The Commission said that the new system respects the judgment of the European Court of Justice - which in July ruled the previous system to be discriminatory - and also meets the concerns raised by New Zealand.
The new regime, which was drawn up following lengthy consultations with Wellington, will attribute 55 per cent of import licences to traditional importers of New Zealand butter and 45 per cent to newcomers.
It will be proposed to the Council to reduce the in-quota tariff by 19.43 per cent and to modify slightly the butterfat specifications. In a case brought by a German dairy company, the European Court in July ruled the existing arrangements discriminatory, as import licences for New Zealand butter were only issued to subsidiaries of the Fonterra company, which enjoys an export monopoly in New Zealand.
"I am extremely pleased with this outcome, which respects the Court's ruling and takes account of the issues raised both by New Zealand and European dairy companies," said Mariann Fischer Boel, commissioner for agriculture and rural development.
"It was important to find a solution before the end of the year to allow trade to continue to flow smoothly. I'd like to thank the New Zealanders for their constructive attitude throughout."
From 2007, import licences for the New Zealand butter quota of 77,402 tonnes will be divided up between traditional importers and newcomers. For 2007, importers will be regarded as 'traditional' based on their imports during 2006.
From 2008 onwards, the reference period will be the preceding 24 months.
It will be proposed that the tariff for New Zealand butter imported under the quota will be reduced to €70 per 100 kg from the current rate of €86.88 per 100 kg, a reduction of 19.43 per cent. A change in the butterfat standard from 80/82 percent to 80/85 per cent, with a 3.5 per cent reduction in the quota to take account of the higher levels of fat (to 74,693 tonnes) will be proposed.
Traders applying for an import licence will have to lodge a security of €35 per 100 kilograms.
The proposed change in the tariff and the butterfat standard must be approved by the Council, while the other proposals will be adopted by the Commission after being put to the management committee for milk and dairy products. The specific butter quota for New Zealand dates back to the United Kingdom's accession to the then European Economic Community in 1973.