Udvalget for Fødevarer, Landbrug og Fiskeri 2008-09
FLF Alm.del Bilag 353
Offentligt
European CommissionDirectorate General for Health and Consumers
Study on fees or charges collected by the Member States tocover the costs occasioned by official controlsFramework Contract for evaluationand evaluation related services - Lot 3: Food Chain(awarded through tender no2004/S 243-208899)
Final ReportPART ONE: MAIN STUDY AND CONCLUSIONS
Submitted by:Food Chain Evaluation Consortium (FCEC)Civic Consulting - Van Dijk MC -Arcadia International - Agra CEASProject Leader: Agra CEAS Consulting
European CommissionDG SANCORue de la Loi 2001049 Brussels28.01.2009
Contact for this assignment:Dr Maria ChristodoulouAgra CEAS Consulting20-22 rue du Commerce1000 Brussels, Belgiumtel:+32 2 736 00 88direct: +32 2 738 05 15fax:+32 2 732 13 61[email protected]www.ceasc.com
Study on fees or charges collected by the Member States to coverthe costs occasioned by official controls
Final ReportPART ONE: MAIN STUDY AND CONCLUSIONS
Prepared by the Food Chain Evaluation Consortium (FCEC)Civic Consulting – Van Dijk MCArcadia International – Agra CEASProject Leader: Agra CEAS Consulting
Food Chain Evaluation ConsortiumC/o Civic ConsultingPotsdamer Strasse 150D-10783 Berlin-GermanyTelephone: +49-30-2196-2297Fax: +49-30-2196-2298E-mail:[email protected]
Expert Team
Agra CEAS Consulting:Dr Maria ChristodoulouConrad CaspariDr Dylan BradleyDr Edward OliverDr Mauro GioeAnna Holl
fcecFood Chain Evaluation ConsortiumCivic Consulting – Van Dijk MCArcadia International – Agra CEAS
Study on fees or charges collected by MS for official controls: Final ReportDG SANCO Evaluation Framework Contract Lot 3 (Food Chain)
ContentsPART ONE: MAIN STUDY AND CONCLUSIONS .................................................................................................1EXECUTIVE SUMMARY............................................................................................................................................11. INTRODUCTION TO THE STUDY .......................................................................................................................11.1. BACKGROUND.......................................................................................................................................................11.2. OBJECTIVES...........................................................................................................................................................21.3. SCOPE....................................................................................................................................................................21.4. METHODOLOGY.....................................................................................................................................................21.4.1. Overall methodological approach and objectives......................................................................................... 21.4.2. Desk research ................................................................................................................................................ 31.4.3. Survey of competent authorities (CAs) .......................................................................................................... 41.4.4. Case studies................................................................................................................................................... 51.4.5. Interviews with key partners and stakeholders.............................................................................................. 61.4.5.1. At EU level ...............................................................................................................................................................61.4.5.2. At MS level (case studies) ........................................................................................................................................7
2. DESCRIPTION AND ASSESSMENT OF THE CURRENT SYSTEM OF FEES..............................................92.1. INTERVENTION LOGIC............................................................................................................................................92.1.1. Principles and objectives of EU policy.......................................................................................................... 92.1.2. The requirements for official controls ......................................................................................................... 102.1.3. The financing of official controls ................................................................................................................ 112.2. SYSTEM DESCRIPTION..........................................................................................................................................112.2.1. Competent Authorities................................................................................................................................. 122.2.2. Activities for which fees are collected ......................................................................................................... 142.2.3. Fee rates used.............................................................................................................................................. 162.2.4. Determination of the fee .............................................................................................................................. 182.2.5. Fee collection method and use of fee revenue ............................................................................................. 182.3. EVALUATION OF THE CURRENT SITUATION..........................................................................................................202.3.1. Enforcement of Article 27 of Regulation 882/2004 ..................................................................................... 21
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2.3.2. Contribution to the functioning of the internal market................................................................................ 222.3.2.1. Distortions between MS..........................................................................................................................................222.3.2.2. Distortions within MS (between regions) ...............................................................................................................252.3.2.3. Distortions between sectors ....................................................................................................................................262.3.2.4. Distortions according to scale .................................................................................................................................282.3.2.5. Distortions at the level of imports ...........................................................................................................................29
2.3.3. Contribution to maintaining the efficiency and effectiveness of OCs.......................................................... 302.3.3.1. Adequacy of the financial resources .......................................................................................................................302.3.3.2. Cost-efficiency issues .............................................................................................................................................32
3. OPTIONS FOR THE FUTURE .............................................................................................................................383.1. THE DEVELOPMENT AND ASSESSMENT OF THE VARIOUS OPTIONS.......................................................................383.1.1. Range of options and scenarios................................................................................................................... 383.1.2. Key components........................................................................................................................................... 423.1.3. Assessment criteria...................................................................................................................................... 443.2. TOWARDS MORE HARMONISATION......................................................................................................................453.2.1. Full harmonisation ...................................................................................................................................... 453.2.1. Intermediate scenarios ................................................................................................................................ 473.3. TOWARDS MORE SUBSIDIARITY...........................................................................................................................493.3.1. Full subsidiarity .......................................................................................................................................... 493.3.2. Intermediate scenarios ................................................................................................................................ 513.4. EXTENSION TO OTHER SECTORS...........................................................................................................................533.5. STATUS-QUO(MIXED SYSTEM) ............................................................................................................................573.5.1. Do nothing option........................................................................................................................................ 573.5.1. Status quo with improvements ..................................................................................................................... 584. CONCLUSIONS AND RECOMMENDATIONS .................................................................................................68ANNEX 1 ......................................................................................................................................................................741.1 LIST OF RELEVANT BACKGROUND LEGISLATION ................................................................................751.2 LIST OF REVIEWED FVO REPORTS AND MS NOTIFICATION LETTERS TO DG SANCO ..............78
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ANNEX 2 ......................................................................................................................................................................812.1: SURVEY OF EU-27 CAS: RESULTS ................................................................................................................822.2: SURVEY OF EU-27 CAS: QUESTIONNAIRE...............................................................................................103ANNEX 3 ....................................................................................................................................................................119COMPETENT AUTHORITIES RESPONSIBLE FOR THE VARIOUS OFFICIAL CONTROLS (OCS)COVERED BY THE SCOPE OF THIS STUDY ....................................................................................................119
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List of TablesTable 1-1Table 2-1Table 3-1Table 3-2Table 3-3Table 3-4European professional organisations interviewed ....................................................................... 7Share of the costs of official controls covered by fee revenue .................................................. 19Range of options, scenarios and components............................................................................ 39Moving towards more harmonisation: overall assessment........................................................ 48Moving towards more subsidiarity: overall assessment ............................................................ 52Extension to other sectors: overall assessment.......................................................................... 56
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AcronymsAVEC: Association of Poultry Processors and Poultry Trade in the EU countriesBIP/s: Border Inspection Post/sCA/s: Competent Authority/iesCCA/s: Central Competent Authority/iesCIBC / IMV / IBC: International Butchers’ ConfederationCLITRAVI: Liaison Centre for the EU Meat Processing IndustryDG: Directorate GeneralDG SANCO: DG Health and ConsumersEASVO - European Association of State Veterinary Officers (member of FVE)ECB: European Central BankEDA: European Dairy AssociationEU: European UnionEUCOLAIT: European Association of Dairy TradeEUROPECHE: Association of the National Organisations of Fishery Enterprises in the EUFBO/s: Feed/Food Business Operator/sFCEC: Food Chain Evaluation ConsortiumFCI: Food Chain InformationFEFAC: European Feed Manufacturers’ FederationFVE: The Federation of Veterinarians of EuropeGHP: Good Hygiene PracticesHACCP: Hazard Analysis Critical Control PointsMNCP: Multiannual National Control PlanMS: Member State/sNMS: New Member State/sOCs: Official ControlsPOAO: Products of Animal Origin
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SCFCAH: Standing Committee on the Food Chain and Animal HealthSG: Steering Group (for this study)ToR: Terms of ReferenceUECVB: European Livestock and Meat Trading Union
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PART ONE: MAIN STUDY AND CONCLUSIONSExecutive SummaryRegulation 882/20041(hereafter referred to as ‘The Regulation’) sets out requirements for theauthorities in EU Member States that have responsibility for monitoring and verifying compliancewith, and enforcement of, feed and food law, animal health and animal welfare rules, i.e. the'Competent Authorities' (CAs) responsible for organising and undertaking 'official controls' (OCs).According to Article 65 of the Regulation, three years after its entry into force, the Commission shouldreview the experience gained from its application, in particular in terms of scope and the fee-settingmechanism, and whether/how the current fees regime can be improved. The data collected and resultsof this study, which focused on the implementation of the financing provisions of the Regulation(Articles 26-29), will feed into a Commission Report to the European Parliament and Council for apossible modification of the current legislation.The objectives of the study are two-fold:a) to establish a detailed picture and evaluate the present situation as regards the application of thecurrent fees regime, in particular the way in which the system operates in practice; and,b) to assess the advantages and disadvantages of a range of policy options (regarding the scope ofcurrent rules and the fee-setting mechanism).As such, the final aim is to provide input to the Commission’s development of proposals to improvethe fees system in future.The assessment of the current system and future policy options take into account the wider objectivesand principles of EU policy in this sector. As such, the study considers the overall objective of theRegulation to ensure a harmonised approach with regard to official controls, the objectives of EU foodand feed law2to ensure a high level of protection of human life and health and achieve the freemovement in the Community of compliant feed and food, and the objectives of the Lisbon Strategy topromote better regulation and support industry competitiveness. Furthermore, the principles ofproportionality, subsidiarity (Article 5 of the Treaty) and FBO responsibility (in accordance withcurrent food and feed law) frame the approach of this study.The study was carried out in the period April-November 2008 through a survey of EU27 CAs, in depthanalysis (case studies) in six MS representing a variety of fee regimes (Germany, the UK, Italy,Poland, France and Slovakia), interviews with key experts and stakeholders at EU level3, andextensive literature and data review (including relevant FVO reports and national legislation).The study has found that significant progress has been made in the application of the Regulation byMS, and in particular the financing provisions of Articles 26-29, since their entry into force on 1January 2007. However, the enforcement of these provisions has been slow and gradual, withsignificant delays in most MS. In some cases, full implementation is still pending subject to theapproval of draft national legislation enacting Article 27, despite the fact that the deadline for its
Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controlsperformed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules.Regulation (EC) 178/2002 (General Food law) and the Hygiene Package (Regulations (EC) 852/2004, 853/2004 and854/2004).Including consultations with the following EU professional organisations: AVEC, CIBC/IMV/IBC, CLITRAVI, EDA,FEFAC, FVE, and the UECBV.32
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definitive entry into force was 1 January 2008. In these cases the fee system in place is largely basedon that laid down in previous, repealed legislation (Directive 85/73).Despite progress a number of important shortcomings have been identified in the current state ofimplementation of Articles 26-29, as follows:Competent Authorities (CAs):There are significant differences in the organisation, structure andstaffing (number and profiles of staff) between MS, which have financial implications for the cost ofofficial controls (OCs). Contrary to the Commission’s expectations, more than one CA is involved inmost cases, which may create lack of transparency and of central/overall responsibility. In MS withdecentralised management, the central CA is not always in control and efficient/effective coordinationis not always ensured. The study findings confirm issues which are already highlighted in relevantFVO reports. In several MS initiatives are under way to rationalize veterinary services, such as the useof appropriately trained contractual staff for the OCs rather than civil servants.Activities for which fees are collected:A distinction is made throughout the study between OCactivities for which fee collection is ‘compulsory’ (Article 27.2, activities of Annexes IV and V), andthose for which fee collection is optional or ‘non-compulsory’ (Article 27.1). The study has found that,in the case of‘compulsory’fees: 9 MS collect such fees only partly; fees for milk production and forresidue controls were found to be ‘controversial’ and often not collected at all; on the other hand, insome MS fees are collected for the same OCs more than once along the production chain (e.g. atslaughter and cutting plant even within the same establishment, contrary to Article 27.7). In the case of‘non-compulsory’ fees: 19 MS collect fees for activities beyond those of Article 27.2, while 6 do notcollect any such fees; fees are collected in some MS for OCs on products of non-animal origin.Fee rates used:Regulation 882/2004 leaves it up to MS to define fee system: either minimum fees asdefined in Annex IV (domestic controls) and V (import controls) or fee rates calculated on the basis ofthe actual costs of OCs (‘flat rates’). In practice, a multitude of fee rates apply for the variousactivities: 18 MS use a mix of the two systems (flat rates and minimum rates); the current situation isquite complex, not transparent and confusing for FBOs; the CAs appear to have interpreted relevantprovisions of Article 27 rather ‘openly’. Furthermore, 12 MS apply fees below minimum rates,however it is not clear or sufficiently justified whether the conditions of Article 27.6 (controls ofreduced frequency and criteria of para 5) are respected in these cases.Fee calculation:Article 27.4 stipulates that where flat rates are used, fee levels need to be set withinthe limits of the minimum fees set out in Annexes IV and V, and a maximum set by the actual controlscosts; the fee calculation in this case must respect the criteria of Annex VI. In practice: the calculationmethod used is not always available, or has not always been communicated to the Commission(contrary to requirements of Article 27.12); even when the method is available, it is not alwaystransparent what type of costs are included under the various cost categories and what reference timeperiod is used; in most cases it is not clear whether the actual costs included in the calculation respectthe criteria of Annex VI (staff salaries; staff costs including overheads; lab analysis and sampling).Fee collection & use of revenue:The rationale of the system is to ensure adequate financial resourcesto provide the necessary staff and other resources (Article 26). In practice: in the majority of MS thecollected revenue is incorporated into the General State Budget, either entirely (11 MS) on in part (7MS); only 9 MS claim to be ‘ring fencing’ revenues specifically for the CAs performing the controls;14 MS indicated they do not cover the OC costs through the fees, while a further 6 MS claim this isoccurring in some cases (regions, activities). This partial cost coverage may be due to inappropriatefee setting (insufficient fee levels) as well as inappropriate fee collection / use of revenue. The positionappears to be better in the case of imports controls, partly because Article 27.8 stipulates that such feesshould be paid to the CA in charge.Enforcement of Article 27:Although the Regulation should be directly enforceable, Article 27allows some discretion to MS on the actual fee system to use and the activities for which OCs should
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be charged beyond those of Article 27.2. The study has found that, in practice, there is significantvariation between MS in the enforcement of Articles 26-29. Underlying this, there is a strongperception - in some cases documented by FVO reports - of significant variation in the organisationand effectiveness of OCs, and that – as documented by the study findings - CAs have rather liberallyinterpreted provisions of Articles 26-29 (this is particularly a problem in some MS with decentralisedmanagement and lack of sufficient central control by the CCA).The study has therefore concluded that, as it currently stands, the system of fees for OCs does not fullyfulfil its key objective: to provide sufficient resources for the effective and efficient operation of theOCs. Furthermore, the actual implementation of the system raises issues with regard to its contributionto the functioning of the internal market and the cost-efficiency of the system of OCs.Contribution to the functioning of the internal market:MS broadly agree with the rationale ofArticles 26-29. However, could the heterogeneity in their application in practice cause distortions incompetition? The study has investigated various potential distortions that may arise in this context. Ithas found that in practice:•Distortions at EU level:There is a general concern amongst stakeholders in the various MS thatimplementation of rules by national authorities put them at disadvantage vis-a-vis other MS.However, it is difficult to substantiate these claims due to lack of clarity and uniformity in MSapproaches which makes the comparison of actual fees difficult. Although evidence of unjustifiedvariations in fee levels were found between MS, there is no evidence of significant distortion incompetitiveness between MS caused by differing fee levels. Other key factors affectingcompetitiveness appear to be more significant.•Regional distortionsare a concern particularly in some MS with decentralised management e.g.amongst the case study countries (Germany, also Italy and Spain);•Discrimination against themeat sector,which is seen as unfairly bearing the cost of the OCs, fromwhich other sectors along the chain also benefit;•Discrimination againstsmaller or disadvantaged FBOs,which compound the difficulties theyface in the general economic climate; this is particularly evident for those MS that have not adoptedspecial provisions for these businesses in line with Article 27.5.Cost efficiency issueshave been raised with regard to:•Staff costs:Stakeholders argue that Regulation 882/2004 could go further than the generalrequirement to have “a sufficient number of suitably qualified and experienced staff”. In practice,there are wide variations in the number and profile of staff involved in controls, and this hasrepercussions on salary costs;•Administrative costs:There is lack of transparency on what type of costs are taken into account,the formulation of Annex VI is considered too broad (in particular criterion 2: ‘associated costs’),resulting in wide variation between MS and unjustifiably high costs in some cases;•Proportionate and risk based controls:important cost savings could be made in the costs of OCsif the guiding principles of OCs (risk basis, FBO responsibility and ‘self-control’ systems) weresufficiently taken into account by MS in implementing the provisions of Articles 26-29.To address the various shortcomings in the current application of the Regulation4, the study hasexamined the following key options: moving from the current system towards more harmonisation;
It is noted that addressing some of the current shortcomings identified by this study requires action that extendsbeyond the financing provisions of Regulation 882/2004, to the wider legislation in the area of food and feed
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moving towards more subsidiarity; and, the continuation of thestatus quo.A complementary option,which transcends the above three alternative options, is the extension of the financing obligation tosectors beyond those currently covered by the Regulation.The key components of the financing system (basis of fee charging; level of fee rates; fee calculationmethod; fee reductions and penalties; and, list of activities covered by fees), as identified on the basisof the intervention logic of the current legislation (Articles 26-29), were combined to develop a rangeof scenarios within the above options (Table3-1).The basis of fee charging is compulsory for all MSunder the harmonisation option, optional under the subsidiarity option, and a mixed approach underthe continuation of current rules.The scenarios were assessed in terms of advantages and disadvantages, feasibility (whether and underwhich conditions they would work in practice), and the acceptance that they might have from thevarious groups of stakeholders. Key criteria for the assessment were the main goals and principles ofthe Regulation, as well as the wider objectives of Community food and feed law and the Lisbonstrategy, in particular: improving the effectiveness and efficiency of the official controls;simplification of the current system; and providing the right incentives for FBOs to encouragecompliance and discourage non-compliance. As these criteria may not necessarily point in the samedirection, the initial assessment of the scenarios provided here aims to provide a balance between thevarious objectives and needs of stakeholders.The assessment has shown that neither harmonisation nor subsidiarity would work in their mostextreme expression. Although both scenarios would simplify the current system at the level of centralmanagement (particularly if full subsidiarity is pursued), they ultimately carry the risk that they maynot lead to sufficient cost-recovery in some MS, and that the level of cost-recovery may varysignificantly between MS. This could undermine the overall effectiveness of the official controlsystem at EU level, and/or act as a disincentive to improving its efficiency.An intermediate solution would clearly provide the most pragmatic way forward. Intermediatescenarios provide different degrees of balance between the flexibility that the majority of MS require,as an incentiveinter aliato rationalise the system, with the simplification needed at the level ofcentral management (Commission, MS CCAs). The study has found that the rationale for a flexibleapproach, which underlies the current Regulation, continues to apply today. The majority of MS CAsand stakeholders have indicated that a system that allows MS flexibility to set the fee rates, within acommonly agreed set of rules, continues to be the most favoured option. This approach is consideredthe most appropriate for the system to be able to adapt to national conditions.On balance, amongst the various scenarios that can be envisaged at an intermediate level, thoseleading to more subsidiarity appear to be more attractive than those that lead to more harmonisation.This is because the degree of flexibility given to MS increases, while the degree of complexity of thelegislation diminishes.Moving towards more subsidiarity, if the primary aim of the legislation is to ensure that MS have thefunds necessary to cover the costs of official controls whatever the means, scenario 4 (maintain onlythe general obligation for MS to provide adequate funding, in the line of a modified Article 26) couldpresent an attractive alternative to pursue for the purposes of simplification.
safety. The discussion of solutions to such shortcomings was therefore limited to its relevance to the costs andthe financing of the official controls.
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The disadvantage of this scenario would be that it could result in wider variations between MS thanthose created by the current system. To reduce these variations, conditions could be attached in theform of common principles at EU level for a more harmonised calculation of the fees and/or feereductions/penalties across the EU (scenario 3).Although the continuation of thestatus quowould be an alternative intermediate solution, the analysisof current shortcomings under section 2.2 has shown that todo nothingis clearly not an acceptable ora pragmatic option. However, if the current mixed approach of the Regulation (which represents thepolitical reality of the evolution of the system since Directive 85/73) was to be maintained, certainimprovements could be introduced as follows: at a general level improve the understanding of theRegulation; provide a rationale for setting minimum fee levels and review Annexes IV and V in thelight of this rationale; reinforce transparency and accountability criteria; refine and define certainprovisions more precisely at technical level; update Articles 26-29 with the progress made since theadoption of the General Food Law and the Hygiene Package.Whatever the scenario to be pursued at an intermediate level, the study has identified the need for thedefinition of common principles that can apply for a more harmonised calculation of the fees and/orfee reductions/penalties across the EU. These could be general principles only or they could be moredetailed criteria defined at a technical level. General principles would include: transparency in thecalculation method of fee setting and for calculating fee reductions/penalties, on the basis of actualcosts; and, the obligation for MS to communicate these to the Commission and the public. Detailedtechnical criteria would include for instance the calculation method to be followed for fee setting andfor fee reductions/penalties, cost-recovery targets that should be sought, precise cost categories thatshould be taken into account, and even maxima/ceilings for each cost element.The level at which common principles should be set needs to be further explored, as it is crucial incontrolling MS flexibility and mitigating the potential disadvantages of subsidiarity. The greater thedegree to which EU legislation moves from defining common principles and general guidelines (as iscurrently the case with Articles 27-29) to more technical criteria, the more difficult it will be for MSto deviate from a common denominator. On the other hand, this increases the complexity of theprovisions and the extent of follow up needed at central level (Commission, MS CCAs).In terms of the calculation of fee reductions and penalties, in particular, the principles could build onthe advantages and benefits of self-control systems, as introduced at EU level by the HygienePackage. Both MS and stakeholders are in principle in favour of providing incentives to FBOs toassume greater responsibility. The study has examined the possibility to follow an integratedapproach more consistently linking compliance and non-compliance, and therefore fee reductions andpenalties, to the uptake of self-control systems by industry (through abonus-malussystem). Suchsystems have already been developed in few MS (e.g. Belgium), highlighting the advantages of anintegrated approach. The study has concluded that, although the development of such systems needsto be encouraged at EU level, their actual design can at present only be pursued at MS level.Furthermore, the cross-cutting theme of the extension in scope of the Regulation was favourablyassessed, in relation in particular to the inclusion of all stages along the food chain. The case of theextension of the system to stages upstream and downstream of the slaughtering and meat cuttingoperations along the meat production chain was a case in point. The study has concluded that anextension in this form would spread the costs of controls currently pursued only at a particular pointin the chain but for the benefit of stages upstream/downstream more equitably along the food chain.Again, this approach is currently being adopted/explored in several MS.This forward looking element of the project aimed to provide an initial assessment of certain keyscenarios. The purpose was not to provide a full feasibility analysis (whether at political or technical
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level). Nonetheless, specific recommendations were made to develop these scenarios, or indeed otherpotential combinations of their components, including through future impact assessments.
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1. Introduction to the study1.1. BackgroundRegulation 882/20045(hereafter referred to as ‘The Regulation’) sets out requirements for theauthorities in EU Member States that have responsibility for monitoring and verifyingcompliance with, and enforcement of, feed and food law, and animal health and animalwelfare rules, i.e. the 'competent authorities' (CAs) responsible for organising and undertaking'official controls' (OCs).According to Article 65 of the Regulation, three years after its entry into force, theCommission should review the experience gained from its application, in particular in termsof scope and the fee-setting mechanism, and whether/how the current regime can beimproved. This study, which was launched in April 2008, aims to respond to this requirement.The data collected and results of the study will feed into a Commission Report to theEuropean Parliament and Council (which will also be discussed at the SCFCAH) for apossible modification of the current legislation.Part One of this Final Report outlines the methodology and overall results, includingconclusions and recommendations, of the work carried out by the study team (FCEC - FoodChain Evaluation Consortium, led by Agra CEAS Consulting for this evaluation).Part Two (provided in a separate volume) describes in detail the system and conclusions ofthe work in the six case study countries.The Final Report (Parts One and Two) forms the basis of the Final meeting with the SteeringGroup for this study, scheduled before end 2008.
EU legal acts quoted in this Report refer, as applicable, to the last amended version. Full references to the actsquoted in this Report are given inAnnex 1.1.
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1.2. ObjectivesThe objectives of the study are two-fold:c) to establish a detailed picture and evaluate the present situation as regards theapplication of the current fees regime in the EU, in particular the way in which thesystem operates in practice; and,d) to assess the advantages and disadvantages of a range of policy options (regardingthe scope of current rules and the fee-setting mechanism).As such, the final aim is to provide input to the Commission’s development of proposals toimprove the system in future.1.3. ScopeThe study covers activities related to the official controls in relation to establishments basedin the EU and in relation to goods introduced into the EU, with regards to the product sectorswhere the current rules apply, in particular the livestock and livestock product sectors.Although the study focuses on the financing provisions of Regulation 882/2004, as containedin Articles 26-29 of Regulation 882/2004 (and in particular Article 27), a range of otherCommunity legislation is relevant to the study. This legislation is summarised inAnnex 1.1.It is noted that reference to ‘mandatory’ and ‘non-mandatory’ fees throughout this Report ismade with respect to MS obligations and possibilities underRegulation 882/2004, Article 27para 2 and para 1respectively, not with respect to whether the fee is charged on acompulsory or other basis.1.4. Methodology1.4.1. Overall methodological approach and objectivesThe activities undertaken during the study have been based on the following mainmethodological tools:••••Desk research, including data and documentation analysis;Survey of competent authorities at MS level (for the EU27);Interviews with European stakeholders/partners (including the Commission);Case studies, basedinter aliaon detailed interviews with MS stakeholders/authoritiesin 6 MS (Germany, UK, Italy, France, Poland, and Slovak Republic);
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The study team has undertaken the design and implementation of the survey and interviewprocess, with the following two key criteria in mind:1. To have an open and transparent dialogue, involving all potentially interested partners andstakeholders at European and MS level. Our commitment to this objective is demonstratedby the fact that the survey has been addressed to all competent authorities in the EU-27,with the process closely monitored by our team. We have also contacted allrepresentatives of the various relevant stakeholders at both EU and MS level.2. To provide a synthetic and concrete analysis of the results, so as to be able to deliveractionable recommendations to the Commission services, in particular in the context ofthe Commission’s review of Regulation 882/2004.To this end, the study team has tried to ensure maximum flexibility throughout the survey andinterview process. Flexibility was sought both in terms of adjusting the sample of relevantpartners/stakeholders, but also in terms of updating the detailed list of questions used duringthe interviews with new findings and comments. New insights have thus been built into theprocess as the interviews were progressing.At the same time, the team has sought to ensure that the Commission’s reporting deadlines areadhered to and that a sound and robust basis for the synthesis at EU level is provided. Thishas involved the establishment of a clearly set out analytical framework and of a tightreporting and synthesis system for the inputs provided by the various phases of the project.The study was carried out during the period March to October 2008.
1.4.2. Desk researchFor the purposes of this study, key relevant literature and material reviewed includes thefollowing:1. Background legislation and other official documents of relevance. A non-exhaustive listof the main background legislation at EU level is provided inAnnex 1.1.The purpose ofthe review has been to understand in detail the subject matter of this study and the way inwhich the various legal instruments interrelate.2. The notification letters submitted by the MS to DG SANCO, in complying with Article 12of Regulation 882/2004. To date, 18 MS have notified the Commission of the measurestaken to enforce the financing provisions of the Regulation (Annex1.2).3. FVO reports carried out in the EU-27, in particular those relating to hygiene controls andimport controls. A list of the reviewed FVO reports, indicating where available referenceto the issue of fees, is provided inAnnex 1.2.The purpose of our review has been toobtain a first view of the situation, and – where possible/applicable - to cross-check withthe information provided by MS in their answers to the survey questionnaire. Thesereports, together with the FVO country profiles on the system of official inspections in the
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areas covered by Regulation 882/20046and the National Controls Plans7where available,also provide useful background material on the structure of the CAs in the MS. This hasbeen useful in the context of identifying the relevant stakeholders both for the EU-27survey and the case studies, and key issues of relevance to the financing of officialcontrols.4. Background material available at national level, including national legislationimplementing Article 27 of Regulation 882/2004.5. Material and data provided by industry stakeholders. Such material has included data onfees collected independently by some of the EU professional organisations (includingnotably the UECBV and CLITRAVI).Desk research continued throughout the project course as new material and data, in all of theabove categories, became available.1.4.3. Survey of competent authorities (CAs)The survey of CAs was addressed to all MS of the EU-27, including the case study countries.It was based on a questionnaire, developed in consultation with the Commission services,which covered the various issues of the fees system under Regulation 882/2004, including allsectors of Annexes IV and V of the Regulation (in the meaning of Article 27.2) but also othersectors to which non-compulsory fees may be currently applied by MS (in the meaning ofArticle 27.1). The questionnaire is attached inAnnex 2.The aim has been to collect facts/hard data on the current operation of the system (Section 1of the questionnaire), and views/suggestions for the future (Section 2 of the questionnaire).The process of questionnaire completion has been monitored closely by the Consultants viatargeted meetings and communication, both with the desk officers responsible for hygiene andofficial controls in the MS Permanent Representations and directly with the CAs in the EU-27MS. Requests for further clarification, following questionnaire submission, were also made toa number of MS.A challenge from the outset has been to identify the relevant CAs in the MS, given the scopeand complexity of the sectors to which fees for official controls apply, and the fact thatseveral CAs and/or delegated bodies are often involved in the organisation of official controls(this issue is further discussed in section 2.2.1). As a result, questionnaire completion hasnecessitated extensive internal consultations within the MS, involving not only the CAs(notably, in most MS, the Ministry of Agriculture and the Ministry of Health), but also thenational/local authorities, in some cases even the laboratories and veterinary institutes.
6
FVO country profiles on food and feed safety, animal health, animal welfare and plant health.NCPs are to be drawn by MS pursuant to Article 41 of Regulation 882/2004.
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The outcome has been a full response to the survey by all EU-27 MS8. It is also noted that thishas largely been within the anticipated timelines (nearly two thirds of MS responded by thedeadline of 27 June). For the case study countries, the survey results were incorporated andfollowed up in the discussions with MS authorities and stakeholders at national level.The full analysis of the survey results (both quantitative and qualitative) is submitted as aseparate spreadsheet file9, while some of the results are used in this Report.1.4.4. Case studiesThe study covered the EU as an entity with treatment of all MS of the EU-27. Given thepotentially wide scope of this coverage, further in-depth analysis was undertaken in six MS,as follows:1. Germany2. Italy,3. UK,4. France,5. Poland6. Slovakia
The selection of these countries represents a mix of different situations as identified duringthe Inception Phase of the study, in terms in particular of centralised/decentralisedorganisation and management of the system for the collection of the fees, and the nature of thesystem applied (whether minimum rates or flat rates). Two NMS have also been included inthis selection.The case studies were carried out and drafted using a common framework. In practice, anydifferences in the final presentation are due to the specific character of the administration ofthe official controls system and the administrative structures in each country. For the samereason, the partner and stakeholders contacted/interviewed in each country may be slightlydifferent, with interviews focussed on the key relevant partners and stakeholders in each case.The case studies are presented in full in a separate volume (Part Two) of the Final Report.Results and information from this work are incorporated in the analysis that follows in thismain part of the Report.
8
In some cases (4 MS) more than one response were received by the various CAs involved.A package of the completed questionnaires has been submitted separately to the DG SANCO services.
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1.4.5. Interviews with key partners and stakeholdersThe partners and stakeholders selected for interview at EU and MS level (for the case studycountries) cover the range of sectors of relevance to this study.1.4.5.1. At EU levelAt European level, the interview programme has included, as partners, the Commissionservices (DG SANCO, other relevant DGs in particular DG Agriculture and DG MARE). Interms of the stakeholders, it has included both EU and national professional organisations.All of the interviews were carried out face-to-face. In view of the large number ofexperts/representatives involved in some cases, where applicable, interviews were conductedby grouping together some of the partners/stakeholders. The latter has been particularly thecase in terms of the interviews with the European professional associations.The final list of interviewed professional organisations is presented inTable 1-1.Several ofthese interviews have been conducted with a group of relevant experts or representatives. Theaim has been to enlarge the debate process to a larger number of people from the various MS,so as to provide different perspectives for the discussion and our analysis. This approach wasalso dictated by the fact that several of the professional associations are umbrellaorganisations representing a wide and often divergent range of views from their nationalmembers.For the same reason, these interviews were conducted using a step by step approach with mostof the EU professional associations. This has involved:1. A preparatory phase with the lead organisation prior to the full interview with itsmembers. The objective has been to focus the discussion during the main interviewon identifying key issues for the organisation as a whole, including common pointsand points where an internal debate may be in evidence;2. Main interview with the organisation and its members (where appropriate, e.g.UECBV, CLITRAVI, EDA, AVEC).3. A second interview which took place towards the end of the study period, to confirmthe points expressed during the first interview and also to focus the discussion onthe options for the future (second ‘group’ interviews were conducted with theUECBV, CLITRAVI and AVEC).
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Table 1-1 European professional organisations interviewedOrganisationUECBVCLITRAVIAVECCIBC/IMV/IBCEDAEUCOLAIT (a)EUROPECHE (a)Full nameEuropean Livestock and Meat Trading UnionLiaison Centre for the EU Meat Processing IndustryAssociation of Poultry Processors and Poultry Import/Export TradeInternational Butchers’ ConfederationEuropean Dairy AssociationEuropean Association of Dairy TradeAssociation of the National Organisations of Fishery Enterprises in theEuropean UnionEuropean Feed Manufacturers’ FederationFederation of Veterinarians of Europe
FEFACFVE
(a) This organisation was contacted for an interview, but no interview was conducted due to limited memberinterest. Member organisations in the case study countries were approached/interviewed in some cases.
The study team has synthesised the information and views collected through this process, andthese are incorporated in the analysis of this Report.In addition, the Consultants were invited by the French Ministry of Agriculture to attend aconference co-organised with the French Presidency on the modernisation of sanitaryinspections in slaughterhouses, and in particular the section dealing with the costs of officialinspections and the fee system10. The conference was attended by relevant CAS and delegatedbodies from various MS of the EU-27 and gave the opportunity to liaise and get feedbackboth a wider base of MS than the case studies alone.1.4.5.2. At MS level (case studies)The case studies have involved a detailed investigation of the system applied, the issuesraised, and the implications of the different systems. To this end, a second round of detailedinterviews was conducted in the case study countries. This interview process, in terms of thestakeholders contacted and the issues addressed, was developed in all of the six case study
10
Lyon 7-11 July 2008. Conference details can be found at:
http://pfue-inspectionsanitaireenabattoir.lso-intl.com/
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countries in close consultation with their permanent representations in Brussels, the centralnational CAs, and the European professional organisations.On average, the interview programme in each of the selected MS has covered at least 6-8interviews for the large case studies (Germany, Italy, the UK) and 4-5 for the small casestudies (France, Poland and Slovakia)11. Typically the interviews have included the relevantMinistries (Ministry of Agriculture, Ministry of Health), industry representatives (liveanimals, traders, meat processors, dairy processors, poultry sector, animal feed industry, fishindustry), and a national veterinary institute (where applicable and if active in this area). Thefull list of authorities/stakeholders selected for interview in the case study countries isprovided in Annex in Part Two of the Final Report.The bulk of the interviews were conducted face-to-face. As was the case with the Europeanstakeholders, several of the national interviews were carried out with a group of relevantofficials/representatives, and involved extensive preparatory work and meetings. Allinterviews were conducted in the national language, by appointing native language expertsfrom the Consultants’ team in charge of the case study in each country.The study team has processed the data and information from these interviews in two steps:•The first step involved the analysis and synthesis of the interview results in a MS report,summarising the key points of the MS position per question. This analysis wasincorporated in particular in Part Two of the Final Report.•The second step was the comparison and cross-referencing of the analysis carried outper MS, with the results of the analysis of the information, data and views collectedthrough the EU interviews and the survey. This analysis is incorporated in particular inthis main part of the Report.
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Case study definition in accordance with the project contract (FCEC/Agra CEAS offer of January 2008).
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2. Description and assessment of the current system of feesThis section presents the intervention logic of EU policy in this area, in particular of thefinancing provisions of Regulation 882/2204 (Articles 26-29) as set within the context of EUfood and feed law and wider EU policy principles and objectives. Based on this, the analysisdescribes the current enforcement of Articles 26-29 by the MS, assesses the extent to whichthe various principles and objectives have been achieved, and highlights shortcomings.The analysis is based on the synthesis of data and information resulting from the stakeholderinterviews, the survey and the case studies, as well as from the desk research and analysis ofsecondary data and sources of information.2.1. Intervention logic2.1.1. Principles and objectives of EU policyThe analysis aims to establish the extent to which the financing provisions of Regulation882/2004 serve the objectives and principles both of this Regulation and the wider objectiveswithin which this is set, in particular those of EU food and feed law and the Lisbon Strategy.In terms of objectives, the assessment of Articles 26-29 includes consideration of thefollowing:•Objectives ofRegulation 882/2004:⇒to ensure a harmonised approach with regard to official controls;•Objectives ofEU food and feed law(Regulation 178/2002 and the Hygiene Package):⇒to ensure a high level of protection of human life and health and the protection ofconsumers' interests, including fair practices in food trade, taking account of,where appropriate, the protection of animal health and welfare, plant health andthe environment;⇒to achieve the free movement in the Community of food and feed manufactured ormarketed according to the general principles and requirements of EU law;•Objectives of theLisbon Strategy(interalia):⇒to promote better regulation and maintain/support competitiveness.In terms of principles, the analysis takes into account the need for Articles 26-29 to ensurerespect of:
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•The principle ofproportionality:as set out in Article 5 of the Treaty, EU Regulationshould not go beyond what is necessary in order to achieve the objectives pursued12;•The principle ofsubsidiarity:as set out in Article 5 of the Treaty, where objectivescannot be sufficiently achieved by the Member States and would therefore, by reason oftheir complexity, trans-border character and, with regard to feed and food imports,international character, be better achieved at Community level, the Community mayadopt measures13;•The principle ofFBO responsibility:actual Community food and feed law is based onthe principle that FBOs at all stages within the business under their control areresponsible for ensuring product safety14.2.1.2. The requirements for official controlsRegulation 882/2004 sets out requirements for the authorities in EU MS that haveresponsibility for monitoring and verifying compliance with, and enforcement of, feed andfood law (and animal health and animal welfare rules), i.e. the 'competent authorities' (CAs)responsible for organising and undertaking 'official controls' (OCs)15.This regulation sets out the general approach that must be taken, and the principles that mustbe adopted, by the authorities in EU MS. It also provides the legal basis for the EuropeanCommission to assess the effectiveness of national official control arrangements.Most of the provisions applied from 1 January 2006, while others applied from 1 January2007. However, a 1-year derogation (to 1 January 2008) was given to MS for the entry intoforce of the financing provisions of Regulation 882/2004 (Articles 26 to 29), which are thesubject of this study.A novelty of the new Regulation has been that CAs can delegate specific tasks to relevantcontrol bodies provided these meet certain conditions (experience, accreditation, staffqualifications, impartiality etc.) and are audited by the CA. This is a very sensitive issue as itraises concern that MS use their right to delegate to avoid accountability (including vis-à-visthe Commission). From the Commission’s point of view there should be only onecentral/single competent authority (or at least only one per type of controls, e.g. veterinary,phytosanitary, aquatic).
12
Preamble (48) of Regulation 882/2004; preamble (66) of Regulation 178/2002.Preamble (48) of Regulation 882/2004.Preamble (4) of Regulation 882/2004; Article 17.1 of Regulation 178/2002.
13
14
15
According to Article 2(1) of Regulation 882/2004,“‘official control’ means any form of control that theCompetent Authority or the Community performs for the verification of compliance with feed and food law,animal health and animal welfare rules”.
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2.1.3. The financing of official controlsThe provisions of Regulation 882/2004 relating to the financing of official controls arecontained in Articles 26-29.In summary, the main principles pursued in these provisions are the following:•Member States must ensure that adequate financial resources are made available forofficial controls (Article 26);•Inspection fees are imposed on feed and food business operators, common principlesmust be observed for setting the level of such fees and the methods and data used for thecalculation of the fees must be published or otherwise made available to the public(Article 27);•When official controls reveal non-compliance with feed and food law, the extra coststhat result from more intensive controls must be borne by the feed and food businessoperator concerned (Article 28).The requirements laid down in Regulation 882/2004 as regards charges for meat hygieneofficial controls were previously contained in Council Directive 85/73, as last amended byDirective 96/43 (Annex1.1).Regulation 882/2004, which supersedes the Directive, requiresthat, from 1 January 2007, MS must charge no more than the actual costs of controls and,other than in specified cases, no less than specified minimum charge rates. The Regulationeffectively allows MS to retain the charge rates set out in Directive 85/73 until 1 January2008, though as minima rather than as standard amounts. Some MS have altogether used thisopportunity to look at possible options to review their fee system.Within these boundaries, the Regulation leaves it to MS to determine the level of fees orcharges. For certain activities for which fee charging is ‘compulsory’ (Article 27.2), theminimum levels laid down in Annex IV (controls on domestic production) and Annex V(import controls) must be respected. Beyond this, the Regulation provides MS with someflexibility within which to determine the fee system, provided that specified factors are takeninto account. The key requirement is that fees should not be higher than the actual costs of theofficial controls.The minimum fee or charge rates in the Directive and in the Regulation (Annexes IV and V)are throughput rates for inspection costs relating to the slaughter per species/type of animal orbird. For controls and inspections connected with cutting operations, the fee is per tonne ofmeat entering the cutting plant for the purpose of being cut up or boned there.2.2. System descriptionThis section outlines and comments on the key elements of the operation of the currentsystem (Task1: system description)of the ToR.
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It is noted from the outset that in several MS the current system continues to be based on theprevious financing legislation (Directive 85/73); in these cases, draft proposals to enforceRegulation 822/2004 are currently undergoing the national legislative making process.2.2.1. Competent AuthoritiesAs already noted in the methodology section of this Report, a key observation – and challenge- of this study from the outset has been the very different level of structure and organisation ofthe CAs involved in the system of official controls in the MS. This includes both theadministrative structures in place for the collection of fees for the controls, and for theconduct of the controls. Two issues have in particular been identified:1. The organisational structure of the CAs responsible for the official controls. Dependingon the MS and often depending on the product sector, this may include central, regionaland district level administrations, as well as external delegated bodies (Agencies,Laboratories etc.). This issue is demonstrated simply by the list of CAs that respondedto the survey (Annex1).It is also confirmed by our review of the CAs performingofficial controls from relevant FVO reports and MNCPs (where available), which ispresented inAnnex 3.It is noted that current structures are dictated by the constitutional law and particularadministrative traditions of a MS, and are therefore not readily amenable to change.2. The staff composition (official veterinarians, hygienists and assistants) of the CAs andexecutive bodies responsible for performing the official controls also variessignificantly between MS. In contrast to the overall administrative structures referred toabove, the staff composition is subject to change.In particular, there is currently a trend in several EU MS to seek to rationalise publicservices, and as part of this trend, the veterinary services and their staff are beingreformed/restructured. In some MS (e.g. NL) the model of employment of the staffperforming the official controls is shifting away from the higher-cost direct payroll ofthe public service towards lower cost/freelance contractual arrangements; such optionsare currently also being examined in other MS (e.g. France, the UK).Both issues have financial implications in terms of the actual cost of official controls, andthese are of relevance to this study:•The addition of several layers of competent/executive bodies in the system of official
controls wouldà prioribe expected to have cost implications and needs to bejustified/supported on efficiency/effectiveness grounds.•Similarly, the use of appropriately trained (in the context of EU rules) staff employed on
a contractual basis over the alternative of highly qualified staff employed as officialcivil servants – without compromising the quality of the controls – could createsignificant cost savings. This appears to be the main motivation in the case of MS thathave adopted or are currently thinking of adopting this approach.
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More generally, both these issues have been a challenge for this study, as it is not easy toseparate the review and evaluation of the fees system from the overall organisation, structureand therefore cost of the official controls. They also have significant implications whenexamining the options for the future.The involvement of several layers of administration (either vertically within the same CA, orhorizontally across CAs, or at regional/local level) raises questions of conformity withRegulation 882/2004. The Regulation envisages that one central CA (Article 2.416) wouldnormally be responsible for the overall supervision and operational control of the system ofOCs. Furthermore, when the competence to carry out official controls has been delegated toan authority or authorities other than the central CA, efficient and effective coordinationshould be ensured between the CAs involved including at regional/local level (Article 4.3)and at vertical level (Article 4.5). More stringent provisions, including audits by the CAs,apply when control tasks are delegated to control bodies (Article 5).Both the desk review (analysis of FVO reports) and the case studies have shown that, inpractice, these provisions are not always complied with, and that the CCA does not alwayshave full control or information on the actual operation of the system when a number of CAsor delegated bodies are involved.It is noted that Regulation 882/2004 requires MS to draw up multi-annual control plans(MNCP) which will provide information on the structure and organisation of the systems offood and feed control, includinginter aliathe designation of CAs at central, regional andlocal level and delegation of tasks to control bodies (Article 42.2(c) and (f)). However, todate, such plans are not available in all MS, and even where they exist they are not publiclyavailable but can only be provided at the request of the Commission17. Consequently, it isdifficult on the basis of objective sources to establish how exactly competence for the officialcontrols falling under Regulation 882/2004 is organised at MS level.From the survey of EU-27 CAs it is clear that in many cases more than one CA is involved18.This issue was also highlighted in the case studies (Part Two of the Final Report).
16
Article 2.4 reads:‘Competent authority’ means the central authority of a Member State competent for theorganisation of official controls or any other authority to which that competence has been conferred.
Despite efforts to consult the MNCPs on this, the Consultants have only seen the MNCP in two of the casestudy countries. It is not known how many MS have drawn MNCPs, or how many MS have submitted those tothe Commission.Indeed, as is highlighted in the methodology part of this Report, separate responses to the survey werereceived from more than one CA in the case of four MS. One of these was Germany, for which responses wereseparately received from 13 out of the 16 Lander. In most of the other MS, although one response was received,there was a significant consultation process between the various CAs and/or bodies involved for the completionof the survey questionnaire.18
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2.2.2. Activities for which fees are collectedThe study has found that in practice fees are currently collected for the official control of thefollowing types of goods, establishments and activities:a)Fees collected on a ‘compulsory’ basis (Article 27.2)
The types of goods, establishments and activities, for the official control of which fees are tobe collected, is established in section A of Annex IV (concerning domestic production) andAnnex V (imports) of Regulation 882/2004. Fee collection for these activities is ‘compulsory’within the meaning of Article 27.2.From the results of the survey, 18 MS (including France, Germany, Italy, Poland andSlovakia) collect fees for all the activities according to Article 27.2; however, the remaining 9MS (including the UK) collect such fees only partly (Question1.4,Annex 2).Fees for milkproduction controls and fees for residue controls are the two types of control activities forwhich several of these MS do not collect fees, and at least 3 MS do not collect fees for a widerrange of activities.In the case ofmilk productioncontrols, although Regulation 882/2004 states that charges forofficial controls in dairy plants are compulsory (under Annex IV, section B, Chapter IV). Infact, however, these charges are not made - at least - in the following MS: UK, Germany,Netherlands, Latvia. Two main reasons are given for this:•It appears that this reflects the fact that there was some debate during the negotiationson Regulation 882/2004 as to whether fees in the dairy sector should be charged on a‘compulsory’ basis (within the meaning of Article 27.2) or not (in this case falling underArticle 27.1). This point was made in the UK case study, but also by some other MS inthe survey. Some MS argued that they should be considered to be compulsory, as theywere also mandatory under the previous charging legislation, Directive 96/43/EC(which amends and consolidates Directive 85/73/EEC). Other MS were opposed to theintroduction of mandatory fees in this area under the new Regulation. In the event, itwas agreed that MS would be required to impose fees on a compulsory basis only whenthey had previously done so under Directive 96/43/EC, but with the compromise thatthe minimum rates for milk production controls remained and could be applied by thoseMS where fees are imposed.•According to the European Dairy Association (EDA), the minimum fees charged on acompulsory basis (Article 27.2) for controls on specified substances and residues inmilk production exceed as much as 20 times the previous fee on these controls19.
The EDA have already expressed their concerns on this in a letter sent to DG SANCO on 13 February 2007.According to the fee calculation provided by the EDA, for the EU-25 the fee revenue collected according toDirective 85/73 amounted to Euro 2.64 million, while under Regulation 882/2004 it would reach Euro 44.32million (if applied in full throughout the EU-25).
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•The CAs of some MS complain of a lack of clarity on how minimum fees should becollected. This point was made in the Germany and Slovakia case studies, but also bysome other MS in the survey. In particular, the CAs in Germany claim that it is unclearwho is liable to pay fees for milk production inspections (dairies or farmers) and whichtime span the quantity of raw milk specified in Annex IV/B/IV refers to. Similarly, theCAs in Slovakia, although they are charging fees for milk production controls, theynonetheless commented that they were unclear whether dairy farmers or milkprocessing companies should pay these fees and the milk quantity to which this refers(whether total annual production or the volume subjected to controls).b)‘Non-compulsory’ fees (Article 27.1)
According to the survey, 19 MS (including the UK and Poland) collect fees for activitiesfalling under Article 27.1, i.e. for which fee collection is ‘not-compulsory’ within the meaningof Article 27.2 (Question1.3a,Annex 2).On the other hand, 6 MS (including France, Italyand Slovakia) do not collect fees for activities beyond those that they are obliged to collectunder Article 27.2, and 2 MS (Germany, Spain, i.e. with a decentralised management of thesystem) collect such fees in some regions but not in others.It would also appear that some MS use significant leeway in interpreting the term ‘routinecontrols’ of Article 28 of the Regulation (which provides for additional fees on expensesarising from additional official controls beyond the ‘routine controls’). The case of the feedsector is an example here. It would appear that Denmark is the only MS that charges fees for‘routine’ controls in the feed sector20. This situation is causing concern to the EU feedfederation (FEFAC).c)Fees collected at several points along the production chain (Article 27.7)
Another observation from the survey and the case studies is that, in practice, fee collectioncan occur more than once along the production chain for what would effectively constitute thesame controls. This is contrary to Article 27.7 which specifies that where several OCs arecarried out at the same establishment, these should be considered as a single activity and becharged a single fee. Evidence of double charging was found for instance in the meat sector inItaly, where industry stakeholders complained they paid double fees at both slaughter andmeat cutting points; and in Portugal and France where the fish industry appears to be payingfees at more than one of the three stages listed in Annex IV/B/V of Regulation 882/2004.Cross-charging or overcharging may also be occurring for the same controls performed morethan once when products are traded across MS. For example, dairy products from another EUMS brought to the NL to be further processed into other products for further export are re-examined on residues. The fact that these products are coming from an approved EU-factoryand from a MS applying a residue plan does not appear to be sufficient.
These are in addition to the ‘compulsory fee’ for the approval of feed establishments provided under section Aof Annex IV of the Regulation, which are indeed collected in most MS (and which according to FEFAC do notpose a problem to the EU feed industry).
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d)
Fees collected for OCs on products of non-animal origin
It is noted that both the survey and the case studies identified cases where fees are collectedfor products of non-animal origin. For example, in Belgium the current fee system collects abase contribution from all FBOs along the food chain including catering and controls onproducts of plant origin. The proposed draft law for the full enforcement of Regulation882/2004 in Italy is also moving to this direction. Fees for some plant health controls alsoappear to be currently being collected in Bulgaria and Greece.Fees are collected in several MS (including the UK, Denmark, Hungary, NL, Poland, andSweden) on import controls on products of plant origin (these can include food and non-fooditems). This appears to be taking place within Directive 2002/89/EC21 (import controls forplant health). This Directive, which came into full effect on 1 January 2005, required that allconsignments of regulated material be subject to a documentary, identity and plant healthcheck prior to customs clearance. The directive also introduced phytosanitary fees to coverthe costs associated with performing these checks. Minimum fees are contained in Annex VIIIof the Directive and several of the above mentioned MS are following these fees.2.2.3. Fee rates usedRegulation 882/2004 leaves it up to MS to define the actual fee system they will use, providedthat the two main boundaries set by the Regulation (minimum fees of Annexes IV and V, anda maximum set by the actual controls costs) are respected.In practice, the study has found that a multitude of scenarios arise out of these possibilities.The resulting picture is quite complex and can be confusing, or at least lack transparency forFBOs, with a multitude of fee rates applied for the various activities. It appears that theoriginal intention of the legislator was that only one of the two systems would be used, or atthe most, a combination of the minimum rates for all activities listed in Annex IV and V andflat rates for the other activities. From our interviews in the case study countries and theresponses to the survey it can be concluded that CAs have interpreted the relevant provisionsof Article 27 in various ways and rather ‘openly’; this is often attributed, by both the CAs andstakeholders, to a perceived vagueness or confusion in the formulation of the provisions in theRegulation.In particular, the following possibilities currently exist:
Council Directive 2002/89/EC of 28 November 2002 amending Directive 2000/29/EC on protective measuresagainst the introduction into the Community of organisms harmful to plants or plant products and against theirspread within the Community. Directive 2002/89 and Annexes amend Directive 2000/29/EC.
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i.
Flat rates or minimum ratesAccording to Article 27.4(b) fees collected for the purposes of official controls may be fixedat a‘flat-rate’or, where applicable, at the amounts fixed in section B of Annex IV and V(‘minimumrates’).The survey of EU-27 CAs has demonstrated that 18 out of the 27 MS (including Germany,Italy and the UK amongst the case study countries) in practice use a mix of flat rates andminimum rates (Question1.6a,Annex 2). A further 6 MS (including Poland and Slovakia) useminimum rates for the activities outlined in Annexes IV and V (and do not collect fees for anyother activities); on the other hand, only 3 MS (including France) use flat rates throughout allactivities for which fees are collected (within the meaning of either paragraph 1 or paragraph2 of Article 27).In the majority of cases where a mix of the two systems is used, the combination of flat ratesand minimum rates were for different activities but could also be for the same categories ofactivities within Annex IV and V.
ii.
Reduction below minimum ratesIn a number of cases the fee applied is below the minimum rates of Annexes IV and V. Inparticular, 12 MS may apply fees below the minimum rates, at least in some cases (Question1.8a,Annex 2).A provision for a reduced fee is made under certain conditions in Article 27.6 (“controlscarried out with a reduced frequency or to take account of the criteria referred to inparagraph 5”).In practice the lower fees are not necessarily always applied in accordancewith this provision. In most cases, MS were not able to provide a clear and completejustification for the fee reduction or the method applied for the calculation of the reduction asrequired by Article 27.6(c). This clearly contravenes Article 27.3 which stipulates that fees“shall not be lower than the minimum rates”specified in section B of Annexes IV and V. Insome cases (e.g. France, Italy), lower fees appear to apply simply because they are based onprevious legislation (notably Directive 85/73/EC). However, it is noted that the transitionalperiod during which such fees could continue to be charged expired on 1 January 200822.
iii.
Flat rates on throughout or time basis
Where flat rates are used, the rates can be expressed on a throughput basis, as is currently thecase for the minimum rates specified in Articles 26-29 (i.e. on an animal or tonnage basis), orthey may be on a time basis i.e. for the actual time during which the OCs are performedmultiplied by the fee of the staff performing the OCs. In the latter case, the rates arefrequently expressed in complex calculations involving different fee rates (e.g. depending onwhether official veterinarians or auxiliaries are involved) and the particular time of the
Both France and Italy are currently discussing legislation with a view tointer aliaadjust all rates to complywith at least the minimum rates indicated in Annexes IV and V.
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inspections (e.g. different rates for normal business hours and non-business hours, holidays,overtime etc.). In several MS, a flat minimum rate topped up by a time based fee is used.2.2.4. Determination of the feeArticle 27.4 stipulates that, where flat rates apply, these may be fixed“on the basis of thecosts borne by the CAs over a given period of time”(paragraph 4(b)) and that they“shall notbe higher than the costs borne by the responsible CAs in relation to the items listed in AnnexVI”(paragraph 4(a)).Again, both the survey results and the case studies have demonstrated that the provisions ofArticle 27.4 are not being fully respected. In particular the following problems have beenidentified:•The calculation method used for the determination of the flat rate is not alwaysavailable, or at least has not always been communicated to either the Commission or theConsultants (although Article 27.12 requires MS to make the calculation method publicand to communicate it to the Commission). From our review of the notification letterssubmitted by MS to the Commission pursuant to this Article, MS have not always madethis explicit to the Commission (Annex1.2);•In several of those cases, where the calculation method has been made available, it isnot transparent what exactly the various cost categories of the calculation have includedand/or by which CA they have been incurred, and which time period these costs refer to;•In the case of the 3 ‘criteria’ or cost categories that should be included in the calculationaccording to Annex VI (1. staff salaries; 2. staff costs including overheads; 3. laboratoryanalysis and sampling), it is not sufficiently transparent whether the actual costs used byMS strictly reflect the costs directly associated with the carrying out of official controls.It is noted that this has emerged as the most controversial point of the fee calculation.The lack of precision from MS CAs on these costs is often attributed to the perceivedvagueness in the formulation of criteria in Annex VI, which results in MS considering ittheir right to add costs that are not necessarily justified in that they are directly linked tothe official controls.Finally, as already discussed under section 2.2.3, in most cases of fee reduction neither thejustification nor the calculation applied has been clearly communicated by MS.2.2.5. Fee collection method and use of fee revenueThe rationale for the whole system of the charging and collection of fees is to cover the costsof the official controls, thereby ensuring that “adequatefinancial resources are available toprovide the necessary staff and other resources”(Article 26).In practice, in the majority of MS the revenue from the collected fees is incorporated into theState’s general budget, either in its entirety (11 MS, including France and Slovakia), or in part
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(7 MS, including Germany, Italy, Poland and the UK). Where this occurs, especially wherethe entire amount of the fees collected is incorporated into the general budget, there is for themost part no guarantee how this is to be used subsequently. Only 9 MS claim to be i.e.‘ringfencing’ revenues specifically for the CAs performing the controls (Question1.10,Annex 2).Most likely related to this, 14 MS (including Italy, Slovakia and the UK) have clearlyindicated that they do not cover the costs occasioned by the official controls through thesefees (Question1.9a,Annex 2).Only 7 MS (including Poland) claim costs are being covered,while a further 6 MS (including France and Germany) claim this is possibly occurring insome cases (some activities; some regions) but not in others. An overview of the extent towhich MS manage to cover the costs of the official controls through the collected fees isprovided below inTable 2-1.Table 2-1 Share of the costs of official controls covered by fee revenueCountry/YearBELGIUMBULGARIACZECHREPUBLICESTONIAFeed controlFINLANDState Food control(meat inspection)Municipal food controlVeterinary BorderControlHUNGARYIRELANDMeatMilkAnimal feedImports of POAOSector (a)200541,99%n.a.36%52%31%104%98%20%97%60%48,5%90,0%82,0%n.a.~50%70%36,5%75%n.a.52,2%43%200645,86%25%33%49%28%n.a.99%20%97%60%37,7%90,0%80,0%n.a.~50%65%36,9%86%60%55,3%41%200738,74%29,3%28%46%20%54%92%20%97%60%42,0%90,0%76,0%27,0%~50%65%39,4%81%50%51,6%43%
ITALY (b)LUXEMBOURGMALTANETHERLANDSROMANIASLOVAKIAUK
(a) all sectors covered, unless explicitly specified(b) approximate estimate provided by the CAs; detailed data not available
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Source: survey of the EU-27 CAs
Table 2-1for the most part covers all controls conducted under Regulation 882/2004, thesituation appears to be better in the case of import controls, for which Article 27.8 stipulatesthat these fees should be paid to the CA in charge of import controls. However, even in thiscase, the information collected from the survey suggests that Article 27.8 may not alwaysnecessarily be complied with particularly in those 11 MS where the fee revenue isincorporated into the general budget23.While the manner of fee collection and use is one key reason why the costs of the officialcontrols are in most cases and in most MS only partially covered, another key reason is thatthe level of fees is often insufficient to cover the costs. This would suggest that fees have beeninappropriately determined in the first place, and then inappropriately collected and used.These results suggest that for the EU as a whole, in part due to ambiguities within the text, therationale and desired interpretation of Regulation 882/2004 has not been sufficiently clearlyunderstood and that as a consequence the objective in terms of the establishment of a moreuniform system of fee collection has largely not been achieved to date.Neither the survey, nor the case studies, established any cases where a direct or indirectrefund of the fee was made, unless in cases where this was collected in error (Article 27.9).There is therefore no evidence to suggest that this may be occurring.2.3. Evaluation of the current situationThis section responds to the questions raised inTask 2of the ToR (evaluation of the currentsituation), notably to:••Indicate the main strengths and weaknesses from the operation of the current system; and,Identify key problems and shortcomings that need addressing in the future (Task3).
Within the wider context of the EU intervention logic in this area (section 2.1), the currentsituation is evaluated in particular in terms of the system’s contribution to the achievement ofthe following two objectives:i.ii.A functioning internal market;Improving and maintaining efficient and effective Official Controls (OCs) in theCommunity.
Before addressing these issues, an overview is provided of the current state of enforcement ofRegulation 882/2004, summarising the key points from the previous section.
In the case of France and Slovakia, which were case study countries, fees were used for these controls andcovered their cost.
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2.3.1. Enforcement of Article 27 of Regulation 882/2004A priori,the provisions of a Regulation should be directly enforceable in MS. However,Article 27 of Regulation 882/2004 generally follows the subsidiarity principle in that MS candecide whether to use the specified minimum rates or to charge for official control activitiesaccording to the actual cost of undertaking them24. This effectively allows some discretion toMS to opt for one of the two fee systems, and in the case of the flat rate system to set the levelof fees according to the costs of OCs actually incurred. There are further provisions allowingMS to reduce fees below minimum rates under certain conditions.The analysis of section 2.2 has demonstrated clearly that there is a significant degree ofvariation in the enforcement of the financing provisions of Regulation 822/2004.Underlying this, there is a perception – documented in some cases by hard evidence (e.g.FVO reports) - of significant variation in the organisation and effectiveness of the OCs bothbetween and within MS. It has not been within the scope of this study to address the issue ofthe performance of the OCs as such. However, this variability has important implications interms of the actual costs of the controls and in terms of the national approaches that arefollowed to recover the costs incurred through the fees25.Clearly many of the origins of these variations reside in the differing evolution ofadministrative structures and of the system of official controls in each MS.Beyond this, however, there is a strong and generalised perception that CAs have ratherliberally interpreted the provisions of Articles 26-29, in ways that diverge from the intentionof the legislator, and that this was made possibleinter aliabecause of shortcomings in boththe underlying principles and the formulation of Regulation 882/2004.Furthermore, the study has found that, in MS with decentralised management of the system,the relatively ‘liberal’ interpretation of the Regulation by the CAs has compounded the issuesstemming from the devolution of powers, to create a situation of limited central control overthe regional/district authorities in terms of fee determination, collection and use. This wascommonly observed in MS such as Germany, Italy and Spain.
This is not the case with respect to Article 28 on charges where additional costs are incurred following non-compliance. Here the actual cost of further work by the CAs must be charged, although this Article is alsointerpreted differently in the different MS.Insufficient training, staff resources, facilities and equipment are often noted in FVO reports on officialcontrols for which fees are normally collected under Regulation 882/2004, such as those in connection withcontrols on imports of products of animal origin at BIPs, controls on animal feed, residue controls and foodhygiene inspections and controls (Annex1.2).These shortcomings are in most cases due to insufficient financialresources. Our review of relevant FVO reports has identified several such cases, even in more recent missions(2008). More recent examples of FVO reports noting insufficient resources include: Romania (2008-7748),Greece (2008-7724 and 2008-7695), Portugal (2008-7745 and 2008-7696), and Bulgaria (2008-7747). Earlierexamples (from 2006, 2007) include a large number of MS.25
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This in turn gives rise to various concerns relating to the functioning of the internal marketand the effectiveness and efficiency of the system to deliver the level of OCs required byRegulation 882/2004, the Hygiene Package and other relevant legislation (as listed inAnnex1.1).These issues are discussed in the following sections.2.3.2. Contribution to the functioning of the internal marketIn terms of achieving internal market objectives, MS generally welcome EU legislation withrespect to fees for official controls and they broadly agree with the rationale of Regulation882/2004.While there is consensus on the rationale, the key question that arises here is whether theheterogeneity in the application in practice of the financing provisions of Regulation882/2004 results in situations of unfair competition within the internal market. Thisencompasses any potential distortions in competition that can occur between MS, within MS,between sectors of the food industry, according to the scale of establishments, as well asdistortions at the level of imports.These issues of distortion of competition at all these levels have been raised during the studyas follows.2.3.2.1. Distortions between MSThe issue of potential distortion at EU level was raised particularly by the EU meat industry.Stakeholders in the sector are generally concerned that the way in which the system of fees orcharges for OCs are set out in Regulation 882/2004 can cause distortions in competitionbetween MS. In almost all of the countries visited, stakeholders are concerned that theimplementation of Regulation 882/2004 by the national authorities can put them at adisadvantage compared to other MS competitors.In most cases, however, the industry was unable to substantiate these comments because ofthe lack of precise information on how rates are set and what they include in the different MS,and the consequent difficulty in comparing data.It is noted that the professional organisation representing the meat industry at EU level(UECBV) attempted recently to make a comparison of the various fee rates charged for OCsat slaughter and meat cutting points. Although detailed data were collected for a number ofMS, the UECBV came to the conclusion that it is virtually impossible to compare across theEU because fee rates are expressed in so many different ways.The results of the survey and of the case studies have confirmed the lack of clarity,transparency and uniformity in the approach of the various fee systems, which make the directcomparison of actual fee levels across the EU (and between sectors) difficult.As already highlighted above (section 2.2.3), current fee rates in the various MS may beminimum rates and/or flat rate; flat rates calculated using different calculation methods; orrates expressed on a throughput or time basis (the latter including many additional factors
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influencing the final level of the fee). Furthermore, there are differences in the range ofcontrol activities covered by the various fee rates (e.g. these may include laboratory andsampling costs for residue controls in some MS but not in others). For the purpose of makinga comparison it is therefore not clear whether the comparison is being made for the provisionof the same services. Finally, the whole production chain (from farm to slaughter to meatprocessing and retail/catering) differs in many ways between MS, making it difficult to isolatedifferences in competitiveness caused by the fee system or the level of fees as such.Across the EU fee rates currently vary within a considerable range. For example, fee ratespaid for the control on the slaughter of adult bovine animals can vary from Euro 2.3/head insome autonomous communities in Spain, to Euro 8.2/head in Denmark and between Euro 10-20/head in Sweden (against a minimum fee of Euro 5/head in Annex IV). Similar variations inscale can be seen on the fees charged for controls on the slaughter of pigs and sheep. Evenwithin MS the scale of the variation can be significant. For example, in Germany withinBavaria fee rates for the slaughter inspection of adult bovine animals ranges from Euro9.4/head to 12.9/head depending on the district.In summary, the following key factors may be included in the calculation affecting the finallevel of the fee:••••••••••••••Whether the rate is set per head-tonnes or on a time basis (time of staffperforming the official controls);The specific activities and services covered by the fees;Whether residue controls are included in the calculation;Whether other type of controls (e.g. BSE tests) are included in the calculation;The range of other costs included in the calculation of flat rates (criteria 2 and3 of Annex VI);The number of official veterinarians/auxiliaries on the slaughter-line, andwhether the speed of the slaughter-line is taken into account;Whether the size of the establishments is taken into account;Whether only veterinarians are employed for the OCs or also auxiliaries;Whether the staff performing the OCs are civil servants or under contract;Whether transport time is taken into account in the time calculation;Whether special provisions for increased staff fee rates apply after normalbusiness hours, public holidays etc.;The tasks carried out by FBOs’ own staff (such as in the case of the poultrysector);The level of salaries/cost of living in MS and of associated (social security)costs in the case of flat rates (criterion 1 of Annex VI of Regulation 882/2004);Whether MS aim for full cost-recovery;
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•
•
Whether any reductions are made for FBOs under Article 27.5 and 27.6 (risk-based reduced frequency controls and/or the interests of small transitional andgeographically remote businesses);Whether only the meat sector is charged for the official controls.
Moreover, several external factors will affect the overall cost of the official controls (and thusthe final level of the fee):•Efficiency factors: the efficiency with which the official control services areorganised and official controls carried out in the MS;Technological developments: for example, new technological advances thatchange the way in which official controls are performed26;Market/trade volumes and the structure of the industry in the MS: in the caseof import controls the costs of the inspection will depend to some extent on thevolume of trade entering the BIP; in the case of domestic controls, the size ofslaughterhouses / meat cutting plants and the speed of the line will affect thetime needed to perform the necessary official controls.
•
•
As a result, it is not always easy to attribute variations in fees between and within MS tospecific factors. For example, in the case of one meat company operating in both Sweden andFinland, in both MS it appears that the conditions and size of operations are the same, but inFinland the fees paid (pro-rata) are only 60% of what is paid in Sweden.On the other hand, beyond the widely held perception of the potential for distortion, the studyhas not identified any concrete cases or examples of distortion in competition between MS.Some MS (e.g. France and the UK) have commented that, taking the potential significance ofother factors into account, the current differences in fees alone are not considered to besufficient to induce a distortion in competition between MS or to be decisive determinants ofthe competiveness of the meat industry in one MS compared to another. This is because allthe other factors influencing the costs of meat production are far more important thanpotential differences in fees.For example, a distortion would be caused if the impact of different fee regimes and fee levelsbetween MS leads to a greater movement of livestock in order to reduce slaughter costs.However, the cost of transportation would have to be lower than the difference in fee tojustify this and this will tend to limit intra-EU movements (whether between or within MS).Differences in fees are nonetheless acknowledged as one of the factors that can affectcompetitiveness, especially when other factors (such as production costs, transport costs, costsrelating to animal health and welfare, market conditions etc.) exist at the same time, and
For example, inspection by camera appears to be developed in the poultry industry replacing previous, morecostly, physical inspections.
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therefore the compounded impact can put the meat industry in a MS at a competitiveadvantage or disadvantage. For example, the pig and sheep sectors across the EU havesuffered significantly in recent years from rising production costs, animal health problems andadverse market conditions. These problems have been particularly acute in some MS andregions, and differences in fee levels could bring the sector in these markets closer to the pointof collapse.It is important also to consider fee levels in relation to the unit value of products. Differencesin the level of fees can be a more important factor in those livestock sectors where the unitvalue of products is relatively low. For example, a small difference in fee in relation to beefmight not be significant, but the same difference in monetary terms in relation to pigs wouldbe significant and in relation to sheep could be very significant.Finally, it is noted that, while the industry recognised that there are likely to be legitimatereasons for differences in the fees charged such as the cost of living differences between MS,the common concern shared by all is that they should not pay more for the OCs than is thecase in other MS.2.3.2.2. Distortions within MS (between regions)The issue of potential distortion in competition between regions within MS was of particularconcern to those MS that have devolved power from central to regional and even districtlevel. This included such MS as Germany, Italy and Spain (but not the UK at present). Acommon perception in these MS is that the financing provisions of Regulation 882/2004, asthey currently stand, allow MS sufficient room for a relatively open interpretation whichresults in widely divergent fee systems and fee levels.Here too, it has been difficult to substantiate this perception with concrete examples ofdistortions, although it has been less difficult than in the case of the alleged distortions ofcompetition between MS. Again, as explained in the previous section, it is noted thatdifferences in fees are considered to be a relatively insignificant factor of competitivenesswhen compared to the actual costs of production, but can compound the impact of these keycompetiveness factors.The most documented examples on regional distortions at present can be found inGermanywhere a number of court cases have been filed since the beginning of the system (Directive85/73) regarding various issues of implementation (and more recently in relation toRegulation 882/2004). These cases, which are all driven by industry complaints, point to therelatively liberal approach taken at Lander and district level in defining their own systems: todetermine the activities for which fees are charged, the fee calculation method and the variouscost components taken into account for the calculation of the flat rates. This situation resultsin highly divergent levels of fees for the different activities across Germany. According to theGerman industry, the outcome is significant confusion and lack of transparency in the system,and a loss of competiveness for FBOs located in regions/districts which pay what are seen asunreasonably high fees defined on the basis of relatively high costs of official controls.
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The inclusion in the calculation of administrative costs as well as of some other costs listedunder the 3 criteria of Annex VI of the Regulation (e.g. laboratory and testing costs), has beena particularly controversial issue. These costs are defined largely at the discretion of theregional/local authorities, and can vary significantly between regions/districts as they are onlybroadly defined in the Regulation.Another controversial provision is the reference to “minimum rates” which is interpreted bysome CAs strictly as an absolute minimum that should not be undercut under anycircumstances, notwithstanding the provisions of Article 27.6 that allow a reduction in therates. In MS where this occurs, meat establishments and slaughterhouses complain that theysuffer a competitive disadvantage vis-a-vis their competitors in other regions paying feesbelow the minimum rates.InItaly,stakeholders expressed serious concerns that the heterogeneous application ofminimum fees among Italian regions and provinces leads to distortion of competition amongFBOs at regional and local level. Although current drafts for a new law attempt to reducethese discrepancies, there is scepticism regarding the likelihood of implementation.Similar concerns relating to regional variations were expressed inSpain,the key issue beingthat there are regions which require payment of the minimum fees, regions which requirereduced fees, and regions which do not require any fees to be paid at all.TheUKdoes not have any such issues at present as the devolved administrations within thecountry implement Regulation 882/2004 in the same way. However, distortions may becomeapparent in future if different systems are implemented in different parts of the UK (the UKsystem is currently under review the intention being to move to fuller cost recovery from 1April 2009).2.3.2.3. Distortions between sectorsThe following elements of potential distortions between the various sectors covered byRegulation 882/2004 were identified by the study:•The meat sector appears to be at a disadvantage vis-à-vis other sectors of the food industry.Although Regulation 882/2004 covers the entire food and feed industry, the fee system asdesigned at present particularly targets the primary processing stages of the meat sector.The detailing of activities for which fees should be charged as a minimum in Annexes IVand V is focused on these stages of the meat industry, in particular the red meat industry.The meat sector considers this unfair:oTheir main argument is that the performance of hygiene controls at slaughter or meatcutting point is done for the purposes of food safety along the entire meat valuechain, which means downstream chain participants benefit from the controls withoutcontributing to cover their costs. It is therefore argued that the total costs of officialcontrols incurred by establishments along the meat production chain should bedistributed among the actors involved, and this could be doneinter aliaaccording tothe degree of actual risk to food safety;
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oFurthermore, it is argued that with the evolution of the food value chain, hygiene
risks have shifted from slaughterhouses/meat cutting plants to the downstream stagesof the production chain (processing, catering, etc.), and consequently the entirerationale of the current official controls needs to be redesigned (this issue is dealtwith under section 2.3.3). Both industry stakeholders but also CAs and stateveterinary officers considered that the meat sector is, on the basis of risk to foodsafety, unfairly targeted by the current OC system. The processing sectors (forexample, manufacturers of meat products) and the catering sector (where a growingpercentage of the final preparation and consumption of meat or meat-based productsactually occurs) were highlighted as areas where risk to the consumer can beconsidered to be at least as high as those generated at the point of slaughter.•In terms of potential distortions between the poultry sector and red meat sectors, the mainpoint of difference is the ability of the poultry sector to use its own - appropriately trained -staff to assist official inspectors appointed by the government. This possibility currentlyexists for the poultry sector under Regulation 854/200427. Although only used at present bya relatively limited number of MS (e.g. the Netherlands and the UK,) other MS arecurrently considering similar approaches as this input can reduce costs and the fee payable.•Potential distortions between red meat sectors were also identified in more marginal cases,where MS/regional/local differences between fee rates can lead the currently sensitive pigsector and the particularly fragile sheep sector to become more adversely affected than thebeef sector. Such issues were for example highlighted in the UK and French case studies.•The milk sector is also considered to be unfairly targeted by Regulation 882/2004. Themost significant observation here is that the milk industry was largely unaware of itsinclusion in Annex IV of the Regulation up to its publication in 2004, as well as of thebasis on which fee rates were established in Chapter IV, section B of this Annex(“minimum rates for fees or charges applicable in milk production”). Although it isassumed that the milk sector was simply included in the Regulation because it wasincluded in the repealed Directive 85/73, the industry does not appear to have beenconsulted, and the fee rates are considered to represent a very significant and unjustifiedincrease from the rates provided in this Directive28. As a result, there continues to be greatconfusion and divergent approaches amongst MS in the application of Article 27 in themilk sector. As indicated in section 0, the study established that for these reasons, fees arenot collected in this sector in a number of MS (UK, Germany, Netherlands, Latvia), and
Under Article 5(6)(a): “Member States may allow slaughterhouse staff to assist with official controls bycarrying out certain specific tasks, under the supervision of the official veterinarian, in relation to the productionof meat from poultry and lagomorphs”.Annex B of Directive 85/73, as amended by Directive 96/23, provides for a fee of ECU 0.02 per 1000 litres ofraw milk, while Annex IV of Regulation 882/2004 provides for a minimum fee of EUR 1 per 30 tonnes and EUR0.5 per tonne thereafter. Although the Regulation does not specify the unit of milk production to which this feeapplies, if the fee quoted in the Directive is compared to the fee quoted in the Regulation on the same basis, itwould come to an approximate equivalent of EUR 0.6 per 30 tonnes of raw milk, i.e. the fee quoted in theRegulation represents a very large increase from the original level.28
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there are extensive complaints from the industry in the MS where fees are collected (e.g.Slovakia).2.3.2.4. Distortions according to scaleIn anticipation of potentially adverse impacts on small scale, traditional and geographicallyisolated meat establishments, Regulation 882/2004 provided for reductions below theminimum rates (Article 27.6) for business with a‘low throughput’or‘traditional methodsused for production, processing or distribution’or‘businesses located in regions subject toparticular geographical constraints’(Article 27.5 (b), (c) and (d) respectively).The study has found that:•First, the general economic context within which this sector operates needs to be noted.The structure of the slaughtering and meat cutting industry has undergone significantrationalisation in the last decade, continuing past trends whereby production isincreasingly concentrated in a smaller number of larger scale, more technologicallyadvanced establishments. This trend has been driven by a number of factors, includingtechnological progress, market developments (e.g. the need of the sector to respond tothe increasingly powerful buyers of the retail and catering sector), as well as the need tocomply with increasingly stringent legislation and the rising costs of compliance. Boththe industry stakeholders and the CAs have consistently indicated that the fees paid forOCs, although not a sufficient factor on their own, are nonetheless an additional factorin the costs of the operation of smaller scale and traditional establishments, thusaffecting final business performance.•Second, smaller slaughterhouses are generally more disproportionately hit by thecurrent fee system, including even cases where the special provisions of Articles 27.5and 27.6 have been used by MS. Small scale slaughterhouses and cutting plantsgenerally complain that the costs of fees for OCs are too high for the limited number ofanimals they slaughter, or for the small volume of throughput. This is generally feltmore in MS where flat rates based on actual inspection costs or time based chargesapply, and/or where no reductions below the minimum rates apply for this type ofbusinesses. For example, the charging system in place in the UK prior to 2001 wasbased solely on time costs and inspection times; as these were increasing rapidly, thesystem quickly posed a particular problem for smaller plants, many of which becameuneconomic.•Only a number of MS have adopted the provisions of Article 27.5. Such MS include theUK, Belgium and France. For example in the UK, there appear to be no distortionsunder the current system because operators have the choice of using charges based onthroughput or according to actual cost. In France and Belgium special provisions aremade for smaller FBOs or according to scale (volume of throughput).•Some MS have not used this possibility, either due to a strict interpretation of the‘minimum rate’ provisions (whereby they have not accepted these should be undercut,e.g. in the case of Germany) or because it was considered it would complicate the fee
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system to have differential fees (e.g. in the case of Slovakia under the new lawenforcing the provisions of Regulation 882/2004). In the case of Germany, the industrypointed to the extensive closures of small slaughterhouses in recent years, which are, atleast partly, blamed on the disproportionately high fees these slaughterhouses pay underthe current system. Representatives of small and medium sized slaughterhouses (e.g.from Bavaria) stressed that, in setting the fees, authorities should take into accountinteraliathe type of business concerned, as stipulated by Article 27(5), which it is argued isnot happening at present;•The situation is changing, however, as several MS are currently in the process ofdiscussing new legislation to fully enforce Regulation 882/2004. It is not clear whetherthis will leave small-scale, traditional and remote businesses better or worse off. Forexample, in the UK, the proposed time-based charging regime is expected to lead tosome distortions against this type of businesses as a result of the scale and degree ofslaughterhouse mechanisation, but a proposed subsidy system may correct for this,depending on how it will be implemented29. In France, where the current system of feeshas achieved what is considered a sensitive balance between larger and smalleroperators, the current debate on reforming both the official inspections system and thefee charging scheme has raised concerns for smaller businesses that the change maylead to higher fees.•The main advantage of the current EU system, where Member States can, in effect,charge anywhere from 0% to 100% of the full cost of controls, is seen by some MS(both at the level of industry stakeholders and at the level of CAs) as allowing thepossibility for lower costs to be charged for these more ‘fragile’ plants.2.3.2.5. Distortions at the level of importsSome concerns were raised at the potential distortion at the level of imports under the currentsystem, as BIPs can charge different rates across Europe depending on whether they followthe minimum rates of Annex IV or flat rates (based on actual costs).Currently 7 MS charge flat rates and 3-5 other MS charge a combination of flat and minimumrates on imports (i.e. flat rates on some products and minimum rates on others) (Question1.6b,Annex 2).Flat rates can be higher than the minimum rates, but in some cases were alsofound to be lower (e.g. France, Hungary, Spain for live animals, Ireland in some cases forhigh volume fish consignments).
If implemented as the proposals currently stand, the future system will involve a 12% increase in charges toFBOs (including 3% for inflation) while maintaining support for small and geographically isolated FBOs. Itappears that the UK government intends to direct subsidy towards some smaller operators as part of a policy toretain small, geographically isolated abattoirs because they contribute to other policy goals such as reductions incarbon footprint, disease control and support for rural economies. The industry would not object to this policy ifit is targeted to micro-businesses (which, account for between 1% and 2% of total UK throughput) such asremote abattoirs in, for example, the Highlands and Islands of Scotland, but would not support the policy if it istargeted to small/medium sized establishments located anywhere in the country.
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Again, in practice, whether this potential distortion will actually occur will depend on a rangeof other factors, notably the transport costs involved and logistical considerations.No documented evidence of such distortions was found, but both the industry and the CAshave expressed concern this may well be occurring, especially in closely situated BIPs.2.3.3. Contribution to maintaining the efficiency and effectiveness of OCsThroughout this study, widespread concern has been expressed by stakeholders at all levels(authorities, industry) that the activities listed in Annex IV (and to a lesser extent the importcontrol listed in Annex V) do not cover the same range, level and standard of controlsthroughout the EU. This raises questions of efficiency and effectiveness in the system ofofficial controlsper se,which are beyond the scope of this study. However, of relevance tothis study is the extent to which the financing of OCs contributes to alleviating or tointensifying this lack of homogeneity and the potential deficiencies in the EU system ofofficial controls.Articles 26-29 of Regulation 882/2004 lay down the principle and the means for the financingof official controls with a view to ensuring that MS have sufficient financial resources to carryout the controls.A priori,the principle of guaranteeing sufficient funds for the financing of the official controlsin all MS of the EU-27 (Article 26) should contribute to alleviating any lack of homogeneityin carrying out the controls, or - at the very least - guarantee that a certain homogenous(minimum) level of controls is applied throughout the EU. This principle is widely endorsedby all stakeholders.Beyond the principle as such, the question arises of whether the means that Articles 27-29 putat the disposal of MS contribute to this objective. This refers in particular to the extent towhich the compulsory application of a fee to finance these controls (Article 27) can guaranteethat MS have adequate funds to carry out the controls, at least at a certain (minimum) uniformlevel throughout the EU. This point is widely contested by stakeholders in all MS.In particular, the study has found that two key questions are raised: first, in terms of theadequacy of financial resources available to MS to carry out the controls; and, second, interms of whether the controls are currently carried out in the most cost-efficient manner. Thesecond question touches on issues of the organisation and the principles of the officialcontrols which are beyond the scope of the study, they are therefore included here only to theextent they are relevant to the discussion.2.3.3.1. Adequacy of the financial resourcesAs indicated in section 2.2.5, the survey results suggest that the rationale for the system of feecollection (to ensure adequate financial resources in the meaning of Article 26) is largely notfulfilled at present for the EU as a whole.
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In the majority of MS the revenue from the collected fees is incorporated into the State’sgeneral budget, either in its entirety (11 MS, including France and Slovakia), or in part (7 MS,including Germany, Italy, Poland and the UK). Where this occurs, especially where the entireamount of the fees collected is incorporated into the general budget, there is for the most partno guarantee how this is to be used subsequently. Only 9 MS claim to be ‘ringfencing’revenues specifically for the CAs performing the controls (Question1.10,Annex 2).Most likely related to this, 14 MS (including Italy, Slovakia and the UK) have clearlyindicated that they do not cover the costs occasioned by the official controls through thesefees (Question1.9a,Annex 2).Only 7 MS (including Poland) claim costs are being covered,while a further 6 MS (including France and Germany) claim this is possibly occurring insome cases (some activities; some regions) but not in others. An overview of the extent towhich MS manage to cover the costs of the official controls through the collected fees isprovided inTable 2-1.As illustrated, the costs of the official controls are in most cases and inmost MS only partially covered by the collected fees. This is due both to the manner of feecollection and channelling (via the State Budget), but also because the level of fees is ofteninadequate to cover the costs.Although the partial coverage of the costs of official controls by the collected fees does notnecessarily imply that the financial resources put at the disposal of the system of officialcontrols are not sufficient, it would be difficult to establish that they are.The reason is that there is lack of transparency at MS level in trying to determine both thetotal costs of the official controls, and the actual standard of controls that this represents.Furthermore, it is difficult to compare between MS, because both the costs and the actualcontrol activities encompass different elements in the various MS (as discussed in section2.3.2).This is reflected in the manner of calculation of the flat fee, in the MS/cases where flat ratesapply, where in most cases little information is available beyond the generalised statement ofthe application of the 3 criteria of Annex VI of Regulation 882/2004. In practice, it appearsthat the 3 criteria are applied rather liberally, encompassing a whole range of cost factors,which are not necessarily the same in all MS, and do not necessarily relate to the actual costsof the official controls. The study has established that there are cases where the fees seem tobe charged at a higher level than what would be justified by the controls undertaken, while inothers the fees are not adequate to cover the costs.In terms of comparing across the EU, an important determinant factor in assessing theadequacy of funds, is the actual cost of living in the various MS. The available data suggeststhat there is wide variation across the EU-27. According to Eurostat, labour costs vary by afactor of one to twenty in the EU2730(2006 data, based on full time employment in industryand services). Comparative price levels by Eurostat show that in 2007 prices paid byconsumers in the NMS remain typically at less than 80% of the average price levels in the
This was the difference in terms of average hourly labour costs in Bulgaria and Romania (the lowest in theEU) compared to the EU27 average.
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EU-2731. Statistics on the costs of living suggest that this can vary by up to 20 percentagepoints across key cities of the EU-1532.It is therefore not surprising that in the MS/cases where the minimum rates apply, in somecases the level of fees is not sufficient to cover the costs of the controls while in others it isconsidered excessive, the final outcome being highly dependent on the cost of living in thevarious MS.2.3.3.2. Cost-efficiency issuesA number of cost-efficiency issues have been identified during this study, and these relateboth to the current organisation and principles of the official controls and theirimplementation in practice. As already indicated, some of these issues extend beyond thescope of the study; they are therefore only discussed here to the extent they are relevant in thecontext of this study.a) Staff costsThe most important element of the costs of official controls is staff costs. In relation to this,the following factors account for significant differences between MS:i.ii.iii.The number of official staff employed to carry out the controls;The profile of the staff used in the official controls; and,The wide variation in salary and costs of living levels, as discussed above.
Regulation 882/2004 refers only to the general requirement to have “asufficient number ofsuitably qualified and experienced staff”(preamble 11 and various Articles of theRegulation). In practice, there is wide variation between MS in the numbers and profiles ofstaff employed to carry out official controls, and this appears to reflect long-standinginstitutional and organisational issues rather than real need. Here too, there is a certain lack oftransparency: no up to date data are currently available (example from the FVE) that wouldallow a comparison between MS33.
Eurostat: comparative price levels of final consumption by private households including indirect taxes (EU-27=100), 2007 data.32
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Source: Mercer's 2008 Quality of Living survey.
If formal data was available it would allow, for example, a comparison of official veterinarian and auxiliarynumbers between MS and in relation to the human population, or in relation to production and trade volumes.Such a comparison is not always straightforward, because the national and local structures of both theadministration and the food sector need to be taken into account. Despite such shortcomings, the comparisonwould still be valuable in that it would enable some preliminary observations to be made, which would highlightwhether there is a need for the review of the current structures.
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In the case of products of animal origin, the profiles and tasks of the staff involved in theofficial controls are laid down in Regulation 854/200434. The Regulation provides for thetasks to be undertaken by the official veterinarian per type of activity, and the tasks that canbe carried out by official auxiliaries under certain conditions; in the case of the poultryindustry, own staff can be involved in these inspections. Within these general parameters MSare given the freedom to implement the staff structure that best fits their needs.The study has found that the current organisation of the veterinary services staff in the MSgenerally lacks motivational character and does not provide any incentives to cut back onthese costs. In particular:•The balance in the use of official veterinarians versus auxiliaries for the officialcontrols, appropriately trained in both cases, is currently generally considered to beunsatisfactory in most MS.•The employment and remuneration conditions of the staff are in many cases questionedfor raising costs.The UK industry criticises the absolute requirement to use government employees asthe official veterinarians for the inspections, which it argued imposes high costs on theinspection function. The case studies established that such criticisms are shared by themeat industry in Germany, Italy, France and Poland, as well as more generally acrossthe EU (UECBV).There are further criticisms on the way salaries and working conditions are negotiatedbetween the CAs and these employees, reportedly leading to higher costs (e.g. Poland,Germany35, Denmark36).•The fees paid by the industry do not appear to be based on the actual level of servicesprovided, at least in the red meat sector. This therefore acts as a disincentive torationalise costs.According to the UECBV, the fixing of the minimum fees paid by slaughterhouses(Annex IV) on a per head basis, in combination with minimum inspection times and
According to preamble 9 of Regulation 854/2004: “officialveterinarians to carry out audits and inspections ofslaughterhouses, game handling establishments and certain cutting plants. Member States should havediscretion to decide which are the most appropriate staff for audits and inspections of other types ofestablishments”In Germany, the level of fees is negotiated between the district or municipal authorities and the German CivilServants’ Union (DBBBeamtenbund und Tarifunion).The meat industry criticised the negotiation processwhich, to their view, hinders an efficient deployment of the existing veterinary personnel.In Denmark, the exact number of official inspectors to be used per number of animals is stipulated within theLaw. The setting of this number is reported by industry to be largely union driven. The industry claims that itdoes not realistically take into consideration key factors of the production process, such as the speed of the line.3635
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maximum inspection targets as has been introduced by several MS (e.g. Denmark),leads to disproportionately high veterinarian fees and does not reflect actual costs37.At cutting plant level, it is argued that the existing fees based on meat volume do notappear to relate directly to the costs involved. Official controllers only need to bepresent in cutting plants for a limited time (as little as twice/week for a few minutes,which is the frequency appropriate to achieving the objectives of Regulation 854/2004),but cutting plants have to pay on a throughput basis for the whole production volume(Euro 2 per tonne in the case of red meat).Consequently, the industry stakeholders see the need for a relaxation of the rules, to allowinter aliathe involvement of appropriately trained staff on contract, rather than higher costgovernment officials, to provide these services. They argue that effectively opening thecompetition between service providers would lead to a more cost-efficient system, whichwould be reflected in lower fees.In a number of MS reforms of this kind have already started (e.g. Netherlands), or a debate iscurrently under way (e.g. the UK, France), targeting these issues. In the Netherlands, sinceJanuary 2008, a new system is in place that uses contracted experts for the inspections. Theseare appropriately trained in accordance with the requirements of the Hygiene Package and arenot civil servants. The new system is believed to have opened up competition, and to havecreated the right incentives to improve efficiency.b) Administrative costsThis is the second most important cost element, reportedly accounting in some cases for asmuch as 25-30% of the total costs (e.g. some German Lander)38.In any case, there is a lack of transparency on the magnitude and the composition of theadministrative costs. This causes widespread confusion as well as concern amongst industrystakeholders that the CAs are in fact charging for costs which do not relate to the actualofficial controls, which in its turn creates mistrust regarding the efficiency and effectivenessof the current system of official controls.These issues are particularly prominent in Germany, where the relative share of administrativecosts that are taken into account when fees are calculated appears to vary significantlybetween and within individualBundesländer.This results in significant variation in final feelevels and, due also to the lack of transparency on how fees are actually calculated, createsdoubts with regards to the cost-efficiency of the system. Despite numerous court cases on this
Fees on a per head basis were introduced by Directive 85/73 and Decision 88/408. This denomination wasmaintained in Regulation 882/2004.According to information provided by the German industry. Again, limited data are available on this elementof the costs. Where data is available, the relative share of administrative costs tends to be very modest,suggesting that data only become available in the good cases.38
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and other related issues on the fee calculation in Germany, to date this issue remains largelyunresolved.Although most prominent in Germany, similar concerns were expressed by industryrepresentatives of other MS (e.g. Italy, Poland, Sweden, Denmark).The main criticism in all cases is actually directed at Annex VI of Regulation 882/2004,which defines the three types of costs on the basis of which fee calculation should take place.In particular, the point is made that Annex VI is formulated too broadly, thus leaving toomuch room to MS authorities for an open interpretation. As a result, it is largely left to thediscretion of MS to define and incorporate the various cost criteria in their fee calculation and,in particular administrative costs, which are not defined as such in Annex VI but appear to becovered by the general term ‘associatedcosts’(point 2 of Annex VI). As it stands, the criticsargue the system does not provide any incentive for authorities to rationalise on the variouscosts, particularly the administrative costs, and it is the industry that has to pay for this.c) The guiding principles of official controlsAccording to Article 3.1 of Regulation 882/2004, official controls should be carried outregularly,on a risk basis and with appropriate frequency,taking account of the followingfour factors:(a) Identified risks;(b) FBOs’ past record as regards compliance with the rules;(c) The reliability of ‘self-control’ systems (own FBO checks already carried out); and,(d) Any information indicating non-compliance.In practice, the study has found that currently these four factors are not sufficiently taken intoaccount in the way MS plan and implement their systems of official controls.Currently, the implementation of the provisions of Article 3.1 is very inconsistent across theEU-27. The discretion given to MS to implement the rules according to their needs andpriorities results in various approaches and modes of operation of the official controls. Whilstthis guarantees flexibility for MS to adapt the provisions to their own national and localconditions, there is scepticism on the part of the industry that MS are in fact avoiding much-needed reforms of the traditional organisation and implementation of official controls thatwould improve cost-efficiency as well as the overall effectiveness of the controls. This, inturn, has repercussions in the way fees are charged under Regulation 882/2004.In particular, the following points have been made during the case studies:TheUKmeat industry considers the above factors are not currently sufficiently taken intoaccount. They argue there is a need for greater consideration of risk, in particular the risk tohuman health, for which the meat industry considers itself disproportionately targeted vis-à-vis sectors downstream the chain (in particular the retail and catering sectors); greater use of
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risk assessments should therefore be made to correct this imbalance and provide a furtherincentive for good performance, which would result in lower costs. Also, at the moment, thereis little incentive in the system to promote the efficiency of the inspections at FBO level. It isargued this would help keep inspection costs down. Although Article 28 of Regulation882/2004 can be used to target FBOs with inefficient inspection structures and create anincentive to improve them, there are doubts as to how effectively these powers are currentlyused across the EU.InGermany,the meat industry strongly criticises the current basis of the frequency ofcontrols for failing to take sufficient account of the risk parameters involved and the actualrisk exposure. The industry believes that, in practice, meat hygiene controls could beconducted by less veterinary personnel than currently employed, by adjusting controlfrequency to an establishment’s actual risk profile; in many cases, the opposite appears to betaking place currently39. There have been some efforts on the part of the industry to correctthe problem, for example through the use of risk assessment models that assess the risk ofindividual establishments and appropriately adjust the frequency of the controls (e.g. poultryindustry; “GüthersloherModell”in the meat products industry). These models have beendeveloped by the industry and approved by the CAs,. however, these initiatives are relativelylimited at present, having been implemented on a pilot basis in only fewBundesländer40.InItaly,all of the different sectors acknowledged that the meat sector is, on the basis of theactual risk to safety, unfairly targeted by the system41. New draft legislation enforcingRegulation 882/2004 that is currently under discussion appears to address, at least in part,some of these issues: it spreads some of the fee charging across the various sectors, and itintroduces fee reduction for efficient large-scale establishments in the red meat sector on thebasis of the reduced unit time required for the inspections due to the high level of efficiency inthe way the sector operates (speed of the chain).Across the EU, the meat industry as represented by the UECBV, highlights what it considersto be the current failure of the implementation of Regulation 882/2004 to move in thedirection of proportionate and risk-based controls, and more self regulation and FBOinvolvement, according to the aims and principles of the General Food Directive (Regulation178/2002) and the Hygiene Package (in particular Regulation 854/2004). It is noted that thefinancing provisions of Regulation 882/2004 still refer to outdated legislation and make noreference to the Hygiene Package. The EU meat industry argues that, as it stands and as
There are cases where control frequency is adjusted to the number of establishments in place, rather thanactual risk. For example, if a veterinary works in a district where e.g. there are two meat establishments, controlfrequency will increase accordingly and be different than in a district where a veterinary e.g. has ten or moreestablishments to control.40
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For example, the “GüthersloherModell”model is applied mainly in North-Rhine Westphalia only.
The meat industry in Italy is further penalised by the fact that fees are charged twice, at slaughter and meatcutting points even where these activities are carried out in the same establishment. The current draft lawenforcing Regulation 882/2004 complicates this issue further, as it appears to extend fee charging also to meatprocessing establishments.
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currently implemented, the system of fees lacks incentives to promote improvements at bothadministrative and business level that would result in cost-efficiency gains. Suchimprovements would include the adjustment of controls on a risk-basis along the food chain,also taking into account the new tools available such as traceability and food chaininformation, and incentivising the adoption of HACCP and self-control systems by theindustry.This position is increasingly endorsed by a growing number of stakeholders. In a recentseminar on the modernisation of inspections in slaughterhouses organised by the FrenchPresidency, there was wide consensus across the EU amongst industry stakeholders andrepresentatives of the CAs, that due account needs to be taken of technological progress andthe increasing uptake of self-control systems (notably GHP and HACCP) following theintroduction of the General Food Law and the Hygiene Package42.
See for example, Seminar on the “Modernisation of sanitary inspection in slaughterhouses”, organised by theFrench Presidency, Lyon, 7-11 July 2008.
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3. Options for the future3.1. The development and assessment of the various options3.1.1. Range of options and scenariosThe analysis of the current situation has outlined various shortcomings arising from theenforcement of Articles 26-29 of Regulation 882/2004. In doing so, it has also highlighted themain challenges going forward in this sector, as imposed by both internal and external factorsaffecting the outlook for the future.External factors would include technological progress and its implications for the way officialcontrols are performed, globalisation issues and the need to support and maintain thecompetitiveness of EU industry in international trade, and the ongoing enlargement of the EUleading to increased variation in administrative structures between MS.At the same time, the orientation and principles of EU legislation are continuously evolving torespond to these challenges. In particular, the 2002 General Food Law and the 2004 HygienePackage have introduced a new integrated approach to feed and food safety which aims toensure a high level of food safety, animal health, and welfare and plant health within the EUthrough coherent farm-to-table measures, while ensuring the effective functioning of theinternal market.The study has investigated how the identified shortcomings relating to the current fee systemand to the future challenges lying ahead could be addressed via a series of options forimprovement of the financing provisions of the Regulation (Task3).A priori,the options to consider for the future would range from full harmonisation to fullsubsidiarity (Table3-1). Full harmonisation would involve a completely harmonised systemacross the EU27 with all MS paying the same fees for the same activities. Full subsidiaritywould mean repealing Articles 26-29 of the Regulation, thus allowing MS to develop theirown systems for the financing of official controls.A range of other possible scenarios can be identified between these two extremes. Indeed, asthey currently stand, Articles 26-29 combine subsidiarity (by giving MS the freedom todecide whether to use the minimum rates of Annexes IV and V or to calculate flat rates basedon costs, and the fact that MS can decide which sectors to includeinter aliavia Article 27.1)with a certain degree of harmonisation (in that MS can adopt the same minimum rates andshould comply with certain common rules and criteria). Maintaining the status quo(donothing)is indeed one of the options for the future considered by the study.In order to illustrate the various options and scenarios, the key components of the system arepresented inTable 3-1and set against certain key scenarios. It is noted that the presentedscenarios consist of various possible combinations of the individual components of thefinancing system, as identified by the study.
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Table 3-1
Range of options, scenarios and componentsComponentsHarmonisation(b)FullCompulsoryScenario 1CompulsoryScenario 2CompulsoryStatus quo:current systemMixCombinationScenario 3Optional (Article26)Scenario 4Optional(Article 26)Subsidiarity(b)Full
R 882/2004 (a)
Art 26, Art 27.2Art 27.1Art 27.3
Art 27.4Annex VIArt 27.5 to 27.7Art 27.3,Annex IV and V
Feescompulsory oroptionalFee levelCommon feelevels (define feelevels)FeeCommoncalculationmethod/modelFeeCommon level ofreductionsreductionsList ofCommonactivitiesactivities (definelist of activities)
Common feelevels (definefee levels)Commonmethod/modelCommonprinciplesCommonactivities
CommonprinciplesCommonprinciplesCommonactivities
Common fee levelsfor compulsoryfees onlyCommon principlesCommon principlesCommon list onlyfor compulsoryfees
CommonprinciplesCommonprinciples
RepealArticles 27-29
RepealArticles 26-29
Potential to extend to other sectors / along the food chainArt 27.8Art 28, Art 29Art 28.12Fee collectionPenaltysystemMS reportingtoCommissionCommonpenaltiesCompulsory fullMS reporting(regular report onoperation ofsystem andamount ofcollected fees)CommonprinciplesCompulsoryfull MSreporting(regular reporton operationof system andamount ofcollected fees)CommonprinciplesAs currently(MS obligedto publishcalculationmethod)CA defined forimport controlsCommonprinciplesMS obliged topublish feecalculationmethod, includingfor fee reductions
CommonprinciplesAs currently (MSobliged to publishcalculationmethod)
MS obliged tocommunicatethe costs ofOCs and howcosts arecovered
(a) Reference in the current provisions of Regulation 882/2004 to the various components of the fee system
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(b) ‘Common’ refers to the application of the same rules across all EU27 MS
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In particular, a number of scenarios were assessed within the following options43:1. Moving from the current systemtowards more harmonisationacross the EU;2. Moving from the current systemtowards more subsidiarity,or leaving moreresponsibility to MS;3. Theextension of the system to cover other sectorsalong the food chain;4.Maintaining the status quo (mixed system),but introducing certain improvements.The first three options were definedà prioriin the ToR and were developed further in thecourse of the study. Each option covers a range of scenarios, depending on the degree ofharmonisation, subsidiarity and sector coverage envisaged. It is noted that Option 3 relatesmore to the scope of the system than the mechanism to be used and therefore transcends thevarious harmonisation/subsidiarity scenarios of (Table3-1).The fourth option, which was developed during the study, is based on the current combinedapproach and principles of Regulation 882/2004. It explores the type of changes that need tobe made, if the status quo is maintained, for a more effective and efficient implementation ofthe Regulation.The two extreme scenarios of full harmonisation and full subsidiarity represent polarisedsolutions which are not feasible to pursue, at least not at present. In particular, both optionswould require closer economic integration and greater harmonisation of the system ofofficial controls in the EU-27 than is the case currently. Due to the significant differences ineconomic conditions and the costs of living between MS which affect the actual cost of theofficial controls (as discussed in chapter 2), applying a fully harmonised system is likely toresult in overcharging in certain MS (particularly some of the NMS) and undercharging inothers. On the other hand, due to the significant differences between MS in the currentimplementation of EU hygiene legislation as well as in the uptake of self control systems,full subsidiarity (repealing Articles 26-29) could risk undermining the standard of thecontrols carried out in parts of the EU, thus potentially threatening the operation of the entireEU official controls system and the progress achieved so far.Both the survey and the case studies have demonstrated the need to maintain a balancebetween the two extremes. In the survey the majority of MS CAs indicated that subsidiarityor a mixed system (both of which allow a certain flexibility for MS to set the rates, within acommonly agreed set of rules) were the most favoured options (Question2.1,Annex 2).AllMS, including those that opted for harmonisation, indicated the need to maintain flexibility toadapt the system to national conditions.
The ToR referred to three specific options: harmonisation; subsidiarity; and, extension to other sectors.Following consultations with DG SANCO, these were re-formulated to the structure followed in this Report.
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The need to maintain flexibility, as well as promote simplification, is also central to theoperation of the enlarged Union of 27 MS.The various scenarios combine a number of different basic components which are discussedin more detail in the following section.3.1.2. Key componentsBased on the intervention logic of the financing system for official controls laid down in thecurrent legislation (Articles 26-29 of Regulation 882/2004), a number of key componentswere identified, from which the various initial options were developed into the scenariosexamined by this study. These components are depicted inTable 3-1as follows:•The basis of fee charging:fees can be charged on a compulsory or on an optionalbasis, or (as in the current system) as a combination of the two (i.e. for certain activitiesfees would be charged on a compulsory basis while for others they would be charged ona compulsory basis);•The level of fee rates:fee rates can be totally harmonised (same fees throughout theEU-27), or can be flexible but based on a calculation method, or (as in the currentsystem) can be a combination of the two (i.e. for those activities for which fees arecharged on a compulsory basis minimum fees are laid down; where costs are beyondthese levels and for other activities for which fees are charged on an optional basis, feescan be charged up to a total cost-recovery basis);•The fee calculation method:this can be a standard method/model throughout the EU-27, or can be flexible but based on certain key principles. A key principle in particularwould be that the fee is aiming at cost recovery as in the current legislation (i.e. feescannot be lower than the minimum, and cannot be higher than costs). The degree of costrecovery (partial or full) to be achieved/allowed would need to be established. Also, thequestion of whether the method needs to be defined by sector, by activity or for theentire food chain would need to be addressed;•Fee reductions and penalties:these can be standard applying throughout the EU-27, orcan be flexible but based on certain key principles. These principles could be those setout in the current legislation (Articles 27.5/6 and Article 28 respectively) or couldexpand on these;•List of activities covered by fees:the list can be finite and harmonised, or can beflexible but based on certain key principles, or totally flexible. Also, the list can remainas per the status quo, or revised (expanded/condensed).In terms of theprinciplesthat can apply for a more harmonised calculation of the fees and/orfee reductions/penalties across the EU, the level at which these should be set needs to befurther discussed. This refers in particular to whether these should be general principles onlyor whether they should be more detailed criteria defined at a technical level:
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•General principles would include: transparency in the calculation method of fee settingand for calculating fee reductions/penalties, on the basis of actual costs; and, theobligation for MS to communicate these to the Commission and the public.•Detailed technical criteria would include for instance the calculation method to befollowed for fee setting and for fee reductions/penalties, cost-recovery targets thatshould be sought, precise cost categories that should be taken into account, and evenmaxima/ceilings for each cost element.General principles are essentially already foreseen in Article 27 (although, as shown insection 2.3, these are not always respected by MS). Some broad criteria are also defined inAnnex VI. More detailed criteria would take the principles to a more precise technical levelwhich could help to ensure that MS have less room to deviate from the general principles. Atthe same time, these details are more difficult to define and make acceptable at EU level.The principles and criteria are discussed further under the presentation of the various optionsbelow.The level at which common principles will be established will be key in controlling MSflexibility and mitigating the potential disadvantages of subsidiarity. The greater the extent towhich a move is made from defining more common principles and general guidelines (as iscurrently the case with Articles 27-29 of Regulation 882/2004) to defining technical criteria,the more difficult it will be for MS to deviate from a common denominator. On the otherhand, this increases the complexity of the provisions and the extent of follow up needed atcentral level (Commission, MS CCAs).In terms of the calculation offee reductions and penalties,in particular, the principles couldbe those established by the provisions of Articles 27.5/6 and Article 28 respectively.However, the study has demonstrated that these principles are currently not fully adhered toby the majority of MS. In practice, as is evidenced by the description of the current system,the provisions of Articles 27.5/6 and 28 are enforced to varying degrees and with considerabledifferences between MS. Moreover, the meat industry in particular appears to be penalised bythe lack of a clear link to the advantages and benefits of self-control systems, as introduced atEU level by the Hygiene Package.To address these concerns, the study has examined the possibility of expanding on the currentprovisions, by introducing:a. A common approach across the EU;b. An integrated approach linking more consistently compliance and non-compliance,therefore fee reductions and penalties, to the uptake of self-control systems.Thus in all scenarios ofTable 3-1where principles for the calculation of feereductions/penalties would apply, these would expand on the current provisions of Articles27.5/6 and Article 28 by linking compliance/non compliance to the uptake of self-controlsystems by industry through an integratedbonus-malussystem.
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Both MS and stakeholders are in principle in favour of providing incentives to FBOs toassume greater responsibility. The extent to which this can be encouraged will depend on thedegree to which an approach on how to reward compliance can be developed (Articles 27.5/6)and, conversely, how to penalise non-compliance (Article 28). This could be through anintegratedbonus-malussystem. Such systems have already been developed at MS level in afew MS (e.g. Belgium) and these highlight the advantages of an integrated approach.3.1.3. Assessment criteriaThe assessment of the various scenarios was based on the analysis of the views and datacollected from stakeholders (both at administrative and business/industry level). All of themethodological tools used in this study (survey, interviews and case studies) have includedsuggestions for overcoming the various shortcomings of the present system. The finalformulation of the various scenarios and their analysis emerged as a result of this work.Each scenario is assessed in terms of its advantages and disadvantages, feasibility (whetherand under which conditions it would work in practice), and the acceptance that it might beexpected to have from the various groups of stakeholders.In the context of the main goals and principles of Regulation 882/2004, as well as the widerobjectives of Community food and feed law and the Lisbon strategy (section 2.1.1), three keycriteria are applied throughout the assessment, as follows:a) Improving theeffectiveness and efficiency of the official controls;b) Moving to asimplificationof the current system;c) Providing theright incentives for FBOs,in particular in terms of the provisions ofArticle 27.6 and Article 28 of Regulation 882/2004, thus encouraging compliance andpenalising non-compliance respectively.It is noted that the above criteria may not necessarily point to the same direction, indeed theycan point to different directions. For example, the objective of pursuing simplification maynot be compatible with the increasing complexity required to ensure a harmonised approachacross the EU. The initial assessment of the scenarios provided here aims to provide abalance between the various objectives and needs of stakeholders.Furthermore, as already indicated, some of the issues raised by the study extend beyond itsscope as such. For example, overcoming certain cost-efficiency issues requires action notonly at the level of the financing provisions of Regulation 882/2004 but also of the HygienePackage44. Addressing these issues is therefore only discussed here to the extent it is relevantin the context of the costs and the financing of the official controls.
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For example, the requirement of Regulation 854/2004 to use official veterinarians to carry out audits andinspections of slaughterhouses, game handling establishments and certain cutting plants is generally consideredas a key obstacle to pursuing cost efficiencies in the control process. At the same time, Regulation 882/2004
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This forward looking element of the project aims to provide an initial assessment of certainkey identified scenarios. The purpose is not to provide a full feasibility analysis (whether atpolitical or technical level). Nonetheless, specific recommendations are made to develop thesescenarios, or indeed other potential combinations of their constituting components, includingthrough future impact assessments.3.2. Towards more harmonisationAs indicated inTable 3-1,moving from the status quo towards more harmonisation couldinvolve a range of scenarios depending on the degree of harmonisation sought. A constantfeature of all scenarios under this option is that fee charging would becompulsoryfor allMS. This effectively sets targets for the recovery of the costs of official controls through feecollection, moreover in the form of targets which are common across the EU. It would nolonger be at the discretion of MS to define the activities for which fees are to be charged as iscurrently foreseen by Article 27.1. This would aim to a more harmonised approach for thefinancing of official controls across the EU-27 (as an intermediate objective for theachievement of more harmonised controls across the EU, as discussed in section 2.1).3.2.1. Full harmonisationThe most extreme version of this option, full harmonisation, would be described as follows:1. All MS pay the same fees at the same level (fixed rates) for the same activities. It isnoted that:i.The fees could be set at the level of the minimum rates currently established byAnnexes IV and V, or at a different level. In any case, the fee level would beestablished on the basis of a common calculation method defined at EU level,aiming at a certain level of cost recovery (to be determined at EU level);The list of activities could be as currently established by Annexes IV and V, orcould be different (expanded/condensed).Fee rates could be subject to regular review (e.g. every two years as provided bycurrent Regulation) inter alia to adjust rates in line with inflation.
ii.iii.
2. Penalties and reductions (for complying and non-complying firms, in the spirit ofArticle 27.6 and Article 28 respectively) are the same (fixed rates) for all MS.
refers only to the general requirement to have “a sufficient number of suitably qualified and experienced staff”.As the scope of this study only concentrates on Articles 26-29 of Regulation 882/2004, the options discussedhere do not address possible changes to the relevant provisions of the Hygiene Package.
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This option was generally the least favoured, with only 7 of the 27 MS CAs indicating theirpreference for a common system (Question2.1,Annex 2).All the MS that opted for fullharmonisation are new MS, and in most cases these have faced considerable difficulty inintroducing Regulation 882/2004 in the first place. Also, all of the 7 MS in favour of thisoption commented that there should nonetheless be some flexibility within the rules. At thelevel of the industry, full harmonisation was largely considered to be unrealistic.Other than some potential advantages under certain conditions, such as possibly allowing fora simplification of the system at least at the level of central management (Commission, MSCentral Competent Authority) and greater transparency as the same rates would applythroughout the EU27, full harmonisation is thus overall seen as having many disadvantages(Table3-2).A key problem is establishing the level at which fees should be set. This level would dependon the extent of cost recovery sought. However, there are currently no objective measures bywhich to establish the optimal level of fees at EU level for each activity. While such measurescould be broadly based on the current criteria of Annex VI, there is currently a lack of theessential parameters that would enable us to provide an objective calculation of an optimalminimum fee at EU level. Such parameters would include for example, the optimal amount oftime needed for the inspections for each activity and per type of business. In theory thisshould be the same figure for all MS; in practice it may differ depending on administrative,inspection staff and industry structures in each MS. In addition, there are certain parametersthat cannot be defined as a common figure across the EU, notably staff costs andadministrative costs.The current differences in living costs and salary levels amongst MS, and their impact on thecosts of staff employed to carry out the official controls and on administrative costs, meanthat some MS would be net losers while others could be net gainers under this system (netlosses and gains in this case refer to the potential revenue from the fees compared to the realcosts of the controls for the administration). In any case, this appears to be the reality today,with the current level of minimum rates deemed to be too low or inadequate to cover the realcosts of OCs for some MS while it is too high for others.Although fees would be set at the same level throughout the EU, full harmonisation does notcreate a level playing field for the industry either, because it is the relative value of the fee(compared to production costs and producer prices) that is important and not the absolutelevel of the fee.Consequently, trying to find a common basis for the EU-27 could simply result in fees beingset in relation to the lowest common denominator, which is below the current rates ofRegulation 882/2004. This is evidenced by the fact that several MS, particularly many of thenew NMS, had considerable difficulty in introducing and enforcing the minimum ratescurrently foreseen by the Regulation. During the survey and case studies, several MS openlycriticised the minimum rates of the Regulation for being too high and not taking into accounttheir national economic reality. This situation has often forced MS to apply exceptions andderogations which, as seen in section 2.2, have not always been transparently applied.
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It would therefore appear that pursuing a policy of full harmonisation of fee rates entailscertain non-negligible risks. If the rates are set too high the risk is that they would not provideincentives for efficiency gains to be made in those sectors and MS where this is consideredappropriate. If set too low, there is considerable risk that this may undermine the level andstandard of controls actually carried out.A full list of the advantages and disadvantages of this option, as put forward by the variousMS, is provided inAnnex 2.1 (Question2.2).3.2.1. Intermediate scenariosTo introduce some flexibility into this option, fees and/or penalties/reductions could becalculated at MS level, rather than fixed for all MS. However, to maintain a certain level ofharmonisation, the calculation methods to be used would adhere to certain commonprinciples.Thus, in scenario 1, fee reductions and penalties are established at MS level by applying acalculation method that follows common principles, but fees are fixed at the same level for allMS. In scenario 2, both the fees and the fee reductions/penalties are established at MS levelby applying calculation methods that follow common principles. These principles aredescribed in section 3.1.2. To ensure appropriate follow up of MS transposition of the rulesand principles, MS would be obliged to communicate the calculation methods to theCommission.In terms of the principles that can apply to promote a more consistent approach for thecalculation of fee reductions/penalties (as discussed in section 3.1.2), pursuing thedevelopment of a commonbonus-malussystem on a totally harmonised basis across the EU isnot considered to be practically implementable at present. This is due to the significantdifferences between MS in terms of industry structures and the organisation of officialcontrols, which would not allow a one-fits-all approach. It would be difficult in practice todevelop a commonbonus-malussystem for the EU-27 that would fit all national conditionsand structures (both at the level of the industry and at the level of the competent authorities).While therefore the need remains to reinforce the link between fee reductions/penalties(Articles 27.5/6 and Article 28, respectively) and the increasing uptake of self-control systemsby industry (in line with the Hygiene Package), the development of a common system acrossthe EU27 does not appear to be possible. Instead it appears MS need rather to be encouragedby the legislation to develop their own systems moving in the direction of an integratedbonus-malusapproach for an effective and consistent implementation of Articles 27.5/6 andArticle 28.
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Table 3-2 Moving towards more harmonisation: overall assessmentHARMONISATION scenariosDescriptionFull harmonisation:1. All MS pay the same fees (fixed rates) for the same activities;2. Penalties and reductions (for complying and non-complying firms, Article 27.6 and Article 28respectively) are the same (fixed rates) for all MS.Introducing some flexibility:Scenario 1:Fee reductions/penalties established at MS level on the basis of common principles.Scenario 2:Fees and fee reductions/penalties established at MS level on the basis of common principles.Advantages/benefits•Full harmonisation could result in potential simplification in monitoring MS compliance with therules, at least at central level (Commission, MS CCAs). This advantage diminishes as we move toscenario 1 and 2;•Transparency for all stakeholders, as both fees and activities would be fixed in EU law;•Potential to reduce distortions in competition amongst MS/regions - however questionable whetherfees alone are an important factor affecting competitiveness within the EU27 (see section 2.3.2);•Harmonisation of fee levels for border controls, thereby addressing concerns for potentialdistortions at this level (see section 2.3.2.5);•Distortions currently caused by different MS approaches on fee charging for ‘non-compulsory’(Article 17.1) activities, could be reduced/eliminated;•Greater harmonisation of official controls if description per activity defined in detail on a commonbasis, e.g. concerning the ante and post mortem inspections, to guarantee the same level andstandard of controls throughout the EU.Disadvantages/drawbacks•In terms of domestic controls, in view of the differences in cost of living and salary costs, fullharmonisation is not creating a level-playing field in the EU27. On the contrary, it can alleviatedifferences if some MS are unable to cover their costs on this basis, or if the rate of cost-recoverythat is achieved through these fees varies greatly between MS;•Considered difficult, if not impossible, in practice to find a common denominator between MS interms of the level of fees for domestic controls, and developing a commonbonus-malussystem;•Concern that finding a common basis for all EU27 may result in the lowest common denominator,thereby jeopardising the overall progress achieved so far in the effectiveness and efficiency of theofficial controls at EU level;•Would not provide incentives for efficiency gains to be made where needed / considered necessary;•To ensure uniform application, this should be a rigid system: it may pose interpretation problems,and actually result again in different approaches, if the provisions are not explicit;
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HARMONISATION scenarios•Scenario 2 is more complex, hence more difficult and cumbersome to implement and control atcentral level (Commission, MS CCAs).Stakeholder positionIn its fuller version, largely considered unworkable in practice, therefore acceptability by stakeholders,both industry and MS CAs, very low. Need to maintain some flexibility (scenarios 1 and 2).ConclusionAlthough rejected in its fuller version, this option becomes increasingly more acceptable if someflexibility is introduced in the rules (scenarios 1 and 2). It is noted that this increases the complexity ofapplication and monitoring at central level. But, if the objective of the legislation is to ensure aminimum level of cost-recovery, then scenarios 1 or 2 would appear most appropriate.If the harmonisation approach is to be pursued further, some elements need further consideration, asfollows:•The need to provide a transparent basis for the setting of fees, whether these are to be fixed for allMS (scenario 1) or calculated at MS level based on common principles (scenario 2);•The need for a more precise definition and common approach for the list and description ofactivities for which fees would be charged (all scenarios);
•The need to adjust and incentivize the system based on actual risk levels and FBO performance(‘bonus-malus’ system), although defined at MS rather than at EU level (scenarios 1 and 2).
3.3. Towards more subsidiarityMoving from the status quo towards more subsidiarity could involve a range of scenariosdepending on the degree of subsidiarity sought (Table3-1). A constant feature of all scenariosunder this option is that fee charging would beoptionalfor all MS. This effectively meansthat there would no longer be any obligation for MS to charge fees, as is currently foreseen byArticle 27.2. MS would be given full discretion not to collect any fees at all, or only to collectfees for any activities that they judge appropriate and necessary. Therefore, MS would be freeto choose the level of cost recovery that best suits their needs and interests.3.3.1. Full subsidiarityIf taken to its most complete expression the scenario of full subsidiarity would involve a totalrepeal of Articles 26-29. MS would be left entirely free to design the financing of the officialcontrols.This scenario was the least favoured by MS CAs. In particular there is concern that, byeliminating the possibility for MS to charge fees so as to ensure adequate funding, there issignificant risk that the standard of the official controls could be undermined. Giving fulldiscretion to MS would - given the current variation in the level of economic, administrative
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and business development between the 27 MS - risk disintegrating the EU official controlssystem. This could potentially jeopardise the ultimate objectives of the system to guaranteefood safety and the protection of public health as well as the free circulation of goods withinthe internal market.The hypothesis made in this case is that MS would not be able to raise adequate fundsthrough alternative means, notably general taxation. However, this possibility is currentlyprovided by Article 26. As demonstrated byTable 2-1,some MS partially cover the costs ofofficial controls through the public budget.On the other hand, the meat industry has expressed more radical views on this point. Theindustry is in favour of a total review of the financing system for such controls, with a viewto having this covered entirely from the public budget. The main argument has been that thisis a public service of benefit to the final consumer, and that therefore the taxpayer shouldcover this cost though the public budget. It is argued that consumers are already paying forthis through the higher prices of meat, as the extra cost of the fees is passed on by FBOs; thiscreates lack of transparency and may inflate prices unnecessarily as the cost may be passedmore than once along the supply chain.As noted from the outset this scenario has not been pursued further because - as it currentlystands across the EU27 - neither the EU system of official controls nor the EU meat industrycan be considered ready to adopt such a radical approach. A key reason is that the various MSare currently at very different levels of enforcement of official controls both at administrativeand at industry level. Furthermore, for a totally publicly funded system of official controls towork, FBO responsibility and self regulation would need to have reached an adequateminimum level of compliance to EU rules across the EU27; this is far from being thesituation today45. With the promotion and further encouragement of FBO responsibility, it isconceivable that scenarios of full subsidiarity, including a totally publicly funded system ofofficial controls, could be examined longer term.A less radical version of full subsidiarity could be scenario 4, whereby only the obligation forMS to ensure the availability of adequate funds for official controls (Article 26) is maintained.In this case, no explicit reference as to how these funds are to be raised would be made(currently, Article 26 is explicit on this46). This would provide a simplification of the currentsystem in terms of Commission and CCA monitoring of the system as such, and could work ifit could be sufficiently guaranteed that MS would provide the means necessary for thesecontrols. In order to achieve this, MS could be obliged to report to the Commission the fundsavailable for the official controls and the extent to which the funds available cover the costs ofthese controls (this obligation does not currently exist).
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As evidenced,inter alia,by the country FVO reports on the implementation of official controls within the EUand border controls on EU imports.Last part of Article 26 reads:“including through general taxation or by establishing fees or charges”.
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3.3.2. Intermediate scenariosSubsidiarity could be made less radical if some common rules and criteria are introduced intothe system. A number of possibilities exist for combining the various components ofTable3-1,of which scenario 3 in particular has been assessed. This can be described as follows:1. MS design the fee system that suits them best. This includes the definition of the activitiesfor which fees are to be charged, and the fee-setting and calculation method.One additional element ‘controls’ the flexibility given to MS under subsidiarity:2. The condition that certain commonly defined principles are respected for the calculation ofthe fees and fee reductions/penalties (as discussed in section 3.1.2). To ensure appropriatefollow up of MS transposition of the rules and principles, MS should communicate thecalculation methods to the Commission.Once this condition is attached to the subsidiarity option, it becomes increasingly attractivefor a number of MS. In total, 16 out of the 27 MS CAs favoured some form of flexibility tobe provided to MS to set the fees, within a commonly agreed framework of rules, and 7 of the27 MS CAs indicated their explicit preference for a subsidiarity system of this form). At thelevel of the industry too, scenario 3 was largely considered to be more realistic than the moreharmonised scenarios 1 and 2.Key advantages or benefits of this option include the flexibility given to MS to adapt the feesystem to a country’s economic reality and administrative/industry structures (Table3-3).Asthis system would provide a more customised fit to national/regional/local conditions, thisultimately can ensure better coverage of costs at MS level, compared to a situation where feeswould be fixed at EU level (under the harmonisation scenarios).Similarly, this option could ultimately provide more incentives for cost-efficiency gains. Byallowing MS the discretion to fix the level of fees on the basis of actual costs, the possibilityopens for authorities and stakeholders at national level to promote a common agenda for costrationalisation through a more efficient and effective organisation of the official controlssystem.Key disadvantages or drawbacks of this option include the potential for distortions incompetition at the various levels investigated by the study, which may be caused by thevariability in fees across the EU if, as would appear to be likely, MS end up adopting verydifferent approaches. As discussed in section 2.3.2, this variability already exists under thecurrent system. Although generally currently considered to be a relatively minor factor inaffecting competitiveness between MS, the variability is higher in MS where flat rates ratherthan minimum rates apply, especially where these are determined on a decentralised basis(e.g. Germany, Italy).The extent to which such disadvantages may occur will depend on MS’ uptake of thediscretion given to them to determine for which activities fees are to be collected and the levelof the fees, on the basis of actual costs, as well as the power of the business community in theindividual MS to force changes and to ensure the transparency of the system.
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As discussed in section 3.1.2, this will dependinter aliaon the level at which commonlydefined principles are set across the EU. It can therefore be anticipated that as we movetowards more subsidiarity, where not only common minimum rates no longer apply but alsono common principles are used, variability in fees and the potential for distortions within theEU would tend to increase.A full list of the advantages and disadvantages of this option, as put forward by the variousMS, is provided inAnnex 2.1(Question2.2).Table 3-3 Moving towards more subsidiarity: overall assessmentSUBSIDIARITY scenariosDescriptionFull subsidiarity:Repeal Articles 26-29Scenario 4:MS only obliged to ensure the availability of adequate funds for OCs (repeal Articles 27-29)Controlling MS flexibility:Scenario 3:1. MS design the fee system that suits them best (incl. list of activities, fee setting & calculation);2. The condition is that certain commonly defined principles are respected; the level at which theseshould be set (whether general principles or technical criteria) needs to be defined.Advantages/benefits•Full subsidiarity/scenario 4 could result in potential simplification in monitoring MS compliancewith the rules, at least at central level (Commission, MS CCAs). This advantage diminishes as wemove to scenario 3;•Flexibility to adapt to country specific economic conditions and administrative/industry structures;•Greater flexibility to adapt to changing situations at MS/EU level;•Greater potential to cover real costs; potential to engage CAs and FBOs in common agenda to pushreforms to promote greater cost-efficiency and effectiveness of OCs;•If a more common agenda can be achieved across the EU, potential for greater transparency.Disadvantages/drawbacks•Can increase variability in fees between MS, particularly as we move to full subsidiarity, or if thecommon principles of scenario 3 are not applied or are not effectively enforced;•This would stimulate various distortions in competition, and distortions would be higher the morethe system fails to implement effectively the common principles of scenario 3;•It would also risk increasing the variability in the effectiveness and efficiency of the controls at MSlevels, thus undermining the performance of the system also at EU level;•Scenario 3 is more complex, hence more difficult and cumbersome to implement and control atcentral level (Commission, MS CCAs);•Can lack transparency in situations where the system fails to motivate the CAs and the business
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SUBSIDIARITY scenarioscommunity to pursue common objectives.Stakeholder positionMore acceptable by MS at both CA and industry level than the harmonisation scenarios, particularly ifcommon principles are set (scenario 3) to control MS discretion. At the same time, considered higherrisk, as highly dependent on acceptance and effective enforcement by MS of these principles.ConclusionAlthough rejected in its fuller version, this option becomes increasingly more acceptable if somecontrol is introduced in the rules.MS are currently found to be at excessively divergent stages of economic and industry developmentfor full subsidiarity to work, especially on an unconditional basis. Potential failure of this optionwould lead to more serious distortions of competition at EU level, and would risk undermining theeffectiveness and efficiency of the official controls system.The inclusion of common principles (scenario 3) could ensure that this option would work better, butthis also increases the difficulty of reaching agreement on common conditions set at EU level. It alsoincreases the complexity of application and monitoring at central level.For the purposes therefore of simplification, if the primary aim of the legislation is to ensure that MShave the funds necessary to cover the costs of official controls, whatever the means, scenario 4 couldpresent an attractive alternative to pursue.
3.4. Extension to other sectorsThis option examines the potential to extend to sectors, other than those listed in Section A ofAnnexes IV and V of Regulation 882/2004, the obligation to contribute to the financing ofofficial controls, within the meaning of Article 27.2.Such sectors could include stages upstream/downstream the feed and food chain (e.g. farmersand processors/retailers/caterers, respectively), and/or other product sectors (e.g. plant healthcontrols). This option was formulated in an open way, to allow MS CAs and stakeholdersmore freedom to respond with their views. Hence, no list of potential sectors or scenarios wasdevelopeda priorion this option.In total, 16 out of the 27 MS CAs favoured some form of extension of the financingobligation to other FBOs/activities(Question 2.3,Annex 2.1).In terms of product sectors, the sporadic evidence and arguments provided by MS, bothduring the survey and the case studies, did not allow the development and analysis of aconsistent scenario under this option (Questions2.4 and 2.5, Annex 2.1).No particularproduct sector consistently came up as eligible to be included in an extended system.
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The most consistent scenario put forward by both MS and industry was the extension of thefinancing obligation across the food chain. For example, the extension to cover stagesupstream and downstream of the slaughtering and meat cutting operations. The analysis belowtherefore focuses on this scenario. Ultimately, some of the conclusions drawn here could be ofrelevance for an extension of this approach to game and fish/aquaculture products.At the level of the industry, the meat sector would favour extending to stages upstream anddownstream of the slaughter and meat cutting operations the obligation to contribute tofinancing the costs of these controls. As discussed in section 2.3.2.3, this element of the chainis generally considered to be unfairly and disproportionately bearing the costs of officialcontrols that are of benefit to the entire food chain. Spreading the costs along the chain wouldtherefore represent a more equitable option (Table3-4).Such a system, covering the entire food chain, has already been developed in Belgium and iscurrently being proposed in Italy. Several other MS, including for example France and Spain,have expressed their positive reaction to such a model. Both the CAs and the professionalorganisations contacted in the various MS (e.g. France, Italy, and at the level of the EU meatindustry the UECBV and CLITRAVI) were keen to introduce such an extension of the feeregime to cover other sectors along the food supply chain.It is generally acknowledged47that an extended system would be more consistent with theintegrated approach on food safety and the responsibility of FBOs, or the ‘farm to table’approach, which the General Food Law (Directive 178/2002) and the Hygiene Package areseeking to promote. By involving all stakeholders, operators would have an interest inensuring that the entire control system is solid and functions well. This would be furtherencouraged when combined with a model that adjusts fees to the level of risk and individualFBO responsibility (such as abonus-malussystem as discussed in section 3.1.2).Furthermore, it is argued that such models should be regulated at EU level, because leavingthe option to MS could lead to a distortion of competition between those MS in which feecharging is extensively spread along the food chain and those MS which collect fees at only afew points of the chain. This could result in situations where the fees paid, for example by theslaughter sector, in the MS that spread the costs are significantly lower than in the MS that donot. It could also put sectors/activities covered in some MS but not in others at a competitivedisadvantage48.The justification for this approach is that it better addresses the food safety risks that the EUfood industry is actually facing today. In particular, it is argued that the risks related to foodsafety and human health have evolved with the development of the food supply chain, and theslaughterhouses and meat cutting plants should no longer alone bear the cost of controls nor
See, for example, the conclusions of EU Seminar on the “Modernisation of Inspections in Slaughterhouses”.Organised by the French Presidency of the EU, 11 July 2008, Lyon France.In Italy, for example, a number of sectors not currently paying fees but included in the new draft law haveopposed the draft on the grounds that they are disadvantagedvis á vistheir competitors in other MS that are notcharged fees, and have requested that the relevant provisions of the draft law are deleted from the current text.48
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should they be the only focal points of the controls. Advances in traceability and HACCPsystems could be used as a tool to provide the official controls system with relevantinformation (‘foodchain information’49) to assist a better targeting of risks within anintegrated food chain safety approach, as advocated by the Hygiene Package.There is some debate as to which activities should potentially be covered by an extendedscheme, in particular how far upstream of downstream along the feed/food chain such a modelwould extend to. Although this might extend to downstream elements of the chain includingdistribution, it is generally considered more difficult to extend it as far as the catering segmentas this would make it significantly more complex to administer. Generally, the more extensivethe system is the fairer it would be in principle, but at the same time, the more cumbersomeand costly it will be to administer in practice.The stakeholders consulted at both industry and at CA level agree that, ultimately, the keycriterion for developing an extended system should be the level of potential risk to publichealth. The controls would in all cases need to be proportionate and risk based. On this basis,both the frequency and focus of the controls and hence their costs would be adjusted to thecritical control points along the entire supply chain. Business operators along the variousstages of the supply chain would then contribute according to the costs incurred, possibly inaddition to a base contribution that all FBOs would pay. These principles are at the basis ofthe Belgian system as it currently stands.It is noted that, in designing the system, it is important to avoid a situation where FBOs areeventually contributing at several points during the food supply chain for the same controls.As discussed in section 2.2.2, this situation already arises in the meat sector in Italy and thereare concerns that the new draft Law may exacerbate, rather than correct, this problem.The position of those sectors not currently paying fees also needs to be carefully considered indesigning such a system. As the experience of countries that have already introduced thisapproach demonstrates (e.g. Belgium, Italy), there is likely to be strong opposition from thesesectors, therefore fee levels and incentives to adhere would need to be appropriatelyestablished. Linking fees and incentives to the level of risk and FBO responsibility is crucialin this respect.In conclusion, the main advantages of an extended system would be that the costs of thecontrols would be more widely and fairly distributed along the feed/food chain, while the
Food Chain Information (FCI) is an important component of the ‘farm to table’ approach to food safety. Aswell as contributing to food safety it can also be used to improve both animal health and welfare. The purpose ofFCI is to inform FBOs about decisions relating to acceptance of animals for human consumption and anyabnormal conditions found during processing. It is also used to inform the official veterinarians about inspectionand testing requirements. To this end, FCI reports must be sent within brief delays in advance of the animalsarriving for slaughter. These provisions are laid down in Section III of Annex II of Regulation 853/2004 and inSection II (Chapter II) of Annex I of Regulation 854/2004. The FCI provisions were immediately applicable inthe poultry sector, but several MS are using transitional provisions to implement FCI in other sectors by the endof 2009 (Regulation 2076/2005).
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involvement of all FBOs along the supply chain would provide an incentive to take onresponsibilities and promote transparency.These advantages would need to be balanced with the need to contain the increased costs thatwill be required to administer an extended system. In larger MS with decentralisedmanagement the feasibility of such an approach is likely to be lower and the costs involvedhigher. It is noted that the opposition likely to be encountered by sectors not currently obligedto pay fees also has to be taken into account.The regulation of an extended system at EU level is likely to be highly cumbersome andcomplex. For this reason, and given the current variations in MS industry structures and levelsof development of the food chain, it would be best for the system to be designed at MS level,with only general principles and guidelines laid down at EU level.A full list of the advantages and disadvantages of this Option, as put forward by the variousMS, is provided inAnnex 2.1(Question 2.3).Table 3-4 Extension to other sectors: overall assessmentEXTENSION TO OTHER SECTORS: key scenariosDescriptionExtend to sectors, other than those listed in Section A of Annexes IV and V of Regulation 882/2004,the obligation to contribute to the financing of official controls, within the meaning of Article 27.2.The key scenario examined here is the extension of the financing obligation to stages upstream anddownstream of the slaughter and meat cutting operations. Ultimately, some of the conclusions drawnhere could be of relevance for an extension of this approach to game and fish/aquaculture products.Advantages/benefits
•Spreads the costs over the extended food chain, hence more equitable than current system (moreFBOs along the food chain pay, cost per FBO is reduced);
•Consistent with the integrated food safety chain approach (‘farm to table’) advocated by theGeneral Food Law and the Hygiene Package;
•Allows better targeting of risk, provided it is based on appropriate risk assessment and full use ofthe new tools available (Food Chain Information, including via traceability and HACCP systems);
•Can encourage FBO responsibility, provided that the fee calculation is adjusted to the level of riskand responsibility;
•Promotes transparency, as more FBOs participate in the system;•These advantages are reinforced the more extensive (upstream/downstream) the chain coveragebecomes.Disadvantages/drawbacks•More cumbersome and costly to administer;•Cost and complexity increase the more extensive (upstream/downstream) the chain coverage
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EXTENSION TO OTHER SECTORS: key scenariosbecomes.Stakeholder positionThe thinking in many MS is increasingly moving to this direction. The current system in Belgium wasquoted as an example by several MS (both by CAs and by industry stakeholders) throughout the study,while Italy is currently proposing such an approach.The meat industry is favourable. While non-currently paying sectors would be initially opposed, thereis evidence that if the right incentives and fee adjustment based on risk and FBO responsibility areattached to the system, they will eventually adhere.ConclusionThe strong advantages and relatively high acceptability of an extended system (upstream/downstreamthe meat production chain) make this worth further consideration. This is also consistent with thegeneral principles and objectives of the current integrated approach to food safety (‘farmto table’).The system would work best if fees payable by FBOs at each stage of the chain are adjusted to realrisks and FBO responsibility; these adjustments are now made possible with the advances in theavailability of Food Chain Information,inter aliavia traceability and HACCP systems.Although the cost and complexity disadvantages can be mitigated if the system is not too extensiveupstream or downstream the chain, this decreases the solidarity and participatory approach of thesystem. These two considerations have to be balanced for the design of the optimal approach. Giventhe current variations in MS industry structures and levels of development of the food chain, it wouldbe best for the system to be designed at MS level, with only general principles and guidelines laiddown at EU level.
3.5. Status-quo (mixed system)3.5.1.Do nothingoptionAmongst the options for the future, the study has also examined the continuation of thecurrent system (status quo). The current financing system for official controls represents thepolitical reality of the evolution of a system first established by Directive 85/73. As discussedin the first part of this study, the intervention logic and rationale of this system continue toapply today. In practice, however, significant shortcomings with the application of the currentsystem were identified by the study. These lead to a large variation in the extent and methodof application of the rules by MS, and affect the ability of the Commission to monitor thesituation and ensure that a harmonised approach is applied across the EU.Given these shortcomings, the continuation of the system as it currently stands (donothing)isclearly not an acceptable or a pragmatic option.
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3.5.1. Status quo with improvementsEssentially, the financing provisions of Regulation 882/2004, as it currently stands, representa mixed system. Article 27 generally follows the subsidiarity principle in that MS can decidewhether to use the specified minimum rates of Annexes IV and V, or to charge for officialcontrol activities according to the actual cost of undertaking them based on the criteria ofAnnex VI.During the study it became evident that, at the time of the adoption of Regulation 882/2004,several MS supported this flexible approach (possibility to opt for the common minimumrates or for flat rates) for political reasons, i.e. because it was considered too difficult to reachagreement on acceptable fee rates amongst the 15 MS (it was EU15 at the time).This study has found that a similar debate exists in the EU27 today. Since the adoption of theRegulation in April 2004, this debate has been further enriched by the new dimensionsbrought about by the accession of 12 NMS to the EU and by the significant changes that haveoccurred in the EU food industry from the implementation of the ‘farmto table’approach tofood safety. The findings of the present study add further arguments to this debate.The fundamental approach and principles of Regulation 882/2004 would therefore appear toremain valid today. On the one hand, flexibility needs to be provided to MS to guarantee thebest adaptation of the system to national/local conditions. On the other hand, certain commonparameters need to be defined at EU level to guarantee maximum homogeneity in applicationthroughout the EU. The appropriate balance between flexibility and homogeneity willguarantee maximum efficiency and effectiveness of the official controls system.The study has examined a range of improvements that can be introduced if the currentapproach of a mixed or flexible system was to be maintained. These improvements weredeveloped in the course of the study. They relate to various components of the system and, assuch, would be also applicable in the case of the other scenarios presented inTable 3-1.These are as follows:1. At a general level improve the understanding of Regulation 882/2004.The problems encountered by the CAs and stakeholders in the interpretation of the financingprovisions of Regulation 882/2004 were often attributed to the complexity in the formulationand interrelation of the various provisions. For example, failure to understand in practice howto link the first four paragraphs of Article 27 is a problem that was commonly mentioned.These problems appear to create two shortcomings:•Considerable deviation from the subsidiarity principle as pursued in the Regulation. Itappears that the original intention of the legislator was that either of the two systemswould be used, not both in combination as is occurring in practice (i.e. minimum ratesfor some products/activities and rates defined at MS level for others).
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This study has found that a combined approach could only be justified for a distinctgroup of official controls, such as common fee rates for import controls and fee ratesdefined at MS level for domestic controls (as further discussed under point 2 below).•Considerable scope for variations in interpretation between MS and regions. Thevariations in the application of Articles 26-29 were discussed at length in section 2.2.Although attributed to many factors, incorrect understanding or interpretation of theRegulation was often identified to be a key factor. For example, the fact that minimumrates are interpreted by some MS as a floor that cannot be undercut under anyconditions (e.g. Germany), while for other MS they can be maximum ceilings, cancreate a very different application of the rules between MS.Although a more in-depth legal analysis would be required to establish what type ofimprovements can be made to the text, the fact remains that as it currently stands there issignificant scope for open or erroneous interpretation. This is demonstrated by the extent andcomplexity of court cases related to Article 27 in the case of Germany.Beyond improvements to the text as such, it would be recommended that DG SANCOprovidea guidance documenttargeted to the CAs on how to implement the financingprovisions of the Regulation. Such guidance documents are provided in other cases, forexample, in the case of the microbiological sampling and testing of foodstuffs underRegulation 882/2004 or on import requirements under Regulation 852/2004.2. Provide a rationale for the setting of common (minimum) fee levels and review therates of Annexes IV and V in the light of this rationale.The study has indentified a lack of rationale for the setting of minimum fees and for the feelevels currently indicated in Annexes IV and V50.A number of shortcomings have been identified as a result, suggesting that a review isnecessary to provide more explicitly the rationale for the setting of these fees. If common feesare to be used, their levels should be revised in the light of this rationale. MS, particularly theNMS that joined the EU after the adoption of Regulation 882/2004, as well as stakeholders,need to understand the rationale for the setting of minimum fee rates in Regulation 882/2004.It appears that it was not the original intention of the legislator to fix minimum rates in thefirst place51. In the deliberations that followed, particularly at Council level, it was decided
There is no justification in the Regulation at present on how the rates of Annexes IV and V were fixed at theindicated levels. The rates previously applying under Directive 85/73 were used as a basis from which the ratesof Annexes IV and V of Regulation 882/2004 were fixed. It is not clear and there is no documented evidence onwhether and what criteria were used for this adjustment. In some cases, e.g. domestic controls in the dairy sector,the study has found that the EU dairy industry faced unjustified rises multiple times above previously applyinglevels, with repercussions on the dairy business in many cases (e.g. Netherlands).51
50
Commission proposal for Regulation 882/2004: COM(2003)52 of 5/2/2003.
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that minimum rates should be introduced. This decision was based on the rationale that EU-wide uniform fees should apply as a minimum in order to prevent distortion of competitionbetween MS.This rationale appears to be more relevant in the case of veterinary checks on imports (AnnexV) than in the case of domestic controls (Annex IV). The principle that the EU is a single blocis applied vis-à-vis third country suppliers via a unique EU border line designating BIPs asthe only entry points for third country imports into the Community. Promoting a harmonisedlevel of controls is the key to the success of this approach. Ensuring that fees are collected atthe same level throughout all entry points to the EU would therefore be consistent with thisobjective. This is demonstrated by the fact that the minimum fee rates of Annex V arerespected by the majority of MS today52.In terms of the domestic controls, the study has found that – given the extent of the variationin costs of living and salary levels amongst the EU-27 – the rationale for common minimumfee rates for these controls appears to be rather weak. Furthermore, even though there issignificant deviation from the minimum rates of Annex IV, there is no clear evidence of adistortion to competition at present. This appears to suggest that if common minimum ratesfor these fees were replaced by a subsidiarity approach by which MS are allowed to set thesefees within commonly defined parameters (as discussed under points 3 and 4 below), thesystem would be more effective and more efficient.As indicated in section 2.2, the current application of the financing provisions of Regulation882/2004 has resulted in significant variation from the minimum rates in most cases. Themajority of these cases concern fee rates applying to domestic controls under Annex IV. Ofthe 20 MS that apply minimum rates, at least 5 MS apply these in combination with flat rates,and in at least 10 MS the actual rates charged are below the minimum rates because the MSapply also fee reductions on the basis of Articles 27.5 and 27.6 (although, in many cases, fullconformity to these paragraphs is also questionable).The fact that MS are, in practice, finding it necessary to deviate from the minimum rates, toapply either higher rates or lower rates on the basis of real costs and/or taking intoconsideration other factors such as those of Articles 27.5 and 27.6, calls into question therationale for the setting of minimum rates for domestic controls. Moreover, as will bediscussed further below under point 5, it would appear appropriate to enlarge the scope ofthese controls over a larger part of the food chain. In this case, the rationale of settingminimum rates would be further called into question.Consequently, there appear to be good reasons for fees on domestic controls to be defined ona MS basis, while fees on import controls could be defined on a common basis. If commonfee rates are to be pursued on border controls, then the level at which these should be setshould be reviewed. This could be done on the basis of actual costs and in finding a commondenominator across the EU.
52
With few exceptions, e.g. France charges lower rates defined on the basis of lower costs.
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3. Improve transparency and accountability (to reinforce the provisions currentlyprovided by Regulation 882/2004).The principles of transparency and accountability are important for the smooth operation ofthe system, under all options. This could be ensured through: the definition of a transparentmethod for setting the fees, and for calculating fee reductions/penalties; the obligation for MSto communicate these to the Commission and stakeholders; and, some guarantee that the feerevenue goes back into the system.Although certain such criteria currently exist in Articles 26-29 of Regulation 882/2004, thestudy has found that they are largely not respected by MS.a) Transparency of fee settingAs discussed in section 2.2, fee setting is currently not transparent. The use of more refinedcriteria to establish the rates - as suggested under point 4 below - should partly address thisproblem.The lack of transparency drives many stakeholders to suspect that the rates charged are higherthan the real costs of the controls. This is particularly evident in the case of significant year-on-year rises in the level of fees, which are not otherwise justified by normal inflationarypressures (e.g. Sweden and Denmark on slaughterhouse fees).To address this issue, some stakeholders suggest the use of maximum rates as ceilings for theamounts that MS may charge under the flat rate calculation. The danger of this approach isthat it may be used to ‘freeze’ fee rates at the higher level, so it would only work incombination with a minimum fee level, to give effectively a range within which MS can setfees. Also, as discussed under the harmonisation option, fixing common fee rates woulddeviate from the principle of creating a level-playing field in the EU given the variation ineconomic and cost of living levels across the EU27.b) Obligation of MS to communicate to the Commission / stakeholdersThe lack of transparency in fee setting is made worse by the fact that MS are largely notreporting back to the Commission or to stakeholders the precise method and criteria they haveused in the calculation.Regulation 882/2004 needs to reinforce the obligation to communicate this information.Article 27.12 requests that MS make this information public. Article 27.6. refers to theobligation to communicate the conditions for fee rate reductions only to the Commission,while Article 28 does not make any provisions on this at all. As already noted elsewhere inthis Report, to date only 18 MS have sent notification letters to the Commission. Furthermore,there are few cases where this information is communicated to stakeholders. The study hasfound that MS simply publish the transposition of the Regulation into national legislation,without providing further explanation to stakeholders and without any consultation (with thenotable exception of a few MS).
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At political level, stakeholders in the MS may be able to exert more pressure on their nationalgovernments for accountability. However, this would be considerably reinforced if it wasspecifically laid down in the Regulation.Another measure to improve accountability would be to systematically introduce a section onfees and financing, or the implementation of Articles 26-29, under the FVO missions that areconducted on the basis of Regulation 882/200453.c) Guarantee that fee revenues go back to finance the systemAlthough this is essentially the main rationale for the financing provisions of Regulation882/2004, the study has found that, apart from the general lack of transparency on thechannelling of these revenues, the use of these finances to refund the official controls systemappears to be very diversified amongst the EU27 (2.2.5).It would therefore appear appropriate, subject to the ability of EU institutions to enforce suchrules within the general Community subsidiarity principles on public finances, to ensuregreater transparency and accountability by MS on this issue.4. Refine and define certain provisions more precisely at technical level.As already discussed, to ensure a harmonised approach to the implementation of the financingprovisions of Regulation 882/2004, in addition to the general principles of point 3 above,some common criteria could also be more clearly defined at a technical level. As we movetowards fuller harmonisation such criteria would include for instance a common calculationmethod, common cost-recovery targets, precise cost categories that should be taken intoaccount, and even maximum ceilings for each cost element.In practice, to define the appropriate level of these criteria, it is important to strike the balancebetween harmonisation and subsidiarity: i.e. maximising flexibility while minimising thepotential for deviation from the principles of the Regulation. Taking this sensitive balanceinto consideration, it would be difficult to introduce certain criteria. For example, it would bedifficult to agree on a common calculation method or cost-recovery targets given that currentmethods and targets vary considerably between MS. Therefore, the criteria below (under pointa) are presented in a stepwise approach as we move towards fuller harmonisation:a) Criteria of Annex VITo improve the coherence in the calculation of the fees by MS, there is a need for a moreprecise definition of the three categories of costs listed in Annex VI.
This refers to FVO missions conducted in the wider context of Regulation 882/2004 and not specifically onArticles 26-29. Some of the relevant FVO reports (food hygiene, official controls on POAO, and importcontrols) cover more explicitly the subject of financing (Annex1.2).
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A first step would be to:•Clarify the individual cost elements under the general heading “salaries for the staffinvolved in the official controls” (criterion1).This will need to address currentdifferences in the approach taken by MS with regards to the inclusion of social securityand welfare costs. It will also need to specify whether the costs refer to the staffcarrying out the controls or staff working in the overall system of official controls(including in this case adjacent services and administration), and whether this relates tothe costs of time spent on the controls or total staff time.•The scope of the various costs undercriterion 2,in particular of ‘associated costs’, willneed to be more strictly defined. The study has demonstrated the significant divergencebetween MS and within MS with regards to the inclusion of this type of costs.•Provide an explicit list of laboratory analysis and sampling costs that can be includedundercriterion 3.This would need in particular to address current discrepanciesbetween MS in terns of the inclusion of the costs of residues sampling/testing and BSEsampling/testing under this criterion.•The time period over which all of the above costs are incurred needs to be defined.In a further step to effectively harmonise the system across the EU, these criteria could be tiedtogether in asingle calculation formula,to be laid down in Annex VI. The availability of aformula would allow the Commission and stakeholders to check the validity of the MS CAcalculation against an objective and standardised measure.Such a formula could, for example, calculate the charge per hour of the staff employed tocarry out the controls, as follows:charge per hour = (FTE/year x SC) AC (%) x LC (%)h
where:FTE (full time equivalent)SCACLC= calculated on the basis of the total number of staff andnumber of working hours= staff costs (criterion 1)= administrative costs (criterion 2)= laboratory costs (criterion 3)
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Further harmonisation could be pursued by establishing maximum ceilings, or a range, withinwhich these costs will need to move in relation to the total costs. For example, administrativecosts may be fixed at a maximum (e.g. 10%) or a range (e.g. 5-10%), as a ratio of total costs.The definition of these limits requires more detailed technical analysis. For example, inestablishing the ratios, due consideration needs to be paid to the relative importance of thesecosts in each MS as affected by the cost of living differences54. There are also argumentsagainst the use of upper limits, because they may risk ‘locking in’ current inefficiencies of thesystem. For example, MS may interpret such limits as a guideline, thereby neglecting reformsthat could improve the ratio of each type of costs. In conclusion, at present it would bedifficult and risky to do this at an EU level, but could be done on a MS basis.Many stakeholders and some MS have expressed the view that, in order to provide greaterincentives for inspection efficiency, Regulation 882/2004 could be more explicit on thenumber and profile of staff that is required to perform the official controls. In particular, it issuggested that the actual number of official veterinarians and auxiliaries per number ofanimals inspected should be specified in EU law55.As already discussed in section 2.3.3.2, this would be difficult to achieve at present at EUlevel for the EU27. It may also reduce the flexibility to incorporate in the legislation theprovisions on reduced frequency and incentives for FBO responsibility. However, it can andshould be explicitly defined at MS level for each MS.On the other hand, the profile and contractual conditions of the staff employed to carry out theofficial controls could – at least in part - be addressed at EU level. In particular, this issuecalls for a review of the requirements of Regulation 854/2004 that only official veterinarians55can carry out audits and inspections of slaughterhouses, game handling establishments andcertain cutting plants56. This requirement is considered to impose high costs. If thisrequirement was to be relaxed, it could lead to more cost-efficient controls. However, suchissues fall outside the scope of the current analysis.Finally, stakeholders in particular argue that incentives to achieve greater cost efficiencies atCA level could be achieved via some form of cost-sharing of at least part of these costs. Themost eligible cost item in this respect would be costs which FBOs have no power to control,in particular administrative costs and some aspects of staff costs. In the first instance,
While staff costs greatly vary between MS, and administrative costs may also be expected to varysignificantly, the costs of laboratory analysis are expected to be more harmonised across the EU. This will affectthe relative weight of each type of costs in the total costs for each MS, e.g. in Bulgaria where staff costs are someof the lowest in the EU, the ratio of staff costs will be lower and of laboratory costs higher than in the UK orGermany where staff costs are relatively far more important.55
54
Regulation 854/2004 of the Hygiene Package provides a broad definition of the terms ‘official veterinarian’and ‘official auxiliary’ (Article 2.f/g and Article 2.h, respectively).
Member States have discretion to decide which are the most appropriate staff for audits and inspections ofother types of establishments.
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administrative costs could be shared 50:50 between the government and stakeholders. Such ascheme would work better under abonus-malussystem encompassing the extended foodchain (as discussed under point 5 below). Again, the principle of the scheme only should belaid down in EU law, with actual implementation details (e.g. establishing the actual amountof these costs and the relative weight in the total cost calculation) left to MS.b) Criteria of Article 27.5 (small, traditional and geographically remote FBOs)Regulation 882/2004 envisages special treatment for business operating under difficultconditions, such as small, traditional and geographically remote FBOs. Again, as discussed insection 2.3.2.4, the application of these provisions has been variable amongst the EU27.Overall, as it currently stands, the application of the Regulation has worked to the detrimentof this type of businesses.It may be appropriate therefore to ensure that the turnover of a business is taken into accountin the fee calculation, for example in the form of a reduction according to scale. The exactlevel or scale of turnover below which reductions can apply can be established at MS level, inaccordance with the need to maintain some flexibility as judged most suitable to national/localconditions.5. Update Articles 26-29 of Regulation 882/2004 with the progress made since theadoption of the General Food Law and the Hygiene Package.Regulation 882/2004 was adopted at the same time as the General Food Law and the HygienePackage. It is therefore normal that 5 years after the adoption of this legislation the progressachieved by its parallel implementation will need to be taken into account.The General Food Law and the Hygiene Package place the primary legal responsibility forensuring feed and food safety to feed and food business operators (FBOs). This principle isincorporated into Regulation 882/2004, whichinter aliacalls for the “frequencyof officialcontrols to be regular and proportionate to the risk, taking into account the results of thechecks carried out by FBOs under HACCP based control programmes or quality assuranceprogrammes, where such programmes are designed to meet requirements of feed and foodlaw, animal health and animal welfare rules”(preamble 13).The study has identified the need for an update, both in form and in principle, of the financingprovisions of Regulation 882/2004 to the changing circumstances brought about by thislegislation. In particular the following recommendations can be made:a) Improve/update reference to the Hygiene PackageTo improve the consistency of Regulation 882/2004 with this approach, precise reference tothe Hygiene Package should be made in Articles 26-29.As the text currently stands, Article 27.6 refers to the possibility to reduce fees below theminimum rates where official controls are carried out with a reduced frequency “in view of
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own check and tracing systems”. There is no further reference to EU legislation in thisrespect.At the same time, Annexes IV and V refer to preceding legislation which is now partlyrepealed or replaced by the Hygiene Package (e.g. Directive 89/662, see Annex 1.1).b) Reinforce incentives (and disincentives) to improve FBO responsibilityAs already discussed in length elsewhere in this Report, the need to adjust official controls tothe actual risks stems in particular from two trends:•The growing introduction of self-control (GHP and HACCP) and traceability systems inthe meat and dairy industry (and all sectors for which fees are collected on a compulsorybasis), whereby there is less need for actual inspections on the product and more need forverification of compliance. Hence, there appears to be a need to tie incentives/disincentivesmore closely to risk reduction where such systems have been introduced and operateeffectively.•The changing structure and operation of the food industry and food consumption, wherebyrisk occurrence and the dangers to public health are increasingly spread along the foodchain rather than concentrated in a few points of the chain only. Hence, there appears to bea need to actively engage, by providing incentives/disincentives, the extended chain ofFBOs involved from ‘farm to table’ (as discussed underpoint cbelow).There is wide consensus amongst the industry and MS that the revision of the financingprovisions of the Regulation presents a unique opportunity to provide an incentive toreinforce the uptake of self-control by the industry, which would be consistent with theprinciples and objectives of the General Food Law and the Hygiene Package.This opportunity remains largely untapped at present. The study has found that there iscurrently substantial variation and lack of consistency in the application of the provisions ofArticle 27.6 by MS. This creates a situation whereby the industry is not facing a level playingfield in Europe, while respect of the principle of self-regulation is undermined. Similarly,although Article 28 can be used to target FBOs with inefficient control systems and create anincentive to improve them, there are doubts as to how effectively these powers are currentlyused across the EU.Consequently, fee reductions need to be further encouraged and non-compliance furtherdiscouraged. At the same time, the calculation of the reduction could be further refined andmade more transparent, in line with the recommendations under points 3 and 4 above.The study has identified the potential to effectively implement this on a‘bonus-malus’basis.This would expand on the provisions currently made by Article 27.6 (for the‘bonus’,i.e. ratereduction), and Article 28 (for the‘malus’,i.e. charge non-compliance costs). Tying together,through a single system, the reward for compliance with the penalty for non-compliance,would provide a more coherent and transparent system of incentives/disincentives than thecurrent provisions of the Regulation.
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It is noted that some MS, in consultation with the industry, are already moving in thisdirection. There may be a need to ensure that a harmonised approach is followed on thisacross the EU. Indeed, as such models are currently at an early stage of development, there isan opportunity to do this based on the principles and objectives of EU law. Although it wouldbe extremely difficult – if not impossible - at present to develop a commonbonus-malussystem across the EU27, it would be appropriate to guarantee that any nationalbonus-malussystems designed by MS are based on common principles as laid down in EU legislation. Inparticular, the reductions and penalties envisaged under MSbonus-malussystems should bebased on the general principles of Articles 27.6 and Article 28 of Regulation 882/2004.Such criteria should include specific reference in Articles 26-29 to:•The requirement to reduce fee rates for FBOs with established HACCP systems;conversely, penalties for FBOs with non-established HACCP systems;•The requirement to reduce fee rates for FBOs with a record of compliance to EUhygiene requirements over a given number of years; conversely, penalties for FBOswith a record of non-compliance over a given number of years.The use of additional criteria, such as private assurance schemes developed in consultationwith the CAs of MS, or quality assurance systems based on international standards (e.g. EN29000) may also be considered.The actual modalities of these criteria (e.g. rates and progression over time ofreductions/penalties; number of years over which to measure compliance and non-complianceetc.) could be left to MS to define. At the same time, it will be important to ensure that theneeds of small, traditional and geographically remote business are taken into account (asdiscussed above under point 4.b), so that they are not discriminated against.Transparency and accountability of the application of these rules by MS would need to beensured along the lines discussed under point 3 above.c) Enlarge scope to the wider food chainAs already noted, the meat industry in particular feel disadvantaged vis-à-vis other foodsectors, especially the processing and catering sectors where the risk to human health can alsobe relatively high. This can be done by extending the financing obligation to stages upstreamand downstream of the slaughter and meat cutting operations, according to the modalities ofOption 3, i.e. encourage extension of the system but leave it up to MS to define (Table3-4).
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4. Conclusions and recommendationsSignificant progress has been made in the application of Regulation 882/2004 by MS, and inparticular the financing provisions of Articles 26-29, since their entry into force on 1 January2007. However, the enforcement of these provisions has been slow and gradual, withimportant delays in most MS. In some cases, full implementation is still pending subject tothe approval of draft national legislation enacting Article 27, despite the fact that the deadlinefor its definitive entry into force was 1 January 2008. In these cases the fee system in place islargely based on that laid down in previous, repealed legislation (Directive 85/73).In conclusion therefore, despite progress, currently the application of the financing provisionsof the Regulation can be considered incomplete at EU level.Apart from the delays in transposition, a number of shortcomings have been identified in theapplication in practice of the current system for the financing of official controls, as laid downin the Regulation. As outlined in detail in section 2, such shortcomings include:•In some MS, despite enacting legislation being in place, fees are not collected or areonly partially collected (e.g. collected below the minimum fee rates or not collected inall sectors where the collection of a fee is compulsory).•There is significant variation between MS in the interpretation of the various provisionsof Article 27. Overall, there are extensive complaints, both from industry and from MSauthorities, that there is excessive scope for wide and open interpretation of the rulesdue to the ambiguous formulation of Article 27 and Annexes and the lack of a clearunderstanding of these provisions. The following issues have been identified asproviding scope for misinterpretation:oReference in Regulation 882/2004 to outdated legislation, e.g. in Annex IV to theold Directives on official controls preceding the Hygiene Package regulations.This has led to confusion in the implementation of the provisions both for theauthorities and for business operators;oThe general formulation of the three criteria of Annex VI. In particular, theproblem appears here to be the lack of definitions for some of the terms used. Forexample, the term ‘associated costs’ (criterion 2) is believed to lead to theinclusion of administrative costs which may not be directly justified by the officialcontrols in place. This has led to a lack of uniformity in approach, and isconsidered to be a key factor explaining the wide variation in fee rates betweenMS or even within MS.oThe complex structure of Article 27, in particular the interrelation and formulationof its various paragraphs, make the various provisions difficult to comprehend.This has led to a situation where in some MS a combination of minimum rates andflat rates apply, which was not the original intention of the legislation (theintention being that either one or the other should apply).
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oThe lack of a rationale for the minimum rates of Annex IV and V. The study hasidentified the need for a clear and transparent basis for the setting of these fees,particularly in the case of domestic controls. As it currently stands, the minimumfee rates are not fully respected and there are many complaints from industry thatthese are too high or unfairly set.•Where flat rates (rather than the minimum rates of Annex IV and V) are used, there isgenerally a lack of transparency on the calculation method that has been followed. Thiscan be seen both from the notification letters sent by MS to DG SANCO pursuant toArticle 27.12 of the Regulation, and from the results of our survey. Very few countriesdescribe their calculation methods, and even in these cases there is no clarity on thevarious elements covered by the ‘administrative costs’ which are always taken intoaccount in the calculation.•There is significant variation in the channelling and use of the revenues raised from thefees. Although the use of these revenues to finance the official controls system is themain rationale for the financing provisions of Regulation 882/2004, as it stands theRegulation does not make any reference to the obligation of MS to ensure this is takingplace. The study has found that there is generally a lack of transparency on thechannelling of these revenues, and the information collected through the surveydemonstrates that the extent to which these funds are used to refund the official controlssystem appears to be very variable amongst the EU27.In addition, the study has identified some overarching challenges which go beyond the scopeof the study and of Regulation 882/2004 as such. These issues are nonetheless discussed inthis Report, as it is not easy to separate the review and evaluation of the fee system from theoverall organisation and structure of official controls. They also have significant implicationswhen examining the options for the future:•The fact that there appear to be widespread variations in the level, frequency andstandard of the official controls performed in the MS of the EU-27. Although not dealtwith directly by this study, this point is relevant, becauseà priorithe cost of controls(and the associated fee for cost-recovery) should in practice relate to the quantity andquality of the services provided. The need to address this point has therefore emerged inour interviews with industry in particular. From a review of FVO Reports on officialcontrols carried out in MS under the Hygiene Package, it is evident that the level andstandard of the controls remains highly variable between MS (some less extensiveissues of variability appear to exist also with import controls performed at BIPs).At the same time, there are on-going discussions concerning the improvement of theinspection services, e.g. in slaughterhouses, to take into account technological progressand the increasing uptake of self-control systems (notably GHP and HACCP) followingthe introduction of the General Food Law and the Hygiene Package.•The significant variation in the structure and organisation of the CAs in the MS, and ofthe staff (veterinarians, hygienists) performing these controls. This point also hasfinancial implications of relevance to this study.
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It is noted that the addition of several layers of competent/executive bodies is usuallydictated by constitutional law and the administrative traditions of a MS, and is thereforedifficult to change as such. On the other hand, there is currently a trend in the EU torationalise public services, and this includes consideration of alternative employmentmodels for the staff responsible for the official controls.•A number of external factors can be added to these challenges, such as technologicalprogress, market trends and the structure of the industry, which can affect the efficiencywith which official controls are organised and performed.These issues call into question the principles and objectives of the Regulation to ensure aharmonised approach across the EU with regard to official controls. The study has found thatthe current organisation of the fees system in the MS creates some distortions in competition(particularly discriminating against the meat industry and smaller businesses) as well ashaving implications for the efficiency and effectiveness of the controls. This can potentiallyundermine the ultimate objectives of the system to guarantee food safety and the protection ofpublic health as well as the free circulation of goods within the internal market.The identified shortcomings can be broadly attributed to:•Problems within the EU legislation.This refers to the various issues identified in theformulation of Articles 26-29 of Regulation 882/2004 as such (including broaddefinitions in Annex VI, confusion in the structure and interception of the variousparagraphs of Article 27 & Annexes IV and V, and concerns on the level of minimumfees and the fact they are expressed on a tonnage basis). It also includes issues identifiedin the wider context of Regulation 882/2004 (such as broad reference to official staffrequirements) and its relation to other legislation (particularly the Hygiene Package). Itis worth noting that, even in the case of the minimum rates of Annexes IV and V,stakeholders as well as most CAs were unclear on how this particular level of fees wasset in the legislation in the first place;•Problems in MS interpretation.These appear to arise largely as a consequence of thediscretion given to MS to implement the rules, within a broadly defined set of criteria,and the relatively limited accountability of authorities at MS level. Although Regulation882/2004 implicitly refers to a central authority as having the ultimate responsibility foreffective and efficient coordination even in cases where competence is conferred toauthorities at a more decentralised level (Article 4.3), the study has found that inpractice this is not always guaranteed and that a large number of authorities may beinvolved with little coordination between them. This, in turn, has implications for theaccountability of the central competent authorities of the MS to the EU institutions.
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To address the various shortcomings in the current application of the Regulation57, the studyhas examined various scenarios within the following key options: moving from the currentsystem towards more harmonisation, moving towards more subsidiarity; and, the continuationof thestatus quo.A complementary option, which in fact transcends the above threealternative options, is the extension of the financing obligation to sectors beyond thosecurrently covered by the Regulation.The scenarios were developed by combining key components, which were identified on thebasis of the intervention logic of the system as laid down in the current legislation (Articles26-29). These are: the basis of fee charging; level of fee rates; fee calculation method; feereductions and penalties; and, list of activities covered by fees (Table3-1).A constant featureof all scenarios under each option is the basis of fee charging: compulsory for all MS underthe harmonisation option, optional under the subsidiarity option, and a mixed approach underthe continuation of current rules.The scenarios were assessed in terms of advantages and disadvantages, feasibility (whetherand under which conditions they would work in practice), and the acceptance that they mighthave from the various groups of stakeholders.The key criteria applied for the assessment were defined in the context of the main goals andprinciples of Regulation 882/2004, as well as the wider objectives of Community food andfeed law and the Lisbon strategy, as follows: improving the effectiveness and efficiency ofthe official controls; simplification of the current system; and providing the right incentivesfor FBOs to encourage compliance and discourage non-compliance.It is noted that these criteria may not necessarily point in the same direction. For example,pursuing simplification may not be compatible with the increasing complexity required toensure a harmonised approach towards cost-recovery across the EU. It would be importanttherefore to define the overall objective of the policy approach to be followed at EU level.The initial assessment of the scenarios provided here aims to provide a balance between thevarious objectives and needs of stakeholders.The assessment has shown that neither harmonisation nor subsidiarity would work in theirmost extreme expression. Determining a uniform level of fees across the EU-27, under thefuller harmonisation scenarios, may be unworkable in practice, because the large variationbetween MS in the actual cost of the controls would make it difficult to find a commondenominator in terms of fee levels. Leaving full discretion to MS to develop their own systemfor the financing of official controls under full subsidiarity, given the current divergence ineconomic and industry development between MS, may not provide the resources to maintain(or improve) the current standard of controls. Although both scenarios would simplify thecurrent system at the level of central management (particularly if full subsidiarity is pursued),
It is noted that addressing some of the current shortcomings identified by this study requires action thatextends beyond the financing provisions of Regulation 882/2004, to the wider legislation in the area of food andfeed safety. The discussion of solutions to such shortcomings was therefore limited to its relevance to the costsand the financing of the official controls.
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they ultimately carry the risk that they may not lead to sufficient cost-recovery in some MS,and that the level of cost-recovery may vary significantly between MS. This could underminethe overall effectiveness of the official control system at EU level, and/or act as a disincentiveto improving its efficiency.An intermediate solution would clearly provide the most pragmatic way forward.Intermediate scenarios provide different degrees of balance between the flexibility that themajority of MS require, as an incentiveinter aliato rationalise the system, with thesimplification needed at the level of central management (Commission, MS CCAs). Thestudy has found that the rationale for a flexible approach, which underlies the currentRegulation, continues to apply today. The majority of MS CAs and stakeholders haveindicated that a system that allows MS flexibility to set the fee rates, within a commonlyagreed set of rules, continues to be the most favoured option. This approach is considered themost appropriate for the system to be able to adapt to national conditions.On balance, amongst the various scenarios that can be envisaged at an intermediate level,those leading to more subsidiarity appear to be more attractive than those that lead to moreharmonisation. This is because the degree of flexibility given to MS increases, while thedegree of complexity of the legislation diminishes.Moving towards more subsidiarity, if the primary aim of the legislation is to ensure that MShave the funds necessary to cover the costs of official controls whatever the means, scenario 4(maintain only the general obligation for MS to provide adequate funding, in the line of amodified Article 26) could present an attractive alternative to pursue for the purposes ofsimplification.The disadvantage of such a system would be that it could result in wider variations betweenMS than those created by the current system. To reduce these variations, conditions could beattached in the form of common principles at EU level for a more harmonised calculation ofthe fees and/or fee reductions/penalties across the EU (scenario 3).Although the continuation of thestatus quowould be an alternative intermediate solution, theanalysis of current shortcomings under section 2.2 has shown that todo nothingis clearly notan acceptable or a pragmatic option. However, the current situation represents the politicalreality of the evolution of the system since Directive 85/73. Thus, if the current mixedapproach of the Regulation was to be maintained, certain improvements could be introducedas follows: at a general level improve the understanding of Regulation 882/2004; provide arationale for the setting of minimum fee levels and review the rates of Annexes IV and V inthe light of this rationale; improve transparency and accountability criteria (to reinforce theprovisions currently provided by Regulation 882/2004); refine and define certain provisionsmore precisely at technical level; update Articles 26-29 of Regulation 882/2004 with theprogress made since the adoption of the General Food Law and the Hygiene Package.Whatever the scenario to be pursued at an intermediate level, the study has identified the needfor the definition of common principles that can apply for a more harmonised calculation ofthe fees and/or fee reductions/penalties across the EU. These could be general principles onlyor they could be more detailed criteria defined at a technical level. General principles would
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include: transparency in the calculation method of fee setting and for calculating feereductions/penalties, on the basis of actual costs; and, the obligation for MS to communicatethese to the Commission and the public. Detailed technical criteria would include for instancethe calculation method to be followed for fee setting and for fee reductions/penalties, cost-recovery targets that should be sought, precise cost categories that should be taken intoaccount, and even maxima/ceilings for each cost element.The level at which common principles should be set needs to be further explored, as it iscrucial in controlling MS flexibility and mitigating the potential disadvantages of subsidiarity.The greater the degree to which EU legislation moves from defining common principles andgeneral guidelines (as is currently the case with Articles 27-29 of Regulation 882/2004) tomore technical criteria, the more difficult it will be for MS to deviate from a commondenominator. On the other hand, this increases the complexity of the provisions and theextent of follow up needed at central level (Commission, MS CCAs).In terms of the calculation of fee reductions and penalties, in particular, the principles couldbuild on the advantages and benefits of self-control systems, as introduced at EU level by theHygiene Package. The study has examined the possibility to expand on existing provisions ofthe Regulation, by following an integrated approach more consistently linking complianceand non-compliance, and therefore fee reductions and penalties, to the uptake of self-controlsystems by industry (through abonus-malussystem). Both MS and stakeholders are inprinciple in favour of providing incentives to FBOs to assume greater responsibility. Theextent to which this can be encouraged will depend on the degree to which an approach onhow to reward compliance can be developed (Articles 27.5/6) and, conversely, how topenalise non-compliance (Article 28). This could be through an integratedbonus-malussystem. Such systems have already been developed at MS level in a few MS (e.g. Belgium)and these highlight the advantages of an integrated approach. The study has concluded that,although the development of such systems needs to be encouraged at EU level, their actualdesign can at present only be pursued at MS level.In addition to the above, the cross-cutting theme of the extension in scope of the Regulationwas favourably assessed, in relation in particular to the inclusion of all stages along the foodchain. The case of the extension of the system to stages upstream and downstream of theslaughtering and meat cutting operations along the meat production chain was a case in point.The study has concluded that an extension in this form would spread the costs of controlscurrently pursued only at a particular point in the chain but for the benefit of stagesupstream/downstream more equitably along the food chain. Again, this approach is currentlybeing adopted/explored in several MS.This forward looking element of the project aimed to provide an initial assessment of certainkey scenarios. The purpose was not to provide a full feasibility analysis (whether at politicalor technical level). Nonetheless, specific recommendations were made to develop thesescenarios, or indeed other potential combinations of their components, including throughfuture impact assessments.
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Annex 1
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1.1 List of relevant background legislationNote: EU legal acts quoted in this Report refer, as applicable, to the last amended version.Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April2004 on official controls performed to ensure the verification of compliance with feedand food law, animal health and animal welfare rulesHygiene Package:•••Regulation (EC) No 852/2004 of the European Parliament and of the Council of 29 April2004 on the hygiene of foodstuffsRegulation (EC) No 853/2004 of the European Parliament and of the Council of 29 April2004 laying down specific hygiene rules for food of animal originRegulation (EC) No 854/2004 of the European Parliament and of the Council of 29 April2004 laying down specific rules for the organisation of official controls on products ofanimal origin intended for human consumption
Regulation (EC) No 183/2005 of the European Parliament and of the Council of 12 January2005 laying down requirements for feed hygiene. In particular Article 10 “Approval of feedbusiness establishments”.Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January2002 laying down the general principles and requirements of food law, establishing theEuropean Food Safety Authority and laying down procedures in matters of food safety.Commission Regulation (EC) No 2076/2005 of 5 December 2005 laying down transitionalarrangements for the implementation of Regulations (EC) No 853/2004, (EC) No 854/2004and (EC) No 882/2004 of the European Parliament and of the Council and amendingRegulations (EC) No 853/2004 and (EC) No 854/2004.Previous legislation:Council Directive 85/73/EEC of 29 January 1985 on the financing of health inspections andcontrols of fresh meat and poultrymeatAs amended by:Council Directive 96/43/EC of 26 June 1996 amending and consolidating Directive85/73/EEC in order to ensure financing of veterinary inspections and controls on live animalsand certain animal products and amending Directives 90/675/EEC and 91/496/EECInternal market (Annex IV, Regulation 882/2004)Council Directive 89/662/EEC of 11 December 1989 concerning veterinary checks in intra-Community trade with a view to the completion of the internal market (Annex listing checks isnow replaced by Annexes to Regulation 853/2004)
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Council Directive 90/425/EEC of 26 June 1990 concerning veterinary and zootechnicalchecks applicable in intra- Community trade in certain live animals and products with a viewto the completion of the internal marketCouncil Directive 93/119/EC of 22 December 1993 on the protection of animals at the time ofslaughter or killingCouncil Directive 96/23/EC of 29 April 1996 on measures to monitor certain substances andresidues thereof in live animals and animal products and repealing Directives 85/358/EECand 86/469/EEC and Decisions 89/187/EEC and 91/664/EECImports (Annex V, Regulation 882/2004):Council Directive 97/78/EC of 18 December 1997 laying down the principles governing theorganisation of veterinary checks on products entering the Community from third countriesCouncil Directive 91/496/EEC of 15 July 1991 laying down the principles governing theorganization of veterinary checks on animals entering the Community from third countriesand amending Directives 89/662/EEC, 90/425/EEC and 90/675/EECNot mentioned in Regulation 882/2004 but related:Regulation (EC) NO 396/2005 of the European Parliament and of the Council of 23February 2005 on maximum residue levels of pesticides in or on food and feed of plantand animal origin and amending Council Directive 91/414/EEC :Official controls of MRLsArticle 26Official controls1. Without prejudice to Directive 96/23/EC (1), Member States shall carry out officialcontrols on pesticide residues in order to enforce compliance with this Regulation, inaccordance with the relevant provisions of Community law relating to official controlsfor food and feed.2. Such controls on pesticide residues shall, in particular, consist of sampling andsubsequent analysis of the samples and identification of the pesticides present and theirrespective residue levels. Such controls shall also be carried out at the point of supplyto the consumer.Council Directive 2002/89/EC of 28 November 2002 amending Directive 2000/29/EC onprotective measures against the introduction into the Community of organisms harmfulto plants or plant products and against their spread within the Community:Article 13d
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1. Member States shall ensure the collection of fees (Phytosanitary fee) to cover thecosts occasioned by thedocumentary checks, identity checks and plant health checks provided for in Article13a(1), which are carried out pursuant to Article 13. The level of the fee shall reflect:(a) the salaries, including social security, of the inspectors involved in the abovechecks;(b) the office, other facilities, tools and equipment for these inspectors;(c) the sampling for visual inspection or for laboratory testing;(d) laboratory testing;(e) the administrative activities (including operational overheads) required forcarrying out the checks concerned effectively, which may include theexpenditure required for pre- and in-service training of inspectors.2. Member States may either set the level of the Phytosanitary fee on the basis of adetailed cost calculation carried out in accordance with paragraph 1, or apply thestandard fee as specified in Annex VIIIa.Council Directive 2000/29/EC of 8 May 2000 on protective measures against theintroduction into the Community of organisms harmful to plants or plant products andagainst their spread within the Community
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1.2 List of reviewed FVO reports and MS notification letters to DG SANCO
Note: Refers to the latest relevant FVO Reports, and notification letters, as available up to15 October 2008.
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Study on fees or charges collected by MS for official controls: Final ReportDG SANCO Evaluation Framework Contract Lot 3 (Food Chain)FVO Reportsavailable**OCs FH1234567891011121314151617181920AustriaBelgiumBulgariaCyprusCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsPoland8176/2006*7196/20077950/2008*7197/20078173/2006*8177/2006*7838/20088153/2006*8194/2006*8170/2006*7223/20078179/2006*7430/2007*8183/2006*7201/20078209/2006*8166/2006*7193/20078206/2006*7190/20078189/2006*7662/20057588/2007*8146/2006*8059/20067442/20077728/2005feesNNNNNNNNNNNNYNYNYNNNNYNNYNYICs BIPsFees mentioned in Report: Y=yes N=noNotificationlettersfeesOtherfeesAvailabilityYNYNY7378/20078058/20067582/20077185/2007*8055/20067917/20077242/20077235/20077275/20077280/20077277/20078133/2006*7283/20077583/20078063/2006YYNYYYYYYYNYYN7419/20078119/2006YN7194/2007N8007/2006 (VRCs)8099/2006NNY8004/2006 (fish)7349/2007 (ICT LAs)8108/20068113/2006NNYNYYYYY7218/2007N7695/2008 (VRCs)7724/2008 (feed OCs)8012/2006 (VRCs)YNNYYYNYYYNNY
fees
ICs PH
fees
PRCs
8121/2006*7571/20078057/20067746/20087727/2005
NYYNY
7426/2007
Y
8258/20067376/20078132/2006
YYN
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feesYNNYYYYN
ICs PH
fees
PRCs7222/2007
8128/20067433/20077429/2007
NYY
7179/20078115/2006
NN
FVO Reports:OCs FH:Official Control Systems in place for Food Hygiene (within the meaning of Regulation (EC) 852/2004) Traceability and LabellingReports marked with*: Official Controls on the Safety of Food of Animal Origin (meat , milk and their products)ICs BIPs:Import/Transit Controls and Border Inspection PostsReports marked with*: Imports Controls on Food and Feed of non-Animal OriginICs PH:Import Inspections for Plant HealthPRCs:Controls of Pesticide ResiduesVRCs:Veterinary Residues ControlsICT Las:Intra-community trade live animalsCP:Country Profile** Only latest Report is mentioned under each categoryBold: case study countries
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Annex 2
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2.1: SURVEY of EU-27 CAs: results
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1.1 Are fees or charges collected for covering the costs incurred through official controls in theareas covered by Regulation 882/2004?
NB. YES & NO means there are cases of official controls for which fees are not collected.
1.3 a) Are fees collected to cover the costs occasioned by official controls (within the meaning ofArt.27 (1) of Reg.882/2004)? (PLEASE INDICATE NON-COMPULSORY FEES ONLY)
NB. YES & NO means there are only some regions within the MS for which such fees are collected.
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1.4 Are fees or charges collected according to Art.27 (2) of Reg.882/2004 (COMPULSORYCOLLECTION OF A FEE)?
NB. YES & NO means there are some activities of Annex IV and V for which fees are not collected.
1.6 a) Which system is being applied for setting fees/charges (system defined according toparagraph 4b of Art.27 of Reg. 882/2004?
NB. Combination of flat rates and minimum rates can be for same or for different categories of activities
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1.6 b) Imports: which system is being applied for setting fees/charges (system defined accordingto paragraph 4b of Art.27 of Reg. 882/2004?
NB. Combination of flat rates and minimum rates can be for same or for different categories of activities
1.8 a) Are there cases where a fee below the minimum rate is being applied (according to Art.27(6))?
NB. In practice, the lower fee is not applied always necessarily in accordance with Art. 27(6)
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1.9 a) Are the actual costs borne by the CA covered entirely by the fees/charges collected?
NB. YES & NO means costs are covered for some activities but not for others.
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1.10 How is the revenue from the fees or charges collected pursuant to Art.27 of reg 882/2004used in the country?
2.1 Would your services be in favour of common system/subsidiarity system?
NB. Definition of subsidiarity system and mixed system, as it appears to be understood by MS, is very close.Both allow for a certain flexibility to MS to set the rates, within a commonly agreed set of rules. On the otherhand, some MS that have opted for a common system, have highlighted nonetheless the importance of keepingsome flexibility.
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2.3 Would your services be in favour of extending to other sectors (than the ones specified inReg. 882/2204) the obligation to contribute to the financing of official control activities?
NB. YES & NO may reflect difference in opinion between the CAs that responded to the survey, (e.g. CzR,Germany); or an undecided position at present (e.g. France); or under certain conditions (e.g. Ireland, Spain)
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SECTION 2 – OPTIONS FOR THE FUTUREQuestion 2.2– What would your services consider as the advantages/benefits, or disadvantages/drawback of either system?“COMMON SYSTEM”ADVANTAGES/BENEFITSDISADVANTAGES/DRAWBACKSCOMPETITION ISSUES1.Reduction of distortions-Equality of production costs induced by administration to allindustries in Europe, not introducing factors that could interferewith free competition;-Competitive conditions of operators retained;-Avoid discrepancies in final product price due to fees;-Avoid distortion of competition between MS;-The competition among MS (on the basis of fees alone) iseliminated;-Cost of controls burdens products in the same way across the EU.1. Unequal basis for competition-Taking into account the different economic and financialconditions of MS, these charges can be considered as barriersfor food business operators in some MS;-Unequal competition conditions. Reinforces gap between directsupport levels between MS due to CAP (for NMS), thuscreating unequal basis for competition;
LEVEL OF FEES1.Uniformity/Less variability-Equal amount of fees charged among all MS (common fees forall MS);-All import controls costs harmonized throughout EU for imports;-Harmonised fees, identical rates for all MS;-For the same type of controls carried out uniformly in all the MSsthere should apply the same/harmonized fee levels;-Less variability within MS;-Equalization of these charges in MS;-Uniform costs for operators in all MS;-All operators are charged equally (Equal treatment);1. Lack of consideration of national economic conditions (costs)-The national peculiarities of MS are not taken into account;-Different costs of OCs among MS due to differences in salary,materials, analysis etc.-Ignores specific economic conditions of MS;-Different economic state between MS;-The specific geographic location of Bulgaria means higherexpenses for the border veterinary inspection control;-Different costs for the same activity in different MS;-Variable working conditions;-Variable national life costs;-Less flexibility to react to the business reality of the different MS89
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ADVANTAGES/BENEFITS
DISADVANTAGES/DRAWBACKS-Costs are different in MS, therefore these might result ininsufficient revenues or excessive costs for the stakeholders;-Same import controls do not mean same costs;-Imports: larger BIPs that handle larger throughputs can havecertain economies of scale that allow them to operate morecost-efficiently.2. Risk of insufficient coverage of actual expenses-Payment does not correspond to actual costs of controls;-Some activities and their expenses may not be covered;-Possibly not full coverage of the cost of controls in some MS;-Fee revenue would not necessarily cover the actual costs.3. Difference in financial burden for governments-The costs paid by the governments in MS would be different;-Higher share of the state budget for financing the controls4. Differences on the financial burden for business operators-Businesses with low throughput may pay higher fees in order tocover the cost of inspection;-Eventually, the same level of fees throughout the EU would notbe adequate for all plants (depends on plant size/amount ofgoods to be controlled);-For the very large establishments, the amount of fees couldbecome disproportionate to the actual cost of inspection5. Difference in the levels of controls-Differences in the cost of controls that exist between MS couldaffect the level of control that would be applied
2.Clear definition of criteria-Same criteria/approach in all MS for application of fees;-Having the guarantee of harmonised OCs based on key pre-defined points (e.g. ante and post mortem inspection)-Clear principles of calculation of the taxes;-Uniformity of criteria
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ADVANTAGES/BENEFITS
DISADVANTAGES/DRAWBACKSIMPLEMENTATION
1. Simplification-Simpler application;-Makes easier the activity of the competent authority;-Can be applied faster if rates included in the Regulation;-No need to do extensive economic evaluation;-Simplification of fee collection;-Simplification for stakeholders;2. Enforcement-CAs are obliged to apply Community law3. Acceptance from the business operators-More acceptable from the business operators;
1. Problems of interpretation-Interpretation problems with the Regulations which are notalways explicit2. Limited coverage-May not cover all control activities in all MS3. Lack of flexibility-Inflexible;-Rigidity of the system and greater burden on some MS-Reduces potential for flexible decisions to be taken by MS;-The system is not dynamic and does not allow the correction ofpayments according to changes in the costs of controls;-Not many possibilities for exemptions
Note: each bullet point corresponds to the comment made by a single MS. Comments have been grouped together by main subject andkey type of advantage/disadvantage.
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Question 2.2– What would your services consider as the advantages/benefits, or disadvantages/drawback of either system?“SUBSIDIARITY SYSTEM”ADVANTAGES/BENEFITSDISADVANTAGES/DRAWBACKSCOMPETITION ISSUES1. Distortion of competition:-Potential distortion of competition between MS. Official controlpriorities may be different between MS;-Fee differences could be used for commercial competition;-The competition among MS might deepen;-Distortion of the internal market, if some MS compete on fees;-Distortion of the Common Market;-If absence of harmonised fee regulation in the EU, industry willbe indirectly supported by MS not collecting fees, to thedisadvantage of collecting MS;-Different rates, thus, possible differences in veterinary costs forthe operators and, therefore, unequal competition;-Can be used for competition between MS, if fees are reduced orabolished to attract industries of other MS;-This system could create differences between MS that would beharmful to the single market and relevant discussions onequivalence with third countries;-Discrepancies in the final price of the product due to the fees
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ADVANTAGES/BENEFITSLEVEL OF FEES1.Adaptation to country’s economic situation-Better evaluation of national realities;-Takes into consideration regional and national characteristics;-Fees adapted to variable national living costs;-Each MS has the possibility to choose the best solution, given itseconomic level;-This system can be adapted more easily to the different situationsin the MS’s reality;-Each MS, knowing their economic and financial status, canestablish the fees to cover the expenses generated by officialcontrols that can be accessible to food business operators;-Based on certain criteria the fees may be adapted to the localproduction conditions;-Fee will be closer to the actual costs of control;-Fees proportionate to special conditions of sector and the controlcosts in each MS;-More accurate and adapted assessment of costs of the costs ofofficial controls in each MS and consequent level of fees;-Fees more justified/cost-based;-Flexibility for MS to adapt costs to the fees and vice versa.2.Adaptation to sector’s specific situation-Milk: MS know their own industry and what level of fee isacceptable;-Milk: MS can adjust fees to meet actual costs;-Meat: systems are different in each MS so important to haveflexibility to fix fees for particular activities3.Coverage of costs-All costs can be covered by the fees/charges, if cost data exist andFood Chain Evaluation Consortium
DISADVANTAGES/DRAWBACKS
1. Variability among MS-Differences between MS;-Variability among MS and business operators;-Fees not harmonised2. Different criteria-Non uniform criteria within the EU3. Difference in financial burden for governments-To cover the difference between actual revenues from controlsand the running and maintenance costs, budget resources arerequired; these needs may be very different for the various MS4. Differences on the financial burden for business operators-Different conditions for operators in the different MS;-Non-harmonised fees put operators in different MS in an unequalposition;-Complication for stakeholders to determine their expenses due tothe different fees in different MS;-Non equivalent costs and conditions for producers in thedifferent MS
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ADVANTAGES/BENEFITSare transparent;-Adaptation for each MS based on actual needs: the calculationwill be closer to actual expenses-Modulation (fee adjustment) based on rational and objectivecriteria (conformity with self-control and traceability,production capacity, production methods etc.)
DISADVANTAGES/DRAWBACKS
IMPLEMENTATION1.More transparency-FBOs would be involved in negotiations to establish the fees,therefore system favours consensus/ transparency;-Allows the inclusion of a fee modulation system taking intoaccount industry actions e.g. staff participation in the controls;-Introduces more responsibility at all levels (CAs, FBOs);-System’s management more accurate because adapted to nationalconditions2.Flexibility-Freedom to set fee rates by the individual MS;-Flexibility of national rules;-In case of a national crisis, a MS will have more autonomy toreact promptly and more efficiently on the financial level;-Allows easier adaptability to changing situations/scenarios;-Possibility to correct the amount of fees without affecting theprinciple of equality, to maintain them on an adequate levelwithout increasing state subsidies1. Difficulties in application-Difficulties in negotiations with the industry in case of non-harmonised EU legislation;-This system could be subject to political pressure and require alengthier process;-Difficulties in fee setting (justification) and in application
2. Higher administrative costs-Indirect administration costs can hike fee levels abovereasonable levels;-Fee may not be fully covering extra costs of control that arebasically linked to running and technical maintenance costs
Note: each bullet point corresponds to the comment made by a single MS. Comments have been grouped together by main subject andkey type of advantage/disadvantage.
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Question 2.4– What would your services consider as the advantages/benefits, or disadvantages/drawback of extending the obligationto other sectors?MSBELGIUMQ 2.3YesADVANTAGES/BENEFITS•Phytosanitary sector has already been placed under theAgency control, and therefore, it shall contribute•Each sector concerned to some extent with the foodchain safety must at the very least be recorded and inthe majority of the cases it shall contribute to thecontrols of this sector/channel•Cover the activities that are the object of controls•Encourage business operators to implement thelegislative requirements•To create adequate conditions for farmed game andwild game processing•Common approach throughout the food chain(including feed production)•Unification of the system for financing of the controlsin MS•Spreads the cost over the whole of the industry - Dir178/2002 talks about responsibility at all levels of thechain; each level has to be effectively responsible -even a small fee would make FBOs conscious of theirresponsibility.•Makes the fees system a motor for the industry as wellas for the control bodies.•Part of the cost of official controls is shared with allfood-feed sectors;•Would provide sufficient financial resources to coverthe costs of OCs.DISADVANTAGES/DRAWBACKS
BULGARIA
Yes
•Additional financial burden for business operators•Additional administrative regulations•Increased administrative - bureaucratic burden forbusiness operators•Additional financial burden on producers, processorsand distributors
CZECH REP.ESTONIA
Yes/noYes
FRANCE
Yes/no
•An extended system on this basis would be hard toimplement
GREECE
No
•Fees for OCs overcharge the consumer;•Opposition of business operators;•Additional administrations cost for fee collection;•The economic situation is already difficult for theindustry in general and particularly the food industry.95
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MSIRELANDITALYLATVIALITHUANIALUXEMBOURG
Q 2.3Yes/noYesYesYesNo
ADVANTAGES/BENEFITS
DISADVANTAGES/DRAWBACKS•Fees can only be applied to areas which are subjectto direct supervision and controls
•Division of costs to all productive activities subjectedto controls.•Could be extended to cover some sectors, other thanfood, not currently covered by Regulation 882/2004.•Unified system for all sectors•More responsibility for the industry•Increased authority for the controller•Incentive to supplementary hygienic efforts to reducethe control frequency•More revenues for the CAs provided that the revenuesare utilised for training and official controls.•Under Reg 852/2004, all operators must be controlled.Today only a few are being taxed to cover all the OCcosts. It doesn’t cover all costs, and it is unfair for thefew sectors which must pay the controls done to all.•Harmonising MS legislation for the non animal andanimal sector, in accordance with food definitionprovided by Art. 2 of Regulation 178/2002•Harmonised fees for all feed business operators(approved/registered) and harmonised fees forimported feed•Additional productions costs in charge of theconsumer•Financial disadvantage for controlled businessestablishments•Lower profits for those subjected to official controlsmight generate higher costs for end products and,therefore, consumers might also be affected•Administrative implementation.
MALTA
Yes
PORTUGAL
Yes
ROMANIA
Yes
SLOVENIA
Yes
•Problem is the great diversity of FBO activities•Difficulties in harmonisation: fees should be relatedalso to production (quantity)•As regards imports, the place of fee collection shouldbe laid down, as to whether the fee shall be collectedon entry or on release into circulation
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MSSPAIN
Q 2.3Yes/no
ADVANTAGES/BENEFITS•Covering the costs of official controls;•Better financing system, better service
DISADVANTAGES/DRAWBACKS•Difficulties for collection of fees;•Adverse social reactions•Negative impact on the society;•Excessive fiscal pressure on the paying sectors
Note: Only the MS that provided answers to Q2.4 are included in this Table. Second column indicates their answer to Q2.3.
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Question 2.5– Which sectors would your services consider as the most appropriate for inclusion in an extended scope of Regulation882/2004 and why?MSBELGIUMMSYesSECTOR/SREASON/S
Belgium already cover a very large selection of operators, on the basis of data provided by the TVAAdministration.•Animal welfare;•Control on imports of honey and bee productsfor human consumption;•Control on imports of milk and milk products;•Control on imports of feedingstuffs of plantorigin;•Control on residues and environmentalcontaminants;•Control on imports of eggs and egg productsfor human consumption;•Control on production establishments;•Control of storage•Feed sector•There all entail expenses for the competent authority
BULGARIA
Yes
CZECH REP.
Yes/no•Slaughter of farmed game•Production, storage and transport of nonanimal foods
DENMARK
Yes
•Attribution of the costs arising by the feed controlactivities to the feed business operators;•Approximation of the approach in all MS;•Encouragement of FBOs to implement the legislativerequirements adequately and efficiently•This sector is currently not charged although it used tobe charged in the past. Slaughter of other speciesincluding wild game is charged.•There is no obvious reason for letting the producers ofmeat and milk pay for controls, while for producers ofother food products it is free98
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MSESTONIA
MSYes
SECTOR/S•Processing and distribution of feed•Processing and distribution of food of non-animal origin•Animal herd free status certification (forzoonoses, e.g. Salmonella, Brucella, TSEs,etc)
REASON/S•Common approach throughout the feed chain (incl.feed production)•Common approach throughout the food chain
GREECE
No
ITALYLATVIA
YesYes
••
LITHUANIALUXEMBOURGPORTUGAL
YesNoYes
••
•For sampling cost: staff salaries, movements,sampling materials, etc•For testing cost: staff salaries, sample dispatching,testing material, etc.•For animal keepers: free of charge supplyVegetable foods•Division of costs to all productive activities subjectedto controlsPossibly some non-food border controls•These are also creating a big financial burden thatcurrently not covered by Regulation 882/2004:should be paid for.controls laid down in Reg. 339/93 andDecision 93/583 (quality control on medicinesintended for humans and animals, toys, fruitsand vegetables, etc.).Only sectors currently paying on a ‘non-compulsory’ basis.Perhaps egg-products•For public health reasons
•Some actions on animal health, animal feed•To support partially the rising costs of animal healthcontrol, farm licensing; Survey of OCs;as well as OC surveys and audits.Audits.•In conclusion all sectors under Regulation852/2004, which CAs must control, or at least,all sectors and establishments underRegulation 853/2004, which CAs mustapprove/control.
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MSROMANIASLOVENIASPAIN
MSYesYes
SECTOR/S•All the sectors provided in Art. 2 ofRegulation 178/2002•Animal feed
REASON/S
•See 2.4
Yes/no•Retail, catering, prepared and distributed food;•These sectors account for an important share of theofficial controls•food of non-animal origin•Fees are insufficient to cover these activities atpresent.
Note: Only the MS that provided answers to Q2.5 are included in this Table. Second column indicates their answer to Q2.3.
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Question 2.6– Do you have any further recommendations for the improvement of the system of fees or charges for official controls?Recommendations1.In favour of certain autonomy for each MS to set the fee amount charged to the food sector. It appears important to avoid the significantdistortion of competition through a certain harmonisation of the collected fees/charges. Minimum amounts fixed by the EU authorities,comparable procedures on controls and financing of each MS and the publication of these national data appear to be necessary to obtainthat goal/objective.Introduce minimum amount of fees, according to the control activities, to be laid down in the European legislation.Explicit fee rate for the control of feed business operators needs to be introduced in EU legislation.Regulation 882/2004 does not stipulate how to cope with minimum rates in countries outside the Eurozone. This causes some problems inimplementation. Need to include provisions similar to Art 7 of Directive 85/73/EEC or stipulate that rates of ECB should be used.To define what is meant with adult bovine animal, missing such a definition which complicates the collection of fees.Introduce maximum limits or cancel all fees or charges for official controls. Costs for official controls should be borne by individual MS(on a case by case basis).In order to establish the fees, the economic status of each individual MS must be taken into account.The European Commission must establish minimum and maximum limits for fees (e.g. adult bovine slaughtering - between 1-5 euro).Collect fees for transit of all products.Fees charged under Art. 27 of Regulation 882/2004 should be incorporated in the TRACES system; as a first step, at least the feesrequired under Annex V of Reg. 882/2004.Further harmonization needed.
2.3.4.
5.6.
7.8.9.10.
11.
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Recommendations12.13.More precise definition needed of the fee calculation for the fees charged under Art 29 (and Art 28) of Reg 882/2004.Provide guidelines regarding the interpretation of Art.27 and 28 incl. Annexes, inter alia: what type of costs may be taken into accountwhen setting the fees (overhead costs, and if so, to what extent? Accommodation costs?). This would contribute to the creation of a morelevel-playing field.Taking into account the general principle that fees or charges should not be higher than the costs borne by CAs, it is the MS responsibilityto fix the amounts of the fees or charges and the activities for which fees or charges should be collected. Especially for activities ofofficial controls in relation to community establishments.Whatever system of fees or charges would be designed for official controls at EU level, it is without effect at a national level, because ofthe administrative structure of the economic and food safety control authorities.Common fees for all MS to avoid any discrepancies in the final price of the product due to fees, calculated by taking into consideration thespecific economic situation of some MS.Establish the list of activities for which fees are collected in Annex IV of Regulation 882/2004 on the basis of the same criteria acrosssectors. These criteria could eventually be as proposed in Rec. #3.In favour of actual system, with common minimum fees, with possibility to raise fees to adjust to the real costs of OCs in some veryparticular conditions equal for all MS. Effectively a combination of common and subsidiarity systems.Enlarge the scope of Regulation 882/2004 to cover all sectors and establishments, adopting the actual criteria of the new EU food hygienelegislation (Regulations 178/2002, 852/2004 and 853/2004). This would result in raised revenue for MS, as a greater number of operatorswill pay, consequently diminishing fee levels for each one. Eventually, perhaps the fee could be charged to the operator, not the activities.
14.
15.
16.
17.
18.
19.
Note: each bullet point corresponds to the recommendation made by a single MS.
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2.2: SURVEY of EU-27 CAs: questionnaire
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A study on the collection of fees or charges for official controls pursuant toArticle 27 of Regulation (EC) No 882/2004SURVEY of EU-27
INTRODUCTIONThis survey takes place in the framework of an ongoing study by the European Commission,Directorate-General for Health & Consumers (DG SANCO), on fees or charges collected bythe Member States (MS) to cover the costs occasioned by official controls under Article 27 ofRegulation 882/200458(hereafter referred to as ‘the Regulation’).According to Article 65 of the Regulation, three years after its entry into force, theCommission needs to review the experience gained from its application, in particular in termsof scope and the fee-setting mechanism, and whether/how the current regime can beimproved. The objective of this survey is to collect your views on these issues.This questionnaire is addressed to the Competent Authority (CA) of each MS, defined as thecentral authority of a MS that is competent for the organisation of official controls or anyother authority to which that competence has been conferred (Article 2.4 of the Regulation).DG SANCO has recently circulated a letter to the MS, in response to questions raised by theGerman government, concerning the interpretation of Articles 26-29 of the Regulation. Thisletter clarifies questions that may arise in the context of the transition from the previous feesystem, under Directive 85/73/EEC59, to the new rules of Regulation 882/2004 which applywith effect from 1 January 2008. According to the Commission’s interpretation, the officialcontrol activities for whichcompulsory feesare charged within the meaning of Article 27.2 ofRegulation 882/2004 under the new hygiene package (Regulations 852/2004, 853/2004 and
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Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controlsperformed to ensure the verification of compliance with feed and food law, animal health and animal welfare issues.
59Council Directive 85/73/EEC of 29 January 1985 on the financing of health inspections and controls of fresh meatand poultry meat.
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854/2004)60remain the same as those mentioned in Articles 1, 2 and 3 of Directive 85/73EEC. The full letter is attached inAppendix 1.ALL QUESTIONS IN SECTION 1 NEED TO BE COMPLETED.THE QUESTIONNAIRE CAN BE COMPLETED IN ENGLISH, FRENCH, SPANISH OR GERMAN.
60Hygiene Package: Regulation (EC) No 852/2004 of the European Parliament and of the Council of 29 April 2004 onthe hygiene of foodstuffs; Regulation (EC) No 853/2004 of the European Parliament and of the Council of 29 April 2004laying down specific hygiene rules for food of animal origin; Regulation (EC) No 854/2004 of the European Parliament andof the Council of 29 April 2004 laying down specific rules for the organisation of official controls on products of animalorigin intended for human consumption.
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Please return the completed questionnaires by e-mail to Agra CEASConsulting (DG SANCO’s external Contractor for this project),to the attention of:
DEADLINE: 27 June 2008
For any questions on this survey or questionnaire please contact the survey manager:
Dr Maria ChristodoulouAgra CEAS Consulting20-22 rue du Commerce1000 Brussels, Belgiumtel:fax:+32 2 736 00 88+32 2 732 13 61
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IDENTIFICATION DATA
-
Member State:
-----------------------------------------------------------------------------------
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Competent Authority (CA) completing the questionnaire:
----------------------------------------------------------------------------------
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Contact person (s):----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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Position held:----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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Phone number (s):----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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E-mail:----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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SECTION 1.
CURRENT SYSTEM
1.1 Are fees or charges collected for covering the costs incurred through officialcontrols in the areas covered by Regulation 882/2004?(please tick the appropriate box)
Yes
No
If the answer is ‘No’, please justify your answer, by referring to:a) The reasons why:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------b) Whether any other system is in place for ensuring the coverage of the costs of official controls:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.2. Since when have the fees/charges pursuant to Article 27 of Regulation 882/2004been collected?(please tick the appropriate box)
Prior to 1.1.2007
Since 1.1.2007
Since 1.1.2008
Other date
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1.3.
a) Are fees collected to cover the costs occasioned by official controls (within themeaning of Article 27 (1) of Regulation 882/2004)? PLEASE INDICATE NON-COMPULSORY FEES ONLY (compulsory fees are dealt with in Question 1.4).(please tick the appropriate box)
Yes
No
b) For which sectors/activities are such fees collected? WhichCA is responsible for
setting and collecting such fees/charges, and at which level?Sector/activityLevelTitle of the Authority responsible for:FEE SETTINGFEE COLLECTION
A:----------------------------------------------------------------------------------------------
CentralRegionalLocal
B:----------------------------------------------------------------------------------------------
CentralRegionalLocal
C:----------------------------------------------------------------------------------------------
CentralRegionalLocal
D:----------------------------------------------------------------------------------------------
CentralRegionalLocal
E:----------------------------------------------------------------------------------------------
CentralRegionalLocal
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Sector/activityLevel
Title of the Authority responsible for:FEE SETTINGFEE COLLECTION
F:----------------------------------------------------------------------------------------------
CentralRegionalLocal
etc (1):----------------------------------------------------------------------------------------------
CentralRegionalLocal
(1)
If A to F is not sufficient, please add more lines as appropriate
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If the answer is ‘No’, please justify your answer, by referring to:c) The reasons why:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------d) Whether any other system is in place for ensuring the coverage of the costs of official controls:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.4. Are fees or charges collected according to Article 27 (2) of Regulation 882/2004(COMPULSORY COLLECTION OF A FEE)?(please tick the appropriate box)
Yes
No
If the answer is ‘No’, please justify your answer, by referring to:a) The reasons why:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------b) Whether any other system is in place for ensuring the coverage of the costs of official controls:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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1.5. Which CA is responsible for setting and collecting the fees/charges according toArticle 27 (2) of Regulation 882/2004, and at which level?
Level
Title of the Authority responsible for:FEE SETTINGFEE COLLECTION
Central
----------------------------------------------- ---------------------------------------------------------------------------------------------------------------
Regional ----------------------------------------------- ---------------------------------------------------------------------------------------------------------------Local
----------------------------------------------- ---------------------------------------------------------------------------------------------------------------
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1.6.
a) Which system is being applied for setting fees/charges (systems defined according toparagraph 4b of Article 27 of Regulation 882/2004)?
(please tick the appropriate box/es)Flat-rates (calculated on the basis of the costs borne by the CA)
Minimum rates (Annex IV & V, section B of Regulation 882/2004)b) Please specify the system of fees/charges applied by activity:(please tick the appropriate box)
ActivitySlaughter inspections (Annex IV, Section B, Chapter I )Cutting plants control (Annex IV, Section B, Chapter II)Game processing houses (Annex IV, Section B, Chapter III )Milk production (Annex IV, Section B, Chapter IV)Fishery products and aquaculture products (Annex IV, SectionB, Chapter V)Imported meat (Annex V, Section B, Chapter I)Imported fishery products (Annex V, Section B, Chapter I I)Meat products, poultry meat, wild game meat, rabbit meat,farmed game meat, by-products and feed of animal origin(Annex V, Section B, Chapter III)Transit through the community of goods and live animals(Annex V, Section B, Chapter IV)Imported live animals (Annex V, Section B, Chapter V)Directive 96/23 (official controls on residues)Other activities (pleasespecify):---------------------------------------------------------
Flat-rate
Minimumrate
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1.7.a)
Please specify the criteria (Annex VI of Regulation 882/2004) and the method thatis being applied to calculate the fees/charges:Criteria:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
b)
Method:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.8.
a) Are there cases where a fee below the minimum rate is being applied(according to Article 27(6) of Regulation 882/2004)?(please tick the appropriate box)
Yesb) Where such cases exist, please specify:Food or Feed or activityconcerned
No
Criteria applied for thereduction
Method applied for thereduction
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1.9.
a) Are the actual costs borne by the CA covered entirely by the fees/chargescollected?
(please tick the appropriate box)
Yes
No
b) If ‘No’, please indicate which percentage of the actual costs has been coveredby the fees collected, for each year over the past three years:
2005: %2006: %2007: %
-----------------------------------------------
1.10.
How is the revenue from the fees or charges collected pursuant to Article 27 ofRegulation 882/2004 used in your country?
(please tick the appropriate box)It is directly used by the CA for funding the controls covered byReg. 882/2004.
It is incorporated into the State's General Budget and only apercentage is used to cover the costs of the controls carried out.
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SECTION 2.
OPTIONS FOR THE FUTURE
2.1. Would your services be in favour of:A common fee or charge system based on minimum rates for acommon list of control activities carried out in Communityestablishments and at the time of import (“commonsystem”)?A system that leaves up to the MS the responsibility to fix theamounts of the fees or charges and the activities for which feesor charges should be collected (“subsidiaritysystem”)?
2.2.
What would your services considerdisadvantages/drawbacks of either system?
as
the
advantages/benefits,
or
“Commonsystem”:Advantages / Benefits------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Disadvantages / Drawbacks------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
“Subsidiaritysystem”:Advantages / Benefits------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Disadvantages / Drawbacks------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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2.3.
Would your services be in favour of extending to other sectors (than the onesspecified in Regulation 882/2004) the obligation to contribute to the financing ofofficial control activities?(please tick the appropriate box)
Yes
No
2.4.
What would your services consider as the advantages/benefits,disadvantages/drawbacks of extending the obligation to other sectors?
or
Advantages / Benefits------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Disadvantages / Drawbacks------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.5.
Which sectors would your services consider as the most appropriate for inclusionin an extended scope of Regulation 882/2004 and why?
Sector/s:------------------------------------------
Reason/s:------------------------------------------------------------------------------------
------------------------------------------
----------------------------------------------------------------------------------
------------------------------------------
----------------------------------------------------------------------------------
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2.6.
Do you have any further recommendations for the improvement of the system of
fees or charges for official controls?
(pleasetype your recommendations)
Recommendation N� 1
Recommendation N� 2
Recommendation N� 3
Thank you very much for your precious collaboration!
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Annex 3Competent authorities responsible for the various Official Controls (OCs) covered by the scope of this studyNotes: The information provided in the following Table is based on the latest FVO Reports and Country Profiles available.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOAustria--Ministry of Health and Women (BMGF);Austrian Agency for Health and Food Safety (AGES).--BMGFJoDepartment IV/B/5, responsible for supervising BIPs andcoordinating activities
Import controls
At Land level, the Provincial Governor (LH), with competenciesshared between:--the Food Inspectorates (controls on milk processing establishmentsand retail sector);the Provincial Vet Services ('Magistrat') (controls in meatestablishments and milk production holdings).FPS (Federal Public Service for Health, Food Chain Safety and theEnvironment) ;AFSCA (Federal Agency for the Safety of the Food Chain)
Customs Authorities of Ministry of Finances (BMF)
Belgium
--
----
AFSCA (Federal Agency for the Safety of the Food Chain).Customs and Excise Administration of the Federal Public Servicefor finance (Central Customs Service)11 Provincial Control Units (PCU) carry out the official controls,including import controlsFPS is indirectly involved since it is responsible for the policy,standards and requirements for all products occurring in the foodand feed chain.oThe Directorate-General for Animals, Plants and Foodstuffs isinvolved in food safety and feed policy making and legislation ;oThe Department of Control Policy (DG Control Policy) developsthe Import control program (i.e. risk analysis);oThe Department of Control (DG Control) elaborates the importcontrol plan for the points of entry.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOBulgaria--Ministry of Health (overall control of food establishments, OCs offood of non-animal origin);Ministry of Agriculture & Forestry (OCs for food of animal originat retail and catering sector)-
Import controlsBorder Veterinary Control Directorate (BVCD) of the NationalVeterinary Service (NVS) within Ministry of Agriculture andForestry.
Plus Border Veterinary Inspection Controls of regional veterinaryoffices, and BIPs.Co-operation between veterinary services and Customs in place.
Cyprus
-
Ministry of Agriculture, Natural Resources and Environment(MANRE).oThe Veterinary Public Health Division (VPHD), within theVeterinary Services (VS) is responsible for the processing andproduction level.
-
MANREoAnimal Health and Welfare Division (AHWD), within theVeterinary Services (VS).
-
At a local level, there are 5 District Veterinary Offices (DVO)
-
Ministry of HealthoThe Health Services (HS) are responsible for the retail level.
The BIPs function under direct instructions from the Imports and AnimalTrade Control Section (IATCS) within the AHWD.
At a regional level VPHD consists of 5 district veterinary offices(DVOs). Some DVOs have the rural veterinary offices.CzechRepublic--Ministry of Health (MH),Ministry of Agriculture (MA) and its supervisory body the CzechAgriculture and Food Inspection Authority (CAFIA).-Ministry of AgricultureoExport and import Division within the State VeterinaryAdministration of the Czech Republic (SVA-CR). It isresponsible for coordination and management of theimport/transit control system and BIPs, as well as for executionof import/transit controls. It also has the responsibility forsupervisory inspections/audits of the BIPs.-Customs within the Ministry of Finance are organised operationallyinto eight Regional Directorates and 54 operational offices, whocarry out Custom’s clearance and check at entry points.
The Czech Rep. has a clearly defined structure of CAs responsible forfood hygiene, with adequate vertical and horizontal communication.
The Municipal Veterinary Administration (MVA) for the city of Praguehas direct responsibility for the BIP Praha-Ruzyne.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAODenmark-DVFA (Danish Veterinary and Food Administration) under theMinistry of Food, Agriculture and Fishery (MFAF) is responsiblefor policy co-ordination. Within DVFA there are several divisionsresponsible for food hygiene (e.g. the Control Co-ordinationDivision and the Division for Microbiological Food Safety,Hygiene and Zoonoses Control).Three RVFA (Regional Veterinary and Food Administration) areresponsible for co-ordination and implementation of controls.They operate through Control and Enforcement Offices within theregions where they are located.-
Import controlsDVFA under the Ministry of Food, Agriculture and Fishery (MFAF)oThe International Trade Division is responsible for import of liveanimals and products of animal origin, the transposition of EUlegislation on imports into national law and the implementationin the different regions through training and supervision. Itsupervises 3 RVFA, which are responsible for checking productsof animal origin and live animals presented for BIP checks.-Customs Services within the Ministry of Taxation. They areorganised in five regional services and, within each region, into anumber of divisions.
-
The RVFA inspects all food premises as well as some premises in theprimary production sector.The Danish Plant Directorate (DPD) inspects the conditions in relationto hygiene on farms except for the use of medicine and risk ofintroduction of zoonoses.The Directorate of Fisheries (DF) inspects conditions in relation tohygiene on fishing vessels etc.EstoniaControl system for food of animal origin:--VFB (Veterinary and Food Board).The Consumer Protection Board of the Ministry of EconomicAffairs is responsible for labelling of foodstuffs and traceability ofbovine meat.
The role of the DVFA head office is to supervise BIP checks and toinstruct, liaise with and co-ordinate these services on BIP matters.At BIPs level, there are agreements with customs and regular meetingstake place.
-
Ministry of Agriculture:oFood and Veterinary Department is responsible fortransposition of legislation
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VFB is the CA for veterinary checks of live animals and products ofanimal or non-animal origin at BIPsoTrade, Import and Export Department has administrative andsupervisory responsibility for all the BIPs.
The VFB prepares its annual inspection and sampling programme.Based on this, inspectors of the 15 CVCs (County Veterinary Centres)draw up their annual inspection and sampling plans.The frequency of inspection is based on risk categorisation of the foodestablishments.The 15 CVCs are responsible among other tasks, for supervision ofactivities of Authorised Veterinarians (AVs) at local level.
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Customs are organised on a central and regional basis into 4Regional Customs Centres
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for general food hygiene:---The VFB of the Ministry of Agriculture has primary responsibility.The Office of retail, organic farming and food of non-animalorigin of the FD (Food Dept.) is the operational body.Approval of retail and catering establishments is the responsibilityof CVCs.
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The frequency of VFB inspections is based on risk categorization. Theminimum frequency of inspection is established in the annual plan.Retail and catering establishments are divided into three risk categories(high, medium and low).FinlandControl system for food of animal origin:-MAF (Ministry of Agriculture and Forestry) is responsible forlegislation on food of animal origin except at retail level, which iscompetence of MSAH (Ministry of Social Affair and Health).Evira (Finnish Food Safety Authority) is the central competentauthority for the control of the foodstuff of animal origin.Evira is in charge for registration and approval of large scaleslaughterhouses and integrated meat and fish establishments, whileall other types of establishments are approved by themunicipalities. Evira issues a National Food Control Programme(EVO) which provides guidance for the official control performedby the SPOs (State Provincial Offices) and MAs (MunicipalAuthorities). Based on this programme each MA produces its owncontrol plan.Evira (Finnish Food Safety Authority) is the CA, under the guidance ofMAF.-MAF is responsible for the transposition and implementation of theEU legislation and strategic planning (“Unit of Animal Health andWelfare” within the “Health and Food Department”)Evira (“Animal Health and Welfare Unit”, in the “Department offood and veterinary control”) is responsible for the import/transitcontrols of products of animal origin, live animals, including animalwelfare.Customs, within the Ministry of Finance, have a centralisedmanagement structure, and are organised operationally on five
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for general food hygiene:-MAF: DHF (Dept. of Food and Health) is responsible for thehygiene of the foodstuffs in primary production and food of animalorigin prior to retail level.MSAH is responsible for health protection and general hygiene offoodstuff.MTI (Ministry of Trade and Industry) ensures the health-relatedand quality aspects of processed food and protects consumerrights.
Import controlsregional services who manage the customs office which operates ineach region.
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Veterinarians at local level are either employed or authorised to work asborder veterinaries by Evira.
The provincial governments through the 6 SPOs are responsible fordeveloping regional control, while at local level the municipalitiesconduct food control via the MFCA (Municipal Food ControlAuthorities).France(For fullstructure ofCAs refer toPart Two ofthis FinalReport)-Ministry of Agriculture and Fisheries, in particular GeneralDirectorate for Food Direction (DGAL) is the competent authority,with primary competence;Ministry of Economy (DGCCRF) is responsible on controls offood products (e.g. composition, labelling etc.);Ministry of Health (DGS) is responsible on fields related to publichealth and food safety.Agents of regional and departmental directorates (correspondent tothe country’s administrative division) carry out the operationalimplementation of controls.The 16 Bundesländer are CAs. The competence is thereforeregional and the fees setting responsibility is assigned to thedesignated CA/s of each Bundesländer.The Federal CA, the Ministry of Food, Agriculture and ConsumerProtection, oversees theBundesländers’implementation of law.-Ministry of Agriculture and Fisheries, in particular General Directoratefor Food Direction (DGAL) – Imports form third countries.
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Germany(For fullstructure ofCAs refer toPart Two of
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOthis FinalReport)The responsibilities for food safety and for feed safety are clearlyseparated and lie with different authorities at different administrativelevels.Food and veterinary affairs are governed on either two or threeadministrative levels within the individualBundesländer.--At a land level, the Ministry in charge of food, feed and veterinaryaffairs is the highest ranking Competent Authority.At the intermediate land level, five Bundesländer (Bavaria, Baden-Württemberg, Hesse, North-Rhine Westphalia and Saxony) haveintermediate food and veterinary authorities responsible for thesurveillance and instruction of local authorities and thecoordination of tasks.At a local level, district or municipal authorities (in total there aresome 440 local authorities in Germany) are responsible toimplement the food and veterinary controls.
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The responsibility for feed safety often lies with an authority atintermediate level (Regierungspräsidien) or at central level.GreeceOfficial Control Systems for Food Hygiene (Regulation 852/2004):According to Joint Ministerial Decision No 088/06, two CCAs aredesignated for the control of food and feed.- Hellenic Food Authority (EFET)- Ministry for Rural Development and FoodImplementation of food control through the regional services of EFETand the autonomous decentralised prefectural services:- the Veterinary Directorates for controls on foods of animal origin,- the Rural Development Directorates on food of plant origin.-The Ministry of Rural Development and Food (MRDF)oDGVS (Directorate General of Veterinary Services). BIPs areunder its direct responsibility and the veterinary staff isemployed by the MRDF as official veterinarians. DAH, DVAHco-ordinate on BIPs matters. DVAC (Dep. of VeterinaryAudits is responsible for auditing the BIPs)Customs authorities are part of the Ministry of Economy andFinance.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOCCA for VRCs (Directive 96/23):-Directorate of Veterinary Public Health (DVPH), which residesunder the DG for VS within the Ministry of Rural Developmentand Food (MRDF).-The Directorate of Animal Health and Animal Protection within theCAO of MARD is responsible for the implementation ofimport/transit controls in BIPs.The BIPs are administratively under the responsibility of theCounty Animal Health and Food Control Department within therelevant county AOCustoms authorities are under the direction and the supervision ofthe Ministry of Finance (MF), having an autonomic legal personalityand countrywide competence.
Import controls
Hungary
Control system for food of animal origin:-Dept. for Food Chain Safety, Animal and Plant Health in MARD(State Secretary for Agricultural Administration)
--CAO (Central Agricultural Office). The CAO-FFSD (CentralAgriculture Administration Office, Food and Feed SafetyDirectorate) has overall responsibility for food and qualitycontrols.
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Inspection tasks are delegated at regional level to 19 CountyDirectorates for Food Chain Safety and Animal Health (CountyDFCSAHs).County DFCSAHs prepare annual inspection plans. The inspectionfrequency is specified in a guide on standard operational procedures(SOP) issued by the CAO-FFSD.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for foodstuff and food hygiene:--Dept of Food Chain Safety, Animal and Plant Health in MARDand the CAO-FFSD is the CA.The Ministry of Health (MH) and the National Public Health andMedical Officers Service (NPHMOS) are responsible for controlson foodstuff intended for particular nutritional uses, and for otheractivities as indicated in Government decree 302/2005.The Ministry of Social Affairs and Labour (MSAL) and theHungarian Authority for Consumer Protection (HACP) are incharge for the controls on quality, labelling and other distributionrelated activities.-DAFF (Dept. of Agriculture, Fisheries and Food) is the CAresponsible for veterinary import controls of products of animalorigin and live animals (except for fish and fisheries, which areresponsibility of SFPA)The control of BIPs is performed under service contract to the FSAI.
Import controls
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Ireland
Control system for food of animal origin:-DAFF (Dept. of Agriculture, Fisheries and Food) and DoHC(Dept. of Health and Children) are responsible for food policy andlegislation with the support of FSAI (Food Safety Authority ofIreland), which has overall responsibility for the enforcement offood legislation in Ireland.DAFF, LA (Local Authorities) and HSE (Health ServiceExecutive) have administrative responsibility for grantingapprovals.
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Co-operation between the different bodies is ensured through a workinggroup on import controls, consisting of staff from FSAI, DAFF, SFPA,customs, VI from LA and representatives of HSE.Co-operation with customs at local level is frequent and informal.
The evaluation of establishments supervised by DAFF is carried out bya VI (Veterinary Inspectors) and RSVI (Regional SuperintendingVeterinary Inspector). The evaluation of establishments supervised byLA is carried out by a VI. On the basis of this evaluation FSAI issuesan approval number.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for foodstuffs and food hygiene (CP 2007):---The DoHC has a Food Unit responsible for most of the issuesrelated to food safety and hygiene.DAFF, HSE, SFPA and LA have responsibilities for controls intheir respective areas of competence.
Import controls
Italy(For fullstructure ofCAs refer toPart Two ofthis FinalReport)
FSAI co-ordinates official controls by means of SC (ServiceContracts) with each CA. CAs have to present the annual controlplan to FSAI which has to approve them.The CAs designated to carry out official controls within the scope ofArticle 4 of Regulation 882/2004 are:•Department for Veterinary Public Health, Nutrition and FoodSafety (DVPHNFS) within the Ministry of Health;•Local Offices of the DVPHNFS: 36 Border Inspection Posts(BIPs) and 17 Veterinary Offices for Compliance withCommunity Requirements (UVAC);•Regional Veterinary Services (RVS);•Local Health Units (AUSL) implement the controls at locallevel.The 19 regions and 2 autonomous provinces have responsibility withintheir territories for planning, co-ordination, guidance, authorisation,and verifications of controls.Institutional co-operation between the central authorities and theRegions takes place in the permanent forum of the State-RegionsConference.(For the full structure and for a detailed allocation of competencies,refer to part 2 of Report, Fig. 3-1 )
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The central government maintains the tasks and responsibilities overimport controls and international prophylaxis.The DVPHNFS is the CA for import/export controls on live animalsand food of animal origin, including international relations and theco-ordination of local offices.Controls on imported animals, food of animal origin, andfeedingstuffs are carried out at the 36 BIPs which report directly tothe Ministry of Health.
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(For the full structure and for a detailed allocation of competencies,refer to part 2 of Report, Fig. 3-2 )
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOLatviaOfficial control related to the safety of food of animal origin:-PVD (Food and Veterinary Service) within the Ministry ofAgriculture.-The official food control is regulated by two laws - Law on VeterinaryMedicine and Law in Supervisioning and Handling of Food.The PVD consists of a Central Office, 27 TSU (Territorial StructuralUnits), border inspection posts and laboratories.Within the PVD, the Food Control Dept. is responsible for the controlof meat and milk production areas.Official controls are carried out by FI (food inspectors) and SAV (stateauthorised veterinarians).-
Import controlsThe Veterinary and Food Department (VFD) is responsible for thetransposition of EU legislation, whereas the SBI is responsible forthe implementation of the legislation.The individual BIPs are under the responsibility of the SBI (SanitaryBorder Inspection), which is also responsible for the employmentand supervision of BIP staff
There is a central management structure, with a chain of command fromthe CCAs to those carrying out relevant tasks at BIP level
Lithuania
Official Control Systems for Food Hygiene (Regulation 852/2004):-State Food and Veterinary Service (SFVS), which accountsdirectly to the Prime Minister.
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The International Affairs Department within SFVS at central levelhas the responsibility for coordination and management of importcontrol system.SFVS at county level is responsible for the execution of importcontrolsThe BIPs are placed under the direct management of the countylevel of SFVSCustoms within the Ministry of Finance are organised operationallyinto five territorial offices which are responsible for the customsposts at the individual entry points.
Within the SFVS there are 11 departments, of which 3 are directlyrelated to food hygiene: Food dept.; Strategic Planning Dept.; Risk andQuality Management Dept.Control activities are carried out by 10 County and 5 City SFVS, whichreport directly to the central office, while 34 district SFVS report to theCounty Offices.The National Veterinary Laboratory is subordinated to the SFVS.
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Management of the BIPs is implemented by SFVS centrally andsupervisory inspections/audits of the BIPs are responsibility of Food andveterinary internal Audit Department of the SFVS.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOLuxembourgControl system for food of animal origin:-MH (Ministry of Health).---Customs and ExciseLNS (National Health Laboratory)
Import controlsINSA (Health Inspectorate) of Ministry of Health
The ASV (Veterinary Service Administration) is responsible for thecontrols. The DSP (Public Health Division) of ASV has specificresponsibilitiy, including the inspection of butchers' shops.An annual plan of official controls is drawn up by the CA. In additionto routine controls, follow-up inspections are carried out where asuspicion of non-compliance exists.Controls are carried out on a permanent basis in slaughterhouses whichhave continuous throughput, and during production in smallerslaughterhouses.Control system for foodstuff and food hygiene (CP 2007):-MH.
No regional or local authorities within the country.
DIS (Sanitary Inspection Division), ASV, ADA (Custom and ExciseAdministration), LNS (National Health Laboratory) and the Policeservice are all involved in carrying out official controls of foodstuffs.OSQCA (Organisation for the Safety and Quality of the Food Chain) isresponsible for co-ordinating the controls carried out by the differentservices.The distribution of responsibilities is not clearly defined in the currentFood Law, which dates from 1953.MaltaOfficial controls related to the safety of food of animal origin:-VAFD (Veterinary Affairs and Fisheries Division) within theMinistry for Rural Affairs and Environment.-VAFD (Veterinary Affairs and Fisheries Division) within theMinistry for Rural Affairs and Environment.oThe Director for Food Health and Veterinary Enforcement underthe Director General of Veterinary Regulation and FisheriesConservation and Control is responsible for supervision ofimport/transit controls of POAO and live animals and threeapproved BIPs are directly under his command.
The VAFD has two General Directorates, one for Administration andOperations and another for Veterinary Regulation and FisheriesConservation and Control.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOThe CA responsible for registered establishments is the Dept of PublicHealth (DPH).NetherlandsOfficial controls related to food of animal origin:-VWA (Food and Consumer Product Safety Authority), anindependent agency in the Ministry of Agriculture, Nature andFood Quality (LNV) and the delivery agency for the Ministry ofHealth, Welfare and Sports (VWS). It is responsible for the meatand milk sector and it is responsible for the official controls in themeat sector.--
Import controlsDepartment of Customs within the Ministry of FinanceSouth West Regional Department within the VWA.oImport DivisionoManagement division (responsible for daily planning of staffactivities)Centralised management structure, with a chain of command from theCCA to those carrying out relevant tasks.Tasks are not split geographically, according to the location of the BIPs,but rather according to the management of specific tasks in relation toimport controls which are allocated to different teams in the ImportDivision.Customs have also a centralised management structure and are organisedoperationally into four regional services.
The 3 main tasks of VWA are: supervision, risk assessment and riskcommunication. The control of establishments in the meat sector isdivided among 5 regional offices.
Control system for foodstuff and food hygiene :--VWAVWS.
VWA prepares tri-annual policy programmes which serve as a basis forannual inspection and sampling and risk categorisation.Inspection strategy is divided between small and larger businesses.Poland(For fullstructure ofCAs refer toPart Two ofthis FinalReport)Responsibility for the implementation of official controls, including feesetting, is assigned to the national administration at central level, butthe execution of control activities is assigned to the regional and locallevels.-State Plant Health and Seed Inspection Service (SPHSIS),represented:oAt national level by the Main Inspectorate of Plant Health and-The BIPs are under the responsibility of the VIPHSIs.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOSeed InspectionoIn the regions (Voivoideships) by the regional inspectorates(VIPHSI). Each VIPHSI defines the financial needs of theirinspectorate.In Poland the CAs designated to carry out official controls (OCs)within the scope of Article 4 of Regulation 882/2004 are:•Veterinary Inspection (IW)•State Sanitary Inspection (PIS);•Agricultural and Food Quality Inspection (IJHARS);•Trade Inspection (IH).The Veterinary and Sanitary Inspections operate through Inspectoratesat central (Chief or Main Inspectorate), regional (VoivodshipInspectorates) and local (Poviat Inspectorates) level, corresponding toadministrative division of the country.Portugal--DG for Veterinary Issues (DGV) under the Ministry ofAgriculture, Rural Affairs and Fisheries (MADRP)Authority for Food and Economic Security (ASAE) under theMinistry of Economy and Innovation.-Import controls at BIPs are responsibility of DSVR, under thesupervision of central service of DGV (DSSPA, Dir. for AnimalHealth and Protection and DSHPV)Customs Authorities of MFAP (DGAIEC, Customs and ExciseGeneral Directorate)NSVFSAoBIPs Coordination Service within Directorate of Import,Export, Transit and Border Inspections Posts is responsiblefor the implementation of all import/transit related issuesincluding the supervision of BIPs and the employment ofBIP staff.Directorate of European Integration, responsible for thetransposition of EU legislation
Import controls
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Official controls related to food of animal origin:-NSVFSA (National Sanitary Veterinary and Food SafetyAuthority is the CCA for implementing food hygiene legislation.
There are 2 central directorates that are at the same level but managedby different Vice-Presidents:-The Inspection and Border Inspection Posts (BIP) CoordinationGeneral Directorate (IBIPCGD), which has an inspection role, andthe Hygieneo
Centralised management structure, with a chain of command from the
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAO-Veterinary Public Health Directorate (HVPHD), which isresponsible for approval of food establishments and zoonosiscontrol.
Import controlscentral CCA to those carrying out relevant tasks.
The CA has a vertical structure consisting in 42 CSVFSDs (CountySanitary Veterinary and Food Safety Directorates) and the circuit ofveterinarians (CVs).The competences are split between the CHVPHS (County Hygiene andVeterinary Public Health Service) and the CICS (County Inspectionand Control Service).The IBIPCGD prepares the annual National Framework InspectionProgramme (NFIP). Once approved it is sent to the CSVFSD, whichschedules its own inspection programme and submits it back to theIBIPCGD for approval.
Slovakia(For fullstructure ofCAs refer toPart Two ofthis FinalReport)
The CAs responsible for official food controls are as follows:••••••Ministry of Agriculture (MoA) and Ministry of Health (MH);Public Health Authority (PHA);Regional Health Authorities (RHA);State Veterinary and Food Administration (SVFA);Regional Veterinary and Food Administrations (RVFA); and,District Veterinary and Food Administrations (DVFA). TheMinistry of Agriculture and the Ministry of Health are jointlyassigned the responsibility at the central level; they coordinateand prepare the national plan of controls, and govern andsupervise the official controls.
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Ministry of Agriculture (MoA)oState Veterinary and Food Administration (SVFA), theDVCCTIE (Department for Veterinary Certifications andControls on Intra-Community Trade, Imports and Exports)manages and co-ordinates the activities of BIPs
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Ministry of Finance (MoF)oCustoms Authorities
Public Health Authority (PHA) and Regional Health Authorities(RHA) are responsible for official food controls regarding special foodcategories.The SVFA together with the RVFAs and DVFAs carry out official
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOcontrols over the production, handling and placement on the market ofspecific product categories; the regional and district authorities carryout much of the day to day monitoring and enforcement of thelegislation. The RVFAs are responsible for the verification of theperformance of the DVFAs and their official veterinarians. TheDVFAs are responsible for carrying out the official controls at allstages of the food chain.SloveniaOfficial controls related to food of animal origin (2006)*: The CAs fordrafting the legislation are:--the Ministry of Agriculture, Forestry and Food (responsible forfood of animal origin);the VURS (Veterinary Administration of the Republic ofSlovenia) (responsible for food of animal origin (...) and animalwelfare);the Ministry of Health (responsible for food of plant and mixedorigin.-VARS,oBIPs are under the responsibility of the “Border VeterinaryInspection Sector”-Customs Administration of the Republic of Slovenia under theministry of Finance
Import controls
Centralised management structure, with a chain of command from thecentral CCA to those carrying out relevant tasks.Customs have also a centralised management structure and are organisedoperationally in ten regional services, who manage the customs officewhich operate in each region.
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The CAs for official controls are:---the VURS (for control of production, storage and trade of food ofanimal origin);the IRSAFF (Inspectorate of the Rep of Slovenia for Agriculture,Forestry and Food) (for the control of labeling related to quality);the HIRS (Health Inspectorate of the Rep of Slo) (for control oflabelling (...) and control of potable water).
The VURS consists of a Main Office (with several sectors), 10Regional Officies (ROs) and 6 BIP.Within the VURS, the competences are shared among the sectors forPublic Health, Animal health and welfare, Internal veterinaryinspection and Quality assurance and internal control (QAIC).
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOSpainDecentralised.At central level responsible for the organisation and operation ofcontrol systems are:---Ministry of Agriculture (MAPA)Ministry of Health (MISACO).The 17 ACs (Autonomous Communities) and the two autonomouscities have the principal responsibility for the operation of controlsystems in Spain for food safety, animal health and animalwelfare. These are operated through regional Ministries(Conserjerias) of Agriculture and of Health. Each AC determinesthe organisation and structure of its services and, therefore, thesedo not necessarily mirror that of the national Ministries.The Spanish Food Safety Agency (AESA), established in 2002,has overall responsibility for the coordination of the activities ofother state bodies and the ACs. To ensure this, a number ofcoordination bodies have been set up. At the highest level, theInstitutional Committee is responsible for this coordination. Attechnical level, the Committee is supported by the TechnicalConsensus Group, within which a permanent group for theapplication of the hygiene Regulations has been set up.--MISACOoSub-Directorate General for Foreign Health, within theDirectorate General for Public health (SGSE)MAPAoSub-Directorate General for means of Livestock production(SGMPG)BIPs receive information directly or through the financial areas of SE(Foreign Health) and SA (Animal Health)---Customs AuthoritiesPort AuthoritiesAESA
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FVO report notes the design of the system of official controls isgenerally not in line with EU requirements; the controls are not carriedout on a risk basis and not all factors laid down in Regulation882/2004, Article 3.1 have been considered in establishing thefrequency. Consequently, recommendations are made to the authoritiesto take corrective measures on all these points, "to ensure that in allACs official controls are carried out regularly, on a risk basis and withappropriate frequency, so as to achieve the objectives of Regulation882/2004 taking account of the factors laid down in Article 3".
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOSwedenOfficial controls related to food of animal origin: éThe CCA structure consists of :-6 regions under the responsibility of the National FoodAdministration's (NFA) Unit in charge of meat. In addition, theAnimal Welfare Agency (AWA) has been integrated into theSwedish Board of Agriculture.
Import controlsoNational Food Administration's (NFA): Food Control Departmentwith the subdivision Group for International Trade is responsiblefor BIP matters in relation to HC-products. At central level twoveterinarians and two administrators are responsible for BIPs. Atperipheral level the veterinarians of the BIPs belong to therespective municipalities, which are responsible for the BIP.oSwedish Board of Agriculture (SBA): the Animal ProductionDepartment with the subdivision Animal Division Control isresponsible for BIP matters in relation to NHC-products and liveanimals. At central level one veterinarian is responsible for BIPs.The District Veterinarian Department oversees Districtveterinarians which include those working for the BIPs. Atregional level there are 21 County Board Veterinary Divisions whohave the general responsibility for the BIPs, but not directlyresponsible for the supervision of the BIPs under central Authorityresponsibility.The veterinary inspectors of the BIPs are contracted by the relevant twoAuthorities.
A Food Act and Food Decree came into force on 01/07/2006, moving asignificant increase of the powers of the Municipalities to the centralauthorities.NFA has developed a risk-based approach for the official controls. Theused criteria are: the type of activity, the quantities produced, thecategories of consumers and the reliability if the FBO. This lead to afinal classification of each establishment on which depends theattribution of hours for supervision (min 1 to max 128 per year). Initialsteps have been taken in order to develop an Audit System inaccordance with Reg.882/2004, but so far nothing has been put intopractice.The Swedish Board of Agriculture (SBA) acts as the Single Authorityresponsible for these controls, within the meaning of Article 1(4) ofDirective 2000/29/EC. A new organisational scheme has been in placesince 1 January 2007.UK(For fullstructure ofCAs refer toPart Two ofthis FinalReport)The responsibility for official food and feed controls in England andWales is assigned centrally, the administration of responsibility isdivided between central and local government.The central authorities are the Food Standards Agency (FSA) and theDepartment for the Environment, Food and Rural Affairs (DEFRA)(and its delivery partners or executive agencies) and equivalentdepartments in the devolved administrations in Scotland, Wales andNorthern Ireland.
The responsibility of developing policies and to draw up guidance andinstruction for control staff lies with:oDEFRA: International Animal Health DivisionoFSA: Imported Food BranchAnd the respective devolved administrations in Scotland and NorthernIreland.Responsibilities for carrying out inspections of facilities and procedures
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOLocal authorities carry out much of the day to day monitoring andenforcement of feed and food law.The Single Authority (CA) is DEFRA, Plant Health Division. Theofficial body carrying out the inspections is the Plant Health and SeedsInspectorate (PHSI).From 1 April 2009, the SA will become part of a new governmentagency which should bring more autonomy over staffing levels,which will be governed by the need to operate within theconstraints of full cost recovery from the trade.at BIPs lies with the SVS.Import controls at BIPs receiving products for human consumption arethe responsibility of the Environmental Health Department of therelevant Local Authority. Import controls at BIPs receiving NHCproducts and live animals are under the responsibility of the SVS. InNorthern Ireland DARD and the Relevant Local Authorities haveresponsibility for import controls.
Import controls
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ContentsPART ONE: MAIN STUDY AND CONCLUSIONS .................................................................................................1EXECUTIVE SUMMARY............................................................................................................................................11. INTRODUCTION TO THE STUDY .......................................................................................................................11.1. BACKGROUND.......................................................................................................................................................11.2. OBJECTIVES...........................................................................................................................................................21.3. SCOPE....................................................................................................................................................................21.4. METHODOLOGY.....................................................................................................................................................21.4.1. Overall methodological approach and objectives......................................................................................... 21.4.2. Desk research ................................................................................................................................................ 31.4.3. Survey of competent authorities (CAs) .......................................................................................................... 41.4.4. Case studies................................................................................................................................................... 51.4.5. Interviews with key partners and stakeholders.............................................................................................. 61.4.5.1. At EU level ...............................................................................................................................................................61.4.5.2. At MS level (case studies) ........................................................................................................................................7
2. DESCRIPTION AND ASSESSMENT OF THE CURRENT SYSTEM OF FEES..............................................92.1. INTERVENTION LOGIC............................................................................................................................................92.1.1. Principles and objectives of EU policy.......................................................................................................... 92.1.2. The requirements for official controls ......................................................................................................... 102.1.3. The financing of official controls ................................................................................................................ 112.2. SYSTEM DESCRIPTION..........................................................................................................................................112.2.1. Competent Authorities................................................................................................................................. 122.2.2. Activities for which fees are collected ......................................................................................................... 142.2.3. Fee rates used.............................................................................................................................................. 162.2.4. Determination of the fee .............................................................................................................................. 182.2.5. Fee collection method and use of fee revenue ............................................................................................. 182.3. EVALUATION OF THE CURRENT SITUATION..........................................................................................................202.3.1. Enforcement of Article 27 of Regulation 882/2004 ..................................................................................... 21
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2.3.2. Contribution to the functioning of the internal market................................................................................ 222.3.2.1. Distortions between MS..........................................................................................................................................222.3.2.2. Distortions within MS (between regions) ...............................................................................................................252.3.2.3. Distortions between sectors ....................................................................................................................................262.3.2.4. Distortions according to scale .................................................................................................................................282.3.2.5. Distortions at the level of imports ...........................................................................................................................29
2.3.3. Contribution to maintaining the efficiency and effectiveness of OCs.......................................................... 302.3.3.1. Adequacy of the financial resources .......................................................................................................................302.3.3.2. Cost-efficiency issues .............................................................................................................................................32
3. OPTIONS FOR THE FUTURE .............................................................................................................................383.1. THE DEVELOPMENT AND ASSESSMENT OF THE VARIOUS OPTIONS.......................................................................383.1.1. Range of options and scenarios................................................................................................................... 383.1.2. Key components........................................................................................................................................... 423.1.3. Assessment criteria...................................................................................................................................... 443.2. TOWARDS MORE HARMONISATION......................................................................................................................453.2.1. Full harmonisation ...................................................................................................................................... 453.2.1. Intermediate scenarios ................................................................................................................................ 473.3. TOWARDS MORE SUBSIDIARITY...........................................................................................................................493.3.1. Full subsidiarity .......................................................................................................................................... 493.3.2. Intermediate scenarios ................................................................................................................................ 513.4. EXTENSION TO OTHER SECTORS...........................................................................................................................533.5. STATUS-QUO(MIXED SYSTEM) ............................................................................................................................573.5.1. Do nothing option........................................................................................................................................ 573.5.1. Status quo with improvements ..................................................................................................................... 584. CONCLUSIONS AND RECOMMENDATIONS .................................................................................................68ANNEX 1 ......................................................................................................................................................................741.1 LIST OF RELEVANT BACKGROUND LEGISLATION ................................................................................751.2 LIST OF REVIEWED FVO REPORTS AND MS NOTIFICATION LETTERS TO DG SANCO ..............78
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ANNEX 2 ......................................................................................................................................................................812.1: SURVEY OF EU-27 CAS: RESULTS ................................................................................................................822.2: SURVEY OF EU-27 CAS: QUESTIONNAIRE...............................................................................................103ANNEX 3 ....................................................................................................................................................................119COMPETENT AUTHORITIES RESPONSIBLE FOR THE VARIOUS OFFICIAL CONTROLS (OCS)COVERED BY THE SCOPE OF THIS STUDY ....................................................................................................119
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List of TablesTable 1-1Table 2-1Table 3-1Table 3-2Table 3-3Table 3-4European professional organisations interviewed ....................................................................... 7Share of the costs of official controls covered by fee revenue .................................................. 19Range of options, scenarios and components............................................................................ 39Moving towards more harmonisation: overall assessment........................................................ 48Moving towards more subsidiarity: overall assessment ............................................................ 52Extension to other sectors: overall assessment.......................................................................... 56
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AcronymsAVEC: Association of Poultry Processors and Poultry Trade in the EU countriesBIP/s: Border Inspection Post/sCA/s: Competent Authority/iesCCA/s: Central Competent Authority/iesCIBC / IMV / IBC: International Butchers’ ConfederationCLITRAVI: Liaison Centre for the EU Meat Processing IndustryDG: Directorate GeneralDG SANCO: DG Health and ConsumersEASVO - European Association of State Veterinary Officers (member of FVE)ECB: European Central BankEDA: European Dairy AssociationEU: European UnionEUCOLAIT: European Association of Dairy TradeEUROPECHE: Association of the National Organisations of Fishery Enterprises in the EUFBO/s: Feed/Food Business Operator/sFCEC: Food Chain Evaluation ConsortiumFCI: Food Chain InformationFEFAC: European Feed Manufacturers’ FederationFVE: The Federation of Veterinarians of EuropeGHP: Good Hygiene PracticesHACCP: Hazard Analysis Critical Control PointsMNCP: Multiannual National Control PlanMS: Member State/sNMS: New Member State/sOCs: Official ControlsPOAO: Products of Animal Origin
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SCFCAH: Standing Committee on the Food Chain and Animal HealthSG: Steering Group (for this study)ToR: Terms of ReferenceUECVB: European Livestock and Meat Trading Union
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PART ONE: MAIN STUDY AND CONCLUSIONSExecutive SummaryRegulation 882/20041(hereafter referred to as ‘The Regulation’) sets out requirements for theauthorities in EU Member States that have responsibility for monitoring and verifying compliancewith, and enforcement of, feed and food law, animal health and animal welfare rules, i.e. the'Competent Authorities' (CAs) responsible for organising and undertaking 'official controls' (OCs).According to Article 65 of the Regulation, three years after its entry into force, the Commission shouldreview the experience gained from its application, in particular in terms of scope and the fee-settingmechanism, and whether/how the current fees regime can be improved. The data collected and resultsof this study, which focused on the implementation of the financing provisions of the Regulation(Articles 26-29), will feed into a Commission Report to the European Parliament and Council for apossible modification of the current legislation.The objectives of the study are two-fold:a) to establish a detailed picture and evaluate the present situation as regards the application of thecurrent fees regime, in particular the way in which the system operates in practice; and,b) to assess the advantages and disadvantages of a range of policy options (regarding the scope ofcurrent rules and the fee-setting mechanism).As such, the final aim is to provide input to the Commission’s development of proposals to improvethe fees system in future.The assessment of the current system and future policy options take into account the wider objectivesand principles of EU policy in this sector. As such, the study considers the overall objective of theRegulation to ensure a harmonised approach with regard to official controls, the objectives of EU foodand feed law2to ensure a high level of protection of human life and health and achieve the freemovement in the Community of compliant feed and food, and the objectives of the Lisbon Strategy topromote better regulation and support industry competitiveness. Furthermore, the principles ofproportionality, subsidiarity (Article 5 of the Treaty) and FBO responsibility (in accordance withcurrent food and feed law) frame the approach of this study.The study was carried out in the period April-November 2008 through a survey of EU27 CAs, in depthanalysis (case studies) in six MS representing a variety of fee regimes (Germany, the UK, Italy,Poland, France and Slovakia), interviews with key experts and stakeholders at EU level3, andextensive literature and data review (including relevant FVO reports and national legislation).The study has found that significant progress has been made in the application of the Regulation byMS, and in particular the financing provisions of Articles 26-29, since their entry into force on 1January 2007. However, the enforcement of these provisions has been slow and gradual, withsignificant delays in most MS. In some cases, full implementation is still pending subject to theapproval of draft national legislation enacting Article 27, despite the fact that the deadline for its
Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controlsperformed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules.Regulation (EC) 178/2002 (General Food law) and the Hygiene Package (Regulations (EC) 852/2004, 853/2004 and854/2004).Including consultations with the following EU professional organisations: AVEC, CIBC/IMV/IBC, CLITRAVI, EDA,FEFAC, FVE, and the UECBV.32
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definitive entry into force was 1 January 2008. In these cases the fee system in place is largely basedon that laid down in previous, repealed legislation (Directive 85/73).Despite progress a number of important shortcomings have been identified in the current state ofimplementation of Articles 26-29, as follows:Competent Authorities (CAs):There are significant differences in the organisation, structure andstaffing (number and profiles of staff) between MS, which have financial implications for the cost ofofficial controls (OCs). Contrary to the Commission’s expectations, more than one CA is involved inmost cases, which may create lack of transparency and of central/overall responsibility. In MS withdecentralised management, the central CA is not always in control and efficient/effective coordinationis not always ensured. The study findings confirm issues which are already highlighted in relevantFVO reports. In several MS initiatives are under way to rationalize veterinary services, such as the useof appropriately trained contractual staff for the OCs rather than civil servants.Activities for which fees are collected:A distinction is made throughout the study between OCactivities for which fee collection is ‘compulsory’ (Article 27.2, activities of Annexes IV and V), andthose for which fee collection is optional or ‘non-compulsory’ (Article 27.1). The study has found that,in the case of‘compulsory’fees: 9 MS collect such fees only partly; fees for milk production and forresidue controls were found to be ‘controversial’ and often not collected at all; on the other hand, insome MS fees are collected for the same OCs more than once along the production chain (e.g. atslaughter and cutting plant even within the same establishment, contrary to Article 27.7). In the case of‘non-compulsory’ fees: 19 MS collect fees for activities beyond those of Article 27.2, while 6 do notcollect any such fees; fees are collected in some MS for OCs on products of non-animal origin.Fee rates used:Regulation 882/2004 leaves it up to MS to define fee system: either minimum fees asdefined in Annex IV (domestic controls) and V (import controls) or fee rates calculated on the basis ofthe actual costs of OCs (‘flat rates’). In practice, a multitude of fee rates apply for the variousactivities: 18 MS use a mix of the two systems (flat rates and minimum rates); the current situation isquite complex, not transparent and confusing for FBOs; the CAs appear to have interpreted relevantprovisions of Article 27 rather ‘openly’. Furthermore, 12 MS apply fees below minimum rates,however it is not clear or sufficiently justified whether the conditions of Article 27.6 (controls ofreduced frequency and criteria of para 5) are respected in these cases.Fee calculation:Article 27.4 stipulates that where flat rates are used, fee levels need to be set withinthe limits of the minimum fees set out in Annexes IV and V, and a maximum set by the actual controlscosts; the fee calculation in this case must respect the criteria of Annex VI. In practice: the calculationmethod used is not always available, or has not always been communicated to the Commission(contrary to requirements of Article 27.12); even when the method is available, it is not alwaystransparent what type of costs are included under the various cost categories and what reference timeperiod is used; in most cases it is not clear whether the actual costs included in the calculation respectthe criteria of Annex VI (staff salaries; staff costs including overheads; lab analysis and sampling).Fee collection & use of revenue:The rationale of the system is to ensure adequate financial resourcesto provide the necessary staff and other resources (Article 26). In practice: in the majority of MS thecollected revenue is incorporated into the General State Budget, either entirely (11 MS) on in part (7MS); only 9 MS claim to be ‘ring fencing’ revenues specifically for the CAs performing the controls;14 MS indicated they do not cover the OC costs through the fees, while a further 6 MS claim this isoccurring in some cases (regions, activities). This partial cost coverage may be due to inappropriatefee setting (insufficient fee levels) as well as inappropriate fee collection / use of revenue. The positionappears to be better in the case of imports controls, partly because Article 27.8 stipulates that such feesshould be paid to the CA in charge.Enforcement of Article 27:Although the Regulation should be directly enforceable, Article 27allows some discretion to MS on the actual fee system to use and the activities for which OCs should
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be charged beyond those of Article 27.2. The study has found that, in practice, there is significantvariation between MS in the enforcement of Articles 26-29. Underlying this, there is a strongperception - in some cases documented by FVO reports - of significant variation in the organisationand effectiveness of OCs, and that – as documented by the study findings - CAs have rather liberallyinterpreted provisions of Articles 26-29 (this is particularly a problem in some MS with decentralisedmanagement and lack of sufficient central control by the CCA).The study has therefore concluded that, as it currently stands, the system of fees for OCs does not fullyfulfil its key objective: to provide sufficient resources for the effective and efficient operation of theOCs. Furthermore, the actual implementation of the system raises issues with regard to its contributionto the functioning of the internal market and the cost-efficiency of the system of OCs.Contribution to the functioning of the internal market:MS broadly agree with the rationale ofArticles 26-29. However, could the heterogeneity in their application in practice cause distortions incompetition? The study has investigated various potential distortions that may arise in this context. Ithas found that in practice:•Distortions at EU level:There is a general concern amongst stakeholders in the various MS thatimplementation of rules by national authorities put them at disadvantage vis-a-vis other MS.However, it is difficult to substantiate these claims due to lack of clarity and uniformity in MSapproaches which makes the comparison of actual fees difficult. Although evidence of unjustifiedvariations in fee levels were found between MS, there is no evidence of significant distortion incompetitiveness between MS caused by differing fee levels. Other key factors affectingcompetitiveness appear to be more significant.•Regional distortionsare a concern particularly in some MS with decentralised management e.g.amongst the case study countries (Germany, also Italy and Spain);•Discrimination against themeat sector,which is seen as unfairly bearing the cost of the OCs, fromwhich other sectors along the chain also benefit;•Discrimination againstsmaller or disadvantaged FBOs,which compound the difficulties theyface in the general economic climate; this is particularly evident for those MS that have not adoptedspecial provisions for these businesses in line with Article 27.5.Cost efficiency issueshave been raised with regard to:•Staff costs:Stakeholders argue that Regulation 882/2004 could go further than the generalrequirement to have “a sufficient number of suitably qualified and experienced staff”. In practice,there are wide variations in the number and profile of staff involved in controls, and this hasrepercussions on salary costs;•Administrative costs:There is lack of transparency on what type of costs are taken into account,the formulation of Annex VI is considered too broad (in particular criterion 2: ‘associated costs’),resulting in wide variation between MS and unjustifiably high costs in some cases;•Proportionate and risk based controls:important cost savings could be made in the costs of OCsif the guiding principles of OCs (risk basis, FBO responsibility and ‘self-control’ systems) weresufficiently taken into account by MS in implementing the provisions of Articles 26-29.To address the various shortcomings in the current application of the Regulation4, the study hasexamined the following key options: moving from the current system towards more harmonisation;
It is noted that addressing some of the current shortcomings identified by this study requires action that extendsbeyond the financing provisions of Regulation 882/2004, to the wider legislation in the area of food and feed
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moving towards more subsidiarity; and, the continuation of thestatus quo.A complementary option,which transcends the above three alternative options, is the extension of the financing obligation tosectors beyond those currently covered by the Regulation.The key components of the financing system (basis of fee charging; level of fee rates; fee calculationmethod; fee reductions and penalties; and, list of activities covered by fees), as identified on the basisof the intervention logic of the current legislation (Articles 26-29), were combined to develop a rangeof scenarios within the above options (Table3-1).The basis of fee charging is compulsory for all MSunder the harmonisation option, optional under the subsidiarity option, and a mixed approach underthe continuation of current rules.The scenarios were assessed in terms of advantages and disadvantages, feasibility (whether and underwhich conditions they would work in practice), and the acceptance that they might have from thevarious groups of stakeholders. Key criteria for the assessment were the main goals and principles ofthe Regulation, as well as the wider objectives of Community food and feed law and the Lisbonstrategy, in particular: improving the effectiveness and efficiency of the official controls;simplification of the current system; and providing the right incentives for FBOs to encouragecompliance and discourage non-compliance. As these criteria may not necessarily point in the samedirection, the initial assessment of the scenarios provided here aims to provide a balance between thevarious objectives and needs of stakeholders.The assessment has shown that neither harmonisation nor subsidiarity would work in their mostextreme expression. Although both scenarios would simplify the current system at the level of centralmanagement (particularly if full subsidiarity is pursued), they ultimately carry the risk that they maynot lead to sufficient cost-recovery in some MS, and that the level of cost-recovery may varysignificantly between MS. This could undermine the overall effectiveness of the official controlsystem at EU level, and/or act as a disincentive to improving its efficiency.An intermediate solution would clearly provide the most pragmatic way forward. Intermediatescenarios provide different degrees of balance between the flexibility that the majority of MS require,as an incentiveinter aliato rationalise the system, with the simplification needed at the level ofcentral management (Commission, MS CCAs). The study has found that the rationale for a flexibleapproach, which underlies the current Regulation, continues to apply today. The majority of MS CAsand stakeholders have indicated that a system that allows MS flexibility to set the fee rates, within acommonly agreed set of rules, continues to be the most favoured option. This approach is consideredthe most appropriate for the system to be able to adapt to national conditions.On balance, amongst the various scenarios that can be envisaged at an intermediate level, thoseleading to more subsidiarity appear to be more attractive than those that lead to more harmonisation.This is because the degree of flexibility given to MS increases, while the degree of complexity of thelegislation diminishes.Moving towards more subsidiarity, if the primary aim of the legislation is to ensure that MS have thefunds necessary to cover the costs of official controls whatever the means, scenario 4 (maintain onlythe general obligation for MS to provide adequate funding, in the line of a modified Article 26) couldpresent an attractive alternative to pursue for the purposes of simplification.
safety. The discussion of solutions to such shortcomings was therefore limited to its relevance to the costs andthe financing of the official controls.
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The disadvantage of this scenario would be that it could result in wider variations between MS thanthose created by the current system. To reduce these variations, conditions could be attached in theform of common principles at EU level for a more harmonised calculation of the fees and/or feereductions/penalties across the EU (scenario 3).Although the continuation of thestatus quowould be an alternative intermediate solution, the analysisof current shortcomings under section 2.2 has shown that todo nothingis clearly not an acceptable ora pragmatic option. However, if the current mixed approach of the Regulation (which represents thepolitical reality of the evolution of the system since Directive 85/73) was to be maintained, certainimprovements could be introduced as follows: at a general level improve the understanding of theRegulation; provide a rationale for setting minimum fee levels and review Annexes IV and V in thelight of this rationale; reinforce transparency and accountability criteria; refine and define certainprovisions more precisely at technical level; update Articles 26-29 with the progress made since theadoption of the General Food Law and the Hygiene Package.Whatever the scenario to be pursued at an intermediate level, the study has identified the need for thedefinition of common principles that can apply for a more harmonised calculation of the fees and/orfee reductions/penalties across the EU. These could be general principles only or they could be moredetailed criteria defined at a technical level. General principles would include: transparency in thecalculation method of fee setting and for calculating fee reductions/penalties, on the basis of actualcosts; and, the obligation for MS to communicate these to the Commission and the public. Detailedtechnical criteria would include for instance the calculation method to be followed for fee setting andfor fee reductions/penalties, cost-recovery targets that should be sought, precise cost categories thatshould be taken into account, and even maxima/ceilings for each cost element.The level at which common principles should be set needs to be further explored, as it is crucial incontrolling MS flexibility and mitigating the potential disadvantages of subsidiarity. The greater thedegree to which EU legislation moves from defining common principles and general guidelines (as iscurrently the case with Articles 27-29) to more technical criteria, the more difficult it will be for MSto deviate from a common denominator. On the other hand, this increases the complexity of theprovisions and the extent of follow up needed at central level (Commission, MS CCAs).In terms of the calculation of fee reductions and penalties, in particular, the principles could build onthe advantages and benefits of self-control systems, as introduced at EU level by the HygienePackage. Both MS and stakeholders are in principle in favour of providing incentives to FBOs toassume greater responsibility. The study has examined the possibility to follow an integratedapproach more consistently linking compliance and non-compliance, and therefore fee reductions andpenalties, to the uptake of self-control systems by industry (through abonus-malussystem). Suchsystems have already been developed in few MS (e.g. Belgium), highlighting the advantages of anintegrated approach. The study has concluded that, although the development of such systems needsto be encouraged at EU level, their actual design can at present only be pursued at MS level.Furthermore, the cross-cutting theme of the extension in scope of the Regulation was favourablyassessed, in relation in particular to the inclusion of all stages along the food chain. The case of theextension of the system to stages upstream and downstream of the slaughtering and meat cuttingoperations along the meat production chain was a case in point. The study has concluded that anextension in this form would spread the costs of controls currently pursued only at a particular pointin the chain but for the benefit of stages upstream/downstream more equitably along the food chain.Again, this approach is currently being adopted/explored in several MS.This forward looking element of the project aimed to provide an initial assessment of certain keyscenarios. The purpose was not to provide a full feasibility analysis (whether at political or technical
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level). Nonetheless, specific recommendations were made to develop these scenarios, or indeed otherpotential combinations of their components, including through future impact assessments.
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1. Introduction to the study1.1. BackgroundRegulation 882/20045(hereafter referred to as ‘The Regulation’) sets out requirements for theauthorities in EU Member States that have responsibility for monitoring and verifyingcompliance with, and enforcement of, feed and food law, and animal health and animalwelfare rules, i.e. the 'competent authorities' (CAs) responsible for organising and undertaking'official controls' (OCs).According to Article 65 of the Regulation, three years after its entry into force, theCommission should review the experience gained from its application, in particular in termsof scope and the fee-setting mechanism, and whether/how the current regime can beimproved. This study, which was launched in April 2008, aims to respond to this requirement.The data collected and results of the study will feed into a Commission Report to theEuropean Parliament and Council (which will also be discussed at the SCFCAH) for apossible modification of the current legislation.Part One of this Final Report outlines the methodology and overall results, includingconclusions and recommendations, of the work carried out by the study team (FCEC - FoodChain Evaluation Consortium, led by Agra CEAS Consulting for this evaluation).Part Two (provided in a separate volume) describes in detail the system and conclusions ofthe work in the six case study countries.The Final Report (Parts One and Two) forms the basis of the Final meeting with the SteeringGroup for this study, scheduled before end 2008.
EU legal acts quoted in this Report refer, as applicable, to the last amended version. Full references to the actsquoted in this Report are given inAnnex 1.1.
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1.2. ObjectivesThe objectives of the study are two-fold:c) to establish a detailed picture and evaluate the present situation as regards theapplication of the current fees regime in the EU, in particular the way in which thesystem operates in practice; and,d) to assess the advantages and disadvantages of a range of policy options (regardingthe scope of current rules and the fee-setting mechanism).As such, the final aim is to provide input to the Commission’s development of proposals toimprove the system in future.1.3. ScopeThe study covers activities related to the official controls in relation to establishments basedin the EU and in relation to goods introduced into the EU, with regards to the product sectorswhere the current rules apply, in particular the livestock and livestock product sectors.Although the study focuses on the financing provisions of Regulation 882/2004, as containedin Articles 26-29 of Regulation 882/2004 (and in particular Article 27), a range of otherCommunity legislation is relevant to the study. This legislation is summarised inAnnex 1.1.It is noted that reference to ‘mandatory’ and ‘non-mandatory’ fees throughout this Report ismade with respect to MS obligations and possibilities underRegulation 882/2004, Article 27para 2 and para 1respectively, not with respect to whether the fee is charged on acompulsory or other basis.1.4. Methodology1.4.1. Overall methodological approach and objectivesThe activities undertaken during the study have been based on the following mainmethodological tools:••••Desk research, including data and documentation analysis;Survey of competent authorities at MS level (for the EU27);Interviews with European stakeholders/partners (including the Commission);Case studies, basedinter aliaon detailed interviews with MS stakeholders/authoritiesin 6 MS (Germany, UK, Italy, France, Poland, and Slovak Republic);
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The study team has undertaken the design and implementation of the survey and interviewprocess, with the following two key criteria in mind:1. To have an open and transparent dialogue, involving all potentially interested partners andstakeholders at European and MS level. Our commitment to this objective is demonstratedby the fact that the survey has been addressed to all competent authorities in the EU-27,with the process closely monitored by our team. We have also contacted allrepresentatives of the various relevant stakeholders at both EU and MS level.2. To provide a synthetic and concrete analysis of the results, so as to be able to deliveractionable recommendations to the Commission services, in particular in the context ofthe Commission’s review of Regulation 882/2004.To this end, the study team has tried to ensure maximum flexibility throughout the survey andinterview process. Flexibility was sought both in terms of adjusting the sample of relevantpartners/stakeholders, but also in terms of updating the detailed list of questions used duringthe interviews with new findings and comments. New insights have thus been built into theprocess as the interviews were progressing.At the same time, the team has sought to ensure that the Commission’s reporting deadlines areadhered to and that a sound and robust basis for the synthesis at EU level is provided. Thishas involved the establishment of a clearly set out analytical framework and of a tightreporting and synthesis system for the inputs provided by the various phases of the project.The study was carried out during the period March to October 2008.
1.4.2. Desk researchFor the purposes of this study, key relevant literature and material reviewed includes thefollowing:1. Background legislation and other official documents of relevance. A non-exhaustive listof the main background legislation at EU level is provided inAnnex 1.1.The purpose ofthe review has been to understand in detail the subject matter of this study and the way inwhich the various legal instruments interrelate.2. The notification letters submitted by the MS to DG SANCO, in complying with Article 12of Regulation 882/2004. To date, 18 MS have notified the Commission of the measurestaken to enforce the financing provisions of the Regulation (Annex1.2).3. FVO reports carried out in the EU-27, in particular those relating to hygiene controls andimport controls. A list of the reviewed FVO reports, indicating where available referenceto the issue of fees, is provided inAnnex 1.2.The purpose of our review has been toobtain a first view of the situation, and – where possible/applicable - to cross-check withthe information provided by MS in their answers to the survey questionnaire. Thesereports, together with the FVO country profiles on the system of official inspections in the
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areas covered by Regulation 882/20046and the National Controls Plans7where available,also provide useful background material on the structure of the CAs in the MS. This hasbeen useful in the context of identifying the relevant stakeholders both for the EU-27survey and the case studies, and key issues of relevance to the financing of officialcontrols.4. Background material available at national level, including national legislationimplementing Article 27 of Regulation 882/2004.5. Material and data provided by industry stakeholders. Such material has included data onfees collected independently by some of the EU professional organisations (includingnotably the UECBV and CLITRAVI).Desk research continued throughout the project course as new material and data, in all of theabove categories, became available.1.4.3. Survey of competent authorities (CAs)The survey of CAs was addressed to all MS of the EU-27, including the case study countries.It was based on a questionnaire, developed in consultation with the Commission services,which covered the various issues of the fees system under Regulation 882/2004, including allsectors of Annexes IV and V of the Regulation (in the meaning of Article 27.2) but also othersectors to which non-compulsory fees may be currently applied by MS (in the meaning ofArticle 27.1). The questionnaire is attached inAnnex 2.The aim has been to collect facts/hard data on the current operation of the system (Section 1of the questionnaire), and views/suggestions for the future (Section 2 of the questionnaire).The process of questionnaire completion has been monitored closely by the Consultants viatargeted meetings and communication, both with the desk officers responsible for hygiene andofficial controls in the MS Permanent Representations and directly with the CAs in the EU-27MS. Requests for further clarification, following questionnaire submission, were also made toa number of MS.A challenge from the outset has been to identify the relevant CAs in the MS, given the scopeand complexity of the sectors to which fees for official controls apply, and the fact thatseveral CAs and/or delegated bodies are often involved in the organisation of official controls(this issue is further discussed in section 2.2.1). As a result, questionnaire completion hasnecessitated extensive internal consultations within the MS, involving not only the CAs(notably, in most MS, the Ministry of Agriculture and the Ministry of Health), but also thenational/local authorities, in some cases even the laboratories and veterinary institutes.
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FVO country profiles on food and feed safety, animal health, animal welfare and plant health.NCPs are to be drawn by MS pursuant to Article 41 of Regulation 882/2004.
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The outcome has been a full response to the survey by all EU-27 MS8. It is also noted that thishas largely been within the anticipated timelines (nearly two thirds of MS responded by thedeadline of 27 June). For the case study countries, the survey results were incorporated andfollowed up in the discussions with MS authorities and stakeholders at national level.The full analysis of the survey results (both quantitative and qualitative) is submitted as aseparate spreadsheet file9, while some of the results are used in this Report.1.4.4. Case studiesThe study covered the EU as an entity with treatment of all MS of the EU-27. Given thepotentially wide scope of this coverage, further in-depth analysis was undertaken in six MS,as follows:1. Germany2. Italy,3. UK,4. France,5. Poland6. Slovakia
The selection of these countries represents a mix of different situations as identified duringthe Inception Phase of the study, in terms in particular of centralised/decentralisedorganisation and management of the system for the collection of the fees, and the nature of thesystem applied (whether minimum rates or flat rates). Two NMS have also been included inthis selection.The case studies were carried out and drafted using a common framework. In practice, anydifferences in the final presentation are due to the specific character of the administration ofthe official controls system and the administrative structures in each country. For the samereason, the partner and stakeholders contacted/interviewed in each country may be slightlydifferent, with interviews focussed on the key relevant partners and stakeholders in each case.The case studies are presented in full in a separate volume (Part Two) of the Final Report.Results and information from this work are incorporated in the analysis that follows in thismain part of the Report.
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In some cases (4 MS) more than one response were received by the various CAs involved.A package of the completed questionnaires has been submitted separately to the DG SANCO services.
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1.4.5. Interviews with key partners and stakeholdersThe partners and stakeholders selected for interview at EU and MS level (for the case studycountries) cover the range of sectors of relevance to this study.1.4.5.1. At EU levelAt European level, the interview programme has included, as partners, the Commissionservices (DG SANCO, other relevant DGs in particular DG Agriculture and DG MARE). Interms of the stakeholders, it has included both EU and national professional organisations.All of the interviews were carried out face-to-face. In view of the large number ofexperts/representatives involved in some cases, where applicable, interviews were conductedby grouping together some of the partners/stakeholders. The latter has been particularly thecase in terms of the interviews with the European professional associations.The final list of interviewed professional organisations is presented inTable 1-1.Several ofthese interviews have been conducted with a group of relevant experts or representatives. Theaim has been to enlarge the debate process to a larger number of people from the various MS,so as to provide different perspectives for the discussion and our analysis. This approach wasalso dictated by the fact that several of the professional associations are umbrellaorganisations representing a wide and often divergent range of views from their nationalmembers.For the same reason, these interviews were conducted using a step by step approach with mostof the EU professional associations. This has involved:1. A preparatory phase with the lead organisation prior to the full interview with itsmembers. The objective has been to focus the discussion during the main interviewon identifying key issues for the organisation as a whole, including common pointsand points where an internal debate may be in evidence;2. Main interview with the organisation and its members (where appropriate, e.g.UECBV, CLITRAVI, EDA, AVEC).3. A second interview which took place towards the end of the study period, to confirmthe points expressed during the first interview and also to focus the discussion onthe options for the future (second ‘group’ interviews were conducted with theUECBV, CLITRAVI and AVEC).
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Table 1-1 European professional organisations interviewedOrganisationUECBVCLITRAVIAVECCIBC/IMV/IBCEDAEUCOLAIT (a)EUROPECHE (a)Full nameEuropean Livestock and Meat Trading UnionLiaison Centre for the EU Meat Processing IndustryAssociation of Poultry Processors and Poultry Import/Export TradeInternational Butchers’ ConfederationEuropean Dairy AssociationEuropean Association of Dairy TradeAssociation of the National Organisations of Fishery Enterprises in theEuropean UnionEuropean Feed Manufacturers’ FederationFederation of Veterinarians of Europe
FEFACFVE
(a) This organisation was contacted for an interview, but no interview was conducted due to limited memberinterest. Member organisations in the case study countries were approached/interviewed in some cases.
The study team has synthesised the information and views collected through this process, andthese are incorporated in the analysis of this Report.In addition, the Consultants were invited by the French Ministry of Agriculture to attend aconference co-organised with the French Presidency on the modernisation of sanitaryinspections in slaughterhouses, and in particular the section dealing with the costs of officialinspections and the fee system10. The conference was attended by relevant CAS and delegatedbodies from various MS of the EU-27 and gave the opportunity to liaise and get feedbackboth a wider base of MS than the case studies alone.1.4.5.2. At MS level (case studies)The case studies have involved a detailed investigation of the system applied, the issuesraised, and the implications of the different systems. To this end, a second round of detailedinterviews was conducted in the case study countries. This interview process, in terms of thestakeholders contacted and the issues addressed, was developed in all of the six case study
10
Lyon 7-11 July 2008. Conference details can be found at:
http://pfue-inspectionsanitaireenabattoir.lso-intl.com/
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countries in close consultation with their permanent representations in Brussels, the centralnational CAs, and the European professional organisations.On average, the interview programme in each of the selected MS has covered at least 6-8interviews for the large case studies (Germany, Italy, the UK) and 4-5 for the small casestudies (France, Poland and Slovakia)11. Typically the interviews have included the relevantMinistries (Ministry of Agriculture, Ministry of Health), industry representatives (liveanimals, traders, meat processors, dairy processors, poultry sector, animal feed industry, fishindustry), and a national veterinary institute (where applicable and if active in this area). Thefull list of authorities/stakeholders selected for interview in the case study countries isprovided in Annex in Part Two of the Final Report.The bulk of the interviews were conducted face-to-face. As was the case with the Europeanstakeholders, several of the national interviews were carried out with a group of relevantofficials/representatives, and involved extensive preparatory work and meetings. Allinterviews were conducted in the national language, by appointing native language expertsfrom the Consultants’ team in charge of the case study in each country.The study team has processed the data and information from these interviews in two steps:•The first step involved the analysis and synthesis of the interview results in a MS report,summarising the key points of the MS position per question. This analysis wasincorporated in particular in Part Two of the Final Report.•The second step was the comparison and cross-referencing of the analysis carried outper MS, with the results of the analysis of the information, data and views collectedthrough the EU interviews and the survey. This analysis is incorporated in particular inthis main part of the Report.
11
Case study definition in accordance with the project contract (FCEC/Agra CEAS offer of January 2008).
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2. Description and assessment of the current system of feesThis section presents the intervention logic of EU policy in this area, in particular of thefinancing provisions of Regulation 882/2204 (Articles 26-29) as set within the context of EUfood and feed law and wider EU policy principles and objectives. Based on this, the analysisdescribes the current enforcement of Articles 26-29 by the MS, assesses the extent to whichthe various principles and objectives have been achieved, and highlights shortcomings.The analysis is based on the synthesis of data and information resulting from the stakeholderinterviews, the survey and the case studies, as well as from the desk research and analysis ofsecondary data and sources of information.2.1. Intervention logic2.1.1. Principles and objectives of EU policyThe analysis aims to establish the extent to which the financing provisions of Regulation882/2004 serve the objectives and principles both of this Regulation and the wider objectiveswithin which this is set, in particular those of EU food and feed law and the Lisbon Strategy.In terms of objectives, the assessment of Articles 26-29 includes consideration of thefollowing:•Objectives ofRegulation 882/2004:⇒to ensure a harmonised approach with regard to official controls;•Objectives ofEU food and feed law(Regulation 178/2002 and the Hygiene Package):⇒to ensure a high level of protection of human life and health and the protection ofconsumers' interests, including fair practices in food trade, taking account of,where appropriate, the protection of animal health and welfare, plant health andthe environment;⇒to achieve the free movement in the Community of food and feed manufactured ormarketed according to the general principles and requirements of EU law;•Objectives of theLisbon Strategy(interalia):⇒to promote better regulation and maintain/support competitiveness.In terms of principles, the analysis takes into account the need for Articles 26-29 to ensurerespect of:
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•The principle ofproportionality:as set out in Article 5 of the Treaty, EU Regulationshould not go beyond what is necessary in order to achieve the objectives pursued12;•The principle ofsubsidiarity:as set out in Article 5 of the Treaty, where objectivescannot be sufficiently achieved by the Member States and would therefore, by reason oftheir complexity, trans-border character and, with regard to feed and food imports,international character, be better achieved at Community level, the Community mayadopt measures13;•The principle ofFBO responsibility:actual Community food and feed law is based onthe principle that FBOs at all stages within the business under their control areresponsible for ensuring product safety14.2.1.2. The requirements for official controlsRegulation 882/2004 sets out requirements for the authorities in EU MS that haveresponsibility for monitoring and verifying compliance with, and enforcement of, feed andfood law (and animal health and animal welfare rules), i.e. the 'competent authorities' (CAs)responsible for organising and undertaking 'official controls' (OCs)15.This regulation sets out the general approach that must be taken, and the principles that mustbe adopted, by the authorities in EU MS. It also provides the legal basis for the EuropeanCommission to assess the effectiveness of national official control arrangements.Most of the provisions applied from 1 January 2006, while others applied from 1 January2007. However, a 1-year derogation (to 1 January 2008) was given to MS for the entry intoforce of the financing provisions of Regulation 882/2004 (Articles 26 to 29), which are thesubject of this study.A novelty of the new Regulation has been that CAs can delegate specific tasks to relevantcontrol bodies provided these meet certain conditions (experience, accreditation, staffqualifications, impartiality etc.) and are audited by the CA. This is a very sensitive issue as itraises concern that MS use their right to delegate to avoid accountability (including vis-à-visthe Commission). From the Commission’s point of view there should be only onecentral/single competent authority (or at least only one per type of controls, e.g. veterinary,phytosanitary, aquatic).
12
Preamble (48) of Regulation 882/2004; preamble (66) of Regulation 178/2002.Preamble (48) of Regulation 882/2004.Preamble (4) of Regulation 882/2004; Article 17.1 of Regulation 178/2002.
13
14
15
According to Article 2(1) of Regulation 882/2004,“‘official control’ means any form of control that theCompetent Authority or the Community performs for the verification of compliance with feed and food law,animal health and animal welfare rules”.
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2.1.3. The financing of official controlsThe provisions of Regulation 882/2004 relating to the financing of official controls arecontained in Articles 26-29.In summary, the main principles pursued in these provisions are the following:•Member States must ensure that adequate financial resources are made available forofficial controls (Article 26);•Inspection fees are imposed on feed and food business operators, common principlesmust be observed for setting the level of such fees and the methods and data used for thecalculation of the fees must be published or otherwise made available to the public(Article 27);•When official controls reveal non-compliance with feed and food law, the extra coststhat result from more intensive controls must be borne by the feed and food businessoperator concerned (Article 28).The requirements laid down in Regulation 882/2004 as regards charges for meat hygieneofficial controls were previously contained in Council Directive 85/73, as last amended byDirective 96/43 (Annex1.1).Regulation 882/2004, which supersedes the Directive, requiresthat, from 1 January 2007, MS must charge no more than the actual costs of controls and,other than in specified cases, no less than specified minimum charge rates. The Regulationeffectively allows MS to retain the charge rates set out in Directive 85/73 until 1 January2008, though as minima rather than as standard amounts. Some MS have altogether used thisopportunity to look at possible options to review their fee system.Within these boundaries, the Regulation leaves it to MS to determine the level of fees orcharges. For certain activities for which fee charging is ‘compulsory’ (Article 27.2), theminimum levels laid down in Annex IV (controls on domestic production) and Annex V(import controls) must be respected. Beyond this, the Regulation provides MS with someflexibility within which to determine the fee system, provided that specified factors are takeninto account. The key requirement is that fees should not be higher than the actual costs of theofficial controls.The minimum fee or charge rates in the Directive and in the Regulation (Annexes IV and V)are throughput rates for inspection costs relating to the slaughter per species/type of animal orbird. For controls and inspections connected with cutting operations, the fee is per tonne ofmeat entering the cutting plant for the purpose of being cut up or boned there.2.2. System descriptionThis section outlines and comments on the key elements of the operation of the currentsystem (Task1: system description)of the ToR.
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It is noted from the outset that in several MS the current system continues to be based on theprevious financing legislation (Directive 85/73); in these cases, draft proposals to enforceRegulation 822/2004 are currently undergoing the national legislative making process.2.2.1. Competent AuthoritiesAs already noted in the methodology section of this Report, a key observation – and challenge- of this study from the outset has been the very different level of structure and organisation ofthe CAs involved in the system of official controls in the MS. This includes both theadministrative structures in place for the collection of fees for the controls, and for theconduct of the controls. Two issues have in particular been identified:1. The organisational structure of the CAs responsible for the official controls. Dependingon the MS and often depending on the product sector, this may include central, regionaland district level administrations, as well as external delegated bodies (Agencies,Laboratories etc.). This issue is demonstrated simply by the list of CAs that respondedto the survey (Annex1).It is also confirmed by our review of the CAs performingofficial controls from relevant FVO reports and MNCPs (where available), which ispresented inAnnex 3.It is noted that current structures are dictated by the constitutional law and particularadministrative traditions of a MS, and are therefore not readily amenable to change.2. The staff composition (official veterinarians, hygienists and assistants) of the CAs andexecutive bodies responsible for performing the official controls also variessignificantly between MS. In contrast to the overall administrative structures referred toabove, the staff composition is subject to change.In particular, there is currently a trend in several EU MS to seek to rationalise publicservices, and as part of this trend, the veterinary services and their staff are beingreformed/restructured. In some MS (e.g. NL) the model of employment of the staffperforming the official controls is shifting away from the higher-cost direct payroll ofthe public service towards lower cost/freelance contractual arrangements; such optionsare currently also being examined in other MS (e.g. France, the UK).Both issues have financial implications in terms of the actual cost of official controls, andthese are of relevance to this study:•The addition of several layers of competent/executive bodies in the system of official
controls wouldà prioribe expected to have cost implications and needs to bejustified/supported on efficiency/effectiveness grounds.•Similarly, the use of appropriately trained (in the context of EU rules) staff employed on
a contractual basis over the alternative of highly qualified staff employed as officialcivil servants – without compromising the quality of the controls – could createsignificant cost savings. This appears to be the main motivation in the case of MS thathave adopted or are currently thinking of adopting this approach.
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More generally, both these issues have been a challenge for this study, as it is not easy toseparate the review and evaluation of the fees system from the overall organisation, structureand therefore cost of the official controls. They also have significant implications whenexamining the options for the future.The involvement of several layers of administration (either vertically within the same CA, orhorizontally across CAs, or at regional/local level) raises questions of conformity withRegulation 882/2004. The Regulation envisages that one central CA (Article 2.416) wouldnormally be responsible for the overall supervision and operational control of the system ofOCs. Furthermore, when the competence to carry out official controls has been delegated toan authority or authorities other than the central CA, efficient and effective coordinationshould be ensured between the CAs involved including at regional/local level (Article 4.3)and at vertical level (Article 4.5). More stringent provisions, including audits by the CAs,apply when control tasks are delegated to control bodies (Article 5).Both the desk review (analysis of FVO reports) and the case studies have shown that, inpractice, these provisions are not always complied with, and that the CCA does not alwayshave full control or information on the actual operation of the system when a number of CAsor delegated bodies are involved.It is noted that Regulation 882/2004 requires MS to draw up multi-annual control plans(MNCP) which will provide information on the structure and organisation of the systems offood and feed control, includinginter aliathe designation of CAs at central, regional andlocal level and delegation of tasks to control bodies (Article 42.2(c) and (f)). However, todate, such plans are not available in all MS, and even where they exist they are not publiclyavailable but can only be provided at the request of the Commission17. Consequently, it isdifficult on the basis of objective sources to establish how exactly competence for the officialcontrols falling under Regulation 882/2004 is organised at MS level.From the survey of EU-27 CAs it is clear that in many cases more than one CA is involved18.This issue was also highlighted in the case studies (Part Two of the Final Report).
16
Article 2.4 reads:‘Competent authority’ means the central authority of a Member State competent for theorganisation of official controls or any other authority to which that competence has been conferred.
Despite efforts to consult the MNCPs on this, the Consultants have only seen the MNCP in two of the casestudy countries. It is not known how many MS have drawn MNCPs, or how many MS have submitted those tothe Commission.Indeed, as is highlighted in the methodology part of this Report, separate responses to the survey werereceived from more than one CA in the case of four MS. One of these was Germany, for which responses wereseparately received from 13 out of the 16 Lander. In most of the other MS, although one response was received,there was a significant consultation process between the various CAs and/or bodies involved for the completionof the survey questionnaire.18
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2.2.2. Activities for which fees are collectedThe study has found that in practice fees are currently collected for the official control of thefollowing types of goods, establishments and activities:a)Fees collected on a ‘compulsory’ basis (Article 27.2)
The types of goods, establishments and activities, for the official control of which fees are tobe collected, is established in section A of Annex IV (concerning domestic production) andAnnex V (imports) of Regulation 882/2004. Fee collection for these activities is ‘compulsory’within the meaning of Article 27.2.From the results of the survey, 18 MS (including France, Germany, Italy, Poland andSlovakia) collect fees for all the activities according to Article 27.2; however, the remaining 9MS (including the UK) collect such fees only partly (Question1.4,Annex 2).Fees for milkproduction controls and fees for residue controls are the two types of control activities forwhich several of these MS do not collect fees, and at least 3 MS do not collect fees for a widerrange of activities.In the case ofmilk productioncontrols, although Regulation 882/2004 states that charges forofficial controls in dairy plants are compulsory (under Annex IV, section B, Chapter IV). Infact, however, these charges are not made - at least - in the following MS: UK, Germany,Netherlands, Latvia. Two main reasons are given for this:•It appears that this reflects the fact that there was some debate during the negotiationson Regulation 882/2004 as to whether fees in the dairy sector should be charged on a‘compulsory’ basis (within the meaning of Article 27.2) or not (in this case falling underArticle 27.1). This point was made in the UK case study, but also by some other MS inthe survey. Some MS argued that they should be considered to be compulsory, as theywere also mandatory under the previous charging legislation, Directive 96/43/EC(which amends and consolidates Directive 85/73/EEC). Other MS were opposed to theintroduction of mandatory fees in this area under the new Regulation. In the event, itwas agreed that MS would be required to impose fees on a compulsory basis only whenthey had previously done so under Directive 96/43/EC, but with the compromise thatthe minimum rates for milk production controls remained and could be applied by thoseMS where fees are imposed.•According to the European Dairy Association (EDA), the minimum fees charged on acompulsory basis (Article 27.2) for controls on specified substances and residues inmilk production exceed as much as 20 times the previous fee on these controls19.
The EDA have already expressed their concerns on this in a letter sent to DG SANCO on 13 February 2007.According to the fee calculation provided by the EDA, for the EU-25 the fee revenue collected according toDirective 85/73 amounted to Euro 2.64 million, while under Regulation 882/2004 it would reach Euro 44.32million (if applied in full throughout the EU-25).
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•The CAs of some MS complain of a lack of clarity on how minimum fees should becollected. This point was made in the Germany and Slovakia case studies, but also bysome other MS in the survey. In particular, the CAs in Germany claim that it is unclearwho is liable to pay fees for milk production inspections (dairies or farmers) and whichtime span the quantity of raw milk specified in Annex IV/B/IV refers to. Similarly, theCAs in Slovakia, although they are charging fees for milk production controls, theynonetheless commented that they were unclear whether dairy farmers or milkprocessing companies should pay these fees and the milk quantity to which this refers(whether total annual production or the volume subjected to controls).b)‘Non-compulsory’ fees (Article 27.1)
According to the survey, 19 MS (including the UK and Poland) collect fees for activitiesfalling under Article 27.1, i.e. for which fee collection is ‘not-compulsory’ within the meaningof Article 27.2 (Question1.3a,Annex 2).On the other hand, 6 MS (including France, Italyand Slovakia) do not collect fees for activities beyond those that they are obliged to collectunder Article 27.2, and 2 MS (Germany, Spain, i.e. with a decentralised management of thesystem) collect such fees in some regions but not in others.It would also appear that some MS use significant leeway in interpreting the term ‘routinecontrols’ of Article 28 of the Regulation (which provides for additional fees on expensesarising from additional official controls beyond the ‘routine controls’). The case of the feedsector is an example here. It would appear that Denmark is the only MS that charges fees for‘routine’ controls in the feed sector20. This situation is causing concern to the EU feedfederation (FEFAC).c)Fees collected at several points along the production chain (Article 27.7)
Another observation from the survey and the case studies is that, in practice, fee collectioncan occur more than once along the production chain for what would effectively constitute thesame controls. This is contrary to Article 27.7 which specifies that where several OCs arecarried out at the same establishment, these should be considered as a single activity and becharged a single fee. Evidence of double charging was found for instance in the meat sector inItaly, where industry stakeholders complained they paid double fees at both slaughter andmeat cutting points; and in Portugal and France where the fish industry appears to be payingfees at more than one of the three stages listed in Annex IV/B/V of Regulation 882/2004.Cross-charging or overcharging may also be occurring for the same controls performed morethan once when products are traded across MS. For example, dairy products from another EUMS brought to the NL to be further processed into other products for further export are re-examined on residues. The fact that these products are coming from an approved EU-factoryand from a MS applying a residue plan does not appear to be sufficient.
These are in addition to the ‘compulsory fee’ for the approval of feed establishments provided under section Aof Annex IV of the Regulation, which are indeed collected in most MS (and which according to FEFAC do notpose a problem to the EU feed industry).
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d)
Fees collected for OCs on products of non-animal origin
It is noted that both the survey and the case studies identified cases where fees are collectedfor products of non-animal origin. For example, in Belgium the current fee system collects abase contribution from all FBOs along the food chain including catering and controls onproducts of plant origin. The proposed draft law for the full enforcement of Regulation882/2004 in Italy is also moving to this direction. Fees for some plant health controls alsoappear to be currently being collected in Bulgaria and Greece.Fees are collected in several MS (including the UK, Denmark, Hungary, NL, Poland, andSweden) on import controls on products of plant origin (these can include food and non-fooditems). This appears to be taking place within Directive 2002/89/EC21 (import controls forplant health). This Directive, which came into full effect on 1 January 2005, required that allconsignments of regulated material be subject to a documentary, identity and plant healthcheck prior to customs clearance. The directive also introduced phytosanitary fees to coverthe costs associated with performing these checks. Minimum fees are contained in Annex VIIIof the Directive and several of the above mentioned MS are following these fees.2.2.3. Fee rates usedRegulation 882/2004 leaves it up to MS to define the actual fee system they will use, providedthat the two main boundaries set by the Regulation (minimum fees of Annexes IV and V, anda maximum set by the actual controls costs) are respected.In practice, the study has found that a multitude of scenarios arise out of these possibilities.The resulting picture is quite complex and can be confusing, or at least lack transparency forFBOs, with a multitude of fee rates applied for the various activities. It appears that theoriginal intention of the legislator was that only one of the two systems would be used, or atthe most, a combination of the minimum rates for all activities listed in Annex IV and V andflat rates for the other activities. From our interviews in the case study countries and theresponses to the survey it can be concluded that CAs have interpreted the relevant provisionsof Article 27 in various ways and rather ‘openly’; this is often attributed, by both the CAs andstakeholders, to a perceived vagueness or confusion in the formulation of the provisions in theRegulation.In particular, the following possibilities currently exist:
Council Directive 2002/89/EC of 28 November 2002 amending Directive 2000/29/EC on protective measuresagainst the introduction into the Community of organisms harmful to plants or plant products and against theirspread within the Community. Directive 2002/89 and Annexes amend Directive 2000/29/EC.
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i.
Flat rates or minimum ratesAccording to Article 27.4(b) fees collected for the purposes of official controls may be fixedat a‘flat-rate’or, where applicable, at the amounts fixed in section B of Annex IV and V(‘minimumrates’).The survey of EU-27 CAs has demonstrated that 18 out of the 27 MS (including Germany,Italy and the UK amongst the case study countries) in practice use a mix of flat rates andminimum rates (Question1.6a,Annex 2). A further 6 MS (including Poland and Slovakia) useminimum rates for the activities outlined in Annexes IV and V (and do not collect fees for anyother activities); on the other hand, only 3 MS (including France) use flat rates throughout allactivities for which fees are collected (within the meaning of either paragraph 1 or paragraph2 of Article 27).In the majority of cases where a mix of the two systems is used, the combination of flat ratesand minimum rates were for different activities but could also be for the same categories ofactivities within Annex IV and V.
ii.
Reduction below minimum ratesIn a number of cases the fee applied is below the minimum rates of Annexes IV and V. Inparticular, 12 MS may apply fees below the minimum rates, at least in some cases (Question1.8a,Annex 2).A provision for a reduced fee is made under certain conditions in Article 27.6 (“controlscarried out with a reduced frequency or to take account of the criteria referred to inparagraph 5”).In practice the lower fees are not necessarily always applied in accordancewith this provision. In most cases, MS were not able to provide a clear and completejustification for the fee reduction or the method applied for the calculation of the reduction asrequired by Article 27.6(c). This clearly contravenes Article 27.3 which stipulates that fees“shall not be lower than the minimum rates”specified in section B of Annexes IV and V. Insome cases (e.g. France, Italy), lower fees appear to apply simply because they are based onprevious legislation (notably Directive 85/73/EC). However, it is noted that the transitionalperiod during which such fees could continue to be charged expired on 1 January 200822.
iii.
Flat rates on throughout or time basis
Where flat rates are used, the rates can be expressed on a throughput basis, as is currently thecase for the minimum rates specified in Articles 26-29 (i.e. on an animal or tonnage basis), orthey may be on a time basis i.e. for the actual time during which the OCs are performedmultiplied by the fee of the staff performing the OCs. In the latter case, the rates arefrequently expressed in complex calculations involving different fee rates (e.g. depending onwhether official veterinarians or auxiliaries are involved) and the particular time of the
Both France and Italy are currently discussing legislation with a view tointer aliaadjust all rates to complywith at least the minimum rates indicated in Annexes IV and V.
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inspections (e.g. different rates for normal business hours and non-business hours, holidays,overtime etc.). In several MS, a flat minimum rate topped up by a time based fee is used.2.2.4. Determination of the feeArticle 27.4 stipulates that, where flat rates apply, these may be fixed“on the basis of thecosts borne by the CAs over a given period of time”(paragraph 4(b)) and that they“shall notbe higher than the costs borne by the responsible CAs in relation to the items listed in AnnexVI”(paragraph 4(a)).Again, both the survey results and the case studies have demonstrated that the provisions ofArticle 27.4 are not being fully respected. In particular the following problems have beenidentified:•The calculation method used for the determination of the flat rate is not alwaysavailable, or at least has not always been communicated to either the Commission or theConsultants (although Article 27.12 requires MS to make the calculation method publicand to communicate it to the Commission). From our review of the notification letterssubmitted by MS to the Commission pursuant to this Article, MS have not always madethis explicit to the Commission (Annex1.2);•In several of those cases, where the calculation method has been made available, it isnot transparent what exactly the various cost categories of the calculation have includedand/or by which CA they have been incurred, and which time period these costs refer to;•In the case of the 3 ‘criteria’ or cost categories that should be included in the calculationaccording to Annex VI (1. staff salaries; 2. staff costs including overheads; 3. laboratoryanalysis and sampling), it is not sufficiently transparent whether the actual costs used byMS strictly reflect the costs directly associated with the carrying out of official controls.It is noted that this has emerged as the most controversial point of the fee calculation.The lack of precision from MS CAs on these costs is often attributed to the perceivedvagueness in the formulation of criteria in Annex VI, which results in MS considering ittheir right to add costs that are not necessarily justified in that they are directly linked tothe official controls.Finally, as already discussed under section 2.2.3, in most cases of fee reduction neither thejustification nor the calculation applied has been clearly communicated by MS.2.2.5. Fee collection method and use of fee revenueThe rationale for the whole system of the charging and collection of fees is to cover the costsof the official controls, thereby ensuring that “adequatefinancial resources are available toprovide the necessary staff and other resources”(Article 26).In practice, in the majority of MS the revenue from the collected fees is incorporated into theState’s general budget, either in its entirety (11 MS, including France and Slovakia), or in part
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(7 MS, including Germany, Italy, Poland and the UK). Where this occurs, especially wherethe entire amount of the fees collected is incorporated into the general budget, there is for themost part no guarantee how this is to be used subsequently. Only 9 MS claim to be i.e.‘ringfencing’ revenues specifically for the CAs performing the controls (Question1.10,Annex 2).Most likely related to this, 14 MS (including Italy, Slovakia and the UK) have clearlyindicated that they do not cover the costs occasioned by the official controls through thesefees (Question1.9a,Annex 2).Only 7 MS (including Poland) claim costs are being covered,while a further 6 MS (including France and Germany) claim this is possibly occurring insome cases (some activities; some regions) but not in others. An overview of the extent towhich MS manage to cover the costs of the official controls through the collected fees isprovided below inTable 2-1.Table 2-1 Share of the costs of official controls covered by fee revenueCountry/YearBELGIUMBULGARIACZECHREPUBLICESTONIAFeed controlFINLANDState Food control(meat inspection)Municipal food controlVeterinary BorderControlHUNGARYIRELANDMeatMilkAnimal feedImports of POAOSector (a)200541,99%n.a.36%52%31%104%98%20%97%60%48,5%90,0%82,0%n.a.~50%70%36,5%75%n.a.52,2%43%200645,86%25%33%49%28%n.a.99%20%97%60%37,7%90,0%80,0%n.a.~50%65%36,9%86%60%55,3%41%200738,74%29,3%28%46%20%54%92%20%97%60%42,0%90,0%76,0%27,0%~50%65%39,4%81%50%51,6%43%
ITALY (b)LUXEMBOURGMALTANETHERLANDSROMANIASLOVAKIAUK
(a) all sectors covered, unless explicitly specified(b) approximate estimate provided by the CAs; detailed data not available
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Source: survey of the EU-27 CAs
Table 2-1for the most part covers all controls conducted under Regulation 882/2004, thesituation appears to be better in the case of import controls, for which Article 27.8 stipulatesthat these fees should be paid to the CA in charge of import controls. However, even in thiscase, the information collected from the survey suggests that Article 27.8 may not alwaysnecessarily be complied with particularly in those 11 MS where the fee revenue isincorporated into the general budget23.While the manner of fee collection and use is one key reason why the costs of the officialcontrols are in most cases and in most MS only partially covered, another key reason is thatthe level of fees is often insufficient to cover the costs. This would suggest that fees have beeninappropriately determined in the first place, and then inappropriately collected and used.These results suggest that for the EU as a whole, in part due to ambiguities within the text, therationale and desired interpretation of Regulation 882/2004 has not been sufficiently clearlyunderstood and that as a consequence the objective in terms of the establishment of a moreuniform system of fee collection has largely not been achieved to date.Neither the survey, nor the case studies, established any cases where a direct or indirectrefund of the fee was made, unless in cases where this was collected in error (Article 27.9).There is therefore no evidence to suggest that this may be occurring.2.3. Evaluation of the current situationThis section responds to the questions raised inTask 2of the ToR (evaluation of the currentsituation), notably to:••Indicate the main strengths and weaknesses from the operation of the current system; and,Identify key problems and shortcomings that need addressing in the future (Task3).
Within the wider context of the EU intervention logic in this area (section 2.1), the currentsituation is evaluated in particular in terms of the system’s contribution to the achievement ofthe following two objectives:i.ii.A functioning internal market;Improving and maintaining efficient and effective Official Controls (OCs) in theCommunity.
Before addressing these issues, an overview is provided of the current state of enforcement ofRegulation 882/2004, summarising the key points from the previous section.
In the case of France and Slovakia, which were case study countries, fees were used for these controls andcovered their cost.
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2.3.1. Enforcement of Article 27 of Regulation 882/2004A priori,the provisions of a Regulation should be directly enforceable in MS. However,Article 27 of Regulation 882/2004 generally follows the subsidiarity principle in that MS candecide whether to use the specified minimum rates or to charge for official control activitiesaccording to the actual cost of undertaking them24. This effectively allows some discretion toMS to opt for one of the two fee systems, and in the case of the flat rate system to set the levelof fees according to the costs of OCs actually incurred. There are further provisions allowingMS to reduce fees below minimum rates under certain conditions.The analysis of section 2.2 has demonstrated clearly that there is a significant degree ofvariation in the enforcement of the financing provisions of Regulation 822/2004.Underlying this, there is a perception – documented in some cases by hard evidence (e.g.FVO reports) - of significant variation in the organisation and effectiveness of the OCs bothbetween and within MS. It has not been within the scope of this study to address the issue ofthe performance of the OCs as such. However, this variability has important implications interms of the actual costs of the controls and in terms of the national approaches that arefollowed to recover the costs incurred through the fees25.Clearly many of the origins of these variations reside in the differing evolution ofadministrative structures and of the system of official controls in each MS.Beyond this, however, there is a strong and generalised perception that CAs have ratherliberally interpreted the provisions of Articles 26-29, in ways that diverge from the intentionof the legislator, and that this was made possibleinter aliabecause of shortcomings in boththe underlying principles and the formulation of Regulation 882/2004.Furthermore, the study has found that, in MS with decentralised management of the system,the relatively ‘liberal’ interpretation of the Regulation by the CAs has compounded the issuesstemming from the devolution of powers, to create a situation of limited central control overthe regional/district authorities in terms of fee determination, collection and use. This wascommonly observed in MS such as Germany, Italy and Spain.
This is not the case with respect to Article 28 on charges where additional costs are incurred following non-compliance. Here the actual cost of further work by the CAs must be charged, although this Article is alsointerpreted differently in the different MS.Insufficient training, staff resources, facilities and equipment are often noted in FVO reports on officialcontrols for which fees are normally collected under Regulation 882/2004, such as those in connection withcontrols on imports of products of animal origin at BIPs, controls on animal feed, residue controls and foodhygiene inspections and controls (Annex1.2).These shortcomings are in most cases due to insufficient financialresources. Our review of relevant FVO reports has identified several such cases, even in more recent missions(2008). More recent examples of FVO reports noting insufficient resources include: Romania (2008-7748),Greece (2008-7724 and 2008-7695), Portugal (2008-7745 and 2008-7696), and Bulgaria (2008-7747). Earlierexamples (from 2006, 2007) include a large number of MS.25
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This in turn gives rise to various concerns relating to the functioning of the internal marketand the effectiveness and efficiency of the system to deliver the level of OCs required byRegulation 882/2004, the Hygiene Package and other relevant legislation (as listed inAnnex1.1).These issues are discussed in the following sections.2.3.2. Contribution to the functioning of the internal marketIn terms of achieving internal market objectives, MS generally welcome EU legislation withrespect to fees for official controls and they broadly agree with the rationale of Regulation882/2004.While there is consensus on the rationale, the key question that arises here is whether theheterogeneity in the application in practice of the financing provisions of Regulation882/2004 results in situations of unfair competition within the internal market. Thisencompasses any potential distortions in competition that can occur between MS, within MS,between sectors of the food industry, according to the scale of establishments, as well asdistortions at the level of imports.These issues of distortion of competition at all these levels have been raised during the studyas follows.2.3.2.1. Distortions between MSThe issue of potential distortion at EU level was raised particularly by the EU meat industry.Stakeholders in the sector are generally concerned that the way in which the system of fees orcharges for OCs are set out in Regulation 882/2004 can cause distortions in competitionbetween MS. In almost all of the countries visited, stakeholders are concerned that theimplementation of Regulation 882/2004 by the national authorities can put them at adisadvantage compared to other MS competitors.In most cases, however, the industry was unable to substantiate these comments because ofthe lack of precise information on how rates are set and what they include in the different MS,and the consequent difficulty in comparing data.It is noted that the professional organisation representing the meat industry at EU level(UECBV) attempted recently to make a comparison of the various fee rates charged for OCsat slaughter and meat cutting points. Although detailed data were collected for a number ofMS, the UECBV came to the conclusion that it is virtually impossible to compare across theEU because fee rates are expressed in so many different ways.The results of the survey and of the case studies have confirmed the lack of clarity,transparency and uniformity in the approach of the various fee systems, which make the directcomparison of actual fee levels across the EU (and between sectors) difficult.As already highlighted above (section 2.2.3), current fee rates in the various MS may beminimum rates and/or flat rate; flat rates calculated using different calculation methods; orrates expressed on a throughput or time basis (the latter including many additional factors
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influencing the final level of the fee). Furthermore, there are differences in the range ofcontrol activities covered by the various fee rates (e.g. these may include laboratory andsampling costs for residue controls in some MS but not in others). For the purpose of makinga comparison it is therefore not clear whether the comparison is being made for the provisionof the same services. Finally, the whole production chain (from farm to slaughter to meatprocessing and retail/catering) differs in many ways between MS, making it difficult to isolatedifferences in competitiveness caused by the fee system or the level of fees as such.Across the EU fee rates currently vary within a considerable range. For example, fee ratespaid for the control on the slaughter of adult bovine animals can vary from Euro 2.3/head insome autonomous communities in Spain, to Euro 8.2/head in Denmark and between Euro 10-20/head in Sweden (against a minimum fee of Euro 5/head in Annex IV). Similar variations inscale can be seen on the fees charged for controls on the slaughter of pigs and sheep. Evenwithin MS the scale of the variation can be significant. For example, in Germany withinBavaria fee rates for the slaughter inspection of adult bovine animals ranges from Euro9.4/head to 12.9/head depending on the district.In summary, the following key factors may be included in the calculation affecting the finallevel of the fee:••••••••••••••Whether the rate is set per head-tonnes or on a time basis (time of staffperforming the official controls);The specific activities and services covered by the fees;Whether residue controls are included in the calculation;Whether other type of controls (e.g. BSE tests) are included in the calculation;The range of other costs included in the calculation of flat rates (criteria 2 and3 of Annex VI);The number of official veterinarians/auxiliaries on the slaughter-line, andwhether the speed of the slaughter-line is taken into account;Whether the size of the establishments is taken into account;Whether only veterinarians are employed for the OCs or also auxiliaries;Whether the staff performing the OCs are civil servants or under contract;Whether transport time is taken into account in the time calculation;Whether special provisions for increased staff fee rates apply after normalbusiness hours, public holidays etc.;The tasks carried out by FBOs’ own staff (such as in the case of the poultrysector);The level of salaries/cost of living in MS and of associated (social security)costs in the case of flat rates (criterion 1 of Annex VI of Regulation 882/2004);Whether MS aim for full cost-recovery;
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•
•
Whether any reductions are made for FBOs under Article 27.5 and 27.6 (risk-based reduced frequency controls and/or the interests of small transitional andgeographically remote businesses);Whether only the meat sector is charged for the official controls.
Moreover, several external factors will affect the overall cost of the official controls (and thusthe final level of the fee):•Efficiency factors: the efficiency with which the official control services areorganised and official controls carried out in the MS;Technological developments: for example, new technological advances thatchange the way in which official controls are performed26;Market/trade volumes and the structure of the industry in the MS: in the caseof import controls the costs of the inspection will depend to some extent on thevolume of trade entering the BIP; in the case of domestic controls, the size ofslaughterhouses / meat cutting plants and the speed of the line will affect thetime needed to perform the necessary official controls.
•
•
As a result, it is not always easy to attribute variations in fees between and within MS tospecific factors. For example, in the case of one meat company operating in both Sweden andFinland, in both MS it appears that the conditions and size of operations are the same, but inFinland the fees paid (pro-rata) are only 60% of what is paid in Sweden.On the other hand, beyond the widely held perception of the potential for distortion, the studyhas not identified any concrete cases or examples of distortion in competition between MS.Some MS (e.g. France and the UK) have commented that, taking the potential significance ofother factors into account, the current differences in fees alone are not considered to besufficient to induce a distortion in competition between MS or to be decisive determinants ofthe competiveness of the meat industry in one MS compared to another. This is because allthe other factors influencing the costs of meat production are far more important thanpotential differences in fees.For example, a distortion would be caused if the impact of different fee regimes and fee levelsbetween MS leads to a greater movement of livestock in order to reduce slaughter costs.However, the cost of transportation would have to be lower than the difference in fee tojustify this and this will tend to limit intra-EU movements (whether between or within MS).Differences in fees are nonetheless acknowledged as one of the factors that can affectcompetitiveness, especially when other factors (such as production costs, transport costs, costsrelating to animal health and welfare, market conditions etc.) exist at the same time, and
For example, inspection by camera appears to be developed in the poultry industry replacing previous, morecostly, physical inspections.
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therefore the compounded impact can put the meat industry in a MS at a competitiveadvantage or disadvantage. For example, the pig and sheep sectors across the EU havesuffered significantly in recent years from rising production costs, animal health problems andadverse market conditions. These problems have been particularly acute in some MS andregions, and differences in fee levels could bring the sector in these markets closer to the pointof collapse.It is important also to consider fee levels in relation to the unit value of products. Differencesin the level of fees can be a more important factor in those livestock sectors where the unitvalue of products is relatively low. For example, a small difference in fee in relation to beefmight not be significant, but the same difference in monetary terms in relation to pigs wouldbe significant and in relation to sheep could be very significant.Finally, it is noted that, while the industry recognised that there are likely to be legitimatereasons for differences in the fees charged such as the cost of living differences between MS,the common concern shared by all is that they should not pay more for the OCs than is thecase in other MS.2.3.2.2. Distortions within MS (between regions)The issue of potential distortion in competition between regions within MS was of particularconcern to those MS that have devolved power from central to regional and even districtlevel. This included such MS as Germany, Italy and Spain (but not the UK at present). Acommon perception in these MS is that the financing provisions of Regulation 882/2004, asthey currently stand, allow MS sufficient room for a relatively open interpretation whichresults in widely divergent fee systems and fee levels.Here too, it has been difficult to substantiate this perception with concrete examples ofdistortions, although it has been less difficult than in the case of the alleged distortions ofcompetition between MS. Again, as explained in the previous section, it is noted thatdifferences in fees are considered to be a relatively insignificant factor of competitivenesswhen compared to the actual costs of production, but can compound the impact of these keycompetiveness factors.The most documented examples on regional distortions at present can be found inGermanywhere a number of court cases have been filed since the beginning of the system (Directive85/73) regarding various issues of implementation (and more recently in relation toRegulation 882/2004). These cases, which are all driven by industry complaints, point to therelatively liberal approach taken at Lander and district level in defining their own systems: todetermine the activities for which fees are charged, the fee calculation method and the variouscost components taken into account for the calculation of the flat rates. This situation resultsin highly divergent levels of fees for the different activities across Germany. According to theGerman industry, the outcome is significant confusion and lack of transparency in the system,and a loss of competiveness for FBOs located in regions/districts which pay what are seen asunreasonably high fees defined on the basis of relatively high costs of official controls.
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The inclusion in the calculation of administrative costs as well as of some other costs listedunder the 3 criteria of Annex VI of the Regulation (e.g. laboratory and testing costs), has beena particularly controversial issue. These costs are defined largely at the discretion of theregional/local authorities, and can vary significantly between regions/districts as they are onlybroadly defined in the Regulation.Another controversial provision is the reference to “minimum rates” which is interpreted bysome CAs strictly as an absolute minimum that should not be undercut under anycircumstances, notwithstanding the provisions of Article 27.6 that allow a reduction in therates. In MS where this occurs, meat establishments and slaughterhouses complain that theysuffer a competitive disadvantage vis-a-vis their competitors in other regions paying feesbelow the minimum rates.InItaly,stakeholders expressed serious concerns that the heterogeneous application ofminimum fees among Italian regions and provinces leads to distortion of competition amongFBOs at regional and local level. Although current drafts for a new law attempt to reducethese discrepancies, there is scepticism regarding the likelihood of implementation.Similar concerns relating to regional variations were expressed inSpain,the key issue beingthat there are regions which require payment of the minimum fees, regions which requirereduced fees, and regions which do not require any fees to be paid at all.TheUKdoes not have any such issues at present as the devolved administrations within thecountry implement Regulation 882/2004 in the same way. However, distortions may becomeapparent in future if different systems are implemented in different parts of the UK (the UKsystem is currently under review the intention being to move to fuller cost recovery from 1April 2009).2.3.2.3. Distortions between sectorsThe following elements of potential distortions between the various sectors covered byRegulation 882/2004 were identified by the study:•The meat sector appears to be at a disadvantage vis-à-vis other sectors of the food industry.Although Regulation 882/2004 covers the entire food and feed industry, the fee system asdesigned at present particularly targets the primary processing stages of the meat sector.The detailing of activities for which fees should be charged as a minimum in Annexes IVand V is focused on these stages of the meat industry, in particular the red meat industry.The meat sector considers this unfair:oTheir main argument is that the performance of hygiene controls at slaughter or meatcutting point is done for the purposes of food safety along the entire meat valuechain, which means downstream chain participants benefit from the controls withoutcontributing to cover their costs. It is therefore argued that the total costs of officialcontrols incurred by establishments along the meat production chain should bedistributed among the actors involved, and this could be doneinter aliaaccording tothe degree of actual risk to food safety;
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oFurthermore, it is argued that with the evolution of the food value chain, hygiene
risks have shifted from slaughterhouses/meat cutting plants to the downstream stagesof the production chain (processing, catering, etc.), and consequently the entirerationale of the current official controls needs to be redesigned (this issue is dealtwith under section 2.3.3). Both industry stakeholders but also CAs and stateveterinary officers considered that the meat sector is, on the basis of risk to foodsafety, unfairly targeted by the current OC system. The processing sectors (forexample, manufacturers of meat products) and the catering sector (where a growingpercentage of the final preparation and consumption of meat or meat-based productsactually occurs) were highlighted as areas where risk to the consumer can beconsidered to be at least as high as those generated at the point of slaughter.•In terms of potential distortions between the poultry sector and red meat sectors, the mainpoint of difference is the ability of the poultry sector to use its own - appropriately trained -staff to assist official inspectors appointed by the government. This possibility currentlyexists for the poultry sector under Regulation 854/200427. Although only used at present bya relatively limited number of MS (e.g. the Netherlands and the UK,) other MS arecurrently considering similar approaches as this input can reduce costs and the fee payable.•Potential distortions between red meat sectors were also identified in more marginal cases,where MS/regional/local differences between fee rates can lead the currently sensitive pigsector and the particularly fragile sheep sector to become more adversely affected than thebeef sector. Such issues were for example highlighted in the UK and French case studies.•The milk sector is also considered to be unfairly targeted by Regulation 882/2004. Themost significant observation here is that the milk industry was largely unaware of itsinclusion in Annex IV of the Regulation up to its publication in 2004, as well as of thebasis on which fee rates were established in Chapter IV, section B of this Annex(“minimum rates for fees or charges applicable in milk production”). Although it isassumed that the milk sector was simply included in the Regulation because it wasincluded in the repealed Directive 85/73, the industry does not appear to have beenconsulted, and the fee rates are considered to represent a very significant and unjustifiedincrease from the rates provided in this Directive28. As a result, there continues to be greatconfusion and divergent approaches amongst MS in the application of Article 27 in themilk sector. As indicated in section 0, the study established that for these reasons, fees arenot collected in this sector in a number of MS (UK, Germany, Netherlands, Latvia), and
Under Article 5(6)(a): “Member States may allow slaughterhouse staff to assist with official controls bycarrying out certain specific tasks, under the supervision of the official veterinarian, in relation to the productionof meat from poultry and lagomorphs”.Annex B of Directive 85/73, as amended by Directive 96/23, provides for a fee of ECU 0.02 per 1000 litres ofraw milk, while Annex IV of Regulation 882/2004 provides for a minimum fee of EUR 1 per 30 tonnes and EUR0.5 per tonne thereafter. Although the Regulation does not specify the unit of milk production to which this feeapplies, if the fee quoted in the Directive is compared to the fee quoted in the Regulation on the same basis, itwould come to an approximate equivalent of EUR 0.6 per 30 tonnes of raw milk, i.e. the fee quoted in theRegulation represents a very large increase from the original level.28
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there are extensive complaints from the industry in the MS where fees are collected (e.g.Slovakia).2.3.2.4. Distortions according to scaleIn anticipation of potentially adverse impacts on small scale, traditional and geographicallyisolated meat establishments, Regulation 882/2004 provided for reductions below theminimum rates (Article 27.6) for business with a‘low throughput’or‘traditional methodsused for production, processing or distribution’or‘businesses located in regions subject toparticular geographical constraints’(Article 27.5 (b), (c) and (d) respectively).The study has found that:•First, the general economic context within which this sector operates needs to be noted.The structure of the slaughtering and meat cutting industry has undergone significantrationalisation in the last decade, continuing past trends whereby production isincreasingly concentrated in a smaller number of larger scale, more technologicallyadvanced establishments. This trend has been driven by a number of factors, includingtechnological progress, market developments (e.g. the need of the sector to respond tothe increasingly powerful buyers of the retail and catering sector), as well as the need tocomply with increasingly stringent legislation and the rising costs of compliance. Boththe industry stakeholders and the CAs have consistently indicated that the fees paid forOCs, although not a sufficient factor on their own, are nonetheless an additional factorin the costs of the operation of smaller scale and traditional establishments, thusaffecting final business performance.•Second, smaller slaughterhouses are generally more disproportionately hit by thecurrent fee system, including even cases where the special provisions of Articles 27.5and 27.6 have been used by MS. Small scale slaughterhouses and cutting plantsgenerally complain that the costs of fees for OCs are too high for the limited number ofanimals they slaughter, or for the small volume of throughput. This is generally feltmore in MS where flat rates based on actual inspection costs or time based chargesapply, and/or where no reductions below the minimum rates apply for this type ofbusinesses. For example, the charging system in place in the UK prior to 2001 wasbased solely on time costs and inspection times; as these were increasing rapidly, thesystem quickly posed a particular problem for smaller plants, many of which becameuneconomic.•Only a number of MS have adopted the provisions of Article 27.5. Such MS include theUK, Belgium and France. For example in the UK, there appear to be no distortionsunder the current system because operators have the choice of using charges based onthroughput or according to actual cost. In France and Belgium special provisions aremade for smaller FBOs or according to scale (volume of throughput).•Some MS have not used this possibility, either due to a strict interpretation of the‘minimum rate’ provisions (whereby they have not accepted these should be undercut,e.g. in the case of Germany) or because it was considered it would complicate the fee
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system to have differential fees (e.g. in the case of Slovakia under the new lawenforcing the provisions of Regulation 882/2004). In the case of Germany, the industrypointed to the extensive closures of small slaughterhouses in recent years, which are, atleast partly, blamed on the disproportionately high fees these slaughterhouses pay underthe current system. Representatives of small and medium sized slaughterhouses (e.g.from Bavaria) stressed that, in setting the fees, authorities should take into accountinteraliathe type of business concerned, as stipulated by Article 27(5), which it is argued isnot happening at present;•The situation is changing, however, as several MS are currently in the process ofdiscussing new legislation to fully enforce Regulation 882/2004. It is not clear whetherthis will leave small-scale, traditional and remote businesses better or worse off. Forexample, in the UK, the proposed time-based charging regime is expected to lead tosome distortions against this type of businesses as a result of the scale and degree ofslaughterhouse mechanisation, but a proposed subsidy system may correct for this,depending on how it will be implemented29. In France, where the current system of feeshas achieved what is considered a sensitive balance between larger and smalleroperators, the current debate on reforming both the official inspections system and thefee charging scheme has raised concerns for smaller businesses that the change maylead to higher fees.•The main advantage of the current EU system, where Member States can, in effect,charge anywhere from 0% to 100% of the full cost of controls, is seen by some MS(both at the level of industry stakeholders and at the level of CAs) as allowing thepossibility for lower costs to be charged for these more ‘fragile’ plants.2.3.2.5. Distortions at the level of importsSome concerns were raised at the potential distortion at the level of imports under the currentsystem, as BIPs can charge different rates across Europe depending on whether they followthe minimum rates of Annex IV or flat rates (based on actual costs).Currently 7 MS charge flat rates and 3-5 other MS charge a combination of flat and minimumrates on imports (i.e. flat rates on some products and minimum rates on others) (Question1.6b,Annex 2).Flat rates can be higher than the minimum rates, but in some cases were alsofound to be lower (e.g. France, Hungary, Spain for live animals, Ireland in some cases forhigh volume fish consignments).
If implemented as the proposals currently stand, the future system will involve a 12% increase in charges toFBOs (including 3% for inflation) while maintaining support for small and geographically isolated FBOs. Itappears that the UK government intends to direct subsidy towards some smaller operators as part of a policy toretain small, geographically isolated abattoirs because they contribute to other policy goals such as reductions incarbon footprint, disease control and support for rural economies. The industry would not object to this policy ifit is targeted to micro-businesses (which, account for between 1% and 2% of total UK throughput) such asremote abattoirs in, for example, the Highlands and Islands of Scotland, but would not support the policy if it istargeted to small/medium sized establishments located anywhere in the country.
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Again, in practice, whether this potential distortion will actually occur will depend on a rangeof other factors, notably the transport costs involved and logistical considerations.No documented evidence of such distortions was found, but both the industry and the CAshave expressed concern this may well be occurring, especially in closely situated BIPs.2.3.3. Contribution to maintaining the efficiency and effectiveness of OCsThroughout this study, widespread concern has been expressed by stakeholders at all levels(authorities, industry) that the activities listed in Annex IV (and to a lesser extent the importcontrol listed in Annex V) do not cover the same range, level and standard of controlsthroughout the EU. This raises questions of efficiency and effectiveness in the system ofofficial controlsper se,which are beyond the scope of this study. However, of relevance tothis study is the extent to which the financing of OCs contributes to alleviating or tointensifying this lack of homogeneity and the potential deficiencies in the EU system ofofficial controls.Articles 26-29 of Regulation 882/2004 lay down the principle and the means for the financingof official controls with a view to ensuring that MS have sufficient financial resources to carryout the controls.A priori,the principle of guaranteeing sufficient funds for the financing of the official controlsin all MS of the EU-27 (Article 26) should contribute to alleviating any lack of homogeneityin carrying out the controls, or - at the very least - guarantee that a certain homogenous(minimum) level of controls is applied throughout the EU. This principle is widely endorsedby all stakeholders.Beyond the principle as such, the question arises of whether the means that Articles 27-29 putat the disposal of MS contribute to this objective. This refers in particular to the extent towhich the compulsory application of a fee to finance these controls (Article 27) can guaranteethat MS have adequate funds to carry out the controls, at least at a certain (minimum) uniformlevel throughout the EU. This point is widely contested by stakeholders in all MS.In particular, the study has found that two key questions are raised: first, in terms of theadequacy of financial resources available to MS to carry out the controls; and, second, interms of whether the controls are currently carried out in the most cost-efficient manner. Thesecond question touches on issues of the organisation and the principles of the officialcontrols which are beyond the scope of the study, they are therefore included here only to theextent they are relevant to the discussion.2.3.3.1. Adequacy of the financial resourcesAs indicated in section 2.2.5, the survey results suggest that the rationale for the system of feecollection (to ensure adequate financial resources in the meaning of Article 26) is largely notfulfilled at present for the EU as a whole.
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In the majority of MS the revenue from the collected fees is incorporated into the State’sgeneral budget, either in its entirety (11 MS, including France and Slovakia), or in part (7 MS,including Germany, Italy, Poland and the UK). Where this occurs, especially where the entireamount of the fees collected is incorporated into the general budget, there is for the most partno guarantee how this is to be used subsequently. Only 9 MS claim to be ‘ringfencing’revenues specifically for the CAs performing the controls (Question1.10,Annex 2).Most likely related to this, 14 MS (including Italy, Slovakia and the UK) have clearlyindicated that they do not cover the costs occasioned by the official controls through thesefees (Question1.9a,Annex 2).Only 7 MS (including Poland) claim costs are being covered,while a further 6 MS (including France and Germany) claim this is possibly occurring insome cases (some activities; some regions) but not in others. An overview of the extent towhich MS manage to cover the costs of the official controls through the collected fees isprovided inTable 2-1.As illustrated, the costs of the official controls are in most cases and inmost MS only partially covered by the collected fees. This is due both to the manner of feecollection and channelling (via the State Budget), but also because the level of fees is ofteninadequate to cover the costs.Although the partial coverage of the costs of official controls by the collected fees does notnecessarily imply that the financial resources put at the disposal of the system of officialcontrols are not sufficient, it would be difficult to establish that they are.The reason is that there is lack of transparency at MS level in trying to determine both thetotal costs of the official controls, and the actual standard of controls that this represents.Furthermore, it is difficult to compare between MS, because both the costs and the actualcontrol activities encompass different elements in the various MS (as discussed in section2.3.2).This is reflected in the manner of calculation of the flat fee, in the MS/cases where flat ratesapply, where in most cases little information is available beyond the generalised statement ofthe application of the 3 criteria of Annex VI of Regulation 882/2004. In practice, it appearsthat the 3 criteria are applied rather liberally, encompassing a whole range of cost factors,which are not necessarily the same in all MS, and do not necessarily relate to the actual costsof the official controls. The study has established that there are cases where the fees seem tobe charged at a higher level than what would be justified by the controls undertaken, while inothers the fees are not adequate to cover the costs.In terms of comparing across the EU, an important determinant factor in assessing theadequacy of funds, is the actual cost of living in the various MS. The available data suggeststhat there is wide variation across the EU-27. According to Eurostat, labour costs vary by afactor of one to twenty in the EU2730(2006 data, based on full time employment in industryand services). Comparative price levels by Eurostat show that in 2007 prices paid byconsumers in the NMS remain typically at less than 80% of the average price levels in the
This was the difference in terms of average hourly labour costs in Bulgaria and Romania (the lowest in theEU) compared to the EU27 average.
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EU-2731. Statistics on the costs of living suggest that this can vary by up to 20 percentagepoints across key cities of the EU-1532.It is therefore not surprising that in the MS/cases where the minimum rates apply, in somecases the level of fees is not sufficient to cover the costs of the controls while in others it isconsidered excessive, the final outcome being highly dependent on the cost of living in thevarious MS.2.3.3.2. Cost-efficiency issuesA number of cost-efficiency issues have been identified during this study, and these relateboth to the current organisation and principles of the official controls and theirimplementation in practice. As already indicated, some of these issues extend beyond thescope of the study; they are therefore only discussed here to the extent they are relevant in thecontext of this study.a) Staff costsThe most important element of the costs of official controls is staff costs. In relation to this,the following factors account for significant differences between MS:i.ii.iii.The number of official staff employed to carry out the controls;The profile of the staff used in the official controls; and,The wide variation in salary and costs of living levels, as discussed above.
Regulation 882/2004 refers only to the general requirement to have “asufficient number ofsuitably qualified and experienced staff”(preamble 11 and various Articles of theRegulation). In practice, there is wide variation between MS in the numbers and profiles ofstaff employed to carry out official controls, and this appears to reflect long-standinginstitutional and organisational issues rather than real need. Here too, there is a certain lack oftransparency: no up to date data are currently available (example from the FVE) that wouldallow a comparison between MS33.
Eurostat: comparative price levels of final consumption by private households including indirect taxes (EU-27=100), 2007 data.32
31
Source: Mercer's 2008 Quality of Living survey.
If formal data was available it would allow, for example, a comparison of official veterinarian and auxiliarynumbers between MS and in relation to the human population, or in relation to production and trade volumes.Such a comparison is not always straightforward, because the national and local structures of both theadministration and the food sector need to be taken into account. Despite such shortcomings, the comparisonwould still be valuable in that it would enable some preliminary observations to be made, which would highlightwhether there is a need for the review of the current structures.
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In the case of products of animal origin, the profiles and tasks of the staff involved in theofficial controls are laid down in Regulation 854/200434. The Regulation provides for thetasks to be undertaken by the official veterinarian per type of activity, and the tasks that canbe carried out by official auxiliaries under certain conditions; in the case of the poultryindustry, own staff can be involved in these inspections. Within these general parameters MSare given the freedom to implement the staff structure that best fits their needs.The study has found that the current organisation of the veterinary services staff in the MSgenerally lacks motivational character and does not provide any incentives to cut back onthese costs. In particular:•The balance in the use of official veterinarians versus auxiliaries for the officialcontrols, appropriately trained in both cases, is currently generally considered to beunsatisfactory in most MS.•The employment and remuneration conditions of the staff are in many cases questionedfor raising costs.The UK industry criticises the absolute requirement to use government employees asthe official veterinarians for the inspections, which it argued imposes high costs on theinspection function. The case studies established that such criticisms are shared by themeat industry in Germany, Italy, France and Poland, as well as more generally acrossthe EU (UECBV).There are further criticisms on the way salaries and working conditions are negotiatedbetween the CAs and these employees, reportedly leading to higher costs (e.g. Poland,Germany35, Denmark36).•The fees paid by the industry do not appear to be based on the actual level of servicesprovided, at least in the red meat sector. This therefore acts as a disincentive torationalise costs.According to the UECBV, the fixing of the minimum fees paid by slaughterhouses(Annex IV) on a per head basis, in combination with minimum inspection times and
According to preamble 9 of Regulation 854/2004: “officialveterinarians to carry out audits and inspections ofslaughterhouses, game handling establishments and certain cutting plants. Member States should havediscretion to decide which are the most appropriate staff for audits and inspections of other types ofestablishments”In Germany, the level of fees is negotiated between the district or municipal authorities and the German CivilServants’ Union (DBBBeamtenbund und Tarifunion).The meat industry criticised the negotiation processwhich, to their view, hinders an efficient deployment of the existing veterinary personnel.In Denmark, the exact number of official inspectors to be used per number of animals is stipulated within theLaw. The setting of this number is reported by industry to be largely union driven. The industry claims that itdoes not realistically take into consideration key factors of the production process, such as the speed of the line.3635
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maximum inspection targets as has been introduced by several MS (e.g. Denmark),leads to disproportionately high veterinarian fees and does not reflect actual costs37.At cutting plant level, it is argued that the existing fees based on meat volume do notappear to relate directly to the costs involved. Official controllers only need to bepresent in cutting plants for a limited time (as little as twice/week for a few minutes,which is the frequency appropriate to achieving the objectives of Regulation 854/2004),but cutting plants have to pay on a throughput basis for the whole production volume(Euro 2 per tonne in the case of red meat).Consequently, the industry stakeholders see the need for a relaxation of the rules, to allowinter aliathe involvement of appropriately trained staff on contract, rather than higher costgovernment officials, to provide these services. They argue that effectively opening thecompetition between service providers would lead to a more cost-efficient system, whichwould be reflected in lower fees.In a number of MS reforms of this kind have already started (e.g. Netherlands), or a debate iscurrently under way (e.g. the UK, France), targeting these issues. In the Netherlands, sinceJanuary 2008, a new system is in place that uses contracted experts for the inspections. Theseare appropriately trained in accordance with the requirements of the Hygiene Package and arenot civil servants. The new system is believed to have opened up competition, and to havecreated the right incentives to improve efficiency.b) Administrative costsThis is the second most important cost element, reportedly accounting in some cases for asmuch as 25-30% of the total costs (e.g. some German Lander)38.In any case, there is a lack of transparency on the magnitude and the composition of theadministrative costs. This causes widespread confusion as well as concern amongst industrystakeholders that the CAs are in fact charging for costs which do not relate to the actualofficial controls, which in its turn creates mistrust regarding the efficiency and effectivenessof the current system of official controls.These issues are particularly prominent in Germany, where the relative share of administrativecosts that are taken into account when fees are calculated appears to vary significantlybetween and within individualBundesländer.This results in significant variation in final feelevels and, due also to the lack of transparency on how fees are actually calculated, createsdoubts with regards to the cost-efficiency of the system. Despite numerous court cases on this
Fees on a per head basis were introduced by Directive 85/73 and Decision 88/408. This denomination wasmaintained in Regulation 882/2004.According to information provided by the German industry. Again, limited data are available on this elementof the costs. Where data is available, the relative share of administrative costs tends to be very modest,suggesting that data only become available in the good cases.38
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and other related issues on the fee calculation in Germany, to date this issue remains largelyunresolved.Although most prominent in Germany, similar concerns were expressed by industryrepresentatives of other MS (e.g. Italy, Poland, Sweden, Denmark).The main criticism in all cases is actually directed at Annex VI of Regulation 882/2004,which defines the three types of costs on the basis of which fee calculation should take place.In particular, the point is made that Annex VI is formulated too broadly, thus leaving toomuch room to MS authorities for an open interpretation. As a result, it is largely left to thediscretion of MS to define and incorporate the various cost criteria in their fee calculation and,in particular administrative costs, which are not defined as such in Annex VI but appear to becovered by the general term ‘associatedcosts’(point 2 of Annex VI). As it stands, the criticsargue the system does not provide any incentive for authorities to rationalise on the variouscosts, particularly the administrative costs, and it is the industry that has to pay for this.c) The guiding principles of official controlsAccording to Article 3.1 of Regulation 882/2004, official controls should be carried outregularly,on a risk basis and with appropriate frequency,taking account of the followingfour factors:(a) Identified risks;(b) FBOs’ past record as regards compliance with the rules;(c) The reliability of ‘self-control’ systems (own FBO checks already carried out); and,(d) Any information indicating non-compliance.In practice, the study has found that currently these four factors are not sufficiently taken intoaccount in the way MS plan and implement their systems of official controls.Currently, the implementation of the provisions of Article 3.1 is very inconsistent across theEU-27. The discretion given to MS to implement the rules according to their needs andpriorities results in various approaches and modes of operation of the official controls. Whilstthis guarantees flexibility for MS to adapt the provisions to their own national and localconditions, there is scepticism on the part of the industry that MS are in fact avoiding much-needed reforms of the traditional organisation and implementation of official controls thatwould improve cost-efficiency as well as the overall effectiveness of the controls. This, inturn, has repercussions in the way fees are charged under Regulation 882/2004.In particular, the following points have been made during the case studies:TheUKmeat industry considers the above factors are not currently sufficiently taken intoaccount. They argue there is a need for greater consideration of risk, in particular the risk tohuman health, for which the meat industry considers itself disproportionately targeted vis-à-vis sectors downstream the chain (in particular the retail and catering sectors); greater use of
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risk assessments should therefore be made to correct this imbalance and provide a furtherincentive for good performance, which would result in lower costs. Also, at the moment, thereis little incentive in the system to promote the efficiency of the inspections at FBO level. It isargued this would help keep inspection costs down. Although Article 28 of Regulation882/2004 can be used to target FBOs with inefficient inspection structures and create anincentive to improve them, there are doubts as to how effectively these powers are currentlyused across the EU.InGermany,the meat industry strongly criticises the current basis of the frequency ofcontrols for failing to take sufficient account of the risk parameters involved and the actualrisk exposure. The industry believes that, in practice, meat hygiene controls could beconducted by less veterinary personnel than currently employed, by adjusting controlfrequency to an establishment’s actual risk profile; in many cases, the opposite appears to betaking place currently39. There have been some efforts on the part of the industry to correctthe problem, for example through the use of risk assessment models that assess the risk ofindividual establishments and appropriately adjust the frequency of the controls (e.g. poultryindustry; “GüthersloherModell”in the meat products industry). These models have beendeveloped by the industry and approved by the CAs,. however, these initiatives are relativelylimited at present, having been implemented on a pilot basis in only fewBundesländer40.InItaly,all of the different sectors acknowledged that the meat sector is, on the basis of theactual risk to safety, unfairly targeted by the system41. New draft legislation enforcingRegulation 882/2004 that is currently under discussion appears to address, at least in part,some of these issues: it spreads some of the fee charging across the various sectors, and itintroduces fee reduction for efficient large-scale establishments in the red meat sector on thebasis of the reduced unit time required for the inspections due to the high level of efficiency inthe way the sector operates (speed of the chain).Across the EU, the meat industry as represented by the UECBV, highlights what it considersto be the current failure of the implementation of Regulation 882/2004 to move in thedirection of proportionate and risk-based controls, and more self regulation and FBOinvolvement, according to the aims and principles of the General Food Directive (Regulation178/2002) and the Hygiene Package (in particular Regulation 854/2004). It is noted that thefinancing provisions of Regulation 882/2004 still refer to outdated legislation and make noreference to the Hygiene Package. The EU meat industry argues that, as it stands and as
There are cases where control frequency is adjusted to the number of establishments in place, rather thanactual risk. For example, if a veterinary works in a district where e.g. there are two meat establishments, controlfrequency will increase accordingly and be different than in a district where a veterinary e.g. has ten or moreestablishments to control.40
39
For example, the “GüthersloherModell”model is applied mainly in North-Rhine Westphalia only.
The meat industry in Italy is further penalised by the fact that fees are charged twice, at slaughter and meatcutting points even where these activities are carried out in the same establishment. The current draft lawenforcing Regulation 882/2004 complicates this issue further, as it appears to extend fee charging also to meatprocessing establishments.
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currently implemented, the system of fees lacks incentives to promote improvements at bothadministrative and business level that would result in cost-efficiency gains. Suchimprovements would include the adjustment of controls on a risk-basis along the food chain,also taking into account the new tools available such as traceability and food chaininformation, and incentivising the adoption of HACCP and self-control systems by theindustry.This position is increasingly endorsed by a growing number of stakeholders. In a recentseminar on the modernisation of inspections in slaughterhouses organised by the FrenchPresidency, there was wide consensus across the EU amongst industry stakeholders andrepresentatives of the CAs, that due account needs to be taken of technological progress andthe increasing uptake of self-control systems (notably GHP and HACCP) following theintroduction of the General Food Law and the Hygiene Package42.
See for example, Seminar on the “Modernisation of sanitary inspection in slaughterhouses”, organised by theFrench Presidency, Lyon, 7-11 July 2008.
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3. Options for the future3.1. The development and assessment of the various options3.1.1. Range of options and scenariosThe analysis of the current situation has outlined various shortcomings arising from theenforcement of Articles 26-29 of Regulation 882/2004. In doing so, it has also highlighted themain challenges going forward in this sector, as imposed by both internal and external factorsaffecting the outlook for the future.External factors would include technological progress and its implications for the way officialcontrols are performed, globalisation issues and the need to support and maintain thecompetitiveness of EU industry in international trade, and the ongoing enlargement of the EUleading to increased variation in administrative structures between MS.At the same time, the orientation and principles of EU legislation are continuously evolving torespond to these challenges. In particular, the 2002 General Food Law and the 2004 HygienePackage have introduced a new integrated approach to feed and food safety which aims toensure a high level of food safety, animal health, and welfare and plant health within the EUthrough coherent farm-to-table measures, while ensuring the effective functioning of theinternal market.The study has investigated how the identified shortcomings relating to the current fee systemand to the future challenges lying ahead could be addressed via a series of options forimprovement of the financing provisions of the Regulation (Task3).A priori,the options to consider for the future would range from full harmonisation to fullsubsidiarity (Table3-1). Full harmonisation would involve a completely harmonised systemacross the EU27 with all MS paying the same fees for the same activities. Full subsidiaritywould mean repealing Articles 26-29 of the Regulation, thus allowing MS to develop theirown systems for the financing of official controls.A range of other possible scenarios can be identified between these two extremes. Indeed, asthey currently stand, Articles 26-29 combine subsidiarity (by giving MS the freedom todecide whether to use the minimum rates of Annexes IV and V or to calculate flat rates basedon costs, and the fact that MS can decide which sectors to includeinter aliavia Article 27.1)with a certain degree of harmonisation (in that MS can adopt the same minimum rates andshould comply with certain common rules and criteria). Maintaining the status quo(donothing)is indeed one of the options for the future considered by the study.In order to illustrate the various options and scenarios, the key components of the system arepresented inTable 3-1and set against certain key scenarios. It is noted that the presentedscenarios consist of various possible combinations of the individual components of thefinancing system, as identified by the study.
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Table 3-1
Range of options, scenarios and componentsComponentsHarmonisation(b)FullCompulsoryScenario 1CompulsoryScenario 2CompulsoryStatus quo:current systemMixCombinationScenario 3Optional (Article26)Scenario 4Optional(Article 26)Subsidiarity(b)Full
R 882/2004 (a)
Art 26, Art 27.2Art 27.1Art 27.3
Art 27.4Annex VIArt 27.5 to 27.7Art 27.3,Annex IV and V
Feescompulsory oroptionalFee levelCommon feelevels (define feelevels)FeeCommoncalculationmethod/modelFeeCommon level ofreductionsreductionsList ofCommonactivitiesactivities (definelist of activities)
Common feelevels (definefee levels)Commonmethod/modelCommonprinciplesCommonactivities
CommonprinciplesCommonprinciplesCommonactivities
Common fee levelsfor compulsoryfees onlyCommon principlesCommon principlesCommon list onlyfor compulsoryfees
CommonprinciplesCommonprinciples
RepealArticles 27-29
RepealArticles 26-29
Potential to extend to other sectors / along the food chainArt 27.8Art 28, Art 29Art 28.12Fee collectionPenaltysystemMS reportingtoCommissionCommonpenaltiesCompulsory fullMS reporting(regular report onoperation ofsystem andamount ofcollected fees)CommonprinciplesCompulsoryfull MSreporting(regular reporton operationof system andamount ofcollected fees)CommonprinciplesAs currently(MS obligedto publishcalculationmethod)CA defined forimport controlsCommonprinciplesMS obliged topublish feecalculationmethod, includingfor fee reductions
CommonprinciplesAs currently (MSobliged to publishcalculationmethod)
MS obliged tocommunicatethe costs ofOCs and howcosts arecovered
(a) Reference in the current provisions of Regulation 882/2004 to the various components of the fee system
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(b) ‘Common’ refers to the application of the same rules across all EU27 MS
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In particular, a number of scenarios were assessed within the following options43:1. Moving from the current systemtowards more harmonisationacross the EU;2. Moving from the current systemtowards more subsidiarity,or leaving moreresponsibility to MS;3. Theextension of the system to cover other sectorsalong the food chain;4.Maintaining the status quo (mixed system),but introducing certain improvements.The first three options were definedà prioriin the ToR and were developed further in thecourse of the study. Each option covers a range of scenarios, depending on the degree ofharmonisation, subsidiarity and sector coverage envisaged. It is noted that Option 3 relatesmore to the scope of the system than the mechanism to be used and therefore transcends thevarious harmonisation/subsidiarity scenarios of (Table3-1).The fourth option, which was developed during the study, is based on the current combinedapproach and principles of Regulation 882/2004. It explores the type of changes that need tobe made, if the status quo is maintained, for a more effective and efficient implementation ofthe Regulation.The two extreme scenarios of full harmonisation and full subsidiarity represent polarisedsolutions which are not feasible to pursue, at least not at present. In particular, both optionswould require closer economic integration and greater harmonisation of the system ofofficial controls in the EU-27 than is the case currently. Due to the significant differences ineconomic conditions and the costs of living between MS which affect the actual cost of theofficial controls (as discussed in chapter 2), applying a fully harmonised system is likely toresult in overcharging in certain MS (particularly some of the NMS) and undercharging inothers. On the other hand, due to the significant differences between MS in the currentimplementation of EU hygiene legislation as well as in the uptake of self control systems,full subsidiarity (repealing Articles 26-29) could risk undermining the standard of thecontrols carried out in parts of the EU, thus potentially threatening the operation of the entireEU official controls system and the progress achieved so far.Both the survey and the case studies have demonstrated the need to maintain a balancebetween the two extremes. In the survey the majority of MS CAs indicated that subsidiarityor a mixed system (both of which allow a certain flexibility for MS to set the rates, within acommonly agreed set of rules) were the most favoured options (Question2.1,Annex 2).AllMS, including those that opted for harmonisation, indicated the need to maintain flexibility toadapt the system to national conditions.
The ToR referred to three specific options: harmonisation; subsidiarity; and, extension to other sectors.Following consultations with DG SANCO, these were re-formulated to the structure followed in this Report.
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The need to maintain flexibility, as well as promote simplification, is also central to theoperation of the enlarged Union of 27 MS.The various scenarios combine a number of different basic components which are discussedin more detail in the following section.3.1.2. Key componentsBased on the intervention logic of the financing system for official controls laid down in thecurrent legislation (Articles 26-29 of Regulation 882/2004), a number of key componentswere identified, from which the various initial options were developed into the scenariosexamined by this study. These components are depicted inTable 3-1as follows:•The basis of fee charging:fees can be charged on a compulsory or on an optionalbasis, or (as in the current system) as a combination of the two (i.e. for certain activitiesfees would be charged on a compulsory basis while for others they would be charged ona compulsory basis);•The level of fee rates:fee rates can be totally harmonised (same fees throughout theEU-27), or can be flexible but based on a calculation method, or (as in the currentsystem) can be a combination of the two (i.e. for those activities for which fees arecharged on a compulsory basis minimum fees are laid down; where costs are beyondthese levels and for other activities for which fees are charged on an optional basis, feescan be charged up to a total cost-recovery basis);•The fee calculation method:this can be a standard method/model throughout the EU-27, or can be flexible but based on certain key principles. A key principle in particularwould be that the fee is aiming at cost recovery as in the current legislation (i.e. feescannot be lower than the minimum, and cannot be higher than costs). The degree of costrecovery (partial or full) to be achieved/allowed would need to be established. Also, thequestion of whether the method needs to be defined by sector, by activity or for theentire food chain would need to be addressed;•Fee reductions and penalties:these can be standard applying throughout the EU-27, orcan be flexible but based on certain key principles. These principles could be those setout in the current legislation (Articles 27.5/6 and Article 28 respectively) or couldexpand on these;•List of activities covered by fees:the list can be finite and harmonised, or can beflexible but based on certain key principles, or totally flexible. Also, the list can remainas per the status quo, or revised (expanded/condensed).In terms of theprinciplesthat can apply for a more harmonised calculation of the fees and/orfee reductions/penalties across the EU, the level at which these should be set needs to befurther discussed. This refers in particular to whether these should be general principles onlyor whether they should be more detailed criteria defined at a technical level:
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•General principles would include: transparency in the calculation method of fee settingand for calculating fee reductions/penalties, on the basis of actual costs; and, theobligation for MS to communicate these to the Commission and the public.•Detailed technical criteria would include for instance the calculation method to befollowed for fee setting and for fee reductions/penalties, cost-recovery targets thatshould be sought, precise cost categories that should be taken into account, and evenmaxima/ceilings for each cost element.General principles are essentially already foreseen in Article 27 (although, as shown insection 2.3, these are not always respected by MS). Some broad criteria are also defined inAnnex VI. More detailed criteria would take the principles to a more precise technical levelwhich could help to ensure that MS have less room to deviate from the general principles. Atthe same time, these details are more difficult to define and make acceptable at EU level.The principles and criteria are discussed further under the presentation of the various optionsbelow.The level at which common principles will be established will be key in controlling MSflexibility and mitigating the potential disadvantages of subsidiarity. The greater the extent towhich a move is made from defining more common principles and general guidelines (as iscurrently the case with Articles 27-29 of Regulation 882/2004) to defining technical criteria,the more difficult it will be for MS to deviate from a common denominator. On the otherhand, this increases the complexity of the provisions and the extent of follow up needed atcentral level (Commission, MS CCAs).In terms of the calculation offee reductions and penalties,in particular, the principles couldbe those established by the provisions of Articles 27.5/6 and Article 28 respectively.However, the study has demonstrated that these principles are currently not fully adhered toby the majority of MS. In practice, as is evidenced by the description of the current system,the provisions of Articles 27.5/6 and 28 are enforced to varying degrees and with considerabledifferences between MS. Moreover, the meat industry in particular appears to be penalised bythe lack of a clear link to the advantages and benefits of self-control systems, as introduced atEU level by the Hygiene Package.To address these concerns, the study has examined the possibility of expanding on the currentprovisions, by introducing:a. A common approach across the EU;b. An integrated approach linking more consistently compliance and non-compliance,therefore fee reductions and penalties, to the uptake of self-control systems.Thus in all scenarios ofTable 3-1where principles for the calculation of feereductions/penalties would apply, these would expand on the current provisions of Articles27.5/6 and Article 28 by linking compliance/non compliance to the uptake of self-controlsystems by industry through an integratedbonus-malussystem.
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Both MS and stakeholders are in principle in favour of providing incentives to FBOs toassume greater responsibility. The extent to which this can be encouraged will depend on thedegree to which an approach on how to reward compliance can be developed (Articles 27.5/6)and, conversely, how to penalise non-compliance (Article 28). This could be through anintegratedbonus-malussystem. Such systems have already been developed at MS level in afew MS (e.g. Belgium) and these highlight the advantages of an integrated approach.3.1.3. Assessment criteriaThe assessment of the various scenarios was based on the analysis of the views and datacollected from stakeholders (both at administrative and business/industry level). All of themethodological tools used in this study (survey, interviews and case studies) have includedsuggestions for overcoming the various shortcomings of the present system. The finalformulation of the various scenarios and their analysis emerged as a result of this work.Each scenario is assessed in terms of its advantages and disadvantages, feasibility (whetherand under which conditions it would work in practice), and the acceptance that it might beexpected to have from the various groups of stakeholders.In the context of the main goals and principles of Regulation 882/2004, as well as the widerobjectives of Community food and feed law and the Lisbon strategy (section 2.1.1), three keycriteria are applied throughout the assessment, as follows:a) Improving theeffectiveness and efficiency of the official controls;b) Moving to asimplificationof the current system;c) Providing theright incentives for FBOs,in particular in terms of the provisions ofArticle 27.6 and Article 28 of Regulation 882/2004, thus encouraging compliance andpenalising non-compliance respectively.It is noted that the above criteria may not necessarily point to the same direction, indeed theycan point to different directions. For example, the objective of pursuing simplification maynot be compatible with the increasing complexity required to ensure a harmonised approachacross the EU. The initial assessment of the scenarios provided here aims to provide abalance between the various objectives and needs of stakeholders.Furthermore, as already indicated, some of the issues raised by the study extend beyond itsscope as such. For example, overcoming certain cost-efficiency issues requires action notonly at the level of the financing provisions of Regulation 882/2004 but also of the HygienePackage44. Addressing these issues is therefore only discussed here to the extent it is relevantin the context of the costs and the financing of the official controls.
44
For example, the requirement of Regulation 854/2004 to use official veterinarians to carry out audits andinspections of slaughterhouses, game handling establishments and certain cutting plants is generally consideredas a key obstacle to pursuing cost efficiencies in the control process. At the same time, Regulation 882/2004
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This forward looking element of the project aims to provide an initial assessment of certainkey identified scenarios. The purpose is not to provide a full feasibility analysis (whether atpolitical or technical level). Nonetheless, specific recommendations are made to develop thesescenarios, or indeed other potential combinations of their constituting components, includingthrough future impact assessments.3.2. Towards more harmonisationAs indicated inTable 3-1,moving from the status quo towards more harmonisation couldinvolve a range of scenarios depending on the degree of harmonisation sought. A constantfeature of all scenarios under this option is that fee charging would becompulsoryfor allMS. This effectively sets targets for the recovery of the costs of official controls through feecollection, moreover in the form of targets which are common across the EU. It would nolonger be at the discretion of MS to define the activities for which fees are to be charged as iscurrently foreseen by Article 27.1. This would aim to a more harmonised approach for thefinancing of official controls across the EU-27 (as an intermediate objective for theachievement of more harmonised controls across the EU, as discussed in section 2.1).3.2.1. Full harmonisationThe most extreme version of this option, full harmonisation, would be described as follows:1. All MS pay the same fees at the same level (fixed rates) for the same activities. It isnoted that:i.The fees could be set at the level of the minimum rates currently established byAnnexes IV and V, or at a different level. In any case, the fee level would beestablished on the basis of a common calculation method defined at EU level,aiming at a certain level of cost recovery (to be determined at EU level);The list of activities could be as currently established by Annexes IV and V, orcould be different (expanded/condensed).Fee rates could be subject to regular review (e.g. every two years as provided bycurrent Regulation) inter alia to adjust rates in line with inflation.
ii.iii.
2. Penalties and reductions (for complying and non-complying firms, in the spirit ofArticle 27.6 and Article 28 respectively) are the same (fixed rates) for all MS.
refers only to the general requirement to have “a sufficient number of suitably qualified and experienced staff”.As the scope of this study only concentrates on Articles 26-29 of Regulation 882/2004, the options discussedhere do not address possible changes to the relevant provisions of the Hygiene Package.
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This option was generally the least favoured, with only 7 of the 27 MS CAs indicating theirpreference for a common system (Question2.1,Annex 2).All the MS that opted for fullharmonisation are new MS, and in most cases these have faced considerable difficulty inintroducing Regulation 882/2004 in the first place. Also, all of the 7 MS in favour of thisoption commented that there should nonetheless be some flexibility within the rules. At thelevel of the industry, full harmonisation was largely considered to be unrealistic.Other than some potential advantages under certain conditions, such as possibly allowing fora simplification of the system at least at the level of central management (Commission, MSCentral Competent Authority) and greater transparency as the same rates would applythroughout the EU27, full harmonisation is thus overall seen as having many disadvantages(Table3-2).A key problem is establishing the level at which fees should be set. This level would dependon the extent of cost recovery sought. However, there are currently no objective measures bywhich to establish the optimal level of fees at EU level for each activity. While such measurescould be broadly based on the current criteria of Annex VI, there is currently a lack of theessential parameters that would enable us to provide an objective calculation of an optimalminimum fee at EU level. Such parameters would include for example, the optimal amount oftime needed for the inspections for each activity and per type of business. In theory thisshould be the same figure for all MS; in practice it may differ depending on administrative,inspection staff and industry structures in each MS. In addition, there are certain parametersthat cannot be defined as a common figure across the EU, notably staff costs andadministrative costs.The current differences in living costs and salary levels amongst MS, and their impact on thecosts of staff employed to carry out the official controls and on administrative costs, meanthat some MS would be net losers while others could be net gainers under this system (netlosses and gains in this case refer to the potential revenue from the fees compared to the realcosts of the controls for the administration). In any case, this appears to be the reality today,with the current level of minimum rates deemed to be too low or inadequate to cover the realcosts of OCs for some MS while it is too high for others.Although fees would be set at the same level throughout the EU, full harmonisation does notcreate a level playing field for the industry either, because it is the relative value of the fee(compared to production costs and producer prices) that is important and not the absolutelevel of the fee.Consequently, trying to find a common basis for the EU-27 could simply result in fees beingset in relation to the lowest common denominator, which is below the current rates ofRegulation 882/2004. This is evidenced by the fact that several MS, particularly many of thenew NMS, had considerable difficulty in introducing and enforcing the minimum ratescurrently foreseen by the Regulation. During the survey and case studies, several MS openlycriticised the minimum rates of the Regulation for being too high and not taking into accounttheir national economic reality. This situation has often forced MS to apply exceptions andderogations which, as seen in section 2.2, have not always been transparently applied.
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It would therefore appear that pursuing a policy of full harmonisation of fee rates entailscertain non-negligible risks. If the rates are set too high the risk is that they would not provideincentives for efficiency gains to be made in those sectors and MS where this is consideredappropriate. If set too low, there is considerable risk that this may undermine the level andstandard of controls actually carried out.A full list of the advantages and disadvantages of this option, as put forward by the variousMS, is provided inAnnex 2.1 (Question2.2).3.2.1. Intermediate scenariosTo introduce some flexibility into this option, fees and/or penalties/reductions could becalculated at MS level, rather than fixed for all MS. However, to maintain a certain level ofharmonisation, the calculation methods to be used would adhere to certain commonprinciples.Thus, in scenario 1, fee reductions and penalties are established at MS level by applying acalculation method that follows common principles, but fees are fixed at the same level for allMS. In scenario 2, both the fees and the fee reductions/penalties are established at MS levelby applying calculation methods that follow common principles. These principles aredescribed in section 3.1.2. To ensure appropriate follow up of MS transposition of the rulesand principles, MS would be obliged to communicate the calculation methods to theCommission.In terms of the principles that can apply to promote a more consistent approach for thecalculation of fee reductions/penalties (as discussed in section 3.1.2), pursuing thedevelopment of a commonbonus-malussystem on a totally harmonised basis across the EU isnot considered to be practically implementable at present. This is due to the significantdifferences between MS in terms of industry structures and the organisation of officialcontrols, which would not allow a one-fits-all approach. It would be difficult in practice todevelop a commonbonus-malussystem for the EU-27 that would fit all national conditionsand structures (both at the level of the industry and at the level of the competent authorities).While therefore the need remains to reinforce the link between fee reductions/penalties(Articles 27.5/6 and Article 28, respectively) and the increasing uptake of self-control systemsby industry (in line with the Hygiene Package), the development of a common system acrossthe EU27 does not appear to be possible. Instead it appears MS need rather to be encouragedby the legislation to develop their own systems moving in the direction of an integratedbonus-malusapproach for an effective and consistent implementation of Articles 27.5/6 andArticle 28.
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Table 3-2 Moving towards more harmonisation: overall assessmentHARMONISATION scenariosDescriptionFull harmonisation:1. All MS pay the same fees (fixed rates) for the same activities;2. Penalties and reductions (for complying and non-complying firms, Article 27.6 and Article 28respectively) are the same (fixed rates) for all MS.Introducing some flexibility:Scenario 1:Fee reductions/penalties established at MS level on the basis of common principles.Scenario 2:Fees and fee reductions/penalties established at MS level on the basis of common principles.Advantages/benefits•Full harmonisation could result in potential simplification in monitoring MS compliance with therules, at least at central level (Commission, MS CCAs). This advantage diminishes as we move toscenario 1 and 2;•Transparency for all stakeholders, as both fees and activities would be fixed in EU law;•Potential to reduce distortions in competition amongst MS/regions - however questionable whetherfees alone are an important factor affecting competitiveness within the EU27 (see section 2.3.2);•Harmonisation of fee levels for border controls, thereby addressing concerns for potentialdistortions at this level (see section 2.3.2.5);•Distortions currently caused by different MS approaches on fee charging for ‘non-compulsory’(Article 17.1) activities, could be reduced/eliminated;•Greater harmonisation of official controls if description per activity defined in detail on a commonbasis, e.g. concerning the ante and post mortem inspections, to guarantee the same level andstandard of controls throughout the EU.Disadvantages/drawbacks•In terms of domestic controls, in view of the differences in cost of living and salary costs, fullharmonisation is not creating a level-playing field in the EU27. On the contrary, it can alleviatedifferences if some MS are unable to cover their costs on this basis, or if the rate of cost-recoverythat is achieved through these fees varies greatly between MS;•Considered difficult, if not impossible, in practice to find a common denominator between MS interms of the level of fees for domestic controls, and developing a commonbonus-malussystem;•Concern that finding a common basis for all EU27 may result in the lowest common denominator,thereby jeopardising the overall progress achieved so far in the effectiveness and efficiency of theofficial controls at EU level;•Would not provide incentives for efficiency gains to be made where needed / considered necessary;•To ensure uniform application, this should be a rigid system: it may pose interpretation problems,and actually result again in different approaches, if the provisions are not explicit;
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HARMONISATION scenarios•Scenario 2 is more complex, hence more difficult and cumbersome to implement and control atcentral level (Commission, MS CCAs).Stakeholder positionIn its fuller version, largely considered unworkable in practice, therefore acceptability by stakeholders,both industry and MS CAs, very low. Need to maintain some flexibility (scenarios 1 and 2).ConclusionAlthough rejected in its fuller version, this option becomes increasingly more acceptable if someflexibility is introduced in the rules (scenarios 1 and 2). It is noted that this increases the complexity ofapplication and monitoring at central level. But, if the objective of the legislation is to ensure aminimum level of cost-recovery, then scenarios 1 or 2 would appear most appropriate.If the harmonisation approach is to be pursued further, some elements need further consideration, asfollows:•The need to provide a transparent basis for the setting of fees, whether these are to be fixed for allMS (scenario 1) or calculated at MS level based on common principles (scenario 2);•The need for a more precise definition and common approach for the list and description ofactivities for which fees would be charged (all scenarios);
•The need to adjust and incentivize the system based on actual risk levels and FBO performance(‘bonus-malus’ system), although defined at MS rather than at EU level (scenarios 1 and 2).
3.3. Towards more subsidiarityMoving from the status quo towards more subsidiarity could involve a range of scenariosdepending on the degree of subsidiarity sought (Table3-1). A constant feature of all scenariosunder this option is that fee charging would beoptionalfor all MS. This effectively meansthat there would no longer be any obligation for MS to charge fees, as is currently foreseen byArticle 27.2. MS would be given full discretion not to collect any fees at all, or only to collectfees for any activities that they judge appropriate and necessary. Therefore, MS would be freeto choose the level of cost recovery that best suits their needs and interests.3.3.1. Full subsidiarityIf taken to its most complete expression the scenario of full subsidiarity would involve a totalrepeal of Articles 26-29. MS would be left entirely free to design the financing of the officialcontrols.This scenario was the least favoured by MS CAs. In particular there is concern that, byeliminating the possibility for MS to charge fees so as to ensure adequate funding, there issignificant risk that the standard of the official controls could be undermined. Giving fulldiscretion to MS would - given the current variation in the level of economic, administrative
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and business development between the 27 MS - risk disintegrating the EU official controlssystem. This could potentially jeopardise the ultimate objectives of the system to guaranteefood safety and the protection of public health as well as the free circulation of goods withinthe internal market.The hypothesis made in this case is that MS would not be able to raise adequate fundsthrough alternative means, notably general taxation. However, this possibility is currentlyprovided by Article 26. As demonstrated byTable 2-1,some MS partially cover the costs ofofficial controls through the public budget.On the other hand, the meat industry has expressed more radical views on this point. Theindustry is in favour of a total review of the financing system for such controls, with a viewto having this covered entirely from the public budget. The main argument has been that thisis a public service of benefit to the final consumer, and that therefore the taxpayer shouldcover this cost though the public budget. It is argued that consumers are already paying forthis through the higher prices of meat, as the extra cost of the fees is passed on by FBOs; thiscreates lack of transparency and may inflate prices unnecessarily as the cost may be passedmore than once along the supply chain.As noted from the outset this scenario has not been pursued further because - as it currentlystands across the EU27 - neither the EU system of official controls nor the EU meat industrycan be considered ready to adopt such a radical approach. A key reason is that the various MSare currently at very different levels of enforcement of official controls both at administrativeand at industry level. Furthermore, for a totally publicly funded system of official controls towork, FBO responsibility and self regulation would need to have reached an adequateminimum level of compliance to EU rules across the EU27; this is far from being thesituation today45. With the promotion and further encouragement of FBO responsibility, it isconceivable that scenarios of full subsidiarity, including a totally publicly funded system ofofficial controls, could be examined longer term.A less radical version of full subsidiarity could be scenario 4, whereby only the obligation forMS to ensure the availability of adequate funds for official controls (Article 26) is maintained.In this case, no explicit reference as to how these funds are to be raised would be made(currently, Article 26 is explicit on this46). This would provide a simplification of the currentsystem in terms of Commission and CCA monitoring of the system as such, and could work ifit could be sufficiently guaranteed that MS would provide the means necessary for thesecontrols. In order to achieve this, MS could be obliged to report to the Commission the fundsavailable for the official controls and the extent to which the funds available cover the costs ofthese controls (this obligation does not currently exist).
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As evidenced,inter alia,by the country FVO reports on the implementation of official controls within the EUand border controls on EU imports.Last part of Article 26 reads:“including through general taxation or by establishing fees or charges”.
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3.3.2. Intermediate scenariosSubsidiarity could be made less radical if some common rules and criteria are introduced intothe system. A number of possibilities exist for combining the various components ofTable3-1,of which scenario 3 in particular has been assessed. This can be described as follows:1. MS design the fee system that suits them best. This includes the definition of the activitiesfor which fees are to be charged, and the fee-setting and calculation method.One additional element ‘controls’ the flexibility given to MS under subsidiarity:2. The condition that certain commonly defined principles are respected for the calculation ofthe fees and fee reductions/penalties (as discussed in section 3.1.2). To ensure appropriatefollow up of MS transposition of the rules and principles, MS should communicate thecalculation methods to the Commission.Once this condition is attached to the subsidiarity option, it becomes increasingly attractivefor a number of MS. In total, 16 out of the 27 MS CAs favoured some form of flexibility tobe provided to MS to set the fees, within a commonly agreed framework of rules, and 7 of the27 MS CAs indicated their explicit preference for a subsidiarity system of this form). At thelevel of the industry too, scenario 3 was largely considered to be more realistic than the moreharmonised scenarios 1 and 2.Key advantages or benefits of this option include the flexibility given to MS to adapt the feesystem to a country’s economic reality and administrative/industry structures (Table3-3).Asthis system would provide a more customised fit to national/regional/local conditions, thisultimately can ensure better coverage of costs at MS level, compared to a situation where feeswould be fixed at EU level (under the harmonisation scenarios).Similarly, this option could ultimately provide more incentives for cost-efficiency gains. Byallowing MS the discretion to fix the level of fees on the basis of actual costs, the possibilityopens for authorities and stakeholders at national level to promote a common agenda for costrationalisation through a more efficient and effective organisation of the official controlssystem.Key disadvantages or drawbacks of this option include the potential for distortions incompetition at the various levels investigated by the study, which may be caused by thevariability in fees across the EU if, as would appear to be likely, MS end up adopting verydifferent approaches. As discussed in section 2.3.2, this variability already exists under thecurrent system. Although generally currently considered to be a relatively minor factor inaffecting competitiveness between MS, the variability is higher in MS where flat rates ratherthan minimum rates apply, especially where these are determined on a decentralised basis(e.g. Germany, Italy).The extent to which such disadvantages may occur will depend on MS’ uptake of thediscretion given to them to determine for which activities fees are to be collected and the levelof the fees, on the basis of actual costs, as well as the power of the business community in theindividual MS to force changes and to ensure the transparency of the system.
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As discussed in section 3.1.2, this will dependinter aliaon the level at which commonlydefined principles are set across the EU. It can therefore be anticipated that as we movetowards more subsidiarity, where not only common minimum rates no longer apply but alsono common principles are used, variability in fees and the potential for distortions within theEU would tend to increase.A full list of the advantages and disadvantages of this option, as put forward by the variousMS, is provided inAnnex 2.1(Question2.2).Table 3-3 Moving towards more subsidiarity: overall assessmentSUBSIDIARITY scenariosDescriptionFull subsidiarity:Repeal Articles 26-29Scenario 4:MS only obliged to ensure the availability of adequate funds for OCs (repeal Articles 27-29)Controlling MS flexibility:Scenario 3:1. MS design the fee system that suits them best (incl. list of activities, fee setting & calculation);2. The condition is that certain commonly defined principles are respected; the level at which theseshould be set (whether general principles or technical criteria) needs to be defined.Advantages/benefits•Full subsidiarity/scenario 4 could result in potential simplification in monitoring MS compliancewith the rules, at least at central level (Commission, MS CCAs). This advantage diminishes as wemove to scenario 3;•Flexibility to adapt to country specific economic conditions and administrative/industry structures;•Greater flexibility to adapt to changing situations at MS/EU level;•Greater potential to cover real costs; potential to engage CAs and FBOs in common agenda to pushreforms to promote greater cost-efficiency and effectiveness of OCs;•If a more common agenda can be achieved across the EU, potential for greater transparency.Disadvantages/drawbacks•Can increase variability in fees between MS, particularly as we move to full subsidiarity, or if thecommon principles of scenario 3 are not applied or are not effectively enforced;•This would stimulate various distortions in competition, and distortions would be higher the morethe system fails to implement effectively the common principles of scenario 3;•It would also risk increasing the variability in the effectiveness and efficiency of the controls at MSlevels, thus undermining the performance of the system also at EU level;•Scenario 3 is more complex, hence more difficult and cumbersome to implement and control atcentral level (Commission, MS CCAs);•Can lack transparency in situations where the system fails to motivate the CAs and the business
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SUBSIDIARITY scenarioscommunity to pursue common objectives.Stakeholder positionMore acceptable by MS at both CA and industry level than the harmonisation scenarios, particularly ifcommon principles are set (scenario 3) to control MS discretion. At the same time, considered higherrisk, as highly dependent on acceptance and effective enforcement by MS of these principles.ConclusionAlthough rejected in its fuller version, this option becomes increasingly more acceptable if somecontrol is introduced in the rules.MS are currently found to be at excessively divergent stages of economic and industry developmentfor full subsidiarity to work, especially on an unconditional basis. Potential failure of this optionwould lead to more serious distortions of competition at EU level, and would risk undermining theeffectiveness and efficiency of the official controls system.The inclusion of common principles (scenario 3) could ensure that this option would work better, butthis also increases the difficulty of reaching agreement on common conditions set at EU level. It alsoincreases the complexity of application and monitoring at central level.For the purposes therefore of simplification, if the primary aim of the legislation is to ensure that MShave the funds necessary to cover the costs of official controls, whatever the means, scenario 4 couldpresent an attractive alternative to pursue.
3.4. Extension to other sectorsThis option examines the potential to extend to sectors, other than those listed in Section A ofAnnexes IV and V of Regulation 882/2004, the obligation to contribute to the financing ofofficial controls, within the meaning of Article 27.2.Such sectors could include stages upstream/downstream the feed and food chain (e.g. farmersand processors/retailers/caterers, respectively), and/or other product sectors (e.g. plant healthcontrols). This option was formulated in an open way, to allow MS CAs and stakeholdersmore freedom to respond with their views. Hence, no list of potential sectors or scenarios wasdevelopeda priorion this option.In total, 16 out of the 27 MS CAs favoured some form of extension of the financingobligation to other FBOs/activities(Question 2.3,Annex 2.1).In terms of product sectors, the sporadic evidence and arguments provided by MS, bothduring the survey and the case studies, did not allow the development and analysis of aconsistent scenario under this option (Questions2.4 and 2.5, Annex 2.1).No particularproduct sector consistently came up as eligible to be included in an extended system.
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The most consistent scenario put forward by both MS and industry was the extension of thefinancing obligation across the food chain. For example, the extension to cover stagesupstream and downstream of the slaughtering and meat cutting operations. The analysis belowtherefore focuses on this scenario. Ultimately, some of the conclusions drawn here could be ofrelevance for an extension of this approach to game and fish/aquaculture products.At the level of the industry, the meat sector would favour extending to stages upstream anddownstream of the slaughter and meat cutting operations the obligation to contribute tofinancing the costs of these controls. As discussed in section 2.3.2.3, this element of the chainis generally considered to be unfairly and disproportionately bearing the costs of officialcontrols that are of benefit to the entire food chain. Spreading the costs along the chain wouldtherefore represent a more equitable option (Table3-4).Such a system, covering the entire food chain, has already been developed in Belgium and iscurrently being proposed in Italy. Several other MS, including for example France and Spain,have expressed their positive reaction to such a model. Both the CAs and the professionalorganisations contacted in the various MS (e.g. France, Italy, and at the level of the EU meatindustry the UECBV and CLITRAVI) were keen to introduce such an extension of the feeregime to cover other sectors along the food supply chain.It is generally acknowledged47that an extended system would be more consistent with theintegrated approach on food safety and the responsibility of FBOs, or the ‘farm to table’approach, which the General Food Law (Directive 178/2002) and the Hygiene Package areseeking to promote. By involving all stakeholders, operators would have an interest inensuring that the entire control system is solid and functions well. This would be furtherencouraged when combined with a model that adjusts fees to the level of risk and individualFBO responsibility (such as abonus-malussystem as discussed in section 3.1.2).Furthermore, it is argued that such models should be regulated at EU level, because leavingthe option to MS could lead to a distortion of competition between those MS in which feecharging is extensively spread along the food chain and those MS which collect fees at only afew points of the chain. This could result in situations where the fees paid, for example by theslaughter sector, in the MS that spread the costs are significantly lower than in the MS that donot. It could also put sectors/activities covered in some MS but not in others at a competitivedisadvantage48.The justification for this approach is that it better addresses the food safety risks that the EUfood industry is actually facing today. In particular, it is argued that the risks related to foodsafety and human health have evolved with the development of the food supply chain, and theslaughterhouses and meat cutting plants should no longer alone bear the cost of controls nor
See, for example, the conclusions of EU Seminar on the “Modernisation of Inspections in Slaughterhouses”.Organised by the French Presidency of the EU, 11 July 2008, Lyon France.In Italy, for example, a number of sectors not currently paying fees but included in the new draft law haveopposed the draft on the grounds that they are disadvantagedvis á vistheir competitors in other MS that are notcharged fees, and have requested that the relevant provisions of the draft law are deleted from the current text.48
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should they be the only focal points of the controls. Advances in traceability and HACCPsystems could be used as a tool to provide the official controls system with relevantinformation (‘foodchain information’49) to assist a better targeting of risks within anintegrated food chain safety approach, as advocated by the Hygiene Package.There is some debate as to which activities should potentially be covered by an extendedscheme, in particular how far upstream of downstream along the feed/food chain such a modelwould extend to. Although this might extend to downstream elements of the chain includingdistribution, it is generally considered more difficult to extend it as far as the catering segmentas this would make it significantly more complex to administer. Generally, the more extensivethe system is the fairer it would be in principle, but at the same time, the more cumbersomeand costly it will be to administer in practice.The stakeholders consulted at both industry and at CA level agree that, ultimately, the keycriterion for developing an extended system should be the level of potential risk to publichealth. The controls would in all cases need to be proportionate and risk based. On this basis,both the frequency and focus of the controls and hence their costs would be adjusted to thecritical control points along the entire supply chain. Business operators along the variousstages of the supply chain would then contribute according to the costs incurred, possibly inaddition to a base contribution that all FBOs would pay. These principles are at the basis ofthe Belgian system as it currently stands.It is noted that, in designing the system, it is important to avoid a situation where FBOs areeventually contributing at several points during the food supply chain for the same controls.As discussed in section 2.2.2, this situation already arises in the meat sector in Italy and thereare concerns that the new draft Law may exacerbate, rather than correct, this problem.The position of those sectors not currently paying fees also needs to be carefully considered indesigning such a system. As the experience of countries that have already introduced thisapproach demonstrates (e.g. Belgium, Italy), there is likely to be strong opposition from thesesectors, therefore fee levels and incentives to adhere would need to be appropriatelyestablished. Linking fees and incentives to the level of risk and FBO responsibility is crucialin this respect.In conclusion, the main advantages of an extended system would be that the costs of thecontrols would be more widely and fairly distributed along the feed/food chain, while the
Food Chain Information (FCI) is an important component of the ‘farm to table’ approach to food safety. Aswell as contributing to food safety it can also be used to improve both animal health and welfare. The purpose ofFCI is to inform FBOs about decisions relating to acceptance of animals for human consumption and anyabnormal conditions found during processing. It is also used to inform the official veterinarians about inspectionand testing requirements. To this end, FCI reports must be sent within brief delays in advance of the animalsarriving for slaughter. These provisions are laid down in Section III of Annex II of Regulation 853/2004 and inSection II (Chapter II) of Annex I of Regulation 854/2004. The FCI provisions were immediately applicable inthe poultry sector, but several MS are using transitional provisions to implement FCI in other sectors by the endof 2009 (Regulation 2076/2005).
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involvement of all FBOs along the supply chain would provide an incentive to take onresponsibilities and promote transparency.These advantages would need to be balanced with the need to contain the increased costs thatwill be required to administer an extended system. In larger MS with decentralisedmanagement the feasibility of such an approach is likely to be lower and the costs involvedhigher. It is noted that the opposition likely to be encountered by sectors not currently obligedto pay fees also has to be taken into account.The regulation of an extended system at EU level is likely to be highly cumbersome andcomplex. For this reason, and given the current variations in MS industry structures and levelsof development of the food chain, it would be best for the system to be designed at MS level,with only general principles and guidelines laid down at EU level.A full list of the advantages and disadvantages of this Option, as put forward by the variousMS, is provided inAnnex 2.1(Question 2.3).Table 3-4 Extension to other sectors: overall assessmentEXTENSION TO OTHER SECTORS: key scenariosDescriptionExtend to sectors, other than those listed in Section A of Annexes IV and V of Regulation 882/2004,the obligation to contribute to the financing of official controls, within the meaning of Article 27.2.The key scenario examined here is the extension of the financing obligation to stages upstream anddownstream of the slaughter and meat cutting operations. Ultimately, some of the conclusions drawnhere could be of relevance for an extension of this approach to game and fish/aquaculture products.Advantages/benefits
•Spreads the costs over the extended food chain, hence more equitable than current system (moreFBOs along the food chain pay, cost per FBO is reduced);
•Consistent with the integrated food safety chain approach (‘farm to table’) advocated by theGeneral Food Law and the Hygiene Package;
•Allows better targeting of risk, provided it is based on appropriate risk assessment and full use ofthe new tools available (Food Chain Information, including via traceability and HACCP systems);
•Can encourage FBO responsibility, provided that the fee calculation is adjusted to the level of riskand responsibility;
•Promotes transparency, as more FBOs participate in the system;•These advantages are reinforced the more extensive (upstream/downstream) the chain coveragebecomes.Disadvantages/drawbacks•More cumbersome and costly to administer;•Cost and complexity increase the more extensive (upstream/downstream) the chain coverage
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EXTENSION TO OTHER SECTORS: key scenariosbecomes.Stakeholder positionThe thinking in many MS is increasingly moving to this direction. The current system in Belgium wasquoted as an example by several MS (both by CAs and by industry stakeholders) throughout the study,while Italy is currently proposing such an approach.The meat industry is favourable. While non-currently paying sectors would be initially opposed, thereis evidence that if the right incentives and fee adjustment based on risk and FBO responsibility areattached to the system, they will eventually adhere.ConclusionThe strong advantages and relatively high acceptability of an extended system (upstream/downstreamthe meat production chain) make this worth further consideration. This is also consistent with thegeneral principles and objectives of the current integrated approach to food safety (‘farmto table’).The system would work best if fees payable by FBOs at each stage of the chain are adjusted to realrisks and FBO responsibility; these adjustments are now made possible with the advances in theavailability of Food Chain Information,inter aliavia traceability and HACCP systems.Although the cost and complexity disadvantages can be mitigated if the system is not too extensiveupstream or downstream the chain, this decreases the solidarity and participatory approach of thesystem. These two considerations have to be balanced for the design of the optimal approach. Giventhe current variations in MS industry structures and levels of development of the food chain, it wouldbe best for the system to be designed at MS level, with only general principles and guidelines laiddown at EU level.
3.5. Status-quo (mixed system)3.5.1.Do nothingoptionAmongst the options for the future, the study has also examined the continuation of thecurrent system (status quo). The current financing system for official controls represents thepolitical reality of the evolution of a system first established by Directive 85/73. As discussedin the first part of this study, the intervention logic and rationale of this system continue toapply today. In practice, however, significant shortcomings with the application of the currentsystem were identified by the study. These lead to a large variation in the extent and methodof application of the rules by MS, and affect the ability of the Commission to monitor thesituation and ensure that a harmonised approach is applied across the EU.Given these shortcomings, the continuation of the system as it currently stands (donothing)isclearly not an acceptable or a pragmatic option.
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3.5.1. Status quo with improvementsEssentially, the financing provisions of Regulation 882/2004, as it currently stands, representa mixed system. Article 27 generally follows the subsidiarity principle in that MS can decidewhether to use the specified minimum rates of Annexes IV and V, or to charge for officialcontrol activities according to the actual cost of undertaking them based on the criteria ofAnnex VI.During the study it became evident that, at the time of the adoption of Regulation 882/2004,several MS supported this flexible approach (possibility to opt for the common minimumrates or for flat rates) for political reasons, i.e. because it was considered too difficult to reachagreement on acceptable fee rates amongst the 15 MS (it was EU15 at the time).This study has found that a similar debate exists in the EU27 today. Since the adoption of theRegulation in April 2004, this debate has been further enriched by the new dimensionsbrought about by the accession of 12 NMS to the EU and by the significant changes that haveoccurred in the EU food industry from the implementation of the ‘farmto table’approach tofood safety. The findings of the present study add further arguments to this debate.The fundamental approach and principles of Regulation 882/2004 would therefore appear toremain valid today. On the one hand, flexibility needs to be provided to MS to guarantee thebest adaptation of the system to national/local conditions. On the other hand, certain commonparameters need to be defined at EU level to guarantee maximum homogeneity in applicationthroughout the EU. The appropriate balance between flexibility and homogeneity willguarantee maximum efficiency and effectiveness of the official controls system.The study has examined a range of improvements that can be introduced if the currentapproach of a mixed or flexible system was to be maintained. These improvements weredeveloped in the course of the study. They relate to various components of the system and, assuch, would be also applicable in the case of the other scenarios presented inTable 3-1.These are as follows:1. At a general level improve the understanding of Regulation 882/2004.The problems encountered by the CAs and stakeholders in the interpretation of the financingprovisions of Regulation 882/2004 were often attributed to the complexity in the formulationand interrelation of the various provisions. For example, failure to understand in practice howto link the first four paragraphs of Article 27 is a problem that was commonly mentioned.These problems appear to create two shortcomings:•Considerable deviation from the subsidiarity principle as pursued in the Regulation. Itappears that the original intention of the legislator was that either of the two systemswould be used, not both in combination as is occurring in practice (i.e. minimum ratesfor some products/activities and rates defined at MS level for others).
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This study has found that a combined approach could only be justified for a distinctgroup of official controls, such as common fee rates for import controls and fee ratesdefined at MS level for domestic controls (as further discussed under point 2 below).•Considerable scope for variations in interpretation between MS and regions. Thevariations in the application of Articles 26-29 were discussed at length in section 2.2.Although attributed to many factors, incorrect understanding or interpretation of theRegulation was often identified to be a key factor. For example, the fact that minimumrates are interpreted by some MS as a floor that cannot be undercut under anyconditions (e.g. Germany), while for other MS they can be maximum ceilings, cancreate a very different application of the rules between MS.Although a more in-depth legal analysis would be required to establish what type ofimprovements can be made to the text, the fact remains that as it currently stands there issignificant scope for open or erroneous interpretation. This is demonstrated by the extent andcomplexity of court cases related to Article 27 in the case of Germany.Beyond improvements to the text as such, it would be recommended that DG SANCOprovidea guidance documenttargeted to the CAs on how to implement the financingprovisions of the Regulation. Such guidance documents are provided in other cases, forexample, in the case of the microbiological sampling and testing of foodstuffs underRegulation 882/2004 or on import requirements under Regulation 852/2004.2. Provide a rationale for the setting of common (minimum) fee levels and review therates of Annexes IV and V in the light of this rationale.The study has indentified a lack of rationale for the setting of minimum fees and for the feelevels currently indicated in Annexes IV and V50.A number of shortcomings have been identified as a result, suggesting that a review isnecessary to provide more explicitly the rationale for the setting of these fees. If common feesare to be used, their levels should be revised in the light of this rationale. MS, particularly theNMS that joined the EU after the adoption of Regulation 882/2004, as well as stakeholders,need to understand the rationale for the setting of minimum fee rates in Regulation 882/2004.It appears that it was not the original intention of the legislator to fix minimum rates in thefirst place51. In the deliberations that followed, particularly at Council level, it was decided
There is no justification in the Regulation at present on how the rates of Annexes IV and V were fixed at theindicated levels. The rates previously applying under Directive 85/73 were used as a basis from which the ratesof Annexes IV and V of Regulation 882/2004 were fixed. It is not clear and there is no documented evidence onwhether and what criteria were used for this adjustment. In some cases, e.g. domestic controls in the dairy sector,the study has found that the EU dairy industry faced unjustified rises multiple times above previously applyinglevels, with repercussions on the dairy business in many cases (e.g. Netherlands).51
50
Commission proposal for Regulation 882/2004: COM(2003)52 of 5/2/2003.
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that minimum rates should be introduced. This decision was based on the rationale that EU-wide uniform fees should apply as a minimum in order to prevent distortion of competitionbetween MS.This rationale appears to be more relevant in the case of veterinary checks on imports (AnnexV) than in the case of domestic controls (Annex IV). The principle that the EU is a single blocis applied vis-à-vis third country suppliers via a unique EU border line designating BIPs asthe only entry points for third country imports into the Community. Promoting a harmonisedlevel of controls is the key to the success of this approach. Ensuring that fees are collected atthe same level throughout all entry points to the EU would therefore be consistent with thisobjective. This is demonstrated by the fact that the minimum fee rates of Annex V arerespected by the majority of MS today52.In terms of the domestic controls, the study has found that – given the extent of the variationin costs of living and salary levels amongst the EU-27 – the rationale for common minimumfee rates for these controls appears to be rather weak. Furthermore, even though there issignificant deviation from the minimum rates of Annex IV, there is no clear evidence of adistortion to competition at present. This appears to suggest that if common minimum ratesfor these fees were replaced by a subsidiarity approach by which MS are allowed to set thesefees within commonly defined parameters (as discussed under points 3 and 4 below), thesystem would be more effective and more efficient.As indicated in section 2.2, the current application of the financing provisions of Regulation882/2004 has resulted in significant variation from the minimum rates in most cases. Themajority of these cases concern fee rates applying to domestic controls under Annex IV. Ofthe 20 MS that apply minimum rates, at least 5 MS apply these in combination with flat rates,and in at least 10 MS the actual rates charged are below the minimum rates because the MSapply also fee reductions on the basis of Articles 27.5 and 27.6 (although, in many cases, fullconformity to these paragraphs is also questionable).The fact that MS are, in practice, finding it necessary to deviate from the minimum rates, toapply either higher rates or lower rates on the basis of real costs and/or taking intoconsideration other factors such as those of Articles 27.5 and 27.6, calls into question therationale for the setting of minimum rates for domestic controls. Moreover, as will bediscussed further below under point 5, it would appear appropriate to enlarge the scope ofthese controls over a larger part of the food chain. In this case, the rationale of settingminimum rates would be further called into question.Consequently, there appear to be good reasons for fees on domestic controls to be defined ona MS basis, while fees on import controls could be defined on a common basis. If commonfee rates are to be pursued on border controls, then the level at which these should be setshould be reviewed. This could be done on the basis of actual costs and in finding a commondenominator across the EU.
52
With few exceptions, e.g. France charges lower rates defined on the basis of lower costs.
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3. Improve transparency and accountability (to reinforce the provisions currentlyprovided by Regulation 882/2004).The principles of transparency and accountability are important for the smooth operation ofthe system, under all options. This could be ensured through: the definition of a transparentmethod for setting the fees, and for calculating fee reductions/penalties; the obligation for MSto communicate these to the Commission and stakeholders; and, some guarantee that the feerevenue goes back into the system.Although certain such criteria currently exist in Articles 26-29 of Regulation 882/2004, thestudy has found that they are largely not respected by MS.a) Transparency of fee settingAs discussed in section 2.2, fee setting is currently not transparent. The use of more refinedcriteria to establish the rates - as suggested under point 4 below - should partly address thisproblem.The lack of transparency drives many stakeholders to suspect that the rates charged are higherthan the real costs of the controls. This is particularly evident in the case of significant year-on-year rises in the level of fees, which are not otherwise justified by normal inflationarypressures (e.g. Sweden and Denmark on slaughterhouse fees).To address this issue, some stakeholders suggest the use of maximum rates as ceilings for theamounts that MS may charge under the flat rate calculation. The danger of this approach isthat it may be used to ‘freeze’ fee rates at the higher level, so it would only work incombination with a minimum fee level, to give effectively a range within which MS can setfees. Also, as discussed under the harmonisation option, fixing common fee rates woulddeviate from the principle of creating a level-playing field in the EU given the variation ineconomic and cost of living levels across the EU27.b) Obligation of MS to communicate to the Commission / stakeholdersThe lack of transparency in fee setting is made worse by the fact that MS are largely notreporting back to the Commission or to stakeholders the precise method and criteria they haveused in the calculation.Regulation 882/2004 needs to reinforce the obligation to communicate this information.Article 27.12 requests that MS make this information public. Article 27.6. refers to theobligation to communicate the conditions for fee rate reductions only to the Commission,while Article 28 does not make any provisions on this at all. As already noted elsewhere inthis Report, to date only 18 MS have sent notification letters to the Commission. Furthermore,there are few cases where this information is communicated to stakeholders. The study hasfound that MS simply publish the transposition of the Regulation into national legislation,without providing further explanation to stakeholders and without any consultation (with thenotable exception of a few MS).
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At political level, stakeholders in the MS may be able to exert more pressure on their nationalgovernments for accountability. However, this would be considerably reinforced if it wasspecifically laid down in the Regulation.Another measure to improve accountability would be to systematically introduce a section onfees and financing, or the implementation of Articles 26-29, under the FVO missions that areconducted on the basis of Regulation 882/200453.c) Guarantee that fee revenues go back to finance the systemAlthough this is essentially the main rationale for the financing provisions of Regulation882/2004, the study has found that, apart from the general lack of transparency on thechannelling of these revenues, the use of these finances to refund the official controls systemappears to be very diversified amongst the EU27 (2.2.5).It would therefore appear appropriate, subject to the ability of EU institutions to enforce suchrules within the general Community subsidiarity principles on public finances, to ensuregreater transparency and accountability by MS on this issue.4. Refine and define certain provisions more precisely at technical level.As already discussed, to ensure a harmonised approach to the implementation of the financingprovisions of Regulation 882/2004, in addition to the general principles of point 3 above,some common criteria could also be more clearly defined at a technical level. As we movetowards fuller harmonisation such criteria would include for instance a common calculationmethod, common cost-recovery targets, precise cost categories that should be taken intoaccount, and even maximum ceilings for each cost element.In practice, to define the appropriate level of these criteria, it is important to strike the balancebetween harmonisation and subsidiarity: i.e. maximising flexibility while minimising thepotential for deviation from the principles of the Regulation. Taking this sensitive balanceinto consideration, it would be difficult to introduce certain criteria. For example, it would bedifficult to agree on a common calculation method or cost-recovery targets given that currentmethods and targets vary considerably between MS. Therefore, the criteria below (under pointa) are presented in a stepwise approach as we move towards fuller harmonisation:a) Criteria of Annex VITo improve the coherence in the calculation of the fees by MS, there is a need for a moreprecise definition of the three categories of costs listed in Annex VI.
This refers to FVO missions conducted in the wider context of Regulation 882/2004 and not specifically onArticles 26-29. Some of the relevant FVO reports (food hygiene, official controls on POAO, and importcontrols) cover more explicitly the subject of financing (Annex1.2).
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A first step would be to:•Clarify the individual cost elements under the general heading “salaries for the staffinvolved in the official controls” (criterion1).This will need to address currentdifferences in the approach taken by MS with regards to the inclusion of social securityand welfare costs. It will also need to specify whether the costs refer to the staffcarrying out the controls or staff working in the overall system of official controls(including in this case adjacent services and administration), and whether this relates tothe costs of time spent on the controls or total staff time.•The scope of the various costs undercriterion 2,in particular of ‘associated costs’, willneed to be more strictly defined. The study has demonstrated the significant divergencebetween MS and within MS with regards to the inclusion of this type of costs.•Provide an explicit list of laboratory analysis and sampling costs that can be includedundercriterion 3.This would need in particular to address current discrepanciesbetween MS in terns of the inclusion of the costs of residues sampling/testing and BSEsampling/testing under this criterion.•The time period over which all of the above costs are incurred needs to be defined.In a further step to effectively harmonise the system across the EU, these criteria could be tiedtogether in asingle calculation formula,to be laid down in Annex VI. The availability of aformula would allow the Commission and stakeholders to check the validity of the MS CAcalculation against an objective and standardised measure.Such a formula could, for example, calculate the charge per hour of the staff employed tocarry out the controls, as follows:charge per hour = (FTE/year x SC) AC (%) x LC (%)h
where:FTE (full time equivalent)SCACLC= calculated on the basis of the total number of staff andnumber of working hours= staff costs (criterion 1)= administrative costs (criterion 2)= laboratory costs (criterion 3)
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Further harmonisation could be pursued by establishing maximum ceilings, or a range, withinwhich these costs will need to move in relation to the total costs. For example, administrativecosts may be fixed at a maximum (e.g. 10%) or a range (e.g. 5-10%), as a ratio of total costs.The definition of these limits requires more detailed technical analysis. For example, inestablishing the ratios, due consideration needs to be paid to the relative importance of thesecosts in each MS as affected by the cost of living differences54. There are also argumentsagainst the use of upper limits, because they may risk ‘locking in’ current inefficiencies of thesystem. For example, MS may interpret such limits as a guideline, thereby neglecting reformsthat could improve the ratio of each type of costs. In conclusion, at present it would bedifficult and risky to do this at an EU level, but could be done on a MS basis.Many stakeholders and some MS have expressed the view that, in order to provide greaterincentives for inspection efficiency, Regulation 882/2004 could be more explicit on thenumber and profile of staff that is required to perform the official controls. In particular, it issuggested that the actual number of official veterinarians and auxiliaries per number ofanimals inspected should be specified in EU law55.As already discussed in section 2.3.3.2, this would be difficult to achieve at present at EUlevel for the EU27. It may also reduce the flexibility to incorporate in the legislation theprovisions on reduced frequency and incentives for FBO responsibility. However, it can andshould be explicitly defined at MS level for each MS.On the other hand, the profile and contractual conditions of the staff employed to carry out theofficial controls could – at least in part - be addressed at EU level. In particular, this issuecalls for a review of the requirements of Regulation 854/2004 that only official veterinarians55can carry out audits and inspections of slaughterhouses, game handling establishments andcertain cutting plants56. This requirement is considered to impose high costs. If thisrequirement was to be relaxed, it could lead to more cost-efficient controls. However, suchissues fall outside the scope of the current analysis.Finally, stakeholders in particular argue that incentives to achieve greater cost efficiencies atCA level could be achieved via some form of cost-sharing of at least part of these costs. Themost eligible cost item in this respect would be costs which FBOs have no power to control,in particular administrative costs and some aspects of staff costs. In the first instance,
While staff costs greatly vary between MS, and administrative costs may also be expected to varysignificantly, the costs of laboratory analysis are expected to be more harmonised across the EU. This will affectthe relative weight of each type of costs in the total costs for each MS, e.g. in Bulgaria where staff costs are someof the lowest in the EU, the ratio of staff costs will be lower and of laboratory costs higher than in the UK orGermany where staff costs are relatively far more important.55
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Regulation 854/2004 of the Hygiene Package provides a broad definition of the terms ‘official veterinarian’and ‘official auxiliary’ (Article 2.f/g and Article 2.h, respectively).
Member States have discretion to decide which are the most appropriate staff for audits and inspections ofother types of establishments.
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administrative costs could be shared 50:50 between the government and stakeholders. Such ascheme would work better under abonus-malussystem encompassing the extended foodchain (as discussed under point 5 below). Again, the principle of the scheme only should belaid down in EU law, with actual implementation details (e.g. establishing the actual amountof these costs and the relative weight in the total cost calculation) left to MS.b) Criteria of Article 27.5 (small, traditional and geographically remote FBOs)Regulation 882/2004 envisages special treatment for business operating under difficultconditions, such as small, traditional and geographically remote FBOs. Again, as discussed insection 2.3.2.4, the application of these provisions has been variable amongst the EU27.Overall, as it currently stands, the application of the Regulation has worked to the detrimentof this type of businesses.It may be appropriate therefore to ensure that the turnover of a business is taken into accountin the fee calculation, for example in the form of a reduction according to scale. The exactlevel or scale of turnover below which reductions can apply can be established at MS level, inaccordance with the need to maintain some flexibility as judged most suitable to national/localconditions.5. Update Articles 26-29 of Regulation 882/2004 with the progress made since theadoption of the General Food Law and the Hygiene Package.Regulation 882/2004 was adopted at the same time as the General Food Law and the HygienePackage. It is therefore normal that 5 years after the adoption of this legislation the progressachieved by its parallel implementation will need to be taken into account.The General Food Law and the Hygiene Package place the primary legal responsibility forensuring feed and food safety to feed and food business operators (FBOs). This principle isincorporated into Regulation 882/2004, whichinter aliacalls for the “frequencyof officialcontrols to be regular and proportionate to the risk, taking into account the results of thechecks carried out by FBOs under HACCP based control programmes or quality assuranceprogrammes, where such programmes are designed to meet requirements of feed and foodlaw, animal health and animal welfare rules”(preamble 13).The study has identified the need for an update, both in form and in principle, of the financingprovisions of Regulation 882/2004 to the changing circumstances brought about by thislegislation. In particular the following recommendations can be made:a) Improve/update reference to the Hygiene PackageTo improve the consistency of Regulation 882/2004 with this approach, precise reference tothe Hygiene Package should be made in Articles 26-29.As the text currently stands, Article 27.6 refers to the possibility to reduce fees below theminimum rates where official controls are carried out with a reduced frequency “in view of
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own check and tracing systems”. There is no further reference to EU legislation in thisrespect.At the same time, Annexes IV and V refer to preceding legislation which is now partlyrepealed or replaced by the Hygiene Package (e.g. Directive 89/662, see Annex 1.1).b) Reinforce incentives (and disincentives) to improve FBO responsibilityAs already discussed in length elsewhere in this Report, the need to adjust official controls tothe actual risks stems in particular from two trends:•The growing introduction of self-control (GHP and HACCP) and traceability systems inthe meat and dairy industry (and all sectors for which fees are collected on a compulsorybasis), whereby there is less need for actual inspections on the product and more need forverification of compliance. Hence, there appears to be a need to tie incentives/disincentivesmore closely to risk reduction where such systems have been introduced and operateeffectively.•The changing structure and operation of the food industry and food consumption, wherebyrisk occurrence and the dangers to public health are increasingly spread along the foodchain rather than concentrated in a few points of the chain only. Hence, there appears to bea need to actively engage, by providing incentives/disincentives, the extended chain ofFBOs involved from ‘farm to table’ (as discussed underpoint cbelow).There is wide consensus amongst the industry and MS that the revision of the financingprovisions of the Regulation presents a unique opportunity to provide an incentive toreinforce the uptake of self-control by the industry, which would be consistent with theprinciples and objectives of the General Food Law and the Hygiene Package.This opportunity remains largely untapped at present. The study has found that there iscurrently substantial variation and lack of consistency in the application of the provisions ofArticle 27.6 by MS. This creates a situation whereby the industry is not facing a level playingfield in Europe, while respect of the principle of self-regulation is undermined. Similarly,although Article 28 can be used to target FBOs with inefficient control systems and create anincentive to improve them, there are doubts as to how effectively these powers are currentlyused across the EU.Consequently, fee reductions need to be further encouraged and non-compliance furtherdiscouraged. At the same time, the calculation of the reduction could be further refined andmade more transparent, in line with the recommendations under points 3 and 4 above.The study has identified the potential to effectively implement this on a‘bonus-malus’basis.This would expand on the provisions currently made by Article 27.6 (for the‘bonus’,i.e. ratereduction), and Article 28 (for the‘malus’,i.e. charge non-compliance costs). Tying together,through a single system, the reward for compliance with the penalty for non-compliance,would provide a more coherent and transparent system of incentives/disincentives than thecurrent provisions of the Regulation.
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It is noted that some MS, in consultation with the industry, are already moving in thisdirection. There may be a need to ensure that a harmonised approach is followed on thisacross the EU. Indeed, as such models are currently at an early stage of development, there isan opportunity to do this based on the principles and objectives of EU law. Although it wouldbe extremely difficult – if not impossible - at present to develop a commonbonus-malussystem across the EU27, it would be appropriate to guarantee that any nationalbonus-malussystems designed by MS are based on common principles as laid down in EU legislation. Inparticular, the reductions and penalties envisaged under MSbonus-malussystems should bebased on the general principles of Articles 27.6 and Article 28 of Regulation 882/2004.Such criteria should include specific reference in Articles 26-29 to:•The requirement to reduce fee rates for FBOs with established HACCP systems;conversely, penalties for FBOs with non-established HACCP systems;•The requirement to reduce fee rates for FBOs with a record of compliance to EUhygiene requirements over a given number of years; conversely, penalties for FBOswith a record of non-compliance over a given number of years.The use of additional criteria, such as private assurance schemes developed in consultationwith the CAs of MS, or quality assurance systems based on international standards (e.g. EN29000) may also be considered.The actual modalities of these criteria (e.g. rates and progression over time ofreductions/penalties; number of years over which to measure compliance and non-complianceetc.) could be left to MS to define. At the same time, it will be important to ensure that theneeds of small, traditional and geographically remote business are taken into account (asdiscussed above under point 4.b), so that they are not discriminated against.Transparency and accountability of the application of these rules by MS would need to beensured along the lines discussed under point 3 above.c) Enlarge scope to the wider food chainAs already noted, the meat industry in particular feel disadvantaged vis-à-vis other foodsectors, especially the processing and catering sectors where the risk to human health can alsobe relatively high. This can be done by extending the financing obligation to stages upstreamand downstream of the slaughter and meat cutting operations, according to the modalities ofOption 3, i.e. encourage extension of the system but leave it up to MS to define (Table3-4).
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4. Conclusions and recommendationsSignificant progress has been made in the application of Regulation 882/2004 by MS, and inparticular the financing provisions of Articles 26-29, since their entry into force on 1 January2007. However, the enforcement of these provisions has been slow and gradual, withimportant delays in most MS. In some cases, full implementation is still pending subject tothe approval of draft national legislation enacting Article 27, despite the fact that the deadlinefor its definitive entry into force was 1 January 2008. In these cases the fee system in place islargely based on that laid down in previous, repealed legislation (Directive 85/73).In conclusion therefore, despite progress, currently the application of the financing provisionsof the Regulation can be considered incomplete at EU level.Apart from the delays in transposition, a number of shortcomings have been identified in theapplication in practice of the current system for the financing of official controls, as laid downin the Regulation. As outlined in detail in section 2, such shortcomings include:•In some MS, despite enacting legislation being in place, fees are not collected or areonly partially collected (e.g. collected below the minimum fee rates or not collected inall sectors where the collection of a fee is compulsory).•There is significant variation between MS in the interpretation of the various provisionsof Article 27. Overall, there are extensive complaints, both from industry and from MSauthorities, that there is excessive scope for wide and open interpretation of the rulesdue to the ambiguous formulation of Article 27 and Annexes and the lack of a clearunderstanding of these provisions. The following issues have been identified asproviding scope for misinterpretation:oReference in Regulation 882/2004 to outdated legislation, e.g. in Annex IV to theold Directives on official controls preceding the Hygiene Package regulations.This has led to confusion in the implementation of the provisions both for theauthorities and for business operators;oThe general formulation of the three criteria of Annex VI. In particular, theproblem appears here to be the lack of definitions for some of the terms used. Forexample, the term ‘associated costs’ (criterion 2) is believed to lead to theinclusion of administrative costs which may not be directly justified by the officialcontrols in place. This has led to a lack of uniformity in approach, and isconsidered to be a key factor explaining the wide variation in fee rates betweenMS or even within MS.oThe complex structure of Article 27, in particular the interrelation and formulationof its various paragraphs, make the various provisions difficult to comprehend.This has led to a situation where in some MS a combination of minimum rates andflat rates apply, which was not the original intention of the legislation (theintention being that either one or the other should apply).
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oThe lack of a rationale for the minimum rates of Annex IV and V. The study hasidentified the need for a clear and transparent basis for the setting of these fees,particularly in the case of domestic controls. As it currently stands, the minimumfee rates are not fully respected and there are many complaints from industry thatthese are too high or unfairly set.•Where flat rates (rather than the minimum rates of Annex IV and V) are used, there isgenerally a lack of transparency on the calculation method that has been followed. Thiscan be seen both from the notification letters sent by MS to DG SANCO pursuant toArticle 27.12 of the Regulation, and from the results of our survey. Very few countriesdescribe their calculation methods, and even in these cases there is no clarity on thevarious elements covered by the ‘administrative costs’ which are always taken intoaccount in the calculation.•There is significant variation in the channelling and use of the revenues raised from thefees. Although the use of these revenues to finance the official controls system is themain rationale for the financing provisions of Regulation 882/2004, as it stands theRegulation does not make any reference to the obligation of MS to ensure this is takingplace. The study has found that there is generally a lack of transparency on thechannelling of these revenues, and the information collected through the surveydemonstrates that the extent to which these funds are used to refund the official controlssystem appears to be very variable amongst the EU27.In addition, the study has identified some overarching challenges which go beyond the scopeof the study and of Regulation 882/2004 as such. These issues are nonetheless discussed inthis Report, as it is not easy to separate the review and evaluation of the fee system from theoverall organisation and structure of official controls. They also have significant implicationswhen examining the options for the future:•The fact that there appear to be widespread variations in the level, frequency andstandard of the official controls performed in the MS of the EU-27. Although not dealtwith directly by this study, this point is relevant, becauseà priorithe cost of controls(and the associated fee for cost-recovery) should in practice relate to the quantity andquality of the services provided. The need to address this point has therefore emerged inour interviews with industry in particular. From a review of FVO Reports on officialcontrols carried out in MS under the Hygiene Package, it is evident that the level andstandard of the controls remains highly variable between MS (some less extensiveissues of variability appear to exist also with import controls performed at BIPs).At the same time, there are on-going discussions concerning the improvement of theinspection services, e.g. in slaughterhouses, to take into account technological progressand the increasing uptake of self-control systems (notably GHP and HACCP) followingthe introduction of the General Food Law and the Hygiene Package.•The significant variation in the structure and organisation of the CAs in the MS, and ofthe staff (veterinarians, hygienists) performing these controls. This point also hasfinancial implications of relevance to this study.
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It is noted that the addition of several layers of competent/executive bodies is usuallydictated by constitutional law and the administrative traditions of a MS, and is thereforedifficult to change as such. On the other hand, there is currently a trend in the EU torationalise public services, and this includes consideration of alternative employmentmodels for the staff responsible for the official controls.•A number of external factors can be added to these challenges, such as technologicalprogress, market trends and the structure of the industry, which can affect the efficiencywith which official controls are organised and performed.These issues call into question the principles and objectives of the Regulation to ensure aharmonised approach across the EU with regard to official controls. The study has found thatthe current organisation of the fees system in the MS creates some distortions in competition(particularly discriminating against the meat industry and smaller businesses) as well ashaving implications for the efficiency and effectiveness of the controls. This can potentiallyundermine the ultimate objectives of the system to guarantee food safety and the protection ofpublic health as well as the free circulation of goods within the internal market.The identified shortcomings can be broadly attributed to:•Problems within the EU legislation.This refers to the various issues identified in theformulation of Articles 26-29 of Regulation 882/2004 as such (including broaddefinitions in Annex VI, confusion in the structure and interception of the variousparagraphs of Article 27 & Annexes IV and V, and concerns on the level of minimumfees and the fact they are expressed on a tonnage basis). It also includes issues identifiedin the wider context of Regulation 882/2004 (such as broad reference to official staffrequirements) and its relation to other legislation (particularly the Hygiene Package). Itis worth noting that, even in the case of the minimum rates of Annexes IV and V,stakeholders as well as most CAs were unclear on how this particular level of fees wasset in the legislation in the first place;•Problems in MS interpretation.These appear to arise largely as a consequence of thediscretion given to MS to implement the rules, within a broadly defined set of criteria,and the relatively limited accountability of authorities at MS level. Although Regulation882/2004 implicitly refers to a central authority as having the ultimate responsibility foreffective and efficient coordination even in cases where competence is conferred toauthorities at a more decentralised level (Article 4.3), the study has found that inpractice this is not always guaranteed and that a large number of authorities may beinvolved with little coordination between them. This, in turn, has implications for theaccountability of the central competent authorities of the MS to the EU institutions.
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To address the various shortcomings in the current application of the Regulation57, the studyhas examined various scenarios within the following key options: moving from the currentsystem towards more harmonisation, moving towards more subsidiarity; and, the continuationof thestatus quo.A complementary option, which in fact transcends the above threealternative options, is the extension of the financing obligation to sectors beyond thosecurrently covered by the Regulation.The scenarios were developed by combining key components, which were identified on thebasis of the intervention logic of the system as laid down in the current legislation (Articles26-29). These are: the basis of fee charging; level of fee rates; fee calculation method; feereductions and penalties; and, list of activities covered by fees (Table3-1).A constant featureof all scenarios under each option is the basis of fee charging: compulsory for all MS underthe harmonisation option, optional under the subsidiarity option, and a mixed approach underthe continuation of current rules.The scenarios were assessed in terms of advantages and disadvantages, feasibility (whetherand under which conditions they would work in practice), and the acceptance that they mighthave from the various groups of stakeholders.The key criteria applied for the assessment were defined in the context of the main goals andprinciples of Regulation 882/2004, as well as the wider objectives of Community food andfeed law and the Lisbon strategy, as follows: improving the effectiveness and efficiency ofthe official controls; simplification of the current system; and providing the right incentivesfor FBOs to encourage compliance and discourage non-compliance.It is noted that these criteria may not necessarily point in the same direction. For example,pursuing simplification may not be compatible with the increasing complexity required toensure a harmonised approach towards cost-recovery across the EU. It would be importanttherefore to define the overall objective of the policy approach to be followed at EU level.The initial assessment of the scenarios provided here aims to provide a balance between thevarious objectives and needs of stakeholders.The assessment has shown that neither harmonisation nor subsidiarity would work in theirmost extreme expression. Determining a uniform level of fees across the EU-27, under thefuller harmonisation scenarios, may be unworkable in practice, because the large variationbetween MS in the actual cost of the controls would make it difficult to find a commondenominator in terms of fee levels. Leaving full discretion to MS to develop their own systemfor the financing of official controls under full subsidiarity, given the current divergence ineconomic and industry development between MS, may not provide the resources to maintain(or improve) the current standard of controls. Although both scenarios would simplify thecurrent system at the level of central management (particularly if full subsidiarity is pursued),
It is noted that addressing some of the current shortcomings identified by this study requires action thatextends beyond the financing provisions of Regulation 882/2004, to the wider legislation in the area of food andfeed safety. The discussion of solutions to such shortcomings was therefore limited to its relevance to the costsand the financing of the official controls.
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they ultimately carry the risk that they may not lead to sufficient cost-recovery in some MS,and that the level of cost-recovery may vary significantly between MS. This could underminethe overall effectiveness of the official control system at EU level, and/or act as a disincentiveto improving its efficiency.An intermediate solution would clearly provide the most pragmatic way forward.Intermediate scenarios provide different degrees of balance between the flexibility that themajority of MS require, as an incentiveinter aliato rationalise the system, with thesimplification needed at the level of central management (Commission, MS CCAs). Thestudy has found that the rationale for a flexible approach, which underlies the currentRegulation, continues to apply today. The majority of MS CAs and stakeholders haveindicated that a system that allows MS flexibility to set the fee rates, within a commonlyagreed set of rules, continues to be the most favoured option. This approach is considered themost appropriate for the system to be able to adapt to national conditions.On balance, amongst the various scenarios that can be envisaged at an intermediate level,those leading to more subsidiarity appear to be more attractive than those that lead to moreharmonisation. This is because the degree of flexibility given to MS increases, while thedegree of complexity of the legislation diminishes.Moving towards more subsidiarity, if the primary aim of the legislation is to ensure that MShave the funds necessary to cover the costs of official controls whatever the means, scenario 4(maintain only the general obligation for MS to provide adequate funding, in the line of amodified Article 26) could present an attractive alternative to pursue for the purposes ofsimplification.The disadvantage of such a system would be that it could result in wider variations betweenMS than those created by the current system. To reduce these variations, conditions could beattached in the form of common principles at EU level for a more harmonised calculation ofthe fees and/or fee reductions/penalties across the EU (scenario 3).Although the continuation of thestatus quowould be an alternative intermediate solution, theanalysis of current shortcomings under section 2.2 has shown that todo nothingis clearly notan acceptable or a pragmatic option. However, the current situation represents the politicalreality of the evolution of the system since Directive 85/73. Thus, if the current mixedapproach of the Regulation was to be maintained, certain improvements could be introducedas follows: at a general level improve the understanding of Regulation 882/2004; provide arationale for the setting of minimum fee levels and review the rates of Annexes IV and V inthe light of this rationale; improve transparency and accountability criteria (to reinforce theprovisions currently provided by Regulation 882/2004); refine and define certain provisionsmore precisely at technical level; update Articles 26-29 of Regulation 882/2004 with theprogress made since the adoption of the General Food Law and the Hygiene Package.Whatever the scenario to be pursued at an intermediate level, the study has identified the needfor the definition of common principles that can apply for a more harmonised calculation ofthe fees and/or fee reductions/penalties across the EU. These could be general principles onlyor they could be more detailed criteria defined at a technical level. General principles would
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include: transparency in the calculation method of fee setting and for calculating feereductions/penalties, on the basis of actual costs; and, the obligation for MS to communicatethese to the Commission and the public. Detailed technical criteria would include for instancethe calculation method to be followed for fee setting and for fee reductions/penalties, cost-recovery targets that should be sought, precise cost categories that should be taken intoaccount, and even maxima/ceilings for each cost element.The level at which common principles should be set needs to be further explored, as it iscrucial in controlling MS flexibility and mitigating the potential disadvantages of subsidiarity.The greater the degree to which EU legislation moves from defining common principles andgeneral guidelines (as is currently the case with Articles 27-29 of Regulation 882/2004) tomore technical criteria, the more difficult it will be for MS to deviate from a commondenominator. On the other hand, this increases the complexity of the provisions and theextent of follow up needed at central level (Commission, MS CCAs).In terms of the calculation of fee reductions and penalties, in particular, the principles couldbuild on the advantages and benefits of self-control systems, as introduced at EU level by theHygiene Package. The study has examined the possibility to expand on existing provisions ofthe Regulation, by following an integrated approach more consistently linking complianceand non-compliance, and therefore fee reductions and penalties, to the uptake of self-controlsystems by industry (through abonus-malussystem). Both MS and stakeholders are inprinciple in favour of providing incentives to FBOs to assume greater responsibility. Theextent to which this can be encouraged will depend on the degree to which an approach onhow to reward compliance can be developed (Articles 27.5/6) and, conversely, how topenalise non-compliance (Article 28). This could be through an integratedbonus-malussystem. Such systems have already been developed at MS level in a few MS (e.g. Belgium)and these highlight the advantages of an integrated approach. The study has concluded that,although the development of such systems needs to be encouraged at EU level, their actualdesign can at present only be pursued at MS level.In addition to the above, the cross-cutting theme of the extension in scope of the Regulationwas favourably assessed, in relation in particular to the inclusion of all stages along the foodchain. The case of the extension of the system to stages upstream and downstream of theslaughtering and meat cutting operations along the meat production chain was a case in point.The study has concluded that an extension in this form would spread the costs of controlscurrently pursued only at a particular point in the chain but for the benefit of stagesupstream/downstream more equitably along the food chain. Again, this approach is currentlybeing adopted/explored in several MS.This forward looking element of the project aimed to provide an initial assessment of certainkey scenarios. The purpose was not to provide a full feasibility analysis (whether at politicalor technical level). Nonetheless, specific recommendations were made to develop thesescenarios, or indeed other potential combinations of their components, including throughfuture impact assessments.
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Annex 1
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1.1 List of relevant background legislationNote: EU legal acts quoted in this Report refer, as applicable, to the last amended version.Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April2004 on official controls performed to ensure the verification of compliance with feedand food law, animal health and animal welfare rulesHygiene Package:•••Regulation (EC) No 852/2004 of the European Parliament and of the Council of 29 April2004 on the hygiene of foodstuffsRegulation (EC) No 853/2004 of the European Parliament and of the Council of 29 April2004 laying down specific hygiene rules for food of animal originRegulation (EC) No 854/2004 of the European Parliament and of the Council of 29 April2004 laying down specific rules for the organisation of official controls on products ofanimal origin intended for human consumption
Regulation (EC) No 183/2005 of the European Parliament and of the Council of 12 January2005 laying down requirements for feed hygiene. In particular Article 10 “Approval of feedbusiness establishments”.Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January2002 laying down the general principles and requirements of food law, establishing theEuropean Food Safety Authority and laying down procedures in matters of food safety.Commission Regulation (EC) No 2076/2005 of 5 December 2005 laying down transitionalarrangements for the implementation of Regulations (EC) No 853/2004, (EC) No 854/2004and (EC) No 882/2004 of the European Parliament and of the Council and amendingRegulations (EC) No 853/2004 and (EC) No 854/2004.Previous legislation:Council Directive 85/73/EEC of 29 January 1985 on the financing of health inspections andcontrols of fresh meat and poultrymeatAs amended by:Council Directive 96/43/EC of 26 June 1996 amending and consolidating Directive85/73/EEC in order to ensure financing of veterinary inspections and controls on live animalsand certain animal products and amending Directives 90/675/EEC and 91/496/EECInternal market (Annex IV, Regulation 882/2004)Council Directive 89/662/EEC of 11 December 1989 concerning veterinary checks in intra-Community trade with a view to the completion of the internal market (Annex listing checks isnow replaced by Annexes to Regulation 853/2004)
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Council Directive 90/425/EEC of 26 June 1990 concerning veterinary and zootechnicalchecks applicable in intra- Community trade in certain live animals and products with a viewto the completion of the internal marketCouncil Directive 93/119/EC of 22 December 1993 on the protection of animals at the time ofslaughter or killingCouncil Directive 96/23/EC of 29 April 1996 on measures to monitor certain substances andresidues thereof in live animals and animal products and repealing Directives 85/358/EECand 86/469/EEC and Decisions 89/187/EEC and 91/664/EECImports (Annex V, Regulation 882/2004):Council Directive 97/78/EC of 18 December 1997 laying down the principles governing theorganisation of veterinary checks on products entering the Community from third countriesCouncil Directive 91/496/EEC of 15 July 1991 laying down the principles governing theorganization of veterinary checks on animals entering the Community from third countriesand amending Directives 89/662/EEC, 90/425/EEC and 90/675/EECNot mentioned in Regulation 882/2004 but related:Regulation (EC) NO 396/2005 of the European Parliament and of the Council of 23February 2005 on maximum residue levels of pesticides in or on food and feed of plantand animal origin and amending Council Directive 91/414/EEC :Official controls of MRLsArticle 26Official controls1. Without prejudice to Directive 96/23/EC (1), Member States shall carry out officialcontrols on pesticide residues in order to enforce compliance with this Regulation, inaccordance with the relevant provisions of Community law relating to official controlsfor food and feed.2. Such controls on pesticide residues shall, in particular, consist of sampling andsubsequent analysis of the samples and identification of the pesticides present and theirrespective residue levels. Such controls shall also be carried out at the point of supplyto the consumer.Council Directive 2002/89/EC of 28 November 2002 amending Directive 2000/29/EC onprotective measures against the introduction into the Community of organisms harmfulto plants or plant products and against their spread within the Community:Article 13d
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1. Member States shall ensure the collection of fees (Phytosanitary fee) to cover thecosts occasioned by thedocumentary checks, identity checks and plant health checks provided for in Article13a(1), which are carried out pursuant to Article 13. The level of the fee shall reflect:(a) the salaries, including social security, of the inspectors involved in the abovechecks;(b) the office, other facilities, tools and equipment for these inspectors;(c) the sampling for visual inspection or for laboratory testing;(d) laboratory testing;(e) the administrative activities (including operational overheads) required forcarrying out the checks concerned effectively, which may include theexpenditure required for pre- and in-service training of inspectors.2. Member States may either set the level of the Phytosanitary fee on the basis of adetailed cost calculation carried out in accordance with paragraph 1, or apply thestandard fee as specified in Annex VIIIa.Council Directive 2000/29/EC of 8 May 2000 on protective measures against theintroduction into the Community of organisms harmful to plants or plant products andagainst their spread within the Community
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1.2 List of reviewed FVO reports and MS notification letters to DG SANCO
Note: Refers to the latest relevant FVO Reports, and notification letters, as available up to15 October 2008.
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Study on fees or charges collected by MS for official controls: Final ReportDG SANCO Evaluation Framework Contract Lot 3 (Food Chain)FVO Reportsavailable**OCs FH1234567891011121314151617181920AustriaBelgiumBulgariaCyprusCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsPoland8176/2006*7196/20077950/2008*7197/20078173/2006*8177/2006*7838/20088153/2006*8194/2006*8170/2006*7223/20078179/2006*7430/2007*8183/2006*7201/20078209/2006*8166/2006*7193/20078206/2006*7190/20078189/2006*7662/20057588/2007*8146/2006*8059/20067442/20077728/2005feesNNNNNNNNNNNNYNYNYNNNNYNNYNYICs BIPsFees mentioned in Report: Y=yes N=noNotificationlettersfeesOtherfeesAvailabilityYNYNY7378/20078058/20067582/20077185/2007*8055/20067917/20077242/20077235/20077275/20077280/20077277/20078133/2006*7283/20077583/20078063/2006YYNYYYYYYYNYYN7419/20078119/2006YN7194/2007N8007/2006 (VRCs)8099/2006NNY8004/2006 (fish)7349/2007 (ICT LAs)8108/20068113/2006NNYNYYYYY7218/2007N7695/2008 (VRCs)7724/2008 (feed OCs)8012/2006 (VRCs)YNNYYYNYYYNNY
fees
ICs PH
fees
PRCs
8121/2006*7571/20078057/20067746/20087727/2005
NYYNY
7426/2007
Y
8258/20067376/20078132/2006
YYN
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Study on fees or charges collected by MS for official controls: Final ReportDG SANCO Evaluation Framework Contract Lot 3 (Food Chain)FVO Reportsavailable**OCs FH21222324252627PortugalRomaniaSlovakiaSloveniaSpainSwedenUK8172/2006*7443/2007*7383/2007*8192/2006*8195/2006*8205/2006*7448/2007*8186/2006*7449/2007*7192/20078323/2006*8190/2006*feesNNNNNYYYYNNNICs BIPs8097/20067748/20087301//20077289/20078062/20068330/20068098/2006Fees mentioned in Report: Y=yes N=noNotificationlettersfeesNOther7696/2008 (VRCs)feesNAvailabilityNNYYNNY
feesYNNYYYYN
ICs PH
fees
PRCs7222/2007
8128/20067433/20077429/2007
NYY
7179/20078115/2006
NN
FVO Reports:OCs FH:Official Control Systems in place for Food Hygiene (within the meaning of Regulation (EC) 852/2004) Traceability and LabellingReports marked with*: Official Controls on the Safety of Food of Animal Origin (meat , milk and their products)ICs BIPs:Import/Transit Controls and Border Inspection PostsReports marked with*: Imports Controls on Food and Feed of non-Animal OriginICs PH:Import Inspections for Plant HealthPRCs:Controls of Pesticide ResiduesVRCs:Veterinary Residues ControlsICT Las:Intra-community trade live animalsCP:Country Profile** Only latest Report is mentioned under each categoryBold: case study countries
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Annex 2
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2.1: SURVEY of EU-27 CAs: results
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1.1 Are fees or charges collected for covering the costs incurred through official controls in theareas covered by Regulation 882/2004?
NB. YES & NO means there are cases of official controls for which fees are not collected.
1.3 a) Are fees collected to cover the costs occasioned by official controls (within the meaning ofArt.27 (1) of Reg.882/2004)? (PLEASE INDICATE NON-COMPULSORY FEES ONLY)
NB. YES & NO means there are only some regions within the MS for which such fees are collected.
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1.4 Are fees or charges collected according to Art.27 (2) of Reg.882/2004 (COMPULSORYCOLLECTION OF A FEE)?
NB. YES & NO means there are some activities of Annex IV and V for which fees are not collected.
1.6 a) Which system is being applied for setting fees/charges (system defined according toparagraph 4b of Art.27 of Reg. 882/2004?
NB. Combination of flat rates and minimum rates can be for same or for different categories of activities
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1.6 b) Imports: which system is being applied for setting fees/charges (system defined accordingto paragraph 4b of Art.27 of Reg. 882/2004?
NB. Combination of flat rates and minimum rates can be for same or for different categories of activities
1.8 a) Are there cases where a fee below the minimum rate is being applied (according to Art.27(6))?
NB. In practice, the lower fee is not applied always necessarily in accordance with Art. 27(6)
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1.9 a) Are the actual costs borne by the CA covered entirely by the fees/charges collected?
NB. YES & NO means costs are covered for some activities but not for others.
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1.10 How is the revenue from the fees or charges collected pursuant to Art.27 of reg 882/2004used in the country?
2.1 Would your services be in favour of common system/subsidiarity system?
NB. Definition of subsidiarity system and mixed system, as it appears to be understood by MS, is very close.Both allow for a certain flexibility to MS to set the rates, within a commonly agreed set of rules. On the otherhand, some MS that have opted for a common system, have highlighted nonetheless the importance of keepingsome flexibility.
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2.3 Would your services be in favour of extending to other sectors (than the ones specified inReg. 882/2204) the obligation to contribute to the financing of official control activities?
NB. YES & NO may reflect difference in opinion between the CAs that responded to the survey, (e.g. CzR,Germany); or an undecided position at present (e.g. France); or under certain conditions (e.g. Ireland, Spain)
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SECTION 2 – OPTIONS FOR THE FUTUREQuestion 2.2– What would your services consider as the advantages/benefits, or disadvantages/drawback of either system?“COMMON SYSTEM”ADVANTAGES/BENEFITSDISADVANTAGES/DRAWBACKSCOMPETITION ISSUES1.Reduction of distortions-Equality of production costs induced by administration to allindustries in Europe, not introducing factors that could interferewith free competition;-Competitive conditions of operators retained;-Avoid discrepancies in final product price due to fees;-Avoid distortion of competition between MS;-The competition among MS (on the basis of fees alone) iseliminated;-Cost of controls burdens products in the same way across the EU.1. Unequal basis for competition-Taking into account the different economic and financialconditions of MS, these charges can be considered as barriersfor food business operators in some MS;-Unequal competition conditions. Reinforces gap between directsupport levels between MS due to CAP (for NMS), thuscreating unequal basis for competition;
LEVEL OF FEES1.Uniformity/Less variability-Equal amount of fees charged among all MS (common fees forall MS);-All import controls costs harmonized throughout EU for imports;-Harmonised fees, identical rates for all MS;-For the same type of controls carried out uniformly in all the MSsthere should apply the same/harmonized fee levels;-Less variability within MS;-Equalization of these charges in MS;-Uniform costs for operators in all MS;-All operators are charged equally (Equal treatment);1. Lack of consideration of national economic conditions (costs)-The national peculiarities of MS are not taken into account;-Different costs of OCs among MS due to differences in salary,materials, analysis etc.-Ignores specific economic conditions of MS;-Different economic state between MS;-The specific geographic location of Bulgaria means higherexpenses for the border veterinary inspection control;-Different costs for the same activity in different MS;-Variable working conditions;-Variable national life costs;-Less flexibility to react to the business reality of the different MS89
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ADVANTAGES/BENEFITS
DISADVANTAGES/DRAWBACKS-Costs are different in MS, therefore these might result ininsufficient revenues or excessive costs for the stakeholders;-Same import controls do not mean same costs;-Imports: larger BIPs that handle larger throughputs can havecertain economies of scale that allow them to operate morecost-efficiently.2. Risk of insufficient coverage of actual expenses-Payment does not correspond to actual costs of controls;-Some activities and their expenses may not be covered;-Possibly not full coverage of the cost of controls in some MS;-Fee revenue would not necessarily cover the actual costs.3. Difference in financial burden for governments-The costs paid by the governments in MS would be different;-Higher share of the state budget for financing the controls4. Differences on the financial burden for business operators-Businesses with low throughput may pay higher fees in order tocover the cost of inspection;-Eventually, the same level of fees throughout the EU would notbe adequate for all plants (depends on plant size/amount ofgoods to be controlled);-For the very large establishments, the amount of fees couldbecome disproportionate to the actual cost of inspection5. Difference in the levels of controls-Differences in the cost of controls that exist between MS couldaffect the level of control that would be applied
2.Clear definition of criteria-Same criteria/approach in all MS for application of fees;-Having the guarantee of harmonised OCs based on key pre-defined points (e.g. ante and post mortem inspection)-Clear principles of calculation of the taxes;-Uniformity of criteria
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ADVANTAGES/BENEFITS
DISADVANTAGES/DRAWBACKSIMPLEMENTATION
1. Simplification-Simpler application;-Makes easier the activity of the competent authority;-Can be applied faster if rates included in the Regulation;-No need to do extensive economic evaluation;-Simplification of fee collection;-Simplification for stakeholders;2. Enforcement-CAs are obliged to apply Community law3. Acceptance from the business operators-More acceptable from the business operators;
1. Problems of interpretation-Interpretation problems with the Regulations which are notalways explicit2. Limited coverage-May not cover all control activities in all MS3. Lack of flexibility-Inflexible;-Rigidity of the system and greater burden on some MS-Reduces potential for flexible decisions to be taken by MS;-The system is not dynamic and does not allow the correction ofpayments according to changes in the costs of controls;-Not many possibilities for exemptions
Note: each bullet point corresponds to the comment made by a single MS. Comments have been grouped together by main subject andkey type of advantage/disadvantage.
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Question 2.2– What would your services consider as the advantages/benefits, or disadvantages/drawback of either system?“SUBSIDIARITY SYSTEM”ADVANTAGES/BENEFITSDISADVANTAGES/DRAWBACKSCOMPETITION ISSUES1. Distortion of competition:-Potential distortion of competition between MS. Official controlpriorities may be different between MS;-Fee differences could be used for commercial competition;-The competition among MS might deepen;-Distortion of the internal market, if some MS compete on fees;-Distortion of the Common Market;-If absence of harmonised fee regulation in the EU, industry willbe indirectly supported by MS not collecting fees, to thedisadvantage of collecting MS;-Different rates, thus, possible differences in veterinary costs forthe operators and, therefore, unequal competition;-Can be used for competition between MS, if fees are reduced orabolished to attract industries of other MS;-This system could create differences between MS that would beharmful to the single market and relevant discussions onequivalence with third countries;-Discrepancies in the final price of the product due to the fees
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ADVANTAGES/BENEFITSLEVEL OF FEES1.Adaptation to country’s economic situation-Better evaluation of national realities;-Takes into consideration regional and national characteristics;-Fees adapted to variable national living costs;-Each MS has the possibility to choose the best solution, given itseconomic level;-This system can be adapted more easily to the different situationsin the MS’s reality;-Each MS, knowing their economic and financial status, canestablish the fees to cover the expenses generated by officialcontrols that can be accessible to food business operators;-Based on certain criteria the fees may be adapted to the localproduction conditions;-Fee will be closer to the actual costs of control;-Fees proportionate to special conditions of sector and the controlcosts in each MS;-More accurate and adapted assessment of costs of the costs ofofficial controls in each MS and consequent level of fees;-Fees more justified/cost-based;-Flexibility for MS to adapt costs to the fees and vice versa.2.Adaptation to sector’s specific situation-Milk: MS know their own industry and what level of fee isacceptable;-Milk: MS can adjust fees to meet actual costs;-Meat: systems are different in each MS so important to haveflexibility to fix fees for particular activities3.Coverage of costs-All costs can be covered by the fees/charges, if cost data exist andFood Chain Evaluation Consortium
DISADVANTAGES/DRAWBACKS
1. Variability among MS-Differences between MS;-Variability among MS and business operators;-Fees not harmonised2. Different criteria-Non uniform criteria within the EU3. Difference in financial burden for governments-To cover the difference between actual revenues from controlsand the running and maintenance costs, budget resources arerequired; these needs may be very different for the various MS4. Differences on the financial burden for business operators-Different conditions for operators in the different MS;-Non-harmonised fees put operators in different MS in an unequalposition;-Complication for stakeholders to determine their expenses due tothe different fees in different MS;-Non equivalent costs and conditions for producers in thedifferent MS
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ADVANTAGES/BENEFITSare transparent;-Adaptation for each MS based on actual needs: the calculationwill be closer to actual expenses-Modulation (fee adjustment) based on rational and objectivecriteria (conformity with self-control and traceability,production capacity, production methods etc.)
DISADVANTAGES/DRAWBACKS
IMPLEMENTATION1.More transparency-FBOs would be involved in negotiations to establish the fees,therefore system favours consensus/ transparency;-Allows the inclusion of a fee modulation system taking intoaccount industry actions e.g. staff participation in the controls;-Introduces more responsibility at all levels (CAs, FBOs);-System’s management more accurate because adapted to nationalconditions2.Flexibility-Freedom to set fee rates by the individual MS;-Flexibility of national rules;-In case of a national crisis, a MS will have more autonomy toreact promptly and more efficiently on the financial level;-Allows easier adaptability to changing situations/scenarios;-Possibility to correct the amount of fees without affecting theprinciple of equality, to maintain them on an adequate levelwithout increasing state subsidies1. Difficulties in application-Difficulties in negotiations with the industry in case of non-harmonised EU legislation;-This system could be subject to political pressure and require alengthier process;-Difficulties in fee setting (justification) and in application
2. Higher administrative costs-Indirect administration costs can hike fee levels abovereasonable levels;-Fee may not be fully covering extra costs of control that arebasically linked to running and technical maintenance costs
Note: each bullet point corresponds to the comment made by a single MS. Comments have been grouped together by main subject andkey type of advantage/disadvantage.
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Question 2.4– What would your services consider as the advantages/benefits, or disadvantages/drawback of extending the obligationto other sectors?MSBELGIUMQ 2.3YesADVANTAGES/BENEFITS•Phytosanitary sector has already been placed under theAgency control, and therefore, it shall contribute•Each sector concerned to some extent with the foodchain safety must at the very least be recorded and inthe majority of the cases it shall contribute to thecontrols of this sector/channel•Cover the activities that are the object of controls•Encourage business operators to implement thelegislative requirements•To create adequate conditions for farmed game andwild game processing•Common approach throughout the food chain(including feed production)•Unification of the system for financing of the controlsin MS•Spreads the cost over the whole of the industry - Dir178/2002 talks about responsibility at all levels of thechain; each level has to be effectively responsible -even a small fee would make FBOs conscious of theirresponsibility.•Makes the fees system a motor for the industry as wellas for the control bodies.•Part of the cost of official controls is shared with allfood-feed sectors;•Would provide sufficient financial resources to coverthe costs of OCs.DISADVANTAGES/DRAWBACKS
BULGARIA
Yes
•Additional financial burden for business operators•Additional administrative regulations•Increased administrative - bureaucratic burden forbusiness operators•Additional financial burden on producers, processorsand distributors
CZECH REP.ESTONIA
Yes/noYes
FRANCE
Yes/no
•An extended system on this basis would be hard toimplement
GREECE
No
•Fees for OCs overcharge the consumer;•Opposition of business operators;•Additional administrations cost for fee collection;•The economic situation is already difficult for theindustry in general and particularly the food industry.95
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MSIRELANDITALYLATVIALITHUANIALUXEMBOURG
Q 2.3Yes/noYesYesYesNo
ADVANTAGES/BENEFITS
DISADVANTAGES/DRAWBACKS•Fees can only be applied to areas which are subjectto direct supervision and controls
•Division of costs to all productive activities subjectedto controls.•Could be extended to cover some sectors, other thanfood, not currently covered by Regulation 882/2004.•Unified system for all sectors•More responsibility for the industry•Increased authority for the controller•Incentive to supplementary hygienic efforts to reducethe control frequency•More revenues for the CAs provided that the revenuesare utilised for training and official controls.•Under Reg 852/2004, all operators must be controlled.Today only a few are being taxed to cover all the OCcosts. It doesn’t cover all costs, and it is unfair for thefew sectors which must pay the controls done to all.•Harmonising MS legislation for the non animal andanimal sector, in accordance with food definitionprovided by Art. 2 of Regulation 178/2002•Harmonised fees for all feed business operators(approved/registered) and harmonised fees forimported feed•Additional productions costs in charge of theconsumer•Financial disadvantage for controlled businessestablishments•Lower profits for those subjected to official controlsmight generate higher costs for end products and,therefore, consumers might also be affected•Administrative implementation.
MALTA
Yes
PORTUGAL
Yes
ROMANIA
Yes
SLOVENIA
Yes
•Problem is the great diversity of FBO activities•Difficulties in harmonisation: fees should be relatedalso to production (quantity)•As regards imports, the place of fee collection shouldbe laid down, as to whether the fee shall be collectedon entry or on release into circulation
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MSSPAIN
Q 2.3Yes/no
ADVANTAGES/BENEFITS•Covering the costs of official controls;•Better financing system, better service
DISADVANTAGES/DRAWBACKS•Difficulties for collection of fees;•Adverse social reactions•Negative impact on the society;•Excessive fiscal pressure on the paying sectors
Note: Only the MS that provided answers to Q2.4 are included in this Table. Second column indicates their answer to Q2.3.
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Question 2.5– Which sectors would your services consider as the most appropriate for inclusion in an extended scope of Regulation882/2004 and why?MSBELGIUMMSYesSECTOR/SREASON/S
Belgium already cover a very large selection of operators, on the basis of data provided by the TVAAdministration.•Animal welfare;•Control on imports of honey and bee productsfor human consumption;•Control on imports of milk and milk products;•Control on imports of feedingstuffs of plantorigin;•Control on residues and environmentalcontaminants;•Control on imports of eggs and egg productsfor human consumption;•Control on production establishments;•Control of storage•Feed sector•There all entail expenses for the competent authority
BULGARIA
Yes
CZECH REP.
Yes/no•Slaughter of farmed game•Production, storage and transport of nonanimal foods
DENMARK
Yes
•Attribution of the costs arising by the feed controlactivities to the feed business operators;•Approximation of the approach in all MS;•Encouragement of FBOs to implement the legislativerequirements adequately and efficiently•This sector is currently not charged although it used tobe charged in the past. Slaughter of other speciesincluding wild game is charged.•There is no obvious reason for letting the producers ofmeat and milk pay for controls, while for producers ofother food products it is free98
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MSESTONIA
MSYes
SECTOR/S•Processing and distribution of feed•Processing and distribution of food of non-animal origin•Animal herd free status certification (forzoonoses, e.g. Salmonella, Brucella, TSEs,etc)
REASON/S•Common approach throughout the feed chain (incl.feed production)•Common approach throughout the food chain
GREECE
No
ITALYLATVIA
YesYes
••
LITHUANIALUXEMBOURGPORTUGAL
YesNoYes
••
•For sampling cost: staff salaries, movements,sampling materials, etc•For testing cost: staff salaries, sample dispatching,testing material, etc.•For animal keepers: free of charge supplyVegetable foods•Division of costs to all productive activities subjectedto controlsPossibly some non-food border controls•These are also creating a big financial burden thatcurrently not covered by Regulation 882/2004:should be paid for.controls laid down in Reg. 339/93 andDecision 93/583 (quality control on medicinesintended for humans and animals, toys, fruitsand vegetables, etc.).Only sectors currently paying on a ‘non-compulsory’ basis.Perhaps egg-products•For public health reasons
•Some actions on animal health, animal feed•To support partially the rising costs of animal healthcontrol, farm licensing; Survey of OCs;as well as OC surveys and audits.Audits.•In conclusion all sectors under Regulation852/2004, which CAs must control, or at least,all sectors and establishments underRegulation 853/2004, which CAs mustapprove/control.
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MSROMANIASLOVENIASPAIN
MSYesYes
SECTOR/S•All the sectors provided in Art. 2 ofRegulation 178/2002•Animal feed
REASON/S
•See 2.4
Yes/no•Retail, catering, prepared and distributed food;•These sectors account for an important share of theofficial controls•food of non-animal origin•Fees are insufficient to cover these activities atpresent.
Note: Only the MS that provided answers to Q2.5 are included in this Table. Second column indicates their answer to Q2.3.
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Question 2.6– Do you have any further recommendations for the improvement of the system of fees or charges for official controls?Recommendations1.In favour of certain autonomy for each MS to set the fee amount charged to the food sector. It appears important to avoid the significantdistortion of competition through a certain harmonisation of the collected fees/charges. Minimum amounts fixed by the EU authorities,comparable procedures on controls and financing of each MS and the publication of these national data appear to be necessary to obtainthat goal/objective.Introduce minimum amount of fees, according to the control activities, to be laid down in the European legislation.Explicit fee rate for the control of feed business operators needs to be introduced in EU legislation.Regulation 882/2004 does not stipulate how to cope with minimum rates in countries outside the Eurozone. This causes some problems inimplementation. Need to include provisions similar to Art 7 of Directive 85/73/EEC or stipulate that rates of ECB should be used.To define what is meant with adult bovine animal, missing such a definition which complicates the collection of fees.Introduce maximum limits or cancel all fees or charges for official controls. Costs for official controls should be borne by individual MS(on a case by case basis).In order to establish the fees, the economic status of each individual MS must be taken into account.The European Commission must establish minimum and maximum limits for fees (e.g. adult bovine slaughtering - between 1-5 euro).Collect fees for transit of all products.Fees charged under Art. 27 of Regulation 882/2004 should be incorporated in the TRACES system; as a first step, at least the feesrequired under Annex V of Reg. 882/2004.Further harmonization needed.
2.3.4.
5.6.
7.8.9.10.
11.
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Recommendations12.13.More precise definition needed of the fee calculation for the fees charged under Art 29 (and Art 28) of Reg 882/2004.Provide guidelines regarding the interpretation of Art.27 and 28 incl. Annexes, inter alia: what type of costs may be taken into accountwhen setting the fees (overhead costs, and if so, to what extent? Accommodation costs?). This would contribute to the creation of a morelevel-playing field.Taking into account the general principle that fees or charges should not be higher than the costs borne by CAs, it is the MS responsibilityto fix the amounts of the fees or charges and the activities for which fees or charges should be collected. Especially for activities ofofficial controls in relation to community establishments.Whatever system of fees or charges would be designed for official controls at EU level, it is without effect at a national level, because ofthe administrative structure of the economic and food safety control authorities.Common fees for all MS to avoid any discrepancies in the final price of the product due to fees, calculated by taking into consideration thespecific economic situation of some MS.Establish the list of activities for which fees are collected in Annex IV of Regulation 882/2004 on the basis of the same criteria acrosssectors. These criteria could eventually be as proposed in Rec. #3.In favour of actual system, with common minimum fees, with possibility to raise fees to adjust to the real costs of OCs in some veryparticular conditions equal for all MS. Effectively a combination of common and subsidiarity systems.Enlarge the scope of Regulation 882/2004 to cover all sectors and establishments, adopting the actual criteria of the new EU food hygienelegislation (Regulations 178/2002, 852/2004 and 853/2004). This would result in raised revenue for MS, as a greater number of operatorswill pay, consequently diminishing fee levels for each one. Eventually, perhaps the fee could be charged to the operator, not the activities.
14.
15.
16.
17.
18.
19.
Note: each bullet point corresponds to the recommendation made by a single MS.
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2.2: SURVEY of EU-27 CAs: questionnaire
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A study on the collection of fees or charges for official controls pursuant toArticle 27 of Regulation (EC) No 882/2004SURVEY of EU-27
INTRODUCTIONThis survey takes place in the framework of an ongoing study by the European Commission,Directorate-General for Health & Consumers (DG SANCO), on fees or charges collected bythe Member States (MS) to cover the costs occasioned by official controls under Article 27 ofRegulation 882/200458(hereafter referred to as ‘the Regulation’).According to Article 65 of the Regulation, three years after its entry into force, theCommission needs to review the experience gained from its application, in particular in termsof scope and the fee-setting mechanism, and whether/how the current regime can beimproved. The objective of this survey is to collect your views on these issues.This questionnaire is addressed to the Competent Authority (CA) of each MS, defined as thecentral authority of a MS that is competent for the organisation of official controls or anyother authority to which that competence has been conferred (Article 2.4 of the Regulation).DG SANCO has recently circulated a letter to the MS, in response to questions raised by theGerman government, concerning the interpretation of Articles 26-29 of the Regulation. Thisletter clarifies questions that may arise in the context of the transition from the previous feesystem, under Directive 85/73/EEC59, to the new rules of Regulation 882/2004 which applywith effect from 1 January 2008. According to the Commission’s interpretation, the officialcontrol activities for whichcompulsory feesare charged within the meaning of Article 27.2 ofRegulation 882/2004 under the new hygiene package (Regulations 852/2004, 853/2004 and
58
Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controlsperformed to ensure the verification of compliance with feed and food law, animal health and animal welfare issues.
59Council Directive 85/73/EEC of 29 January 1985 on the financing of health inspections and controls of fresh meatand poultry meat.
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854/2004)60remain the same as those mentioned in Articles 1, 2 and 3 of Directive 85/73EEC. The full letter is attached inAppendix 1.ALL QUESTIONS IN SECTION 1 NEED TO BE COMPLETED.THE QUESTIONNAIRE CAN BE COMPLETED IN ENGLISH, FRENCH, SPANISH OR GERMAN.
60Hygiene Package: Regulation (EC) No 852/2004 of the European Parliament and of the Council of 29 April 2004 onthe hygiene of foodstuffs; Regulation (EC) No 853/2004 of the European Parliament and of the Council of 29 April 2004laying down specific hygiene rules for food of animal origin; Regulation (EC) No 854/2004 of the European Parliament andof the Council of 29 April 2004 laying down specific rules for the organisation of official controls on products of animalorigin intended for human consumption.
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Please return the completed questionnaires by e-mail to Agra CEASConsulting (DG SANCO’s external Contractor for this project),to the attention of:
DEADLINE: 27 June 2008
For any questions on this survey or questionnaire please contact the survey manager:
Dr Maria ChristodoulouAgra CEAS Consulting20-22 rue du Commerce1000 Brussels, Belgiumtel:fax:+32 2 736 00 88+32 2 732 13 61
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IDENTIFICATION DATA
-
Member State:
-----------------------------------------------------------------------------------
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Competent Authority (CA) completing the questionnaire:
----------------------------------------------------------------------------------
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Contact person (s):----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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Position held:----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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Phone number (s):----------------------------------------------------------------------------------------------------------------------------------------------------------------------
-
E-mail:----------------------------------------------------------------------------------------------------------------------------------------------------------------------
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SECTION 1.
CURRENT SYSTEM
1.1 Are fees or charges collected for covering the costs incurred through officialcontrols in the areas covered by Regulation 882/2004?(please tick the appropriate box)
Yes
No
If the answer is ‘No’, please justify your answer, by referring to:a) The reasons why:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------b) Whether any other system is in place for ensuring the coverage of the costs of official controls:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.2. Since when have the fees/charges pursuant to Article 27 of Regulation 882/2004been collected?(please tick the appropriate box)
Prior to 1.1.2007
Since 1.1.2007
Since 1.1.2008
Other date
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1.3.
a) Are fees collected to cover the costs occasioned by official controls (within themeaning of Article 27 (1) of Regulation 882/2004)? PLEASE INDICATE NON-COMPULSORY FEES ONLY (compulsory fees are dealt with in Question 1.4).(please tick the appropriate box)
Yes
No
b) For which sectors/activities are such fees collected? WhichCA is responsible for
setting and collecting such fees/charges, and at which level?Sector/activityLevelTitle of the Authority responsible for:FEE SETTINGFEE COLLECTION
A:----------------------------------------------------------------------------------------------
CentralRegionalLocal
B:----------------------------------------------------------------------------------------------
CentralRegionalLocal
C:----------------------------------------------------------------------------------------------
CentralRegionalLocal
D:----------------------------------------------------------------------------------------------
CentralRegionalLocal
E:----------------------------------------------------------------------------------------------
CentralRegionalLocal
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Sector/activityLevel
Title of the Authority responsible for:FEE SETTINGFEE COLLECTION
F:----------------------------------------------------------------------------------------------
CentralRegionalLocal
etc (1):----------------------------------------------------------------------------------------------
CentralRegionalLocal
(1)
If A to F is not sufficient, please add more lines as appropriate
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If the answer is ‘No’, please justify your answer, by referring to:c) The reasons why:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------d) Whether any other system is in place for ensuring the coverage of the costs of official controls:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.4. Are fees or charges collected according to Article 27 (2) of Regulation 882/2004(COMPULSORY COLLECTION OF A FEE)?(please tick the appropriate box)
Yes
No
If the answer is ‘No’, please justify your answer, by referring to:a) The reasons why:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------b) Whether any other system is in place for ensuring the coverage of the costs of official controls:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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1.5. Which CA is responsible for setting and collecting the fees/charges according toArticle 27 (2) of Regulation 882/2004, and at which level?
Level
Title of the Authority responsible for:FEE SETTINGFEE COLLECTION
Central
----------------------------------------------- ---------------------------------------------------------------------------------------------------------------
Regional ----------------------------------------------- ---------------------------------------------------------------------------------------------------------------Local
----------------------------------------------- ---------------------------------------------------------------------------------------------------------------
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1.6.
a) Which system is being applied for setting fees/charges (systems defined according toparagraph 4b of Article 27 of Regulation 882/2004)?
(please tick the appropriate box/es)Flat-rates (calculated on the basis of the costs borne by the CA)
Minimum rates (Annex IV & V, section B of Regulation 882/2004)b) Please specify the system of fees/charges applied by activity:(please tick the appropriate box)
ActivitySlaughter inspections (Annex IV, Section B, Chapter I )Cutting plants control (Annex IV, Section B, Chapter II)Game processing houses (Annex IV, Section B, Chapter III )Milk production (Annex IV, Section B, Chapter IV)Fishery products and aquaculture products (Annex IV, SectionB, Chapter V)Imported meat (Annex V, Section B, Chapter I)Imported fishery products (Annex V, Section B, Chapter I I)Meat products, poultry meat, wild game meat, rabbit meat,farmed game meat, by-products and feed of animal origin(Annex V, Section B, Chapter III)Transit through the community of goods and live animals(Annex V, Section B, Chapter IV)Imported live animals (Annex V, Section B, Chapter V)Directive 96/23 (official controls on residues)Other activities (pleasespecify):---------------------------------------------------------
Flat-rate
Minimumrate
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1.7.a)
Please specify the criteria (Annex VI of Regulation 882/2004) and the method thatis being applied to calculate the fees/charges:Criteria:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
b)
Method:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.8.
a) Are there cases where a fee below the minimum rate is being applied(according to Article 27(6) of Regulation 882/2004)?(please tick the appropriate box)
Yesb) Where such cases exist, please specify:Food or Feed or activityconcerned
No
Criteria applied for thereduction
Method applied for thereduction
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1.9.
a) Are the actual costs borne by the CA covered entirely by the fees/chargescollected?
(please tick the appropriate box)
Yes
No
b) If ‘No’, please indicate which percentage of the actual costs has been coveredby the fees collected, for each year over the past three years:
2005: %2006: %2007: %
-----------------------------------------------
1.10.
How is the revenue from the fees or charges collected pursuant to Article 27 ofRegulation 882/2004 used in your country?
(please tick the appropriate box)It is directly used by the CA for funding the controls covered byReg. 882/2004.
It is incorporated into the State's General Budget and only apercentage is used to cover the costs of the controls carried out.
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SECTION 2.
OPTIONS FOR THE FUTURE
2.1. Would your services be in favour of:A common fee or charge system based on minimum rates for acommon list of control activities carried out in Communityestablishments and at the time of import (“commonsystem”)?A system that leaves up to the MS the responsibility to fix theamounts of the fees or charges and the activities for which feesor charges should be collected (“subsidiaritysystem”)?
2.2.
What would your services considerdisadvantages/drawbacks of either system?
as
the
advantages/benefits,
or
“Commonsystem”:Advantages / Benefits------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Disadvantages / Drawbacks------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
“Subsidiaritysystem”:Advantages / Benefits------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Disadvantages / Drawbacks------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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2.3.
Would your services be in favour of extending to other sectors (than the onesspecified in Regulation 882/2004) the obligation to contribute to the financing ofofficial control activities?(please tick the appropriate box)
Yes
No
2.4.
What would your services consider as the advantages/benefits,disadvantages/drawbacks of extending the obligation to other sectors?
or
Advantages / Benefits------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Disadvantages / Drawbacks------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.5.
Which sectors would your services consider as the most appropriate for inclusionin an extended scope of Regulation 882/2004 and why?
Sector/s:------------------------------------------
Reason/s:------------------------------------------------------------------------------------
------------------------------------------
----------------------------------------------------------------------------------
------------------------------------------
----------------------------------------------------------------------------------
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2.6.
Do you have any further recommendations for the improvement of the system of
fees or charges for official controls?
(pleasetype your recommendations)
Recommendation N� 1
Recommendation N� 2
Recommendation N� 3
Thank you very much for your precious collaboration!
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Annex 3Competent authorities responsible for the various Official Controls (OCs) covered by the scope of this studyNotes: The information provided in the following Table is based on the latest FVO Reports and Country Profiles available.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOAustria--Ministry of Health and Women (BMGF);Austrian Agency for Health and Food Safety (AGES).--BMGFJoDepartment IV/B/5, responsible for supervising BIPs andcoordinating activities
Import controls
At Land level, the Provincial Governor (LH), with competenciesshared between:--the Food Inspectorates (controls on milk processing establishmentsand retail sector);the Provincial Vet Services ('Magistrat') (controls in meatestablishments and milk production holdings).FPS (Federal Public Service for Health, Food Chain Safety and theEnvironment) ;AFSCA (Federal Agency for the Safety of the Food Chain)
Customs Authorities of Ministry of Finances (BMF)
Belgium
--
----
AFSCA (Federal Agency for the Safety of the Food Chain).Customs and Excise Administration of the Federal Public Servicefor finance (Central Customs Service)11 Provincial Control Units (PCU) carry out the official controls,including import controlsFPS is indirectly involved since it is responsible for the policy,standards and requirements for all products occurring in the foodand feed chain.oThe Directorate-General for Animals, Plants and Foodstuffs isinvolved in food safety and feed policy making and legislation ;oThe Department of Control Policy (DG Control Policy) developsthe Import control program (i.e. risk analysis);oThe Department of Control (DG Control) elaborates the importcontrol plan for the points of entry.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOBulgaria--Ministry of Health (overall control of food establishments, OCs offood of non-animal origin);Ministry of Agriculture & Forestry (OCs for food of animal originat retail and catering sector)-
Import controlsBorder Veterinary Control Directorate (BVCD) of the NationalVeterinary Service (NVS) within Ministry of Agriculture andForestry.
Plus Border Veterinary Inspection Controls of regional veterinaryoffices, and BIPs.Co-operation between veterinary services and Customs in place.
Cyprus
-
Ministry of Agriculture, Natural Resources and Environment(MANRE).oThe Veterinary Public Health Division (VPHD), within theVeterinary Services (VS) is responsible for the processing andproduction level.
-
MANREoAnimal Health and Welfare Division (AHWD), within theVeterinary Services (VS).
-
At a local level, there are 5 District Veterinary Offices (DVO)
-
Ministry of HealthoThe Health Services (HS) are responsible for the retail level.
The BIPs function under direct instructions from the Imports and AnimalTrade Control Section (IATCS) within the AHWD.
At a regional level VPHD consists of 5 district veterinary offices(DVOs). Some DVOs have the rural veterinary offices.CzechRepublic--Ministry of Health (MH),Ministry of Agriculture (MA) and its supervisory body the CzechAgriculture and Food Inspection Authority (CAFIA).-Ministry of AgricultureoExport and import Division within the State VeterinaryAdministration of the Czech Republic (SVA-CR). It isresponsible for coordination and management of theimport/transit control system and BIPs, as well as for executionof import/transit controls. It also has the responsibility forsupervisory inspections/audits of the BIPs.-Customs within the Ministry of Finance are organised operationallyinto eight Regional Directorates and 54 operational offices, whocarry out Custom’s clearance and check at entry points.
The Czech Rep. has a clearly defined structure of CAs responsible forfood hygiene, with adequate vertical and horizontal communication.
The Municipal Veterinary Administration (MVA) for the city of Praguehas direct responsibility for the BIP Praha-Ruzyne.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAODenmark-DVFA (Danish Veterinary and Food Administration) under theMinistry of Food, Agriculture and Fishery (MFAF) is responsiblefor policy co-ordination. Within DVFA there are several divisionsresponsible for food hygiene (e.g. the Control Co-ordinationDivision and the Division for Microbiological Food Safety,Hygiene and Zoonoses Control).Three RVFA (Regional Veterinary and Food Administration) areresponsible for co-ordination and implementation of controls.They operate through Control and Enforcement Offices within theregions where they are located.-
Import controlsDVFA under the Ministry of Food, Agriculture and Fishery (MFAF)oThe International Trade Division is responsible for import of liveanimals and products of animal origin, the transposition of EUlegislation on imports into national law and the implementationin the different regions through training and supervision. Itsupervises 3 RVFA, which are responsible for checking productsof animal origin and live animals presented for BIP checks.-Customs Services within the Ministry of Taxation. They areorganised in five regional services and, within each region, into anumber of divisions.
-
The RVFA inspects all food premises as well as some premises in theprimary production sector.The Danish Plant Directorate (DPD) inspects the conditions in relationto hygiene on farms except for the use of medicine and risk ofintroduction of zoonoses.The Directorate of Fisheries (DF) inspects conditions in relation tohygiene on fishing vessels etc.EstoniaControl system for food of animal origin:--VFB (Veterinary and Food Board).The Consumer Protection Board of the Ministry of EconomicAffairs is responsible for labelling of foodstuffs and traceability ofbovine meat.
The role of the DVFA head office is to supervise BIP checks and toinstruct, liaise with and co-ordinate these services on BIP matters.At BIPs level, there are agreements with customs and regular meetingstake place.
-
Ministry of Agriculture:oFood and Veterinary Department is responsible fortransposition of legislation
-
VFB is the CA for veterinary checks of live animals and products ofanimal or non-animal origin at BIPsoTrade, Import and Export Department has administrative andsupervisory responsibility for all the BIPs.
The VFB prepares its annual inspection and sampling programme.Based on this, inspectors of the 15 CVCs (County Veterinary Centres)draw up their annual inspection and sampling plans.The frequency of inspection is based on risk categorisation of the foodestablishments.The 15 CVCs are responsible among other tasks, for supervision ofactivities of Authorised Veterinarians (AVs) at local level.
-
Customs are organised on a central and regional basis into 4Regional Customs Centres
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for general food hygiene:---The VFB of the Ministry of Agriculture has primary responsibility.The Office of retail, organic farming and food of non-animalorigin of the FD (Food Dept.) is the operational body.Approval of retail and catering establishments is the responsibilityof CVCs.
Import controls
The frequency of VFB inspections is based on risk categorization. Theminimum frequency of inspection is established in the annual plan.Retail and catering establishments are divided into three risk categories(high, medium and low).FinlandControl system for food of animal origin:-MAF (Ministry of Agriculture and Forestry) is responsible forlegislation on food of animal origin except at retail level, which iscompetence of MSAH (Ministry of Social Affair and Health).Evira (Finnish Food Safety Authority) is the central competentauthority for the control of the foodstuff of animal origin.Evira is in charge for registration and approval of large scaleslaughterhouses and integrated meat and fish establishments, whileall other types of establishments are approved by themunicipalities. Evira issues a National Food Control Programme(EVO) which provides guidance for the official control performedby the SPOs (State Provincial Offices) and MAs (MunicipalAuthorities). Based on this programme each MA produces its owncontrol plan.Evira (Finnish Food Safety Authority) is the CA, under the guidance ofMAF.-MAF is responsible for the transposition and implementation of theEU legislation and strategic planning (“Unit of Animal Health andWelfare” within the “Health and Food Department”)Evira (“Animal Health and Welfare Unit”, in the “Department offood and veterinary control”) is responsible for the import/transitcontrols of products of animal origin, live animals, including animalwelfare.Customs, within the Ministry of Finance, have a centralisedmanagement structure, and are organised operationally on five
-
-
-
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for general food hygiene:-MAF: DHF (Dept. of Food and Health) is responsible for thehygiene of the foodstuffs in primary production and food of animalorigin prior to retail level.MSAH is responsible for health protection and general hygiene offoodstuff.MTI (Ministry of Trade and Industry) ensures the health-relatedand quality aspects of processed food and protects consumerrights.
Import controlsregional services who manage the customs office which operates ineach region.
--
Veterinarians at local level are either employed or authorised to work asborder veterinaries by Evira.
The provincial governments through the 6 SPOs are responsible fordeveloping regional control, while at local level the municipalitiesconduct food control via the MFCA (Municipal Food ControlAuthorities).France(For fullstructure ofCAs refer toPart Two ofthis FinalReport)-Ministry of Agriculture and Fisheries, in particular GeneralDirectorate for Food Direction (DGAL) is the competent authority,with primary competence;Ministry of Economy (DGCCRF) is responsible on controls offood products (e.g. composition, labelling etc.);Ministry of Health (DGS) is responsible on fields related to publichealth and food safety.Agents of regional and departmental directorates (correspondent tothe country’s administrative division) carry out the operationalimplementation of controls.The 16 Bundesländer are CAs. The competence is thereforeregional and the fees setting responsibility is assigned to thedesignated CA/s of each Bundesländer.The Federal CA, the Ministry of Food, Agriculture and ConsumerProtection, oversees theBundesländers’implementation of law.-Ministry of Agriculture and Fisheries, in particular General Directoratefor Food Direction (DGAL) – Imports form third countries.
---
Germany(For fullstructure ofCAs refer toPart Two of
-
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOthis FinalReport)The responsibilities for food safety and for feed safety are clearlyseparated and lie with different authorities at different administrativelevels.Food and veterinary affairs are governed on either two or threeadministrative levels within the individualBundesländer.--At a land level, the Ministry in charge of food, feed and veterinaryaffairs is the highest ranking Competent Authority.At the intermediate land level, five Bundesländer (Bavaria, Baden-Württemberg, Hesse, North-Rhine Westphalia and Saxony) haveintermediate food and veterinary authorities responsible for thesurveillance and instruction of local authorities and thecoordination of tasks.At a local level, district or municipal authorities (in total there aresome 440 local authorities in Germany) are responsible toimplement the food and veterinary controls.
Import controls
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The responsibility for feed safety often lies with an authority atintermediate level (Regierungspräsidien) or at central level.GreeceOfficial Control Systems for Food Hygiene (Regulation 852/2004):According to Joint Ministerial Decision No 088/06, two CCAs aredesignated for the control of food and feed.- Hellenic Food Authority (EFET)- Ministry for Rural Development and FoodImplementation of food control through the regional services of EFETand the autonomous decentralised prefectural services:- the Veterinary Directorates for controls on foods of animal origin,- the Rural Development Directorates on food of plant origin.-The Ministry of Rural Development and Food (MRDF)oDGVS (Directorate General of Veterinary Services). BIPs areunder its direct responsibility and the veterinary staff isemployed by the MRDF as official veterinarians. DAH, DVAHco-ordinate on BIPs matters. DVAC (Dep. of VeterinaryAudits is responsible for auditing the BIPs)Customs authorities are part of the Ministry of Economy andFinance.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOCCA for VRCs (Directive 96/23):-Directorate of Veterinary Public Health (DVPH), which residesunder the DG for VS within the Ministry of Rural Developmentand Food (MRDF).-The Directorate of Animal Health and Animal Protection within theCAO of MARD is responsible for the implementation ofimport/transit controls in BIPs.The BIPs are administratively under the responsibility of theCounty Animal Health and Food Control Department within therelevant county AOCustoms authorities are under the direction and the supervision ofthe Ministry of Finance (MF), having an autonomic legal personalityand countrywide competence.
Import controls
Hungary
Control system for food of animal origin:-Dept. for Food Chain Safety, Animal and Plant Health in MARD(State Secretary for Agricultural Administration)
--CAO (Central Agricultural Office). The CAO-FFSD (CentralAgriculture Administration Office, Food and Feed SafetyDirectorate) has overall responsibility for food and qualitycontrols.
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Inspection tasks are delegated at regional level to 19 CountyDirectorates for Food Chain Safety and Animal Health (CountyDFCSAHs).County DFCSAHs prepare annual inspection plans. The inspectionfrequency is specified in a guide on standard operational procedures(SOP) issued by the CAO-FFSD.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for foodstuff and food hygiene:--Dept of Food Chain Safety, Animal and Plant Health in MARDand the CAO-FFSD is the CA.The Ministry of Health (MH) and the National Public Health andMedical Officers Service (NPHMOS) are responsible for controlson foodstuff intended for particular nutritional uses, and for otheractivities as indicated in Government decree 302/2005.The Ministry of Social Affairs and Labour (MSAL) and theHungarian Authority for Consumer Protection (HACP) are incharge for the controls on quality, labelling and other distributionrelated activities.-DAFF (Dept. of Agriculture, Fisheries and Food) is the CAresponsible for veterinary import controls of products of animalorigin and live animals (except for fish and fisheries, which areresponsibility of SFPA)The control of BIPs is performed under service contract to the FSAI.
Import controls
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Ireland
Control system for food of animal origin:-DAFF (Dept. of Agriculture, Fisheries and Food) and DoHC(Dept. of Health and Children) are responsible for food policy andlegislation with the support of FSAI (Food Safety Authority ofIreland), which has overall responsibility for the enforcement offood legislation in Ireland.DAFF, LA (Local Authorities) and HSE (Health ServiceExecutive) have administrative responsibility for grantingapprovals.
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Co-operation between the different bodies is ensured through a workinggroup on import controls, consisting of staff from FSAI, DAFF, SFPA,customs, VI from LA and representatives of HSE.Co-operation with customs at local level is frequent and informal.
The evaluation of establishments supervised by DAFF is carried out bya VI (Veterinary Inspectors) and RSVI (Regional SuperintendingVeterinary Inspector). The evaluation of establishments supervised byLA is carried out by a VI. On the basis of this evaluation FSAI issuesan approval number.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOControl system for foodstuffs and food hygiene (CP 2007):---The DoHC has a Food Unit responsible for most of the issuesrelated to food safety and hygiene.DAFF, HSE, SFPA and LA have responsibilities for controls intheir respective areas of competence.
Import controls
Italy(For fullstructure ofCAs refer toPart Two ofthis FinalReport)
FSAI co-ordinates official controls by means of SC (ServiceContracts) with each CA. CAs have to present the annual controlplan to FSAI which has to approve them.The CAs designated to carry out official controls within the scope ofArticle 4 of Regulation 882/2004 are:•Department for Veterinary Public Health, Nutrition and FoodSafety (DVPHNFS) within the Ministry of Health;•Local Offices of the DVPHNFS: 36 Border Inspection Posts(BIPs) and 17 Veterinary Offices for Compliance withCommunity Requirements (UVAC);•Regional Veterinary Services (RVS);•Local Health Units (AUSL) implement the controls at locallevel.The 19 regions and 2 autonomous provinces have responsibility withintheir territories for planning, co-ordination, guidance, authorisation,and verifications of controls.Institutional co-operation between the central authorities and theRegions takes place in the permanent forum of the State-RegionsConference.(For the full structure and for a detailed allocation of competencies,refer to part 2 of Report, Fig. 3-1 )
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The central government maintains the tasks and responsibilities overimport controls and international prophylaxis.The DVPHNFS is the CA for import/export controls on live animalsand food of animal origin, including international relations and theco-ordination of local offices.Controls on imported animals, food of animal origin, andfeedingstuffs are carried out at the 36 BIPs which report directly tothe Ministry of Health.
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(For the full structure and for a detailed allocation of competencies,refer to part 2 of Report, Fig. 3-2 )
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOLatviaOfficial control related to the safety of food of animal origin:-PVD (Food and Veterinary Service) within the Ministry ofAgriculture.-The official food control is regulated by two laws - Law on VeterinaryMedicine and Law in Supervisioning and Handling of Food.The PVD consists of a Central Office, 27 TSU (Territorial StructuralUnits), border inspection posts and laboratories.Within the PVD, the Food Control Dept. is responsible for the controlof meat and milk production areas.Official controls are carried out by FI (food inspectors) and SAV (stateauthorised veterinarians).-
Import controlsThe Veterinary and Food Department (VFD) is responsible for thetransposition of EU legislation, whereas the SBI is responsible forthe implementation of the legislation.The individual BIPs are under the responsibility of the SBI (SanitaryBorder Inspection), which is also responsible for the employmentand supervision of BIP staff
There is a central management structure, with a chain of command fromthe CCAs to those carrying out relevant tasks at BIP level
Lithuania
Official Control Systems for Food Hygiene (Regulation 852/2004):-State Food and Veterinary Service (SFVS), which accountsdirectly to the Prime Minister.
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The International Affairs Department within SFVS at central levelhas the responsibility for coordination and management of importcontrol system.SFVS at county level is responsible for the execution of importcontrolsThe BIPs are placed under the direct management of the countylevel of SFVSCustoms within the Ministry of Finance are organised operationallyinto five territorial offices which are responsible for the customsposts at the individual entry points.
Within the SFVS there are 11 departments, of which 3 are directlyrelated to food hygiene: Food dept.; Strategic Planning Dept.; Risk andQuality Management Dept.Control activities are carried out by 10 County and 5 City SFVS, whichreport directly to the central office, while 34 district SFVS report to theCounty Offices.The National Veterinary Laboratory is subordinated to the SFVS.
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Management of the BIPs is implemented by SFVS centrally andsupervisory inspections/audits of the BIPs are responsibility of Food andveterinary internal Audit Department of the SFVS.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOLuxembourgControl system for food of animal origin:-MH (Ministry of Health).---Customs and ExciseLNS (National Health Laboratory)
Import controlsINSA (Health Inspectorate) of Ministry of Health
The ASV (Veterinary Service Administration) is responsible for thecontrols. The DSP (Public Health Division) of ASV has specificresponsibilitiy, including the inspection of butchers' shops.An annual plan of official controls is drawn up by the CA. In additionto routine controls, follow-up inspections are carried out where asuspicion of non-compliance exists.Controls are carried out on a permanent basis in slaughterhouses whichhave continuous throughput, and during production in smallerslaughterhouses.Control system for foodstuff and food hygiene (CP 2007):-MH.
No regional or local authorities within the country.
DIS (Sanitary Inspection Division), ASV, ADA (Custom and ExciseAdministration), LNS (National Health Laboratory) and the Policeservice are all involved in carrying out official controls of foodstuffs.OSQCA (Organisation for the Safety and Quality of the Food Chain) isresponsible for co-ordinating the controls carried out by the differentservices.The distribution of responsibilities is not clearly defined in the currentFood Law, which dates from 1953.MaltaOfficial controls related to the safety of food of animal origin:-VAFD (Veterinary Affairs and Fisheries Division) within theMinistry for Rural Affairs and Environment.-VAFD (Veterinary Affairs and Fisheries Division) within theMinistry for Rural Affairs and Environment.oThe Director for Food Health and Veterinary Enforcement underthe Director General of Veterinary Regulation and FisheriesConservation and Control is responsible for supervision ofimport/transit controls of POAO and live animals and threeapproved BIPs are directly under his command.
The VAFD has two General Directorates, one for Administration andOperations and another for Veterinary Regulation and FisheriesConservation and Control.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOThe CA responsible for registered establishments is the Dept of PublicHealth (DPH).NetherlandsOfficial controls related to food of animal origin:-VWA (Food and Consumer Product Safety Authority), anindependent agency in the Ministry of Agriculture, Nature andFood Quality (LNV) and the delivery agency for the Ministry ofHealth, Welfare and Sports (VWS). It is responsible for the meatand milk sector and it is responsible for the official controls in themeat sector.--
Import controlsDepartment of Customs within the Ministry of FinanceSouth West Regional Department within the VWA.oImport DivisionoManagement division (responsible for daily planning of staffactivities)Centralised management structure, with a chain of command from theCCA to those carrying out relevant tasks.Tasks are not split geographically, according to the location of the BIPs,but rather according to the management of specific tasks in relation toimport controls which are allocated to different teams in the ImportDivision.Customs have also a centralised management structure and are organisedoperationally into four regional services.
The 3 main tasks of VWA are: supervision, risk assessment and riskcommunication. The control of establishments in the meat sector isdivided among 5 regional offices.
Control system for foodstuff and food hygiene :--VWAVWS.
VWA prepares tri-annual policy programmes which serve as a basis forannual inspection and sampling and risk categorisation.Inspection strategy is divided between small and larger businesses.Poland(For fullstructure ofCAs refer toPart Two ofthis FinalReport)Responsibility for the implementation of official controls, including feesetting, is assigned to the national administration at central level, butthe execution of control activities is assigned to the regional and locallevels.-State Plant Health and Seed Inspection Service (SPHSIS),represented:oAt national level by the Main Inspectorate of Plant Health and-The BIPs are under the responsibility of the VIPHSIs.
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOSeed InspectionoIn the regions (Voivoideships) by the regional inspectorates(VIPHSI). Each VIPHSI defines the financial needs of theirinspectorate.In Poland the CAs designated to carry out official controls (OCs)within the scope of Article 4 of Regulation 882/2004 are:•Veterinary Inspection (IW)•State Sanitary Inspection (PIS);•Agricultural and Food Quality Inspection (IJHARS);•Trade Inspection (IH).The Veterinary and Sanitary Inspections operate through Inspectoratesat central (Chief or Main Inspectorate), regional (VoivodshipInspectorates) and local (Poviat Inspectorates) level, corresponding toadministrative division of the country.Portugal--DG for Veterinary Issues (DGV) under the Ministry ofAgriculture, Rural Affairs and Fisheries (MADRP)Authority for Food and Economic Security (ASAE) under theMinistry of Economy and Innovation.-Import controls at BIPs are responsibility of DSVR, under thesupervision of central service of DGV (DSSPA, Dir. for AnimalHealth and Protection and DSHPV)Customs Authorities of MFAP (DGAIEC, Customs and ExciseGeneral Directorate)NSVFSAoBIPs Coordination Service within Directorate of Import,Export, Transit and Border Inspections Posts is responsiblefor the implementation of all import/transit related issuesincluding the supervision of BIPs and the employment ofBIP staff.Directorate of European Integration, responsible for thetransposition of EU legislation
Import controls
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Romania
Official controls related to food of animal origin:-NSVFSA (National Sanitary Veterinary and Food SafetyAuthority is the CCA for implementing food hygiene legislation.
There are 2 central directorates that are at the same level but managedby different Vice-Presidents:-The Inspection and Border Inspection Posts (BIP) CoordinationGeneral Directorate (IBIPCGD), which has an inspection role, andthe Hygieneo
Centralised management structure, with a chain of command from the
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAO-Veterinary Public Health Directorate (HVPHD), which isresponsible for approval of food establishments and zoonosiscontrol.
Import controlscentral CCA to those carrying out relevant tasks.
The CA has a vertical structure consisting in 42 CSVFSDs (CountySanitary Veterinary and Food Safety Directorates) and the circuit ofveterinarians (CVs).The competences are split between the CHVPHS (County Hygiene andVeterinary Public Health Service) and the CICS (County Inspectionand Control Service).The IBIPCGD prepares the annual National Framework InspectionProgramme (NFIP). Once approved it is sent to the CSVFSD, whichschedules its own inspection programme and submits it back to theIBIPCGD for approval.
Slovakia(For fullstructure ofCAs refer toPart Two ofthis FinalReport)
The CAs responsible for official food controls are as follows:••••••Ministry of Agriculture (MoA) and Ministry of Health (MH);Public Health Authority (PHA);Regional Health Authorities (RHA);State Veterinary and Food Administration (SVFA);Regional Veterinary and Food Administrations (RVFA); and,District Veterinary and Food Administrations (DVFA). TheMinistry of Agriculture and the Ministry of Health are jointlyassigned the responsibility at the central level; they coordinateand prepare the national plan of controls, and govern andsupervise the official controls.
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Ministry of Agriculture (MoA)oState Veterinary and Food Administration (SVFA), theDVCCTIE (Department for Veterinary Certifications andControls on Intra-Community Trade, Imports and Exports)manages and co-ordinates the activities of BIPs
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Ministry of Finance (MoF)oCustoms Authorities
Public Health Authority (PHA) and Regional Health Authorities(RHA) are responsible for official food controls regarding special foodcategories.The SVFA together with the RVFAs and DVFAs carry out official
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOcontrols over the production, handling and placement on the market ofspecific product categories; the regional and district authorities carryout much of the day to day monitoring and enforcement of thelegislation. The RVFAs are responsible for the verification of theperformance of the DVFAs and their official veterinarians. TheDVFAs are responsible for carrying out the official controls at allstages of the food chain.SloveniaOfficial controls related to food of animal origin (2006)*: The CAs fordrafting the legislation are:--the Ministry of Agriculture, Forestry and Food (responsible forfood of animal origin);the VURS (Veterinary Administration of the Republic ofSlovenia) (responsible for food of animal origin (...) and animalwelfare);the Ministry of Health (responsible for food of plant and mixedorigin.-VARS,oBIPs are under the responsibility of the “Border VeterinaryInspection Sector”-Customs Administration of the Republic of Slovenia under theministry of Finance
Import controls
Centralised management structure, with a chain of command from thecentral CCA to those carrying out relevant tasks.Customs have also a centralised management structure and are organisedoperationally in ten regional services, who manage the customs officewhich operate in each region.
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The CAs for official controls are:---the VURS (for control of production, storage and trade of food ofanimal origin);the IRSAFF (Inspectorate of the Rep of Slovenia for Agriculture,Forestry and Food) (for the control of labeling related to quality);the HIRS (Health Inspectorate of the Rep of Slo) (for control oflabelling (...) and control of potable water).
The VURS consists of a Main Office (with several sectors), 10Regional Officies (ROs) and 6 BIP.Within the VURS, the competences are shared among the sectors forPublic Health, Animal health and welfare, Internal veterinaryinspection and Quality assurance and internal control (QAIC).
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOSpainDecentralised.At central level responsible for the organisation and operation ofcontrol systems are:---Ministry of Agriculture (MAPA)Ministry of Health (MISACO).The 17 ACs (Autonomous Communities) and the two autonomouscities have the principal responsibility for the operation of controlsystems in Spain for food safety, animal health and animalwelfare. These are operated through regional Ministries(Conserjerias) of Agriculture and of Health. Each AC determinesthe organisation and structure of its services and, therefore, thesedo not necessarily mirror that of the national Ministries.The Spanish Food Safety Agency (AESA), established in 2002,has overall responsibility for the coordination of the activities ofother state bodies and the ACs. To ensure this, a number ofcoordination bodies have been set up. At the highest level, theInstitutional Committee is responsible for this coordination. Attechnical level, the Committee is supported by the TechnicalConsensus Group, within which a permanent group for theapplication of the hygiene Regulations has been set up.--MISACOoSub-Directorate General for Foreign Health, within theDirectorate General for Public health (SGSE)MAPAoSub-Directorate General for means of Livestock production(SGMPG)BIPs receive information directly or through the financial areas of SE(Foreign Health) and SA (Animal Health)---Customs AuthoritiesPort AuthoritiesAESA
Import controls
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FVO report notes the design of the system of official controls isgenerally not in line with EU requirements; the controls are not carriedout on a risk basis and not all factors laid down in Regulation882/2004, Article 3.1 have been considered in establishing thefrequency. Consequently, recommendations are made to the authoritiesto take corrective measures on all these points, "to ensure that in allACs official controls are carried out regularly, on a risk basis and withappropriate frequency, so as to achieve the objectives of Regulation882/2004 taking account of the factors laid down in Article 3".
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOSwedenOfficial controls related to food of animal origin: éThe CCA structure consists of :-6 regions under the responsibility of the National FoodAdministration's (NFA) Unit in charge of meat. In addition, theAnimal Welfare Agency (AWA) has been integrated into theSwedish Board of Agriculture.
Import controlsoNational Food Administration's (NFA): Food Control Departmentwith the subdivision Group for International Trade is responsiblefor BIP matters in relation to HC-products. At central level twoveterinarians and two administrators are responsible for BIPs. Atperipheral level the veterinarians of the BIPs belong to therespective municipalities, which are responsible for the BIP.oSwedish Board of Agriculture (SBA): the Animal ProductionDepartment with the subdivision Animal Division Control isresponsible for BIP matters in relation to NHC-products and liveanimals. At central level one veterinarian is responsible for BIPs.The District Veterinarian Department oversees Districtveterinarians which include those working for the BIPs. Atregional level there are 21 County Board Veterinary Divisions whohave the general responsibility for the BIPs, but not directlyresponsible for the supervision of the BIPs under central Authorityresponsibility.The veterinary inspectors of the BIPs are contracted by the relevant twoAuthorities.
A Food Act and Food Decree came into force on 01/07/2006, moving asignificant increase of the powers of the Municipalities to the centralauthorities.NFA has developed a risk-based approach for the official controls. Theused criteria are: the type of activity, the quantities produced, thecategories of consumers and the reliability if the FBO. This lead to afinal classification of each establishment on which depends theattribution of hours for supervision (min 1 to max 128 per year). Initialsteps have been taken in order to develop an Audit System inaccordance with Reg.882/2004, but so far nothing has been put intopractice.The Swedish Board of Agriculture (SBA) acts as the Single Authorityresponsible for these controls, within the meaning of Article 1(4) ofDirective 2000/29/EC. A new organisational scheme has been in placesince 1 January 2007.UK(For fullstructure ofCAs refer toPart Two ofthis FinalReport)The responsibility for official food and feed controls in England andWales is assigned centrally, the administration of responsibility isdivided between central and local government.The central authorities are the Food Standards Agency (FSA) and theDepartment for the Environment, Food and Rural Affairs (DEFRA)(and its delivery partners or executive agencies) and equivalentdepartments in the devolved administrations in Scotland, Wales andNorthern Ireland.
The responsibility of developing policies and to draw up guidance andinstruction for control staff lies with:oDEFRA: International Animal Health DivisionoFSA: Imported Food BranchAnd the respective devolved administrations in Scotland and NorthernIreland.Responsibilities for carrying out inspections of facilities and procedures
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CAs responsible for official controls (Reg.882/2004)Food hygiene controls POAOLocal authorities carry out much of the day to day monitoring andenforcement of feed and food law.The Single Authority (CA) is DEFRA, Plant Health Division. Theofficial body carrying out the inspections is the Plant Health and SeedsInspectorate (PHSI).From 1 April 2009, the SA will become part of a new governmentagency which should bring more autonomy over staffing levels,which will be governed by the need to operate within theconstraints of full cost recovery from the trade.at BIPs lies with the SVS.Import controls at BIPs receiving products for human consumption arethe responsibility of the Environmental Health Department of therelevant Local Authority. Import controls at BIPs receiving NHCproducts and live animals are under the responsibility of the SVS. InNorthern Ireland DARD and the Relevant Local Authorities haveresponsibility for import controls.
Import controls
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