Estonia, one of the EU's newest members, may be fined for keeping too much sugar in storage, an official said Monday.

"The excess of sugar may be around 40.000 tons, but we cannot specify the exact amount," Kalle Nolvak, a chief specialist at the Baltic country's bureau of trade at the agriculture ministry told AFP.

Estonia and the other 10 countries which joined the EU on May 1 had to present a report by July 31 detailing its sugar stocks.

The EU decided to keep checks on sugar stocks and fine countries holding big surpluses to prevent companies stocking up on, and then selling subsidied sugar that was imported from the EU before the accession.

"It is probable that we may face some kind of fine, but it depends upon how much of our explanation is taken into consideration," Nolvak said.

The European Union executive commission will finalise the size of the excess sugar reserves by October 31. Then, unless the excess sugar is withdrawn from circulation by May 1 2005 a tax must be imposed on it.

If a country fails to do so, it faces a fine equal to the highest level of the export subsidy.

The Estonian press has suggested that Estonia may face fines up to 31 billion euros.

In 2002, Estonia imported around 65.000 tons of sugar, in 2003 it increased up to 101.000 tons.