Title III of Regulation (EC) No 1493/1999 and this Regulation lay down the Community rules applicable to market mechanisms in the wine sector.
Commission regulation (EC) No 1623/2000 of 25 July 2000 laying down detailed rules for implementing Regulation (EC) No 1493/1999 on the common organisation of the market in wine with regard to market mechanisms
Commission regulation (EC) No 1623/2000 of 25 July 2000 laying down detailed rules for implementing Regulation (EC) No 1493/1999 on the common organisation of the market in wine with regard to market mechanisms
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 1493/1999 on the common organisation of the market in wine(1), and in particular Articles 24, 25, 26, 33, 34, 35, 36 and 80 thereof,
Whereas:
Title III of Regulation (EC) No 1493/1999 lays down general rules on market mechanisms and refers for the rest to detailed implementing rules to be adopted by the Commission.
Until now, those rules have been contained in a large number of Community regulations. In the interests of both economic operators in the Community and the authorities responsible for applying Community rules, all these provisions should be brought together in a single Regulation.
This Regulation must include the current rules and adapt them to the new requirements of Regulation (EC) No 1493/1999. They must also be simplified and made more coherent and certain gaps must be filled in to ensure that the Community rules in this area are complete. In addition, some rules should be made more specific to ensure greater legal certainty when they are applied.
Article 35(1)(a) of Regulation (EC) No 1493/1999 introduces an aid scheme for the use of grape must and concentrated grape must made from grapes produced in the Community for the purpose of manufacturing grape juice or other comestible products made with this juice.
Such other comestible products should be specified.
The economic aim of the aid scheme is to encourage the use of raw materials of Community origin rather than imported raw materials in the manufacture of grape juice or other comestible products made with this juice. The aid should accordingly be granted to the users of the raw materials, i.e. the processors.
It should be stipulated that the aid is granted only for raw materials with the quality characteristics required for processing into grape juice. It should accordingly be specified in particular that the grapes and grape must covered by a statement must have a density at 20 oC of between 1.055 and 1.100 grams per cubic centimetre.
Application of the aid scheme calls for an administrative system to monitor both the origin of products eligible for the aid and their intended use.
To ensure that the aid scheme and the checks operate properly, the processors concerned should be required to submit a written statement containing the information needed to enable the operations to be monitored.
However, to avoid excessive administration for both the processors and the authorities concerned, no prior written statement should be required from processors using only a small quantity of grapes or grape must each wine year. That quantity should be fixed. The processors concerned must nevertheless inform the competent authorities of their Member State at the beginning of each wine year of their intention to process a certain quantity of grapes or grape must.
When the processor is not the user of the product concerned, particularly where the inspecting authority concerned is in a different Member State than the processor, it is not always easy for that authority to know whether a statement relates to grape must which has not received aid under this Regulation or to grape juice for which an aid application has already been submitted. The transport document accompanying the product concerned should therefore indicate whether an aid application has been submitted.
In order for the aid scheme to significantly increase the use of Community raw materials, it should be stipulated that aid applications must be submitted for a fixed minimum quantity for each product.
Under Article 35(5) of Regulation (EC) No 1493/1999, part of the aid is to be used to organise campaigns to promote the consumption of grape juice. The percentage of the aid earmarked for this purpose should be sufficient to generate adequate funds to finance effective promotion campaigns.
Processing is carried out by both occasional processors and undertakings working continuously. The detailed rules for applying the aid scheme must take account of that difference in structures.
In order to allow the competent authorities of the Member States to conduct the necessary checks, the obligations of processors as regards stock accounts should be specified.
In order to avoid unwarranted expenditure and facilitate checks, a maximum ratio should be specified between the raw materials used and the grape juice obtained, based on normal processing techniques.
For commercial reasons, some operators store the grape juice obtained for a long time before putting it up for consumption. This being the case, a system of advances should be introduced so that the aid can be paid in advance to operators against a suitable security to protect the competent authorities against the risk of undue payment. The time limit for the payment of advances should therefore be specified, together with detailed rules for the release of securities.
To qualify for the aid, the parties concerned must submit an application together with certain supporting documents. To ensure that the system operates in the same way in all the Member States, time limits should be laid down for the submission of applications and for payment of the aid to processors.
Under Article 44(5) of Regulation (EC) No 1493/1999, grape juice may not be turned into wine or added to wine. In order to ensure compliance with that provision, the obligations and special checks devolving on processors and bottlers of grape juice should be specified.
Article 34 of Regulation (EC) No 1493/1999 introduces an aid scheme for concentrated must and rectified concentrated must produced in the Community and used to increase the alcoholic strength of wines.
Under Article 36 of Regulation (EC) No 1493/1999, detailed rules may be laid down, in particular to stipulate the conditions for granting the aid. On that basis, rules should be laid down for applying the measure in the case of small producers. It should also be stipulated that only producers who have fulfilled their Community obligations during a specified period are to be eligible under this measure.
The competent authorities must be informed of enrichment operations involving the addition of concentrated grape must and rectified concentrated grape must and of the quantities of those products which are held. Since the quantities of those products which are or have been used for enrichment must be recorded in the registers provided for in Article 70(2) of Regulation (EC) No 1493/1999, there is no need to require additional documents to be presented in order for the aid to be received.
To ensure uniform application of the aid scheme concerned, the method for establishing the potential alcoholic strength of musts should be harmonised at Community level.
The cost price of grape must used to produce concentrated grape must and rectified concentrated grape must depends on its potential natural alcoholic strength. To take account of this fact and to avoid disrupting the existing pattern of trade, the aid should be differentiated so that a higher amount can be granted for concentrated grape must and rectified concentrated grape must from the southernmost regions of the Community, which traditionally produce must with the highest potential natural alcoholic strength.
Article 35(1)(b) and (c) of Regulation (EC) No 1493/1999 introduces an aid scheme for the use of grape musts and concentrated grape musts produced in wine-growing zones C III (a) and C III (b) to prepare certain products falling within CN code 2206 00 in the United Kingdom and Ireland and for the use of concentrated grape musts produced in the Community to manufacture certain products marketed in the United Kingdom and in Ireland with instructions for using them to obtain a beverage in imitation of wine.
Products falling within CN code 2206 00 as referred to in Article 35(1)(c) of Regulation (EC) No 1493/1999 are currently produced exclusively from concentrated grape must. At this stage, therefore, aid should be fixed for the use of concentrated grape must alone.
Application of the aid scheme calls for an administrative system to monitor both the origin of products eligible for the aid and their intended use.
To ensure that the aid scheme and the checks operate properly, the operators concerned should be required to submit written applications giving the information needed to identify the product and enable the operations to be checked.
In order for the aid scheme to significantly increase the use of Community products, it should be stipulated that applications must be submitted for a fixed minimum quantity.
Aid is to be granted only for products having the minimum quality characteristics required for use for the purposes referred to in Article 35(1)(b) and (c) of Regulation (EC) No 1493/1999.
In order to enable the competent authorities of the Member States to conduct the necessary checks, the obligations of processors as regards stock accounts should be specified.
Entitlement to aid is acquired when the processing operations are completed. To allow for technical losses, the quantity actually used should be allowed to be up to 10 % less than the quantity stated in the application.
For technical reasons, operators lay in their stocks a long time before manufacturing the marketed products. This being the case, a system of advances should be introduced so that the aid can be paid in advance to operators against a suitable security to protect the competent authorities against the risk of undue payment. The time limit for the payment of advances should therefore be specified, together with detailed rules for the release of securities.
Under Chapter I of Title III of Regulation (EC) No 1493/1999, private storage aid may be granted for table wine, grape must, concentrated grape must and rectified concentrated grape must. opened segment Under Article 24(2) of that Regulation, the grant of aid is subject to the conclusion of storage contracts. Detailed rules should be laid down covering the conclusion, content, period of validity and effects of such contracts.
The term ‘producer’ should be defined and, in view of the obligations imposed upon such persons, it should be stipulated that producers must be the owners of the products covered by the storage contract.
An effective check must be kept on the products covered by storage contracts. To that end, the intervention agency of a Member State should be allowed to conclude contracts only for quantities stored on the territory of that Member State, and it should be informed of any change in the product or the place of storage.
For the sake of uniformity, contracts should be concluded on the same terms throughout the Community and be sufficiently precise to enable the product concerned to be identified.
Experience of the various schemes for the private storage of agricultural products has shown that it is necessary to specify the extent to which Council Regulation (EEC, Euratom) No 1182/71 is applicable for determining periods, dates and time limits relating to those schemes, and that the dates on which contractual storage periods begin and end should be stated precisely.
Under Article 3(4) of Regulation (EEC, Euratom) No 1182/71, where the last day of a period is a public holiday, Sunday or Saturday, the period expires at the end of the last hour of the following working day. It may not be in the interest of operators for this provision to be applied in the case of storage contracts, since it could result in unequal treatment where the last days of storage are carried over. A derogation must therefore be provided for when the final day of storage under contract is determined.
In order to ensure that the system of contracts has an effect on market prices, contracts should be concluded only for significant quantities.
Storage aid should be restricted to products which have an effect on market prices. Accordingly, only products in bulk should qualify for aid. For the same reason, contracts should cover only products of sufficiently high quality. In the case of table wine, contracts should relate to wines at an advanced stage of preparation, but it must be possible during the contract period to carry out any oenological processes needed to ensure the preservation of the product.
To encourage improvement in quality, the minimum alcoholic strength of wine and must eligible for storage measures should be fixed. To the same end, it should be possible to lay down more stringent conditions for table wine covered by storage contracts, based on the quality of the harvest.
In order to avoid abuse of the system, table wines which have been stored under contract may not subsequently be recognised as quality wines psr.
In order to prevent products covered by a contract from affecting the market situation, marketing and certain actions preparatory thereto should be prohibited during the contractual storage period.
Under the third indent of Article 26(1) of Regulation (EC) No 1493/1999, rules may be adopted allowing grape must covered by a long-term contract to be processed into concentrated grape must or rectified concentrated grape must during the period of validity of the contract. Since such processing is a normal operation, it should be permitted permanently.
Intervention agencies should be notified whenever grape must is processed while under a storage contract, so that they may carry out the necessary checks.
The processing of grape must into concentrated grape must and rectified concentrated grape must reduces the volume of product in storage and consequently brings down storage costs. However, since the product obtained has a higher value, the reduction in storage costs is offset by the rise in interest. It is therefore justified, in cases where the product is processed during storage, for the aid to remain at the level calculated on the basis of the quantity of grape must under contract prior to processing throughout the period of validity of the contract. Moreover, the products obtained must have the characteristics required by the Community rules.
The amount of private storage aid should take into account technical storage costs and interest. Technical storage costs can differ according to the type of product, while the amount of the interest depends on the value of the product. Accordingly, for ease of administration, the amount of aid per hectolitre per day should be fixed for separate groups of table wines and musts. Under Article 25(4) of Regulation (EC) No 1493/1999, the amount of aid for concentrated grape must should be 1,5 times higher than for grape must. However, the amounts fixed in this Regulation may be amended to take account of substantial fluctuations in market prices or interest rates.
It must also be possible to shorten the storage period in cases where the products are intended for export once removed from storage. Proof that the products have been exported should be supplied in the same way as for refunds, in accordance with Commission Regulation (EC) No 800/1999 of 15 April 1999 laying down common detailed rules for the application of the system of export refunds on agricultural products(2).
To ensure that this system is effective while at the same time taking into account the administrative requirements of the intervention agencies, a time limit should be laid down for payment of the aid. However, in the case of long-term contracts, in order to help meet the cash-flow requirements of the producers concerned, the Member States should be authorised to introduce an advance payment scheme involving the lodging of adequate securities.
When a storage contract for table wine expires, producers may, on request, conclude a new contract using simplified formalities provided the conditions for the conclusion of a new contract for the same product are satisfied.
The market for must and concentrated must for grape juice production is expanding and, in order to promote the use of vine products for purposes other than wine-making, permission should be granted for must and concentrated must covered by storage contracts and intended for grape-juice production to be sold from the fifth month of the contract onwards on simple notification by the producer to the intervention agency. This same possibility should apply to promote export of these products.
The products which may be obtained by distillation should be specified, and in particular the minimum quality requirements for neutral alcohol should be laid down. In setting these requirements, technological progress should be taken into account, as should the need to ensure that the alcohol produced can be sold normally on the markets for the different uses.
The checks on products intended for distillation should be intensified.
In the case of voluntary distillation under Articles 29 and 30 of Regulation (EC) No 1493/1999, producers should be required to conclude delivery contracts with distillers, to be approved by the intervention agency, so that operations can be supervised and both parties' compliance with their obligations can be checked. Under such a system the quantitative effects of distillation operations on the market could be more closely monitored. However, the contracts system needs to be adjusted to take account of the fact that some producers wish to entrust distillation to a jobbing distiller while others have distillation plant themselves.
Specific rules are needed to ensure that wine delivered for one of the optional distillation operations comes from the producers' own production. To that end, such producers should be required to provide proof that they have actually produced and hold the wine to be delivered. Rules are also needed to ensure that the essential elements of distillation contracts are adequately checked.
Experience shows that a certain tolerance should be allowed in the quantity and actual alcoholic strength by volume of the wine covered by delivery contracts.
Time limits should be set for payment of aid to distillers by the intervention agencies. It should also be possible for the aid to be paid to distillers in advance. A system of securities is needed to ensure that the intervention agency is not exposed to unjustified risks.
In the case of distillation under Articles 27 and 28 of Regulation (EC) No 1493/1999, experience has shown that it is not always easy for producers to calculate exactly the quantities of products they are required to deliver to meet their obligation. Where producers have delivered almost all the quantities required by the expiry of the period for delivery and have only to make some minor adjustments, the penalty imposed should not be out of proportion to the infringement committed. Such producers should therefore be deemed to have fulfilled their obligations within the time limits, provided they deliver the quantities outstanding in due course.
Distillation under Articles 27 and 28 of Regulation (EC) No 1493/1999 plays a vital role in achieving balance on the market in table wine and indirectly helps to adjust wine-growing potential to requirements. Compulsory distillation must therefore be enforced very strictly and all persons subject to the obligation to distil must actually deliver the required quantities for distillation. In some cases exclusion from intervention measures has not been a sufficient incentive to ensure that persons subject to compulsory distillation fulfil their obligations. Additional Community measures are therefore needed for producers who fail to fulfil their obligations within the time allowed but who do fulfil them before another date to be specified.
The various wine distillation operations may yield neutral alcohol as defined in the Annex to this Regulation, on the basis of criteria relating to its composition. Community methods of analysis should be adopted to ensure that these criteria are complied with.
These methods must be compulsory for all commercial transactions and verification procedures. In view of the trade's limited facilities, a small number of usual procedures should be allowed so that the requisite factors can be determined rapidly and with reasonable accuracy.
The Community methods of analysis should be generally recognised methods and should be uniformly applied.
In order to ensure that the results obtained by applying the analytical methods referred to in Regulation (EC) No 1493/1999 are comparable, the terms relating to the repeatability and reproducibility of results obtained using these methods should be defined.
The buying-in price of wine deliveries should apply ex distiller's premises. In certain cases, transport is provided by the distiller for practical reasons. In order not to disturb this practice, which is often necessary, the transport costs should be deducted from the buying-in price in such cases.
The obligation to distil represents a considerable constraint for isolated producers who make only a small quantity of wine. The costs such producers would incur in transporting their grape marc and wine lees for distillation would be out of all proportion to the return which they could hope to obtain on the alcohol distilled from them. They should therefore be permitted not to make delivery.
For that part of their wine production actually delivered for distillation under Article 28 of Regulation (EC) No 1493/1999, producers should be required to deliver only by-products of wine-making for distillation under Article 27 of that Regulation.
The obligation to distil by-products is a disproportionate constraint for some producers of small quantities in certain wine-growing areas. At the request of their Member State, such producers should be allowed to have their by-products withdrawn under supervision instead of delivering them for distillation.
Producers who deliver their marc for the manufacture of oenocyanin generally supply unfermented grape marc. The process by which oenocyanin is extracted from such marc makes the marc unsuitable for fermentation and distillation thereafter. Those producers should therefore be exempted from the obligation to distil in proportion to the quantity of grape marc they supply for such manufacture.
When wine delivered for distillation is used to manufacture wine vinegar, the volume of alcohol delivered to intervention agencies is likely to be reduced. Producers should therefore be released from their obligation to distil where they deliver to the vinegar industry the wine which would otherwise be necessary to make up the quantity for compulsory distillation.
Where the by-products of wine-making are withdrawn under supervision under Article 27(7) and (8) of Regulation (EC) No 1493/1999, all such by-products must have been withdrawn by the end of the wine year in which they were produced. To this end, an appropriate monitoring system is needed, which will not result in disproportionately high administrative costs, particularly in Member States whose wine production is very low.
Administration of the proof that marc, wine lees and wine have been delivered to a distiller should distinguish between whether the distiller is established in the same Member State as the producer or in another Member State.
Under Article 27(11) and Article 28(5) of Regulation (EC) No 1493/1999, distillers may opt either to receive aid for the product to be distilled or to deliver the product obtained by distillation to the intervention agency. The amount of aid should be fixed on the basis of the market price for the various products which may be obtained by distillation.
To qualify for the aid, the parties concerned must submit an application together with certain supporting documents. The type and number of documents required must reflect the differences between wine and wine lees on the one hand and grape marc on the other. To ensure that the system operates uniformly in all Member States, applications should be lodged and aid paid to distillers within time limits to be laid down. Some proportional allowance should be made for distillers who, although they have met their principal obligations, are late in furnishing proof thereof.
When fixing the price to be paid by the intervention agencies for the products delivered to them, account should be taken of the average cost of transporting and distilling the products concerned.
A single standard price should be fixed for products delivered to intervention agencies in connection with distillation under Article 27 of Regulation (EC) No 1493/1999, irrespective of the origin of the raw materials.
In some regions of the Community, the relation between the quantities of marc and those of wine and wine lees is such that the average distillation costs differ from those used to calculate the standard price. This situation makes it, or can make it, economically impossible in some of these regions to achieve the objective sought through the compulsory distillation of the by-products of wine-making. Prices differentiated according to the raw material of the product obtained by distillation should therefore be fixed at the same time as the standard price, while leaving it to the Member States to decide whether such differentiated prices should be applied in regions where application of the standard price would lead to the difficulties referred to above.
Recourse to this option must not increase the expenditure incurred by the intervention agency and, hence, by the EAGGF. The prices differentiated according to the origin of the alcohol should therefore be correlated with the standard price in such a way that the weighted average of the former does not exceed the standard price.
In the absence of an organised Community market in ethyl alcohol, the intervention agencies responsible for marketing the alcohol which they are obliged to take over following distillation under Articles 27 and 28 of Regulation (EC) No 1493/1999 must resell it at less than the buying-in price. The difference between the buying-in price and the selling price for such alcohol should be borne, at a standard rate, by the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section.
Article 29 of Regulation (EC) No 1493/1999 provides for distillation to support the wine market and, as a consequence, to facilitate the continuation of supplies of wine distillate to parts of the potable alcohol sector. To take end-of-the-year surpluses into account, the measure should come into effect from 1 September each marketing year.
Since the Commission is responsible for organising the sale of certain wine alcohols, it needs more detailed knowledge of the transactions carried out on the alcohol market. The information that the Member States send the Commission about alcohol from compulsory distillation should therefore be extended to cover alcohol from voluntary distillation held by the intervention agencies.
The required characteristics of products that may be delivered for distillation should be specified in greater detail.
Products entering distilleries should be physically checked using procedures that ensure adequate representativeness.
The consequences to be incurred by producers who fail to comply with their obligations must be specified. However, the Commission should adopt rules on the entitlement to aid of distillers who fail to comply with certain administrative time limits, in particular to take account of the proportionality principle.
Rules are needed to cover cases of force majeure which may prevent distillation from taking place as planned.
To ensure that distillation operations are adequately supervised, distillers should be subject to a system of approval.
To take account of the actual situation on the market in wine for distillation, both distillers and makers of fortified wine should be allowed to fortify such wine for distillation and the overall arrangements should be adjusted accordingly.
Member States should be able to restrict the places at which wine may be fortified for distillation so as to ensure the most appropriate form of supervision.
Detailed rules are needed for payment of the buying-in price for the wine, payment of aid to makers of fortified wine, payment of the aid in advance, and the lodging and release of securities.
Since the addition of an indicator to wine for distillation is an effective method of supervision, it should be stipulated that the presence of such an indicator may not prevent free movement of such wine or of products obtained therefrom.
To take account of the way in which products are transported to distilleries in some Member States, particularly where small quantities are involved, Member States should be authorised to allow them to be transported in bulk.
In the case provided for in Article 32 of Regulation (EC) No 1493/1999, for some types of distillation the buying-in price for wine should be reduced where producers have increased the alcoholic strength by adding sucrose or concentrated grape must for which they have either received or applied for aid under Article 34 of that Regulation.
It is very difficult to link the increase in alcoholic strength obtained by each producer to the wine delivered for distillation. Determining exactly the economic advantage accruing to each producer would therefore require an excessive amount of administrative work liable to delay payment of the aid and affect the whole intervention system. The buying-in price should therefore be reduced on the basis of the average increase in the natural alcoholic strength in each wine-growing zone. To avoid the excessive amount of administrative work needed to verify the increase in alcoholic strength for each producer, the buying-in price for such wine delivered for distillation should be reduced by a fixed amount for each zone or zone division.
It is only fair that producers should receive the full price if they have not increased the alcoholic strength of any part of their table wine by adding either sucrose or concentrated grape must for which they have received aid under Article 34 of Regulation (EC) No 1493/1999. Moreover, producers who have increased the alcoholic strength of less of their production than they deliver for distillation should be paid the full price for the difference between the quantity enriched and the quantity delivered.
The aid for the product obtained by distillation and the price of the products taken over by the intervention agency in connection with distillation under Article 28 of Regulation (EC) No 1493/1999 must be adjusted to take account of the reduction in the buying-in price for the wine.
One feature of the Community market for alcohol is the existence of stocks resulting from intervention under Articles 27, 28 and 30 of Regulation (EC) No 1493/1999(3).
Specific detailed rules are needed for such tendering procedures to ensure that all purchasers are treated equally.
These stocks of alcohol may be disposed of by three different types of tendering procedure, depending on the use and destination for which the alcohol is intended and the quantities of alcohol at 100 % vol. to be disposed of.
Since the aim of tendering procedures is to obtain the most favourable price, where the Commission decides to sell following a tendering procedure the sale must be awarded to the tenderer offering the highest price. Rules are also needed for cases where several tenders for the same lot offer the same price.
Tenders for up to 5 000 hectolitres should be admissible, on certain conditions, so that new uses devised for alcohol can be tested at intermediate industrial scale, thereby helping to develop outlets in the longer term for significant quantities of Community alcohol without disrupting the market in spirit drinks.
It is necessary to determine which forms of processing into goods exported under inward processing arrangements may be considered equivalent to real industrial uses.
In order to ensure that alcohol sold under such tendering procedures is actually used for purposes not likely to disrupt the market in alcohol, tenders must give a precise indication of the intended use.
Tenderers should be allowed to submit only one tender per type of alcohol, type of end use and tendering procedure. The legal consequences for tenderers who submit more than one tender should also be specified.
In order not to affect competition with products which the alcohol may replace, the Commission should be free to award no quantities on the basis of tenders received.
So that sales can be awarded in response to the greatest possible number of tenders submitted where the proposed prices are deemed satisfactory and the proposed end uses are suitable for developing new industrial outlets for the product, it should be possible, within certain limits, for tenderers who have submitted such tenders to be awarded a replacement lot. Such a procedure is likely to increase sales of Community alcohol and thus reduce stocks which must otherwise be managed at a high cost to the budget.
Irrespective of the margin of tolerance on the overall quantity of alcohol put up for sale by tender, the price to be paid before a removal order is issued should be calculated on the basis of a quantity of alcohol at 100 % vol., determined to the nearest hectolitre.
Regular tendering procedures should be held for export of the alcohol awarded to the countries of the Caribbean area for final use in the fuel sector so as to give these countries greater continuity of supply. Experience shows that this outlet is most unlikely to disrupt the market and affords a major market opportunity.
The size of the lots put up for sale by tender for export to the Caribbean countries should be linked to normal sea transport capacity, thereby reducing the cost to the traders concerned of providing performance guarantees. The time limits laid down for removing the alcohol awarded should be adjusted accordingly.
Public sales of wine alcohol for use as fuel within the Community should be subject to certain conditions so as to provide undertakings with supplies to some extent and take account of the cost of the investment in processing plant needed for that particular use, without, however, preventing the alcohol put up for sale from being physically moved.
It should be specified that public sales of this type should involve several lots of alcohol where large quantities are set aside for such public sales and that the alcohol in the vats concerned can no longer be physically moved until a removal order has been issued for it.
In the case of sale by tender or public sale for use as fuel, since physical removal and processing of the alcohol must take place over a period of several years, the price per hectolitre of alcohol at 100 % vol. offered by the successful tenderer should be adjusted every three months by applying a coefficient indicated in the relevant notice of invitation to tender, so that the prices to be paid for the alcohol awarded more closely follow the fluctuation of fuel prices on international markets.
In view of the size of some of the vats in which part of the alcohol obtained by compulsory distillation is stored and the considerable length of time that some of this alcohol remains in storage, it is impossible in practice to know exactly what quantity of marketable alcohol is contained in certain storage vats.
This being the case, any tendering procedure ultimately found to relate to a quantity of marketed alcohol amounting to between 99 and 101 % of the quantity of alcohol originally put up for sale should be deemed to have been executed.
Tenderers' statements waiving all claims in respect of the quality and characteristics of the alcohol awarded to them should not extend to hidden defects that by their nature could not be detected by them beforehand and that make the alcohol unfit for the use intended.
Alcohol reserved for certain sales by tender should be denatured where appropriate to prevent it from being used for other purposes. The quantity of alcohol awarded in such cases should be denatured by adding petrol.
A system of securities should be introduced to ensure that tendering procedures are properly conducted and that the alcohol is in fact used for the purpose specified in the relevant invitation to tender. Securities should be set at a level which will prevent any utilisation contrary to the objectives of the tendering procedure that might cause a disturbance on the market in alcohol and spirit drinks produced in the Community in accordance with Article 31 of Regulation (EC) No 1493/1999. The rules laid down in Commission Regulation (EEC) No 2220/85 of 22 July 1985 laying down common detailed rules for the application of the system of securities for agricultural products, which also covers wine, should be taken into account. The primary requirements of the obligations subject to a security should therefore be specified.
Losses may occur when alcohol is being transported by land and sea and processed prior to final use. Account should be taken of the relevant technical standards to evaluate changes in the volume of alcohol recorded on loading and unloading and a specific tolerance limit should be set for each category of loss.
An overall tolerance limit should be set for losses of alcohol due to multiple land and sea transport operations in connection with a tendering procedure for the export of alcohol to be processed in the third countries covered by this Regulation. A higher tolerance limit should also be set for alcohol losses due to processing operations in such third countries by comparison with similar operations in the Community to take account of operational, climatic and other conditions and the fact that some equipment is less efficient in some third countries.
Penalties should be applied for losses exceeding the set tolerance limits by withholding a standard amount of the performance guarantee covering the cost price of the alcohol delivered to the intervention agency in connection with distillation under Articles 27, 28 and 30 of Regulation (EC) No 1493/1999. Part of the performance guarantee should be released only after the successful tenderer has produced evidence concerning all the losses relating to the tender concerned so that the amount of guarantee available is sufficient to penalise such illegal losses of alcohol.
Some end uses intended for alcohol covered by a tendering procedure require all or some of the alcohol awarded to be processed into rectified alcohol. Some of the intended uses for the alcohol sold require prior rectification or dehydration that also produces foul-tasting alcohol unsuitable for the uses initially intended for these tendering procedures. This being the case, the conditions on which performance guarantees can be released should be amended.
The checks made to verify whether the alcohol is used for the purposes specified in the relevant invitations to tender should include at least checks equivalent to those applied to the monitoring of Community-produced alcohol. For the purposes of checks on certain uses or destinations, an international surveillance firm may be used to verify whether the contract awarded is duly fulfilled. In line with the strengthening and development of the internal market, physical checks should be conducted at the place of departure or destination of alcohol transport operations.
The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Wine,
HAS ADOPTED THIS REGULATION:
Article 1 Purpose
This Regulation lays down the detailed rules for applying Regulation (EC) No 1493/1999 in particular regarding aid for the use of grapes, grape must and concentrated grape must (Title I), private storage aid (Title II) and distillation (Title III).
Article 2 General provisions
1.
Member States may rule that operators starting up their activities for the first time during a given wine year are entitled to aid under this Regulation only for products resulting from the processing of their own grape production.
2.
Without prejudice to Article 30 of this Regulation, operators who were subject to the obligations laid down in Articles 27 and 28 of Regulation (EC) No 1493/1999 during the previous wine year shall be eligible for the measures provided for in this Regulation only where they provide evidence that they fulfilled their obligations regarding delivery or withdrawal under supervision during the wine year concerned.
For the 2000/01 wine year, the obligations referred to in the first subparagraph shall be those laid down in Articles 35 and 36 of Regulation (EEC) No 822/87.