(1)

On 31 October 2005, the Security Council of the United Nations adopted Resolution 1636 (2005) noting the conclusion of the report of the International Investigation Commission into the 14 February 2005 terrorist bombing in Beirut, Lebanon, that killed 23 people, including former Lebanese Prime Minister Rafiq Hariri, and caused injury to dozens of people.

(2)

The Security Council noted with extreme concern the International Investigation Commission’s conclusion that there is converging evidence pointing at the involvement of both Lebanese and Syrian officials in this terrorist act, and acting under Chapter VII of the Charter of the United Nations, decided, as a step to assist in the investigation of this crime and without prejudice to the ultimate judicial determination of the guilt or innocence of any individual, to impose measures against all individuals suspected of involvement in the planning, sponsoring, organizing or perpetrating of this terrorist act.

(3)

Common Position 2005/888/CFSP provides for implementation of the measures set out in UNSCR 1636 (2005) and, in particular, the freezing of funds and economic resources of persons registered by the Committee of the Security Council established by paragraph 3(b) of UNSCR 1636 (2005) as suspected of involvement in the planning, sponsoring, organising or perpetrating of the assassination of former Lebanese Prime Minister Rafiq Hariri and others on 14 February 2005.

(4)

These measures fall within the scope of the Treaty and, therefore, notably with a view to ensuring their uniform application by economic operators in all Member States, Community legislation is necessary to implement them as far as the Community is concerned.

(5)

For reasons of expediency, the Commission should be empowered to amend the Annexes to this Regulation, on the basis of notification or information by the relevant Sanctions Committee and Member States, as appropriate.

(6)

Member States should determine the penalties applicable to infringements of the provisions of this Regulation. The penalties provided for should be proportionate, effective and dissuasive.

(7)

In order to ensure that the measures provided for in this Regulation are effective, it should enter into force on the day of its publication,

1.

‘Sanctions Committee’ means the Committee of the Security Council of the United Nations which was established pursuant to paragraph 3(b) of UNSCR 1636 (2005);

2.

‘funds’ means financial assets and benefits of every kind, including but not limited to:

3.

‘freezing of funds’ means preventing any move, transfer, alteration, use of, access to, or dealing with funds in any way that would result in any change in their volume, amount, location, ownership, possession, character, destination or other change that would enable the funds to be used, including portfolio management;

4.

‘economic resources’ means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but can be used to obtain funds, goods or services;

5.

‘freezing of economic resources’ means preventing the use of economic resources to obtain funds, goods or services in any way, including, but not limited to, the selling, hiring or mortgaging of them;

6.

‘territory of the Community’ means the territories of the Member States to which the Treaty is applicable, under the conditions laid down in that Treaty.

(a)

within the territory of the Community, including its airspace;

(b)

on board any aircraft or any vessel under the jurisdiction of a Member State;

(c)

to any person inside or outside the territory of the Community who is a national of a Member State;

(d)

to any legal person, entity or body which is incorporated or constituted under the law of a Member State;

(e)

to any legal person, entity or body in respect of any business done in whole or in part within the Community.

(1)

Regulation (EC) No 3223/94 lays down, pursuant to the outcome of the Uruguay Round multilateral trade negotiations, the criteria whereby the Commission fixes the standard values for imports from third countries, in respect of the products and periods stipulated in the Annex thereto.

(2)

In compliance with the above criteria, the standard import values must be fixed at the levels set out in the Annex to this Regulation,

(1)

Commission Regulation (EC) No 80/2006 (2) opens a standing invitation to tender for the resale on the Community market of rye held by the German intervention agency.

(2)

In view of market requirements and the quantities held by the German intervention agency, Germany has informed the Commission that its intervention agency intends to increase the amount put out to tender by 50 000 tonnes. In view of the market situation, the request made by Germany should be granted.

(3)

Regulation (EC) No 80/2006 should be amended accordingly.

(4)

The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Cereals,

(1)

The possibility of applying a reduced rate of value added tax should be granted in respect of supplies of district heating as for supplies of natural gas and electricity, for which the possibility of applying a reduced rate is already allowed in Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (3).

(2)

To achieve a better understanding of the impact of reduced rates, it is necessary for the Commission to prepare an assessment report on the impact of reduced rates applied to locally supplied services, notably in terms of job creation, economic growth and the proper functioning of the internal market.

(3)

The experiment of reduced rates for labour-intensive services should therefore be extended until 31 December 2010 and it should also be made possible for all Member States to take part in it under the same conditions.

(4)

Accordingly, Member States wishing to avail themselves, for the first time, of the option provided for in Article 28(6) of Directive 77/388/EEC and those wishing to amend the list of services to which they have applied the said provision in the past should submit a request to the Commission, together with the relevant particulars for the purpose of assessment. Such prior assessment by the Commission does not appear necessary where Member States have previously benefited from an authorisation and submitted a report on the matter to the Commission.

(5)

To ensure legal continuity, this Directive should be applicable as from 1 January 2006.

(6)

Implementation of this Directive in no way implies change in the legislative provisions of Member States,

1.

Article 12 shall be amended as follows:

2.

Article 28(6) shall be amended as follows:

(1)

Article 104 of the Treaty lays down an excessive deficit procedure (EDP) to ensure that Member States avoid excessive government deficits or that they correct such deficits when they occur.

(2)

Pursuant to point 5 of the Protocol on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland, the obligation under Article 104(1) of the Treaty to avoid excessive general government deficits does not apply to the United Kingdom unless it moves to the third stage of economic and monetary union. While in the second stage, the United Kingdom is required to endeavour to avoid excessive government deficits, pursuant to Article 116(4) of the Treaty.

(3)

The Stability and Growth Pact is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation.

(4)

The excessive deficit procedure under Article 104 of the Treaty, as clarified by Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (1), which is part of the Stability and Growth Pact, provides for a decision on the existence of an excessive deficit. The Protocol on the excessive deficit procedure annexed to the Treaty sets out further provisions relating to the implementation of the excessive deficit procedure. Council Regulation (EC) No 3605/93 (2) lays down detailed rules and definitions for the application of the provision of the said Protocol.

(5)

Article 104(5) of the Treaty requires the Commission to address an opinion to the Council if the Commission considers that an excessive deficit in a Member State exists or may occur. Having taken into account its report in accordance with Article 104(3) of the Treaty and having regard to the opinion of the Economic and Financial Committee in accordance with Article 104(4), the Commission services’ autumn 2005 forecast, as well as the United Kingdom’s December 2005 Pre-Budget Report, the Commission concluded that an excessive deficit exists in the United Kingdom. The Commission therefore addressed such an opinion to the Council in respect of the United Kingdom on 11 January 2006.

(6)

Article 104(6) of the Treaty states that the Council should consider any observations which the Member State concerned may wish to make before deciding, after an overall assessment, whether an excessive deficit exists. In the case of the United Kingdom, this overall assessment leads to the following conclusions.

(7)

In the period since the United Kingdom’s previous excessive deficit procedure was abrogated in May 1998, the UK general government balance moved from a comfortable surplus position in the late 1990s to a deficit of 3,2 % of GDP in 2003/04 (3). This development was equivalent to a change in the structural fiscal balance of around 4 percentage points of GDP in the period between 1999/2000 and 2003/04. During these years, the general government expenditure ratio increased from less than 40 % to about 43 % of GDP. In the same period, government gross fixed capital formation increased from 1,2 % to 1,6 % of GDP; the government gross debt ratio went down to 37,6 % of GDP in 2002/03 but has been increasing since then. Such an evolution, coupled with developments in interest rates, led to interest payments having fallen from 2,9 % to 2,0 % of GDP in that period.

(8)

In the 2004/05 financial year, according to the EDP data notified by the United Kingdom in August 2005, the general government deficit remained at 3,2 % of GDP, again above, but close to, the 3 % of GDP Treaty reference value. The excess over the 3 % of GDP reference value was not exceptional. In particular, it did not result from an unusual event outside the control of the United Kingdom authorities, nor was it the result of a severe economic downturn. Growth of 3,2 % in 2004 is estimated to have been above potential as was growth in the financial year 2004/05. The output gap in 2004 is estimated to have been positive, implying that the budget deficit was by and large structural. Therefore, the excess of the deficit over the reference value cannot be considered as resulting from a severe economic downturn. The excess over the 3 % of GDP reference value is also considered not temporary, based on the Commission services’ autumn 2005 forecasts. In 2004 to 2005, the general government gross fixed capital formation continued to increase, rising to 1,8 % of GDP, and in the United Kingdom Pre-Budget Report is set to reach 2,2 % in 2006/07 and 2,3 % in 2007/08. Assuming United Kingdom fiscal policy remained as hitherto announced, the deficit in these forecasts was expected to widen to just below 3,5 % of GDP in 2005/06 and to remain over 3 % of GDP in 2006/07. Based on these projections, the excess over the reference value could not be considered either exceptional or temporary within the meaning of the Treaty and the Stability and Growth Pact although the deficit is close to the reference value. After the Commission services’ autumn forecasts had been published, the United Kingdom announced policy decisions in the Pre-Budget Report presented to Parliament on 5 December. In net terms, the United Kingdom authorities’ costings of these measures, compared with the baseline of announced policy (as taken into account in the Commission services’ autumn forecasts), represent an easing of policy by 0,1 percentage points of GDP in the current financial year and a tightening of policy by 0,1 percentage points of GDP in 2006/07. Compared to an unchanged policy scenario, the Pre-Budget Report foresees a tightening of 0,2 percentage points of GDP in 2007/08 which is expected to be permanent. In the Pre-Budget Report, the UK authorities expect the deficit to be below 3 % in 2006/07 and to fall to 2,4 % in 2007/08. Taking into consideration these measures, which are all structural, the Commission’s assessment nevertheless remains that the deficit in 2006/07, at around 3,1 % of GDP, is expected to exceed 3 % of GDP and is therefore not temporary. This indicates that the Treaty requirement concerning the deficit criterion is not fulfilled.

(9)

In contrast, the general government debt ratio remains well below the 60 % reference value (the August EDP data reporting a ratio of 40,8 % of GDP in the 2004/05 financial year) although, given the scale of actual and projected primary deficits, on a rising trend. In the Commission’s autumn forecasts the debt ratio is projected to reach around 44,5 % of GDP in 2007/08. This means that the Treaty requirement concerning the debt criterion is respected by a large margin.

(10)

According to Article 2(4) of Regulation (EC) No 1467/97, ‘relevant factors’ can only be taken into account in the Council decision on the existence of an excessive deficit in accordance with Article 104(6) if the double condition — that the deficit remains close to the reference value and that its excess over the reference value is temporary — is fully met. This double condition is not met in the case of the United Kingdom. Therefore, other relevant factors are not taken into account in this decision,

(1)

Under Article 27(1) of Directive 77/388/EEC, the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce special measures for derogation from that Directive, in order to simplify the procedure for charging the valued added tax (VAT) or to prevent certain types of tax evasion or avoidance.

(2)

By letter registered by the Secretariat-General of the Commission on 25 October 2005, the Kingdom of the Netherlands (hereinafter Netherlands) requested an extension of Council Decision 98/161/EC of 16 February 1998 authorising the Kingdom of the Netherlands to apply a measure derogating from Articles 2 and 28a(1) of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes (2).

(3)

By letter registered by the Secretariat-General of the Commission on 3 August 2005, the Kingdom of Spain (hereinafter Spain) requested an extension of Council Decision 2004/228/EC of 26 February 2004 authorising Spain to apply a measure derogating from Article 21 of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes (3).

(4)

By letter registered by the Secretariat-General of the Commission on 26 September 2005, the Italian Republic (hereinafter Italy) requested an extension of Council Decision 2004/295/EC of 22 March 2004 authorising Italy to apply a measure derogating from Article 21 of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes (4).

(5)

In accordance with Article 27(2) of Directive 77/388/EEC, the Commission informed the other Member States of the mentioned requests. In letters dated 27 October 2005, 7 September 2005 and 25 October 2005, the Commission respectively notified the Netherlands, Spain and Italy that it had all the information it considered necessary for the appraisal of their individual requests.

(6)

Decision 98/161/EC authorised the Netherlands to apply, until 31 December 1999, certain measures to prevent evasion connected with the supply and intra-community acquisition of used and waste materials. Council Decision 2000/435/EC (5) extended the expiry date of Decision 98/161/EC until 31 December 2003. It was subsequently followed by Council Decision 2004/514/EC (6), which further extended the authorisation given under Decision 98/161/EC until the earlier of the date of entry into force of a special scheme for the application of VAT to the recycled waste sector or 31 December 2005.

(7)

Decision 2004/228/EC authorised Spain to apply a measure to prevent evasion of VAT in the waste recycling sector. The said Decision expires on the earlier of the date of entry into force of a special scheme for the application of VAT to the recycled waste sector or 31 December 2005.

(8)

Decision 2004/295/EC authorised Italy to apply a measure to prevent evasion of VAT in the waste recycling sector. The said Decision expires on the earlier of the date of entry into force of a special scheme for the application of VAT to the recycled waste sector or 31 December 2005.

(9)

The measures are proportionate to the objectives pursued since they are intended to apply to specific supplies which pose considerable risks of tax evasion.

(10)

The matters of law and of fact which justified the application of the special measures in question have not been changed and still pertain. However, on 16 March 2005, the Commission submitted a proposal for a Council Directive amending Directive 77/388/EEC as regards certain measures to simplify the procedure for charging value added tax and to assist in countering tax evasion and avoidance, and repealing certain Decisions granting derogations. The proposed Directive would, if adopted, empower Member States to designate the recipient of certain goods and services in the waste sector as the person liable to pay the tax.

(11)

Consequently, it is necessary to extend the application of Decisions 98/161/EC, 2004/228/EC and 2004/295/EC, until 31 December 2009 or until the date of entry into force of a special scheme for the application of VAT to the recycled waste sector amending Directive 77/388/EEC, whichever is the earlier.

(12)

The extension of the derogation has no adverse impact on the Communities’ own resources accruing from VAT, nor does it have any effect on the amount of VAT charged at the final stage of consumption.

(13)

In order to ensure legal continuity, this Decision should apply as from 1 January 2006,

(1)

In accordance with Decision 96/411/EC, the Commission establishes a technical action plan for agricultural statistics each year.

(2)

In accordance with Decision 96/411/EC, the Community contributes to the costs incurred by the Member States in making adaptations to national agricultural statistical systems or the costs of preparatory work for new or increasing needs which are part of a technical action plan.

(3)

It is essential to improve and develop statistical information on rural development for the implementation of the related Community policies. This is a main area of the annual action plan.

(4)

There is a need to consolidate the agricultural statistical system and to continue the work supported by the previous action plans in the areas of farm registers and small farms.

(5)

The measures provided for in this Decision are in line with the opinion of the Standing Committee of Agricultural Statistics,

(1)

Directive 2001/109/EC, which establishes the list of species to be surveyed in the Member States, is implemented by Commission Decision 2002/38/EC of 27 December 2001 setting out the survey parameters and laying down the code and standard rules for transcription, in machine-readable form, of the data relating to the surveys on plantations of certain species of fruit trees (2). That Decision establishes the limits of the production areas to be set and their respective codes and the species of fruits and the varieties.

(2)

As a result of the accession of the new Member States it is necessary to adapt the respective Annexes to Directive 2001/109/EC and to Decision 2002/38/EC.

(3)

Directive 2001/109/EC and Decision 2002/38/EC should therefore be amended accordingly.

(4)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on Agricultural Statistics instituted by Council Decision 72/279/EEC (3),

(1)

Regulation (EC) No 1774/2002 lays down health rules concerning animal by-products not intended for human consumption. In view of the strict nature of those rules, transitional measures have been granted.

(2)

Commission Decision 2003/329/EC of 12 May 2003 on transitional measures under Regulation (EC) No 1774/2002 of the European Parliament and of the Council as regards the heat treatment process for manure (2), allows the industry time to adjust and develop alternative heat treatment process for manure until 31 December 2005.

(3)

An EFSA opinion on the biological safety of heat treatment of manure was adopted on 7 September 2005. On the basis of this opinion, the Commission is currently proposing amendments to the relevant chapter in Annex VIII to Regulation (EC) No 1774/2002. Pending the application of these new measures, Member States and operators have asked the Commission to extend the validity of the transitional measures provided for in Decision 2003/329/EC in order to avoid disruption of trade.

(4)

The transitional measures provided for in Decision 2003/329/EC should therefore be extended for the last time for a further period of time to enable the Member States to authorise operators to continue to apply national rules for the heat treatment process for manure until the amended requirements of Annex VIII to Regulation (EC) No 1774/2002 apply.

(5)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,