Export refund scheme branded too ‘unwieldy’

Date: 03/04/03

By David Cronin

EU GOVERNMENTS have been urged to consider scrapping a key element of the €3.4 billion-per-year 'export refund' scheme under which farmers are compensated for the differences between prices within the Union and those on world markets.

The recommendation comes from the EU's Court of Auditors. According to the Luxembourg-based financial watchdog, the 'prefinancing' provisions of the scheme have led to an "overly complex and unwieldy system".

First introduced in 1969, prefinancing enables an advance payment to be made to an exporter up to 240 days before his or her goods are transported abroad.

About 11 of all the EU's export refund payments are made under prefinancing, with 96 of those going to beef, pork and cereals producers.

A study by the auditors has found that the surrounding rules have proved difficult to enforce.

The French authorities have decided, for example, that prefinanced grain and flour should be stored separately to that which is covered by other customs regimes.

This has placed prohibitive costs on exporters and even put the prefinancing on hold in some cases.

The auditors also state that the last in-depth review of prefinancing was conducted by the European Commission in 1997.

This reviewed inadequacies in the checks carried out by member state auditors and as a result the EU's executive decided to claw back more than €166 million from national coffers.

But it did not follow up this move by analysing how the relevant procedures could be improved.

Replying to the auditors, the Commission said it shares the opinion that a fresh review is necessary.

EU governments have been urged to consider scrapping a key element of the €3.4 billion-per-year 'export refund' scheme under which farmers are compensated for the differences between prices within the European Union and those on world markets.