ENLARGEMENT - Preparation of the next Accession Conferences with Hungary and Slovakia = Chapter 7:Agriculture

ENLARGEMENT - Preparation of the next Accession Conferences with Hungary and Slovakia = Chapter 7:Agriculture - Hoofdinhoud

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1. Tekst

COUNCIL OFBrussels, 6 November 2002

THE EUROPEAN UNIONPUBLIC

13202/02

LIMITE

ELARG 326

REPORT

from : Enlargement Group

on : 6 November 2002

to : Permanent Representatives Committee

Subject : ENLARGEMENT

- Preparation of the next Accession Conferences with Hungary and Slovakia -

= Chapter 7: Agriculture

With a view to the next Accession Conferences, the Enlargement Group has prepared draft

European Union Common Positions on Agriculture. However, the Italian Delegation

maintained a reservation on the draft Common Positions in relation to the Tokaj/Tocai issue

(point 30 of the draft Common Position for Hungary and point 25 of the draft Common

CONFERENCE ON ACCESSION - ANNEX I

TO THE EUROPEAN UNION

- HUNGARY -

DRAFT

EUROPEAN UNION COMMON POSITION

(Replaces doc.20402/02 CONF. H 21/02)

Chapter 7: Agriculture

This position of the European Union is based on its general position for the Accession Conference with Hungary (CONF-H 2/98), and is subject to the negotiating principles endorsed by the Conference (CONF-H 6/98), in particular:

"- any view expressed by either party on a chapter of the negotiations will in no way prejudge the position which may be taken on other chapters;

-

agreements - even partial - reached during the course of the negotiations on chapters to be examined successively may not be considered as final until an overall agreement has been established".

ii.

The EU underlines the importance for Hungary of compliance with the Association Agreement as well as with the Accession Partnership, which constitute basic elements of the enhanced pre-accession strategy. The EU underlines the paramount importance for Hungary

of the acceptance of the acquis in the field of agriculture prevailing at the date of accession. The EU notes the progress Hungary has made in this chapter and encourages it to accelerate the continuing process of alignment with the acquis and its effective implementation and enforcement, and in general to develop already before accession, policies and instruments as close as possible to those of the Common Agricultural Policy.

iii.

Most of the acquis in the field of agriculture applies directly from accession and does not therefore call for transposition. The EU underlines, however, that Hungary's ability to

implement and enforce the acquis is of paramount importance. In order to ensure the smooth execution of the Common Agricultural Policy after accession, Hungary has to demonstrate, sufficiently ahead of accession, that it possesses the administrative capacity for effective implementation and enforcement of the acquis . An equally important element in ensuring the smooth application of the Common Agricultural Policy after accession is that Hungary has the necessary mechanisms in place needed for the management of the various Common Market Organisations.

iv.

Moreover, the EU points out that, in the veterinary and phytosanitary fields, the acquis consists mainly of a large number of legislative acts that are rather broad in scope and quite demanding in terms of transposition, implementation and enforcement. It is essential that Hungary not only ensures the full transposition into its national legislation of the veterinary

and phytosanitary acquis but also that administrative structures and procedures are strengthened and reformed before accession. The EU underlines the importance of achieving full compliance by the time of accession with regard to EU requirements for food safety and consumer protection.

The EU recalls that Hungary, in its negotiating position (CONF-H 59/99), accepts the

acquis under chapter 7 and that Hungary declares that it will be able to implement it by 1 January 2003, while it makes a number of specific requests for transitional measures and with regard to the application of the Common Agricultural Policy on Hungary. The EU takes note of the additional information provided by Hungary in CONF-H 63/00, 21/01, 37/01, 38/01 39/01, 53/01, 2/02, 4/02, 5/02, 15/02 17/02 and 32/02.

vi.

As an overall response to Hungary's requests for transitional arrangements, the EU recalls its general negotiating position that transitional measures are exceptional, limited in time and scope, and accompanied by a plan with clearly defined stages for the application of the

acquis . They must not involve amendments to the rules or policies of the European Union, disrupt their proper functioning, or lead to significant distortion of competition.

viii.

The EU recalls that the framework for financing enlargement for the period 2000-2006 was set by the Berlin European Council in March 1999 and by the Interinstitutional Agreement

of 6 May 1999.

ix.

The Financial Perspectives agreed in Berlin for the period 2000-2006 did not cover direct payments in agriculture to the new Member States. However, the EU notes that the direct support schemes listed in Council Regulation (EC) No 1259/1999 and its Annex are part of

the acquis and that the acquis must be applied in all Member States, with transitional modalities to be adopted with the candidate countries in the Treaty of Accession.

x.

The EU recalls the conclusions of the European Council in Brussels on financing enlargement.
xi.

The phasing in of direct payments will take place within a framework of financial stability,

where total annual expenditure for market related expenditure and direct payments in a Union of 25 cannot in the period 2007-2013 exceed the amount in real terms of the ceiling of category 1.A for the year 2006 agreed in Berlin for the EU-15 and the proposed corresponding expenditure ceiling for the new Member States for the year 2006. The overall expenditure in nominal terms for market-related expenditure and direct payments for each year in the period 2007-2013 shall be kept below this 2006 figure increased by 1% per year.

xii.

The needs of producers living in the disadvantaged regions of the present European Union

should be safeguarded; multifuncional agriculture will be maintained in all areas of Europe, in accordance with the conclusions of the 1997 Luxembourg European Council and the 1999 Berlin European Council.

xiii.

The EU takes the view that technical adaptations to the acquis are to be examined at the

appropriate moment at a later stage of the negotiations.

xiv.

As a matter of principle, the EU considers that where a particular issue, for instance a product

group, has not been covered by Hungary's position, Hungary accepts the acquis and undertakes to be able to fully implement it upon accession. The EU reserves the right to come back to any issue, including those that are not explicitly raised in the present position, at a later stage of the negotiations in the light of the additional information to be provided by Hungary as well as the evolution of the acquis . The EU notes that certain aspects of the Common Agricultural Policy will be the subject of formal reviews in the appropriate framework in the next few years.

HORIZONTAL ISSUES

A1. Implementation of agricultural sections of Act of Accession

The EU considers that it would be appropriate to stipulate in the relevant parts of the Act of Accession that unless stipulated otherwise in specific cases, the Council, acting by a qualified majority on a proposal from the Commission, should adopt the necessary provisions to implement the parts related to the Common Agricultural Policy of the Act of Accession.

A2. Adaptation of Act of Accession following changes to EU agricultural legislation

The EU considers that it should be stipulated in the parts related to the Common Agricultural Policy of the Act of Accession that the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may make the adaptations to the provisions related to the Common Agricultural Policy of the Act of Accession which may prove necessary as a result of a modification in Community rules. Furthermore, it should also be foreseen that such adaptations may be made already before accession.

A3. Transitional measures

The EU considers that the parts related to the Common Agricultural Policy of the Act of Accession should provide for the necessary legal bases to adopt transitional measures under the following

conditions:

Where transitional measures are necessary to facilitate the transition from the existing regime in the new Member States to that resulting from application of the Common Agricultural Policy under the conditions set out in the agricultural sections of the Act of Accession, such measures should be adopted by the Commission in accordance with the relevant comitology procedure. It should be possible to take such measures during a period of three years after the date of accession and the application thereof should not exceed that period. However, it should be provided that the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may extend the said period.

Where the transitional measures relate to implementation of the instruments concerning the Common Agricultural Policy not specified in the Act of Accession which are required as a result of accession, they should be adopted prior to accession by the Council, acting by a qualified majority on a proposal from the Commission or, where they affect instruments initially adopted by the Commission, by this institution in accordance with the relevant comitology procedure.

A.4 Transitional measures in the field of veterinary and phyto-sanitary legislation

If transitional measures are necessary to facilitate the transition from the existing regime in the new Member States to that resulting from the application of the Community veterinary and phyto- sanitary rules, such measures shall be adopted by the Commission in accordance with the relevant comitology procedure. The measures may be taken for a period expiring three years after the date of acccession and their application shall be limited to that date.

European Agricultural Guarantee and Guidance Fund (EAGGF)

Guarantee section (Council Regulation (EC) No 1258/1999)

The EU takes note of the implementation plan and additional information provided by Hungary in respect of setting up the paying agency and establishing the necessary elements of a functioning Integrated Administration and Control System (IACS). The EU underlines the importance of having a functioning IACS by the date of accession, in particular as regards the area aspects, as IACS would also be relevant to administer and control the payments made under the simplified scheme if Hungary decides to opt for this scheme.

The EU underlines the importance of a fully functioning system for the identification and registration of animals as part of IACS, in the framework of the standard direct payments system.

The EU notes that Hungary does not foresee any problems in complying with EU requirements as regards the system of advances, public storage and budgetary discipline. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

Guidance section budgetary and financial aspects (Council Regulation (EC)

No 1258/1999)

The EU takes note of the information submitted by Hungary with regard to making the necessary administrative and financial adjustments required for full harmonisation with the procedures necessary to implement the acquis relating to EAGGF Guidance Section. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

Trade mechanisms (Commission Regulations (EEC) No 2220/85, (EC) No 800/1999, (EC) No 1291/2000, (EEC) No 3002/92, (EC) No 3122/94, (EC) No 2221/95, (EC) No 615/98 and Council Regulation (EEC) No 386/90)

The EU takes note of the implementation plan/timetable provided by Hungary in respect of the establishment of the administrative structures necessary to implement the acquis related to trade mechanisms. It underlines that further efforts are required to implement the acquis within the given timetable. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

Quality Policy (Council Regulation (EEC) No 2081/92 on the protection of geographical indications and designations of origin and Council Regulation (EEC) No 2082/92 on certificates of specific character for agricultural products and foodstuffs)

The EU takes note of the plans and timetable provided by Hungary in respect of the establishment of the administrative structures necessary to implement the acquis relating to quality policy. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

The EU takes note of Hungary's request that the Hungarian collection "Traditions Tastes Regions" be recognised as part of the European Collection "Euroterroirs". The EU recalls that the "Euroterroirs" Collection is not part of the acquis and is most appropriately addressed outside the accession negotiations.

Organic Farming (Council Regulation (EEC) No 2092/91)

The EU takes note of the implementation plan provided by Hungary in respect of establishing the necessary elements of a functioning inspection system. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

The EU also notes that Hungary has provided the terminology that it wants to be protected under Article 2 and Annex V of Regulation (EEC) No 2092/91. The EU considers that the issue should be dealt with as a technical adaptation.

Products not covered by Annex I

acquis within the given timetable. The EU encourages Hungary to continue the process of

alignment with the acquis and its effective implementation.

7a.

Stocks of agricultural products in the new Member States

The EU notes that the issue of stocks of agricultural products held in Hungary at the date of accession needs to be addressed under two different aspects:

the taking over of public stocks by the Community and

the treatment of stocks in free circulation , in particular where these stocks exceed the level of normal carry-over stocks.

The EU also notes that, as in past accessions, security stocks should be disregarded for this exercise, assuming that they will be maintained during a certain period after accession.

Public stocks

The EU considers that public stocks held at the date of accession and resulting from Hungary's market-support policy should be taken over by the Community at a value resulting from the application of Article 8 of Regulation (EEC) No 1883/78 laying down the general rules for the financing of interventions by EAGGF. Hungary's public stocks should only be eligible on condition that there is public intervention in the Community for the product concerned and that those stocks meet the relevant EU intervention requirements (Community requirements or, if so provided for, specific requirements agreed for intervention in Hungary). The provision in the Act of Accession setting out the above arrangements should be designed along the lines of Article 6 of Regulation (EEC) No 3577/90.

Stocks in free circulation

The EU considers that any stocks (private as well as public) in free circulation at the date of accession in Hungary exceeding the level of what can be considered as normal carry-over of stock should be eliminated at the cost of Hungary. This exercise, should in principle concern products for which export refunds or intervention measures apply.

The EU considers furthermore that the level of normal carry-over stock should be determined for each product in the light of the criteria and objectives which are specific to each common market organisation.

The EU considers that the Commission should be authorised to implement and apply the arrangements outlined above.

Speculative transactions

The EU underlines that possible market disturbances due to trade deflection resulting from abusive operations exploiting differing trade conditions before and after accession should be dealt with in a precautionary manner , by taking appropriate measures preferably before and after accession based on a transition clause similar to Article 149 of the Act of Accession for Austria, Finland and Sweden. In particular, the EU accepts to address the risk of deflection of trade due to the accession of Hungary, where necessary, through transitional measures to be decided before accession under the appropriate procedure.

It would be appropriate to deal with this issue by provisions similar to those of Regulation (EC)

No 3108/94 on transitional measures adopted on the account of the accession of Austria, Finland and Sweden in respect of trade in agricultural products (notably providing rules for import and export transactions ongoing at the moment of accession and for taxation of the holders of surplus

stocks).

The EU notes that Hungary maintains its request for a special provision authorising the granting of national aids in case of serious difficulties to be inserted in the Act of Accession. The EU reiterates its position that accepting the request would deprive the Commission of the possibility of ensuring that there is consistency and coherence between the Commission's policy in respect of the control of State aid and the support which is granted under the Common Agricultural and Rural Development Policy. It therefore reiterates its invitation to Hungary to reconsider its request.

8a. Existing State aids

The EU considers that in order to classify upon accession certain aids as existing aid in the sense of Article 1(b) of Regulation (EC) No 659/1999

1 and to have an overview of all State aids applicable

in Hungary, it should be provided by the agricultural chapter of the Act of Accession that Hungary

shall hand over, within 4 months after Accession, detailed information

2 concerning all the State aid

measures that are to be considered existing aid.

The EU also considers that to avoid a situation, in which State aids that have not yet been examined in detail by the Commission would continue to exist for a longer period of time, a specific clause should be introduced in the agricultural chapter of the Act of Accession. The new provision on State aid in the Act of Accession should provide that in the field of the aids provided for in Articles 87 and 88 of the EC Treaty and without prejudice to the procedures concerning existing aid provided for in Article 88 of the EC Treaty.

(a)

among the aids applied in the new Member States prior to accession only those communicated to the Commission by the end of the fourth month from the date of accession would be deemed to be 'existing' aids within the meaning of Article 88 (1) of the EC Treaty until the end of third year from the date of accession. The Commission would publish a list

of such aids.

(b)

(c)

existing aids and plans intended to grant or alter aids, communicated to the Commission prior to accession, would be deemed to have been communicated or notified on the date of

accession

Miscellaneous

The EU notes that Hungary accepts the acquis with regard to Regulation (EEC) No 827/68 ("solde"), programmes for ultra-peripheral regions, promotion aiming at increasing consumption of some products and free distribution of food to the most deprived persons. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

COMMON MARKET ORGANISATIONS

9a.

Direct payments

1.

Direct payments

The EU takes note of Hungary's request that direct payments be granted to its farmers after accession to the same extent as farmers in the EU. The EU considers that this request should not be followed but direct payments introduced in Hungary gradually during a transition period.

Without prejudice to future decisions on the Common Agricultural Policy and the financing of the European Union after 2006, nor to any result following the implementation of paragraph 22 of the Berlin European Council conclusions, as well as to the international commitments which the Union has undertaken inter alia in the launching of the Doha Development Round, direct payments will be introduced in accordance with the following schedule of increments expressed as a percentage of the level of such payments in the Union:

2004 : 25%

2005: 30% 2006 : 35% 2007 : 40%

and thereafter in 10% increments so as to ensure that the new Member States reach in 2013 the support level then applicable in the current European Union. The EU considers furthermore that the small farmers scheme set out in Article 2a of Council Regulation (EC) No 1259/1999 should not apply .

2.

Simplified scheme

The EU considers that Hungary should have the option, instead of applying the standard direct payments system applicable in the current EU, to grant its farmers the CAP direct payments during a limited period in the form of a decoupled area payment, expressed in /ha.

The EU further considers that the payments that can be made per year in Hungary under the simplified scheme should be limited by an annual financial envelope. This envelope should be determined as

the sum of the EU funds that would be available in Hungary for granting direct payments under the standard scheme,

calculated according to the relevant EU rules and on the basis of the quantitative parameters (e.g. base area, premium ceilings, Maximum Guaranteed Quantities (MGQ)) specified in the Act of Accession for each direct aid listed in the annex to Regulation (EC) No 1259/1999 and

adjusted using the relevant percentage specified for the gradual introduction of direct payments.

The EU notes that under this option, the hectare amount of the area payment applicable in Hungary should be calculated by dividing Hungary's annual financial envelope by its agricultural area. The agricultural area under the simplified scheme should be that part of its utilised agricultural area, as established by the EUROSTAT definition

3, which has been maintained in good agricultural

condition on 30 June 2003 (whether in production or not at that date) according to objective criteria to be set by Hungary.

The EU considers that for the purpose of granting payments under the simplified scheme:

All agricultural parcels corresponding to the EUROSTAT definition of utilised agricultural area, that have been maintained in good agricultural condition on 30 June 2003 (whether in production or not at that date) according to objective criteria to be set by Hungary should be eligible.

The minimum size of eligible area per holding for which payments can be requested should be set at 0,3ha. However, Hungary should have the possibility to decide, on the basis of objective criteria and after approval by the Commission, to set the minimum size at a higher level but no more than 1ha.

There should be no obligation to produce or to employ the factors of production.

Any land benefiting from payments under the simplified scheme should be maintained in good agricultural condition compatible with the protection of the environment, in accordance with the relevant acquis .

The EU stresses that where the area payments to be made under the simplified scheme would exceed Hungary's financial envelope the national per hectare amount should be reduced proportionately by application of a reduction coefficient.

The EU underlines that the simplified scheme would require a limited application of IACS. To this end, the IACS rules laid down in Regulation (EEC) No 3508/92 notably article 2 thereof, should apply to the simplified scheme to the extent necessary. This implies that Hungary would, inter alia, have to

prepare and handle farmers' annual aid applications where such applications only contain data on applicants and on declared agricultural parcels (identification number and area but not use);

put in place a land parcel identification system so as to ensure that the parcels for which aid applications have been made can actually be identified, that the area in question is correct, that the parcels concern agricultural land and that they have not already been the subject of a previous application;

have in place a computerized database for agricultural holdings, parcels and aid applications;

The EU considers furthermore that the simplified scheme should fall within the scope of Regulation (EC) No 1258/1999 on CAP financing. It should also be subject to the common rules established by Regulation (EC) No 1259/1999. However, the small farmers scheme (Article 2a) should not apply due to its character as a pilot project limited in time and the fact that upon accession historical aid references for the farmers in Hungary would not be available.

The EU considers that the simplified scheme should be available for three years with the possibility to be renewed twice by one year on Hungary's request. However, Hungary should have the possibility to terminate the application period already after the first or the second year after accession. During the period of application of the simplified scheme, Hungary would have to take all necessary steps to set up the IACS implementation structures required for properly running the standard system of direct payments. At the end of the transitional period, Hungary should therefore be ready to enter the standard system in the form then applicable. In this respect, the EU refers in particular to the IACS system with its components (Article 2 of Regulation (EEC) No 3508/92).

Before the end of the period of application of the simplified scheme, the Commission would assess Hungary's state of preparedness to fully apply the standard system of direct payments. On that basis, the Commission would:

note that Hungary can enter the standard direct payments system, or

decide to extend the application of the simplified scheme by Hungary for the period necessary to allow for the necessary management and control procedures to be fully in place and/or to function properly.

In the latter case, however, but not before the expiry of the five year application period, the annual increase of the direct payments rate for Hungary under the above approach would be frozen until the end of the extended application period. The decision to authorise Hungary to enter the standard system of direct payments at the end of the extended application period would also be taken by the Commission once Hungary has demonstrated its preparedness to fully apply the standard system.

The EU underlines that after the end of the application period of the simplified scheme, the standard scheme would be applied according to the relevant EU rules and on the basis of the quantitative parameters (e.g. base area, premium ceilings, Maximum Guaranteed Quantities (MGQ)) specified in the Act of Accession, without prejudice to possible changes arising from amendments to the relevant EU legislation, for each direct aid listed in the Annex to Regulation (EC) N°1259/1999.

The EU notes that the application of the simplified scheme should be optional. However, should Hungary not choose the simplified system, it would then be required to fully implement the standard system for direct payments upon accession in accordance with the relevant EU management and control rules. There could be no transitional periods for IACS implementation or other Common Market Organisations (CMO) requirements concerning direct payments.

The EU considers that the detailed rules relating to the implementation of simplified scheme should be adopted by the Commission according to the Management Committee procedure.

3.

Complementary national direct payments
a)

The EU considers that Hungary should be given the possibility, if it had applied national direct payments to farmers before accession and subject to authorisation by the Commission, to complement direct aid paid to a farmer

4 under any scheme listed in the Annex to Regulation (EC)

No 1259/1999 up to the total level of direct support he would have been entitled to receive in Hungary prior to accession under a like national scheme. However, the total direct support the farmer could be granted after accession in Hungary under the relevant EU scheme including all complementary national direct payments should in no case exceed the level of direct support he would be entitled to receive under that scheme in the existing EU.

The EU considers that authorisations by the Commission should:

specify the relevant national CAP like direct payment schemes and the conditions for the

granting of the complementary national direct payments and

be granted subject to any adjustments which may be rendered necessary by developments in the

common agricultural policy.

b)

The EU considers furthermore that the option to grant national aid complements should also be available if Hungary chose to apply the simplified scheme. Under that option, provided that Hungary could demonstrate that there are differences between the level of national direct support granted to its farmers before accession and that which may be granted under the EU simplified scheme, and subject to authorisation by the Commission, Hungary would have the possibility to grant, in an appropriate form, digressive complementary national aids to farmers benefiting from EU direct payments under the simplified scheme.

The EU stresses that the total amount of complementary national aids that could be granted in a given year after accession should be limited by a specific financial envelope. This specific financial envelope would be equal to the difference between

the total amount of national direct support per sector granted in Hungary before accession under CAP like direct payments schemes and

the total amount of direct support that would be available for the same sectors in the year concerned after accession under the relevant EU direct payment schemes.

In addition, the total amount of direct support that could be granted to a farmer after accession under the simplified scheme including complementary national aids should not exceed the total amount of national direct payments he could have received under the CAP like national direct payment schemes applicable before accession.

The EU considers that within the limits of its specific financial envelope Hungary should have the right to decide, on the basis of objective criteria and subject to authorisation by the Commission, on the amounts of complementary national aid to be granted. However, the amounts fixed should be digressive according to the direct payments introduction rhythm.

The EU considers that the authorisations by the Commission should:

· define the initial specific financial envelope, the rate at which the complementary national aids

The EU stresses that both under the EU standard scheme and the simplified scheme there should be no complementary national payments and aids for agricultural activities that are not directly supported under the CAP (annex to Regulation (EC) No 1259/1999).

The EU also stresses that the reference period for establishing the level of pre-accession direct support in Hungary should be set in such a way as to realistically reflect the pre-accession direct income support in Hungary and avoid new or additional schemes being created with a view to making use of the top-up possibility. Therefore the year 2001 should be chosen as the relevant reference year. Moreover, Hungary would be required to inform the EU not later than upon accession of the national schemes in respect of which it would envisage to grant complementary national direct payments after accession.

Should Hungary be able to demonstrate, on a product by product basis, that the EU approach would lead to a genuine reduction of support for their farmers a country specific solution could be developed, taking account, however, of all elements of support available under the CAP after accession.

The EU underlines that any national complementary direct payments or aids would be financed from the national budget.

9b. -

Production quotas and other supply management instruments

The EU takes note of Hungary's requests in relation to the determination of various production quotas and other supply management instruments. The EU considers that these instruments should be quantified on the basis of the most recent historical reference periods for which data are available, i.e. the time span from 1995 to 1999 (where available including 2000). The EU considers it reasonable furthermore, for the purpose of choosing within the above time frame the most appropriate reference period for each individual scheme, to take into account the approach followed when the relevant schemes were established, as regards the number or combination of years concerned. The methods applied in previous accessions should also be considered. The EU will take into account exceptional conditions such as natural disasters or significant market disturbances, provided that Hungary can demonstrate the existence of such exceptional conditions on the basis of clear and convincing evidence/elements.

ARABLE CROPS

Common Market Organisation of cereals (Council Regulation (EEC) No 1766/92

10.

Intervention period similar to that of the Southern EU Members States (first indent of Article 4(2) of Council Regulation (EEC) No 1766/92)

The EU notes that Hungary has withdrawn its request to have an intervention period similar to that of the Southern Member States.

11.

Reporting of prices and offers for oilseeds (Annex I of Commission Regulation (EC)

No 3405/93)

The EU notes that Hungary has withdrawn its request to be included in Annex I of Regulation (EC)

No 3405/93 as a reporting country of prices and offers for oilseeds.

Area payment scheme for Arable crops (Council Regulation (EC) No 1251/1999)

12.

Determination of the base area of arable crops (Cereals, oilseeds, protein crops) under Article 2(2) and Annex II of Council Regulation (EC) No 1251/1999 and of the average cereal yield provided for under Article 3(5) of Council Regulation (EC) No 1251/1999

The EU takes note of Hungary's request for a base area of 3,650,652 ha (which does not contain the production area of rice, wild rice, flax and hemp grown for fibre) and an average yield of 5.04 t/ha (CONF-H 63/00, 37/01 and 32/02). The EU also takes note of the information provided by Hungary on arable crop area, yield and production, broken down per each arable crop, for the years 1985- 1999 (CONF-H 63/00, 53/01 and 4/02).

(i) Establishment of Base Area

The EU considers that in line with the approach on historical quantitative reference levels set out in point 9b, the average of the years 1997, 1998 and 1999 would be the most appropriate to determine the arable base area for Hungary.

The EU concludes that, following the method explained above, the base area for Hungary should be set at 3,553,155 ha.

(ii) Establishment of Reference Yield

The EU considers that in line with the approach on historical quantitative reference levels set out in point 9b above, the average of the median three years of the period 1994/1995 - 1998/1999 should be taken to determine the appropriate reference yield for Hungary.

The EU concludes that, following the method explained above, the reference yield for Hungary should be set at 4.49 tonnes/ha.

The EU underlines, however, that in accordance with Article 9 of l Regulation (EC) No 1251/1999, the base area and reference yield of Hungary will be established by the Commission following the Management Committee procedure.

(iii) Establishment of eligibility of land for direct payments

The EU notes that all payments under Regulation (EC) No 1251/99 can only be granted for land that is considered an "eligible area" in the sense of Article 7 of the above Regulation.

The EU considers that in line with the approach on historical reference levels set out in point 9b above, 31 December 2000 should be taken as the date on which the current definition of eligible area should be applied.

The EU notes, however, that the certainty about the distribution of past land use and the reliability of registers might possibly be improved if Hungary would be allowed to take a different date as the reference date for the eligible area. Therefore, an alternative date (which shall be prior to the date of conclusion of the accession negotiations) could be considered in order to achieve a more rigorous application of the concept of eligible land, if Hungary could demonstrate that such an approach would lead to more reliable implementation and control of the arable crops scheme. -

13.

Determination of the eligible area of durum wheat provided for under Article 5 and Annex II of Council Regulation (EC) No 1251/1999 subject to the limits fixed in Annex III) to that Regulation (traditional areas) as well as in Annex IV of the Council Regulation (non-traditional areas)

The EU notes that Hungary has modified its position, requesting the determination of 11,000 ha as the traditional durum wheat zone and the determination of 3,855 ha as a region where durum wheat production is well established as mentioned in Article 5 of Regulation (EC) No 1251/1999 (CONF-

H 32/02). The EU also takes note of the information submitted by Hungary on the total area of durum wheat for the years 1980-2000 and the total production of durum wheat for the years 1980- 1988 and 1998-2000. The EU also notes the information provided on the durum wheat harvested area and production, broken down by county, for the years 1998-2000, and on the varieties of durum wheat cultivated over the period 1980-2000, their qualities (for the period 1996-2000) and end use. Furthermore, the EU takes note of the information provided on the importance of durum wheat production relative to total cereal production in certain (micro) regions (CONF-H 59/99, 63/00, 4/02 and 17/02).

The EU considers it would be appropriate to apply the following criteria to establish durum wheat area for Hungary:

1.

The special aids should only concern durum wheat to be used for pasta production. Glassiness

(vitreous aspect) of the grain mainly determines the suitability for pasta production. Therefore, a criterion should be introduced that the glassiness of the variety grown should be higher than 73% to be eligible for both the "traditional durum wheat aid" and the "well established durum wheat aid." The EU underlines that the 60% glassiness criterion in Commission Regulation (EC) No 2104/2001 is not relevant, since it refers to imported durum wheat.

2.

A period of approximately 20 years should be taken as the minimum period in which durum

wheat has been grown to qualify for the "traditional durum wheat aid" and the "well established durum wheat aid."

3.

The criterion concerning the importance of durum wheat should be interpreted as follows:

The EU considers that in line with the approach on historical quantitative reference levels set out in point 9b above, and in line with the approach to determine the base area for arable crops, the area eligible for the special support for durum wheat should be set as the average area under durum wheat during the reference period 1997-1999.

The EU takes note of the information provided by Hungary clarifying which part of the durum wheat production complies with the glassiness criterion (> 73%). The EU also notes that durum wheat has been grown in Hungary since at least 1980. The EU therefore considers that the durum wheat area for Hungary should be set at 721 ha. The EU also notes that the area under durum wheat is at least 2% of the total area under cereal production in the regions Dél-Dunantil, Mezöföld, Dél- Dunamenti-síkság, Közép-Alföld, and Berettyo-Körös-Maros vidéke. However, as only a small part of the total durum wheat production met the glassiness criterion in the period 1997-1999, these areas cannot be considered traditional durum wheat areas in the sense of Regulation (EC) N 1251/1999. The EU therefore considers that the durum wheat area for Hungary should be eligible for the "well-established" durum wheat aid.

14.

Determination of the maximum guaranteed area for grain legumes (Article 3 of Council Regulation (EC) No 1577/96)

The EU notes that Hungary maintains its request to increase the global maximum guaranteed area for grain legumes by 10,000 hectares. The EU takes note of the information submitted by Hungary in this respect.

The EU notes that, contrary to other direct payment schemes, the aid for grain legumes is not linked to national quotas or guaranteed quantities.

The EU notes, however, that in order to avoid a decrease in support upon accession, the maximum guaranteed area in Article 3 of Regulation (EC) No 1577/96 should be adjusted for the accession of the new Member States. Following the approach used to establish the original Community guaranteed area

5 and in line with the approach on historical quantitative reference levels set out in

NON-FOOD (industrial set-aside), PROCESSED CEREALS, POTATO STARCH, CEREAL SUBSTITUTES (MANIOC ETC.), ANIMAL COMPOUNDS, RICE AND DRIED FODDER

Rice (Council Regulation (EC) No 3072/95)

15.

Inclusion of Hungary in the list of rice producing countries of Article 6(4) of Council Regulation (EC) No 3072/95 on the common organisation of the market in rice, and determination of i) national base area and ii) area payment based on national average yield

The EU notes that Hungary has modified its position and now requests a national base area of 4,208 hectares and a national average yield of 3.33 t/ha (CONF-H 32/02). The EU also takes note of the information provided by Hungary on production areas and on average yields during the period 1985-2000.

With regard to the base area, the EU considers that it should be determined on the basis of the area sown to rice in the year 2000, this being the most recent year for which data are available. The EU notes that this would lead to setting the base area at 3,222 ha.

With regard to the area payment, the EU considers that it should be determined by multiplying the payment per tonne by the national average yield. The EU further considers that the national average yield should be the higher of two options: either the average of three years during a recent five year period (1996/97 to 2000/01), with the exclusion of the year with the highest yield and the year with the lowest yield or the average of the three years 1998/99, 1999/00 and 2000/01.

The EU notes that this should lead to setting the national average yield at 3.10 tonnes per hectare and the full area payment at 163.215 per hectare. The EU further notes that this payment should be introduced in accordance with the approach set out in point 9a above.

16.

Inclusion of wild rice or Indian rice (Zizania acquatica) in the coverage of Council Regulation (EC) No 3072/95 on the common market organisation of rice

The EU notes that 'wild rice' falls under CN code 1008 90 90 and therefore already belongs to the category 'other cereals', listed in Annex I to Regulation (EC) No 1251/1999. The EU therefore considers that this issue is settled.

17.

Dried fodder (Council Regulation (EC) No 603/95)

The EU notes that Hungary maintains its request for the allocation of a national guaranteed quantity (NGQ) of 200,000 tonnes of dried fodder. The EU takes note of Hungary's statement that no official statistics are available on the production of artificially heat-dried fodder and that there is no national production of sun-dried fodder (CONF-H 53/01). However, the EU notes that Hungary has provided the final results of a survey of actual dried fodder production over the period 1998-2001, as well as information on the technical conditions of the driers (CONF-H 32/02).

In line with the general approach on historical quantitative reference levels set out in point 9b above, national guaranteed quantities for the new Member States should be taken as the average production during 1998 and 1999.

The EU therefore considers that a national guaranteed quantity of 49,593 tonnes of dehydrated (artificially dried) fodder should be set for Hungary.

SUGAR

18. -

Administration of the Common Market Organisation for sugar (Council Regulation (EC)

No 1260/2001)

The EU takes note of the implementation plan submitted by Hungary in respect of the administration of the Common Market Organisation for sugar. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

19.

Sugar and isoglucose quota (Council Regulation (EC) No 1260/2001, -

Articles 10-21)

The EU takes note that Hungary accepts to set the A quota at 400,454 tonnes. The EU takes note that Hungary maintains its request for a basic quantity B sugar of 80,000 tonnes, a basic quantity A isoglucose of 130,000 tonnes of dry matter and a basic quantity B isoglucose of 10,000 tonnes of dry matter. The EU takes note of the up-dated data provided by Hungary for sugar and isoglucose.

With regard to the sugar and isoglucose production quotas, the EU considers that they should be determined on the basis of the average sugar production of the years 1995-1999 and with a view to ensuring the self-financing system of the CMO, having regard also to WTO constraints. In this context, the EU considers furthermore that the overall equilibrium of quotas as it has evolved under the current CMO should not be jeopardised. Therefore, with regard to sugar production quotas, for Hungary being a net exporter, the A quota should be equal to that part of the net production which is consumed domestically. The B quota should be equal to the WTO permitted exports.

The EU considers that following this approach the total sugar quota for Hungary should be set at 401,684 tonnes of which 400,454 tonnes A quota and 1,230 tonnes B quota (0.31 % of the A quota).

Contrary to other net exporting countries, the consideration of net exports of sugar without export subsidies to the other nine candidate countries did not lead to an increase of the B quota for Hungary.

With regard to isoglucose production quotas, the EU considers that they should be determined upon the same principles as for sugar quotas. The EU considers that following this approach the total isoglucose quota for Hungary should be set at 111,244 tonnes equalling the A quota. As Hungary is a net exporter no B quota should be determined.

The EU notes that the co-efficients used for the reduction of guaranteed quantities in Article 10 of Regulation (EC) No 1260/2001 will be adapted at an appropriate moment after the conclusion of the accession negotiations on the basis of the finally agreed quota.

The EU notes that for Hungary, the marketing year 2000/2001 referred to in points IV.2, V.2, V.3, VI.2 , VIII(d) and XI.2 of Annex III to Regulation (EC) N° 1260/2001 will be replaced by the marketing year 2003/2004.

FIBRE CROPS

19A. National Guaranteed Quantity of flax fibre (Council Regulation (EC) No 1673/2000)

The EU notes that Hungary has modified its position and requests a national guaranteed quantity of 3,137 tonnes, on the basis of the best production year in the period 1997-1999 (CONF-H 32/02). The EU notes that Hungary has provided figures for 1985-1999 on production and yield of hemp for fibre (CONF-H 53/01). The EU also notes that Hungary states that it is unable to provide separate data, as requested, on the area and average yield of short and long fibre flax for the period 1995-2000. According to the information provided by Hungary, statistics on the production of flax for fibre after 1991 are unavailable (CONF-H 53/01 and 4/02).

The EU considers that in line with the general approach on historical quantitative reference levels set out in point 9b above, a recent reference period should be taken to determine the national quota for the new Member States. Furthermore, the measure concerns aid for straw processing. Farmers growing the flax and hemp to be processed receive aid under the arable crops aid system

7, and the

same reference years as are used in the arable crop scheme should be used to determine the average recent production. Therefore, in line with the reference years used to determine the base area for arable crops, a reference period of 1997-1999 should be used.

The EU considers that a national guaranteed quantity of 2,061 tonnes for hemp for fibre should be set for Hungary.

The EU considers that no national guaranteed quantity for long or short flax fibres should be set for

Hungary.

SPECIALISED CROPS

FRUIT AND VEGETABLES

Fresh fruit and vegetables

20.

Marketing standards for fruit and vegetables (Council Regulation (EC) N°2200/96 as amended by Regulation (EC) N°2699/2000)

The EU takes note of the state of implementation of marketing standards for fruit and vegetables in Hungary. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

21.

Financial assistance to Producer Organisations (Article 14(7) of Council Regulation (EC) N°2200/96 as amended by Regulation (EC) N°2699/2000)

The EU notes that Hungary maintains its request to benefit from measures similar to those presently in force in Portugal under Article 14(7) of Regulation (EC) No 2200/96 with regard to aids to set up Producer Organisations.

The EU recalls that the measures applied to Portugal were granted due to the anticipated elimination of the transitional arrangements granted to Spain and Portugal in the context of their accession. These measures resulted from the entry into force of the Single Market and the EU considers that extending those measures to Hungary would not be justified.

Furthermore, the EU recalls that Article 15(6) of Regulation (EC) No 2200/96 already provides for measures in favour of areas where the organisational level of the producers is particularly weak. These measures mainly consist of national complementary aids to the producer organisations operational funds, and could contribute to meet Hungary's concerns.

Therefore the EU reiterates its invitation to Hungary to reconsider its request.

22.

Reimbursement of the national assistance granted to producer organisations (Article 15(6) of Council Regulation (EC) N°2200/96 as amended by Regulation (EC) N°2699/2000)

The EU notes that Hungary has withdrawn its request to be granted the possibility of reimbursement, during a transitional period of 5 years, of the national financial assistance granted to producer organisations.

Processed fruit and vegetables

23. Individual producers of tomatoes (Article 2(2) of Council Regulation (EC) N°2201/96 as amended by Regulation (EC) N°2699/2000)

The EU notes that Hungary has withdrawn its request for the possibility for individual producers of tomato cultivating land not exceeding 1 ha to conclude contracts with processors during a transitional period of 5 years.

24.

National threshold for processing aid for tomatoes (Council Regulation (EC) N°2201/96 as amended by Regulation (EC) N°2699/2000

The EU takes note that Hungary does not object to the national threshold for tomatoes proposed by the EU, which should be set at 130,790 tonnes.

25.

National threshold for peaches and pears (Council Regulation (EC) N°2201/96 as amended by Regulation (EC) N°2699/2000

The EU takes note that Hungary accepts the national thresholds for peaches and pears proposed by the EU at 1,616 tonnes of fresh peaches and 1,031 tonnes of fresh pears.

WINE AND ALCOHOL

Wine

26.

Management of the Common Market Organisation for wine (Council Regulation (EC)

No 1493/1999)

The EU takes note of the implementation plan and timetable provided by Hungary in respect of the implementation of the CMO for wine. The EU encourages Hungary to continue the process of

alignment with the acquis and its effective implementation.

27.

Wine-growing areas (Annex III of Council Regulation (EC) No 1493/1999)

The EU notes that Hungary maintains its request to classify all wine - growing areas in Hungary as part of wine growing zone C I a and that it considers its request justified on the basis of climatic and geographic conditions of every Hungarian wine-growing area and of the quality of grapes and wines in different vintages (total alcoholic strength and acidity). The EU also notes that Hungary requests to establish a new zone for the entire territory of Hungary if the Hungarian request to classify all wine-growing areas into zone C I a cannot be met.

The EU takes note of the data submitted by Hungary on natural alcoholic strength of grapes, which is of particular importance to decide on this classification. The EU underlines that the classification into the EU wine-growing zones must ensure maintenance of quality wine production which is largely prevailing at present in Hungary.

The EU considers that based on the data submitted by Hungary it appears more appropriate to classify the whole territory of Hungary in EU zone C I b. However, during a transitional period of 10 years, a minimum natural alcoholic strength of 7,7%

8 vol. would be allowed for table wines in

all Hungarian wine areas. After this transitional period, the table wines should meet the CIb minimum natural alcoholic strength of 8% vol. The EU underlines that such an increase of the minimum natural alcoholic strength can be achieved notably by adapted grapevine-growing methods and yield controls.

A minimum natural alcoholic strength of 9%vol for quality wines psr, as is the case for the current CIb level would be maintained. The EU underlines that under the CMO for wine, Hungary is entitled to maintain its current level of 9,1% vol for quality wines psr.

The EU notes that Hungary maintains its request for the possibility of enrichment of wine by the addition of sucrose. Hungary states that enrichment by addition of sucrose has been allowed by Decree since November 1970 which tacitly meant that addition of sucrose had been widely and unavoidably recognised and practised in vintages with bad conditions and especially in 1970. The EU also notes that, taking into account the limited availability of (rectified) concentrated grape must and the administrative procedures to apply the EU aid in question, Hungary considers that the use of sucrose is the only feasible solution in case of a forced harvest.

However, the EU notes that, on the basis of the information provided, Hungary has not demonstrated that enrichment by addition of sucrose was effectively allowed on 8 May 1970 and that the praxis of sucrose was in use on this date.

28.

Mandatory distillation (Council Regulation (EC) No 1493/1999)

The EU notes that Hungary has withdrawn its request to exclude the wine producers on the whole territory of Hungary from the mandatory distillation of the by-products of the winemaking.

The EU takes note of Hungary's request to exempt from compulsory distillation Hungarian producers which produce more than 25 hectolitres but not more than 40 hectolitres of wine, as is the case for Italy and Portugal under Article 45 (2) second paragraph of Regulation (EC)

No 1623/2000. The EU considers this request to be acceptable and it should be addressed under the appropriate procedure (Management Committee procedure) at the appropriate moment.

The EU also takes note of Hungary's request to exempt from compulsory distillation producers established in production areas where distillation is a disproportionate constraint in general as provided for under Article 50 (1) a of Regulation (EC) No 1623/2000. The EU notes that its request concerns provisions that are an established right of Member States under existing legislation if distillation in such production areas is a disproportionate constraint. These producers may therefore avail themselves of the option to replace distillation by withdrawal of the by-products under supervision. The EU notes that Hungary's request is therefore unnecessary.

29.

Hungarian technology of wine-making (Council Regulation (EC) No 1493/1999, oenological practices)

The EU takes note of the technical information provided by Hungary on the technology of winemaking of "Tokaji Fordítás" and "Tokaji Máslás" as requested in the EU Common Position.

The EU notes that for both "Tokaji Fordítás" and "Tokaji Máslás" some oenological treatment or practices are applied which are not foreseen in Annex IV of Regulation (EC) No 1493/1999. Preservation of this Hungarian technology of winemaking under the EU acquis would therefore require a modification of annex IV of Regulation (EC) No 1493/1999 and the introduction of subsequent detailed rules in Regulation (EC) No 1622/2000. The EU considers that preservation of this Hungarian technology of winemaking for both products under the EU wine acquis is acceptable since both Tokaji wines are traditional quality specialities produced in the Tokajhegyalja wine region.

30.

Hungarian quality wines produced in a specified region (Article 7(2) of Council Regulation (EEC) No 823/87 as repealed by Council Regulation (EC) No 1493/1999)

The EU notes that Hungary has amended its position and has requested that "Tokaji eszencia" be recognised as a quality wine psr in spite of the fact that its alcoholic strength by volume does not always reach 4.5 % vol. The EU also takes note of the technical information provided by Hungary, in particular on oenological practices and production technology of Tokaji eszencia.

The EU recalls that the acquis provides for a minimum actual alcoholic strength of 4.5 % vol. for quality wines produced in a specified region. Hungary's request, therefore, would require a substantial modification to Regulation (EC) No 1493/1999 establishing the Common Market Organisation for wine. The EU acknowledges however that "Tokaij eszencia" is in Hungary a traditional wine speciality with a high quality reputation meriting some form of protection.

The EU can accept the request as regards the traditional Tokaj wine speciality "Tokaji eszencia"

(Nectar) which has a very low alcoholic strength owing to its production method. Regarding the Tokaji Aszu Essence, the EU takes note of Hungary's information that it fulfils the criteria laid down in Article 7(2) of Regulation (EEC) No 823/87 as replaced by Regulation (EC) N 1493/1999 regarding the minimum alcoholic strength by volume required for a quality wine produced in a specific region.

31.

Maximum sulphur dioxide content and maximum volatile acidity content of some wines

The EU notes that Hungary maintains its request that the following Hungarian wines be included in Annex V, Point A 2 of Regulation (EC) No 1493/1999 as a result of their maximum authorised level of sulphur dioxide in mg/litre: Tokaji édes szamorodni, Tokaji máslás, Tokaji fordítás, Tokaji aszú, Tokaji aszúeszencia, Tokaji eszencia, Töppedt szXlXbXl készült bor (i.e. "wine made of shrivelled berries") and Aszúbor. The EU also notes that Hungary extends its position to volatile acidity in the same wine specialities, in line with Regulation (EC) No 1493/1999.

The EU takes note of the information provided by Hungary on national standards defining the maximum authorised level of SO2 in mg/litre for these wine specialities. The EU can accept that these Hungarian wines should be classified in Annex V Point A 2 of Regulation (EC)

No 1493/1999, on the basis of their maximum authorised level of sulphur dioxide in mg/litre. The EU can also accept that the maximum volatile acid content of these Hungarian wines should be defined accordingly in Annex 13 of Regulation (EC) No 1622/2000.

32.

Customs classification of Tokaj speciality wine

The EU notes that Hungary accepts the EU position on the classification of Tokaj speciality wines.

33. -

Hungarian designations (Commission Regulation (EEC) No 3201/90 on description and presentation of wines and grape musts)

The EU notes that Hungary maintains its position concerning a transitional period of five years from the date of accession during which it could use the name "Rizlingszilváni" as a synonym of the variety "Müller Thurgau" in respect of wines exclusively marketed in Hungary. The EU also notes that Hungary does not propose a synonym of "Müller Thurgau" to be used after the expiry of the requested transitional period.

The EU notes that Hungary is going to start the phasing out of the name "Rizlingszilvani" already before accession.

The EU recalls that according to Community legislation, the wine concerned is not a Riesling-X-Silvaner and as a consequence cannot be described as such. However, given the economic importance in Hungary of the wine variety `Rizlingszilváni' and its share in Hungarian plantations, the EU can accept a transitional period until 31 December 2008 during which it could use the name "Rizlingszilvani" as a synonym of the variety "Müller Thurgau" in respect of wines exclusively marketed in Hungary.

34.

Bottling of Tokaj wine specialities (Commission Regulation (EEC) No 3201/90)

The EU notes that Hungary accepts that its request to add the special-shaped bottle for Tokaj wines described in the Hungarian standard MSZ 8053-75 to the list in Article 20(1) of Regulation (EEC) N°3201/90 and to add a provision about its exclusive utilisation for the bottling of Tokaj wine specialities in Annex V of the Regulation, should be addressed under the appropriate procedure (Management Committee procedure) after accession.

The EU considers that the issue concerning the exclusive utilisation of the Tokaj bottle shape should be dealt with under the appropriate procedure (Management Committee procedure) at the appropriate moment and invites Hungary to demonstrate to the Commission that the conditions set out in Article 9 of Regulation (EC) N°753/2002 are met in that context.

35. -

Description and presentation of wines and grape musts and sparkling wines (Council Regulation (EEC) No 2392/89 and Council Regulation (EEC) No 2333/92)

The EU notes that Hungary maintains its request for an exemption in the application of EU rules on description and presentation of wines during the period necessary to exhaust the stocks available at the time of accession. It also takes note that Hungary is ready to ensure that the stocks available at the date of accession would be checked and declared to the EU. In these conditions, the EU can accept this request.

The EU notes that Hungary will set up a computerised databank including the stock declarations and invites Hungary to declare the available stocks at the time of accession.

36.

Marketing of stocks (Article 5 of Council Directive 75/106/EEC and amendments)

The EU notes that Hungary maintains its request to authorise the marketing of stocks of nominal volumes of 0.7 litres for pre-packages, which are still available from the period preceding 1993. It also notes that Hungary is ready to ensure that the stocks existing on the date of accession would be checked and declared to the EU. In these conditions, the EU can accept this request.

The EU notes that Hungary will set up a computerised databank including the stock declarations and invites Hungary to declare the available stocks concerned at the time of accession.

37.

Hungarian varieties of wine from which quality sparkling wines of the aromatic type may

be obtained (Commission Regulation (EC) No 1622/2000)

The EU notes that Hungary maintains its request to add to the list of Annex I of Regulation (EEC)

No 2332/92 the following varieties of wine used in Hungary to produce sparkling wines of the aromatic type and quality sparkling wines psr of the aromatic type: Csaba gyöngye, Cserszegi f[szeres, Irsai Olivér. The EU also takes note of the information provided by Hungary on the aromatic character of these varieties. On the basis of this information the EU can accept Hungary's request. The EU notes that this issue is now regulated under Regulation (EC) No 1622/2000. The request should be dealt with under the appropriate procedure (Management Committee procedure) before accession.

38. -

Hungarian terms for sparkling wines (Article 6(6) of Council Regulation (EEC)

No 2333/92)

The EU notes that Hungary maintains its request that the term "TermelXi pezsgX" be used as an equivalent term to the term "Winzersekt". The EU also takes note of the information provided by Hungary, in particular that Hungary intends to introduce the term "TermelXi pezsgX" within the framework of the Wine Codex by the end of 2001. The EU can accept this request on condition that sparkling wines using the requested term fulfil certain detailed conditions as laid out in Regulation (EC) No 1493/1999 Annex VIII, Point E.6, by reference to point D.4.

Spirits, alcohol and aromatised wines

39.

Quality standards for spirits and protection of spirits bearing a geographical indication (Council Regulation (EEC) No 1576/89 and Commission Regulation (EEC) No 1014/90)

The EU takes note of the information provided by Hungary in respect of the implementation of quality standards for spirits as laid down in Regulation (EEC) No 1576/89 and Regulation (EEC)

No 1014/90.

The EU also notes that Article 10 of the Hungarian Food Codex Regulation No 1-3-1576/89 contains transitional provisions on the production and marketing of rum, whisky, fruit spirits and on the use of designation "Vilmos" (pear palinka) which Hungary plans to repeal by 31.12.02 in the case of rum and whisky and by 30.06.02 in the case of Vilmos.

The EU takes note of the information provided by Hungary on the ex officio protection of spirits bearing a geographical indication.

The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation in particular in respect of the protection of spirits in a way to ensure the ex-officio protection for spirits bearing a geographical designation.

40. -

Traditional designations for fruit spirit (Article 1 (4)(i) of Council Regulation (EEC)

No 1576/89)

The EU notes that Hungary has amended its position and that it now requests that new provisions be included in Regulation (EEC) No 1576/89 authorising the use of the name "pálinka" with its Hungarian spelling:

instead of the names "fruit spirit" and "grape marc spirit" (article 1 paragraphs (4)(i) and (4)(f)

of Regulation (EEC) No 1576/89, respectively) for every kind of fruit or grape mark distillates solely produced in Hungary according to the Hungarian Food Codex Regulation No. 1-3- 1576/89 (3

The EU notes that, following further analysis, the name "pálinka" appears to be a term standing for a category of spirit drinks or distillates. Although the name is traditionally used in Hungary it is questionable whether "pálinka" can be considered and protected exclusively as a traditional name in the sense of Regulation (EEC) No 1576/89. However, the EU could consider to add the name "Magyar pálinka" as a geographical designation in Annex II of Regulation (EEC) No 1576/89 under the appropriate categories.

41.

Geographical indications (Annex II of Council Regulation (EEC) No 1576/89)

As regards Hungary's requests that Hungarian geographical designations should be included in Annex II of Regulation (EEC) No 1576/89, the EU takes note of the list of Hungarian products to be added to Annex II: Plum Pálinka (spirit) of Szatmár (Szatmári zilvapálinka), Apricot Pálinka (spirit) of Kecskemét (Kecskeméti barackpálinka), Plum Pálinka (spirit) of Békés (Békési szilvapálinka) and Apple Pálinka (spirit) of Szabolcs (Szabolcsi almapálinka). The EU can accept this request and will provide for a classification of these spirits under Annex II of Regulation (EEC)

No 1576/89.

The EU also notes that Hungarian geographical indications are regulated by Act XI of 1997 on the protection of trademarks and geographical indications and by Government Decree No 87/1998, (V.6.) on the detailed rules concerning the protection of geographical indications for agricultural products and foods which were adopted in line with Regulation (EEC) No 2081/92. The EU recalls that Regulation (EEC) No 2081/92 does not apply to spirit drinks.

42.

Definition of Rum (Article 1 (4) of Council Regulation (EEC) No 1576/89)

The EU notes that Hungary has withdrawn its request to authorise the manufacturing and marketing of Hungarian rum, the definition of which differs from that contained in Article 1(4) of Regulation (EEC) No 1576/89.

BANANAS

43.

The EU takes note of the import statistics and of the replies to the questionnaire provided by Hungary (CONF-H 63/00 and 4/02). The EU also notes that Hungary maintains its position on the tariff rate quota for banana imports (CONF-H 53/01). The EU informs Hungary that this issue will be settled according to the procedure outlined above.

The EU recalls that the Common Market Organisation for bananas has been amended following the adoption of Regulation (EC) No 2587/2001.

TOBACCO

44.

National production quota for tobacco (Council Regulation (EEC) No 2075/92, Article 9(2) 20)

The EU takes note that Hungary has revised its position and now requests that the best year of the reference period 1997-1999 should be chosen as the basis of the national production quota and that the national production quota for tobacco be set at 15,105 tonnes (which was the actual production in 1999), and divided as follows among the categories of tobacco: flue cured tobaccos (Virginia): 7,430 tonnes and light air cures tobaccos (Burley) 7,675 tonnes (CONF- H 32/02).

The EU considers that in line with the approach on historical quantitative reference levels set out in point 9b above and in line with the method of establishing quotas for individual producers in the EU, the national quotas for the candidate countries should be established as the average of the three most recent consecutive production years.

The EU notes that the most recent year for which data on tobacco production are generally available concerns the production year 1999. Therefore the years 1997-1999 should be taken as the reference period.

The EU considers that following the method explained above, the national production quota for Hungary for tobacco should be set at 12,355 tonnes. This quota should be divided as follows among the categories of the tobacco varieties in the Annex to Regulation (EEC) No 2075/92:

I Flue cured (Virginia): 5,768 tonnes; II Light air cured (Burley and Kerti): 6,587 tonnes.

SEEDS

44 a

Maximum quantity eligible for aid for certain seeds (Council Regulation (EC) No 154/2002 and Commission Regulation (EEC) No 1686/72 (Art. 3 and 3 a) as amended by Commission Regulation (EC) No 800/2002

The EU notes Hungary's request for the inclusion of Hungary to the seed producer Member States and the allocation of quantities determined in line with the provisions of Council Regulation (EC)

No 154/2002. (CONF- H 32/02).

The EU considers that the amendment of the list of seed producer countries to which a maximum quantity of seeds is allocated should be addressed under the appropriate procedure (Management Committee procedure) at an appropriate moment. The EU invites therefore Hungary to reconsider its request on this basis.

ANIMAL PRODUCTS

MILK AND MILK PRODUCTS

45.

Specific reference quantity (milk quota) (Council Regulation (EEC) No 3950/92 as amended by Council Regulation (EC) No 1256/1999)

The EU notes that Hungary maintains its request for an annual reference quantity for milk of 2,800,000 tonnes, of which 2,600,000 tonnes for deliveries and 200,000 tonnes for direct sales. The EU also takes note of the additional information provided by Hungary. These data need further

clarification.

The EU considers that milk quotas should be determined on the basis of the average production of milk delivered and for direct sales for the years 1997-1999.

The EU considers that following this approach the total national reference quantity for milk should be set for Hungary at 1,793,333 tons of which 1,637,000 tonnes for deliveries and 156,333 tonnes for direct sales.

With regard to Article 11 of Regulation (EEC) No 3950/92, the EU considers that the most recent calendar year for which data are available (2001) should be used for the determination of the characteristics of milk, in particular the representative fat content. The EU therefore again invites Hungary to provide data on the representative average fat content of all milk delivered for the year 2001.

The EU again invites Hungary to indicate the relevant date for establishing the individual reference quantity of milk available on the holding in the framework of Article 4(1) of Regulation (EC) No 3950/92.

The EU recalls that, according to the acquis, all cow milk or milk equivalent delivered to a purchaser or sold directly for consumption is covered by the milk quota scheme established by Regulation (EEC) N° 3950/92 irrespective of whether it is produced or marketed under a transitional measure agreed in the accession negotiations with Hungary.

46.

Dairy premium and additional payments (Regulation (EC) N°1255/1999, Articles 16-25)

The EU notes that Hungary maintains its request for setting up of a global amount for additional payments of Euro 7.3 million in the year 2005, Euro 14.6 million in the year 2006 and Euro 22 million in the year 2007 and subsequent calendar years.

With regard to direct payments in the dairy sector, the EU makes reference to point 9a. The dairy premia should therefore be introduced in the same way as direct payments in general, i.e. starting at 30% of the EU level in 2005.

The EU notes that entitlement to dairy premia from 2005 on should depend on implementation of the milk quota system, in particular on the allocation, by 31 March 2005, of milk quotas to individual producers. That point notwithstanding, the total amount of milk for which dairy premia are granted must not exceed the total national reference quantity as will be established for Hungary

(Article 16(3) of Regulation (EC) N°1255/1999).

With regard to the national envelope for the additional payments, the EU considers that it should be calculated for Hungary in the same way as for existing Member States, but adjusted according to the approach taken for the introduction of direct payments as outlined in point 9a above.

The EU considers that the upper limit of 350 /ha set out in Article 19(3) of Regulation (EC) N°1255/1999 should be adjusted in accordance with the gradual introduction of the dairy premium, starting in 2005 at 105 /ha and using the percentage steps indicated in point 9a.1.

47.

Fat content of drinking milk (Council Regulation (EC) No 2597/97)

The EU notes that Hungary maintains its request for authorisation for 5 years from accession to market within Hungary as drinking milk a product with a fat content of 2.8% (m/m), and takes note of the information provided. The EU can accept Hungary´s request.

The EU recalls that drinking milk covered by such a transitional arrangement may only be marketed in the country of production or exported to third countries.

BEEFMEAT

48. -

Carcass classification and reporting of prices for bovine animals (Council Regulation (EC) No 1254/1999 and (EEC) No 1208/81

)

The EU takes note of the implementation plan provided by Hungary in respect of carcass classification and reporting of prices for bovine animals. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

49.

Bovine carcasses category A classed 02 and 03 (Council Regulation (EC) No 1254/1999 and (EEC) No 1208/91)

50.

Identification and registration of bovine animals and labelling of beef (Parliament and Council Regulation (EC) No 1760/2000, Commission Regulation (EC) No 1825/2000)

Regarding the labelling of beef, the EU notes that Hungary has not provided a detailed plan including a timetable for the implementation of EU requirements. In the absence of this information, it is not possible to assess whether full implementation can be achieved upon accession. Therefore the EU reiterates its request that Hungary provide a detailed plan, including a timetable, for the practical implementation of EU requirements in this field.

51.

Special beef premium (Council Regulation (EC) No 1254/1999)

The EU notes that Hungary maintains its request for special beef premiums for 245,000 animals per calendar year. The EU also takes note that Hungary has provided information on the number of bulls and steers over 9 months for one year on the basis of the identification and registration of animals.

The EU reiterates that the ceiling for special beef premium must be calculated on the basis of the total number of bulls and steers over 9 months old and not on the basis of the number of male calves born in a given year.

In accordance with its general position set out in No 9b above, the EU considers that the regional ceiling for Hungary should be determined using the relevant reference data from the only year available.

The EU therefore considers that the regional ceiling for the special premium should be set at 40,810 for Hungary.

52.

Suckler cow premium (Council Regulation (EC) No 1254/1999)

The EU notes that Hungary maintains its request to establish at 300,000 the premium rights concerning suckler cows. The EU also takes note of the information provided by Hungary on the number of suckler cows for 2000.

In line with the approach on quantitative reference levels set out in point 9b above, the EU considers that the national ceiling for Hungary should be determined using:

the relevant reference data from the best year out of the years 1998-2000, i.e. the year 2000;

reduced by 10 % to take account that the EU ceiling is 10 % lower than the total number of suckler cows in the EU.

The EU therefore considers that the national ceiling for the suckler cow premium should be set at 117,000 for Hungary. The ceiling includes the 3 % national reserve of individual rights.

The EU considers that the detailed rules for the distribution of premium rights for suckler cows to individual producers should be dealt with for all candidate countries horizontally under the appropriate procedure (Management Committee procedure) at an appropriate moment and sufficiently ahead of the application of the aid scheme in question.

53.

Slaughter premium (Council Regulation (EC) No 1254/1999, Article 11 (3))

The EU notes that Hungary maintains its request for setting a ceiling of 480,000 animals for the slaughter premium. The EU takes note that the information provided by Hungary on slaughtering of bovine animals for the period 1996-2000 and on exports of live bovines for the period 1996-2000 has been clarified. As Hungary has not distinguished between adult bovines and calves, a 65:35 split should be assumed and used.

In accordance with its general position set out in No 9b above, the EU considers that the national ceiling for Hungary should be determined using the relevant reference data from the best year out of the years 1998-2000, which was the year 2000.

The EU therefore considers that the ceiling for the slaughter premium for Hungary should be set at 141,559 for bulls, steers, cows and heifers and at 94,439 for calves between 1 and 7 months old and of carcass weight less than 160 kg.

54.

Additional payments (Council Regulation (EC) No 1254/1999)

The EU notes that Hungary maintains its request for the setting up of a global amount of 12 million for Hungary. The EU takes note that the information provided by Hungary on beef production (including calves), expressed in carcass weight, for the period 1995-1998, as well as the information on the number of live bovine animals exported for the period 1995-2000 have been clarified

In accordance with its general position set out in No 9b above, the EU considers that the global amounts for additional payments for Hungary should be determined using the relevant reference data from the best year out of the years 1998-2000, which was the year 2000.

The EU therefore considers that the global amounts for additional payments should be set at 2, 936,076 for Hungary.

SHEEPMEAT AND GOATMEAT

55.

Carcass classification and reporting of prices for sheepmeat (Council Regulation (EC) No 2137/92)

The EU underlines the importance of achieving full compliance upon accession with regard to reporting of prices for sheep. The EU takes note of the information submitted by Hungary in respect of the practical implementation of price reporting for sheep. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

56. -

Overall ceiling for the granting of the ewe premium (Council Regulation (EC)

No 2467/1998, replaced by Council Regulation (EC) 2529/2001)

The EU notes that Hungary maintains its request for 1,500,000 as the number of animals eligible for the ewes premium. The EU takes note of the information submitted on the number of ewes during the period 1995-1999 and on goats for 2000.

In line with the approach on quantitative reference levels set out in point 9b above, the EU considers that the individual ceiling for ewe and goat premium for Hungary should be determined:

using the relevant reference data on the number of ewes from the best year out of the years 1998-2000, which was the year 1998 by adding 3 % to act as a national reserve;

-

without taking into account goats, as Hungary has not provided sufficient information to verify that their rearing fulfils the eligibility criteria.

The EU therefore considers that the individual ceiling for ewe and goat premium should be set at 1,026,910. The EU considers that the detailed rules for the distribution of premium rights for sheep and goats to individual producers should be dealt with for all candidate countries horizontally under the appropriate procedure (Management Committee procedure) at an appropriate moment and sufficiently ahead of the application of the aid scheme in question.

56a.

Additional payments (Council Regulation (EC) No 2529/2001)

The EU considers that the global amount for additional payments for Hungary should be determined on the basis of the ceiling which is proposed under point 56 above, multiplied by the ratio 72,000,000 (for the financial envelope, in euro, which was available for the additional payments) / 68,106,718 (for the average number of units of premium paid in the EU-15).

The EU considers that the global amount for additional payments should therefore be fixed at 1,086,000 euro.

57. -

Premiums for goatmeat producers (Council Regulation (EEC) No 2467/98, replaced by Council Regulation (EC) 2529/2001)

The EU notes that Hungary has withdrawn its request concerning premiums for goatmeat producers.

PIGMEAT

58.

EGGS AND POULTRYMEAT

59.

Marketing standards for eggs and poultry (Council Regulations (EEC) Nos 1906/90 and 1907/90) and prices and production statistics (Council Regulation (EEC) No 2782/75 and Commission Regulation No 1868/77)

With regard to the implementation of the acquis on marketing standards for eggs, the EU takes note of the information provided by Hungary. The EU also takes note of Hungary's statement that the marketing standards have been introduced by Decree No 40/1995 and that these will apply from 1 January 2002. The EU underlines that further efforts are required to implement the acquis . The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

With regard to the implementation of the acquis on marketing standards for poultry, the EU takes note of the information provided by Hungary. The EU also takes note of Hungary's statement that standards fully in line with EU standards have been introduced by Decree No 40/1995 and have been applicable since 1 January 1998.

With regard to the provision of price and production statistics, the EU takes note of the information provided by Hungary. It underlines that further efforts are required to implement the acquis . The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

RURAL DEVELOPMENT AND FORESTRY

60. -

Programming, administrative structure for implementation, control and monitoring, strategy (Council Regulations (EC) No 1260/1999, (EC) No 1257/1999)

The EU takes note of the information provided by Hungary concerning the implementation of EU rural development policy. The EU notes in particular that Hungary has informed the Commission that as from 1

61.

Rural Development measures eligible for community support (Council Regulation (EC)

No 1257/1999)

The EU notes that Hungary has provided additional information in this area (CONF-H 32/02).

The EU underlines that an emphasis on rural development is key to agricultural restructuring in the new Member States as it is flexible and comprises specifically designed restructuring oriented measures. The EU considers that the existing acquis provides a wide range of measures to assist restructuring within the agricultural and rural sectors, for example, opportunities for those working in agriculture and forestry to retrain in preparation for undertaking alternative economic activities.

In order to address the specific needs of the new Member States in relation to rural development, and to facilitate the uptake of the rural development allocations, the EU proposes as transitional measures, for the programming period 2004-2006, firstly to create a temporary rural development instrument, funded by the EAGGF Guarantee section, and secondly to provide for certain temporary derogations from the existing rural development acquis . The specific adaptations proposed are described below. Where necessary, detailed rules for the application of the temporary rural development instrument and the temporary derogations from the existing acquis shall be adopted in accordance with the procedure laid down in Article 50 (2) of Regulation (EC) No 1260/1999.

The new Member States are encouraged to make use of the scope of the rural development acquis available to them, in order to design programme appropriate to their situation, and which will contribute to achieving their rural development objectives. Whilst recalling the advantages of simplicity in programme design, particularly for such a short implementation period, the EU nevertheless points out the requirement se down in Article 43 (2) of Regulation (EC) No 1257/1999 to ensure the necessary balance between support measures. During the appraisal and approval process, the Commission will consider the balance of the programme presented, its coherence with the rural development strategy, and the detailed eligibility condition of each measure. The Commission will pay particular attention to the proportion of the overall resources which are allocated to support for semi-subsistence farms undergoing restructuring, as well as to the specific measure to assist farmers in meeting EU standards, in order to ensure that an appropriate balance is maintained within the programme.

Differentiated appropriations

The EU considers that differentiated appropriations (as for SAPARD) should be used to implement the temporary rural development instrument. This will allow more time between commitments and payments than would be possible under Guarantee rules.

The use of differentiated appropriations for all rural development measures available to the new Member States which are not financed by the Structural Funds, for the programming period 2004- 2006, makes it necessary to establish a temporary rural development instrument managed on the basis of specific transitional rules as follows.

Commitments and payments will follow the principles established for the Community's structural interventions, and in particular:

· The same automatic decommitment rule (n+2 years) that applies to the Structural Funds

(including EAGGF Guidance) will be used.

· commitments in respect of assistance to be carried out over the programming period shall be

effected automatically on an annual basis according to the Commission Decision granting a contribution to these rural development programmes.

· Paying agencies and their accreditation, accounting and conformity clearance of accounts of

these agencies and financial supervision and control of expenditure by the new Member States and by the Commission will be based on the principles and provisions established for the financing of the Common Agricultural Policy.

· Rural Development Plans and their content, procedures for submission and approval by the

Commission, as well as their follow-up and evaluation will be based on the principles and provisions relating to support for rural development from the EAGGF-Guarantee.

· Detailed rules for applying the above principles shall be adopted by the Commission in

accordance with management committee procedures.

Increase in Community contribution

The co-financing rate for the temporary rural development instrument will be increased in Objective 1 areas to a maximum of 80% for the eight measures concerned

10, as currently applied for

Additional measures:

In order to address the specific needs of the new Member States, the EU considers that certain additional optional measures should be offered to the candidate countries. These measures will be available for the period 2004-2006, will be funded out of the EAGGF Guarantee envelope for rural development, and will be included in Rural Development Plans to be approved by the Commission.

Support for semi-subsistence farms undergoing restructuring

Semi-subsistence farms which produce for their own consumption, but also market a proportion of their output, and which could potentially evolve into commercially viable units, are a feature of several candidate countries. To help these farms meet the challenges of accession, the EU considers that it would be appropriate to introduce a specific measure to assist semi-subsistence farms undergoing restructuring. This temporary income support for semi-subsistence farms will serve to alleviate cash flow constraints and household income difficulties whilst further restructuring is undertaken to ensure the commercial future of the holding.

The measure takes the form of a flat rate annual aid with a maximum annual amount of EUR 1,000 per farm. Eligibility will be dependent on submission of a business plan demonstrating the future economic viability of the enterprise, detailing investments required, and including specific milestones and targets.

The aid will be payable for up to five years, with a review after three years. If specified milestones as set out in the business plan have not been reached by the time of the three year review, further payments will not be made, but there will be no requirement to repay monies already received.

The Member State will be responsible for defining detailed eligibility conditions, which must be included in the description of the measure in the Rural Development Plan to be approved by the Commission. These must include a clear definition of semi-subsistence holdings, and should in particular address the minimum and/or maximum size limits, the proportion of output currently marketed, and/or income levels of farms eligible to apply for support under this measure. The measure description must also define the content of the business plan, which should be comprehensive enough to support an application for investment aid.

Support for setting-up producer groups

To meet the needs of farmers in candidate countries, it would be appropriate to continue to make provision (as was done under SAPARD) for the establishment of producer groups for the period 2004-2006, for those sectors for which there is no provision under the market regulations.

Support may be granted to encourage the setting-up, and to facilitate the administrative operation, of producer groups, during the first five years following the date of their recognition.

These provisions shall apply to producer groups set up for the purpose of jointly adapting the production and output of the producers who are members of such groups to market requirements, and, of jointly placing goods on the market, including centralisation of sale, preparation for sale, and supply to bulk buyers, and, of establishing common rules on production information, with particular regard to harvesting and availability, and which have been formally recognised by the member state.

Support granted to producer groups recognised after the date of accession for the first five years following the date on which they are recognised, shall be granted towards the costs of setting up and running the producer organisation, at a flat rate.

The aid shall be determined for each producer organisation on the basis of its annual marketed production and shall not exceed:

a)

for the first, second, third, fourth and fifth years 5%, 5%, 4%, 3% and 2% respectively of the value of marketed production up to 1 000 000, and
b)

for the first, second, third, fourth and fifth years, 2.5%, 2.5%, 2.0%, 1.5% and 1.5% respectively of the values of marketed production exceeding 1 000 000,

The aid shall be subject to a ceiling for each producer organisation of:

Support to assist farmers in meeting EU standards

The EU considers that a new temporary measure should be introduced, for the period 2004-2006, to be funded out of the EAGGF Guarantee temporary rural development instrument, to help farmers meet costs related to compliance with EU environmental, hygiene, welfare, food safety and occupational safety standards, which may be considerably more demanding than previously existing national standards. These costs may take the form of additional investments required, additional workload, or income foregone due to changes in husbandry practice.

This measure will take the form of a temporary and degressive annual payment available until such time as the standard is due to be met, and at any rate for a maximum of five years. Maximum payment in the first year will be 200/ha or an appropriate amount calculated on an alternative basis (e.g. Livestock Unit for standards related to animal welfare, or per holding for standards related to occupational safety). The payment will be reduced in equal steps to zero in subsequent years. Detailed rules for the application of this measure, including in particular conditions to avoid over- compensation and to allow for the possibility of a global ceiling on the amount paid to any individual farmer, as well as arrangements concerning the verification of compliance with the relevant standard at the end of the support measure, shall be adopted in accordance with the procedure laid down in Article 50 (2) of Regulation (EC) No 1260/1999.

In order to qualify for support under this measure, a farmer would either have to have an application for a farm investment grant approved under Title II Chapter I of Regulation (EC) No 1257/1999 (including investments which will result in all relevant standards being met), or would have to supply a plan of the upgrading and/or alterations in husbandry practices required to meet the relevant standards, prepared or certified by a person with recognised expertise (such as an agricultural advisor). Any costs associated with preparing this plan could be eligible under the measure on provision of advisory and extension services. Support under this measure would only be available to farmers who can demonstrate that their agricultural holding is already economically viable, or will be at the end of the support measure.

Technical assistance

Amendments and extensions to existing measures:

Investments in farm holdings (Chapter I of Council Regulation (EC) No 1257/1999)

The eligibility conditions of this measure will be adapted, on an exceptional basis, for the new Member States for the period 2004-2006, as follows:

Support for investment shall be granted to agricultural holdings for which economic viability at the end of the realisation of the investment shall be demonstrated.

The EU considers that, for the new Member States for the period 2004-2006, the ceiling for public financing of assistance under this measure should be set at 50% outwith LFAs, and at 60% within LFAs, with the possibility of an additional 5% for young farmers.

Investments in marketing and processing (Chapter VII of Regulation (EC) No 1257/1999)

The eligibility conditions of this measure will be adapted, on an exceptional basis, for the new Member States for the period 2004-2006, as follows:

Support shall be granted in respect of enterprises which comply with minimum standards regarding the environment, hygiene and animal welfare, or which have been granted a transitional period after accession in which to meet the minimum standards. The enterprise must be in compliance with all relevant EU standards by the end of the specified transition period or the end of the investment period whichever is the earlier. All other eligibility conditions remain as specified in the existing

acquis .

Support for the provision of advisory and extension services (new indent of Article 33 of Council Regulation (EC) No 1257/1999)

Support under this measure could be provided for drawing up business plans, assistance in making applications for rural development measures (e.g. farm investment schemes, agri-environment programmes, preparation of statements in relation to the measure on meeting standards), advice and extension related to respect of Good Farming Practice (a prerequisite for entry into agri- environment programmes, and for eligibility for LFA payments).

Public or private advisory and extension services could apply for support under this scheme in respect of provision of services to farmers.

Support for LEADER+ type activities

The LEADER+ Community Initiative will not be applied separately for the period 2004-2006.

Instead, the EU proposes that LEADER type activities could be integrated into the mainstream programmes. The main aim of this measure is to build experience with the LEADER approach, as the operational time for Local Action Groups (LAGs) will be limited.

In Objective 1 areas this measure will be funded under EAGGF Guidance and form part of Structural Funds programming.

Implementation of LEADER+ in the new Member States should be focused on Action 1 of LEADER+ - 'Integrated territorial rural development strategies of a pilot nature'.

Support under the transitional LEADER+ measure for the new Member States will be available

for:-

(1)

Expenditure on acquisition of skills in the LEADER method. All rural areas of the new Member States will in principle be eligible under this measure. Actions to be financed under it would be aimed at preparing local rural communities for implementation of LEADER- type approaches in the post 2006 period. Eligible actions would include technical support for studies of the local area, for building representative local development partnerships, for drawing up integrated development strategies and for preparing applications for support.

(2)

Selection of a limited number of pilot Local Action Groups and cofinancing of the implementation of their local development strategies. This option will only be available in regions of the new Member States where there is already sufficient administrative capacity and experience of local rural development type approaches available to implement LAGs in the short programming period. Selection of LAGs should be by open and competitive procedures. LAG selection criteria will need to include suitable safeguards to ensure the development strategies of potential LAGS could indeed be realised within the limited programming period. These LAGS would have the scope to support the full range of actions as provided for under the LEADER+ guidelines.

These pilot LAGs would also be eligible to participate in inter-territorial and transnational co-operation actions under Action 2 of LEADER+.

Each new Member State which decides to implement the transitional LEADER+ measure within its programming framework will need to indicate whether which options it wishes to implement and to provide appropriate justification for the choice. The Structural Funds' programmes submitted by each country should specify on what basis each option is to be implemented.

In addition, all new Member States' administrations (and selected pilot LAGs, for those new Member States who implement option (2) above) will be given access to the new Observatory of Rural Areas being set up under Action 3 of LEADER+. They will have the opportunity to have access to and contribute to the sharing of good practice and transfer of know-how in rural development that is fundamental to the LEADER approach.

New 61a.

Protection of the Community's forest against fire (Council Regulation (EEC)

No 2158/92)

The EU notes that Regulation (EEC) No 2158/92 will be repealed on 31.12.2002.

In order to take account of areas at risk of forest fires, and to provide for appropriate fire prevention measures, the EU invites Hungary to classify its territory according to the degree of forest-fire risk, differentiating between high, medium and low risk areas. An area classified by degree of risk must normally correspond to an administrative area at least equivalent to NUTS level III. Only areas where the permanent or cyclical risk of forest fire presents a serious threat to the ecological balance and the safety of persons and goods or constitutes a factor which is hastening the process of desertification of rural areas my be classified as an area of high risk. Areas where the forest-fire risk is not permanent or cyclical but presents a significant threat to forest ecosystems may be classified as areas of medium risk. All other areas shall be classified as low risk.

The EU invites Hungary to establish forest-fire protection plans for the areas classified as at high and medium risk of forest-fires. These plans shall comprise a description of the current situation in the area concerned as regards the system of prevention and monitoring, the associated partners and co-ordination structure, as well as the measures, methods and techniques used to protect forests against fire.

The classification of areas at risk of forest fires should be submitted as part of the rural development plans submitted in accordance with Regulation (EC) No 1257/1999 (i.e. as part of Structural Funds' programming in Objective 1 areas, and as part of the Guarantee funded Rural Development Plan in other areas). These plans may contain measures related to the prevention of forest fires for those areas classified as high or medium risk to be co-financed by the EU in accordance with the provisions of Chapter VIII of Regulation (EC) No 1257/1999. Such measures must be in conformity with the forest-fire prevention plan established by Hungary.

VETERINARY AND PHYTOSANITARY LEGISLATION

62.

- 64.

General

62.

The EU underlines that the levels of food safety, public health, animal health, animal welfare,

plant health and plant quality must be maintained in the EU after the accession of Hungary.

The EU stresses the importance of the accession preparations with regard to food safety. The maintenance of a high level of food safety is of crucial importance first and foremost for the protection of public health, but also for the preservation of consumer confidence with regard to all products of animal and plant origin and thus for the functioning of the internal market.

63.

The EU underlines that full and effective enforcement of the internal market control systems,

The EU stresses the importance of ensuring at all times proper veterinary and phytosanitary controls at its external borders.

64.

The EU takes note of the information provided by Hungary and of the adoption of the

amendment of Act XCI of 1995 on veterinary issues. The EU underlines the importance for Hungary to respect its commitment to adopt the necessary technical regulations to ensure complete harmonisation with the acquis by the end of the year 2001, in order to have enough time to assess the conformity of Hungarian legislation with EU requirements and for the administrative and inspection bodies to be familiarised with the new rules.

The EU draws Hungary's attention to the importance of the new acquis relating to transmissible spongiform encephalopathies (TSE) and to the necessity of implementing it as soon as possible and from accession at the latest. In this respect, the EU takes note of Hungary's plan for transposition and implementation of these measures (CONF-H 2/02).

The EU underlines that further efforts are required to ensure that all necessary measures be taken and enforced at all levels, in full conformity with EU requirements, as regards epidemio-surveillance, the rendering system, the removal and disposal of Specified Risk Material (SRM) and the feed ban. In this respect, the EU draws Hungary's attention to the need to put in place official targeted and coordinated controls at all stages to ensure efficient implementation of protection measures against TSE.

The EU will closely monitor developments with regard to the transposition and

implementation of the acquis on TSE, public health conditions in establishments for animal products and border inspection posts, and the setting up of an animal waste treatment system, and will return to any related issue, as necessary, in the light of the outcome of such monitoring, notably on the basis of the reports of the Food and Veterinary Office of the Commission. The EU underlines that the FVO's missions and reports will continue, including after the provisional closure of this chapter.

The EU recalls that Community funds are available under the PHARE program in order to facilitate the implementation of the acquis , in particular as regards BSE testing.

VETERINARY LEGISLATION

65.

Control system in the internal market

The EU takes note of the information provided by Hungary regarding the control system in the internal market. The EU underlines that this system should be fully operational by the date of accession. In this context, the EU reiterates that the necessary requirements must be gradually implemented during the pre-accession period. The EU encourages Hungary to continue the process

of alignment with the acquis, its effective implementation and enforcement.

The EU invites Hungary to join the ANIMO system on a voluntary basis as soon as possible.

66.

Identification and registration of animals

The EU reiterates the importance of achieving full compliance with the acquis upon accession with regard to identification and registration of animals.

The EU takes note of Hungary's confirmation that the animal identification and registration system will be fully implemented by 31 March 2002. The EU encourages Hungary to continue the process

of alignment with the acquis and its effective implementation. In particular, the EU underlines that additional efforts are required to ensure that all necessary measures are implemented, in full conformity with EU requirements, as concerns the establishment of a uniform control programme for bovine identification and registration as well as the introduction of compulsory and harmonised farm registers for all holdings.

67.

Financing of veterinary inspections and controls (Council Directive 85/73/EEC)

The EU takes note of the information provided by Hungary regarding the plans for the veterinary inspection fees.

68.

Veterinary checks of live animals and animal products entering the Community from third

countries

The EU takes note of the information provided by Hungary regarding veterinary checks of live animals and animal products entering the Community from third countries. In this context the EU emphasises that all long term border inspection posts with third countries must be operating from the date of accession in accordance with the acquis both in terms of facilities and of procedures. The EU invites Hungary to ensure that the necessary requirements are implemented gradually during the pre-accession period.

As regards Hungary's frontiers with Romania, the EU envisages the introduction of a special regime after having held technical discussions with all parties concerned (including Romania). The EU proposes to discuss the issue at a later stage of the negotiations.

69.

Expenditure in the veterinary field

The EU takes note of the information provided by Hungary regarding expenditure in the veterinary field. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

70.

Animal disease control measures

The EU takes note of the information provided by Hungary regarding animal disease control measures. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

71.

Animal health trade in live animals and animal products

The EU takes note of the information provided by Hungary regarding animal health relating to trade in live animals and animal products. The EU encourages Hungary to continue the process of

alignment with the acquis and its effective implementation.

72.

Status of a country free of certain diseases

The EU invites Hungary to provide detailed dossiers to the Accession Conference in support of its request for status as officially free of brucella melitensis, bovine tuberculosis and bovine brucellosis. The EU considers that the requested status should be dealt with under the appropriate procedure prior to accession. The EU underlines that the dossiers submitted will be assessed on the basis currently used for current Member States.

73.

Additional guarantees regarding Aujeszky's disease relating to trade in pigs

(Directive 64/432/EEC)

The EU notes that Hungary maintains its request for additional guarantees for Aujeszky's disease relating to trade in pigs. The EU invites Hungary to provide a detailed dossier covering the programme in operation and the results achieved to date to the Accession Conference in support to its request for additional guarantees for Aujeszky's disease relating to trade in pigs. The EU considers that the request should be dealt with under the appropriate procedure at the appropriate moment.

. Supplementary guarantees (Council Directives 88/407/EEC, 89/556/EEC, 90/429/EEC, and

Commission Decision 93/199/EEC)

The EU notes that Hungary has withdrawn its request concerning supplementary guarantees as regards Leptospirosis.

. Public health protection

The EU underlines the importance of food safety, in particular in relation to public health conditions in establishments for animal products.

The EU notes that Hungary has revised its position regarding public health and requests a transitional period for high capacity red meat establishments according to individual development plans lasting until 31 December 2006 at the latest. The EU notes that the request concerns structural requirements as listed in points 1 to 13 of Annex I of Council Directive 64/433/EEC as amended.

The EU takes note of Hungary's confirmation that fresh meat and processed meat from high capacity red meat establishments subject to transitional arrangements will only be sold on the domestic market and will be clearly identified with a special health mark. The EU further notes that Hungary has provided a list of the planned measures to ensure that meat from the establishments in question is not sold fraudulently (CONF-H 53/01).

The EU notes that Hungary has provided the national plan for the achievement of full compliance with EU requirements regarding public health conditions in establishments. The EU further notes that this plan includes a list, approved by the competent veterinary authority, of all establishments which are expected to comply with EU requirements at the date of accession and those where transitional measures are requested.

The EU takes note of Hungary's statement that the Hungarian Veterinary Service will continuously supervise the carrying out of the establishments's officially approved development plans on the basis of uniform criteria to be fully harmonised by 31 March 2002. The EU further takes note of Hungary's confirmation that those high capacity red meat establishments, as listed in Annex I of document CONF-H 5/02, which are expected to fully comply with the acquis by the time of accession but fail to do so, will be closed or classified as low capacity red meat establishments by decision of the Hungarian Veterinary Service in the form of withdrawal or amendment of the operational licence. The EU invites Hungary to notify the Commission of any such decisions.

The EU recalls that low capacity establishments must fully comply with the requirements applicable to such establishments under the acquis . In particular, the EU recalls that if such establishments benefit from the derogations provided for under the acquis for certain structural requirements, products may then only be marketed on the domestic market and a special health mark must be applied.

The EU notes that Hungary will submit annual reports on progress made in each establishment subject to transitional arrangements, and that the reports will list the establishments, which have completed the developments during the year in question, with a request for removing them from the list of establishments for which the transitional period applies. Furthermore, the EU notes that Hungary will also prepare annual reports on the progress made in each individual high capacity red meat establishment which is expected to fully comply with the acquis by the time of accession and that the first report will be submitted to the Commission by 31 December 2002 (CONF-H 5/02). The EU invites Hungary, in co-operation with the Commission and before the end of 2002, to review and, where necessary, update the plans for each establishment, taking into account the outcome of the monitoring process.

The EU notes Hungary's confirmation that a detailed description of the new health marks to be used on fresh meat and processed meat from plants subject to transitional arrangements and on meat from low capacity plants will be communicated to the European Commission before 30 June 2002.

In the light of Hungary's commitments to take, implement and enforce the necessary guarantees, the EU can accept Hungary's request for a transition period for high capacity red meat establishments, linked to the deadlines for correcting existing shortcomings contained in the individual binding plans for each establishment, as mentioned in Annex V of doc. 20037/02 CONF-H 2/02 and which expires at the latest on 31 December 2006. The Union recalls that, at the end of this transitional period, all establishments will have to fully comply with the acquis. The EU takes note of Hungary's statement that out of the list of 44 high capacity red meat establishments subject to transitional arrangements, 32 establishments have integrated meat processing facilities (slaughter, cutting and meat processing), while 12 establishments only have slaughter facilities and/or cutting facilities.

In this context, the EU stresses that the granting of the transitional period is subject to Hungary's commitment to ensure that the high capacity red meat establishments covered by the transitional period will fully comply with the following requirements:

-

fresh meat, processed meat, meat preparations or products using such meat as an ingredient,

originating from establishments subject to transition can only be placed on the domestic market, irrespective of the date of marketing;

-

meat originating from the 32 integrated establishments in transition may only be marketed as

fresh meat on the domestic market or used for further processing in the same establishment. Meat originating from these establishments may, under no circumstances, be processed in any other establishment and will only be marketed on the domestic market. The 12 other establishments must market their production as fresh meat only on the domestic market.

Furthermore, the EU underlines that Hungary must meet all EU requirements in the field of public health with the exception of the specified shortcomings of each establishment listed in Annex V of doc. 20037/02 CONF-H 2/02 and in accordance with the individual development plans.

The EU will closely monitor the implementation of the acquis in the field of public health in all establishments in Hungary, with particular emphasis on the establishments in transition in the red meat sector and on the control measures to ensure effective enforcement.

The EU notes that Hungary foresees that the lists of establishments covered by the transitional period would be included in the Accession Treaty. The EU considers that a more appropriate procedure would be to adapt Directives 64/433/EEC and 77/99/EEC in order to authorise the Commission to maintain the list of Hungarian establishments in transition as well as the possibility to update this list in the light of progress made in the correction of existing shortcomings and of the outcome of the monitoring process.

The EU underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Hungary to continue the process of alignment with the

acquis and its effective implementation.

76.

Quality of raw milk (Council Directive 92/46/EEC)

The EU takes note of the information provided by Hungary regarding raw milk quality. The EU further notes that Hungary states its intention to avail itself of:

-

the derogation provided for in Article 11 of Council Directive 92/46/EEC in line with

Commission Decision 95/165/EC for milk processing establishments with a limited capacity up

to 500,000 l milk/year;

the derogation provided for in Article 8(2) of Council Directive 92/46/EEC in line with

Commission Decision 97/284/EC for the production of traditional milk-based products.

The EU takes note of Hungary's commitment that the annual production in establishments granted a derogation will not exceed the production limit set out in Annex A of Commission Decision 95/165/EC. The EU also takes note of Hungary's commitment that the Hungarian Veterinary Service will ensure by continuous surveillance that these arrangements will not affect hygiene conditions.

The EU also takes note of the information provided by Hungary concerning the characteristics of the traditional milk-based products.

77.

78.

Common measures

The EU takes note of the information provided by Hungary with regard to common measures. The EU underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

79.- 80 Animal waste treatment

The EU takes note of the information provided by Hungary regarding animal waste treatment. The EU underlines that further efforts are required to implement the acquis within precise timetables. The EU encourages Hungary to continue the process of alignment with the acquis, including the new acquis relating to TSE, and its effective implementation.

81.-82. Animal welfare

The EU underlines the importance of achieving full compliance with the acquis upon accession as regards animal welfare. This is important for safeguarding public confidence in food production. In addition, the EU underlines that disparities between Member States with regard to animal protection may give rise to unequal conditions of competition and may consequently have an indirect effect on the proper functioning of the internal market.

. Protection of animal welfare - laying hens (Council Directive 1999/74/EC)

83A.

Alternative systems built and brought into service before the date of accession

The EU notes that Hungary has withdrawn its request for a transitional period until 1 January 2010 for alternative systems built and brought into service before the date of accession.

83B. Non-enriched cages brought into service before the date of accession

The EU notes that Hungary has modified its request for a transitional period for laying hens in battery cages and that it now requests a transitional period until 31 December 2009, with regard to the requirements under items 4 and 5 of paragraph 1 of Article 5 of Directive 1999/74/EC for 21 establishments brought into service before 1 July 1999. The EU notes that Hungary has provided a list of the establishments foreseen to be covered by the requested transitional period indicating, for each individual establishment, the nature of the shortcomings as well as the number and date of installation of the cages (CONF-H 5/02).

On the basis of this list, the EU can accept Hungary's request for a transition period until 31 December 2009 for minor construction elements covering the existing cages, with a minimum height of 36 cm over 65% of the cage area and elsewhere at least 33 cm, located in 21 establishments brought into service before 1 July 1999.

84.

Protection of animal welfare - cattle holdings (Council Directive 91/629/EEC)

The EU notes that Hungary has withdrawn its request for a transitional period concerning minimum standards for the protection of calves.

. Protection of animal welfare - pigs (Council Directive 91/630/EEC)

The EU notes that Hungary has withdrawn its request for a transitional period until 31 December 2009 in respect of the provisions laid down in Article 3, Point 1, of Council Directive 91/630/EEC concerning the required space per animal for the installations already in use on 1 April 1999.

86.

Zootechnical legislation

PHYTOSANITARY

LEGISLATION

87.

Plant health (harmful organisms)

The EU takes note of the information provided by Hungary concerning the field of plant health (harmful organisms) and underlines that Hungary's legislation in this field must be gradually

aligned with the acquis during the pre-accession period in order to ensure full compliance as regards transposition and enforcement by the date of accession. The EU emphasises that all border inspection posts with third countries must be operating from the date of accession in accordance

with the acquis both in terms of facilities and in terms of procedures. As regards Hungary's frontiers with Romania, the EU envisages the introduction of a special regime after having held technical discussions with all parties concerned (including Romania). The EU proposes to discuss the issue at a later stage of the negotiations.

The EU stresses the importance for Hungary to set up a register of producers in due time before accession.

The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

. Protected zone status in respect of certain harmful organisms

(Council Directive 77/93/EEC replaced by Council Directive 2000/29/EC )

The EU notes that Hungary has withdrawn its request for recognition of its entire territory as a protected zone in respect of Erwinia stewartii in case of Zea mais L . seeds and Xylophylus ampelinus in relation to plants, other than fruits and seeds, of Vitis species.

89.

Quality of seeds and propagating material

90.

Zero tolerance for the presence of certain weeds

The EU notes that Hungary foresees to ensure zero tolerance as regards Cuscuta spp in seed lots with the application of the present EU legislation. The EU considers this request no longer to be a matter for the negotiations. The EU further notes that Hungary has withdrawn its request concerning zero tolerance of Galium spp and Datura stramonium.

91.

Plant variety rights

The EU notes that Hungary has taken note of the EU position regarding plant variety rights.

Plant health (pesticides)

92.

Plant protection products; Residues of pesticides

The EU takes note of the information provided by Hungary regarding plant protection products and residues of pesticides.

The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

93.

Plant hygiene

The EU takes note of the information provided by Hungary with regard to plant hygiene.

The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

94.

Animal nutrition

The EU underlines the importance in this field of the new acquis relating to TSE.

The EU takes note of the information provided by Hungary with regard to animal nutrition.

The EU encourages Hungary to continue the process of alignment with the acquis and its effective implementation.

95.

INTERNATIONAL AGREEMENTS

The EU takes note of the information provided by Hungary regarding its bilateral veterinary and phytosanitary agreements. The EU underlines that it is the responsibility of Hungary to ensure that all its bilateral international agreements are in compliance with EU requirements and notes that Hungary confirms that it will denounce or adjust any agreements not in conformity with the acquis .

* * *

The EU will continue to monitor the progress in the alignment with and implementation of the

acquis throughout the negotiations. Special attention will be dedicated to the monitoring of the effective implementation by Hungary of Common Agricultural Policy structures and of the effective implementation by Hungary of its commitments with respect to the veterinary and phytosanitary control of external borders, to the new acquis relating to TSE as well as to the public

health protection acquis applying to establishments involved in the production and marketing of products of animal origin and the setting up of an animal waste treatment system. Special attention will also be dedicated to the effective implementation of the plant passport system for plants and plant products, the pesticide registration and the monitoring of residues. A final assessment on the conformity of Hungary's legislation and policies with the acquis and its implementation can only be made at a later stage of the negotiations. Particular consideration needs to be given to the links between the present chapter and other negotiating chapters such as Free Movement of Goods, Free Movement of Capital, Statistics, Regional Policy and Coordination of Structural Instruments, Environment, Consumers and Health Protection (notably with regard to the Rapid Exchange of Information System), Cooperation in the Fields of Justice and Home Affairs, Customs Union and External Relations. In addition to all the information the EU may require for the negotiations on this chapter and which is to be provided to the Conference, the EU invites Hungary to provide regularly detailed, written information to the Association Council on progress in the alignment with and

implementation of the acquis .

In view of the above considerations, the Conference will have to return to this chapter at an appropriate moment.

Furthermore, the EU recalls that there may be new acquis before the conclusion of the negotiations.

CONFERENCE ON ACCESSION - ANNEX II

TO THE EUROPEAN UNION

- SLOVAKIA -

DRAFT

EUROPEAN UNION COMMON POSITION

(Replaces doc. 20404/02 CONF-SK 55/02)

Chapter 7: Agriculture

This position of the European Union is based on its general position for the Accession Conference with Slovakia (CONF-SK 2/00), and is subject to the negotiating principles endorsed by the Conference (CONF-SK 14/00), in particular:

"- any view expressed by either party on a chapter of the negotiations will in no way prejudge the position which may be taken on other chapters;

agreements - even partial - reached during the course of the negotiations on chapters to be examined successively may not be considered as final until an overall agreement has been established".

ii.

The EU underlines the importance for Slovakia of compliance with the Association Agreement as well as with the Accession Partnership, which constitute basic elements of the enhanced pre-accession strategy. The EU underlines the paramount importance for Slovakia

of the acceptance of the acquis in the field of agriculture prevailing at the date of accession. The EU notes the progress Slovakia has made in this chapter and encourages it to accelerate the continuing process of alignment with the acquis and its effective implementation and enforcement, and in general to develop already before accession, policies and instruments as close as possible to those of the Common Agricultural Policy.

iii.

Most of the acquis in the field of agriculture applies directly from accession and does not therefore call for transposition. The EU underlines, however, that Slovakia's ability to

implement and enforce the acquis is of paramount importance. In order to ensure the smooth execution of the Common Agricultural Policy after accession, Slovakia has to demonstrate, sufficiently ahead of accession, that it possesses the administrative capacity for effective implementation and enforcement of the acquis . An equally important element in ensuring the smooth application of the Common Agricultural Policy after accession, is that Slovakia has the necessary mechanisms in place needed for the management of the various Common Market Organisations.

iv.

Moreover, the EU points out that in the veterinary and phytosanitary fields the acquis consists mainly of a large number of legislative acts that are rather broad in scope and quite demanding in terms of transposition, implementation and enforcement. It is essential that Slovakia not only ensures the full transposition into its national legislation of the veterinary

and phytosanitary acquis , but also that administrative structures and procedures are strengthened and reformed before accession. The EU underlines the importance of achieving full compliance by the time of accession with regard to EU requirements for food safety and consumer protection.

The EU recalls that Slovakia, in its negotiating position (CONF-SK 71/00 and 3/01), accepts

the acquis under chapter 7 and that Slovakia declares that it will be able to implement it by 1 January 2004, while it makes a number of specific requests for transitional measures and with regard to the application of the Common Agricultural Policy on Slovakia. The EU takes note of the additional information provided by the Slovakia in CONF-SK 74/01 + ADD 1, 75/01, 89/01, 93/01, 2/02, 6/02, 8/02, 28/02, 30/02, 32/02 and 79/02.

vi.

As an overall response to Slovakia's requests for transitional arrangements, the EU recalls its general negotiating position that transitional measures are exceptional, limited in time and scope, and accompanied by a plan with clearly defined stages for the application of the

acquis . They must not involve amendments to the rules or policies of the European Union, disrupt their proper functioning, or lead to significant distortions of competition.

ix.

the acquis and that the acquis must be applied in all Member States, with transitional modalities to be adopted with the candidate countries in the Treaty of Accession.

xv.

The EU recalls the conclusions of the European Council in Brussels on financing

enlargement.

xvi.

The phasing in of direct payments will take place within a framework of financial stability,

xvii.

The needs of producers living in the disadvantaged regions of the present European Union

xviii.

The EU takes the view that technical adaptations to the acquis are to be examined at the

appropriate moment at a later stage of the negotiations.

xix.

As a matter of principle, the EU considers that where a particular issue, for instance a product

group, has not been covered in Slovakia's position, Slovakia accepts the acquis and undertakes to be able to fully implement it upon accession. The EU reserves the right to come back to any issue, including those that are not explicitly raised in the present position, at a later stage of the negotiations in the light of the additional information to be provided by Slovakia as well as the evolution of the acquis . The EU notes that certain aspects of the Common Agricultural Policy will be the subject of formal reviews in the appropriate framework in the next few years.

HORIZONTAL ISSUES

A1. Implementation of agricultural sections of Act of Accession

A2. Adaptation of Act of Accession following changes to EU agricultural legislation

A3. Transitional measures

The EU considers that the parts related to the Common Agricultural Policy of the Act of Accession should provide for the necessary legal bases to adopt transitional measures under the following

conditions:

A4.

Transitional measures in the field of veterinary and phyto-sanitary legislation

If transitional measures are necessary to facilitate the transition from the existing regime in the new Member States to that resulting from the application of the Community veterinary and phytosanitary rules, such measures shall be adopted by the Commission in accordance with the relevant comitology procedure. The measures may be taken for a period expiring three years after the date of accession and their application shall be limited to that date.

European Agricultural Guarantee and Guidance Fund (EAGGF)

Guarantee section: Paying Agency (Council Regulation (EC) No 1258/1999)

The EU takes note of the implementation plan and additional information provided by Slovakia in respect of setting up the Paying Agency

The EU notes that Slovakia does not foresee any problems in complying with EU requirements as regards the system of advances, public storage and budgetary discipline. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

Integrated administration and control system (IACS) (Council Regulation (EEC)

No 3508/92)

The EU notes that Slovakia has withdrawn its request for a transitional period until the end of 2006 for the full implementation of the Integrated Administration and Control System (IACS).

The EU takes note of the implementation plan and the additional information provided by Slovakia in respect of establishing the necessary elements of a functioning IACS. The EU underlines the importance of having a functioning IACS by the date of accession, in particular as regards the area aspects, as IACS would also be relevant to administer and control the payments made under the simplified scheme if Slovakia decides to opt for this scheme.

Guidance section: budgetary and financial aspects (Council Regulation (EC)

No 1258/1999)

The EU notes that Slovakia accepts the acquis related to EAGGF Guidance section and takes note of the information provided by Slovakia with regard to making the necessary administrative and financial adjustments required for full harmonisation with the procedures necessary to implement

the acquis in this area. The EU encourages Slovakia to continue the process of alignment with the

acquis and its effective implementation.

Trade Mechanisms general (Commission Regulations (EEC) No 2220/85, (EC)

No 1291/2000, (EEC) No 3002/92, (EC) No 3122/94, (EC) No 2221/95, (EC) No 615/98, (EC) No 800/1999, Council Regulation (EEC) No 386/90)

The EU notes that Slovakia accepts the acquis related to trade mechanisms for agricultural products. The EU takes note of the information provided by Slovakia in respect of the establishment of the administrative structures necessary to implement the acquis related to trade mechanisms. It also takes note of Slovakia's commitment to provide the requested information for the planned administrative structures and a detailed timetable after adoption of certain legal documents. It underlines that further efforts are required to implement the acquis within the given timetable. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

Trade Mechanisms

The EU notes that Slovakia has withdrawn its request for an import safeguard clause. The EU further notes that Slovakia agrees that the potential risk of deflection of trade due to Slovakia's accession will be addressed by taking appropriate measures before accession based on a transition clause similar to Article 149 of the Act on Accession of Austria, Finland and Sweden.

In particular, the EU accepts to address the risk of deflection of trade due to the accession of Slovakia, where necessary, through transitional measures to be decided before accession under the appropriate procedure.

It would be appropriate to deal with this issue by provisions similar to those of Regulation (EC)

The EU takes note of the implementation plan submitted by Slovakia in respect of quality policy, the information on the inspection structures and on the structures that will be in charge of

implementing the acquis in this area upon accession. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

Organic Farming (Council Regulation (EEC) No 2092/91)

The EU takes note of the information and of the implementation plan submitted by Slovakia in respect of the organic farming sector including the establishment of the necessary elements of a functioning inspection system. The EU encourages Slovakia to continue the process of alignment

with the acquis and its effective implementation.

The EU also notes that Slovakia has provided the terminology it wants to be protected under Article 2 and Annex V of Regulation (EEC) No 2092/91.

Farm Accountancy Data Network (FADN) Council Regulation (EEC) No 79/65

The EU takes note of the information provided by Slovakia in relation to implementation of the FADN. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

Products not covered by Annex I

The EU notes that Slovakia accepts the acquis related to products not covered by Annex I. The EU also takes note of the information provided by Slovakia with regard to the planned establishment of the administrative structures necessary to implement the acquis in this area.

9A.

Stocks of agricultural products in the new Member States

The EU notes that the issue of stocks of agricultural products held in Slovakia at the date of accession needs to be addressed under two different aspects:

the taking over of public stocks by the Community and

the treatment of stocks in free circulation , in particular where these stocks exceed the level of normal carry-over stocks.

The EU also notes that as in past accessions, security stocks should be disregarded for this exercise, assuming that they will be maintained during a certain period after accession.

Public stocks

The EU considers that public stocks held at the date of accession and resulting from Slovakia's market-support policy should be taken over by the Community at a value resulting from the application of Article 8 of Regulation (EEC) No 1883/78 laying down the general rules for the financing of interventions by EAGGF. Slovakia's public stocks should only be eligible on condition that there is public intervention in the Community for the product concerned and those stocks meet the relevant EU intervention requirements (Community requirements or, if so provided for, specific requirements agreed for intervention in Slovakia). The provision in the Act of Accession setting out the above arrangements should be designed along the lines of Article 6 of Regulation (EEC)

No 3577/90.

Stocks in free circulation

The EU considers that any stocks (private as well as public) in free circulation at the date of accession in Slovakia exceeding the level of what can be considered as normal carry-over of stock should be eliminated at the cost of Slovakia. This exercise should in principle concern products for which export refunds or intervention measures apply.

The EU considers that the Commission should be authorised to implement and apply the arrangements outlined above.

10.

State aids

The EU notes that Slovakia accepts in full the acquis on State aids in the field of agriculture and will be ready to implement it upon accession.

The EU also notes that Slovakia has withdrawn its requests for applying the following special exceptions to be able to maintain and provide national subsidies:

to maintain the breeding of race and riding horses at the holdings Národny zreb`ín, s.p. Topol'`ianky and Závadoski, s.p. Brataislava;

ii)

to cover some part of any damage to crop and livestock production - including damage caused by catastrophes;

iii)

for investment activities, by means of payment of some of the interest on loans.

The EU recalls that all state aid measures in the field of agriculture have to be brought in line with

the acquis by the time of accession. The EU invites Slovakia to provide the Commission with information on the measures it wishes to maintain after accession in order to allow for a proper assessment of their compatibility with the acquis in conjunction with the relevant Community guidelines on State aids in the agricultural sector. The EU considers that this issue should be dealt with at a technical level at the appropriate moment, outside the framework of the accession negotiations.

10a. -

Existing State aids

The EU considers that in order to classify upon accession certain aids as existing aid in the sense of Article 1(b) of Regulation (EC) No 659/1999

11 and to have an overview of all State aids applicable

in Slovakia, the agricultural chapter of the Act of Accession should provide that Slovakia shall hand over, within 4 months after Accession, detailed information

12 concerning all the State aid measures

(a)

of such aids.

(b)

the new Member States would amend any aid deemed to be existing in accordance with paragraph (a) in order to conform with the guidelines applied by the Commission by the end of the third year from the date of accession at the latest. After that date, any aid found to be incompatible with the aforementioned guidelines shall be considered as new aid;

(c)

existing aids and plans intended to grant or alter aids, communicated to the Commission prior to accession, would be deemed to have been communicated or notified on the date of accession.

10b.

(ex 33) Maintenance of existing aid for seed

The EU notes that Slovakia has withdrawn its request for the retention of its existing aid system for new and maintaining plant-breeding for a period of 3 years up to 31 December 2006.

11. -

Miscellaneous (Council Regulation (EEC) No 827/68)

The EU notes that Slovakia accepts the acquis with regard to Regulation (EEC) No 827/68 ("solde") and with regard to programmes for ultra-peripheral regions, promotion aiming at increasing consumption of some products and free distribution of food to the most deprived persons.

COMMON MARKET ORGANISATIONS

11a.

Direct payments

1.

Direct payments The EU takes note of Slovakia's request that direct payments be granted to its farmers after accession to the same extent as farmers in the EU. The EU considers that this request should not be followed but direct payments introduced in Slovakia gradually during a transition period. Without prejudice to future decisions on the Common Agricultural Policy and the financing of the European Union after 2006, nor to any result following the implementation of paragraph 22 of the Berlin European Council conclusions, as well as to the international commitments which the Union has undertaken inter alia in the launching of the Doha Development Round, direct payments will be introduced in accordance with the following schedule of increments expressed as a percentage of the level of such payments in the Union:

2004 : 25%

2005: 30% 2006 : 35% 2007 : 40%

2.

Simplified scheme

The EU considers that Slovakia should have the option, instead of applying the standard direct payments system applicable in the current EU, to grant its farmers the CAP direct payments during a limited period in the form of a decoupled area payment, expressed in /ha.

The EU further considers that the payments that can be made per year in Slovakia under this simplified scheme should be limited by an annual financial envelope. This envelope should be determined as

· the sum of the EU funds that would be available in Slovakia for granting direct payments under

the standard scheme,

· calculated according to the relevant EU rules and on the basis of the quantitative parameters

(e.g. base area, premium ceilings, Maximum Guaranteed Quantities (MGQ)) specified in the Act of Accession for each direct aid listed in the annex to Regulation (EC) No 1259/1999 and

· adjusted using the relevant percentage specified for the gradual introduction of direct payments.

The EU notes that, under this option, the hectare amount of the area payment applicable in Slovakia should be calculated by dividing Slovakia's annual financial envelope by its agricultural area. The agricultural area under the simplified scheme should be that part of its utilised agricultural area, according to the EUROSTAT definition

13, which has been maintained in good agricultural

condition on 30 June 2003 (whether in production or not at that date) as established by objective criteria to be set by Slovakia.

The EU considers that for the purpose of granting payments under the simplified scheme:

· All agricultural parcels corresponding to the EUROSTAT definition of utilised agricultural

area, that have been maintained in good agricultural condition on 30 June 2003 (whether in production or not at that date) as established by objective criteria to be set by Slovakia should

be eligible.

The minimum size of eligible area per holding for which payments can be requested should be

set at 0,3ha. However, Slovakia should have the possibility to decide, on the basis of objective criteria and after approval by the Commission, to set the minimum size at a higher level but no more than 1ha.

· There should be no obligation to produce or to employ the factors of production.

· Any land benefiting from payments under the simplified scheme should be maintained in good

The EU underlines that the simplified scheme would require a limited application of IACS. To this end, the IACS rules laid down in Regulation (EEC) No 3508/92, notably Article 2 thereof, should apply to the simplified scheme to the extent necessary. This implies that Slovakia would, inter alia, have to:

prepare and handle farmers' annual aid applications where such applications only contain data on applicants and on declared agricultural parcels (identification number and area but not use);

have in place a computerized database for agricultural holdings, parcels and aid applications;

check the aid applications in accordance with Articles 7 and 8 of Regulation (EEC)

No 3508/92.

The EU stresses that the application of the simplified scheme would not in any way affect Slovakia's commitments with regard to the implementation of the acquis on the identification and registration of animals.

The EU considers that the simplified scheme should be available for three years with the possibility to be renewed twice by one year on Slovakia's request. However, Slovakia should have the possibility to terminate the application period already after the first or the second year after accession. During the period of application of the simplified scheme, Slovakia would have to take all necessary steps to set up the IACS implementation structures required for properly running the standard system of direct payments. At the end of the transitional period, Slovakia should therefore be ready to enter the standard system in the form then applicable. In this respect, the EU refers in particular to the IACS system with its components (Article 2 of Regulation (EEC) No 3508/92).

Before the end of the period of application of the simplified scheme, the Commission would assess Slovakia's state of preparedness to fully apply the standard system of direct payments. On that basis, the Commission would:

note that Slovakia can enter the standard direct payments system, or

decide to extend the application of the simplified scheme by Slovakia for the period necessary to allow for the necessary management and control procedures to be fully in place and/or to function properly.

In the latter case, however, but not before the expiry of the five-year application period, the annual increase of the direct payments rate for Slovakia under the above approach would be frozen until the end of the extended application period. The decision to authorise Slovakia to enter the standard system of direct payments at the end of the extended application period would also be taken by the Commission once Slovakia has demonstrated its preparedness to fully apply the standard system.

The EU underlines that after the end of the application period of the simplified scheme, the standard schem would be applied according to the relevant EU rules and on the basis of the quantitative parameters (e.g. base area, premium ceilings, Maximum Guaranteed Quantities (MGQ)) specified in the Act of Accession, without prejudice to possible changes arising from amendments to the relevant EU legislation, for each direct aid listed in the Annex to Regulation (EC) No 1259/1999.

The EU notes that the application of the simplified scheme should be optional. However, should Slovakia not choose the simplified system it would then be required to fully implement the standard system for direct payments upon accession in accordance with the relevant EU management and control rules. There could be no transitional periods for IACS implementation or other Common Market Organisations (CMO) requirements concerning direct payments.

The EU considers that the detailed rules relating to the implementation of simplified scheme should be adopted by the Commission according to the management committee procedure.

3.

Complementary national direct payments

The EU considers that Slovakia should be given the possibility, if it had applied national direct

payments to farmers before accession and subject to authorisation by the Commission, to complement direct aid paid to a farmer

14 under any scheme listed in the annex to

Regulation (EC) No 1259/1999 up to the total level of direct support he would have been entitled to receive in Slovakia prior to accession under a like national scheme. However, the total direct support the farmer could be granted after accession in Slovakia under the relevant EU scheme including all complementary national direct payments should in no case exceed the level of direct support he would be entitled to receive under that scheme in the existing EU.

The EU considers that authorisations by the Commission should:

· specify the relevant national CAP like direct payment schemes and the conditions for the

granting of the complementary national direct payments and

· be granted subject to any adjustments which may be rendered necessary by developments in the

common agricultural policy.

b)

The EU considers furthermore that the option to grant national aid complements should also be available if Slovakia chose to apply the simplified scheme. Under that option, provided that Slovakia could demonstrate that there are differences between the level of national direct support granted to its farmers before accession and that which may be granted under the EU simplified scheme, and subject to authorisation by the Commission, Slovakia would have the possibility to grant, in an appropriate form, digressive complementary national aids to farmers benefiting from EU direct payments under the simplified scheme.

· the total amount of national direct support per sector granted in Slovakia before accession under

The EU considers that within the limits of its specific financial envelope Slovakia should have the right to decide, on the basis of objective criteria and subject to authorisation by the Commission, on the amounts of complementary national aid to be granted. However, the amounts fixed should be digressive according to the direct payments introduction rhythm.

The EU considers that the authorisations by the Commission should:

· define the initial specific financial envelope, the rate at which the complementary national aids

decrease and, where appropriate, the conditions for the granting thereof,

· be granted subject to any adjustments which may be rendered necessary by developments in the

common agricultural policy.

c)

The EU considers that a national direct payment scheme applicable prior to accession should be considered as a CAP like scheme if the national direct support available was granted to farmers in respect of a production covered by one of the EU direct payment schemes listed in the annex to Regulation (EC) No 1259/1999.

The EU also stresses that the reference period for establishing the level of pre-accession direct support in Slovakia should be set in such a way as to realistically reflect the pre-accession direct income support in Slovakia and avoid new or additional schemes being created with a view to making use of the top-up possibility. Therefore the year 2001 should be chosen as the relevant reference year. Moreover, Slovakia would be required to inform the EU not later than upon accession of the national schemes in respect of which it would envisage to grant complementary national direct payments after accession.

Should Slovakia be able to demonstrate, on a product by product basis, that the EU approach would lead to a genuine reduction of support for their farmers, a country specific solution could be developed, taking account, however, of all elements of support available under the CAP after accession.

The EU underlines that any national complementary direct payments or aids would be financed from the national budget.

11b.

Production quotas and other supply management instruments

The EU takes note of Slovakia's requests in relation to the determination of various production quotas and other supply management instruments. The EU considers that these instruments should be quantified on the basis of the most recent historical reference periods for which data are available, i.e. the time span from 1995 to 1999 (where available including 2000). The EU considers it reasonable furthermore, for the purpose of choosing within the above time frame the most appropriate reference period for each individual scheme, to take into account the approach followed when the relevant schemes were established, as regards the number or combination of years concerned. The methods applied in previous accessions should also be considered. The EU will take into account exceptional conditions, such as natural disasters or significant market disturbances, provided that Slovakia can demonstrate the existence of such exceptional conditions on the basis of clear and convincing evidence/elements.

ARABLE CROPS

CEREALS, OILSEEDS AND PROTEIN CROPS

Area payment scheme for Arable crops (Council Regulation (EC) No 1251/1999)

12.

Determination of the base area of arable crops under Article 2(2) and Annex II of Council Regulation (EC) No 1251/1999 and of the average cereal yield provided for under Article 3(5) of Council Regulation (EC) No 1251/1999

The EU takes note that Slovakia has modified its request for a base area, requesting 1,017,674 ha, plus 30,000 ha additional area for oilseeds and protein crops. The EU also notes the information provided on the area under arable crops and the total production of arable crops following the logic of Annex I of Regulation (EC) No 1251/99 (CONF-SK 2/02).

(i) Establishment of Base Area

The EU considers that in line with the approach on historical quantitative reference levels set out in point 11b, the average of the years 1997, 1998 and 1999 would be the most appropriate to determine the arable base area for Slovakia.

The EU concludes that, following the method explained above, the base area for Slovakia should be

set at 1,003,453 ha.

(ii) Establishment of Reference Yield

The EU considers that in line with the approach on historical quantitative reference levels set out in point 11b above, the average of the median three years of the period 1994/1995 - 1998/1999 should be taken to determine the appropriate reference yield for Slovakia.

The EU concludes that, following the method explained above, the reference yield for Slovakia should be set at 4.06 tonnes/ha.

The EU underlines, however, that in accordance with Article 9 of Regulation (EC) No 1251/1999, the base area and reference yield of Slovakia will be established by the Commission following the Management Committee procedure.

(iii) Establishment of eligibility of land for direct payments

The EU notes that all payments under Regulation (EC) No 1251/1999 can only be granted for land that is considered an "eligible area" in the sense of Article 7 of the above Regulation.

The EU notes Slovakia's request that 31 December 2001 be taken as the date on which to apply the current definition of eligible area (CONF-SK 79/02).

The EU notes that the certainty about the distribution of past land use and the reliability of registers may be improved if Slovakia would be allowed to take this date as the reference date for the eligible area. The EU can therefore accept Slovakia's request.

13.

Determination of the eligible area of durum wheat provided for under Article 5 and Annex II of Council Regulation (EC) No 1251/1999 subject to the limits fixed in Annex III to that Regulation

The EU also notes the information provided by Slovakia on the regions where durum wheat was grown, the information on the durum wheat production in the period 1995-99, and information on the quality and end-use of the durum wheat varieties used (CONF-SK 74/01, 2/02 and 8/02).

The EU considers it would be appropriate to apply the following criteria to establish durum wheat area for Slovakia:

The special aids should only concern durum wheat to be used for pasta production. Glassiness

A period of approximately 20 years should be taken as the minimum period in which durum

wheat has been grown to qualify for the "traditional durum wheat aid" and the "well established durum wheat aid."

The criterion concerning the importance of durum wheat should be interpreted as follows:

to be eligible for the "traditional durum wheat aid" the area under durum wheat production in the region concerned should be at least 2% of the area under all cereal production in this region.

The EU considers that in line with the approach on historical quantitative reference levels set out in point 11b above, and in line with the approach to determine the base area for arable crops, the area eligible for the special support for durum wheat should be set as the average area under durum wheat during the reference period 1997-1999.

The EU notes that glassiness of the durum wheat varieties grown in Slovakia ranges from 80% to 89%. The EU also notes Slovakia's statement that no statistics were gathered on durum wheat production before 1989 but that durum wheat production has a long-standing tradition in Slovakia

15.

Finally, the EU notes that durum wheat does not concern 2% or more of the area under cereal production.

The EU concludes that of the above mentioned criteria, only 1 and 2 are met. Consequently, the EU considers that the area eligible for the well established durum wheat aid in Slovakia should be set at 4,717 ha.

14.

Determination of the maximum guaranteed area for grain legumes (Article 3 of Council Regulation (EC) No 1577/96)

The EU notes that Slovakia modified its request for the granting of a production support for growers of certain grain legumes - lentils in the area of 1,200 ha, with respect to the 1995-1999 reference period, when the average harvested area for lentils was 1,234 ha. The EU also notes that Slovakia also provides additional information on harvested areas, yield and production of the lentils (CONF-SK 2/02).

The EU notes that contrary to other direct payment schemes the aid for grain legumes is not linked to national quotas or guaranteed quantities. In this context the EU underlines that Slovakia's request for the granting of a production support for growers of certain grain legumes - lentils in the area of 1,200 ha seems without object, as there are no national guaranteed areas.

16 and in line with the approach on historical quantitative reference levels set out in

point 11b above, the EU considers that the Community guaranteed area should be adjusted by adding the average number of hectares under the grain legumes eligible for support in the Candidate Countries in the years 1997-1999. The increase for the accession of Slovakia would amount to 1215 hectares

17.

NON-FOOD (industrial set-aside), PROCESSED CEREALS, POTATO STARCH, CEREAL SUBSTITUTES (MANIOC ETC.), ANIMAL COMPOUNDS, RICE AND DRIED FODDER

14.A

Production quota of potato starch (Council Regulation (EC) No 1868/94, amended by

Council Regulation (EC) No 1252/1999)

The EU considers that in line with the general approach on historical quantitative reference levels set out in point 9b above, the national quota for Slovakia should be taken as the average of 1997, 1998 and 1999.

The EU therefore considers that a national quota for Slovakia for potato starch should be set at 729 tonnes.

The EU considers that the capacity of investments irreversibly undertaken before 1.2.2002 may, to a certain extent, be taken into account when finally attributing the national quota. In this context, the EU invites Slovakia to notify all investment projects in this sector that have been irreversibly undertaken and that have an effect on total potato starch production capacity.

Furthermore, the EU considers that the quota should be allocated between potato starch manufacturers in line with the average production in the period 1997-1999 and taking into account any irreversible investments made by those undertakings prior to 1 February 2002.

15.

Dried Fodder (Council Regulation (EC) No 603/95) )

The EU takes note of Slovakia's statement that it maintains its request to be allocated a national guaranteed quantity (NGQ) of dried fodder (CONF-SK 71/00). The EU takes note of the data provided by Slovakia concerning the production of dried fodder (CONF-SK 74/01, 2/02 and 8/02). The EU takes note of the information provided by Slovakia regarding technical conditions, processing facilities and domestic quality requirements (CONF-SK 2/02). In this context, the EU notes that the sun dried fodder produced in Slovakia does not correspond to the products eligible for support under Regulation (EC) No 603/95. The EU considers that therefore, no national guaranteed quantity for sun dried fodder should be fixed.

In line with the general approach on historical quantitative reference levels set out in point 11b above, the national guaranteed quantities for the new Member States should be taken as the average production during the two most recent production years for which data are in most cases available, i.e. the years 1998 and 1999.

The EU therefore considers that a national guaranteed quantity of 13,100 tonnes of deshydrated (artificially dried) fodder should be set for Slovakia.

SUGAR

16.

Administration of the Common Market Organisation for sugar (Council Regulation (EC)

No 1260/2001)

The EU takes note of the information provided by Slovakia with regard to the implementation of the Common Market Organisation for sugar. The EU encourages Slovakia to continue the process

of alignment with the acquis and its effective implementation.

17.

Sugar and isoglucose quota (Council Regulation (EC) No 1260/2001, -

Articles 10-21)

The EU notes that Slovakia maintains its request for annual production quotas for white sugar according to Regulation (EC) No 2038/1999 as follows: 190,000 tonnes (A quota), and 45,000 tonnes (B quota). The EU also notes that Slovakia maintains its request for an A quota for isoglucose of 50,000 tonnes (dry matter) and a B quota for isoglucose of 10,000 tonnes (dry matter). The EU takes note of the information provided by Slovakia.

With regard to the sugar and isoglucose production quotas, the EU considers that they should be determined on the basis of the average sugar production of the years 1995-1999 and with a view to ensuring the self-financing system of the CMO, having regard also to WTO constraints. In this context, the EU considers furthermore that the overall equilibrium of quotas as it has evolved under the current CMO should not be jeopardised. Therefore, with regard to sugar production quotas, for Slovakia being a net importer, the A quota should equal net production. The B quota should be 10%

of the A quota. In order to maintain the balance on the sugar market, total A and B quotas should not exceed internal consumption plus the quantity that can be exported within the limit of the WTO commitments.

The EU considers that following this approach the total sugar quota for Slovakia should be set Slovakia at 207,432 tonnes of which 189,760 tonnes A quota and 17,672 tonnes B quota (9.3 % of the A quota).

With regard to isoglucose production quotas, the EU considers that they should be determined upon the same principles as for sugar quotas. However, for Slovakia where isoglucose production started only in 1998 only the average isoglucose performance over the effective production years 1998- 1999 should be considered for isoglucose quota determination. The EU considers that following this approach the total isoglucose quota for Slovakia should be set at 10,497 tonnes equalling to the A quota. As Slovakia is considered to be a net exporter no B quota should be determined.

The EU also notes that the co-efficients used for the reduction of guaranteed quantities in Article 10 of Regulation (EC) No 1260/2001 will be adapted at an appropriate moment after the conclusion of the negotiations on the basis of the finally agreed quota.

The EU notes that for Slovakia the marketing year 2000/2001 referred to in points IV.2, V.2, V.3, VI.2, VIII(d) and XI.2 of Annex III to Regulation (EC) No 1260/2001 will be replaced by the marketing year 2003/2004.

FIBRE CROPS

18.

Inclusion of flax varieties in the EC varieties list (Commission Regulation (EC)

No 2316/1999 Annex XII)

The EU notes that Slovakia will request the inclusion of new varieties of flax in the list of varieties through the relevant procedures of the Management Committee. The EU invites Slovakia to address this issue under the appropriate procedure (Management Committee procedure) at the appropriate moment, sufficiently ahead of application of the aid scheme in question.

18bis.

National guaranteed quantity of flax and hemp fibre (Council Regulation (EC)

No 1673/2000)

The EU takes note that the Slovak Republic has modified its position and now requests a national guaranteed quantity of 473 tonnes of long fibres and 1,587 tonnes of short fibres under Regulation (EC) No 1673/2000 (CONF-SK 79/02). The EU also takes note of the information provided on production facilities in Slovakia and on the production of short and long flax fibres over the period 1994-2001 (CONF-SK 2/02 and 79/02).

The EU considers that in line with the approach on historical quantitative reference levels set out in point 11b above, a recent reference period should be taken to determine the national quota for the new Member States. The EU notes that furthermore, the measure concerns aid for straw processing. Farmers growing the flax and hemp to be processed receive aid under the arable crops aid system, and the same reference years as are used in the EU arable crop scheme should be used to determine average recent production. Therefore, in line with the reference years used to determine the base area for arable crops, a reference period of 1997-1999 should be used.

The EU therefore considers that a national guaranteed quantity for fibres for the Slovak Republic should be set at 73 tonnes for long fibres and 189 tonnes for short fibres.

SPECIALISED CROPS

FRUIT AND VEGETABLES

Fresh fruit and vegetables

19.

Marketing standards for fruit and vegetables (Council Regulation (EC) No 2200/96 as amended by Council Regulation (EC) No 2699/2000)

The EU takes note of the additional information provided by Slovakia on the state of implementation of marketing standards for fruit and vegetables. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

20.

Quality standards and control

The EU takes note of Slovakia's request to be considered as a single production area with respect to Regulation (EC) No 2200/96, Article 3(2) - conformity to the quality standards - and taking into consideration the transport of unsorted fruit and vegetables in the country. The EU notes that

according to the acquis this issue falls under the competence of each Member State under the conditions laid down in Regulation (EC) No 2200/96. The EU therefore considers that Slovakia's request is unnecessary.

21.

Minimum requirements for the recognition of producer organisations (Council Regulation (EC) No 2200/96 as amended by Council Regulation (EC) No 2699/2000;

Commission Regulation (EC) No 412/97)

The EU takes note of Slovakia's requests as concerns the criteria for recognition of producer organisations (minimum numbers of producers and minimum volumes of marketable production):

The EU considers that this issue should be addressed under the appropriate procedure (Management Committee procedure) at the appropriate moment.

Processed fruit and vegetables

21bis. National thresholds for processing aid (Council Regulation (EC) No 2201/96 as amended

by Council Regulation (EC) No 2699/2000)

The EU notes that Slovakia maintains its request for the establishment of a quota (threshold) for products processed from tomatoes corresponding to a weight of 36,000 tonnes of fresh tomatoes for this country. The EU considers that Slovakia requests the allocation of a national threshold of 36,000 tonnes for fresh tomatoes destined for processing. The EU notes that Slovakia also requests the establishment of a national threshold of 1,100 tonnes for peaches destined for processing.

On the basis of the information submitted by Slovakia, the EU considers that the national threshold for tomatoes should be set at 27,484 tonnes and the national threshold for processing of peaches should be set at 125 tonnes.

WINE AND ALCOHOL

Wine

22.

Management of the Common Market Organisation in wine (Council Regulation (EC)

No 1493/1999)

The EU underlines the importance of full compliance with the acquis upon accession with regard to the management of the Common Market Organisation for wine, in particular the rules on the wine-growing potential comprising planting and replanting rights and the establishment of a vineyard register, on the market rules for wines, on the oenological processes and practices, including the respect of the prohibition of vinification of imported grape must, product specifications for wines, on the protection of wine designations, the specific provisions on quality wines produced in specific regions, on trade names and traditional denominations, on the free movement of wine products in the Community, and import and export of wines and finally the controls in the wine sector.

The EU takes note of the implementation plan and timetable provided by Slovakia in respect of the establishment of the vineyard register. It also takes note of the additional information provided by Slovakia in respect of its legislation on wine in order to gradually prepare for full harmonisation with the CMO for wine.

The EU takes note of the additional information provided by Slovakia in respect of the sparkling wine production rules.

The EU takes note of Slovakia's confirmation that the names of the sparkling wines Hubert, Pálffy and Sandtners- are trademarks. It underlines that further efforts are required to implement the

acquis within a given timetable.

The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

23.

Wine-growing areas (Council Regulation (EC) No 1493/1999, Annex III)

The EU notes that Slovakia maintains its request to be included in wine-growing zone B in accordance with Regulation (EC) No 1493/1999. The EU also takes note of the additional information provided by Slovakia regarding its inclusion in wine-growing zone B.

The EU considers that, on the basis of the information provided by Slovakia, and in particular the natural alcoholic strength of the wine grapes and climatic conditions for each of the six wine-growing areas in Slovakia, the wine-growing areas of the Small Carpathians, South Slovakia, Nitra, Central Slovakia and East Slovakia should be classified in EU wine-growing zone B and the wine-growing area of Tokay as referred to in the additional information provided by Slovakia should be classified in EU wine-growing region C I a) of Annex III of Regulation (EC)

No 1493/1999. The EU invites Slovakia to reconsider its request on this basis.

Regarding enrichment of wine by the addition of sucrose, the EU takes note that this practice was authorised in the relevant Czechoslovak technical norm which came into force on 1 January 1964 and that this technical norm was included without any change in the current Slovak wine legislation which authorises addition of sugar to wines under certain conditions. The EU invites Slovakia to indicate the wine production areas of its territory where this practice of enrichment by addition of sucrose has been traditionally or exceptionally practised under the legislation in force on 8 May 1970 (since wine production areas where enrichment is allowed are to be indicated in Regulation (EC) No 1622/2000).

24.

Replanting rights (Council Regulation (EC) No 1493/1999)

The EU takes note of Slovakia's declaration that there is no request for new planting rights at present. The EU notes that Slovakia only requests to be granted a total area of vineyards for wine region of the Slovak republic amounting to 22.227 hectares and that Slovakia will only apply replanting rights within this area. The EU underlines that such replanting rights must be similar to the replanting rights granted under paragraph 2 of article 4 of Regulation (EC) No 1493/1999 and acquired under Slovak legislation before accession.

25.

Slovak indications of quality wines (Council Regulation (EEC) No 823/87, Article 15)

The EU notes that Slovakia has modified its request to use the term "Kabinet" (Cabinet) for Slovak selection wines and now requests to use the term "Kabinetné vino". The EU also notes that Slovakia requests to classify under Regulation (EC) No 1493/1999 the following wine names (according to Sections 9 and 13 of Act No 332 of 1996 on viticulture and wine making): selection wine with attribute according to amount of sugar content in grape juice kabinet (Cabinet), neskorý zber (late harvest), výber z hrozna (selection of grapes), bobucový výber (selection of berries), hrozienkový výber (raisin selection), cadový zber (ice harvest).

The EU points out that Regulation (EEC) No 3201/90 should be repealed with effect from 1.1.2003 by the new Regulation on designation, denomination, presentation and protection of wines. The EU invites Slovakia to address the inclusion of such traditional terms designating a particular quality of quality wines under the appropriate procedure (Management Committee procedure) at the appropriate moment.

The EU can accept Slovakia's request to use the term "Kabinetné vino" for Slovak selection wines.

With regard to the inclusion in Regulation (EC) No 1493/1999 of the Slovak traditional terms designating a particular quality of some wines in the "Slovak" Tokay wine-growing area - tokajské samorodné suché (Tokay wine dry), tokajské samorodné sladké (Tokay wine sweet), tokajská Lipovina (Tokay Lipovina), tokajský Furmint (Tokay Furmint), tokajský Muskát zltý (Tokay Muscat yellow), tokajský výber 2 6 putdový (Tokay aszu 2-6), the EU also invites Slovakia to address their inclusion under the appropriate procedure (Management Committee procedure) at the appropriate moment.

26.

Modification of Slovak wine growing regions

The EU takes note of Slovakia's request to include under Regulation (EC) No 1056/96 the modification of wine-growing areas in Slovakia according to Section 5, sub-section 2 of Act

No 332 of 1996 on viticulture and wine making as follows:

Malokarpatská vinohradnícka oblase Wine-growing area of the Small Carpathians;

Juznoslovenská vinohradnícka oblase - Wine-growing area of South Slovakia;

Stredoslovenská vinohradnícka oblase - Wine-growing area of Central Slovakia;

Nitrianska vinohradnícka oblase - Wine-growing area of Nitra;

Východoslovenská vinohradnícka oblase - Wine-growing area of East Slovakia;

Tokajská vinohradnícka oblase - Wine-growing area of Tokay.

The EU points out that the EU legislation regarding description and presentation of wines no longer contains a list of imported wines described by means of a geographical indication for countries which have notified to the World Trade Organisation their legislation on geographical indications for wines as is the case for Slovakia.

26 bis.

Mandatory distillation of grape by-products (Council regulation (EC) No 1493/1999) (NEW)

The EU notes that Slovakia requests to exclude the wine producers on the whole territory of Slovakia from the mandatory distillation of the by-products of the wine production on the basis of article 27 (7) of Council Regulation (EC) No 1493/1999.

The EU informs Slovakia that article 27 (4) of Council Regulation (EC) No 1493/1999 provides for selective exemptions in the case of small producers or for certain regions to be determined.

The EU therefore invites Slovakia to reconsider its request in this light.

Spirits, alcohol and aromatised wines

27.

Quality standards for spirits and protection of spirits bearing a geographical indication (Council Regulation (EEC) No 1576/89 and Commission Regulation (EEC) No 1014/90)

The EU notes that Slovakia will address the issue of spirits designated by geographical indications in its legislation so as to comply with Regulation (EEC) No 1576/89 by the end of 2002.

The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation, notably with the marketing standards laid down for spirits in Regulation (EEC)

No 1576/89.

28.

Definition of Rum (Council Regulation (EEC) No 1576/89, Article 1, paragraph 4 (a))

The EU notes that Slovakia has withdrawn its request for a transitional period until 31 December 2006 during which it would be allowed to use the term "Tuzemský rum".

29. -

Geographical indications (Annex II of Council Regulation (EEC) No 1576/89)

The EU notes that Slovakia has withdrawn its request to include the drinks bearing the names of Urpignac, Bystrické brandy speciál, and Matús fák Tren`iansky into the Annex II of Regulation (EEC) No 1576/89.

The EU however notes that these spirits are currently designated as brandy without meeting the requirements for brandy under Regulation (EEC) No 1576/89. The EU stresses that the labelling of these spirit drinks must be brought in compliance with Regulation (EEC) No 1576/89 and should be modified at the latest upon accession so as not to mislead the consumers regarding the nature of the product.

The EU notes that Slovakia maintains its request for the inclusion of the spirits bearing the names of Karpatské brandy speciál, Spisská borovi`ka, Slovenská borovi`ka Juniperus, Slovenská borovi`ka, Inovecká borovi`ka, Liptovská borovi`ka, Pravá bosácka slivovica, Laugarício vodka, Demänovka bylinná horká, Demänovka bylinný likér into the Annex II of Regulation (EEC)

No 1576/89. It also takes note of the additional information provided by Slovakia in respect of the nature and production standards of Karpatské brandy speciál, Spisská borovi`ka, Slovenská borovi`ka Juniperus, Slovenská borovi`ka, Inovecká borovi`ka, Liptovská borovi`ka, Pravá bosácka slivovica, Laugarício vodka, Demänovka bylinná horká, Demänovka bylinný likér as well as to the link of these drinks to the declared geographical indications.

The EU can accept Slovakia's request to include these names into the Annex II of Regulation (EEC) No 1576/89 as follows:

Karpatské brandy speciál under point 5 "brandy";

Spisská borovi`ka under point 11 " juniper-flavoured spirit drinks" ;

Slovenská borovi`ka Juniperus under point 11 " juniper-flavoured spirit drinks";

Slovenská borovi`ka under point 11 " juniper-flavoured spirit drinks";

Inovecká borovi`ka under point 11 " juniper-flavoured spirit drinks";

Liptovská borovi`ka under point 11 " juniper-flavoured spirit drinks";

Bosacka Slivovica under point 7 ' fruit spirit ";

Laugarício vodka under point 16 "vodka";

Demänovka bylinný likér under point 14 "liqueur";

Demänovka bylinná horká under a " bitter-tasting spirit drinks or bitter" point to be created

in annex II.

The EU points out that the spirit sprinks listed in Article 9 of Regulation (EEC) No 1576/89 may not bear in any form whatsoever in their presentation a generic name such as brandy, which is reserved for the above drinks if they contain added ethyl alcohol of agricultural origin.

30.

Mutual recognition of procedures for the complete denaturing of alcohol for the purposes of exemption from excise duty (Commission Regulation (EC) No 3199/93)

BANANAS

31.

Tariff rate quota for banana imports (Council Regulation (EEC) No 404/93 and Commission Regulation (EC) No 896/2001)

The EU informs Slovakia that appropriate arrangements will be made in order to ensure sufficient supply of bananas to EU consumers, in conformity with WTO rules.

The EU takes note of the statistics on net imports of bananas provided by Slovakia (CONF-SK 74/01 and 2/02).

The EU underlines that the Common Market Organisation for bananas has been amended following the adoption of Regulation (EC) No 2587/2001.

TOBACCO

32.

National production quota for tobacco (Council Regulation (EC) No 2075/92, Article 9(2))

The EU takes note that Slovakia requests that the years 2000-2002 are taken as reference period for the determination of the national production quota for tobacco and maintains its request for a production quota for tobacco of 2,600 tonnes (CONF- SK 79/02). The EU also takes note of the data provided by Slovakia concerning the production of tobacco, the distribution between tobacco variety groups over the years 1995-2000 (CONF-SK 74/01) and production estimates for the years 2002 and 2003 (CONF- SK 79/02).

The EU considers that in line with the approach on historical quantitative reference levels set out in point 11b above and in line with the method of establishing quotas for individual producers in the EU, the national quotas should be established as the average of the three most recent consecutive production years.

The EU notes that the most recent production year for which data on tobacco production are generally available is 1999. Therefore the years 1997-1999 should be taken as the reference period.

The EU considers that following this approach, the national production quota for tobacco should be set for Slovakia at 1,257 tonnes. This quota should be divided as follows among the categories of the tobacco varieties in the Annex to Council Regulation (EEC) No 2075/92:

I Flue cured (Virginia): 1,117 tonnes II Light air cured (Burley): 140 tonnes

The EU could envisage that these quotas would be subject to a buy back scheme in the sense of Chapter VI of Commission Regulation (EC) No 2848/98 even before application. Producers would be compensated for the renunciation of any claims on tobacco direct payments. In this way a relatively heavy administrative procedure (heavy in relation to the possible benefit) would be avoided. The EU invites Slovakia to indicate whether it is interested in such a buy back scheme.

33.

Maintenance of existing aid for seed

The point has been moved to point 10b above.

ANIMAL PRODUCTS

MILK AND MILK PRODUCTS

34.

Specific reference quantity (milk quota) (Council Regulation (EEC) No 3950/92 as amended by Council Regulation (EC) Nos 1256/1999)

The EU notes that Slovakia maintains its request on setting of a national milk quota of 1,200 million litres (1,236,000 tonnes): 1,140 million litres (1,174,000 tonnes) for deliveries and 60 million litres (61,800 tonnes) for direct sales. The EU takes note of Slovakia's additional request for an additional quota or special reference quantity or national reserve of 120,000 tonnes to compensate the Slovak milk producers for the radical decline of milk production ("SLOM" quota).The EU also takes note of Slovakia's additional request for a transfer of 60,000 tonnes from the on farm consumption to deliveries.

The EU takes note of the data and information provided by Slovakia, in particular on direct sales and on-farm consumption. These data need further clarification. With regard to Slovakia's request for an additional quota of 120,000 tonnes to compensate Slovak milk producers for the radical decline of milk production ("SLOM" quota), the EU invites Slovakia to reconsider this request.

The EU considers that milk quotas should be determined on the basis of the average production of milk delivered and for direct sales for the years 1997-1999.

The EU notes that following this approach the total national reference quantity for milk should be set for Slovakia at 946,029 tonnes of which 932,029 tonnes for deliveries and 14,000 tonnes for direct sales.

With regard to Article 11 of Regulation (EEC) No 3950/92, the EU considers that the most recent calendar year for which data are available (2001) should be used for the determination of the characteristics of milk, in particular the representative fat content. The EU notes that Slovakia proposes to set the average fat content at 3.82%. The EU considers, however, that further clarifications are needed to ensure that the fat content corresponds to the average fat content of all

milk delivered.

The EU takes note of Slovakia's intention to establish the individual reference quantity on the basis of the quantity available on the holding on the basis of the year 2003 in the framework of Article 4(1) of Regulation (EEC) No 3950/92. It notes, therefore, that the individual reference quantity should be established on the basis of the quantity available on the holding on 31 March 2004. The EU recalls that according to the acquis all cow milk or milk equivalent delivered to the purchaser or sold directly for consumption is covered by the milk quota scheme established by Regulation (EEC) N

° 3950/92 irrespective of whether it is produced or marketed under a

transitional measure agreed in the accession negotiations with Slovakia.

35. -

Dairy premium and additional payments (Council Regulation (EC) No 1255/1999, Articles 16-25)

The EU notes that Slovakia will apply its current subsidy schemes throughout the whole pre-accession period until the time of accession and that after accession Slovakia will apply the EU direct payments system.

With regard to direct payments in the dairy sector, the EU makes reference to point 11a above. The dairy premia should therefore be introduced in the same way as direct payments in general, i.e. starting at 30% of the EU level in 2005.

The EU notes that entitlement to dairy premia from 2005 on should depend on the implementation of the milk quota system, in particular on the allocation, by 31 March 2005, of milk quotas to individual producers. That point notwithstanding, the total amount of milk for which dairy premia are granted must not exceed the total national reference quantity as will be established for Slovakia

The EU considers that the upper limit of 350 /ha set out in Article 19(3) of Regulation (EC)

No 1255/1999 should be adjusted in accordance with the gradual introduction of the dairy premium, starting in 2005 at 105 /ha and using the percentage steps indicated in point 11a.1.

BEEFMEAT

36.

Carcass classification and reporting of prices for bovine animals (Council Regulation (EC) No 1254/1999 and (EEC) No 1208/81)

The EU takes note of the implementation plan and of the further information submitted by Slovakia in respect of carcass classification and price reporting for bovine animals. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

37.

Identification and registration of bovine animals (Parliament and Council Regulation (EC) No 1760/2000)

This issue is dealt with under point 56 below.

38. -

Labelling of beef (Parliament and Council Regulation (EC) No 1760/2000, Commission Regulation (EC) No 1825/2000)

The EU takes note of the implementation plan and of the further information submitted by Slovakia in respect of beef labelling. The EU encourages Slovakia to continue the process of alignment with

the acquis and its effective implementation.

39.

Special beef premium (Council Regulation (EC) No 1254/1999)

The EU therefore considers that the regional ceiling for the special premium should be set at 78,348 for Slovakia.

40.

Suckler cow premium (Council Regulation (EC) No 1254/1999)

The EU notes that Slovakia maintains its request for a national ceiling of 50,000 animals under the suckler cow premium. The EU also takes note of the information provided by Slovakia on the number of suckler cows for the years 1997-2000.

In line with the approach on quantitative reference levels set out in point 11b above, the EU considers that the national ceiling for Slovakia should be determined using the relevant reference data from the best year out of the years 1998-2000, i.e. the year 2000, as reduced by 10 % to take into account that the EU ceiling is 10 % lower than the total number of suckler cows in the EU.

The EU therefore considers that the national ceiling for the suckler cow premium should be set at 25,819 for Slovakia. The ceiling includes the 3 % national reserve of individual rights.

41. -

Slaughter premium (Council Regulation (EC) No 1254/1999, Article 11 (3))

The EU notes that Slovakia has adjusted its request for a national ceiling for the slaughter premium and is now requesting the following maximum numbers of animals guaranteed by slaughter

premiums: 259,978 for bulls, steers, cows and heifers; 56,601 for calves. The EU takes note of the information provided by Slovakia on slaughterings for calves between 1 and 7 months old and of carcass weight less than 160 kg and for bulls, steers, cows and heifers for the period 1995-2000 and the figures for live exports of adult bovines and calves for the period 1995-2000.

The EU therefore considers that for Slovakia the national ceiling for the slaughter premium should be set at 204,062 for bulls, steers, cows and heifers and at 62,841 for calves between 1 and 7 months old and of carcass weight less than 160 kg.

42.

Additional payments (Council Regulation (EC) No 1254/1999)

The EU takes note of the information provided by Slovakia on beef production (including calves, for which information has been provided expressed in live weight), expressed in carcass weight, for the period 1995-2000; as well as the information on the number of adult live bovine animals exported and imported for the period 1995-2000.

In line with the approach on quantitative reference levels set out in point 11b above, the EU considers that the global amounts for additional payments for Slovakia should be determined on the basis of the relevant reference data from the best year out of the years 1998-2000, which was the year 1998.

The EU therefore considers that the global amount for additional payments should be set at 4,500,535 euro for Slovakia.

SHEEPMEAT AND GOATMEAT

43.

Carcass classification and reporting of prices for sheepmeat (Council Regulation (EC) No 2137/92)

The EU underlines the importance for Slovakia of achieving full compliance upon accession with regard to reporting of prices for sheep. The EU takes note of the information submitted by Slovakia in respect of the practical implementation of price reporting for sheep. However, the EU invites Slovakia to complete this information with a detailed plan including a timetable for the practical implementation of reporting of prices for sheep.

44. -

Ewe and goat premium (Council Regulations (EC) No 2467/98 and (EEC) No 1323/90, both replaced by Council Regulation (EC) No 2529/2001)

45.

Overall ceiling for the granting of the ewe premium (Council Regulation (EC)

No 2467/98, replaced by Council Regulation (EC) No 2529/2001)

The EU notes that Slovakia has reconsidered its position and now requests the setting up of the national quota at 400,000 for ewes and goats (370,000 for ewes and 30,000 for goats). The EU takes note of the information provided by Slovakia on the number of ewes and goats during the period 1993-2001.

In line with the approach on quantitative reference levels set out in point 11b above, the EU considers that the individual ceiling for ewe and goat premium for Slovakia should be determined:

using the relevant reference data on the number of ewes from the best year out of the years 1998-2000 which was the year 2000;

by adding 3 % to act as a national reserve;

without taking into account goats, as their rearing does not fulfil the eligibility criteria.

The EU therefore considers that the individual ceiling for ewe and goat premium should be set at 272,435 for Slovakia.

The EU considers that the detailed rules for the distribution of premium rights for sheep and goats to individual producers should be dealt with for all candidate countries horizontally under the appropriate procedure (Management Committee procedure) at an appropriate moment and sufficiently ahead of the application of the aid scheme in question.

45A

Additional payments (Council Regulation (EC) No 2529/2001)

The EU considers that the global amount for additional payments for Slovakia should be determined on the basis of the ceiling which is proposed under point 45, multiplied by the ratio 72,000,000 (for the financial envelope, in euros, which was available for the additional payments) / 68,106,718 (for the average number of units of premium paid in the EU-15).

The EU therefore considers that the global amount for additional payments should be set at 288,000 euro for Slovakia.

PIGMEAT

46.

Pigmeat (Council Regulation (EEC) No 3220/84 on carcass classification and Commission Regulation (EEC) No 2806/79 on reporting of prices for pigmeat).

EU takes note of the implementation plan provided by Slovakia in respect of the classification of carcasses and the reporting of prices for pigs. It underlines that further efforts are required to

implement the acquis within the given timetable. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

EGGS AND POULTRYMEAT

47.

Marketing standards for eggs and poultry (Council Regulations (EEC) No 1906/90 and (EEC) No 1907/90); prices and production statistics (Council Regulations (EEC)

No 2782/75 and (EEC) No 1868/77)

With regard to marketing standards for eggs and poultry and the provision of price and production statistics, the EU takes note of the information provided by Slovakia. It underlines that further efforts are required to implement the acquis within the given timetable. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

RURAL DEVELOPMENT AND FORESTRY

48.

Programming, administrative structure for implementation, control and monitoring, strategy (Council Regulations (EC) No 1260/1999, (EC) No 1257/1999)

The EU notes the additional information provided by Slovakia on the administrative organisation and implementation of rural development programmes. The EU takes note of the accreditation of the SAPARD agency.

The EU considers that maximum use should be made of the experience gained in the implementation of SAPARD, in particular through using the SAPARD agency to implement and manage future rural development measures, whether funded from EAGGF Guidance or Guarantee. Therefore, the implementing bodies for the rural development programme co-financed from the EAGGF Guarantee section (differentiated appropriations) should be the programme management authority in conjunction with the paying agency set up under SAPARD, and where appropriate the monitoring committee set up under SAPARD.

The EU notes that the SAPARD agency will become responsible for the implementation of all rural development measures after accession, whether funded from EAGGF Guidance or Guarantee.

49.

Rural Development measures eligible for community support (Council Regulation (EC) No 1257/1999)

Differentiated appropriations

Commitments and payments will follow the principles established for the Community's structural interventions, and in particular:

· The same automatic decommitment rule (n+2 years) that applies to the Structural Funds

(including EAGGF Guidance) will be used.

· commitments in respect of assistance to be carried out over the programming period shall be

effected automatically on an annual basis according to the Commission Decision granting a contribution to these rural development programmes

Paying agencies and their accreditation, accounting and conformity clearance of accounts of

· Rural Development Plans and their content, procedures for submission and approval by the

Commission, as well as their follow-up and evaluation will be based on the principles and provisions relating to support for rural development from the EAGGF-Guarantee.

Detailed rules for applying the above principles shall be adopted by the Commission in

Increase in Community contribution

The co-financing rate for the temporary rural development instrument will be increased in Objective 1 areas to a maximum of 80% for the eight measures concerned

19, as currently applied for

the Structural Funds, including EAGGF Guidance, in the cohesion countries.

Additional measures:

Support for semi-subsistence farms undergoing restructuring

Support for setting-up producer groups

Support may be granted to encourage the setting-up, and to facilitate the administrative operation, of producer groups, during the first five years following the date of their recognition.

The aid shall be determined for each producer organisation on the basis of its annual marketed production and shall not exceed:

a)

for the first, second, third, fourth and fifth years 5%, 5%, 4%, 3% and 2% respectively of the value of marketed production up to 1 000 000, and
b)

for the first, second, third, fourth and fifth years, 2.5%, 2.5%, 2.0%, 1.5% and 1.5% respectively of the values of marketed production exceeding 1 000 000,

The aid shall be subject to a ceiling for each producer organisation of:

-

100 000 for the first year

-

100 000 for the second year

-

80 000 for the third year

-

60 000 for the fourth year

-

50 000 for the fifth year

and shall be paid in annual instalments.

Support to assist farmers in meeting EU standards

This measure will take the form of a temporary and degressive annual payment available until such time as the standard is due to be met and at any rate for a maximum of five years. Maximum payment in the first year will be 200/ha or an appropriate amount calculated on an alternative basis (e.g. Livestock Unit for standards related to animal welfare, or per holding for standards related to occupational safety). The payment will be reduced in equal steps to zero in subsequent years. Detailed rules for the application of this measure, including in particular conditions to avoid over- compensation and to allow for the possibility of a global ceiling on the amount paid to any individual farmer, as well as arrangements concerning the verification of compliance with the relevant standard at the end of the support measure shall be adopted in accordance with the procedure laid down in Article 50 (2) of Regulation (EC) No 1260/1999.

Technical assistance

The EU proposes to establish a provision for technical assistance in relation to EAGGF Guarantee funded rural development measures for the period 2004-2006, in order to ensure the smooth transition from SAPARD to the rural development acquis . This provision will operate in accordance with the rules for technical assistance under the Structural Funds, in particular EAGGF Guidance.

Amendments and extensions to existing measures:

Investments in farm holdings (Chapter I of Council Regulation (EC) No 1257/1999)

The eligibility conditions of this measure will be adapted, on an exceptional basis, for the new Member States for the period 2004-2006, as follows:

Support for investment shall be granted to agricultural holdings for which economic viability at the end of the realisation of the investment shall be demonstrated.

acquis .

Support for the provision of advisory and extension services (new indent of Article 33 of Council Regulation (EC) No 1257/1999)

Regulation (EC) No 1257/1999 provides for assistance for setting-up of farm management services (Article 33, third indent). In view of the needs of farmers in the candidate countries for advice and assistance, a new specific measure to support the provision of advisory and extension services to farmers should be created for the period 2004-2006.

Public or private advisory and extension services could apply for support under this scheme in respect of provision of services to farmers.

Support for LEADER+ type activities

The LEADER+ Community Initiative will not be applied separately for the period 2004-2006.

In Objective 1 and 2 areas this measure will be funded under EAGGF Guidance and form part of Structural Funds programming.

Implementation of LEADER+ in the new Member States should be focused on Action 1 of LEADER+ - 'Integrated territorial rural development strategies of a pilot nature'.

Support under the transitional LEADER+ measure for the new Member States will be available

for:-

(1)

And/or

(2)

Selection of a limited number of pilot Local Action Groups and cofinancing of the implementation of their local development strategies. This option will only be available to regions of the new Member States where there is already sufficient administrative capacity and experience of local rural development type approaches available to implement LAGs in the short programming period. Selection of LAGs should be by open and competitive procedures. LAG selection criteria will need to include suitable safeguards to ensure the development strategies of potential LAGS could indeed be realised within the limited programming period. These LAGS would have the scope to support the full range of actions as provided for under the LEADER+ guidelines.

These pilot LAGs would also be eligible to participate in inter-territorial and transnational co- operation actions under Action 2 of LEADER+.

Each new Member State which decides to implement the transitional LEADER+ measure within its programming framework will need to indicate which options it wishes to implement and to provide appropriate justification for the choice. The Structural Funds' programmes submitted by each country should specify on what basis each option is to be implemented.

50.

51.

Forestry -Protection of the Community's forest against fire (Council Regulation (EEC) No 2158/92)

The EU notes that Regulation (EEC) No 2158/92 will be repealed on 31.12.2002.

In order to take account of areas at risk of forest fires, and to provide for appropriate fire prevention measures, the EU invites Slovakia to classify its territory according to the degree of forest-fire risk, differentiating between high, medium and low risk areas. An area classified by degree of risk must normally correspond to an administrative area at least equivalent to NUTS level III. Only areas where the permanent or cyclical risk of forest fire presents a serious threat to the ecological balance and the safety of persons and goods or constitutes a factor which is hastening the process of desertification of rural areas my be classified as an area of high risk. Areas where the forest-fire risk is not permanent or cyclical but presents a significant threat to forest ecosystems may be classified as areas of medium risk. All other areas shall be classified as low risk.

The EU invites Slovakia to establish forest-fire protection plans for the areas classified as at high and medium risk of forest-fires. These plans shall comprise a description of the current situation in the area concerned as regards the system of prevention and monitoring, the associated partners and co-ordination structure, as well as the measures, methods and techniques used to protect forests against fire.

The classification of areas at risk of forest fires should be submitted as part of the rural development plans submitted in accordance with Council Regulation (EC) No 1257/1999 (i.e. as part of Structural Funds' programming in Objective 1 areas, and as part of the Guarantee funded Rural Development Plan in other areas). These plans may contain measures related to the prevention of forest fires for those areas classified as high or medium risk to be co-financed by the EU in accordance with the provisions of Chapter VIII of Council Regulation (EC) No 1257/1999. Such measures must be in conformity with the forest-fire prevention plan established by Slovakia.

E. VETERINARY AND PHYTOSANITARY LEGISLATION

52.

53.

The EU underlines that full and effective enforcement of the internal market control

systems, as regards both the veterinary and phytosanitary fields, is a necessary condition for the participation of a new Member State in the internal market.

The EU underlines that Slovakia must give a high priority to ensuring the transposition of the

acquis in its national legislation and to ensure full and effective implementation as well as enforcement. The EU draws Slovakia's attention to the importance of the new or forthcoming

acquis aimed at enhancing food safety by considering all aspects of the food production chain as a continuum from, and including, primary production, the production of animal feed up to, and including, sale or supply of food to the consumer, in accordance with the "farm to table" approach.

The EU stresses the importance of ensuring at all times proper veterinary and phytosanitary controls at its external borders.

54.

The EU takes note of the information provided by Slovakia on its plans for legal transposition of the veterinary and phytosanitary acquis. The EU emphasises the importance of the new framework Veterinary Act. It urges Slovakia to ensure its early adoption and implementation and notes the information provided by Slovakia on the timetable for the remaining legislative process. The EU underlines the importance for Slovakia to respect its commitment to adopt the necessary technical regulations to ensure complete harmonisation with the acquis by 1 January 2003.

The EU draws Slovakia's attention to the importance of the new acquis relating to transmissible spongiform encephalopathies (TSE) and to the necessity of implementing it as soon as possible and from accession at the latest. The EU underlines that further efforts are required to ensure that all necessary measures be taken and enforced at all levels, in full conformity with EU requirements, as regards epidemio-surveillance, the rendering system, the removal and disposal of Specified Risk Material (SRM) and the feed ban.

The EU will closely monitor developments with regard to the transposition and implementation of

the acquis on TSE, public health conditions in establishments for animal products and border inspection posts and the setting up of an animal waste treatment system, and will return to any related issue, as necessary, in the light of the outcome of such monitoring, notably on the basis of the reports of the Food and Veterinary Office of the Commission. The EU underlines that the FVO's missions and reports will continue, including after the provisional closure of this chapter.

The EU recalls that Community funds are available under the Phare program in order to facilitate

the implementation of the acquis , in particular as regards BSE testing.

The EU invites Slovakia to provide tables of correspondence as soon as possible when transposition is completed for a sector or a directive. These tables will be essential for the assessment of the correct transposition of EU requirements.

VETERINARY LEGISLATION

55.

C ONTROL SYSTEM IN THE INTERNAL MARKET

The EU takes note of the information provided by Slovakia regarding the control system in the internal market. The EU underlines that this system must be fully operational by the date of accession. In this context, the EU reiterates that the necessary requirements must be gradually implemented during the pre-accession period. The EU encourages Slovakia to continue the process

of alignment with the acquis, its effective implementation and enforcement.

The EU notes that Slovakia expects to join the ANIMO system on a voluntary basis in the near future.

56.

Identification and registration of animals

The EU underlines the importance of achieving full compliance upon accession with regard to identification and registration of animals.

The EU takes note of the information provided by Slovakia regarding the identification of all bovine animals and of sheep and pigs by mid 2002 and the end of 2003, respectively. It also takes notes of Slovakia's statement that the database for bovine animals will be fully operational by the end of 2002 (CONF-SK 2/02).

The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation, in order to have operational databases at the latest by the date of accession.

57.

Financing of veterinary inspection and controls (Council Directive 85/73/EEC)

The EU notes that Slovakia has withdrawn its request for a 3 year transitional period until 31 December 2006 in order to adjust the amount of minimum fees for health inspections and veterinary controls. The EU takes note of Slovakia's commitment to implement the requirements of Directive 85/73/EEC on the financing of veterinary inspections and controls at the latest by the date of accession

The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation, in order to have a regime of veterinary fees fully in compliance with the EU

acquis.

58.

Veterinary checks of live animals and animal products entering the Community from third countries

The EU notes that Slovakia has withdrawn its request for a 3 year transitional period until 1 January 2007 in order to complete the necessary infrastructure development of three border inspection posts. The EU notes that Slovakia has also withdrawn its proposal to locate a border inspection post in Bratislava port.

The EU takes note of the information provided by Slovakia regarding veterinary checks of live animals and animal products entering the Community from third countries. In this context, the EU emphasises that all long term border inspection posts with third countries must be operating from the date of accession in accordance with the acquis both in terms of facilities and of procedures. The EU invites Slovakia to ensure that the necessary requirements are implemented gradually during the pre-accession period.

The EU underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the

acquis and its effective implementation.

As regards possible frontiers with other candidate countries in case of different dates of accession, the EU takes note of the information provided by Slovakia and proposes to discuss this issue at a later stage of the negotiations.

59.

Expenditure in veterinary field

The EU takes note of the information provided by Slovakia regarding expenditure in the veterinary field. It underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the

acquis and its effective implementation.

60.

Animal disease control measures

The EU takes note of the information provided by Slovakia regarding animal disease control measures. It underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with

the acquis and its effective implementation.

The EU takes note of the information provided by Slovakia regarding the cessation of preventive vaccination against classical swine fever.

The EU notes that Slovakia has joined the ADNS system on a voluntary basis.

61.

Animal health trade in live animals and products of animal origin

the acquis and its effective implementation.

62.

Status as officially free of bovine tuberculosis and bovine brucellosis

The EU invites Slovakia to provide detailed dossiers to the Accession Conference in support of its request for status as officially free of bovine tuberculosis and bovine brucellosis. The EU considers that the requested status should be dealt with under the appropriate procedure prior to accession. The EU underlines that the dossiers submitted will be assessed on the basis currently used for current Member States.

63.

Additional guarantees regarding Aujeszky's disease relating to trade in pigs

The EU takes note of Slovakia's requests for additional guarantees for Aujeszky's disease regarding trade in live pigs. The EU points out that granting additional guarantees requires a detailed examination of the situation in Slovakia in the light of the acquis accompanied by favourable results. The EU invites Slovakia to submit a dossier and to regularly update it in the light of epidemiological developments, test results etc. The EU considers that the requested status for Aujeszky's disease should be dealt with under the appropriate procedure prior to accession. The EU underlines that the dossiers submitted will be assessed on the basis currently used for current Member States.

Public health protection

64.

Public health protection in establishments concerning red meat, poultry meat, meat products, egg products, milk and milk products and fish

The EU notes that Slovakia maintains its request for a maximum 3 year transitional period to achieve full harmonisation of hygienic parameters with the structural requirements laid down in Directives 64/433/EEC and 77/99/EEC (as applicable to red meat slaughterhouses and to meat processing and meat products manufacturing establishments, respectively), and 91/493/EEC (as applicable for fishery products establishments) and has withdrawn its request in relation to Directive 71/118/EEC (as applicable to poultry slaughterhouses), 89/437/EEC (as applicable to egg products establishments) and 92/46/EEC (as applicable to milk and milk products establishments).

The EU underlines the importance of food safety, in particular in relation to public health conditions in establishments for animal products. The EU reiterates that it is of crucial importance that establishments comply with the acquis in order to guarantee food safety and to ensure the functioning of the internal market.

The EU notes that Slovakia has provided a national plan for the achievement of full compliance with the EU requirements regarding public health conditions in establishments for animal products (CONF-SK 6/02).

The EU further notes that this plan includes a list, approved by the competent veterinary authority, of all establishments which are expected to comply with EU requirements at the date of accession and those for which transitional measures are requested.

The EU notes that Slovakia has revised its position regarding the establishments to be covered by that transitional period and now requests such transitional period for two establishments according to individual development plans lasting until 31 December 2006 at the latest. The EU further notes that these establishments comprise one integrated slaughterhouse, cutting plant and meat product establishment and one fishery products establishment.

The EU takes note of Slovakia's confirmation that all products from establishments subject to transitional arrangements will only be sold on the domestic market and will be clearly identified with a special health mark. The EU notes that Slovakia has provided a list of the planned measures to ensure that products from the establishments in question are not sold fraudulently.

The EU notes that the Slovak Veterinary Service will continuously supervise the carrying out of the establishments officially approved development plans on the basis of uniform criteria. The EU takes note of Slovakia's confirmation that this supervision comprises also the establishments which are expected to fully comply with the acquis by the date of accession. The EU also takes note of Slovakia's confirmation that those establishments, which are expected to fully comply with the

acquis by the time of accession but fail to do so, will have to terminate their activities. The EU further notes that the current approval granted to those establishments will expire on 31 December 2003 and that all establishments are obliged to apply for the new approval by 30 June 2003. The EU invites Slovakia to notify the Commission of any such decisions.

The EU notes that Slovakia will submit annual reports on progress made in each establishment subject to transitional arrangements, including a list of the establishments which have completed the developments during the year in question, with a request for removing them from the list of establishments for which the transitional period applies. Furthermore, the EU takes note of Slovakia's confirmation that it will prepare annual reports on the progress made in each individual establishment which is expected to fully comply with the acquis by the time of accession, and that it will submit the first report to the Commission by 31 December 2002. The EU invites Slovakia, in co-operation with the Commission and before the end of 2002, to review and, where necessary, update the plans for each establishment, taking into account the outcome of the monitoring process.

The EU notes that Slovakia has provided a detailed description of the new health marks to be used on fresh meat, processed meat and fishery products from plants subject to transitional arrangements and on meat from low capacity plants.

In the light of Slovakia's commitments to take, implement and enforce the necessary guarantees, the EU can accept Slovakia's request for a transition period for two establishments, linked to the deadlines for correcting existing shortcomings contained in the individual binding plans for each establishment, as mentioned in doc. CONF-SK 30/02 and which expires on 31 December 2006 at the latest. The Union recalls that, at the end of this transitional period, all establishments will have

to fully comply with the acquis.

The EU takes note of Slovakia's confirmation that products originating from an establishment subject to a transitional period will not enter another establishment.

In this context, the EU stresses that the granting of a transitional period is subject to Slovakia's commitment to ensure that the establishments covered by the transitional period will fully comply with the following requirements:

fresh meat, processed meat, meat preparations, products using such meat as an ingredient or fishery products, originating from establishments subject to transition can only be placed on the domestic market, irrespective of the date of marketing;

meat originating from the integrated establishment in transition may only be marketed as fresh meat on the domestic market or used for further processing in the same establishment, the products of which may only be placed on the domestic market;

prepared or processed fishery products coming from the fishery product establishment in transition can only be marketed on the domestic market.

Furthermore, the EU underlines that Slovakia must:

meet all EU requirements in the field of public health with the exception of the specified shortcomings of each establishment and in accordance with the individual development plans;

The EU considers that an appropriate procedure would be to adapt the relevant Directives (64/433/EEC, 77/99/EEC and 91/493/EEC) in order to authorise the Commission to maintain the list of the Slovak establishments in transition as well as the possibility to update this list in the light of progress made in the correction of existing shortcomings and of the outcome of the monitoring process.

The EU notes that there is a need to set out detailed implementing rules in order to ensure the smooth operation of the transition regime and considers that this could be done through the Committee on the food chain and animal health.

The EU underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the

acquis and its effective implementation.

65.

Derogation for dairy establishments with limited capacity

The EU takes note of the information provided by Slovakia regarding its intention to avail itself of the derogations provided for in Article 11 of Directive 92/46/EEC in line with Decision 95/165/EC for milk processing establishments with a limited capacity up to 500,000 l milk/year and for milk processing establishments with a limited capacity up to 2 million l milk/year.

The EU notes Slovakia's commitment that the annual production in establishments to which a derogation has been granted will not exceed the production limit set out in the relevant Annex of Decision 95/165/EC. The EU also takes note of Slovakia's commitment that the Veterinary Service will ensure by regular surveillance that these arrangements will not affect hygiene conditions.

Quality of raw milk

66.

General comment

68.

Quality of raw milk for direct consumption

The EU takes note that Slovakia has withdrawn its request not to implement Article 4 of Directive 92/46/EEC concerning the conditions for the placing on the market of raw milk.

69.

Use of raw goat milk for production of milk-based products

The EU takes note that Slovakia has withdrawn its request for a derogation as regards the use of raw goat milk without prior heat treatment for milk-based products.

70.

Production of the traditional sheep milk cheese «bryndza»

The EU takes note that Slovakia has withdrawn its request for a derogation for seven establishments, which are producing the traditional sheep milk cheese "bryndza", concerning the hygienic conditions of the raw material used.

71.

Common measures

The EU takes note of the information provided by Slovakia on the transposition of the acquis in this field. The EU underlines the importance of achieving full compliance in the fields of hormones, thyrostatics, beta-agonists and BST, residues, zoonosis as well as medicated feedingstuffs. The EU also underlines the importance of making full use of the pre-accession period for the correct

implementation of the acquis in this field.

72.

Animal waste treatment

The EU takes note of the information provided by Slovakia on animal waste treatment. The EU underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

73/74 Animal Welfare

75.

Welfare of furskin animals at killing

The EU takes notes that Slovakia has withdrawn its request for a derogation as regards killing methods for furskin animals.

76.

Zootechnical legislation

The EU takes note of Slovakia's commitment to comply with the relevant acquis prior to accession. The EU underlines that further efforts are required to transpose and implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the

acquis and its effective implementation.

77.

Imports from third countries of animals and animal products

The EU notes the information provided by Slovakia concerning the transposition and

implementation of the acquis as regards imports from third countries of animals and animal products.

PHYTOSANITARY

LEGISLATION

78.

Plant health (harmful organisms)

The EU takes note of the information provided by Slovakia concerning plant health (harmful organisms) and underlines that Slovakia's legislation in this field must be gradually aligned with

the acquis during the pre-accession period in order to ensure full compliance as regards transposition, implementation and enforcement by the date of accession. The EU emphasises that all border inspection posts with third countries must be operating from the date of accession in

accordance with the acquis both in terms of facilities and in terms of procedures. The EU stresses the importance for Slovakia to meet its commitment to set up a register of producers and importers and to introduce plant passports in due time for them to be fully operational by the date of accession.

79.

Protected zone status in respect of Erwinia amylovora (Burr.) Winsl. et al. and Globodera pallida (Stone) Behrens.

The EU takes note of Slovakia's request that its whole territory should be recognised as a protected

zone in respect of Erwinia amylovora (Burr.) Winsl. et al. and Globodera pallida (Stone) Behrens and of the information provided. The EU invites Slovakia to continue its survey work to ensure that the information remains up-to-date and to notify the Commission of the results of the annual surveys. A status as protected zone (initially provisional) in respect of Erwinia amylovora (Burr.) Winsl. et. al. and of Globodera pallida (Stone) Behrens could be granted if it is found that all relevant Community legislation pertaining to the recognition and maintenance of the said protected zone has been transposed and implemented, and that the relevant provisions of Directives 2000/29/EC and 92/70/EEC are met. The request should be dealt with under the appropriate procedure prior to accession.

Quality of seeds and propagating material

80.

Transposition and implementation with regard to quality of seeds and propagating material

The EU takes note of the information provided by Slovakia concerning the quality of seeds and propagating material. The EU underlines that further efforts are required to transpose and

implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

81.

Marketing of agricultural crops, fruit and vegetables not grown and/or propagated in Slovakia

The EU takes note that, as regards Slovakia's request for a derogation concerning the species of agricultural crops, fruits and vegetables that are not grown and/or propagated in Slovakia due to unsuitable agro-ecological conditions, Slovakia accepts the possibility of marketing according to the existing EU legislation and intends to open the question after its accession to the EU on the basis of the applicable legislation. The EU therefore considers that this is no longer a matter for negotiation.

82.

Plant variety rights

The EU takes note of the information provided by Slovakia regarding plant variety rights. It notes that Regulation (EC) No 2100/94 concerning the Community system of plant variety protection will apply automatically in Slovakia after accession and that it does not therefore require special implementing measures by Slovakia. This does not, however, preclude Slovakia from maintaining or revising its national system of plant variety protection alongside the Community system.

Plant health (pesticides)

83.

Authorisation of Plant protection products - Residues of pesticides

The EU underlines the importance of achieving full compliance with EU requirements by the time of accession with regard to the authorisation of the placing on the market of plant protection products and to pesticide residues. The EU underlines that further efforts are required to implement

the acquis within precise timetables. The EU encourages Slovakia to continue the process of

alignment with the acquis and its effective implementation.

84.

Plant hygiene

The EU takes note of the information provided by Slovakia with regard to plant hygiene. The EU underlines that further efforts are required to implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

85.

Animal nutrition

The EU underlines the importance of achieving full compliance with EU requirements by the time of accession with regard to animal nutrition. The EU underlines that further efforts are required to

implement the acquis within precise timetables. The EU encourages Slovakia to continue the process of alignment with the acquis and its effective implementation.

INTERNATIONAL AGREEMENTS

86.

The EU takes note of the information provided by Slovakia regarding its bilateral veterinary and phytosanitary agreements. The EU underlines that it is the responsibility of Slovakia to ensure that all its bilateral international agreements are in compliance with EU requirements and notes that Slovakia confirms that all such agreements will be terminated at the time of the accession.

The EU will continue to monitor the progress in the alignment with and implementation of the

acquis throughout the negotiations. Special attention will be dedicated to the monitoring of the effective establishment by Slovakia of Common Agricultural Policy structures and of the effective implementation by Slovakia of its commitments with respect to the veterinary and phytosanitary control of external borders, to the new acquis relating to TSE as well as to the public health

protection acquis applying to establishments involved in the production and marketing of products of animal origin and the setting up of an animal waste treatment system. Special attention will also be dedicated to the effective implementation of the plant passport system for plants and plant products, the pesticide registration and the monitoring of residues. A final assessment on the conformity of Slovakia's legislation and policies with the acquis and its implementation can only be made at a later stage of the negotiations. Particular consideration needs to be given to the links between the present chapter and other negotiating chapters such as Free Movement of Goods, Free Movement of Capital, Statistics, Regional Policy and Coordination of Structural Instruments, Environment, Consumers and Health Protection (notably with regard to the rapid exchange of information system), Cooperation in the Fields of Justice and Home Affairs, Customs Union and External Relations. In addition to all the information the EU may require for the negotiations on this chapter and which is to be provided to the Conference, the EU invites Slovakia to provide regularly detailed, written information to the Association Council on progress in the alignment with and

implementation of the acquis .

In view of the above considerations, the Conference will have to return to this chapter at an appropriate moment.

Furthermore, the EU recalls that there may be new acquis before the conclusion of the negotiations.

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2. Originele weergave

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3. Meer informatie

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