 2013
The proposal of Regulation (EU) of the Council and of the Parliament No …/… [COM(2011) 626 final] aims at adapting the single CMO to the Common Agricultural policy post 2013 and to the multiannual financial framework 2014-2020. It is currently the subject of long and exhausting discussions at Council and Parliament level. The proposed Regulation of the European Parliament and of the Council is based on a careful examination of the new CMO post 2013 proposal and the necessary adaptations of current legal arrangements on the trade arrangements for processed agricultural products/non-Annex I goods in order to maintain the status quo.
Consequently, the list containing the non-Annex I goods eligible for export refunds (Annex XX of Regulation (EC) No 1234/2007, annex XVII of COM(2010) 799 final) is transferred from the single CMO to the Regulation laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products.
Consistency with other policies and objectives of the Union
The proposal is in line with the Common Agricultural Policy and with the Common Commercial Policy.
The proposal is in line with the proposal to adapt the single CMO Regulation (EC) to the Lisbon Treaty (COM(2010) 799 final).
The proposal is in line with the Common Agricultural Policy (CAP) post 2013 and in particular with the proposal to adapt the single CMO Regulation (EC) No …/… [COM(2010) 799 final] to the post 2013 CAP (COM(2011) 626 final).
For reasons of coherence and in order to avoid a legal loophole, this proposal needs to be adapted to the outcome of the discussions in Council and Parliament about proposals (COM(2010) 799 final) and (COM(2011) 626 final).
The proposal is also in line with the Union Customs legislation and in particular with Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Common Customs Code and with Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff. The latter two Regulations will also be aligned to the Lisbon Treaty. Therefore, once a final text of them is adopted, this proposal may need to be adjusted, accordingly.
Consultation of interested parties
Member States were informed and involved through the channel of an expert group.
Collection and use of expertise
There was no need for consultation of interested parties or for external expertise since the proposal for the alignment of Regulation No 1216/2009 to the Lisbon Treaty is an inter-institutional matter of relevance to all Council Regulations.
The same applies for the adaptation to the CAP after 2013 and to the new MFF 2014-2020 which is a pure technical consequence of the adoption of the new Single CMO Regulation (EC) No …/… [COM(2011) 626 final].
Impact assessment
There is no need for an impact assessment since the proposal to align Regulation No 1216/2009 to the Lisbon Treaty is an inter-institutional matter of relevance to all Council Regulations and the alignment to the new Single CMO Regulation is a consequence of the new CAP after 2013 and the new MFF 2014-2020.
Summary of the proposed action
1. Identify in Regulation (EC) No 1216/2009 the delegated and implementing powers of the Commission and establish the corresponding procedure for the adoption of these acts and this in parallel with the Lisbon alignment of the sCMO (COM(2010) 799 final).
2. Adapt Regulation (EC) No 1216/2009 to the new Single CMO Regulation [COM (2011)626 final] in the context of the CAP after 2013 and the new MFF 2014-2020.
3. Integrate the common system of trade for ovalbumin and lactalbumin (Regulation (EC) No 614/2009) in the trade regime for processed agricultural products (Regulation (EC) No 1216/2009).
Legal basis
Article 43 and Article 207 of the Treaty on the Functioning of the European Union.
Subsidiarity principle
Commercial policy is an exclusive competence of the Union – therefore only the Union, and not individual Member States, can legislate on trade matters. Agricultural policy is of shared competence between the EU and the Member States. This means that as long as the Union does not legislate in this field, Member States maintain their competence. This proposal is limited to the adaptation of Regulations (EC) No 1216/2009 and (EC) No 614/2009 to new requirements introduced by the Lisbon Treaty on one hand, and to the new Common Agricultural Policy after 2013 on the other hand and thus the existing Union approach is not affected.
Proportionality principle
The proposal complies with the proportionality principle which requires each decision and measure to be based on a fair assessment and balancing of interests, as well as on a reasonable choice of means .
Choice of instruments
Proposed instrument: Regulation of the European Parliament and of the Council.
Other means would not be adequate for the following reason: direct application is due to the nature of the CAP and the Common Commercial Policy and their management requirements and is an indispensable characteristic of CAP and Trade legislation.
This measure does not involve any additional Union expenditure
5. ADDITIONAL INFORMATION
The proposal will improve the comprehensibility and accessibility of the legal text laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products. It will consolidate the legal basis for its implementing Regulations and will align the text with existing Commission provisions for example by adding a provision allowing opening of import quotas and the way of managing them. In addition it will remove inconsistencies in the current legal text such as in Article 14 of Council Regulation (EC) No 1216/2009 that refers to Commission implementing Regulation (EC) No 1460/96[11], while implementing Regulation (EC) No 1460/96 has Council Regulation (EC) No 1216/2009 as a legal basis.