. /.   WORLD TRADE  
ORGANIZATION  G/TRIMS/W/46 
31 March 2006 
 (06-1474) 
Committee on Trade-Related Investment Measures 
 Original:   English 
 
 
COMMUNICATION FROM THE UNITED STATES 
 
 
 The following communication, dated 29 March 2006, is being circulated at the request of the Delegation of the United States. 
 
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QUESTIONS FOR THE EUROPEAN  COMMUNITIES ON POLAND’S 
IMPLEMENTATION OF COU NCIL REGULATION 1257/1999 
 
 
I. BACKGROUND 
 Poland has promulgated a regulation for the disbursement of funds from the European 
Agriculture Guidance and Guarante e Fund (EAGGF) to assist the financing of certain investments in 
the food-processing industry.  Pursuant to this re gulation, investments in the food-processing industry 
in Poland are not eligible to receive EAGGF funds  if they purchase or use any amount of products 
originating from outside the EU.  Thus, the Polish regulation apparently conditions the receipt of 
EAGGF funds on what seems to be a domestic purchase or use requirement.  Poland has stated that the regulation is necessary to implement EU law,  including Council Regula tion 1257/1999.  (Article 
28.1 of Regulation 1257/1999, which establishes th e EC’s regime for the disbursement of EAGGF 
funds, provides, inter alia , that "[t]he following types of investment shall be excluded from support:   
. . . investment in the processing or mark eting of products from third countries." 
 
II. QUESTIONS FOR THE EUROPEAN COMMUNITIES 
1. Please explain whether Council Regulation 1257/ 1999 (or any other EC measures) requires 
Member States to condition the granting of EAGG F funds to investments in the food-processing 
industry on a commitment by those investments to:  (1) only use products from within the EU; or (2) 
not import products for use in their investments from outside the EU. 
2. Please explain whether Council Regulation 1257/199 9 establishes eligibility requirements for 
EU investment aids other than the EAGGF that are directed toward agriculture.  If so, please identify 
all such EU investment aids. 
3. Please identify and provide copies of all EC measures interpreting, implementing, 
superseding, and/or amending Council Regulation 1257/1999. 
4. Please provide a copy of all guidance issued to Member States regarding the implementation 
of Council Regulation 1257/1999 (and all other EC me asures, if any, identified in your response to 
Question No. 1). G/TRIMS/W/46 
Page 2  
 
  5. Have other member States adopted measures imposing conditions on the granting of EAGGF 
funds similar to the regulation adopted by Poland?  If so, please describe (and provide a copy of) all 
such measures. 
6. It appears that Poland’s regulation conditions the receipt of an "advantage" – EAGGF funds – 
on "the purchase or use by an enterprise of products  of domestic origin or from any domestic source," 
under paragraph 1(a) of the Annex to the TRIMs Agreement.  In this light, please explain how 
Poland’s regulation is cons istent with Article 2.1 of the TRIMs Agreement. 
7. In addition, it appears that Poland’s regula tion conditions the receipt of an "advantage" – 
EAGGF funds - on "the importation by an enterpri se of products used in or related to its local 
production," under paragraph 2(a) of  that Annex.   In this light, please explain how Poland’s 
regulation is consistent with Artic le 2.1 of the TRIMs Agreement. 
8. Please explain how Poland’s regulation is cons istent with Article 3.1(b) of the SCM 
Agreement and Articles III:4 and XI:1 of the GATT 1994. 
9. Please confirm that Council Regulation 1698/2005,  which will enter into force January 1, 
2007, does not 
require Member States to condition the granting of EAGGF funds to investments in the 
food-processing industry on a commitment by those investments to:  (1) only use products from 
within the EU; or (2) not import products for use in their investments from outside the EU.  To the 
extent Poland has relied on Council Regulation 1257/1999, what steps has the EC taken to ensure that 
Poland repeals its regulation? 
10. Did Poland consult with the European Commiss ion prior to adopting this regulation to 
implement Regulation 1257/1999?  If so, please d escribe and provide copies of all guidance that 
Poland received from the European Commissi on with respect to the regulation. 
11. What steps, if any, has Poland taken to repeal  its regulation, in light of Council Regulation 
1698/2005? 
12. The Polish regulation allows investments in th e processing of fruits and vegetables to obtain 
for use in such processing up to 30 percent of thei r products from outside the EU and still qualify for 
the EAGGF funds.  How does this exception for fru it and vegetable processing relate to the total 
prohibition on the use of all other products from out side the EU?  Was it discussed with the EU?  Are 
there any other such exemptions? 
 
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