# EUR-Lex - 52012PC0524 - EN

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# 52012PC0524

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to generalized tariff preferences from Myanmar/Burma /* COM/2012/0524 final - 2012/0251 (COD) */**

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EXPLANATORY MEMORANDUM

The Generalised Scheme of Tariff
Preferences (GSP scheme) is part of the European Union's common commercial
policy, in accordance with the general provisions governing the European Union's
external action.

Council Regulation (EC) No 732/2008[1] of 22 July 2008 applying the
current GSP scheme ("the current GSP
Regulation") provides that the preferential arrangements provided for in
this Regulation may be withdrawn temporarily, in respect of all or of certain
products originating in a beneficiary country, for the serious and systematic
violation of principles laid down in fifteen out of the twenty-seven
international conventions listed in its Annex, on the basis of the conclusions
of the relevant monitoring bodies. The relevant conventions also cover core
labour rights such as forced labour.

Myanmar/Burma's access to the GSP tariff
preferences was temporarily withdrawn by Council Regulation (EC) No 552/97[2] due to routine and widespread
practice of forced labour, confirmed by the International Labour Organisation
(ILO), in a special procedure of its Commission of Inquiry.

Since 2011, Myanmar/Burma has been
undertaking a historic programme of openness and reform as acknowledged by the
Council of the EU in its Conclusions of 23 April 2012[3]. The Council expressed support
for "reinstating the Generalised System of Preferences (GSP) for
Myanmar/Burma as soon as possible once the required conditions are fulfilled,
following the assessment of the International Labour Organisation".

On 13 June 2012, the International Labour
Conference (ILC) lifted restrictions, which excluded the Government of
Myanmar/Burma from receiving ILO technical cooperation and assistance and
suspended for one year the ILO request to its members to review their
relationships with Myanmar/Burma to ensure forced labour is not being used in
those relationships.

Accordingly, the violations cannot be any
longer considered as "serious and systematic" and thus the tariff
preferences should be reinstated according to the current GSP Regulation.

In the absence of explicit reinstatement
provisions in the current GSP Regulation, and in light of the provisions of the
Treaty of Lisbon, the ordinary legislative procedure is applied for the
adoption of the reinstatement of preferences for Myanmar. This is a one-off
procedure aimed at responding to a clear and present political need as
expeditiously as possible. The new GSP Regulation which will apply only as of 1
January 2014 redresses the absence of reinstatement provisions.

The proposed Regulation does not incur
costs to the EU budget and its application entails a very limited loss of
customs revenue. The actual loss of customs revenue resulting from reintegration
of Myanmar/Burma is estimated at less than €5 million, as explained in the statement
attached, and due to a structural lack of production and trading capacity in
the country.

2012/0251 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

repealing Council Regulation (EC) No
552/97 temporarily withdrawing access to generalized tariff preferences from
Myanmar/Burma

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 207 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       Article 1 of Regulation
(EC) No 552/97[4],
as amended by Article 28(1) of Regulation (EC) 732/2008 applying a scheme of generalised tariff preferences for the period
from 1 January 2009[5],
provides that Myanmar/Burma's access to the tariff preferences granted by the
Regulation (EC) No 732/2008 is temporarily withdrawn.

(2)       Point (a) of Article 15(1)
of Regulation (EC) No 732/2008 provides
that the preferential arrangements provided for in this Regulation may be
withdrawn temporarily, in respect of all or of certain products originating in a
beneficiary country, for the serious and systematic violation of principles
laid down in the conventions listed in Part A of Annex III, on the basis of the
conclusions of the relevant monitoring bodies.

(3)       The
International Labour Organization's (ILO) Convention concerning Forced or
Compulsory Labour, No. 29, (1930) is listed in Annex III, Part A of Regulation (EC) No 732/2008.

(4)       According to Article 2 of
Regulation (EC) No 552/97, as amended by Article 28(2) of Regulation (EC) No
732/2008, the application of Regulation
(EC) No 552/97 should be brought to the end in the
light of a Commission report on forced labour in Myanmar/Burma, showing that
the practices mentioned in point (a) of Article 15(1)
of Regulation (EC) No 732/2008 no
longer exist.

(5)       On
13 June 2012 the International Labour Conference (ILC) adopted the Resolution ‘Concerning
the measures on the subject of Myanmar adopted under article 33 of the ILO
Constitution’ (‘ILC resolution’). Taking
note of the conclusions adopted on 4 June 2012 by the Committee on the
Application of Standards (CAS) and considering that maintaining the existing
measures would no longer help attaining the desired result, the ILC decided to lift
restrictions, which excluded the Government of Myanmar/Burma from receiving ILO
technical cooperation and assistance. It also suspended for one year the ILO
request of its members to review their relationships with Myanmar/Burma to
ensure forced labour is not being used in those relationships.

(6)       On ..... 2012, the
Commission approved a report on forced labour in Myanmar/Burma containing its
findings (hereinafter ‘the Report’). The Report concludes that the progress made by Myanmar/Burma towards complying
with the ILO recommendations, which has been acknowledged by the competent ILO
monitoring bodies, justifies that violations of the principles laid down in ILO
Convention No 29 are no longer
considered as 'serious and systematic' and recommends that the access to
generalized tariff preferences should be reinstated to Myanmar/Burma.

(7)       In view of these conclusions and pursuant to Article 2 of Regulation (EC) No 552/97 the temporary withdrawal of Myanmar/Burma's access to the tariff preferences granted by Regulation (EC) No
732/2008 should therefore be repealed, as of the date of the adoption of the
ILC resolution.

(8)       The Commission should
continue to monitor the developments in Myanmar/Burma with respect to forced
labour and react to them in accordance with the procedures in force, including,
if necessary, with renewed withdrawal procedures,

HAVE ADOPTED THIS REGULATION:

Article 1

Council Regulation (EC) No 552/97 is hereby
repealed.

Article 2

1.           This Regulation shall
enter into force on the twentieth day following that of its publication in the Official
Journal of the European Union.

2.           It shall apply from 13 June 2012.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

LEGISLATIVE FINANCIAL STATEMENT FOR
PROPOSALS HAVING A BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE

1.           NAME OF THE PROPOSAL:

Regulation of the European Parliament and
of the Council repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to
generalized tariff preferences from Myanmar/Burma.

2.           BUDGET LINES:

Chapter and Article: Chapter 12, Article
120

Amount budgeted for the year concerned: €
19 171 200 000 (B 2012);           
€ 18 631 800 000 (DB 2013)

3.           FINANCIAL IMPACT

x        The proposal has no financial impact on expenditure but has
a financial impact on revenue – the effect is as follows:

(€ million to one decimal place)

Budget line || Revenue[6] || 6.5 month period, starting 13/06/2012 || 12 month period (2013)

Article 120 || Impact on own resources || -7.3 || -14.1

Note: This is
a maximum estimate. Taking into account structural constraints which limit
export levels and tariff preference use, actual
loss is likely to be less than €5 million.

4.           ANTI-FRAUD MEASURES

...

5.           OTHER REMARKS

Myanmar/Burma, potential covered imports in
2011 and loss of revenue were the GSP preferences already reinstated (*€ 1,000)

GSP trade Section || Covered Imports || Revenue under MFN[7] tariff (A) || Revenue under EBA arrangement[8] (B) || Loss of revenue (A-B)

S-01b || 14,283.1 || 1,174.1 || - || 1,174.1

S-02a || 0.3 || 0.0 || - || 0.0

S-02b || 10,570.8 || 3.4 || - || 3.4

S-02c || 24.6 || 0.0 || - || 0.0

S-02d || 3,500.6 || 0.1 || - || 0.1

S-03 || 0.1 || 0.0 || - || 0.0

S-04a || 2.9 || 0.4 || - || 0.4

S-04b || 14.1 || - || - || -

S-06b || 0.6 || 0.0 || - || 0.0

S-07a || 131.2 || 8.5 || - || 8.5

S-08a || 10.6 || 0.6 || - || 0.6

S-08b || 9.5 || 0.3 || - || 0.3

S-09a || 17.5 || 0.0 || - || 0.0

S-09b || 823.4 || 30.6 || - || 30.6

S-10 || 4.0 || - || - || -

S-11a || 4.0 || 0.3 || - || 0.3

S-11b || 132,516.6 || 15,496.5 || - || 15,496.5

S-12a || 3,962.8 || 380.7 || - || 380.7

S-12b || 22.7 || 0.9 || - || 0.9

S-13 || 34.4 || 0.8 || - || 0.8

S-14 || 131.1 || 0.0 || - || 0.0

S-15a || 0.1 || 0.0 || - || 0.0

S-15b || 227.9 || 6.0 || - || 6.0

S-16 || 566.4 || 7.7 || - || 7.7

S-17b || 143.8 || 3.9 || - || 3.9

S-18 || 1.9 || 0.1 || - || 0.1

S-20 || 300.4 || 12.1 || - || 12.1

S-21 || 11.0 || - || - || -

Total || 167,316.3 || 17,127.1 || - || 17,127.1

Loss of revenue is calculated as follows:

(Total of Most Favoured Nation duty
calculated on covered imports) – (Total of preferential duty calculated on
preferential trade).

The estimated loss of revenue (calculated
on the basis of year 2011 trade flows
and duty collections) for Myanmar/Burma and with a 5% increase per year is (*€ 1,000):

Year || 2011 || 2012 || 2013 || 2014 || 2015

Total value of imports || 167,316.3 || 175,682.1 || 184,466.3 || 193,689.6 || 203,374.0

Maximum preferential import || N/A || 95,161.1 || 184,466.3 || 193,689.6 || 203,374.0

Loss of revenue (after deduction of 25% of collection costs) || N/A || 7,305.8 || 14,162.0 || 14,870.1 || 15,613.6

Note:
This is a maximum estimate. Taking into account structural constraints which
limit export levels and tariff preference use, actual loss is likely to be less
than €5 million.

[1]               Council Regulation (EC) No 732/2008 of
22 July 2008 applying a scheme of generalised
tariff preferences for the period from 1 January 2009 to 31 December 2011 and
amending Regulations (EC) No 552/97, (EC) No 1933/2006 and Commission
Regulations (EC) No 1100/2006 and (EC) No 964/2007 (OJ L 211,
6.8.2008, p. 1).

[2]               OJ L 85, 27.3.1997, p. 8.

[3]               9008/12, MCL/aa.

[4]               OJ L 085, 27.3.1997, p. 8.

[5]               OJ L 211, 6.8.2008, p. 1.

[6]               Regarding traditional own resources (agricultural
duties, sugar levies, customs duties) the amounts indicated must be net
amounts, i.e. gross amounts after deduction of 25 % of collection costs

[7]               Most favoured nation status

[8]               Special arrangement for the least-developed countries