Commission Regulation (EC) No 1145/2008 of 18 November 2008 laying down detailed rules for implementing Council Regulation (EC) No 637/2008 as regards the national restructuring programmes for the cotton sector

CHAPTER I

GENERAL RULES

Article 1

Scope

This Regulation lays down implementing rules concerning national restructuring programmes under Regulation (EC) No 637/2008, containing the five eligible measures provided for in Article 7 of that Regulation.

Article 2

Content of restructuring programmes

Restructuring programmes submitted by Member States in accordance with Article 4(1) of Regulation (EC) No 637/2008, shall consist of the following elements:

(a) a detailed description of the measures proposed as well as their quantifiable objectives;

(b) the results of consultations held as provided for in the second subparagraph of Article 4(1) of Regulation (EC) No 637/2008;

(c) an appraisal showing the expected technical, economic, environmental and social impact;

(d) a description of the ginning facilities in the Member State concerned and use of their capacity since 2005, in case of inclusion in the restructuring programme of the measures referred to in Article 7(1)(a) and (b) of Regulation (EC) No 637/2008;

(e) a schedule for implementing each of the measures;

(f) a general financial table, following the model provided for in the Annex to this Regulation, showing the resources to be deployed and the envisaged allocation of the resources between the measures in accordance with the budgetary allocation fixed in Article 5(1) of Regulation (EC) No 637/2008;

(g) the criteria and quantitative indicators to be used for monitoring and evaluation of the measure of the restructuring programme as well as the steps taken to ensure that the programmes are implemented appropriately and effectively;

(h) the designation of competent authorities and bodies responsible for implementing the programme.

Article 3

Changes of restructuring programmes

Changes of restructuring programmes, as referred in Article 4(3) of Regulation (EC) No 637/2008, shall not be submitted more than once per year.

The modified programmes shall indicate clearly and precisely the proposed changes, the reasons for these changes and their financial consequences, and shall include, if applicable, a revised version of the financial table following the model provided for in the Annex to this Regulation.

Expenditure resulting from modification of restructuring programmes shall be eligible from the date of the submission of the revised programme to the Commission. Member States shall bear the responsibility for expenditure between the date on which their modified restructuring programme is received by the Commission and the date of its applicability in accordance with the second subparagraph of Article 4(2) of Regulation (EC) No 637/2008.

Article 4

Reporting and evaluation

The report submitted under paragraph 1 of this Article and that submitted with the communication requesting termination of the programme as referred to in Article 5(2) of Regulation (EC) No 637/2008 shall:

(a) list and describe the measures for which Community assistance under the restructuring programmes was granted, for each of the years of the programming period concerned;

(b) if applicable, describe any changes to the restructuring programme, the reasons therefore and its implications for the future;

(c) describe the results achieved with each measure, in light of the quantifiable objectives set out in the restructuring programme;

(d) contain a statement of expenditure by financial year already incurred in the programming period which will in no case overshoot the limit of the total financial amount allocated to the Member State pursuant to Article 5(1) of Regulation (EC) No 637/2008;

(e) support forecasts for expenditure until the end of the foreseen period of implementation of the restructuring programme, up to the limit of the total financial amount allocated to the Member State pursuant in Article 5(1) of Regulation (EC) No 637/2008;

(f) if applicable, contain an analysis of the involvements of other Community funds and their conformity with the aids financed by the restructuring programme.

Article 5

Public access to information on restructuring programmes

Member States shall make the restructuring programme, its modifications, the report on the implementation of the programme, and any national legislation concerning this programme, publicly available on a website.

Article 6

Requirements for application and payment

Member States shall for each measure contained in their restructuring programme and listed in Article 7(1) of Regulation (EC) No 637/2008:

(a) determine the elements to be contained in an application for support;

(b) set the start date and end date of the period for lodging an application;

(c) approve valid and complete applications on the basis of objective and non-discriminatory criteria, taking into account the financial resources available within the annual ceilings provided for in Article 5(1) of Regulation (EC) No 637/2008;

(d) pay the eligible support, or the remaining eligible support in case an advance has been paid, after completion of the measure and execution of controls as referred to in Article 7 of this Regulation.

The payment of an advance shall be subject to the lodging of a security of an amount equal to 120 % of the amount of the advance concerned.

When the conditions for the completion of a measure have been fulfilled, and when the controls referred to in the second and third subparagraphs of Article 7(1) have been carried out, securities shall be released and any additional payments shall not be subject to the lodging of a security.;

All payments referred to in paragraphs 1 and 2 that relate to a particular application shall be made at the latest:

(a) by 30 June of the fourth year following the year of the deadline for submission of the draft four-year restructuring programmes as laid down in the first subparagraph of Article 4(1) of Regulation (EC) No 637/2008;

(b) by 30 June of the eight year following the year of the deadline for submission of the draft eight-year restructuring programmes as laid down in the second subparagraph of Article 4(1) of Regulation (EC) No 637/2008.

Payments in the first year of the first programming period shall be made from 16 October 2009.

Article 7

Monitoring and control

For the measures referred to in Article 7(1), points (a), (b), (d) and (e) of Regulation (EC) No 637/2008, the Member States shall inspect on the spot each factory, production site and beneficiary receiving support under the restructuring programme before a final payment is made, to check that all conditions for obtaining the aid have been met and the measures referred to in Article 7(1), points (a), (b), (d) and (e) of that Regulation have been completed.

With regard to the measure referred to in Article 7(1), point (a) of Regulation (EC) No 637/2008 an on-the-spot inspection shall be carried out on all relevant factory and production sites at the latest three months after the expiry of the one year period referred to in Article 10(1)(b) of this Regulation to verify that the requirements of that paragraph have been met.

Member States shall verify whether the commitment referred to in Article 10(1)(e) is respected.

For each on-the-spot inspection a report shall be established within one month, fully describing the work undertaken, the main findings and any follow-up action required. Specifically, the inspection reports shall:

(a) contain information regarding the beneficiary and the production site subject to inspection as well as the persons present;

(b) state whether notice of the visit was given to the beneficiary and, if so, the period of advance notice;

(c) state the requirements and standards subject to inspection;

(d) describe the nature and extent of the checks carried out;

(e) contain the findings;

(f) contain the elements in relation to which non-compliances are found;

(g) contain an evaluation providing an assessment of the importance of the non-compliance in respect of each element on the basis of, among others, its severity, extent, degree of permanence and history.

The beneficiary shall be informed of any non-compliance found.

Article 8

Recovery of undue payments

Undue payments shall be recovered, with interest, from the beneficiaries concerned. The rules fixed in Article 73 of Regulation (EC) No 796/2004 shall apply mutatis mutandis.

Implementation of administrative penalties and recovery of unduly paid amounts are without prejudice to communication of irregularities to the Commission pursuant to Commission Regulation (EC) No 1848/2006 (⁵).

Article 9

Penalties

CHAPTER II

ELIGIBLE MEASURES

SECTION 1

Dismantling of ginning facilities

Article 10

Scope

Full and permanent dismantling of ginning facilities as referred to in Article 7(1)(a) of Regulation (EC) No 637/2008 shall require:

(a) the definitive and total cessation of the ginning of cotton in the factory or factories concerned;

(b) the dismantling of all ginning equipment thereof, and the removal of the ginning equipment from the site or sites, within one year of the approval of the application by the Member State;

(c) the definitive exclusion of the ginning equipment from cotton processing in the Community, by: (i) removal of equipment to a third country; (ii) guaranteed application of equipment in another sector; or (iii) destruction of equipment;

(d) the restoring of the good environmental conditions of the factory site or sites and the facilitation of redeployment of the workforce; and

(e) the written commitment not to use the production site or sites for the ginning of cotton during a period of ten years from the approval of the application as referred to in point (b).

Ginning equipment means all specific equipment used for the transformation of unginned cotton into ginned cotton and its by-products, including feeders, dryers, cleaners, stick machines, gins, condensers, lint cleaners and bale presses.

Article 11

Community contribution

SECTION 2

Investments in the ginning industry

Article 12

Scope

Support for the measure referred to in Article 7(1)(b) of Regulation (EC) No 637/2008 shall be granted for tangible or intangible investments which improve the overall performance of the enterprise and concern:

(a) the processing and/or marketing of cotton; and/or

(b) the development of new processes and technologies linked to cotton.

Article 13

Eligible expenditure

Eligible expenditure shall be:

(a) the improvement of immovable property;

(b) the purchase or lease purchase of new machinery and equipment, including computer software up to the market value of the asset, and excluding other costs connected with the leasing contract, such as lessor’s margin, interest refinancing costs, overheads and insurance charges;

(c) general costs linked to expenditure referred to in points (a) and (b), such as fees of architects and engineers and consultation fees, feasibility studies, the acquisition of patent rights and licences.

Article 14

Community contribution

The Community contribution for support referred to in Article 12 shall be limited to the following maximum aid rates:

(a) 50 % in regions classified as convergence regions in accordance with Council Regulation (EC) No 1083/2006 (⁷);

(b) 40 % in regions other than convergence regions.

SECTION 3

Participation of farmers in cotton quality schemes

Article 15

Scope

Support for the measure referred to in Article 7(1)(c) of Regulation (EC) No 637/2008 shall:

(a) be granted for Community quality schemes for cotton established under Council Regulation (EC) No 834/2007 (¹⁰), or Council Regulation (EC) No 510/2006 (¹¹), or quality schemes recognised by the Member States;

(b) be granted as an annual incentive payment whose level shall be determined according to the level of the fixed costs arising from participation in supported schemes, for a maximum duration of four years.

Schemes whose sole purpose is to provide a higher level of control of respect of obligatory standards under Community or national law shall not be eligible for support under this section.

Article 16

Eligibility criteria

To be eligible for support, quality schemes recognised by Member States, as referred to in point (a) of the first subparagraph of Article 15, shall comply with the following criteria:

(a) the specificity of the final product under such schemes shall be derived from detailed obligations on farming and processing methods that guarantee: (i) specific characteristics including the production process; or (ii) a quality of the final product that goes significantly beyond the commercial commodity standards as regards plant health or environmental protection;

(b) the schemes involve binding product specifications and compliance with those specifications shall be verified by an independent inspection body;

(c) the schemes shall be open to all producers;

(d) the schemes shall be transparent and assure complete traceability of the products;

(e) the schemes shall respond to current and foreseeable market opportunities.

As regards the quality schemes established under Regulation (EC) No 510/2006, support may only be granted in respect of names registered in the Community register.

Article 17

Community contribution

Support for the measure referred to in Article 15 shall be limited to a maximum amount of EUR 3 000 per holding per year.

SECTION 4

Information and promotion

Article 18

Scope

Article 19

Eligible activities

Such activities shall draw attention to the specific features or advantages of the products concerned, notably the quality, specific production methods, and respect for the environment linked to the quality scheme concerned, and may include the dissemination of scientific and technical knowledge about those products. Such activities shall include, in particular, the organisation of, and/or participation in, fairs and exhibitions, similar public relations exercises and advertising via the different channels of communication or at the points of sale.

Such activities shall not incite consumers to buy a product due to its particular origin, except for products covered by the quality scheme introduced by Regulation (EC) No 510/2006. The origin of a product may nevertheless be indicated provided the mention of the origin is subordinate to the main message.

Activities related to the promotion of commercial brands shall not be eligible for support.

Article 20

Community contribution

Support for the measure referred to in Article 18 shall be limited to 70 % of the cost of the activity.

SECTION 5

Aid to machinery contractors

Article 21

Scope

Aid for the measure referred to in Article 7(1)(e) of Regulation (EC) No 637/2008 shall be granted on the basis of objective and non-discriminatory criteria, for the losses incurred including the loss of value of specialised harvest machinery, which can not be used for other purposes.

Article 22

Community contribution

CHAPTER III

FINAL PROVISIONS

Article 23

Entry into force and application

This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Union.

It shall apply from 1 January 2009.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

ANNEX

(1 000 EUR)
Member State:
Date of communication:
Amended table: Yes/No	If Yes, number:
	Financial year
Measures	Regulation (EC) No 637/2008	Year 1 (2010)	Year 2 (2011)	Year 3 (2012)	Year 4 (2013)	Total
Dismantling	Article 7(1)(a)
Investments	Article 7(1)(b)
Quality schemes	Article 7(1)(c)
Information and promotion	Article 7(1)(d)
Machinery contractors	Article 7(1)(e)
Total