# EUR-Lex - 22001A0504(01) - EN

Avis juridique important

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# 22001A0504(01)

**Interim Agreement on trade and trade-related matters between the European Community, of the one part, and the former Yugoslav Republic of Macedonia, of the other part - Annexes - Protocols **

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Official Journal L 124 , 04/05/2001 P. 0002 - 0196 *

Interim Agreement

on trade and trade-related matters between the European Community, of the one part, and the former Yugoslav Republic of Macedonia, of the other part

THE EUROPEAN COMMUNITY,

hereinafter referred to as the "Community",

of the one part, and

THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA,

of the other part,

WHEREAS:

(1) The Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the former Yugoslav Republic of Macedonia, of the other part, was signed by way of Exchange of Letters in Luxembourg on 9 April 2001.

(2) The Stabilisation and Association Agreement is intended to establish a close and lasting relationship based on reciprocity and mutual interest, which should allow the former Yugoslav Republic of Macedonia to further strengthen and extend the already established relationship.

(3) It is necessary to ensure the development of trade links by strengthening and widening the relations established previously, notably by the Cooperation Agreement signed on 29 April 1997 by way of Exchange of Letters, which entered into force on 1 January 1998.

(4) To this end it is necessary to implement as speedily as possible, by means of an Interim Agreement, provisions of the Stabilisation and Association Agreement on trade and trade related matters.

(5) It is necessary to ensure that pending the entry into force of the Stabilisation and Association Agreement and the establishment of the Stabilisation and Association Council, the Cooperation Council set up by the Cooperation Agreement can exercise the powers assigned by the Stabilisation and Association Agreement to the Stabilisation and Association Council, which are necessary in order to implement the Interim Agreement,

HAVE DECIDED to conclude this Agreement and to this end have designated as their Plenipotentiaries:

THE EUROPEAN COMMUNITY:

Anna Lindh,

Minister for Foreign Affairs of the Kingdom of Sweden,

President-in-office of the Council of the European Union,

Christopher Patten,

Member of the Commission of the European Communities,

THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA:

Ljubco Georgievski,

Prime Minister of the Government of the Former Yugoslav Republic of Macedonia,

WHO, having exchanged their full powers, found in good and due form,

HAVE AGREED AS FOLLOWS:

TITLE I

GENERAL PRINCIPLES

Article 1 (SAA 2)

Respect for the democratic principles and human rights as proclaimed in the Universal Declaration of Human Rights and as defined in the Helsinki Final Act and the Charter of Paris for a New Europe, respect for international law principles and the rule of law as well as the principles of market economy as reflected in the Document of the CSCE Bonn Conference on Economic Cooperation, shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement.

TITLE II

FREE MOVEMENT OF GOODS

Article 2 (SAA 15)

1. The Community and the former Yugoslav Republic of Macedonia shall gradually establish a free trade area over a period lasting a maximum of ten years starting from the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the GATT 1994 and the WTO. In so doing they shall take into account the specific requirements laid down hereinafter.

2. The combined nomenclature of goods shall be applied to the classification of goods in trade between the two Parties.

3. For each product the basic duty to which the successive reductions set out in this Agreement are to be applied shall be the duty actually applied erga omnes on the day preceding the signature of this Agreement.

4. If, after the signature of this Agreement, any tariff reduction is applied on an erga omnes basis, in particular reductions resulting from the tariff negotiations in the WTO, such reduced duties shall replace the basic duty referred to in paragraph 3 as from the date when such reductions are applied.

5. The Community and the former Yugoslav Republic of Macedonia shall communicate to each other their respective basic duties.

Chapter I

Industrial products

Article 3 (SAA 16)

1. The provisions of this Chapter shall apply to products originating in the Community or the former Yugoslav Republic of Macedonia listed in chapters 25 to 97 of the combined nomenclature, with the exception of the products listed in Annex I paragraph 1, (ii) of the Agreement on agriculture (GATT 1994).

2. The provisions of Articles 4 and 5 shall neither apply to textile products nor to steel products, as specified in Articles 9 and 10.

3. Trade between the Parties in products covered by the Treaty establishing the European Atomic Energy Community shall be conducted in accordance with the provisions of that Treaty.

Article 4 (SAA 17)

1. Customs duties on imports into the Community of products originating in the former Yugoslav Republic of Macedonia shall be abolished upon the entry into force of this Agreement.

2. Quantitative restrictions on imports into the Community and measures having equivalent effect shall be abolished on the date of entry into force of this Agreement with regard to products originating in the former Yugoslav Republic of Macedonia.

Article 5 (SAA 18)

1. Customs duties on imports into the former Yugoslav Republic of Macedonia of goods originating in the Community other than those listed in Annexes I and II shall be abolished upon the entry into force of this Agreement.

2. Customs duties on imports into the former Yugoslav Republic of Macedonia of goods originating in the Community which are listed in Annex I shall be progressively reduced in accordance with the following timetable:

- on 1 January of the first year after the entry into force of this Agreement each duty shall be reduced to 90 % of the basic duty,

- on 1 January of the second year after the entry into force of this Agreement each duty shall be reduced to 80 % of the basic duty,

- on 1 January of the third year after the entry into force of this Agreement each duty shall be reduced to 70 % of the basic duty,

- on 1 January of the fourth year after the entry into force of this Agreement each duty shall be reduced to 60 % of the basic duty,

- on 1 January of the fifth year after the entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty,

- on 1 January of the sixth year after the entry into force of this Agreement each duty shall be reduced to 40 % of the basic duty,

- on 1 January of the seventh year after the entry into force of this Agreement each duty shall be reduced to 30 % of the basic duty,

- on 1 January of the eighth year after the entry into force of this Agreement each duty shall be reduced to 20 % of the basic duty,

- on 1 January of the ninth year after the entry into force of this Agreement each duty shall be reduced to 10 % of the basic duty,

- on 1 January of the tenth year after the entry into force of this Agreement the remaining duties shall be abolished.

3. Customs duties on imports into the former Yugoslav Republic of Macedonia of goods originating in the Community which are listed in Annex II shall be progressively reduced and eliminated in accordance with the timetable specified in the Annex.

4. Quantitative restrictions on imports into the former Yugoslav Republic of Macedonia of goods originating in the Community and measures having equivalent effect shall be abolished upon the date of entry into force of this Agreement.

Article 6 (SAA 19)

The Community and the former Yugoslav Republic of Macedonia shall abolish upon the entry into force of this Agreement in trade between themselves any charges having an effect equivalent to customs duties on imports.

Article 7 (SAA 20)

1. The Community and the former Yugoslav Republic of Macedonia shall abolish any customs duties on exports and charges having equivalent effect upon the entry into force of this Agreement.

2. The Community and the former Yugoslav Republic of Macedonia shall abolish between themselves any quantitative restrictions on exports and measures having equivalent effect upon the entry into force of this Agreement.

Article 8 (SAA 21)

The former Yugoslav Republic of Macedonia declares its readiness to reduce its customs duties in trade with the Community more rapidly than is provided for in Article 5 if its general economic situation and the situation of the economic sector concerned so permit.

The Cooperation Council shall make recommendations to this effect.

Article 9 (SAA 22)

Protocol 1 lays down the arrangements applicable to the textile products referred to therein.

Article 10 (SAA 23)

Protocol 2 lays down the arrangements applicable to steel products referred to therein.

Chapter II

Agriculture and fisheries

Article 11 (SAA 24)

Definition

1. The provisions of this chapter shall apply to trade in agricultural and fishery products originating in the Community or former Yugoslav Republic of Macedonia.

2. The term "agricultural and fishery products" refers to the products listed in chapters 1 to 24 of the combined nomenclature and the products listed in Annex I paragraph 1, (ii) of the Agreement on agriculture (GATT, 1994).

3. This definition includes fish and fisheries products covered by chapter 3, heading Nos 1604 and 1605, and subheading Nos 0511 91, 2301 20 00 and No ex 1902 20(1).

Article 12 (SAA 25)

Protocol 3 lays down the trade arrangements for processed agricultural products that are listed therein.

Article 13 (SAA 26)

1. On the date of entry into force of this Agreement, the Community shall abolish all quantitative restrictions and measures having equivalent effect, on imports of agricultural and fishery products originating in the former Yugoslav Republic of Macedonia.

2. On the date of entry into force of this Agreement, the former Yugoslav Republic of Macedonia shall abolish all quantitative restrictions and measures having equivalent effect, on imports of agricultural and fishery products originating in the Community.

Article 14 (SAA 27)

Agricultural products

1. From the date of entry into force of this Agreement, the Community shall abolish the customs duties and charges having equivalent effect, on imports of agricultural products originating in the former Yugoslav Republic of Macedonia, other than those of heading Nos 0102, 0201, 0202 and 2204 of the combined nomenclature.

For the products covered by chapters 7 and 8 of the combined nomenclature, for which the Common Customs Tariff provides for the application of ad valorem customs duties and a specific customs duty, the elimination applies only to the ad valorem part of the duty.

2. From the date of entry into force of this Agreement, the Community shall fix the customs duties applicable to imports into the Community of "baby-beef" products defined in Annex III and originating in the former Yugoslav Republic of Macedonia, at 20 % of the ad valorem duty and 20 % of the specific duty as laid down in the Common Customs Tariff of the European Communities, within the limit of an annual tariff quota of 1650 tonnes expressed in carcass weight.

3. From the date of entry into force of this Agreement, the former Yugoslav Republic of Macedonia shall:

(a) abolish the customs duties applicable on imports of certain agricultural products originating in the Community, listed in Annex IV (a);

(b) abolish the customs duties applicable on imports of certain agricultural products originating in the Community, listed in Annex IV (b) within the limits of tariff quotas indicated for each product in that Annex. For the quantities exceeding the tariff quotas the former Yugoslav Republic of Macedonia shall reduce progressively the customs duties in accordance with the timetable indicated for each product in that Annex;

(c) reduce progressively the customs duties applicable on imports of certain agricultural products originating in the Community, listed in Annex IV (c) within the limits of tariff quotas and in accordance with the timetable indicated for each product in that Annex.

4. The trade arrangements to apply to wine and spirit products will be defined in a separate wine and spirit agreement.

Article 15 (SAA 28)

Fisheries products

1. From the entry into force of this Agreement the Community shall totally eliminate customs duties on fish and fisheries products originating in the former Yugoslav Republic of Macedonia. Products listed in Annex V (a) shall be subject to the provisions laid down therein.

2. From the entry into force of this Agreement the former Yugoslav Republic of Macedonia shall abolish all charges having an equivalent effect to a custom duty and reduce customs duties on fish and fisheries products originating in the European Community by 50 % of the MFN duty. The residual duties shall be reduced over a period of six years to be eliminated at the end of this period.

The rules contained in this paragraph shall not apply to products listed in Annex V (b) which shall be subject to tariff reductions laid down in the said Annex.

Article 16 ( SAA 29)

1. Taking account of the volume of trade in agricultural and fishery products between the Parties, of their particular sensitivities, of the rules of the Community common policies for agriculture and fisheries, of the rules of the agricultural policies of the former Yugoslav Republic of Macedonia, of the role of agriculture in the former Yugoslav Republic of Macedonia's economy, of the production and export potential of its traditional branches and markets and of the consequences of the multilateral trade negotiations under the WTO, the Community and the former Yugoslav Republic of Macedonia shall examine in the Cooperation Council, no later than 1 January 2003, product by product and on an orderly and appropriate reciprocal basis, the opportunities for granting each other further concessions with a view to implementing greater liberalisation of the trade in agricultural and fishery products.

2. The provisions of this chapter shall in no way affect the application, on a unilateral basis, of more favourable measures by one or the other Party.

Article 17 (SAA 30)

Notwithstanding other provisions of this Agreement, and in particular Article 24, given the particular sensitivity of the agricultural and fisheries markets, if imports of products originating in one of the two Parties, which are the subject of concessions granted pursuant to Articles 12, 14 and 15, cause serious disturbance to the markets or to their domestic regulatory mechanisms, in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the appropriate measures it deems necessary.

Chapter III

Common provisions

Article 18 (SAA 31)

The provisions of this chapter shall apply to trade in all products between the Parties except where otherwise provided herein or in Protocols 1, 2 and 3.

Article 19 (SAA 32)

Standstill

1. From the date of entry into force of this Agreement, no new customs duties on imports or exports or charges having equivalent effect shall be introduced, nor shall those already applied be increased, in trade between the Community and the former Yugoslav Republic of Macedonia.

2. From the date of entry into force of this Agreement, no new quantitative restriction on imports or exports or measure having equivalent effect shall be introduced, nor shall those existing be made more restrictive, in trade between the Community and the former Yugoslav Republic of Macedonia.

3. Without prejudice to the concessions granted under Article 13, the provisions of paragraphs 1 and 2 of this Article shall not restrict in any way the pursuit of the respective agricultural policies of the former Yugoslav Republic of Macedonia and the Community nor the taking of any measures under those policies in so far as the import regime in the Annexes III, IV (a), (b), (c) and V (a), (b) is not affected.

Article 20 (SAA 33)

Prohibition of fiscal discrimination

1. The Parties shall refrain from, and abolish where existing, any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.

2. Products exported to the territory of one of the Parties may not benefit from repayment of internal indirect taxation in excess of the amount of indirect taxation imposed on them.

Article 21 (SAA 34)

The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.

Article 22 ( SAA 35)

Customs unions, free trade areas, cross-border arrangements

1. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements provided for in this Agreement.

2. During the transitional periods specified in Articles 4 and 5, this Agreement shall not affect the implementation of the specific preferential arrangements governing the movement of goods either laid down in frontier agreements previously concluded between one or more Member States and the Socialist Federal Republic of Yugoslavia and succeeded to by the former Yugoslav Republic of Macedonia or resulting from the bilateral agreements concluded by the former Yugoslav Republic of Macedonia in order to promote regional trade.

3. Consultations between the Parties shall take place within the Cooperation Council concerning the agreements described in paragraphs 1 and 2 of this Article and, where requested, on other major issues related to their respective trade policies towards third countries. In particular in the event of a third country acceding to the Community, such consultations shall take place so as to ensure that account is taken of the mutual interests of the Community and the former Yugoslav Republic of Macedonia stated in this Agreement.

Article 23 (SAA 36)

Dumping

1. If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of the GATT 1994, it may take appropriate measures against this practice in accordance with the Agreement on implementation of Article VI of the GATT 1994 and its own related internal legislation.

2. As regards paragraph 1 of this Article, the Cooperation Council shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. When no end has been put to the dumping within the meaning of Article VI of the GATT or no other satisfactory solution has been reached within 30 days of the matter being referred to the Cooperation Council, the importing Party may adopt the appropriate measures.

Article 24 (SAA 37)

General safeguard clause

1. Where any product of one Party is being imported into the territory of the other Party in such increased quantities and under such conditions as to cause or threaten to cause:

- serious injury to the domestic industry of like or directly competitive products in the territory of the importing Party; or

- serious disturbances in any sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region of the importing Party,

the importing Party may take appropriate measures under the conditions and in accordance with the procedures laid down in this Article.

2. The Community and the former Yugoslav Republic of Macedonia shall only apply safeguard measures between themselves in accordance with the provisions of this Agreement. Such measures shall not exceed what is necessary to remedy the difficulties which have arisen, and should normally consist of the suspension of the further reduction of any applicable rate of duty provided for under this Agreement for the product concerned or the increase of the rate of duty for that product.

Such measures shall contain clear elements progressively leading to their elimination at the end of the set period, at the latest. Measures shall not be taken for a period exceeding one year. In very exceptional circumstances, measures may be taken up to a total maximum period of three years. No safeguard measure shall be applied to the import of a product that has previously been subject to such a measure for a period of, at least, three years since the expiry of the measure.

3. In the cases specified in this Article, before taking the measures provided for therein or, in the cases to which paragraph 4(b) of this Article applies, as soon as possible, the Community or the former Yugoslav Republic of Macedonia, as the case may be, shall supply the Cooperation Council with all relevant information, with a view to seeking a solution acceptable to the two Parties.

4. For the implementation of the above paragraphs the following provisions shall apply:

(a) The difficulties arising from the situation referred to in this Article shall be referred for examination to the Cooperation Council, which may take any decisions needed to put an end to such difficulties. If the Cooperation Council or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred to the Cooperation Council, the importing Party may adopt the appropriate measures to remedy the problem in accordance with this Article. In the selection of safeguard measures priority must be given to those which least disturb the functioning of the arrangements established in this Agreement.

(b) Where exceptional and critical circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Party concerned may, in the situations specified in this Article, apply forthwith precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.

5. The safeguard measures shall be notified immediately to the Cooperation Council and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their abolition as soon as circumstances permit.

6. In the event of the Community or the former Yugoslav Republic of Macedonia subjecting imports of products liable to give rise to the difficulties referred to in this Article to an administrative procedure having at its purpose the rapid provision of information on the trend of trade flows, it shall inform the other Party.

Article 25 (SAA 38)

Shortage clause

1. Where compliance with the provisions of this Title leads to:

(a) a critical shortage, or threat thereof, of foodstuffs or other products essential to the exporting Party; or

(b) re-export to a third country of a product against which the exporting Party maintains quantitative export restrictions, export duties or measures or charges having equivalent effect, and where the situations referred to above give rise, or are likely to give rise to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in this Article.

2. In the selection of measures, priority must be given to those which least disturb the functioning of the arrangements in this Agreement. Such measures shall not be applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination where the same conditions prevail, or a disguised restriction on trade and shall be eliminated when the conditions no longer justify their maintenance.

3. Before taking the measures provided for in paragraph 1 of this Article or, as soon as possible in cases to which paragraph 4 of this Article applies, the Community or the former Yugoslav Republic of Macedonia, as the case may be, shall supply the Cooperation Council with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties within the Cooperation Council may agree on any means needed to put an end to the difficulties. If no agreement is reached within 30 days of the matter being referred to the Cooperation Council, the exporting Party may apply measures under this Article on the exportation of the product concerned.

4. Where exceptional and critical circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or the former Yugoslav Republic of Macedonia, whichever is concerned, may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.

5. Any measures applied pursuant to this Article shall be immediately notified to the Cooperation Council and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their elimination as soon as circumstances permit.

Article 26 (SAA 39)

State monopolies

The former Yugoslav Republic of Macedonia shall progressively adjust any State monopolies of a commercial character so as to ensure that, by the end of the fifth year following the entry into force of this Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and of the former Yugoslav Republic of Macedonia. The Cooperation Council shall be informed about the measures adopted to attain this objective.

Article 27 (SAA 40)

Protocol 4 lays down the rules of origin for the application of tariff preferences provided for in this Agreement.

Article 28 (SAA 41)

Restrictions authorised

This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property, or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

Article 29 (SAA 42)

Both Parties agree to cooperate to reduce the potential for fraud in the application of the trade provisions of this Agreement.

Notwithstanding other provisions of this Agreement, and in particular Articles 17, 24 and 36 and Protocol 4, where one Party finds that there is sufficient evidence of fraud such as a significant increase in trade of products by one Party to the other Party, beyond the level reflecting economic conditions such as normal production and export capacities, or failure to provide administrative cooperation as required for the verification of evidence of origin by the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the appropriate measures it deems necessary. In the selection of the measure priority must be given to those which least disturb the functioning of the arrangements established in this Agreement.

Article 30 (SAA 43)

The application of this Agreement shall be without prejudice to the application of the provisions of Community law to the Canary Islands.

TITLE III

PAYMENTS, COMPETITION AND OTHER ECONOMIC PROVISIONS

Article 31 (SAA 58)

The Parties undertake to authorise, in freely convertible currency, in accordance with the provisions of Article VIII of the Articles of Agreement of the International Monetary Fund, any payments and transfers on the current account of balance of payments between the Community and the former Yugoslav Republic of Macedonia.

Article 32 (SAA 65)

1. The Parties shall endeavour wherever possible to avoid the imposition of restrictive measures, including measures relating to imports, for balance of payments purposes. A Party adopting such measures shall present as soon as possible to the other Party a timetable for their removal.

2. Where one or more Member States or the former Yugoslav Republic of Macedonia is in serious balance of payments difficulties, or under imminent threat thereof, the Community or the former Yugoslav Republic of Macedonia, as the case may be, may, in accordance with the conditions established under the WTO Agreement, adopt restrictive measures, including measures relating to imports, which shall be of limited duration and may not go beyond what is strictly necessary to remedy the balance of payments situation. The Community or the former Yugoslav Republic of Macedonia, as the case may be, shall inform the other Party forthwith.

3. Any restrictive measures shall not apply to transfers related to investment and in particular to the repatriation of amounts invested or reinvested or any kind of revenues stemming there from.

Article 33 (SAA 69)

Competition and other economic provisions

1. The following are incompatible with the proper functioning of the Agreement, in so far as they may affect trade between the Community and the former Yugoslav Republic of Macedonia:

(i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;

(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or of the former Yugoslav Republic of Macedonia as a whole or in a substantial part thereof;

(iii) any public aid which distorts or threatens to distort competition by favouring certain undertakings or certain products.

2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the rules of Articles 81, 82 and 87 of the Treaty establishing the European Community.

3. (a) For the purposes of applying the provisions of paragraph 1(iii), the Parties recognise that during the first four years after the entry into force of this Agreement, any public aid granted by the former Yugoslav Republic of Macedonia shall be assessed taking into account the fact that the former Yugoslav Republic of Macedonia shall be regarded as an area identical to those areas of the Community described in Article 87(3)(a) of the Treaty establishing the European Community.

(b) Each Party shall ensure transparency in the area of public aid, inter alia by reporting annually to the other Party on the total amount and the distribution of the aid given and by providing, upon request, information on aid schemes. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.

Each Party shall ensure that the provisions of this Article are applied within five years of the Agreement's entry into force.

4. With regard to products referred to in chapter II of Title II:

- paragraph 1(iii) shall not apply.

- any practices contrary to paragraph 1(i) shall be assessed according to the criteria established by the Community on the basis of Articles 36 and 37 of the Treaty establishing the European Community and specific Community instruments adopted on this basis.

5. If the Community or the former Yugoslav Republic of Macedonia considers that a particular practice is incompatible with the terms of paragraph 1, and:

- if such practice causes or threatens to cause serious injury to the interests of the other Party or material injury to its domestic industry, including its services industry, it may take appropriate measures after consultation within the Cooperation Council or after 30 working days following referral for such consultation.

In the case of practices incompatible with paragraph 1(iii), such appropriate measures may, where the WTO Agreement applies thereto, only be adopted in accordance with the procedures and under the conditions laid down thereby or the relevant Community internal legislation.

6. The Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business confidentiality.

Article 34 (SAA 70)

With regard to public undertakings, and undertakings to which special or exclusive rights have been granted, each Party shall ensure that as from the third year following the date of entry into force of this Agreement, the principles of the Treaty establishing the European Community, in particular Article 86 thereof, are upheld.

Article 35 (SAA 71)

Intellectual, industrial and commercial property

1. Pursuant to the provisions of this Article and Annex VI, the Parties confirm the importance that they attach to ensure adequate and effective protection and enforcement of intellectual, industrial and commercial property rights.

2. The former Yugoslav Republic of Macedonia shall take the necessary measures in order to guarantee no later than five years after entry into force of this Agreement a level of protection of intellectual, industrial and commercial property rights similar to that existing in the Community, including effective means of enforcing such rights.

3. The former Yugoslav Republic of Macedonia undertakes to accede, within the period referred above, to the multilateral conventions on intellectual, industrial and commercial property rights referred to in Annex VI.

4. If problems in the area of intellectual, industrial and commercial property affecting trading conditions occur, they shall be referred urgently to the Cooperation Council, at the request of either Party, with a view to reaching mutually satisfactory solutions.

Article 36 (SAA 88(3))

Customs

Mutual assistance between administrative authorities in customs matters of the Parties shall take place in accordance with the provisions of Protocol 5.

TITLE IV

INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 37

The Cooperation Council set up by the Cooperation Agreement signed on 29 April 1997, by way of Exchange of Letters between the European Community and the former Yugoslav Republic of Macedonia, shall perform the duties assigned to it by this Agreement according to the same modalities as practised so far in the context of the Cooperation Agreement.

Article 38 (SAA 110 and 112)

1. The Cooperation Council shall, for the purpose of attaining the objectives of this Agreement, have the power to take decisions within the scope of the Agreement in the cases provided for therein. The decisions taken shall be binding on the Parties, which shall take the measures necessary to implement the decisions taken.

2. The Cooperation Council may also make appropriate recommendations. It shall draw up its decisions and recommendations by agreement between the Parties.

3. The Cooperation Council may be assisted in the performance of his duties by a Joint Committee composed by representatives of the Community, on the one hand, and of representatives of the Government of the former Yugoslav Republic of Macedonia, on the other, normally at senior civil servant level.

The duties of the Joint Committee should include the preparation of meetings of the Cooperation Council.

4. The Cooperation Council may delegate to the Joint Committee any of its powers. In that event the Joint Committee shall take decisions in accordance with the conditions laid down in paragraphs 1 and 2.

5. The Joint Committee should, as necessary, adopt its own rules of procedure. The Joint Committee would meet once a year. Special meetings may be convened by mutual agreement, at the request of either party. The Joint Committee would be chaired alternately by each of the Parties. Whenever possible the Agenda of the Joint Committee shall be agreed beforehand.

Article 39 (SAA 111)

Each Party may refer to the Cooperation Council any dispute relating to the application or interpretation of this Agreement. The Cooperation Council may settle the dispute by means of a binding decision.

Article 40 (SAA 115)

Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights.

Article 41 (SAA 116)

Nothing in this Agreement shall prevent a Party from taking any measures:

(a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests;

(b) which relate to the production of, or trade in, arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes;

(c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting a threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.

Article 42 (SAA 117)

1. In the fields covered by this Agreement and without prejudice to any special provisions contained therein:

- the arrangements applied by the former Yugoslav Republic of Macedonia in respect of the Community shall not give rise to any discrimination between the Member States, their nationals or their companies or firms;

- the arrangements applied by the Community in respect of the former Yugoslav Republic of Macedonia shall not give rise to any discrimination between the nationals of the former Yugoslav Republic of Macedonia or its companies or firms.

2. The provisions of paragraph 1 shall be without prejudice to the right of the Parties to apply the relevant provisions of their fiscal legislation to taxpayers who are not in identical situations as regards their place of residence.

Article 43 (SAA 118)

1. The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. They shall see to it that the objectives set out in this Agreement are attained.

2. If either Party considers that the other Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Cooperation Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement. These measures shall be notified immediately to the Cooperation Council and shall be the subject of consultations within the Cooperation Council if the other Party so requests.

Article 44 (SAA 119)

The Parties agree to consult promptly through appropriate channels at the request of either Party to discuss any matter concerning the interpretation or implementation of this Agreement and other relevant aspects of the relations between the Parties.

The provisions of this Article shall in no way affect and are without prejudice to Articles 17, 24, 25 and 29.

Article 45 (SAA 121)

Protocols 1, 2, 3, 4 and 5 and Annexes I to VI shall form an integral part of this Agreement.

Article 46 (SAA 122)

This Agreement shall be applicable until the entry into force of the Stabilisation and Association Agreement signed in Luxembourg on 9 April 2001.

Either Party may denounce this Agreement by notifying the other Party. This Agreement shall cease to apply six months after the date of such notification.

Article 47 (SAA 124)

This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Community, applies and under the conditions laid down in this Treaty, and to the territory of the former Yugoslav Republic of Macedonia on the other.

Article 48 (SAA 125)

The Secretary General of the Council of the European Union shall be the depository of the Agreement.

Article 49 (SAA 126)

This Agreement is drawn up in duplicate each of the official languages of the Parties, each of these texts being equally authentic.

Article 50 (SAA 127)

The Parties shall approve this Agreement in accordance with their own procedures.

This Agreement shall enter into force on the first day of the second month following the date on which the Parties notify each other that the procedures referred to in the first paragraph have been completed.

Upon the entry into force of this Agreement, Articles 13 to 32 of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed on 29 April 1997 by way of Exchange of Letters, shall be suspended.

(1) is "stuffed pasta containing more than 20 % by weight of fish, crustaceans, molluscs or other aquatic invertebrates".

INDEX OF ANNEXES

>TABLE>

ANNEX I

IMPORTS INTO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA OF LESS SENSITIVE INDUSTRIAL GOODS ORIGINATING IN THE COMMUNITY

(referred to in Article 5(2))

>TABLE>

ANNEX II

IMPORTS INTO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA OF SENSITIVE INDUSTRIAL GOODS ORIGINATING IN THE COMMUNITY

(referred to in Article 5(3))

Customs duties on imports into the former Yugoslav Republic of Macedonia of goods originating in the Community which are listed in this Annex shall be progressively reduced in accordance with the following timetable:

- on 1 January of the third year after the entry into force of the Agreement each duty shall be reduced to 80 % of the basic duty,

- on 1 January of the fifth year after the entry into force of the Agreement each duty shall be reduced to 70 % of the basic duty,

- on 1 January of the sixth year after the entry into force of the Agreement each duty shall be reduced to 60 % of the basic duty,

- on 1 January of the seventh year after the entry into force of the Agreement each duty shall be reduced to 50 % of the basic duty,

- on 1 January of the eighth year after the entry into force of the Agreement each duty shall be reduced to 40 % of the basic duty,

- on 1 January of the ninth year after the entry into force of the Agreement each duty shall be reduced to 20 % of the basic duty,

- on 1 January of the tenth year after the entry into force of the Agreement the remaining duties shall be abolished.

>TABLE>

ANNEX III

EC DEFINITION OF "BABY-BEEF" PRODUCTS

(referred to in Article 14(2))

Notwithstanding the rules for the interpretation of the combined nomenclature, the wording for the description of the products is to be considered as having no more than an indicative value, the preferential scheme being determined, within the context of this Annex, by the coverage of the CN-codes. Where ex CN-codes are indicated, the preferential scheme is to be determined by application of the CN-code and corresponding description taken together.

>TABLE>

ANNEX IV (a)

IMPORTS INTO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA OF AGRICULTURAL GOODS ORIGINATING IN THE COMMUNITY (ZERO-DUTY TARIFF)

(referred to in Article 14(3)(a))

>TABLE>

ANNEX IV (b)

IMPORTS INTO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA OF AGRICULTURAL GOODS ORIGINATING IN THE COMMUNITY

(ZERO-DUTY TARIFF WITHIN TARIFF QUOTAS)

(referred to in Article 14(3)(b))

>TABLE>

ANNEX IV (c)

IMPORTS INTO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA OF AGRICULTURAL GOODS ORIGINATING IN THE COMMUNITY (CONCESSIONS WITHIN TARIFF QUOTAS)

(referred to in Article 14(3)(c))

>TABLE>

ANNEX V (a)

IMPORTS INTO THE COMMUNITY OF FISH AND FISHERIES PRODUCTS ORIGINATING IN THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA

(referred to in Article 15(1))

>TABLE>

ANNEX V (b)

IMPORTS INTO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA OF FISH AND FISHERIES PRODUCTS ORIGINATING IN THE COMMUNITY

(referred to in Article 15(2))

>TABLE>

ANNEX VI

INTELLECTUAL, INDUSTRIAL AND COMMERCIAL PROPERTY RIGHTS

(referred to in Article 35)

1. Article 35(3) concerns the following Multilateral Conventions:

- Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the purposes of Patent Procedures (1977, modified in 1980);

- Protocol relating to the Madrid Agreement concerning the International Registration of Marks (Madrid, 1989);

- International Convention for the Protection of New Varieties of Plants (UPOV Geneva Act, 1991).

The Cooperation Council may decide that Article 35(3) shall apply to other multilateral conventions.

2. The Parties confirm the importance they attach to the obligations arising from the following multilateral conventions:

- International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome, 1961);

- Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967 and amended in 1979);

- Madrid Agreement concerning the International Registration of Marks (Stockholm Act, 1967 and amended in 1979);

- Patent Cooperation Treaty (Washington, 1970, amended in 1979 and modified in 1984);

- Convention for the Protection of Producers of Phonograms against Unauthorised Duplications of their Phonograms (Geneva 1971);

- Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971);

- Nice Agreement concerning the International Classification of Goods and Services for the purposes of the Registration of Marks (Geneva, 1977 and amended in 1979).

3. From entry into force of this Agreement, the former Yugoslav Republic of Macedonia shall grant to Community companies and nationals, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by it to any third country under bilateral agreements.

LIST OF PROTOCOLS

>TABLE>

PROTOCOL 1

on textile and clothing products

Article 1

This Protocol applies to the textile and clothing products (hereinafter "textile products") listed in Section XI (chapter 50 to 63) of the combined nomenclature of the Community.

Article 2

1. Textile products falling within Section XI (chapter 50 to 63) of the combined nomenclature and originating in the former Yugoslav Republic of Macedonia as defined in Protocol 4 of this Agreement will enter into the Community free of Customs duties on the day of entry into force of this Agreement.

2. The duties applied to direct imports into the former Yugoslav Republic of Macedonia of textile products falling within Section XI (chapter 50 to 63) of the combined nomenclature and originating in the Community as defined in Protocol 4 of the Agreement, shall be abolished on the date of entry into force of Agreement except for products listed in Annex I to this Protocol for which the rates of duties shall be progressively reduced as provided therein.

3. Subject to this Protocol, the provisions of the Agreement and in particular Articles 6 and 21 of the Agreement shall apply to trade in textile products between the Parties.

Article 3

The double-checking arrangements and other related issues regarding exports of textile products originating in the former Yugoslav Republic of Macedonia to the Community and originating in the Community to the former Yugoslav Republic of Macedonia are stipulated in the Agreement between the European Community and the former Yugoslav Republic of Macedonia on trade in textile products as renewed and applied since 1 January 2000.

Article 4

From the entry into force of this Agreement, no new quantitative restrictions or measures of equivalent effect shall be imposed except as provided for under the above Agreement and its Protocols.

ANNEX I

CUSTOMS DUTIES REFFERED TO IN ARTICLE 2(2)

Customs duties on imports into the former Yugoslav Republic of Macedonia of textile products listed in this Annex and originating in the Community shall be progressively reduced in accordance with the following timetable:

- on 1 January of the first year after the entry into force of the Agreement each duty shall be reduced to 70 % of the basic duty,

- on 1 January of the second year after the entry into force of the Agreement each duty shall be reduced to 63 % of the basic duty,

- on 1 January of the third year after the entry into force of the Agreement each duty shall be reduced to 56 % of the basic duty,

- on 1 January of the fourth year after the entry into force of the Agreement each duty shall be reduced to 49 % of the basic duty,

- on 1 January of the fifth year after the entry into force of the Agreement each duty shall be reduced to 42 % of the basic duty,

- on 1 January of the sixth year after the entry into force of the Agreement each duty shall be reduced to 35 % of the basic duty,

- on 1 January of the seventh year after the entry into force of the Agreement each duty shall be reduced to 28 % of the basic duty,

- on 1 January of the eighth year after the entry into force of the Agreement each duty shall be reduced to 21 % of the basic duty,

- on 1 January of the ninth year after the entry into force of the Agreement each duty shall be reduced to 14 % of the basic duty,

- on 1 January of the tenth year after the entry into force of the Agreement the remaining duties shall be abolished.

List of products for which the rates shall be reduced

5007 10

5007 20

5007 90

5106 10

5106 20

5107 10

5107 20

5108 10

5108 20

5109 10

5109 90

5110 00

5111 11

5111 12

5111 13

5111 90

5112 11

5112 19

5112 20

5112 30

5112 90

5113 00

5204 20

5205 11

5205 12

5205 13

5205 14

5205 15

5205 21

5205 22

5205 23

5205 24

5205 26

5205 27

5205 28

5205 31

5205 32

5205 33

5205 34

5205 35

5205 41

5205 42

5205 43

5205 44

5205 46

5205 47

5205 48

5206 11

5206 12

5206 13

5206 14

5206 15

5206 21

5206 22

5206 23

5206 24

5206 25

5206 31

5206 32

5206 33

5206 34

5206 35

5206 41

5206 42

5206 43

5206 44

5206 45

5207 10

5207 90

5208 11

5208 12

5208 13

5208 19

5208 21

5208 22

5208 23

5208 29

5208 31

5208 32

5208 33

5208 39

5208 41

5208 42

5208 43

5208 49

5208 51

5208 52

5208 53

5208 59

5209 11

5209 12

5209 19

5209 21

5209 22

5209 29

5209 31

5209 32

5209 39

5209 41

5209 42

5209 43

5209 49

5209 51

5209 52

5209 59

5210 11

5210 12

5210 19

5210 21

5210 22

5210 29

5210 31

5210 32

5210 39

5210 41

5210 42

5210 49

5210 51

5210 52

5210 59

5211 11

5211 12

5211 19

5211 21

5211 22

5211 29

5211 31

5211 32

5211 39

5211 41

5211 42

5211 43

5211 49

5211 51

5211 52

5211 59

5212 11

5212 12

5212 13

5212 14

5212 15

5212 21

5212 22

5212 23

5212 24

5212 25

5309 11

5309 19

5309 21

5309 29

5310 10

5310 90

5311 00

5401 10

5401 20

5402 10

5402 20

5402 31

5402 32

5402 33

5402 39

5402 41

5402 42

5402 43

5402 49

5402 51

5402 52

5402 59

5402 61

5402 62

5402 69

5403 10

5403 20

5403 33

5403 39

5403 41

5403 42

5403 49

5404 90

5405 00

5406 10

5406 20

5407 10

5407 20

5407 30

5407 41

5407 42

5407 43

5407 44

5407 51

5407 52

5407 53

5407 54

5407 61

5407 69

5407 71

5407 72

5407 73

5407 74

5407 81

5407 82

5407 83

5407 91

5407 92

5407 93

5407 94

5408 10

5408 21

5408 22

5408 23

5408 24

5408 31

5408 32

5408 33

5408 34

5501 10

5501 20

5501 30

5501 90

5503 10

5503 20

5503 30

5503 40

5503 90

5505 10

5505 20

5506 10

5506 20

5506 30

5506 90

5508 10

5508 20

5509 11

5509 12

5509 21

5509 22

5509 31

5509 32

5509 41

5509 42

5509 51

5509 52

5509 53

5509 59

5509 61

5509 62

5509 69

5509 91

5509 92

5509 99

5510 11

5510 12

5510 20

5510 30

5510 90

5511 10

5511 20

5511 30

5512 11

5512 19

5512 21

5512 29

5512 97

5512 99

5513 11

5513 12

5513 13

5513 19

5513 21

5513 22

5513 23

5513 29

5513 31

5513 32

5513 33

5513 39

5513 41

5513 42

5513 43

5513 49

5514 11

5514 12

5514 13

5514 19

5514 21

5514 22

5514 23

5514 29

5514 31

5514 32

5514 33

5514 39

5514 41

5514 42

5514 43

5514 49

5515 11

5515 12

5515 13

5515 19

5515 21

5515 22

5515 29

5515 91

5515 92

5515 99

5516 11

5516 12

5516 13

5516 14

5516 21

5516 22

5516 23

5516 24

5516 31

5516 32

5516 33

5516 34

5516 41

5516 42

5516 43

5516 44

5516 91

5516 92

5516 93

5516 94

5601 10

5601 21

5601 22

5601 29

5601 30

5602 10

5602 21

5602 29

5602 90

5603 11

5603 12

5603 13

5603 14

5603 91

5603 92

5603 93

5603 94

5606 00

5608 19

5608 90

5609 00

5701 10

5701 90

5702 10

5702 20

5702 31

5702 32

5702 39

5702 41

5702 42

5702 49

5702 51

5702 52

5702 59

5702 91

5702 92

5702 99

5703 10

5703 20

5703 30

5703 90

5704 10

5704 90

5705 00

5801 10

5801 21

5801 22

5801 23

5801 24

5801 25

5801 26

5801 31

5801 32

5801 33

5801 34

5801 35

5801 36

5801 90

5802 11

5802 19

5802 20

5802 30

5803 10

5803 90

5804 10

5804 21

5804 29

5804 30

5805 00

5806 10

5806 20

5806 31

5806 32

5806 39

5806 40

5807 10

5807 90

5808 10

5808 90

5809 00

5810 10

5810 91

5810 92

5810 99

5811 00

5901 10

5901 90

5902 10

5902 20

5902 90

5904 10

5904 91

5904 92

5905 00

5906 10

5906 91

5906 99

5907 00

5908 00

5910 00

6001 10

6001 21

6001 22

6001 29

6001 91

6001 92

6001 99

6002 10

6002 20

6002 30

6002 41

6002 42

6002 43

6002 49

6002 91

6002 92

6002 93

6002 99

6101 10

6101 20

6101 30

6101 90

6102 10

6102 20

6102 30

6102 90

6103 11

6103 12

6103 19

6103 21

6103 22

6103 23

6103 29

6103 31

6103 32

6103 33

6103 39

6103 41

6103 42

6103 43

6103 49

6104 11

6104 12

6104 13

6104 19

6104 21

6104 22

6104 23

6104 29

6104 31

6104 32

6104 33

6104 39

6104 41

6104 42

6104 43

6104 44

6104 49

6104 51

6104 52

6104 53

6104 59

6104 61

6104 62

6104 63

6104 69

6105 10

6105 20

6105 90

6106 10

6106 20

6106 90

6107 11

6107 12

6107 19

6107 21

6107 22

6107 29

6107 91

6107 92

6107 99

6108 11

6108 19

6108 21

6108 22

6108 29

6108 31

6108 32

6108 39

6108 91

6108 92

6108 99

6109 10

6109 90

6110 10

6110 20

6110 30

6110 90

6111 10

6111 20

6111 30

6111 90

6112 11

6112 12

6112 19

6112 20

6112 31

6112 39

6112 41

6112 49

6113 00

6114 10

6114 20

6114 30

6114 90

6115 11

6115 12

6115 19

6115 20

6115 91

6115 92

6115 93

6115 99

6116 10

6116 91

6116 92

6116 93

6116 99

6117 10

6117 20

6117 80

6117 90

6201 11

6201 12

6201 13

6201 19

6201 91

6201 92

6201 93

6201 99

6202 11

6202 12

6202 13

6202 19

6202 91

6202 92

6202 93

6202 99

6203 11

6203 12

6203 19

6203 21

6203 22

6203 23

6203 29

6203 31

6203 32

6203 33

6203 39

6203 41

6203 42

6203 43

6203 49

6204 11

6204 12

6204 13

6204 19

6204 21

6204 22

6204 23

6204 29

6204 31

6204 32

6204 33

6204 39

6204 41

6204 42

6204 43

6204 44

6204 49

6204 51

6204 52

6204 53

6204 59

6204 61

6204 62

6204 63

6204 69

6205 10

6205 20

6205 30

6205 90

6206 10

6206 20

6206 30

6206 40

6206 90

6207 11

6207 19

6207 21

6207 22

6207 29

6207 91

6207 92

6207 99

6208 11

6208 19

6208 21

6208 22

6208 29

6208 91

6208 92

6208 99

6209 10

6209 20

6209 30

6209 90

6210 10

6210 20

6210 30

6210 40

6210 50

6211 11

6211 12

6211 20

6211 31

6211 32

6211 33

6211 39

6211 41

6211 42

6211 43

6211 49

6212 10

6212 20

6212 30

6212 90

6213 10

6213 20

6213 90

6214 10

6214 20

6214 30

6214 40

6214 90

6215 10

6215 20

6215 90

6216 00

6217 10

6217 90

6301 10

6301 20

6301 30

6301 40

6301 90

6302 10

6302 21

6302 22

6302 29

6302 31

6302 32

6302 39

6302 40

6302 51

6302 52

6302 53

6302 59

6302 60

6302 91

6302 92

6302 93

6302 99

6303 11

6303 12

6303 19

6303 91

6303 92

6303 99

6304 11

6304 19

6304 91

6304 92

6304 93

6304 99

6305 10

6305 20

6305 32

6305 33

6305 39

6305 90

6306 11

6306 12

6306 19

6306 21

6306 22

6306 29

6306 31

6306 39

6306 41

6306 49

6306 91

6306 99

6307 10

6307 20

6307 90

6308 00

PROTOCOL 2

on steel products

Article 1

This Protocol shall apply to the products listed in chapter 72 of the Common Customs Tariff. It shall also apply to other finished steel products that may originate in future in the former Yugoslav Republic of Macedonia under the above chapter.

Article 2

Customs duties on imports applicable in the Community on steel products originating in the former Yugoslav Republic of Macedonia shall be abolished on the date of entry into force of the Agreement.

Article 3

Customs duties applicable in the former Yugoslav Republic of Macedonia on imports of steel products originating in the Community shall be progressively abolished in accordance with the following timetable:

1. Each duty shall be reduced to 80 % of the basic duty at the beginning of the first year after the entry into force of the Agreement;

2. Further reductions to 60 %, 40 %, 20 % and 0 % of the basic duty shall be made at the beginning of the second, third, fourth and fifth year respectively after the entry into force of the Agreement.

Article 4

1. Quantitative restrictions on imports into the Community of steel products originating in the former Yugoslav Republic of Macedonia as well as measures having equivalent effect shall be abolished on the date of entry into force of the Agreement.

2. Quantitative restrictions on imports into the former Yugoslav Republic of Macedonia of steel products originating in the Community, as well as measures having equivalent effect, shall be abolished on the date of entry into force of the Agreement.

Article 5

1. In view of the disciplines stipulated by Article 33 of this Agreement, the Parties recognise the need and urgency that each Party addresses promptly any structural weaknesses of its steel sector to ensure the global competitiveness of its industry. The former Yugoslav Republic of Macedonia shall therefore establish within two years the necessary restructuring and conversion programme for its steel industry to achieve viability of this sector under normal market conditions. Upon request, the Community shall provide former Yugoslav Republic of Macedonia with the appropriate technical advice to achieve this objective.

2. Further to the disciplines stipulated by Article 33 of this Agreement, any practices contrary to this Article shall be assessed on the basis of specific criteria arising from the application of the State aid disciplines of the Community, including its secondary legislation, and including any specific rules on State aid control applicable to the steel sector after the expiry of the ECSC Treaty.

3. For the purposes of applying the provisions of Article 33(1)(iii) of this Agreement with regard to steel products, the Community recognises that during five years after the entry into force of this Agreement, the former Yugoslav Republic of Macedonia may exceptionally grant State aid for restructuring purposes provided that:

- it leads to the viability of the benefiting firms under normal market conditions at the end of the restructuring period, and

- the amount and intensity of such aid are strictly limited to what is absolutely necessary in order to restore such viability and are progressively reduced, and

- the restructuring programme is linked to a global rationalisation and reduction of capacity in the former Yugoslav Republic of Macedonia.

4. Each Party shall ensure full transparency with respect to the implementation of the necessary restructuring and conversion programme by a full and continuous exchange of information to the other Party, including details on the restructuring plan as well as amount, intensity and purpose for any State aid granted on the basis of paragraphs 2 and 3 of this Article.

5. The Cooperation Council shall monitor the implementation of the requirements set out at paragraphs (1) to (4) above.

6. If one of the Parties considers that a particular practice of the other Party is incompatible with the terms of this Article, and if that practice causes or threatens to cause prejudice to the interests of the first Party or material injury to its domestic industry, this Party may take appropriate measures after consultation within the Contact Group referred to in Article 8, or after 30 working days following referral for such consultation.

Article 6

The provisions of Articles 6, 7 and 21 of the Agreement shall apply to trade between the parties in steel products.

Article 7

1. The Contracting Parties recognise the need for an administrative procedure having as its purpose the rapid provision of information on the trend in trade flows in respect of the trade in steel products originating in the former Yugoslav Republic of Macedonia in order to increase transparency and to avoid possible diversions of trade.

2. The Contracting Parties therefore agree to establish a double-checking system, without quantitative limits, for the import into the Community of steel products originating in the former Yugoslav Republic of Macedonia; to exchange statistical information on export and surveillance documents and to hold consultations promptly on any problems arising from the operation of such a system.

3. The details of the double-checking system are contained in Annex I to this Protocol. The continuing need for this system shall be regularly reviewed. The Annex may subsequently be amended or the double-checking system abolished by means of a Decision of the Cooperation Council.

Article 8

The Parties agree that the special body already established by the Cooperation Council, namely "the Contact Group on Iron and Steel products"(1), will discuss the implementation of this Protocol.

(1) Decision No 1/98 of 20 March 1998.

ANNEX I

concerning the introduction of a double-checking system for the export of certain steel products from the former Yugoslav Republic of Macedonia to the European Communities

Article 1

1. From the date of entry into force of the Interim Agreement between the European Community and the former Yugoslav Republic of Macedonia (hereinafter referred to as respectively "the Agreement" and "the Community"), imports into the Community of the products listed in Appendix 1 originating in the former Yugoslav Republic of Macedonia shall be subject to the presentation of a surveillance document conforming to the model shown in Appendix 2 issued by the authorities in the Community.

2. The classification of the products covered by this Protocol is based on the tariff and statistical nomenclature of the Community (hereinafter called the "combined nomenclature", or in abbreviated form "CN"). The origin of the products covered by this Protocol shall be determined in accordance with the rules in force in the Community.

3. The competent authorities of the Community undertake to inform the former Yugoslav Republic of Macedonia of any changes in the combined nomenclature (CN) in respect of products covered by the double-checking system before the date of their entry into force in the Community.

4. Imports into the Community of the iron and steel products listed in Appendix 1 and which originate in the former Yugoslav Republic of Macedonia shall, in addition, be subject to the issue of an export document by the competent authorities of the former Yugoslav Republic of Macedonia. In order to avoid problems at the end of a year, presentation by the importer of the original of the export document must be effected not later than 31 March of the year following that in which in the goods covered by the document were shipped.

5. An export document will not be required for goods already shipped before the date of entry into force of the Agreement, provided that the destination of such products is not changed from a non-Community destination and that those products which, under the prior surveillance regime applicable in 1996, could be imported only on presentation of a surveillance document are in fact accompanied by such a document.

6. Shipment is considered to have taken place on the date of loading onto the exporting means of transport.

7. The export document shall conform to the model shown at Appendix 3. It shall be valid for exports throughout the customs territory of the Community.

8. The former Yugoslav Republic of Macedonia shall notify the Commission of the European Communities of the names and addresses of the appropriate governmental authorities of the former Yugoslav Republic of Macedonia which are authorised to issue and to verify export documents together with specimens of the stamps and signatures they use. The former Yugoslav Republic of Macedonia shall also notify the Commission of any change in these particulars.

9. Certain technical provisions on the implementation of the double-checking system are set out in Appendix 4.

Article 2

1. The former Yugoslav Republic of Macedonia undertakes to supply the Community with precise statistical information on the export documents issued by the authorities of the former Yugoslav Republic of Macedonia pursuant to Article 1.

Such information shall be transmitted to the Community by the end of the month following the month to which the statistics relate.

2. The Community undertakes to supply the authorities of the former Yugoslav Republic of Macedonia with precise statistical information on surveillance documents issued by Member States in respect of the products listed in Appendix 1. Such information shall be transmitted to the authorities of the former Yugoslav Republic of Macedonia by the end of the month following the month to which the statistics relate.

Article 3

If necessary, at the request of either of the Parties, consultations shall be held on any problems arising from the operation of the double-checking system. Such consultations shall be held promptly. Any consultations held under this Article shall be approached by both Parties in a spirit of cooperation and with a desire to reconcile the difference between them.

Article 4

Any notices to be given hereunder shall be given:

- in respect of the Community, to the Commission of the European Communities (DG Trade E/2 and DG Enterprise C/2),

- in respect of the former Yugoslav Republic of Macedonia, to its Mission to the European Communities, the Ministry of Foreign Affairs and the Ministry of Economy.

Appendix 1

LIST OF PRODUCTS SUBJECT TO DOUBLE-CHECKING

Complete CN heading 7208

Complete CN heading 7209

Complete CN heading 7210

Complete CN heading 7211

Complete CN heading 7212

The remaining technical Annexes will be added at a later stage and will reflect the technical Annexes currently in force.

PROTOCOL 3

on trade between the former Yugoslav Republic of Macedonia and the Community in processed agricultural products

Article 1

1. The Community and the former Yugoslav Republic of Macedonia apply to processed agricultural products the duties, listed in Annex I and Annex II respectively in accordance with the conditions mentioned therein, whether limited by quota or not.

2. The Cooperation Council shall decide on:

- extensions of the list of processed agricultural products under this Protocol,

- amendments to the duties referred to in Annexes I and II,

- increases in or the abolition of tariff quotas.

3. The Cooperation Council may replace the duties established by this Protocol by a regime established on the basis of the respective market prices of the Community and the former Yugoslav Republic of Macedonia of agricultural products actually used in the manufacture of processed agricultural products subject to this Protocol. It will establish the list of goods subject to these amounts and as a consequence, the list of basic products; to this end, it will decide the general rules of application.

Article 2

The duties applied pursuant to Article 1 may be reduced by decision of the Cooperation Council:

- when in trade between the Community and the former Yugoslav Republic of Macedonia the duties applied to the basic products are reduced, or

- in response to reductions resulting from mutual concessions relating to processed agricultural products.

The reductions provided for under the first indent shall be calculated on the part of the duty designated as the agricultural component which shall correspond to the agricultural products actually used in the manufacture of the processed agricultural products in question and deducted from the duties applied to these basic agricultural products.

Article 3

The Community and the former Yugoslav Republic of Macedonia shall inform each other of the administrative arrangements adopted for the products covered by this Protocol. These arrangements should ensure equal treatment for all interested parties and should be as simple and flexible as possible.

ANNEX I

Duties applicable upon imports into the Community of goods originating in the former Yugoslav Republic of Macedonia

Duties are set to zero for imports into the Community of processed agricultural products originating in the former Yugoslav Republic of Macedonia as listed hereafter.

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ANNEX II

Duties applicable to goods originating in the Community on import into the former Yugoslav Republic of Macedonia

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PROTOCOL 4

concerning the definition of the concept of originating products and methods of administrative cooperation

TABLE OF CONTENTS

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TITLE I

GENERAL PROVISIONS

Article 1

Definitions

For the purposes of this Protocol:

(a) "manufacture" means any kind of working or processing including assembly or specific operations;

(b) "material" means any ingredient, raw material, component or part, etc., used in the manufacture of the product;

(c) "product" means the product being manufactured, even if it is intended for later use in another manufacturing operation;

(d) "goods" means both materials and products;

(e) "customs value" means the value as determined in accordance with the 1994 Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade (WTO Agreement on customs valuation);

(f) "ex-works price" means the price paid for the product ex-works to the manufacturer in the Community or the former Yugoslav Republic of Macedonia in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the product obtained is exported;

(g) "value of materials" means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the Community or the former Yugoslav Republic of Macedonia;

(h) "value of originating materials" means the value of such materials as defined in subparagraph (g) applied mutatis mutandis;

(i) "chapters" and "headings" mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonised Commodity Description and Coding System, referred to in this Protocol as "the Harmonised System" or "HS";

(k) "classified" refers to the classification of a product or material under a particular heading;

(l) "consignment" means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;

(m) "territories" includes territorial waters.

TITLE II

DEFINITION OF THE CONCEPT OF "ORIGINATING PRODUCTS"

Article 2

General requirements

1. For the purpose of implementing this Agreement, the following products shall be considered as originating in the Community:

(a) products wholly obtained in the Community within the meaning of Article 5 of this Protocol;

(b) products obtained in the Community incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the Community within the meaning of Article 6 of this Protocol;

2. For the purpose of implementing this Agreement, the following products shall be considered as originating in the former Yugoslav Republic of Macedonia:

(a) products wholly obtained in the former Yugoslav Republic of Macedonia within the meaning of Article 5 of this Protocol;

(b) products obtained in the former Yugoslav Republic of Macedonia incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the former Yugoslav Republic of Macedonia within the meaning of Article 6 of this Protocol.

Article 3

Bilateral cumulation in the European Community

Materials originating in the former Yugoslav Republic of Macedonia shall be considered as materials originating in the Community when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 6(1).

Article 4

Bilateral cumulation in the former Yugoslav Republic of Macedonia

Materials originating in the Community shall be considered as materials originating in the former Yugoslav Republic of Macedonia when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 6(1).

Article 5

Wholly obtained products

1. The following shall be considered as wholly obtained in the Community or the former Yugoslav Republic of Macedonia:

(a) mineral products extracted from their soil or from their seabed;

(b) vegetable products harvested there;

(c) live animals born and raised there;

(d) products from live animals raised there;

(e) products obtained by hunting or fishing conducted there;

(f) products of sea fishing and other products taken from the sea outside the territorial waters of the Community or the former Yugoslav Republic of Macedonia by their vessels;

(g) products made aboard their factory ships exclusively from products referred to in subparagraph (f);

(h) used articles collected there fit only for the recovery of raw materials, including used tyres fit only for retreading or for use as waste;

(i) waste and scrap resulting from manufacturing operations conducted there;

(j) products extracted from marine soil or subsoil outside their territorial waters provided that they have sole rights to work that soil or subsoil;

(k) goods produced there exclusively from the products specified in subparagraphs (a) to (j).

2. The terms "their vessels" and "their factory ships" in paragraph 1(f) and (g) shall apply only to vessels and factory ships:

(a) which are registered or recorded in an EC Member State or in of the former Yugoslav Republic of Macedonia;

(b) which sail under the flag of an EC Member State or of the former Yugoslav Republic of Macedonia;

(c) which are owned to an extent of at least 50 % by nationals of EC Member States or of the former Yugoslav Republic of Macedonia, or by a company with its head office in one of these States, of which the manager or managers, Chairman of the Board of Directors or the Supervisory Board, and the majority of the members of such boards are nationals of EC Member States or of the former Yugoslav Republic of Macedonia and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to those States or to public bodies or nationals of the said States;

(d) of which the master and officers are nationals of EC Member States or of the former Yugoslav Republic of Macedonia; and

(e) of which at least 75 % of the crew are nationals of EC Member States or of the former Yugoslav Republic of Macedonia.

Article 6

Sufficiently worked or processed products

1. For the purposes of Article 2, products which are not wholly obtained are considered to be sufficiently worked or processed when the conditions set out in the list in Annex II are fulfilled.

The conditions referred to above indicate, for all products covered by this Agreement, the working or processing which must be carried out on non-originating materials used in manufacturing and apply only in relation to such materials. Accordingly, it follows that if a product, which has acquired originating status by fulfilling the conditions set out in the list is used in the manufacture of another product, the conditions applicable to the product in which it is incorporated do not apply to it, and no account shall be taken of the non-originating materials which may have been used in its manufacture.

2. Notwithstanding paragraph 1, non-originating materials which, according to the conditions set out in the list, should not be used in the manufacture of a product may nevertheless be used, provided that:

(a) their total value does not exceed 10 % of the ex-works price of the product;

(b) any of the percentages given in the list for the maximum value of non-originating materials are not exceeded through the application of this paragraph.

This paragraph shall not apply to products falling within chapters 50 to 63 of the Harmonised System.

3. Paragraphs 1 and 2 shall apply except as provided in Article 7.

Article 7

Insufficient working or processing operations

1. Without prejudice to paragraph 2, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 6 are satisfied:

(a) preserving operations to ensure that the products remain in good condition during transport and storage;

(b) breaking-up and assembly of packages;

(c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings;

(d) ironing or pressing of textiles;

(e) simple painting and polishing operations;

(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;

(g) operations to colour sugar or form sugar lumps;

(h) peeling, stoning and shelling of fruits, nuts and vegetables;

(i) sharpening, simple grinding or simple cutting;

(j) sifting, screening, sorting, classifying, grading, matching; (including the making-up of sets of articles);

(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;

(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;

(m) simple mixing of products, whether or not of different kinds,

(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;

(o) a combination of two or more operations specified in subparagraphs (a) to (n);

(p) slaughter of animals.

2. All operations carried out either in the Community or in the former Yugoslav Republic of Macedonia on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1.

Article 8

Unit of qualification

1. The unit of qualification for the application of the provisions of this Protocol shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonised System.

Accordingly, it follows that:

(a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonised System in a single heading, the whole constitutes the unit of qualification;

(b) when a consignment consists of a number of identical products classified under the same heading of the Harmonised System, each product must be taken individually when applying the provisions of this Protocol.

2. Where, under General Rule 5 of the Harmonised System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin.

Article 9

Accessories, spare parts and tools

Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

Article 10

Sets

Sets, as defined in General Rule 3 of the Harmonised System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15 % of the ex-works price of the set.

Article 11

Neutral elements

In order to determine whether a product originates, it shall not be necessary to determine the origin of the following which might be used in its manufacture:

(a) energy and fuel;

(b) plant and equipment;

(c) machines and tools;

(d) goods which do not enter and which are not intended to enter into the final composition of the product.

TITLE III

TERRITORIAL REQUIREMENTS

Article 12

Principle of territoriality

1. The conditions for acquiring originating status set out in Title II must continue to be fulfilled at all times in the Community or the former Yugoslav Republic of Macedonia.

2. If originating goods exported from the Community or the former Yugoslav Republic of Macedonia to another country are returned, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a) the returning goods are the same as those that were exported; and

(b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported.

Article 13

Direct transport

1. The preferential treatment provided for under the Agreement applies only to products, satisfying the requirements of this Protocol, which are transported directly between the Community and the former Yugoslav Republic of Macedonia. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, trans-shipment or temporary warehousing in such territories, provided that they remain under the surveillance of the customs authorities in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition.

Originating products may be transported by pipeline across territory other than that of the Community or the former Yugoslav Republic of Macedonia.

2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authorities of the importing country by the production of:

(a) a single transport document covering the passage from the exporting country through the country of transit; or

(b) a certificate issued by the customs authorities of the country of transit:

(i) giving an exact description of the products;

(ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships, or the other means of transport used; and

(iii) certifying the conditions under which the products remained in the transit country; or

(c) failing these, any substantiating documents.

Article 14

Exhibitions

1. Originating products, sent for exhibition in a country other than the Community or the former Yugoslav Republic of Macedonia shall benefit on importation from the provisions of the Agreement provided it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned these products from the Community or the former Yugoslav Republic of Macedonia to the country in which the exhibition is held and has exhibited them there;

(b) the products have been sold or otherwise disposed of by that exporter to a person in the Community or the former Yugoslav Republic of Macedonia;

(c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and

(d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition.

2. A proof of origin must be issued or made out in accordance with the provisions of Title V and submitted to the customs authorities of the importing country in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the conditions under which they have been exhibited may be required.

3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organised for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control.

TITLE IV

DRAWBACK OR EXEMPTION

Article 15

Prohibition of drawback of, or exemption from customs duties

1. Non-originating materials used in the manufacture of products originating in the Community, in the former Yugoslav Republic of Macedonia, for which a proof of origin is issued or made out in accordance with the provisions of Title V shall not be subject in the Community or the former Yugoslav Republic of Macedonia to drawback of, or exemption from, customs duties of whatever kind.

2. The prohibition in paragraph 1 shall apply to any arrangement for refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect, applicable in the Community or the former Yugoslav Republic of Macedonia to materials used in the manufacture and to products covered by paragraph 1(b) above, where such refund, remission or non-payment applies, expressly or in effect, when products obtained from the said materials are exported and not when they are retained for home use there.

3. The exporter of products covered by a proof of origin shall be prepared to submit at any time, upon request from the customs authorities, all appropriate documents proving that no drawback has been obtained in respect of the non-originating materials used in the manufacture of the products concerned and that all customs duties or charges having equivalent effect applicable to such materials have actually been paid.

4. The provisions of paragraphs 1 to 3 shall also apply in respect of packaging within the meaning of Article 8(2), accessories, spare parts and tools within the meaning of Article 9 and products in a set within the meaning of Article 10 when such items are non-originating.

5. The provisions of paragraphs 1 to 4 shall apply only in respect of materials which are of the kind to which the Agreement applies. Furthermore, they shall not preclude the application of an export refund system for agricultural products, applicable upon export in accordance with the provisions of the Agreement.

6. Notwithstanding paragraph 1, the former Yugoslav Republic of Macedonia may apply arrangements for drawback of, or exemption from, customs duties or charges having an equivalent effect, applicable to materials used in the manufacture of originating products, subject to the following provisions:

(a) a 5 % rate of customs charge shall be retained in respect of products falling within chapters 25 to 49 and 64 to 97 of the Harmonised System, or such lower rate as is in force in the former Yugoslav Republic of Macedonia;

(b) a 10 % rate of customs charge shall be retained in respect of products falling within chapters 50 to 63 of the Harmonised System, or such lower rate as is in force in the former Yugoslav Republic of Macedonia.

The provisions of this Article shall apply from 1 January 2003 and may be reviewed by common accord.

TITLE V

PROOF OF ORIGIN

Article 16

General requirements

1. Products originating in the Community shall, on importation into the former Yugoslav Republic of Macedonia and products originating in the former Yugoslav Republic of Macedonia shall, on importation into the Community benefit from this Agreement upon submission of either:

(a) a movement certificate EUR.1, a specimen of which appears in Annex III; or

(b) in the cases specified in Article 21(1), a declaration, the text of which appears in Annex IV, given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified (hereinafter referred to as the "invoice declaration").

2. Notwithstanding paragraph 1, originating products within the meaning of this Protocol shall, in the cases specified in Article 26, benefit from this Agreement without it being necessary to submit any of the documents referred to above.

Article 17

Procedure for the issue of a movement certificate EUR.1

1. A movement certificate EUR.1 shall be issued by the customs authorities of the exporting country on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorised representative.

2. For this purpose, the exporter or his authorised representative shall fill out both the movement certificate EUR.1 and the application form, specimens of which appear in Annex III. These forms shall be completed in one of the languages in which this Agreement is drawn up and in accordance with the provisions of the domestic law of the exporting country. If they are hand-written, they shall be completed in ink in printed characters. The description of the products must be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the empty space being crossed through.

3. The exporter applying for the issue of a movement certificate EUR.1 shall be prepared to submit at any time, at the request of the customs authorities of the exporting country where the movement certificate EUR.1 is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol.

4. A movement certificate EUR.1 shall be issued by the customs authorities of an EC Member State or the former Yugoslav Republic of Macedonia if the products concerned can be considered as products originating in the Community or in the former Yugoslav Republic of Macedonia and fulfil the other requirements of this Protocol.

5. The issuing customs authorities shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of this Protocol. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate. The issuing customs authorities shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions.

6. The date of issue of the movement certificate EUR.1 shall be indicated in Box 11 of the certificate.

7. A movement certificate EUR.1 shall be issued by the customs authorities and made available to the exporter as soon as actual exportation has been effected or ensured.

Article 18

Movement certificates EUR.1 issued retrospectively

1. Notwithstanding Article 17(7), a movement certificate EUR.1 may exceptionally be issued after exportation of the products to which it relates if:

(a) it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances; or

(b) it is demonstrated to the satisfaction of the customs authorities that a movement certificate EUR.1 was issued but was not accepted at importation for technical reasons.

2. For the implementation of paragraph 1, the exporter must indicate in his application the place and date of exportation of the products to which the movement certificate EUR.1 relates, and state the reasons for his request.

3. The customs authorities may issue a movement certificate EUR.1 retrospectively only after verifying that the information supplied in the exporter's application agrees with that in the corresponding file.

4. Movement certificates EUR.1 issued retrospectively must be endorsed with one of the following phrases:

- "EXPEDIDO A POSTERIORI",

- "UDSTEDT EFTERFØLGENDE",

- "NACHTRÄGLICH AUSGESTELLT",

- "EKΔΟΘΕΝ ΕΚ ΤΩΝ ΥΣΤΕΡΩΝ",

- "ISSUED RETROSPECTIVELY",

- "DÉLIVRÉ A POSTERIORI",

- "RILASCIATO A POSTERIORI",

- "AFGEGEVEN A POSTERIORI",

- "EMITIDO A POSTERIORI",

- "ANNETTU JÄLKIKÄTEEN",

- "UTFÄRDAT I EFTERHAND",

- "DOPOLNITELNO IZDADENO".

5. The endorsement referred to in paragraph 4 shall be inserted in the "Remarks" box of the movement certificate EUR.1.

Article 19

Issue of a duplicate movement certificate EUR.1

1. In the event of theft, loss or destruction of a movement certificate EUR.1, the exporter may apply to the customs authorities which issued it for a duplicate made out on the basis of the export documents in their possession.

2. The duplicate issued in this way must be endorsed with one of the following words:

- "DUPLICADO",

- "DUPLIKAT",

- "DUPLIKAT",

- "ΑΝΤΙΓΡΑΦΟ",

- "DUPLICATE",

- "DUPLICATA",

- "DUPLICATO",

- "DUPLICAAT",

- "SEGUNDA VIA",

- "KAKSOISKAPPALE",

- "DUPLIKAT",

- "DUPLIKAT".

3. The endorsement referred to in paragraph 2 shall be inserted in the "Remarks" box of the duplicate movement certificate EUR.1.

4. The duplicate, which must bear the date of issue of the original movement certificate EUR.1, shall take effect as from that date.

Article 20

Issue of movement certificates EUR.1 on the basis of a proof of origin issued or made out previously

When originating products are placed under the control of a customs office in the Community or the former Yugoslav Republic of Macedonia, it shall be possible to replace the original proof of origin by one or more movement certificates EUR.1 for the purpose of sending all or some of these products elsewhere within the Community or the former Yugoslav Republic of Macedonia. The replacement movement certificate(s) EUR.1 shall be issued by the customs office under whose control the products are placed.

Article 21

Conditions for making out an invoice declaration

1. An invoice declaration as referred to in Article 16(1)(b) may be made out:

(a) by an approved exporter within the meaning of Article 22, or

(b) by any exporter for any consignment consisting of one or more packages containing originating products whose total value does not exceed EUR 6000.

2. An invoice declaration may be made out if the products concerned can be considered as products originating in the Community or in the former Yugoslav Republic of Macedonia and fulfil the other requirements of this Protocol.

3. The exporter making out an invoice declaration shall be prepared to submit at any time, at the request of the customs authorities of the exporting country, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol.

4. An invoice declaration shall be made out by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the declaration, the text of which appears in Annex IV, using one of the linguistic versions set out in that Annex and in accordance with the provisions of the domestic law of the exporting country. If the declaration is hand-written, it shall be written in ink in printed characters.

5. Invoice declarations shall bear the original signature of the exporter in manuscript. However, an approved exporter within the meaning of Article 22 shall not be required to sign such declarations provided that he gives the customs authorities of the exporting country a written undertaking that he accepts full responsibility for any invoice declaration which identifies him as if it had been signed in manuscript by him.

6. An invoice declaration may be made out by the exporter when the products to which it relates are exported, or after exportation on condition that it is presented in the importing country no longer than two years after the importation of the products to which it relates.

Article 22

Approved exporter

1. The customs authorities of the exporting country may authorise any exporter who makes frequent shipments of products under this Agreement to make out invoice declarations irrespective of the value of the products concerned. An exporter seeking such authorisation must offer to the satisfaction of the customs authorities all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of this Protocol.

2. The customs authorities may grant the status of approved exporter subject to any conditions which they consider appropriate.

3. The customs authorities shall grant to the approved exporter a customs authorisation number which shall appear on the invoice declaration.

4. The customs authorities shall monitor the use of the authorisation by the approved exporter.

5. The customs authorities may withdraw the authorisation at any time. They shall do so where the approved exporter no longer offers the guarantees referred to in paragraph 1, does not fulfil the conditions referred to in paragraph 2 or otherwise makes an incorrect use of the authorisation.

Article 23

Validity of proof of origin

1. A proof of origin shall be valid for four months from the date of issue in the exporting country, and must be submitted within the said period to the customs authorities of the importing country.

2. Proofs of origin which are submitted to the customs authorities of the importing country after the final date for presentation specified in paragraph 1 may be accepted for the purpose of applying preferential treatment, where the failure to submit these documents by the final date set is due to exceptional circumstances.

3. In other cases of belated presentation, the customs authorities of the importing country may accept the proofs of origin where the products have been submitted before the said final date.

Article 24

Submission of proof of origin

Proofs of origin shall be submitted to the customs authorities of the importing country in accordance with the procedures applicable in that country. The said authorities may require a translation of a proof of origin and may also require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions required for the implementation of the Agreement.

Article 25

Importation by instalments

Where, at the request of the importer and on the conditions laid down by the customs authorities of the importing country, dismantled or non-assembled products within the meaning of General Rule 2(a) of the Harmonised System falling within Sections XVI and XVII or heading Nos 7308 and 9406 of the Harmonised System are imported by instalments, a single proof of origin for such products shall be submitted to the customs authorities upon importation of the first instalment.

Article 26

Exemptions from proof of origin

1. Products sent as small packages from private persons to private persons or forming part of travellers' personal luggage shall be admitted as originating products without requiring the submission of a proof of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Protocol and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, this declaration can be made on the customs declaration CN22/CN23 or on a sheet of paper annexed to that document.

2. Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade if it is evident from the nature and quantity of the products that no commercial purpose is in view.

3. Furthermore, the total value of these products shall not exceed EUR 500 in the case of small packages or EUR 1200 in the case of products forming part of travellers' personal luggage.

Article 27

Supporting documents

The documents referred to in Articles 17(3) and 21(3) used for the purpose of proving that products covered by a movement certificate EUR.1 or an invoice declaration can be considered as products originating in the Community or in the former Yugoslav Republic of Macedonia and fulfil the other requirements of this Protocol may consist inter alia of the following:

(a) direct evidence of the processes carried out by the exporter or supplier to obtain the goods concerned, contained for example in his accounts or internal bookkeeping;

(b) documents proving the originating status of materials used, issued or made out in the Community or the former Yugoslav Republic of Macedonia where these documents are used in accordance with domestic law;

(c) documents proving the working or processing of materials in the Community or the former Yugoslav Republic of Macedonia, issued or made out in the Community or the former Yugoslav Republic of Macedonia, where these documents are used in accordance with domestic law;

(d) movement certificates EUR.1 or invoice declarations proving the originating status of materials used, issued or made out in the Community or the former Yugoslav Republic of Macedonia in accordance with this Protocol.

Article 28

Preservation of proof of origin and supporting documents

1. The exporter applying for the issue of a movement certificate EUR.1 shall keep for at least three years the documents referred to in Article 17(3).

2. The exporter making out an invoice declaration shall keep for at least three years a copy of this invoice declaration as well as the documents referred to in Article 21(3).

3. The customs authorities of the exporting country issuing a movement certificate EUR.1 shall keep for at least three years the application form referred to in Article 17(2).

4. The customs authorities of the importing country shall keep for at least three years the movement certificates EUR.1 and the invoice declarations submitted to them.

Article 29

Discrepancies and formal errors

1. The discovery of slight discrepancies between the statements made in the proof of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the proof of origin null and void if it is duly established that this document does correspond to the products submitted.

2. Obvious formal errors such as typing errors on a proof of origin should not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document.

Article 30

Amounts expressed in euro

1. For the application of the provisions of Article 21(1)(b) and Article 26(3) in cases where products are invoiced in a currency other than euro, amounts in the national currency of the former Yugoslav Republic of Macedonia equivalent to the amounts expressed in euro shall be fixed annually.

2. A consignment shall benefit from the provisions of Article 21(1)(b) or Article 26(3) by reference to the currency in which the invoice is drawn up, according to the amount fixed by the Community or the former Yugoslav Republic of Macedonia.

3. The amounts to be used in any given national currency shall be the equivalent in that currency of the amounts expressed in euro as at the first working day of October. The amounts shall be communicated to the European Commission by 15 October and shall apply from 1 January the following year. The European Commission shall notify the former Yugoslav Republic of Macedonia of the relevant amount.

4. The Community or the former Yugoslav Republic of Macedonia may round up or down the amount resulting from the conversion into its national currency of an amount expressed in euro. The rounded-off amount may not differ from the amount resulting from the conversion by more than 5 %. The former Yugoslav Republic of Macedonia may retain unchanged its national currency equivalent to an amount expressed in euro if, at the time of the annual adjustment provided for in paragraph 3, the conversion of that amount, prior to any rounding-off, results in an increase of less that 15 % in the national currency equivalent. The national currency equivalent may be retained unchanged if the conversion would result in a decrease in that equivalent value.

5. The amounts expressed in euro shall be reviewed by the Cooperation Council at the request of the Community or the former Yugoslav Republic of Macedonia. When carrying out this review, the Cooperation Council shall consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in euro.

TITLE VI

ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

Article 31

Mutual assistance

1. The customs authorities of the EC Member States and of the former Yugoslav Republic of Macedonia shall provide each other, through the European Commission, with specimen impressions of stamps used in their customs offices for the issue of movement certificates EUR.1 and with the addresses of the customs authorities responsible for verifying those certificates and invoice declarations.

2. In order to ensure the proper application of this Protocol, the Community and the former Yugoslav Republic of Macedonia shall assist each other, through the competent customs administrations, in checking the authenticity of the movement certificates EUR.1 or the invoice declarations and the correctness of the information given in these documents.

Article 32

Verification of proofs of origin

1. Subsequent verifications of proofs of origin shall be carried out at random or whenever the customs authorities of the importing country have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Protocol.

2. For the purposes of implementing the provisions of paragraph 1, the customs authorities of the importing country shall return the movement certificate EUR.1 and the invoice, if it has been submitted, the invoice declaration, or a copy of these documents, to the customs authorities of the exporting country giving, where appropriate, the reasons for the enquiry. Any documents and information obtained suggesting that the information given on the proof or origin is incorrect shall be forwarded in support of the request for verification.

3. The verification shall be carried out by the customs authorities of the exporting country. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate.

4. If the customs authorities of the importing country decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary.

5. The customs authorities requesting the verification shall be informed of the results of this verification as soon as possible. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as products originating in the Community or the former Yugoslav Republic of Macedonia and fulfil the other requirements of this Protocol.

6. If in cases of reasonable doubt there is no reply within ten months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences.

Article 33

Dispute settlement

Where disputes arise in relation to the verification procedures of Article 32 which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification or where they raise a question as to the interpretation of this Protocol, they shall be submitted to the Cooperation Council.

In all cases the settlement of disputes between the importer and the customs authorities of the importing country shall be under the legislation of the said country.

Article 34

Penalties

Penalties shall be imposed on any person who draws up, or causes to be drawn up, a document which contains incorrect information for the purpose of obtaining a preferential treatment for products.

Article 35

Free zones

1. The Community and the former Yugoslav Republic of Macedonia shall take all necessary steps to ensure that products traded under cover of a proof of origin which in the course of transport use a free zone situated in their territory, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration.

2. By means of an exemption to the provisions contained in paragraph 1, when products originating in the Community or the former Yugoslav Republic of Macedonia are imported into a free zone under cover of a proof of origin and undergo treatment or processing, the authorities concerned shall issue a new EUR.1 certificate at the exporter's request, if the treatment or processing undergone is in conformity with the provisions of this Protocol.

TITLE VII

CEUTA AND MELILLA

Article 36

Application of the Protocol

1. The term "Community" used in Article 2 does not cover Ceuta and Melilla.

2. Products originating in the former Yugoslav Republic of Macedonia, when imported into Ceuta or Melilla, shall enjoy in all respects the same customs regime as that which is applied to products originating in the customs territory of the Community under Protocol 2 of the Act of Accession of the Kingdom of Spain and the Portuguese Republic to the European Communities. The former Yugoslav Republic of Macedonia shall grant to imports of products covered by the Agreement and originating in Ceuta and Melilla the same customs regime as that which is granted to products imported from and originating in the Community.

3. For the purpose of the application of paragraph 2 concerning products originating in Ceuta and Melilla, this Protocol shall apply mutatis mutandis subject to the special conditions set out in Article 37.

Article 37

Special conditions

1. Providing they have been transported directly in accordance with the provisions of Article 13, the following shall be considered as:

1) products originating in Ceuta and Melilla:

(a) products wholly obtained in Ceuta and Melilla;

(b) products obtained in Ceuta and Melilla in the manufacture of which products other than those referred to in (a) are used, provided that:

(i) the said products have undergone sufficient working or processing within the meaning of Article 6; or that

(ii) those products are originating in the former Yugoslav Republic of Macedonia or the Community within the meaning of this Protocol, provided that they have been submitted to working or processing which goes beyond the insufficient working or processing referred to in Article 7(1).

2) products originating in the former Yugoslav Republic of Macedonia:

(a) products wholly obtained in the former Yugoslav Republic of Macedonia;

(b) products obtained in the former Yugoslav Republic of Macedonia, in the manufacture of which products other than those referred to in (a) are used, provided that:

(i) the said products have undergone sufficient working or processing within the meaning of Article 6; or that

(ii) those products are originating in Ceuta and Melilla or the Community within the meaning of this Protocol, provided that they have been submitted to working or processing which goes beyond the insufficient working or processing referred to in Article 7(1).

2. Ceuta and Melilla shall be considered as a single territory.

3. The exporter or his authorised representative shall enter "the former Yugoslav Republic of Macedonia" and "Ceuta and Melilla" in Box 2 of movement certificates EUR.1 or on invoice declarations. In addition, in the case of products originating in Ceuta and Melilla, this shall be indicated in Box 4 of movement certificates EUR.1 or on invoice declarations.

4. The Spanish customs authorities shall be responsible for the application of this Protocol in Ceuta and Melilla.

TITLE VIII

FINAL PROVISIONS

Article 38

Amendments to the Protocol

The Cooperation Council may decide to amend the provisions of this Protocol.

ANNEX I

INTRODUCTORY NOTES TO THE LIST IN ANNEX II

Note 1:

The list sets out the conditions required for all products to be considered as sufficiently worked or processed within the meaning of Article 6.

Note 2:

2.1. The first two columns in the list describe the product obtained. The first column gives the heading number or chapter number used in the Harmonised System and the second column gives the description of goods used in that system for that heading or chapter. For each entry in the first two columns a rule is specified in column 3 or 4. Where, in some cases, the entry in the first column is preceded by an "ex", this signifies that the rules in column 3 or 4 apply only to the part of that heading as described in column 2.

2.2. Where several heading numbers are grouped together in column 1 or a chapter number is given and the description of products in column 2 is therefore given in general terms, the adjacent rules in column 3 or 4 apply to all products which, under the Harmonised System, are classified in headings of the chapter or in any of the headings grouped together in column 1.

2.3. Where there are different rules in the list applying to different products within a heading, each indent contains the description of that part of the heading covered by the adjacent rules in column 3 or 4.

2.4. Where, for an entry in the first two columns, a rule is specified in both columns 3 and 4, the exporter may opt, as an alternative, to apply either the rule set out in column 3 or that set out in column 4. If no origin rule is given in column 4, the rule set out in column 3 has to be applied.

Note 3:

3.1. The provisions of Article 6, concerning products having acquired originating status which are used in the manufacture of other products, shall apply, regardless of whether this status has been acquired inside the factory where these products are used or in another factory in the former Yugoslav Republic of Macedonia or in the Community.

Example:

An engine of heading No 8407, for which the rule states that the value of the non-originating materials which may be incorporated may not exceed 40 % of the ex-works price, is made from "other alloy steel roughly shaped by forging" of heading No ex 7224.

If this forging has been forged in the former Yugoslav Republic of Macedonia from a non-originating ingot, it has already acquired originating status by virtue of the rule for heading No ex 7224 in the list. The forging can then count as originating in the value-calculation for the engine, regardless of whether it was produced in the same factory or in another factory in the former Yugoslav Republic of Macedonia. The value of the non-originating ingot is thus not taken into account when adding up the value of the non-originating materials used.

3.2. The rule in the list represents the minimum amount of working or processing required, and the carrying-out of more working or processing also confers originating status; conversely, the carrying-out of less working or processing cannot confer originating status. Thus, if a rule provides that non-originating material, at a certain level of manufacture, may be used, the use of such material at an earlier stage of manufacture is allowed, and the use of such material at a later stage is not.

3.3. Without prejudice to Note 3.2, where a rule states that "materials of any heading" may be used, materials of the same heading as the product may also be used, subject, however, to any specific limitations which may also be contained in the rule. However, the expression "manufacture from materials of any heading, including other materials of heading No ..." means that only materials classified in the same heading as the product and of a different description than that of the product as given in column 2 of the list may be used.

3.4. When a rule in the list specifies that a product may be manufactured from more than one material, this means that one or more materials may be used. It does not require that all be used.

Example:

The rule for fabrics of headings Nos 5208 to 5212 provides that natural fibres may be used and that chemical materials, among other materials, may also be used. This does not mean that both have to be used; it is possible to use one or the other, or both.

3.5. Where a rule in the list specifies that a product must be manufactured from a particular material, the condition obviously does not prevent the use of other materials which, because of their inherent nature, cannot satisfy the rule. (See also Note 6.2 below in relation to textiles).

Example:

The rule for prepared foods of heading No 1904 which specifically excludes the use of cereals and their derivatives, does not prevent the use of mineral salts, chemicals and other additives which are not products from cereals.

However, this does not apply to products which, although they cannot be manufactured from the particular materials specified in the list, can be produced from a material of the same nature at an earlier stage of manufacture.

Example:

In the case of an article of apparel of ex Chapter 62 made from non-woven materials, if the use of only non-originating yarn is allowed for this class of article, it is not possible to start from non-woven cloth - even if non-woven cloths cannot normally be made from yarn. In such cases, the starting material would normally be at the stage before yarn - that is, the fibre stage.

3.6. Where, in a rule in the list, two percentages are given for the maximum value of non-originating materials that can be used, then these percentages may not be added together. In other words, the maximum value of all the non-originating materials used may never exceed the higher of the percentages given. Furthermore, the individual percentages must not be exceeded, in relation to the particular materials to which they apply.

Note 4:

4.1. The term "natural fibres" is used in the list to refer to fibres other than artificial or synthetic fibres. It is restricted to the stages before spinning takes place, including waste, and, unless otherwise specified, includes fibres which have been carded, combed or otherwise processed, but not spun.

4.2. The term "natural fibres" includes horsehair of heading No 0503, silk of headings Nos 5002 and 5003, as well as wool-fibres and fine or coarse animal hair of headings Nos 5101 to 5105, cotton fibres of headings Nos 5201 to 5203 and other vegetable fibres of headings Nos 5301 to 5305.

4.3. The terms "textile pulp", "chemical materials" and "paper-making materials" are used in the list to describe the materials, not classified in chapters 50 to 63, which can be used to manufacture artificial, synthetic or paper fibres or yarns.

4.4. The term "man-made staple fibres" is used in the list to refer to synthetic or artificial filament tow, staple fibres or waste, of headings Nos 5501 to 5507.

Note 5:

5.1. Where, for a given product in the list, reference is made to this Note, the conditions set out in column 3 shall not be applied to any basic textile materials used in the manufacture of this product and which, taken together, represent 10 % or less of the total weight of all the basic textile materials used. (See also Notes 5.3 and 5.4 below.)

5.2. However, the tolerance mentioned in Note 5.1 may be applied only to mixed products which have been made from two or more basic textile materials.

The following are the basic textile materials:

- silk,

- wool,

- coarse animal hair,

- fine animal hair,

- horsehair,

- cotton,

- paper-making materials and paper,

- flax,

- true hemp,

- jute and other textile bast fibres,

- sisal and other textile fibres of the genus Agave,

- coconut, abaca, ramie and other vegetable textile fibres,

- synthetic man-made filaments,

- artificial man-made filaments,

- current-conducting filaments,

- synthetic man-made staple fibres of polypropylene,

- synthetic man-made staple fibres of polyester,

- synthetic man-made staple fibres of polyamide,

- synthetic man-made staple fibres of polyacrylonitrile,

- synthetic man-made staple fibres of polyimide,

- synthetic man-made staple fibres of polytetrafluoroethylene,

- synthetic man-made staple fibres of polyphenylene sulphide,

- synthetic man-made staple fibres of polyvinyl chloride,

- other synthetic man-made staple fibres,

- artificial man-made staple fibres of viscose,

- other artificial man-made staple fibres,

- yarn made of polyurethane segmented with flexible segments of polyether, whether or not gimped,

- yarn made of polyurethane segmented with flexible segments of polyester, whether or not gimped,

- products of heading No 5605 (metallised yarn) incorporating strip consisting of a core of aluminium foil or of a core of plastic film whether or not coated with aluminium powder, of a width not exceeding 5 mm, sandwiched by means of a transparent or coloured adhesive between two layers of plastic film,

- other products of heading No 5605.

Example:

A yarn, of heading No 5205, made from cotton fibres of heading No 5203 and synthetic staple fibres of heading No 5506 is a mixed yarn. Therefore, non-originating synthetic staple fibres which do not satisfy the origin-rules (which require manufacture from chemical materials or textile pulp) may be used up to a weight of 10 % of the yarn.

Example:

A woollen fabric, of heading No 5112, made from woollen yarn of heading No 5107 and synthetic yarn of staple fibres of heading No 5509 is a mixed fabric. Therefore, synthetic yarn which does not satisfy the origin-rules (which require manufacture from chemical materials or textile pulp), or woollen yarn which does not satisfy the origin-rules (which require manufacture from natural fibres, not carded or combed or otherwise prepared for spinning), or a combination of the two, may be used provided their total weight does not exceed 10 % of the weight of the fabric.

Example:

Tufted textile fabric, of heading No 5802, made from cotton yarn of heading No 5205, and cotton fabric of heading No 5210 is a only mixed product if the cotton fabric is itself a mixed fabric made from yarns classified in two separate headings, or if the cotton yarns used are themselves mixtures.

Example:

If the tufted textile fabric concerned had been made from cotton yarn of heading No 5205 and synthetic fabric of heading No 5407 then, obviously, the yarns used are two separate basic textile materials and the tufted textile fabric is, accordingly, a mixed product.

5.3. In the case of products incorporating "yarn made of polyurethane segmented with flexible segments of polyether, whether or not gimped", this tolerance is 20 % in respect of this yarn.

5.4. In the case of products incorporating "strip consisting of a core of aluminium foil or of a core of plastic film whether or not coated with aluminium powder, of a width not exceeding 5 mm, sandwiched by means of an adhesive between two layers of plastic film", this tolerance is 30 % in respect of this strip.

Note 6:

6.1. Where, in the list, reference is made to this Note, textile materials (with the exception of linings and interlinings), which do not satisfy the rule set out in the list in column 3 for the made-up product concerned, may be used, provided that they are classified in a heading other than that of the product and that their value does not exceed 8 % of the ex-works price of the product.

6.2. Without prejudice to Note 6.3, materials, which are not classified within chapters 50 to 63, may be used freely in the manufacture of textile products, whether or not they contain textiles.

Example:

If a rule in the list provides that, for a particular textile item (such as trousers), yarn must be used, this does not prevent the use of metal items, such as buttons, because buttons are not classified within chapters 50 to 63. For the same reason, it does not prevent the use of slide-fasteners, even though slide-fasteners normally contain textiles.

6.3. Where a percentage-rule applies, the value of materials which are not classified within chapters 50 to 63 must be taken into account when calculating the value of the non-originating materials incorporated.

Note 7:

7.1. For the purposes of headings Nos ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403 the "specific processes" are the following:

(a) vacuum-distillation;

(b) redistillation by a very thorough fractionation-process(1);

(c) cracking;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all of the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralisation with alkaline agents; decolourisation and purification with naturally-active earth, activated earth, activated charcoal or bauxite;

(g) polymerisation;

(h) alkylation;

(i) isomerisation.

7.2. For the purposes of headings Nos 2710, 2711 and 2712, the "specific processes" are the following:

(a) vacuum-distillation;

(b) redistillation by a very thorough fractionation-process(2);

(c) cracking;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all of the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralisation with alkaline agents; decolourisation and purification with naturally-active earth, activated earth, activated charcoal or bauxite;

(g) polymerisation;

(h) alkylation;

(ij) isomerisation;

(k) in respect of heavy oils of heading No ex 2710: only, desulphurisation with hydrogen, resulting in a reduction of at least 85 % of the sulphur-content of the products processed (ASTM D 1266-59 T method);

(l) in respect of products of heading No 2710 only, deparaffining by a process other than filtering;

(m) in respect of heavy oils of heading No ex 2710 only, treatment with hydrogen, at a pressure of more than 20 bar and a temperature of more than 250 °C, with the use of a catalyst, other than to effect desulphurisation, when the hydrogen constitutes an active element in a chemical reaction. The further treatment, with hydrogen, of lubricating oils of heading No ex 2710 (for example hydrofinishing or decolourisation), in order, more especially, to improve colour or stability shall not, however, be deemed to be a specific process;

(n) in respect of fuel oils of heading No ex 2710 only, atmospheric distillation, on condition that less than 30 % of these products distils, by volume, including losses, at 300 °C, by the ASTM D 86 method;

(o) in respect of heavy oils other than gas oils and fuel oils of heading No ex 2710 only, treatment by means of a high-frequency electrical brush-discharge.

7.3. For the purposes of headings Nos ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, simple operations, such as cleaning, decanting, desalting, water-separation, filtering, colouring, marking, obtaining a sulphur-content as a result of mixing products with different sulphur-contents, or any combination of these operations or like operations, do not confer origin.

(1) See Additional Explanatory Note 4(b) to chapter 27 of the Combined Nomenclature.

(2) See Additional Explanatory Note 4(b) to chapter 27 of the Combined Nomenclature.

ANNEX II

LIST OF WORKING OR PROCESSING REQUIRED TO BE CARRIED OUT ON NON-ORIGINATING MATERIALS IN ORDER THAT THE PRODUCT MANUFACTURED CAN OBTAIN ORIGINATING STATUS

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ANNEX III

MOVEMENT CERTIFICATE EUR.1 AND APPLICATION FOR A MOVEMENT CERTIFICATE EUR.1

1. Each form shall measure 210 × 297 mm; a tolerance of up to minus 5 mm or plus 8 mm in the length may be allowed. The paper used must be white, sized for writing, not containing mechanical pulp and weighting not less than 25 g/m2. It shall have a printed green guilloche pattern background making any falsification by mechanical or chemical means apparent to the eye.

2. The competent authorities of the parties may reserve the right to print the forms themselves or may have them printed by approved printers. In the latter case, each form must include a reference to such approval. Each form must bear the name and address of the printer or a mark by which the printer can be identified. It shall also bear a serial number, either printed or not, by which it can be identified.

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ANNEX IV

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PROTOCOL 5

on mutual administrative assistance in customs matters

Article 1

Definitions

For the purposes of this Protocol:

(a) "customs legislation" shall mean any legal or regulatory provisions applicable in the territories of the European Community and former Yugoslav Republic of Macedonia, governing the import, export and transit of goods and their placing under any other customs regime or procedure, including measures of prohibition, restriction and control;

(b) "applicant authority" shall mean a competent administrative authority which has been designated by a Contracting Party for this purpose and which makes a request for assistance on the basis of this Protocol;

(c) "requested authority" shall mean a competent administrative authority which has been designated by a Contracting Party for this purpose and which receives a request for assistance on the basis of this Protocol;

(d) "personal data" shall mean all information relating to an identified or identifiable individual;

(e) "operation in breach of customs legislation" shall mean any violation or attempted violation of customs legislation.

Article 2

Scope

1. The Contracting Parties shall assist each other, in the areas within their competence, in the manner and under the conditions laid down in this Protocol, to ensure the correct application of the customs legislation, in particular by preventing, investigating and combating operations in breach of that legislation.

2. Assistance in customs matters, as provided for in this Protocol, shall apply to any administrative authority of the Contracting Parties which is competent for the application of this Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover information obtained under powers exercised at the request of a judicial authority, except where communication of such information is authorised by that authority.

3. Assistance to recover duties, taxes or fines is not covered by this Protocol.

Article 3

Assistance on request

1. At the request of the applicant authority, the requested authority shall provide it with all relevant information which may enable it to ensure that customs legislation is correctly applied, including information regarding activities noted or planned which are or could be operations in breach of customs legislation.

2. At the request of the applicant authority, the requested authority shall inform it:

(a) whether goods exported from the territory of one of the Contracting Parties have been properly imported into the territory ofthe other Contracting Party, specifying, where appropriate, the customs procedure applied to the goods;

(b) whether goods imported into the territory of one of the Contracting Parties have been properly exported from the territory of the other Party, specifying, where appropriate, the customs procedure applied to the goods.

3. At the request of the applicant authority, the requested authority shall, within the framework of its legal or regulatory provisions, take the necessary steps to ensure special surveillance of:

(a) natural or legal persons in respect of whom there are reasonable grounds for believing that they are or have been involved in operations in breach of customs legislation;

(b) places where stocks of goods have been or may be assembled in such a way that there are reasonable grounds for believing that these goods are intended to be used in operations in breach of customs legislation;

(c) goods that are or may be transported in such a way that there are reasonable grounds for believing that they are intended to be used in operations in breach of customs legislation;

(d) means of transport that are or may be used in such a way that there are reasonable grounds for believing that they are intended to be used in operations in breach of customs legislation.

Article 4

Spontaneous assistance

The Contracting Parties shall assist each other, at their own initiative and in accordance with their legal or regulatory provisions, if they consider that to be necessary for the correct application of customs legislation, particularly by providing information obtained pertaining to:

- activities which are or appear to be operations in breach of customs legislation and which may be of interest to the other Contracting Party;

- new means or methods employed in carrying out operations in breach of customs legislation;

- goods known to be subject to operations in breach of customs legislation;

- natural or legal persons in respect of whom there are reasonable grounds for believing that they are or have been involved in operations in breach of customs legislation;

- means of transport in respect of which there are reasonable grounds for believing that they have been, are, or may be used in operations in breach of customs legislation.

Article 5

Delivery, Notification

At the request of the applicant authority, the requested authority shall, in accordance with legal or regulatory provisions applicable to the latter, take all necessary measures in order:

- to deliver any documents or

- to notify any decisions,

emanating from the applicant authority and falling within the scope of this Protocol, to an addressee residing or established in the territory of the requested authority.

Requests for delivery of documents or notification of decisions shall be made in writing in an official language of the requested authority or in a language acceptable to that authority.

Article 6

Form and substance of requests for assistance

1. Requests pursuant to this Protocol shall be made in writing. They shall be accompanied by the documents necessary to enable compliance with the request. When required because of the urgency of the situation, oral requests may be accepted, but must be confirmed in writing immediately.

2. Requests pursuant to paragraph 1 shall include the following information:

(a) the applicant authority;

(b) the measure requested;

(c) the object of and the reason for the request;

(d) the legal or regulatory provisions and other legal elements involved;

(e) indications as exact and comprehensive as possible on the natural or legal persons who are the target of the investigations;

(f) a summary of the relevant facts and of the enquiries already carried out.

3. Requests shall be submitted in an official language of the requested authority or in a language acceptable to that authority. This requirement shall not apply to any documents that accompany the request under paragraph 1.

4. If a request does not meet the formal requirements set out above, its correction or completion may be requested; in the meantime precautionary measures may be ordered.

Article 7

Execution of requests

1. In order to comply with a request for assistance, the requested authority shall proceed, within the limits of its competence and available resources, as though it were acting on its own account or at the request of other authorities of that same Contracting Party, by supplying information already possessed, by carrying out appropriate enquiries or by arranging for them to be carried out. This provision shall also apply to any other authority to which the request has been addressed by the requested authority when the latter cannot act on its own.

2. Requests for assistance shall be executed in accordance with the legal or regulatory provisions of the requested Contracting Party.

3. Duly authorised officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, be present to obtain in the offices of the requested authority or any other concerned authority in accordance with paragraph 1, information relating to activities that are or may be operations in breach of customs legislation which the applicant authority needs for the purposes of this Protocol.

4. Duly authorised officials of a Contracting Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, be present at enquiries carried out in the latter's territory.

Article 8

Form in which information is to be communicated

1. The requested authority shall communicate results of enquiries to the applicant authority in writing together with relevant documents, certified copies or other items.

2. This information may be in computerised form.

3. Original documents shall be transmitted only upon request in cases where certified copies would be insufficient. These originals shall be returned at the earliest opportunity.

Article 9

Exceptions to the obligation to provide assistance

1. Assistance may be refused or may be subject to the satisfaction of certain conditions or requirements, in cases where a Party is of the opinion that assistance under this Protocol would:

(a) be likely to prejudice the sovereignty of former Yugoslav Republic of Macedonia or that of a Member State which has been requested to provide assistance under this Protocol; or

(b) be likely to prejudice public policy, security or other essential interests, in particular in the cases referred to under Article 10(2); or

(c) violate an industrial, commercial or professional secret.

2. Assistance may be postponed by the requested authority on the ground that it will interfere with an ongoing investigation, prosecution or proceeding. In such a case, the requested authority shall consult with the applicant authority to determine if assistance can be given subject to such terms or conditions as the requested authority may require.

3. Where the applicant authority seeks assistance which it would itself be unable to provide if so requested, it shall draw attention to that fact in its request. It shall then be for the requested authority to decide how to respond to such a request.

4. For the cases referred to in paragraphs 1 and 2, the decision of the requested authority and the reasons therefor must be communicated to the applicant authority without delay.

Article 10

Information exchange and confidentiality

1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a confidential or restricted nature, depending on the rules applicable in each of the Contracting Parties. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to similar information under the relevant laws of the Contracting Party that received it and the corresponding provisions applying to the Community authorities.

2. Personal data may be exchanged only where the Contracting Party which may receive them undertakes to protect such data in at least an equivalent way to the one applicable to that particular case in the Contracting Party that may supply them. To that end, Contracting Parties shall communicate to each other information on their applicable rules, including, where appropriate, legal provisions in force in the Member States of the Community.

3. The use, in judicial or administrative proceedings instituted in respect of operations in breach of customs legislation, of information obtained under this Protocol, is considered to be for the purposes of this Protocol. Therefore, the Contracting Parties may, in their records of evidence, reports and testimonies and in proceedings and charges brought before the courts, use as evidence information obtained and documents consulted in accordance with the provisions of this Protocol. The competent authority which supplied that information or gave access to those documents shall be notified of such use.

4. Information obtained shall be used solely for the purposes of this Protocol. Where one of the Contracting Parties wishes to use such information for other purposes, it shall obtain the prior written consent of the authority which provided the information. Such use shall then be subject to any restrictions laid down by that authority.

Article 11

Experts and witnesses

An official of a requested authority may be authorised to appear, within the limitations of the authorisation granted, as an expert or witness in judicial or administrative proceedings regarding the matters covered by this Protocol, and produce such objects, documents or certified copies thereof, as may be needed for the proceedings. The request for appearance must indicate specifically before which judicial or administrative authority the official will have to appear, on what matters and by virtue of what title or qualification the official will be questioned.

Article 12

Assistance expenses

The Contracting Parties shall waive all claims on each other for the reimbursement of expenses incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses, and those to interpreters and translators who are not public service employees.

Article 13

Implementation

1. The implementation of this Protocol shall be entrusted on the one hand to the customs authorities of former Yugoslav Republic of Macedonia and on the other hand to the competent services of the Commission of the European Communities and the customs authorities of the Member States as appropriate. They shall decide on all practical measures and arrangements necessary for its application, taking into consideration the rules in force in particular in the field of data protection. They may recommend to the competent bodies amendments which they consider should be made to this Protocol.

2. The Contracting Parties shall consult each other and subsequently keep each other informed of the detailed rules of implementation which are adopted in accordance with the provisions of this Protocol.

Article 14

Other agreements

1. Taking into account the respective competencies of the European Community and the Member States, the provisions of this Protocol shall:

- not affect the obligations of the Contracting Parties under any other international agreement or convention;

- be deemed complementary to agreements on mutual assistance which have been or may be concluded between individual Member States and former Yugoslav Republic of Macedonia; and shall

- not affect the Community provisions governing the communication between the competent services of the Commission of the European Communities and the customs authorities of the Member States of any information obtained under this Protocol which could be of interest to the Community.

2. Notwithstanding the provisions of paragraph 1, the provisions of this Protocol shall take precedence over the provisions of any bilateral agreement on mutual assistance which has been or may be concluded between individual Member States and former Yugoslav Republic of Macedonia in so far as the provisions of the latter are incompatible with those of this Protocol.

3. In respect of questions relating to the applicability of this Protocol, the Contracting Parties shall consult each other to resolve the matter in the framework of the Cooperation Council set up by the Cooperation Agreement signed on 29 April 1997 by way of an Exchange of Letters.