WORLD TRADE  
ORGANIZATION  G/MA/192 
25 September 2006 
 (06-4568) 
Committee on Market Access Original:   English 
                  French/                   Spanish 
 
  
AGREEMENT ON DUTY-FREE TREATMENT OF  
MULTI-CHIP INTEGRATED CIRCUITS (MCPS) 
 
Communication from the European Communities
 
 
 The following communication, dated 18 Septembe r 2006, is being distributed at the request of 
the Delegation of the European Communities. 
_______________ 
 
 Please find attached Council Decision of 21 December 2005 on the conclusion, on behalf of 
the European Community, of the Agreement on Duty-Free Treatment of Multi-Chip Integrated 
Circuits (MCPs). You will also find attached th e text of the Agreement and the Council Regulation 
implementing it. 
 This Agreement has been concluded among th e EC, the US, Japan, Korea and the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu, i.e. the Members of the 
Governments/Authorities meeting on Semiconductors (GAMs) and reduces to zero the rate of all 
customs duties and other duties and charges applied by the Parties to MCPs. The EC has implemented 
the Agreement by adopting the Council Regula tion (EC) N° 486/2006 of 20 March 2006, published 
on the Official Journal on 25 March 2006. 
 The General Secretariat of the Council of the European Union as the depository of the 
Agreement has received the instruments of accep tance from the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu on 4 January 2006,  the USA on 23 January 2006, the Republic of 
Korea on 27 January 2006 and Japan on 24 May 2006. G/MA/192 
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  L 349/24   Official Journal of the European Union   31.12.2005
 
 
II 
(Acts whose publication is not obligatory) 
 
COUNCIL 
 
Council Decision 
of 21 December 2005 
 
on the conclusion, on behalf of the European Community, of the Agreement on Duty-Free 
Treatment of Multi-Chip Integrated Circuits (MCPs) 
 
(Text with EEA relevance) 
(2005/964/EC) 
 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular Article 133 in 
conjunction with the first sentence of the first 
subparagraph of Article 300(2) thereof,   
Having regard to the proposal from the Commission
1. 
 Whereas: 
 
(1) Multi-chip Integrated Circuits (MCPs) are a 
new form of semiconductors which did not 
exist at the time of negotiation of the WTO Information Technology Agreement.  Had 
they existed at the time, they would have 
probably been included at  zero tariff level.  
Trade in this important technology should be 
facilitated. 
(2) The Commission has negotiated on behalf of 
the Community an Agreement on Duty-Free 
Treatment of Multi-chip Integrated Circuits 
(MCPs) (hereinafter referred to as "the Agreement"), within the framework of the 
Government/Authorities Meeting on 
Semiconductors (GAMS). 
(3) The Agreement elimin ates applied duties and 
charges on MCPs, whilst leaving the WTO 
bound rates unchanged. 
(4) The Agreement has been authenticated by the 
Secretary General of the Council of the 
European Union as depository on 28 
November 2005. 
(5) The Agreement should be concluded on 
behalf of the Community. 
(6) Paragraph 7(a) of the Agreement provides 
that after the depositary receives four   instruments of acceptance, those accepting 
Parties shall agree on a date of entry into force of the Agreement.  It is appropriate to 
authorize the Commission,  as representative 
of the Community in GAMS, to agree on a date in that regard with the other Parties to 
the Agreement. 
 HAD DECIDED AS FOLLOWS: 
 
Article 1  
The Agreement on Duty-Free Treatment of Multi-chip 
Integrated Circuits (MCPs) is hereby concluded on behalf of the Community. 
 
The text of the Agreement is attached to this Decision 
 
Article 2  
 The Commission is authorized to agree with the other 
Parties to the Agreement on a date of entry into force.  
This date will be published in the Official Journal of 
the European Union . 
 
Article 3  
 
The President of the Council is hereby authorized to 
designate the person(s) empowered to deposit on behalf of the Community, the instrument of 
acceptance of the agreem ent in accordance with 
paragraph 7(b) thereof. 
 
Done at Brussels, 21 December 2005. 
 
 
For the Council 
The President 
B.  BRADSHAW 
                                                      
1 Not yet published in the Official Journal.  G/MA/192 
 Page 3 
 
 
  L 349/25   Official Journal of the European Union   31.12.2005  
 
AGREEMENT 
 
on Duty-Free Treatment of Multi-Chip Integrated Circuits (MCPs) 
 
Recalling that there exists a shared view on the duty-free treatment of MCPs among the Members of 
the Government/Authorities Meeting on Semic onductors (GAMS), which are the European 
Community represented in GAMS through the European  Commission;  Japan; the Republic of Korea; 
the United States of America; and the Separate Cu stoms Territory of Taiwan, Penghu, Kinmen and 
Matsu, those GAMS Members have agreed as follows: 
 1. For purposes of this Agreement:  (a) multi-chip integrated circuits (MCPs) means multi-chip integrated circuits consisting of two 
or more interconnected monolithic integrated ci rcuits combined to all intents and purposes 
indivisibly, whether or not on one or more insu lating substrates, with or without lead frames, 
but with no other active or passive circuit elements; 
 (b) Harmonised System means the Harmonised Commodity Description and Coding System set 
out in the Annex to the International Conve ntion of the Harmonised Commodity Description 
and Coding System, as may be amended, and as adopted and implemented by the Parties in 
their respective internal laws and regulations; 
 (c) Party means a GAMS Member or any Member of the World Trade Organization (WTO) that 
has deposited its instrument of acceptance with the depositary; and  
 
(d) terms used in this Agreement that are also used in the Marrakech Agreement Establishing the 
World Trade Organization (the WTO Agreement)  shall have the same meaning as in the 
WTO Agreement. 
 2. This Agreement shall apply to all MCPs, regardless of where such products are classified in 
the Harmonized System 
 3. Each Party shall, on a most-favoured-nation basi s, reduce to zero the rate of all customs duties 
and other duties and charges, as such duties and char ges are described in Article II:1(b) of the General 
Agreement on Tariffs and Trade 1994 (GATT 1994), that  is applies to MCPs, in accordance with the 
following procedures: 
 (a) Each Party shall apply duties and charges on MCPs at a rate of zero until all the Parties agree 
that a sufficient level of global trade in MC Ps is covered in a multilateral tariff reduction 
agreement under the auspices of the WTO. 
 
(b) At that time, or, if that time is before 31 December 2006, on 1 January 2007, each Party shall 
bind all duties and charges on MCPs at a rate of zero. 
 (c) All the parties agree to cooperate with ot her Members of the WTO to achieve 90 percent 
coverage of global trade in MCPs in  such a tariff reduction agreement. 
 G/MA/192 
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  L 349/26   Official Journal of the European Union   31.12.2005
 
 
4.(a) Each Party shall, at the time of its acceptan ce of this Agreement, provide to the depositary a 
list of the headings in its tariff schedule that include MCPs.  If a Party subsequently classifies an MCP in a heading not included on its origin al list, that Party shall promptly provide a 
modified list to the depositary. 
 (b) Any Party may at any time request modifications to a list of another Party that it finds to be 
incomplete, in which case the requested Party shall consult and work  with the requesting 
Party in good faith to complete all modifica tions as necessary.  The modified list shall be 
provided to the depositary. 
 (c) The depositary shall transmit the provided list,  including its modifications, to all Parties. 
 5. Notwithstanding the autonomous liberalisati on of applied duties and charges on MCPs under 
this Agreement, each Party shall be permitted to ta ke into account the binding of tariffs on MCPs at 
zero level as part of its overall balance of concessions in a multila teral tariff reduction agreement 
under the auspices of the WTO.  6. Without prejudice to paragraph 3, nothing in th is Agreement shall be in terpreted as affecting a 
Party's rights and obligations under the WTO Agreement. 
 
7.(a) After the depositary receives four instruments of acceptance from GAMS Members, those 
Parties shall agree on a date of en try into force of the Agreement. 
 (b) This Agreement shall be open for acceptance by any Member of the WTO.  An acceptance 
following the entry into force of this Agreem ent shall enter into force on the date such 
acceptance is received by the depositary.  The de positary shall inform all Parties upon receipt 
of an acceptance. 
 (c) If the Parties agree to amend this Agreem ent, subparagraphs (a ) and (b) shall apply mutatis 
mutandis  to such amendment. 
 
8. When all the Parties bind all duties and ch arges on MCPs at a rate of zero pursuant to 
paragraph 3 subparagraphs (a) to (c), this Agreement shall terminate. 
 9. The original of this Agreement in the English language as well as the instruments of 
acceptance shall be deposited with the Secretary-Ge neral of the Council of the European Union.  G/MA/192 
 Page 5 
 
 
  25.3.2006             Official Journal of the European Union                                    L 88/1  
 
I 
(Acts whose publication is obligatory) 
 
COUNCIL REGULATION (EC) No. 486/2006 
 
of 20 March 2006 
 
concerning the implementation of the Agreement on Duty-Free Treatment of Multi-Chip Integrated 
Circuits (MCPs) by amending Anne x I to Regulation (EEC) No. 2658/87 on the tariff and statistical 
nomenclature and on the Common Customs Tariff 
  
 
THE COUNCIL OF THE EUROPEAN UNION, 
 Having regard to the Treaty establishing the European 
Community, and in particular Article 133 thereof,  
 Having regard to the proposal from the Commission, 
 
Whereas:  
(1) Council Regulation (EEC) No. 2658/87
1 
established a goods nomenclature, hereinafter referred to as the "Combined Nomenclature", 
and set out the conventional duty rates of the 
Common Customs  Tariff. 
(2) By its Decision 2005/964/EC
2, the Council 
has concluded, on behalf of the European 
Community, the Agr eement on Duty-Free 
Treatment of Multi-Chip Integrated Circuits 
(MCPs) (hereinafter referred to as "the 
Agreement"). 
(3) The Agreement reduces to  zero the rate of all 
customs duties and other duties and charges 
applied to MCPs. 
(4) The Secretary General of the Council of the 
European Union as the depository designated by the Agreement has received instruments of 
 
   acceptance from four Parties.  Pursuant to 
 Article 7(a) of the Agreement, these four 
 Parties have agreed th at the Agreement shall 
 enter into force on 1 April 2006. 
 (5) The Agreement s hould therefore be 
implemented by amending Annex 1 to 
Regulation (EEC) No. 2658/87, 
 
HAD ADOPTED THIS REGULATION: 
 
Article 1 
 
In Annex 1, Part One, Section II "Special Provisions" of Regulation EEC No. 2658/87, a letter G "Duty-Free 
Treatment of Multi-Chip Inte grated Circuits (MCPs)" 
as contained in the Annex to this regulation is added.  
Article 2  
 This Regulation shall enter into force the day 
following its publication on the Official Journal of the 
European Union . 
 
It shall apply from 1 April 2006. 
 
 This Regulation shall be binding in its entirety and directly applicable in all Member States 
 
 Done at Brussels, 20 March 2006.   
For the Council 
The President U. PLASSNIK 
 
                                                      
1 OJ L 256, 7.9.1987, p.1. Regulation as last amended by Regulation 
   (EC) No. 1989/2004 (OJ L. 344, 20.11.2004, p.5). 
2 OJ L 349, 31.12.2005, p.24. G/MA/192 
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  L 88/2              Official Journal of the European Union      25.3.2006
 
 
ANNEX 
 
G. Duty-Free Treatment of Multi-Chip Integrated Circuits (MCPs) 
 
1. Relief from customs duty is provided for multi-ch ip integrated circuits (MCPs) consisting of 
two or more interconnected monolithic integrated circuits combined to all intents and purposes 
indivisibly, whether or not on one or more insulating substrates, with or without lead frames, but with 
no other active or passive circuits elements. 
 
2. Goods eligible to this relie f of customs duty are coved by the following headings: 8418, 8422, 
8450, 8466, 8473, 8517, 8518, 8522, 8523, 8525, 8528, 8529, 8530, 8531, 8535, 8536, 8537, 8538, 8543, 8548, 8708, 9009, 9026, 9031, 9504.  
3. Upon presentation to the Member State's cust oms authorities of the customs declaration for 
release into free circulation of MCPs, the decl arant shall indicate in box 44 of the Single 
Administrative Document ("SAD") the reference number C500. 
__________