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The Product Board MVO is a corporate institution. This means that the product board deploys activities which are both in the interest of the oils and fats companies and in the public interest. MVO is fully financed by the companies in the oils and fats production and distribution chain and is governed by employers and employees. Together the two latter decide which items have to be considered the main priorities and which activities the product board has to deploy.
The Product Board MVO is financed through levies on the import and production of oilseeds, oils and fats. The height of the levies is decided upon each year by the Board of Governance. As from 1 January 2010 the tariff has been fixed at € 0,40 per 1000 kg. For oilseeds, spreadable fat products and emulsified sauces the levy is fixed according to the oil or fat content. These decisions are laid down in publicly announced MVO Regulations.
Financial reserves volume and investment policy
According to the balance sheet on 31st December 2010 the product board's equity was about 1.0 million euros. This equity is meant to cover for eventual exploitation shortages of the product board. For the last years, financial policy has been aimed at gradually reducing the product board's equity to a target equity level of around 1 million euros. For the coming years the aim is to structurally more or less balance revenues and costs and therefore have a budget which is in a situation of equilibrium.
In its meeting of 11th November 2010 the board has fixed the principles and targets of equity and investment policy by means of a regulation. The full text of the 'Regulation Investment Policy Product Board MVO' (in Dutch) can be found here.
The Juridical framework of the administrative levies of the Product Board you can find below.
More information about these and other MVO Regulations can be found here.
If you have any questions concerning the financing of the product board, please contact Theo Vrancken, tel. +00.31.70.3195156, or mail to vrancken@mvo.nl.
Juridical framework of the administrative levies of the Product Board for Margarine, Fats and Oils (MVO)
1. Decision of Institution for the Product Board for Margarine, Fats and Oils
The Law for the Institution of the Product Board for Margarine, Fats and Oils entered into force in 1954. Due to a modification of the Sector Organization Law in 1994 this law was replaced by a SER Regulation for the Institution of MVO. A new change in the Sector Organization Law made it necessary, in June 2003, to establish the product board once again, this time by means of a ministerial Decision of Institution for the Product Board for Margarine, Fats and Oils.
Each successive change has been carried out one-to-one, which means that changes have only been applied to secure the text's conformity with the new legislation. Since the laws and decisions of institution have not been altered when it comes to their content, the advices of the Socio-Economic Council (SER) given in the past keep their explanatory value.
In the SER advices elaborate explanations are provided concerning the position of companies which produce or process fats and oils, the position of trading companies and the products which have a so-called technical destination and which come under the competence of the product board.
The Product Board has been established (article 3 of the Decision of Institution) for companies where:
- Fats and oils are prepared or processed;
- Fats and oils are processed in becoming products which may serve as food for human beings, eventually after their further processing;
- Trade activities are carried out concerning:
- copra or oilseeds or oil fruits that are grown abroad, with the exception of peanuts intended for direct consumption and cocoa beans;
- fats or oils, with the exception of crude (non processed) animal fats, or products derived from these oils and fats, which may or may not, after further processing, serve as food for human beings.
The production and distribution chain for which the product board has been installed, comprises three main groups of companies, i.e.
- Companies where fats or oils of vegetable or animal origin are prepared or processed;
- Companies where these fats or oils are further processed;
- Trading companies.
In the explanatory paper it is specified that, in accordance with common day language, 'trade' is meant to indicate trading activities in any form whatsoever, like import and export, homeland wholesale trade, wholesale business and retail.
The group 'Companies where fats or oils of vegetable or animal origin are prepared or processed' comprises the oil factories (crushers), companies which process crude animal fats into processed fats and the rendering business. Furthermore, you will find here the companies where oils and fats are processed, specifically refined, hardened or separated.
In the category 'Companies where these fats or oils are further processed' you may only find companies which bring forth products which may serve as food fit for human consumption. The words 'eventually after their further processing' have been put in to indicate that also intermediary processing companies belong to this category.
Trading companies which come under the competence of the product board, may be divided in three groups:
In the first group you will find companies that trade in vegetable raw materials for the production of oils and fats, which are cultivated abroad: copra, oilseeds, kernels, beans and nuts.
The second group comprises companies that trade in oils and fats. Trading both in products like linseed oil, bone fat and fatty acids and in other vegetable and animal fats and oils can be found here. It makes no difference in what phase of production or processing the fats and oils are, nor for which use they are intended.
In the third group one will find traders in products which are derived from oils and fats, in so far as these products - eventually after further processing - may serve as food for human beings, like for instance margarine.
Product board's competence
According to article 126 of the Sector Organization Law public institutions, like the product board, may - by means of regulation - impose levies upon the companies on behalf of which they have been installed. In the Decision of Institution (see art. 1 of the Decision of Institution's alteration of 19 December 2003) it is stated that the product board's Board of Governance has the competence to decide on the basis for the imposition of these levies. The Board of Governance has chosen a levy system according to which a levy must be paid over every 1.000 kilogram of imported or in-land produced product. Tariffs for certain oilseeds, spreadable fat products, mayonnaise and other sauces are derived from the general tariff of this levy (based upon the fat content of these products).
The imposition of the so-called administrative levy is based upon the reports which the product board receives by virtue of either the MVO Regulation 2009, Data procurement intra and extra trade, or the MVO Regulation 2009, General provisions.
The actual imposition of the administrative levies is based upon the MVO Regulation Administrative levy 2009.
2. MVO regulation 2009, General provisions and MVO Regulation 2009, Data procurement intra and extra trade
The duty to inform which the product board imposes on companies, can be found in the MVO Regulation Data procurement intra and extra trade and the MVO Regulation 2009 General provisions.
Companies on behalf of which the product board has been installed, have a legal obligation to apply certain administrative systems (company reports) and/or to provide accurate data about the import and export of the products mentioned in the MVO Regulation Data procurement intra and extra trade.
All persons and corporate bodies, i.e. not only the companies on behalf of which the product board was established, who or which import and/or export the mentioned products, are bound by the provisions of these regulations. The duty to inform is applies to all other persons and corporate bodies, in so far as they carry out activities which may be considered normal company activities in the companies for which the product board has been established (art. 2, sub 2 of the MVO Regulation 2009 General provisions and art. 3 of the MVO Regulation 2009 Data procurement intra and extra trade).
Practical application
In situations of trading with third countries this duty to provide data is fulfilled by means of the data on import and export declarations which are received from customs. If no declaration of imports or exports are received through the customs system, according to the regulation a written statement to the product board must be handed over in a way which will be determined by the product board's president.
In regard to the import and export declarations concerning trade within the European Union the choice has been made for a system in which companies may appoint the product board as a legal intermediary organization in the procedure in which they provide (obligatory) Intrastat data to the Central Bureau for Statistics (CBS). In this way the administrative burden for the companies is restricted to a minimum.
The Product Board MVO has signed an agreement of cooperation with the CBS. Therefore, the product board acts as an intermediary organization for the monthly company data declarations to the CBS, can function as the company's first contact in these matters when questions arise, and carries out control in relation to the companies' response. In some cases companies have chosen not to appoint the product board as an intermediary organization and, consequently, to send the product board a copy of their CBS declaration.
The duty to declare has been imposed upon all companies which are in the Netherlands responsible for the movements of products.
Application of disciplinary law
If the regulations as mentioned above are violated, like in a situation of non procurement of data, companies face disciplinary sanctions. The non obedience to the mentioned obligations is a disciplinary offence. The HPA Regulation Disciplinary law application 2003 is applicable to the above-mentioned MVO regulations and the disciplinary court which is mentioned in this HPA Regulation is the disciplinary court which is competent in case of transgression of the MVO regulations.
Both the concerned party and the product board's president may appeal a judgment of this disciplinary court at the Appeal Court for trade and industry, within six weeks of the verdict.
3. The imposing of administrative levies
The imposing of administrative levies is based upon the MVO Regulation Administrative levy. The tariff level for this levy is laid down every year by the Board of Governance by means of an MVO regulation (see the MVO Regulation Administrative levies 2009).
When importing or producing MVO products a levy is imposed of €0.40 per 1.000 kilogram. For a number of oilseeds and spreadable fat products, mayonnaise and sauces derived tariffs have been laid down (based upon the products' fat content).
Decisive for the scope of the regulation is the date on which customs accept a cargo (in case of extra trade) resp. the month of reporting (in case of intra EU trade). In the latter case the product board sticks to the provisions of the European Intrastat regulation. Levies are not charged if the total amount of imported and/or produced products within a calendar month results in an amount due (in levy) which is less than €50.
If the received data show, that they do not coincide with the real situation (read: if the data are absent), the product board's president may impose a (provisionary) levy, for reasons to avoid a situation of unfair competition towards companies which do provide data on a regular basis and which do regularly pay their levies.
Companies may, until six weeks after the date of invoice, send in a motivated appeal against an invoice for administrative levy which they have received from the product board. This option is also mentioned on the invoices. The appeal will be dismissed at all times if the mentioned term is not respected. This term stems from public ruling and cannot be extended by the product board 'for accommodating reasons'. Sending in an appeal does not mean that the duty to pay is suspended.
When the six weeks term has ended, the product board has the right of immediate foreclosure, which means that it may impose a warrant without intervention of a judge.
A company may contest a negative decision on its appeal by the product board with the Appeal Court for trade and industry.
Rijswijk, October 2010
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