Proposal for a COUNCIL DECISION on the signing and conclusion on behalf of the European Community of the International Cocoa Agreement 2001

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 2 March 2001, during its second session in Geneva, the conference organised by UNCTAD to negotiate a successor to the International Cocoa Agreement 1993, as extended, approved a new text. The current Agreement is to remain in force until 30 September 2003 at the latest.

In the discussions the Community negotiated on the basis of the negotiating mandate and directives proposed by the Commission and approved by the Council on 6 September 2000.

In the light of the discussions and the content of the new instrument, which reflects the Community's position, the Commission considers the International Cocoa Agreement 2001 should be signed and the instrument of approval deposited with the Treaty Section of the United Nations in New York.

From a strictly legal viewpoint it should be noted that, although they are trade agreements covered by Article 133 of the Treaty establishing the European Community, commodity agreements such as this have been concluded by the Community jointly with the Member States under the arrangement between the Council and the Commission known as PROBA 20.

In this case, since the international agreement in question expressly excludes a financial instrument supported by the Members, and the Member States' contributions to the operating budget of the International Cocoa Organisation cannot in themselves justify the Member States' participation in the conclusion of the Agreement, the new Agreement 2001 should be concluded by the Community.

Consequently, under Article 133 of the Treaty establishing the European Community, this recommendation is for a decision authorising the Commission to conclude, on behalf of the Community, the International Cocoa Agreement 2001.

Under Article 58(3) of the International Cocoa Agreement 2001, the instrument of acceptance should be signed and lodged as soon as possible, preferably before 1 September 2002. The Council is therefore requested to adopt this decision before that deadline.

2002/0190 (ACC)

Proposal for a COUNCIL DECISION on the signing and conclusion on behalf of the European Community of the International Cocoa Agreement 2001

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 in conjunction with Article 300(2) thereof,

Having regard to the proposal from the Commission,

Whereas:

1. On 2 March 2001 the UNCTAD negotiating conference formally approved the text of the International Cocoa Agreement 2001.

2. This new agreement has been negotiated to replace the International Cocoa Agreement 1993, as extended, which will remain in force until 30 September 2003 at the latest.

3. The International Cocoa Agreement 2001 is open for signature and deposit of the instruments of ratification, acceptance or approval.

4. The Community is a member of the 1993 International Agreement, as extended, and it is therefore in its interest to approve the agreement which succeeds it,

HAS DECIDED AS FOLLOWS:

Article 1

The International Cocoa Agreement 2001 is hereby approved on behalf of the European Community. The text of the Agreement is attached to this Decision.

Article 2

The President of the Council is authorised to designate the person authorised to sign the agreement and deposit the instrument of approval on behalf of the Community.

Done at Brussels,

For the Council

The President

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Development and relations with ACP States

Activity(ies): Development co-operation policy and sectoral strategies

Title of action: European Community contribution to the International Cocoa Organisation (ICCO)

1. BUDGET LINE(S) AND HEADING(S): B7-8211 - Yearly membership fees of the European Union to the International Organisations of Coffee, Cocoa, Jute and other tropical products

2. OVERALL FIGURES

2.1 Total allocation for action (Part B): EUR1.000 million in commitments.

2.2 Period of application: 2003 onwards. No change assumed after 2003.

2.3 Overall multiannual estimate of expenditure:

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

EUR million (to the 3rd decimal place)

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b) Technical and administrative assistance and support expenditure (see point 6.1.2)

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(c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

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2.4 Compatibility with financial programming and financial perspective

|X| Proposal compatible with existing financial programming.

O This proposal will entail reprogramming of the relevant heading in the financial perspective.

O This may entail application of the provisions of the Interinstitutional Agreement.

2.5 Financial impact on revenue:

|X| No financial implications (involves technical aspects regarding implementation of a measure)

OR

| | Financial impact - the effect on revenue is as follows:

Note: All details and observations relating to the method of calculating the effect on revenue should be included in a separate annex.

EUR million (to the 1st decimal place)

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(Please state each budget line involved, adding the appropriate number of rows to the table if there is an effect on more than one budget line.)

3. BUDGET CHARACTERISTICS

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4. LEGAL BASIS

Article 133 of the Treaty, in conjunction with Article 300(2); Council Decision of ...

5. DESCRIPTION AND GROUNDS

5.1 Need for Community intervention [1]

[1] For additional information, see separate policy document.

5.1.1 Objectives pursued

By virtue of its economic importance, particularly in terms of development cooperation, the European Community ought to be represented in international commodity agreements, which offer one way of monitoring global change, stimulating the economic development of producer countries and defending the Community's interests in relation to the products concerned.

The Community's payment of contributions will further the objectives of the International Cocoa Agreement. The International Cocoa Organisation (ICCO), which administers the agreement, was set up to promote those objectives, primarily international cooperation, exchanges of statistics, marketing, product quality, and cooperation with the private sector. It is therefore in the European Community's interest to participate in the Agreement.

The International Cocoa Agreement 2001 was negotiated in March 2001 at an UNCTAD-sponsored conference. Article 58(3) of the Agreement provides for its entry into force on 1 September 2002 if enough countries have acceded. Otherwise it will enter into force on 30 September 2003 at the latest.

Up to now, in view of the hybrid nature of these agreements, the Member States paid the administrative contributions. But according to an assessment by the Commission's Legal Service, wholly endorsed by its counterpart at the Council, the new Agreement tends more towards commercial policy than, say, development policy, which, though important, is ancillary. The Council accepted the same approach when concluding the International Coffee Agreement 2001 last September. That is why the Council should accept this proposal for a decision on the grounds of exclusive competence. The contributions to the administrative budget should therefore come from the Community budget.

Members' contributions are set annually and must be paid as long as the European Community remains a party to the Agreement.

Obviously, if the European Community were to undertake the work conducted by the ICCO on its own account, it would cost rather more than the membership fee.

5.1.2 Measures taken in connection with ex ante evaluation

5.2 Actions envisaged and budget intervention arrangements

The European Community will pay the annual membership fee for the International Cocoa Agreement. The fees will be due as long as the European Community is a signatory of the Agreement.

The European Community and the Member States will participate fully in the activities of the International Cocoa Organisation and enjoy all the benefits of membership.

5.3 Methods of implementation

(Specify the methods to be used to implement the planned actions: direct management by the Commission using either regular or outside staff or by externalisation. In that case, give details of the arrangements envisaged for this externalisation (TAO, Agencies, Offices, decentralised executive units, management shared with Member States - national, regional and local authorities).

Indicate the effect of the externalisation model chosen on the financial intervention, management and support resources and on human resources (seconded officials, etc.).)

Direct management by the Commission using regular staff.

6. FINANCIAL IMPACT

6.1 Total financial impact on Part B - (over the entire programming period)

(The method of calculating the total amounts set out in the table below must be explained by the breakdown in Table 6.2. )

6.1.1 Financial interventio Commitments in EUR million (to the 3rd decimal place)

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6.2. Calculation of costs by measure envisaged in Part B (over the entire programming period) [2]

[2] For additional information, see separate policy document.

(Where there is more than one action, give sufficient detail of the specific measures to be taken for each one to allow the volume and costs of the outputs to be estimated.)

Commitments in EUR million (to the 3rd decimal place)

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If necessary explain the method of calculation

The sum of EUR1.000 million is calculated on the basis of the Member States' current contributions (GBP 609 888) and the assumption that all members of the International Cocoa Agreement 1993 also become members of the 2001 Agreement. Should a member delay its accession, the budget deficit could be covered by the other members in the interim. Similarly, if new members were to join, the Community contribution should fall.

7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

7.1. Impact on human resources

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7.2 Overall financial impact of human resources

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The amounts are total expenditure for twelve months.

7.3 Other administrative expenditure deriving from the action

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(1) Specify the type of committee and the group to which it belongs.

The amounts are total expenditure for twelve months.

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(In the estimate of human and administrative resources required for the action, DGs/Services must take into account the decisions taken by the Commission in its orientation debate and when adopting the preliminary draft budget (PDB). This means that DGs must show that human resources can be covered by the indicative pre-allocation made when the PDB was adopted.

Exceptional cases, where the action concerned could not be foreseen when the PDB was being prepared, will have to be referred to the Commission for a decision on whether and how (by means of an amendment of the indicative pre-allocation, an ad hoc redeployment exercise, a supplementary/amending budget or a letter of amendment to the draft budget) implementation of the proposed action can be accepted.)

8. FOLLOW-UP AND EVALUATION

8.1 Follow-up arrangements

(Adequate follow-up information must be collected, from the outset of each action, on the inputs, outputs and results of the intervention. In practice this means (i) identifying the indicators for inputs, outputs and results and (ii) putting in place methods for the collection of data.)

8.2 Arrangements and schedule for the planned evaluation

(Describe the planned schedule and arrangements for interim and ex post evaluations to be carried out in order to assess whether the intervention has achieved the objectives set. In the case of multiannual programmes, at least one thorough evaluation in the life cycle of the programme is needed. For other activities ex post or mid-term evaluations should be carried out at intervals not exceeding six years.)

Commission officials will participate actively in the Finance Committee and the Council of the ICCO. These bodies are responsible for setting the budget contributions. The administrative budget, spending records, the financial situation and the decisions adopted by the ICCO can be consulted by members.

9. ANTI-FRAUD MEASURES

(Article 3(4) of the Financial Regulation: "In order to prevent risk of fraud or irregularity, the Commission shall record in the financial statement any information regarding existing and planned fraud prevention and protection measures.")

The Commission will ensure that the administrative and financial management of the ICCO is monitored.

If necessary the ICCO is willing to grant OLAF, and any other Community financial and audit department, access to its accounts.