(1)

Multiannual Financing Agreements (MAFAs) and Annual Financing Agreements (AFAs) were concluded between the European Commission, representing the European Community, on the one hand and the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia (hereinafter referred to as ‘the new Member States’) on the other.

(2)

In areas falling within the scope of the EU Treaty, the relationship between the new Member States and the EU, as of 1 May 2004, when these States acceded to the EU, is governed by EU law. In principle, bilateral agreements, without any particular legal acts being necessary, continue to apply as far as they do not contradict obligatory EU law in general and Community law in particular. In certain areas, the MAFAs and AFAs provide for rules which are different from Community law whilst not being contrary to any binding provisions. However, it is appropriate to foresee that in respect of Sapard the new Member States should, as far as possible, follow the same rules as those which apply to any other areas of Community law.

(3)

It is therefore appropriate to provide for the continuation of the applicability of the MAFAs and AFAs subject to certain derogations and amendments. At the same time, certain provisions are no longer needed given the fact that the Community is no longer dealing with third countries but with Member States and that the new Member States will be directly submitted to provisions under Community law. Such MAFA provisions should therefore no longer apply.

(4)

Council Regulation (EC) No 1266/1999 of 21 June 1999 on coordinating aid to the applicant countries in the framework of the pre-accession strategy and amending Regulation (EEC) No 3906/89 (1) and Commission Regulation (EC) No 2222/2000 of 7 June 2000 laying down financial rules for the application of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period (2) have been the legal bases for the Commission to confer the management of aid under the Special Accession Programme for Agriculture and Rural Development (Sapard) on implementing agencies in the applicant countries, on a case-by-case basis. The MAFAs were concluded based on that possibility. However, in relation to Member States, Community law does not require a conferral of management procedure but an accreditation procedure at national level for paying agencies, referred to in Article 4 of Council Regulation (EC) No 1258/1999 on the financing of the common agricultural policy (3). The MAFAs provide basically for an identical accreditation procedure in their Article 4 of Section A of the Annex. With regard to Member States there is, therefore, no longer a need to provide for a conferral of the management of aid. Therefore, derogation from these provisions is appropriate.

(5)

On 3 March 2004 the Commission decided on the conclusion of a new Agreement for the year 2003 amending the AFAs 2000, 2001, 2002 and 2003 and the MAFA with the applicant countries. Meanwhile, the new Member States have joined the EU and there is no room for the conclusion of further bilateral agreements between the EU and these States in areas falling within the competences of the EU. Rather than concluding bilateral agreements with these States, the Commission should therefore include the substance of these envisaged agreements in this Regulation. In particular, the amounts committed in view of the AFA 2003 and decided upon by the Commission in that decision should now be incorporated in the present Regulation.

(6)

To allow a smooth transition from the pre-accession requirements, it is appropriate to provide for immediate entry into force and, with regard to certain provisions, a retrospective application of this Regulation.

(7)

The Treaty of Accession enables the Commission to adopt transitional measures for a period of three years as of the date of accession. Given the fact that certain programmes under the MAFAs/AFAs may still continue after accession it is appropriate to provide for the applicability of this Regulation until 30 April 2007.

(8)

The measures provided for in this Regulation are in accordance with the opinion of the Committee on Agricultural Structures and Rural Development and of the Committee of the European Agriculture Guarantee and Guidance Fund,