S/C/N/720  
 
13 February 2014  
(14-0895)  Page: 1/2  
Council for Trade in Services  Original: English  
 
NOTIFICATION PURSUANT TO ARTICLE III:3 
OF THE GENERAL AGREEMENT 
ON TRADE IN SERVICES 
The following notification, dated 12 February 2014, from the delegation of the European Union, is 
being circulated to the Members of the Council for Trade in Services.  
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  The following notification is made pursuant to GATS Article III:3 and relates to measures adopted 
by the European Union in 2012. Given that th ere is no common understanding among WTO 
Members on when a measure "significantly affects trade in services" within the meaning of GATS Article III:3 and that the European Union cannot make a positive determination on this issue, it is 
therefore notifying measures that may be relevant to trade in services without prejudice to the 
interpretation of the phrase "significantly affect trade in services" in Article III:3.   
1  MEMBER NOTIFYING 
EU 
 2  NOTIFICATION UNDER ARTICLE 
Article III, paragraph 3 of the General Agreement on Trade in Services. 
 3  DATE OF ENTRY INTO FORCE 
30 December 2013 
 
4  AGENCY RESPONSIBLE FOR ENFORCEMENT OF THE MEASURE 
Member States of the EU 
 5  DESCRIPTION OF THE MEASURE 
a. Full title of the EU act:  
Regulation No 1257/2013 of the Eu ropean Parliament and of the Council of 20 November 2013 on 
ship recycling and amending Regulation (E C) No 1013/2006 and Directive 2009/16/EC 
 
b. Brief summary of the content with a focus on potential effect on services trade: 
As most large vessels contain hazardous materials such as asbestos, PCBs, TBT, and CFCs, their 
export to non-OECD countries for recycling has been prohibited under the EU Waste Shipment 
Regulation (WSR), the adaptation of the Basel In ternational Convention and its Ban amendment in 
the EU. However, economic incentives, the high mobility of ships and insufficient recycling capacity in the OECD have led to most of the recycling to take place in Asia, often in substandard conditions.  
 
EU Member States and companies play a major role in international shipping (17% of the international merchant fleet tonnage is flying EU flags and about 40% of the tonnage belongs to EU 
owners). In March 2012, EU Commissioners Poto čnik and Kallas presented a proposal for a new S/C/N/720 
 
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  Regulation on Ship Recycling (SRR), based on the Hong Kong Convention (HKC), to address the 
recycling of ships flying EU flags. Following political agreement between the European Parliament and the Council of the European Union, the final text was adopted in autumn 2013 and has entered into force on 30 December 2013.  
 
Large commercial ships subject to the SRR (i.e. ships of more than 500 Gross tonnage and flying the flag of an EU Member State) will be excluded from the scope of the WSR. This means that such ships 
will be allowed to be recycled outside the OECD as from the date of full application of the Regulation 
or from 31 December 2014 upon a case-by-case decision by the EU Member States.  The SRR includes all the requirements found in the HKC and sets a date of application for each of 
them. This is notably the case for Inventories of Hazardous Materials (IHM), which ships will have to 
carry according to their status, in a staged timeline (as from 31 December 2020 for ships flying the flag of a 3rd country and calling at an EU port or anchorage). The IHM, maintained throughout the 
ship's life, will facilitate the recycling of the ship when it reaches its end-of-life stage, but also enable 
protecting the EU marine environment from pollution caused by ships calling at EU ports or anchorages. Prior to recycling, details of additional hazards in stores and wastes will have to be 
added to the inventory, and the document can then be used to help the recycling yard formulate a 
safer and more environmentally sound plan for decommissioning the ship.   The Regulation also includes additional environmental and safety requirements related to recycling 
facilities. Under the SRR, ships flying EU flags can only be recycled in a facility listed on the EU List of 
ship recycling facilities. This List will consist of both facilities located in the EU and authorised by the EU Member States and facilities located outside the EU, whose application to the List will be reviewed 
by the European Commission. Listed facilities will not only have to fulfil the requirements of the HKC, 
but will also need to operate from built structures, demonstrate the control of any leakage in particular in intertidal zones and handle hazardous materials and waste only on impermeable floors 
with effective drainage systems. 
 Verification of the facilities' credentials will rest with the EU Member States' competent authorities for facilities located in the EU and with independent verifiers in the case of facilities located outside the 
EU. The latter accepts the possibility to being subject to site inspections by the European 
Commission or agents acting on its behalf in cooperation with the competent authorities of the third country where the ship recycling facility is located. 
 
6  MEMBERS SPECIFICALLY AFFECTED, IF ANY 
None 
 
7  TEXT AVAILABLE FROM 
EU Official Journal, available on line at:  
http://eur-lex.europa.eu/LexUriServ/LexUri Serv.do?uri=OJ:L:2013:330:0001:0020:EN:PDF  
 
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