European Economic Community: Council Decisions on Financing Agricultural Policy and Timetable for Completing Customs Union

European Economic Community: Council Decisions on Financing Agricultural Policy andTimetable for Completing Customs UnionSource: International Legal Materials, Vol. 5, No. 4 (JULY 1966), pp. 778-783Published by: American Society of International LawStable URL: http://www.jstor.org/stable/20690108 .

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778 E.E.C. DECISIONS ON FINANCING AGRICULTURAL POLICY AND

TIMETABLE FOR COMPLETING CUSTOMS UNION*

No. 377 EUROPE May 16 1966

ESC COUNCIL DECISIONS ON FINANCING COMMON AGRICULTURAL POLICY, TIMETABLE FOR IMPLEMENTATION OF THIS POLICY AND COMPLETITION OF

CUSTOMS UNION

On May 11 1966, at 0500 hours, the EEC Council adopted a corpus of documents setting out its decision on the financing of common agricultural policy and related issues.

We reproduce these documents below. They contain: a) decisions on finance proper (which are to be turned into Council regulations during the next few weeks); commitments on pursuit of common agricultural policy and complete abolition of remaining customs duties; declarations and resolutions on other points connected indirectly with the financial arrangement; resolution on progress which Council proposes to make in other spheres of European integration.

TEXTS ADOPTED BY COUNCIL

I ARRANGEMENTS FOR PERIOD BETWEEN JULY 1 1967 AND END OF TRANSITION PERIOD (1967/68, 1968/69, second half of 1965). i. Free movement of agricultural and industrial goods,

a) Free circulation for agricultural products will be achieved between November 1 1966 and" July""!-"19687"" i"t he"" f ollowIng~stages7 - November 1 1966, introduction of common market organisation for olive oil; entry

into force of common price for this product. -

January 1 1967.implementation of additional arrangements for common organisation of fruit and vegetable market, and of quality standards for fruit and vegetables

marketed within producer member countries. ~ July 1 1967?-implementation of December 15 1964 Council decisions regarding

produces covered by Regulations Nos 19-22. - Introduction of common market organisations for sugar, fats and oils (except olive

oil); entry into force of common prices for oil seeds. -

Implementation of criteria for common policy on aid in agriculture. - September 1 1967? entry into force of common price* for rice; - April 1 1968, entry into force of common prices for milk, milk products, beef and veal.

July 1 1968 at latest, entry into force of common sugar price

b) The free circulation of industrial goods will be achieved by reducing duties on trade between member countries by 5% on July l 1967, and by abolishing them on July 1 1968. The Common Customs Tariff will come into force on the same day.

c) Not later than July 1 196 7? the Commission shall make proposals to Council for achieving free circulation for the products listed in Annex II which are still not covered, on this date, by a common market organisation in accordance with

Article 40. Common market organisations for the sectors covers by Section V of the agricultural timetable - non-edible horticultural products, fishery products and hops - will be put into effect by July 1 1968 at the latest.

2) Expenditure by Fund.

a) Application of "gross" principle. From July l~19 6 77~expendIture"or which refunds on exports to third countries can be claimed shall be calculated in terms of the gross ttanage exported.

*[Reproduced with special permission from an unofficial transla tion in EUROPE Documents, No. 377 (May 16, 1966), published by EUROPE Agence Internationale d1Information pour la Presse, Brussels.]



779 "EUROPE" DOCUMENT No. 377 - 2 - May 16 1966

b) Liability for expenditure

From July 1 1966 6/6ths liability shall be borne for eligible expenditure on products for which a market organisation is in force. The Council shall determine how eventual liability shall be assumed for eligible expenditure on other products in its decision on the common market organisation for the said products, in line with the above rules.

c) Community's financial liability ?or_tobacco_and_wine. "~By~the~end~of~19667~the~Co for a common

organisation of non-manufactured tobacco markets, together with proposals for the

relaxation of monopolies and abolition of discrimination in this sector. This proposal may provide for the common market organisation to come into effect on July 1 1968, if work on monopoly relaxation is advanced enough to ensure that there is no discrim

ination between MemberState citizens in terms of supply or outlet.

The Community's financial responsibility for tobacco, laid down in the Council resolution of December 15 1964, shall take the form in 1967/68 of the grant from the resources of the Guidance section of EAGGF of 15 million dollar u.a. to the Italian

Republic, for the improvement of production and marketing structures in the tobacco sector.

- The Commission shall table, by March 1 1967, a proposal relating to the estab lishment of a common market organisation for ordinary table wine, to cul minate in free circulation for these products by October 31 1969 at the latest.

Council notes that its decision on financing common agricultural policy does not rule out Community financial responsibility for this product.

d) Maximum expenditure by "Guidance" section of Fund.

Council - confirms its resolution dated December 15 1964, regarding the need to improve Italian and Luxembourg agricultural structures, which the Commission has to allow for within the context of the Fund's "Guidance" section; -

agrees that from the 1967/68 EAGGF financial year: ?

Expenditure by the "Guidance" section, calculated under 2) of Article 5 of

Regulation No, 25 may not exceed 285 million u.a. ? The above limit may be increased by the Council, acting on a Commission

proposal, ? The Fund may not contribute more than 25% of the capital cost of a scheme.

This proportion may be increased to up to 45% for certain types of projects, to be defined by Community programmes with reference in particular to the

point recalled above regarding Italy and Luxembourg.

3) Fund receipts,,

a) Contributions to the Fund's "Guarantee" section shall be computed from a scale made up of

- a variable component, equal to 90% of levies on products traded with third countries which are collected by Member States. - a comppnent making up the remainder of these contributions, calculated from the

following fixed percentage scale:

Belgium 8.1

Germany 31.2 France 32

Italy 20.3

Luxembourg 0.2 Netherlands 8.2

b) Contributions to the "Guidance" section of the Fund are calculated from the above scale for the "Guarantee"?section.

II ARRANGMENTS FOR 1965/66 AND 1966/67

l) Fund expenditure

a) Liability for expenditure eligible for refund under the "Guarantee" section

Iiability~f?r~eligibTe"expendT in 1965/66 and 7/l0ths in 1966/67

- for products covered by common market

organisations on July 1 1965. If the set of decisions to be taken by Council, tabulated below, is taken

by July 1 1966, 4/6ths liability will obtain for 1965/66 and 5/6ths for 1966/67

List of decisions to be taken by Council - Common market organisation for sugar. - Common market organisation for fats and oils - Additional arrangements for fruit and vegetable market organisation. -

Application of quality standards to fruit and vegetables marketed within each

Member States



780

"KUKOFE/Document Mo. 3 77 - 3 - May 16 1966

- Common prices for :

a) Milk and milk products

b) Beef and veal

c) Rice d) Sugar e) Oil seeds f) Olive oil

- Criteria for establishment of a common pclicy on agricultural aids.

Liability shall be assumed on the above lines for products for which a

common market organisation is introduced between July 1 1965 and July 1 1967, where

provision is made for such Community financial liability, as soon as each of these

organisations comes into effect.

b) Community's financial liability for spending on various products in 1965/66

Olive oil, fruit and vegetables

(1) On the following terms, and notwithstanding Articles 13-22 inclusive of

Regulation No. 17/64/EEC, a sum of 45 million dollar units of account shall be paid in advance to the Italian Republic for the 1965/66 (1967 budget) year. This sum shall

be drawn from the resources of the European Agricultural Guidance and Guarantee Fund

("Guidance" section) and shall be used to improve growing and marketing structures

for olives, olive oil, fruit and vegetables.

(2) The Italian Republic shall obtain a share of the sums remaining available to

the "Guidance" section of the Fund, on the terms in force and on the same footing as

other Member States.

(3) The Italian Government shall submit to the Commission, by the end of the

transition period, one or more sets of accounts with documentary evidence for

expenditure from November 1 1965 on the measures mentioned in the first paragraph.

Sugar

(1) EAGGF shall refund notmore than 4 million u.a. of expenditure by the Kingdom of Belgium on the marketing of sugar during the 1965/66 marketing year.

(2) This contribution shall be drawn from the "Guarantee" section of EAGGF.

(3) The sum of the expenditure involved shall be submitted to the Commission; accounts shall be balanced when the "Guarantee" section of EAGGF provides assistance for the 1965/66 period.

c) Community's financial liability for spending on olive oil,sugar, fruit and

The Community shall have financial responsibility for olive oil, sugar, fruit and

vegetables until the relevant common market organisations come into force.

Acting on a Commission proposal, Council shall take the necessary decisions to

put this responsibility into effect, by granting a sum at least equal to that of the

previous year.

2. Fund receipts.

The financial contributions of the Member States to the Fund shall be calculated

according to the following overall and flat rate scale:

1965/66 1966/67

Belgium 7.95 7.95

Germany 31.67 30.83 France 32.58 29.26

Italy 18 22 Luxembourg 0.22 0.22 Netherlands 9.58 9.74

III OTHER QUESTIONS TOUCHED ON DURING DISCUSSION OF FINANCIAL ARRANGEMENTS FOR COMMON AGRICULTURAL POLICY

1. Financial aspects of trade with the rest of the world in industrial

products obtained from farm products

The following declaration shall be included in the minutes of the Council meeting at which a decision on the financing of common agricultural policy is taken:

"Council agrees that when'consideration is given' to the proposal fcrwa regulation

governing trade in specific processed farm products inquiries shall be conducted into

the financial aspects of trade in these products with third countries. Council agrees to settle this problem, to the extent that this can be done on the basis of the afore

mentioned inquiries; it agrees that the said inquiries shall entail examination of

the legal and economic aspects of any Community liability^ for the products in question.



781

"EUROPE" DOCUMENT No. 377 - 4 - May 16 1966

Council notes that its decision on financial arrangements for the common agricultural

policy leaves open the possibility of Community financial responsibility for these

products."

2. Possible equalisation of customs revenue once goods are circulating0

freely

Council has taken the decision set out in Appendix I. In addition, the

following declaration shall be included in the minutes of the Council meeting:

"Council's decision over the equalisation of customs revenue shall

prejudice neither the legal basis nor the procedure for the introduction of a general

equalisation system or special measures."

3. Problems related to introduction of common market organisation for

fats and oils

The Commission's declaration reproduced in Appendix II shall be written into the minutes of the Council meeting.

4. Farm exports to the Soviet-occupied Zone of Germany

a) The Soviet-occupied Zone of Germany is not a third country for the

purposes of the regulation regarding financial arrangements for common agricultural policy.

b) National steps to promote farm exports to the Soviet-occupied Zone of

Germany shall be discussed by the governments involved and Germany. The German

Government shall enter into talks with the relevant governments if it fears that measures planned will impair its relations with Soviet-Occupied Germany.

c) While reserving its legal position, the German Government withdraws its reservation against assumption of liability for expenditure on refunds in the financial

years 1962/63, 1963/64 and 1964/65.

5. Questions connected with Community's independent sources of income.

Councilshallset the procedure laid down in Treaty Article 201 in motion, so that Article 2 of Regulation No. 25 come into effect at the end of the

transition period laid down by Treaty Article 8,

++++++++++++++++++++++

APPENDIX I

COUNCIL DECISION

1. Prior to the removal of customs duties on trade between Member States, the Member Governments shall coordinate their customs and tax regulations to ensure

that there is no incentive to put non-Community goods which are to be sold in one

Member State into Tree c: r~v.l 3tic- in another Member State. This coordination shall

apply in particular to:

a) Customs provisions regarding classification of goods in accordance with the nomenclature of the common customs tariff.

b) Provisions for fixing value for customs purposes.

c) General provisions for clearing customs, including all ways in which customs duties can be paid.

d) Various national provisions regarding turnover tax on internal Community transit; as far as possible, this alignment shall be dealt with in the context of work on tax coordination.

The establishment of a "procedure for transit within the Community" shall be pushed ahead, so as to promote the transit of consignments from third countries for which customs duties are suspended.

2. Member State customs departments shall work together, and with the

Commission, to preclude a shift in the pattern of customs revenue to the detriment of the country which is the ultimate importer. The measures adopted for this purpose shall not impede the free circulation of goods in the Common Market in any way,

3. Once intraCommunity customs duties have been abolished, the Commission

may put or: record the fact that customs revenue has changed to more than a certain

extent, if so requested by a Member State. Council shall inform the Council as soon as possible. Acting on a Commission recommendation or proposal, Council or Member States shall, depending on the extent and nature of the change noted: - introduce a general equalisation system - or special action to remedy the change in revenue.



782

"EUROPE" DOCUMENT No, 377 - 5 - May 16 1966

4. With regard to implementation of sub-paragraph 3, the Commission shall

investigate in conjunction with the Member States:

a) How the change in customs revenue, to the detriment of countries of destination of

goods, can be determined;

b) the criteria which can be used to apportion customs revenue among the six Member

States. The Commission shall report to Council at least 9 months before customs

duties on trade between Member States are removed.

5 The Member States shall provide the Commission with all data which it

considers necessary to establish any shift in the rovjnue pattern.

+++++++++++++++

APPENDIX II

PROBLEMS ARISING IN CONNECTION WITH OPERATION OF COMMON MARKET FC2 FATS AND OILS

a) In line with the principles of a policy for vegetable fats, laid down in its decision dated December 1963, Council reiterates that special measures for

vegetable fats from the AASM should come into effect at the same time as the

regulation regarding a common market organisation for fats and oils.

b) The Council also recalls that it is important to echte7.plate':, at the

appropriate juncture, the application of provisions regarding the financing of fats and oil policy which is also provided for in the above decisions (Commission's proposal regarding introduction of levy on fats and oils).

+++++++++++++++

APPENDIX III

COUNCIL DECISION regarding balanced development of Community

a) Lining up taxes

The development and completion of the Common Market require removal of all trade hindrances. The Crimmunity and Member Governments ?!*?11 neccrcingly put

through, in stages, all steps necessary to this end.

Accordingly, douncil, having regard to the phased removal of fiscal

frortiers between Member States, shall decide by January 31 1967 on the two initial

proposed Commission directives "or approximation of member State turnover tax law.

h) Trade policy

The Community is aware that it~ progressive internal development affects its economic relations with the rest of the world. It reiterates its intention to contribute to the expansion of international trade, within the meaning of Treaty Article 18. The Council shall conduct, at each of its meetings, a general review of progress made in Fcrnedy Round negotiations

- to which the Community ascribes

great importance - on farm and industrial products. In the light of progress

achieved, it shall broaden the directives given to the Commission ::-.7onc lines which enable the latter body to bring the negotiations to a successful conclusion.

The Council's decisions on^external economic relations shall allow for the problems posed by the economic development of various Member State areas. In

negotiations with Mediterranean countries Council shall bear in mind the Memorandum submitted by the Italian Government on May 8 1964.

Council instructs the Committee of Permanent Representatives to report to it on previous Member State practices regarding the grant of credits for exports to State-trading countries.

The Committee of Permanent Representatives is alho directed to produce a report on the policy pursued for the grant of credits for exports to Soviet-occupied Ge rmany.

c) Social policy.

Council underscores the relevance of social policy to balanced development of the Common Market. After taking cognisance of steps which, have be : taken to

expedite work on proposals submitted by the Commission for this sector, in particular for the European Social Fund, Council shall reach a decision on these proposals as quickly as possible and at all events not later than January 31 1967.



783 "EUROPE" DOCUMENT No, 377 - 6 - May 16 1966

d) Area development policy Council is alive to the significance of the area policy issues

thrown up by a continuing rapid and balanced economic expansion in all Member States. It will therefore scrutinise the Commission's memorandum on the matter as soon as

possible.

e) European type of companies and patents.

Council and Member Governments shall look at the problem of European patent law and the creation of a European company as soon as possible.

+++++++++++++ ++

