Commission Regulation (EC) No 1973/2004 (repealed)Show full title

CHAPTER 16 U.K. USE OF LAND SET ASIDE FOR THE PRODUCTION OF RAW MATERIALS

SECTION 1 U.K. Object and definitions

Article 143 U.K. Purpose

1. Land set aside in the context of the direct support schemes provided for in Regulation (EC) No 1782/2003 may be used, in accordance with Article 55(b) and the first indent of Article 107(3) thereof, for producing raw materials for the manufacture within the Community of products not primarily intended for human or animal consumption, under the conditions laid down in this Chapter.

2. No payment shall be made in respect of set-aside land on which sugarbeet, Jerusalem artichokes or chicory roots are grown. However, all the provisions of this Chapter shall apply to these crops grown on land set aside in the same way as if such a payment were made.

These raw materials may be grown on set-aside land provided that:

(a) the sugarbeet does not serve for the production of sugar, as defined by Commission Regulation (EC) No 314/2002(1), either as an intermediate product, co-product or by-product;

(b) the chicory roots and Jerusalem artichokes do not undergo the process known as hydrolysis as defined by Regulation (EEC) No 314/2002, either in their natural state or as an intermediate product such as inuline, or as a co-product such as oligofructose, or as any by-products.

Article 144 U.K. Definitions

For the purposes of this Chapter:

(a)

‘applicant’ means a farmer using the land set aside in accordance with Article 55(b) and the first indent of Article 107(3) of Regulation (EC) No 1782/2003;

(b)

‘collector’ means any person signing a contract as provided for in Article 147 who purchases on his own account raw materials listed in Article 145 and intended for the uses provided for in Annex XXIII;

(c)

‘first processor’ means any user of agricultural raw materials who undertakes the first processing thereof with a view to obtaining one or more of the products referred to in Annex XXIII to this Regulation.

SECTION 2 U.K. Contract

Article 145 U.K. Use of raw material

1. Any agricultural raw material may be grown on the areas set aside pursuant to Article 55(b) and the first indent of Article 107(3) of Regulation (EC) No 1782/2003.

The economic value of the products used for non-food purposes referred to in Annex XXIII to this Regulation obtained by processing raw materials shall be higher than that of all other products intended for other uses and obtained by such processing, as determined by the valuation method set out in Article 163(3) of this Regulation.

2. The raw materials referred to in paragraph 1 shall be covered by a contract in accordance with Article 147 of this Regulation, without prejudice to Article 148.

3. Applicants shall deliver all raw materials harvested to a collector or first processor who shall take delivery of them and ensure that an equivalent quantity of such raw materials is used within the Community for the manufacture of one or more end products intended for non-food purposes as listed in Annex XXIII.

Where the first processor uses the raw material actually harvested to manufacture an intermediate product or a by-product, he may use an equivalent quantity of such intermediate products or by-products to manufacture one or more end products as referred to in the first subparagraph.

In the case referred to in the second subparagraph, or where the collector sells an equivalent quantity of the raw material harvested, the first processor or the collector shall so inform the competent authority with whom the security is lodged. Where such equivalent quantity is used in a Member State other than that in which the raw material is harvested, the competent authorities of the Member States concerned shall inform each other of the details of such transaction.

4. In accordance with the national provisions governing contractual relations, the first processor may delegate to a third party the collection of the raw material from the farmer applying for the aid. The processor remains solely responsible with regard to the obligations laid down by this Chapter.

Article 146 U.K. Derogations

1. Notwithstanding Article 145(2) and (3), Member States may permit applicants to:

(a) use all the cereals or oilseeds covered by CN codes 1201 00 90, 1205 10 90, 1205 90 00, 1206 00 911206 00 91 and 1206 00 99 harvested:

(i)

as fuel for heating their agricultural holding;

(ii)

for the production on the holding of power or biofuels;

(b) process into biogas falling within CN code 2711 29 00, on their holdings, all raw materials harvested.

2. In the cases referred to in paragraph 1, applicants shall:

(a) undertake, by way of a declaration in place of the contract referred to in Article 147, to use or process directly the raw material covered by the declaration; Articles 147 to 164 shall apply mutatis mutandis;

(b) have all the raw material harvested weighed by a body or an undertaking designated by the Member State and keep separate accounts for the raw material used and the products and by-products resulting from its processing; however, in the case of cereals and oilseeds, and of straw, and where the entire plant is used, weighing may be replaced by volumetric measurement of the raw material.

3. Member States applying paragraph 1 shall introduce adequate control measures to ensure that the raw material is used directly on the holding or is processed into biogas falling within CN code 2711 29 00.

4. Cereals and oilseeds used in accordance with paragraph 1(a) shall be denatured in accordance with the method laid down by the Member State. The Member States may, however, authorise the oil produced by processing oilseeds in accordance with paragraph 1(a)(ii) to be denatured instead of the oilseeds themselves, provided that such denaturing takes place immediately after the seeds are processed into oil and that the use to which the seeds are put is checked.

Article 147 U.K. Contract

1. In support of their aid applications, applicants shall submit to their competent authorities the contracts they have concluded with a collector or a first processor. However, Member States may decide that the contract may only be concluded between an applicant and a first processor.

2. Applicants shall ensure that such contracts specify the following:

(a) the names and addresses of the parties to the contract;

(b) the duration of the contract;

(c) the species of all raw materials concerned and the area planted with each species;

(d) any conditions applicable to the delivery, and for oilseeds the forecast quantities, deemed representative by the competent authority, of the raw material in question;

(e) an undertaking to fulfil their obligations pursuant to Article 145(3);

(f) the intended primary end uses for the raw material, each end use complying with the conditions laid down in Articles 145(1) and 163(3).

3. Applicants shall ensure that the contracts are concluded in time to allow collectors or first processors to deposit a copy with their competent authorities within the time limits laid down in Article 157(1).

4. For the purposes of control, Member States may require each applicant to conclude a single supply contract for each raw material.

5. Where contracts relate to rapeseed, colza seed, sunflower seed or soya beans covered by CN codes 1205 10 90, 1205 90 00, 1206 00 91, 1206 00 99 or 1201 00 90, applicants shall ensure that, in addition to the information required under paragraph 2, they specify the total forecast quantity of by-products intended for uses other than human or animal consumption, expressed by species in both cases.

The quantities shall be calculated on the basis of the following ratios:

(a) 100 kilograms of rapeseed and/or colza seed covered by CN code 1205 10 90 or 1205 90 00 shall be deemed equivalent to 56 kilograms of by-products;

(b) 100 kilograms of sunflower seed covered by CN codes 1206 00 91 or 1206 00 99 shall be deemed equivalent to 56 kilograms of by-products;

(c) 100 kg of soya beans covered by CN code 1201 00 90 shall be deemed equivalent to 78 kg of by-products.

Article 148 U.K. Raw materials which need not be covered by contracts

By way of derogation from Article 147, the raw materials listed in Annex XXII need not necessarily be covered by contracts.

To qualify for payments, applicants wishing to use land set aside for growing these raw materials shall submit a written declaration with their payment applications to the competent authorities in their Member States, to the effect that the raw materials concerned will only be used or sold for purposes in accordance with Annex XXIII.

Article 149 U.K. Soya bean meal equivalents for oleaginous by-products

1. The competent authorities concerned shall inform the Commission, as soon as possible and not later than 30 June of the year in which the raw materials are to be harvested, of the total quantity, by species, of by-products intended for human or animal consumption and resulting from the contracts as referred to in Article 147, covering rapeseed, colza seed, sunflower seeds and soya beans falling within CN codes 1205 10 90, 1205 90 00, 1206 00 91, 1206 00 99 or 1201 00 90, and the area by species of these oilseeds.

2. On the basis of the information provided pursuant to paragraph 1, the Commission shall calculate the forecast total quantity of by-products for human or animal consumption, expressed in terms of soya bean meal equivalent applying the following coefficients:

• soya cake: 48 %

• colza cake: 32 %

• sunflower cake: 28 %.

If, as a result of the calculation made pursuant to the first subparagraph, the Commission finds that there is an overrun of the 1 million tonnes ceiling for by-products intended for human or animal consumption, it shall fix, as soon as possible and not later than 31 July of the year in which the raw materials are to be harvested, the percentage reduction to be applied to each contract, for the purpose of calculating the maximum quantity of by-products for human or animal consumption.

SECTION 3 U.K. Amendment and termination of contracts

Article 150 U.K. Amendment and termination of contracts

Where the parties to a contract amend or terminate the contract after applicants have lodged an aid application, applicants may maintain such aid applications only on condition that, with a view to allowing the requisite inspections to be carried out, they inform their competent authorities of such amendment or termination, no later than the closing date set in the Member State concerned for amendment of the application.

Article 151 U.K. Exceptional circumstances

Without prejudice to Article 150, where applicants inform their competent authorities that, owing to exceptional circumstances, they will be unable to supply all or part of the raw materials specified in the contract, the competent authorities may, after obtaining sufficient evidence of such exceptional circumstances, authorise such amendments to contracts as appear justified, or may authorise their termination.

Where the land covered by a contract is reduced as a result of amendments thereto, or where a contract is terminated, then, in order to maintain their right to payments, applicants shall:

(a)

once more set aside the land in question by any means permitted by the competent authorities;

(b)

abstain from selling, transferring or using raw materials grown on land struck out of the contracts.

Article 152 U.K. Changes in end uses

Without prejudice to Article 150, collectors or first processors may alter the intended primary end uses of raw materials, as referred to in Article 147(2)(f), once the raw materials under contract have been delivered to them and once the conditions laid down in Article 154(1) and the first subparagraph of Article 157(3) have been fulfilled.

Changes in end uses shall be made in compliance with the conditions laid down in the second subparagraph of Article 145(1) and Article 163(3).

The collectors or first processors shall give prior notice to their competent authorities with a view to the requisite controls.

SECTION 4 U.K. Representative yields and quantities delivered

Article 153 U.K. Representative yields

Each year the Member States shall establish, using an appropriate procedure, representative yields which must be attained, and shall inform the applicants concerned thereof.

However, the raw materials listed in Annex XXII may be exempt from the representative yields.

Article 154 U.K. Quantities to be delivered

1. Applicants shall declare the total quantity of raw materials harvested by species to their competent authorities and shall confirm the quantities of raw materials delivered and the parties to whom such deliveries are made.

2. The actual quantities to be delivered by the applicants to the collectors or first processors must at least correspond to the representative yield.

However, in duly justified cases, the Member States may, by way of an exception, accept a quantity up to 10 % below the representative yield.

Furthermore, where the competent authorities have authorised the amendment or termination of contracts in accordance with Article 151, they may, where it seems justified to do so, reduce the quantities that applicants are required to deliver under the first subparagraph.

SECTION 5 U.K. Conditions of payment of the aid

Article 155 U.K. Payment

1. The aid may be paid to applicants before the raw material is processed. However, such payments shall only be made where the requisite quantities of raw materials pursuant to this Chapter have been delivered to the collector or first processor and where:

(a) the declaration provided for in Article 154(1) has been made;

(b) a copy of the contract has been deposited with the collector's or first processor's competent authority in accordance with Article 158(1) and the conditions referred to in Article 145(1) have been fulfilled;

(c) the competent authority has received proof that the full security provided for in Article 158(2) has been lodged;

(d) the competent authority responsible for the payment has checked that the conditions laid down in Article 147 have been met in respect of each application.

2. In the case of biennial crops, where the raw materials are harvested, and hence delivered, in the course of the second year of cultivation only, payment shall be made in each of the two years following the conclusion of the contract as provided for in Article 147, on condition that the competent authorities establish that:

(a) the obligations referred to in paragraph 1(b), (c) and (d) of this Article are fulfilled as from the first year of cultivation; and

(b) the obligations l referred to in paragraph 1(a) are fulfilled, and the information referred to in the first subparagraph of Article 157(3) is communicated, in the second year of cultivation.

In respect of the first year of cultivation, payments shall be made only if the competent authorities have received proof that the security provided for in Article 158(2) has been lodged. In respect of the second year of cultivation, payment may be made without the security being lodged.

3. In the case of permanent or multiannual crops, the payment of the aid shall be made each year from the date of conclusion of the contract. The conditions laid down in paragraph 2 shall be applied mutatis mutandis.

SECTION 6 U.K. Obligations on collectors and applicants

Article 156 U.K. Number of processors

Non-food products shall be produced at the most by a third successive processor.

Article 157 U.K. Obligations

1. Collectors or first processors shall deposit a copy of the contract with their competent authorities under a timetable to be established by the Member State concerned and no later than the closing date for the submission of aid applications for the year in question in the Member State concerned.

Where applicants and collectors or first processors amend or terminate contracts prior to the date referred to in Article 150 in a given year, the collectors or first processors shall deposit with their competent authorities a copy of the amended or terminated contract, no later than that date.

2. First processors shall provide their competent authorities with the requisite information on the processing chain in question, in particular as regards prices and the technical processing coefficients to be used for determining the quantities of end products that may be obtained as referred to in the second subparagraph of Article 164(2).

3. Collectors or first processors who have taken over the raw materials from applicants shall inform their competent authorities of the quantities of raw materials received, specifying the species, the name and address of the party to the contract who delivered the raw materials, the place of delivery and the contract reference, within a time limit to be set by the Member States that allows the payments to be made within the period specified in Article 28 of Regulation (EC) No 1782/2003.

Where the Member States of the collectors or first processors are not the same as the Member States in which the raw materials have been grown, the competent authorities concerned shall inform the competent authorities of the applicants of the total quantities of raw materials delivered within 40 working days of receipt of the information referred to in the first subparagraph.

SECTION 7 U.K. Securities

Article 158 U.K. Securities lodged by collectors or first processors

1. Collectors or first processors shall lodge a full security as provided for in paragraph 2 with their competent authorities by the closing date for submission of payment applications for the year in question in the Member State concerned.

2. The securities to be lodged in respect of each raw material shall be calculated by multiplying the sum of all areas covered by a contract signed by the collector or first processor concerned and used to produce that raw material by the rate of EUR 250 per hectare.

3. Where contracts are amended or terminated in accordance with Articles 150 or 151, the securities lodged shall be adjusted accordingly.

4. A percentage of the security shall be released for each raw material on condition that the competent authority of the collector or first processor concerned is in possession of proof:

(a) that the quantity of raw material in question has been processed in accordance with the uses referred to in Article 147(2)(f), account being taken, where necessary, of any changes pursuant to Article 152; and

(b) where contracts relate to rapeseed, colza seed, sunflower seed or soya beans covered by CN codes 1205 00 90, 1206 00 91, 1206 00 99 or 1201 00 90 and the procedure laid down in the second subparagraph of Article 149(2) applies, that the quantity of by-products in excess of the maximum quantity for human or animal consumption has found outlets other than the feed or foodstuffs markets.

5. Without prejudice to paragraph 4, where the security has been lodged by the collector, it shall be released once the raw material in question has been delivered to the first processor, provided that the collector's competent authority has proof that the first processor has lodged an equivalent security with their competent authority.

Article 159 U.K. Primary and subordinate requirements

1. The following obligations shall constitute primary requirements within the meaning of Article 20 of Regulation (EEC) No 2220/85:

(a) the obligation to process the quantities of raw materials principally into the end products specified in the contract. The raw materials shall be processed by 31 July of the second year following that of harvest;

(b) the obligation to find, before the date referred to in point (a), outlets other than the feed or foodstuffs markets for the quantities of by-products in excess of the maximum quantity for human or animal consumption, where the procedure provided for in the second subparagraph of Article 149(2) of this Regulation applies;

(c) the obligation that products be accompanied by a T5 control copy in accordance with Articles 160 and 161 of this Regulation.

2. The following obligations, incumbent on collectors or processors, shall constitute subordinate requirements within the meaning of Article 20 of Regulation (EEC) No 2220/85:

(a) the obligation to take delivery of all raw materials delivered by applicants pursuant to Article 145(3) of this Regulation;

(b) the obligation to deposit copies of contracts in accordance with Article 157(1) of this Regulation;

(c) the obligation to provide the information required in accordance with the first subparagraph of Article 157(3) of this Regulation;

(d) the obligation to lodge a security in accordance with Article 158(1) of this Regulation.

SECTION 8 U.K. Documents for sale in, transfer to, or delivery to another Member State or export

Article 160 U.K. T5 control copy

1. Where processors sell or transfer to processors in other Member States intermediate products covered by contracts as provided for in Article 147, the products shall be accompanied by T5 control copies issued in accordance with Regulation (EEC) No 2454/93.

Where collectors sell or transfer to first processors established in other Member States raw materials covered by contracts, the first subparagraph shall apply.

2. One of the following shall be entered under ‘Other’ in box 104 of the T5 control copy:

• Producto destinado a su transformación o entrega de acuerdo con lo establecido en el articulo 147 del Reglamento (CE) n^o 1973/2004 de la Comisión;

• Použito pro zpracování nebo dodávku v souladu s článkem 147 nařízení Rady (ES) 1973/2004

• Skal anvendes til forarbejdning eller levering i overensstemmelse med artikel 147 i Kommissionens forordning (EF) nr. 1973/2004

• Zur Verarbeitung oder Lieferung gemäß Artikel 147 der Verordnung (EG) Nr. 1973/2004 der Kommission zu verwenden

• Προς χρήση για μεταποίηση ή παράδοση σύμφωνα με το άρθρο 147 του κανονισμού (ΕΚ) αριθ. 1973/2004 της Επιτροπής

• To be used for processing or delivery in accordance with Article 147 of Commission Regulation (EC) No 1973/2004

• Kasutamiseks töötlemisel või tarnimisel vastavalt komisjoni määruse (EÜ) nr 1973/2004 artiklile 147

• À utiliser pour transformation ou livraison conformément aux dispositions de l'article 147 du règlement (CE) n^o 1973/2004 de la Commission

• Da consegnare o trasformare conformemente all'articolo 147 del regolamento (CE) n. 1973/2004 della Commissione

• Izmantot pārstrādei vai piegādei saskaņā ar Komisijas Regulas (EK) Nr. 1973/2004 147. panta nosacījumiem

• Naudoti perdirbimui arba pristatymui pagal Komisijos reglamento (EB) Nr. 1973/2004 147 straipsnio nuostatas

• A Bizottság 2004/1973/EK rendelete szerint feldolgozásra, vagy átadásra használandó

• Te gebruiken voor verwerking of aflevering overeenkomstig artikel 147 van Verordening (EG) nr. 1973/2004 van de Commissie

• Do wykorzystania w procesie przetwórstwa bądź do dostawy zgodnie z postanowieniami zawartymi w art. 147 rozporządzenia Komisji (WE) nr 1973/2004

• A utilizar para transformação ou entrega em conformidade com o artigo 147 do Regulamento (CE) n.^o 1973/2004 da Comissão

• Na spracovanie alebo dodávku v súlade s článkom 147 nariadenia Komisie (ES) č. 1973/2004

• Se uporablja za predelavo ali dostavo v skladu s členom 147 Uredbe Komisije (ES) št. 1973/2004

• Käytetään jalostamiseen tai toimittamiseen komission asetuksen (EY) N:o 1973/2004 147 artiklan mukaisesti

• Används till bearbetning eller leverans i enlighet med artikel 147 i kommissionens förordning (EG) nr 1973/2004.

Article 161 U.K. T5 control copy for export

Where one or more end products, intermediate products, co-products or by-products covered by contracts as provided for in Article 147 are intended for export to third countries, a T5 control copy shall be drawn up by the competent authority of the Member State in which those products are obtained to cover their transport within the Community.

One of the following shall be entered under ‘Other’ in box 104 of the T5 control copy:

• Este producto no podrá acogerse a ninguna de las medidas previstas en el apartado 2 del artículo 1 del Reglamento (CE) n^o 1258/1999 del Consejo

• Pro tento produkt nemůže být poskytnuto financování podle čl. 1 odst. 2 nařízení (ES) č. 1258/1999 Rady

• De finansieringsforanstaltninger, der er omhandlet i artikel 1, stk. 2, i Rådets forordning (EF) nr. 1258/1999, kan ikke anvendes på dette produkt

• Dieses Erzeugnis kommt für keine Finanzierungen gemäß Artikel 1 Absatz 2 der Verordnung (EG) Nr. 1258/1999 des Rates in Betracht

• Το προϊόν αυτό δεν μπορεί να τύχει καμιάς από τις χρηματοδοτήσεις που προβλέπονται στο άρθρο 1 παράγραφος 2 του κανονισμού (ΕΚ) αριθ. 1258/1999 του Συμβουλίου

• This product shall not qualify for any benefit pursuant to Article 1(2) of Council Regulation (EC) No 1258/1999

• Kõnealuse toote puhul nõukogu määruse (EÜ) nr 1258/1999 artikli 1 lõikele 2 vastavaid soodustusi ei anta.

• Ce produit ne peut pas bénéficier des financements prévus à l'article l^er, paragraphe 2, du règlement (CE) n^o 1258/1999 du Conseil

• Questo prodotto non può beneficiare delle misure di cui all'articolo 1, paragrafo 2 del regolamento (CE) n. 1258/1999 del Consiglio

• Šis produkts nevar saņemt Padomes Regulas (EK) Nr. 1258/1999 1. panta 2. punktā noteikto finansējumu

• Šiam produktui netaikoma jokia išmoka pagal Tarybos reglamento (EB) Nr. 1258/1999 1 straipsnio 2 punktą.

• Ez a termék nem jogosult az 1258/1999/EK tanácsi rendelet 1. cikkének (2) bekezdése szerinti semmilyen ellátásra

• Dit product komt niet in aanmerking voor financieringen zoals bedoeld in artikel 1, lid 2, van Verordening (EG) nr. 1258/1999 van de Raad

• Ten produkt nie kwalifikuje się do finansowania przewidzianego w art. 1 ust. 2 rozporządzenia Rady (WE) nr 1258/1999

• O presente produto não pode beneficiar de medidas ao abrigo do n.^o 2 do artigo 1.^o do Regulamento (CE) n.^o 1258/1999 do Conselho

• Tento produkt nie je oprávnený na financovanie uvedené v odseku 2 článku 1 nariadenia Rady (ES) č. 1258/1999

• Ta proizvod ni upravičen do financiranja iz člena 1(2) Uredbe Sveta (ES) št. 1258/1999

• Tähän tuotteeseen ei sovelleta neuvoston asetuksen (EY) N:o 1258/1999 1 artiklan 2 kohdan mukaisia toimenpiteitä

• De åtgärder som avses i artikel 1.2 i rådets förordning (EG) nr 1258/1999 kan inte användas för denna produkt.

The first and second subparagraphs shall apply only where end products listed in Annex XXIII, intermediate products, co-products or by-products covered by contracts as provided for in Article 147 would attract export refunds if they were obtained from raw materials grown otherwise than under this scheme.

Article 162 U.K. Alternatives to the T5 control copy

Notwithstanding Article 159(1)(b), if the T5 control copy is not returned to the office of departure of the body responsible for control in the Member State in which the collector or the first processor is established two months after expiry of the deadline provided for in Article 159(1)(a), as a result of circumstances for which the first processor is not responsible, the following documents may be accepted as alternatives to the T5 control copy:

(a)

purchase invoices for the intermediate products;

(b)

statements by the final processor verifying final processing into non-food products;

(c)

certified photocopies from the final processor of accounting documents proving that processing has been carried out.

SECTION 9 U.K. Checks

Article 163 U.K. Record keeping

1. The competent authority of the Member State shall specify the records to be kept by collectors or processors and the frequency thereof, which shall be at least monthly.

In the case of collectors, such records shall include at least the following information:

(a) the quantities of all raw materials purchased and sold for processing under this scheme;

(b) the names and addresses of the first processors.

In the case of processors, such records shall include at least the following information:

(a) the quantities of different raw materials purchased for processing;

(b) the quantities of raw materials processed and the quantities and types of end products, co-products and by-products obtained therefrom;

(c) wastage during processing;

(d) the quantities destroyed and the reasons for such destruction;

(e) the quantities and types of products sold or transferred by the processor and the prices obtained;

(f) where applicable, the names and addresses of the subsequent processors.

2. The competent authority of the collector or the first processor shall check that the contract submitted complies with the conditions laid down in Article 145(1). Where those conditions are not met, the applicant's competent authorities shall be notified.

3. With a view to calculating the economic value of the products referred to in Article 145(1), the competent authorities concerned shall, on the basis of the information referred to in Article 157(2), compare the sum of the values of all non-food products with the sum of the values of all other products intended for other uses and obtained from the same processing operation. Each value shall equal the relevant quantity multiplied by the average of the ex-factory prices recorded during the previous marketing year. Where such prices are not available, the competent authorities shall determine the relevant prices, in particular on the basis of the information referred to in Article 157(2).

Article 164 U.K. Checks at the premises of collectors and processors

1. The competent authorities of the Member States in which collectors are located shall carry out checks on the premises of at least 25 % of the collectors established in their territory, selected on the basis of a risk analysis. These shall comprise physical checks and inspections of commercial documents, with a view to verifying consistency between the purchases of raw materials and the corresponding deliveries.

2. The competent authorities of the Member States in which processing takes place shall verify compliance with Article 146(1) at the premises of at least 25 % of the processors located in their territory, selected on the basis of a risk analysis. Such checks shall involve at least:

(a) a comparison of the sum of the values of all the non-food products with the sum of the values of all other products intended for other uses and obtained from the same processing operation;

(b) analysis of the processor's production system, comprising physical checks and inspections of commercial documents, with a view to verifying, in the case of processors, that deliveries of raw materials, end products, co-products and by-products tally.

For the purpose of the checks referred to in point (b) of the first subparagraph, the competent authorities shall base themselves in particular on the technical processing coefficients for the raw materials concerned. Where such coefficients exist for exports in Community legislation, they shall be applied. Where they do not but other coefficients do exist in Community legislation, they shall be applied. In all other cases, inspection shall rely mainly on the coefficients generally accepted by the processing industry.

3. For the processing operations referred to in Article 146, checks shall be carried out on 10 % of applicants selected on the basis of a risk analysis taking account of:

(a) aid amounts;

(b) the number of agricultural parcels and the area covered by an aid application;

(c) developments since the previous year;

(d) the findings of checks made in past years;

(e) other parameters to be defined by the Member States, based on the representativeness of the declarations submitted.

4. Where the checks referred to in paragraph 3 reveal irregularities in at least 3 % of cases, the competent authority shall carry out additional checks during the year and shall consequently increase the percentage of farmers to be subject to an on-the-spot check the following year.

5. If it has been provided that certain elements of the checks referred to in paragraphs 1, 2 and 3 may be carried out on the basis of a sample, that sample must guarantee a reliable and representative level of inspection.

6. Every on-the-spot check shall be the subject of an inspection report signed by the inspector giving the details of the checks carried out. The reports shall indicate in particular:

(a) the date of the check;

(b) the persons present;

(c) the period checked;

(d) the checking techniques used including, where applicable, reference to sampling methods;

(e) results of the check.

Article 165 U.K. Production of hemp

The provisions relating to hemp referred to in Article 29 of Regulation (EC) No 795/2004 and in Article 33 of Regulation (EC) No 796/2004 shall apply.

Article 166 U.K. Additional measures and mutual assistance

1. The Member States shall take all further measures required for the proper application of this Chapter and shall give the mutual assistance needed for the purposes of checks required pursuant to this Chapter. Where this Chapter does not provide for appropriate reductions and exclusions, the Member States may apply appropriate national sanctions against market participants involved in the procedure for granting aid.

2. As far as necessary or as required by this Chapter, the Member States shall assist one another mutually to ensure effective checks, and enable the authenticity of documents submitted and the accuracy of the data exchanged to be verified.

SECTION 10 U.K. Exclusion from the scheme and notifications

Article 167 U.K. Exclusion of raw materials from the scheme

The Member States may exclude any agricultural raw material from the scheme established by this Chapter where such materials raise difficulties from the viewpoint of controls, public health, the environment, criminal law, or a reduced rate of final non-food products.

Article 168 U.K. Minimum area

Member States may fix a minimum cultivated area for each raw material referred to in Article 145(1).

Article 169 U.K. Notifications

The Member States shall forward to the Commission, before 15 October of the year following the end of the year in question, the following information:

(a)

the areas which result from the contracts referred to in Article 147 and the declarations referred to in Articles 146(2) and 148, for each raw material;

(b)

the quantities of each type of raw material, end product, by-product and co-product obtained, with details of the type of raw material used;

(c)

the measures taken under Article 146;

(d)

the raw materials excluded from the scheme under Article 167;

(e)

the minimum areas fixed in accordance with Article 168.

(1)

OJ L 50, 21.2.2002, p. 40