COUNCIL REGULATION (EC) No 1256/96 of 20 June 1996 applying multiannual schemes of generalized tariff preferences from 1 July 1996 to 30 June 1999 in respect of certain agricultural products originating in developing countries
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion of the European Parliament (2),
Having regard to the opinion of the Economic and Social Committee (3),
(1) Whereas, in accordance with its offer made in the context of the United Nations Conference on Trade and Development (UNCTAD), the Community opened generalized tariff preferences commencing in 1971 in respect of certain agricultural products of Chapters 1 to 24 of the Common Customs Tariff from developing countries; whereas the initial 10-year period of application of such preferences ended on 31 December 1980 and a second 10-year period ended on 31 December 1990, though the scheme has been kept in being unchanged until now;
(2) Whereas the positive role played by this system in the past in improving access for the developing countries to the markets of preference-giving countries is accepted and justifies its continued existence for a time, in step with other priority measures, including the multilateral liberalization of trade;
(3) Whereas in communications to the Council dated 6 July 1990 and 1 June 1994 the Commission set out its recommendations for a further 10-year period of application of its scheme of generalized preferences;
(4) Whereas the Treaty on European Union has lent a fresh impetus to Community development policy as an aspect of the Union's foreign policy, with priority given to the sustainable economic and social development of the developing countries and their smooth and gradual integration into the world economy;
(5) Whereas the Community scheme of generalized preferences should accordingly become more development-oriented, focusing on the countries which have most need of it, i. e. the poorest countries; whereas the scheme should be complementary to World Trade Organization (WTO) instruments and should foster the integration of developing countries into the world economy and the multilateral trading system; whereas the giving of preferences should therefore be seen as a transitional measure, to be used at need and phased out when the need is considered no longer to exist;
(6) Whereas the new offer aims at a level of liberalization which is neutral overall compared with the existing scheme, as regards the impact of the preferential margin on the potential volume of preferential trade, without prejudice to special incentive arrangements;
(7) Whereas the new offer must also take account of certain sectors or products which are sensitive for Community industry; whereas sensitive sectors should be protected against import surges solely by a dual mechanism involving a modulation of preferential tariff margins coupled with an emergency safeguard clause; whereas this system will replace the machinery of fixed duty-free amounts and ceilings;
(8) Whereas in order to improve access to the Community market and increase the actual take-up of preferences by moderately-developed or less-developed countries, a system of graduation should be used to transfer preferential margins gradually from advanced to less-developed countries;
(9) Whereas graduation should be applied sensibly and gradually, by country and sector;
(10) Whereas sector/country graduation combines a development criterion, expressed as a development index reflecting a country's per capita income and the level of its manufactured exports as compared with those of the Community, with a measurement of relative agricultural specialization expressed as a specialization index based on the ratio of the beneficiary country's share of total Community imports in general to its share of total Community imports in a given sector; whereas combined application of these two criteria should make it possible to adjust the crude results of the specialization index, in terms of the sectors to be excluded, in line with the level of development;
(11) Whereas the sector/country graduation system should also be applied to beneficiary countries whose exports of products covered by the scheme of generalized preferences in a given sector exceed 25 % of all beneficiaries' exports of those products in that sector, irrespective of their level of development;
(12) Whereas the graduation mechanism does not apply to countries whose exports to the Community of products covered by the scheme in a given sector do not exceed 2 % of beneficiary countries' exports to the Community in that sector;
(13) Whereas the statistical reference year for applying graduation criteria will be 1994 in so far as data is available at the time the Commission proposal is drawn up;
(14) Whereas it seems equitable for the most advanced beneficiary countries to be excluded from entitlement under this Regulation as from 1 January 1998 on the basis of clearly defined, objective criteria for which the Commission will make appropriate proposals before 1 January 1997;
(15) Whereas countries undertaking effective programmes to combat drug production and trafficking should, however, remain entitled to the more favourable arrangements granted them under the previous scheme; whereas the countries concerned will therefore continue to enjoy duty-free access provided they continue their efforts to combat drugs;
(16) Whereas provision should also be made for special types of assistance additional to the general preferential scheme, aimed at supporting the introduction of forward-looking social or environmental policies in certain moderately-advanced developing countries;
(17) Whereas beneficiary countries which so desire and which still do not have the means of meeting the costs may be encouraged to introduce effective policies for the protection of workers' rights, with particular regard to the right to organize and the prohibition of child labour; whereas special incentive arrangements may therefore also be established for products manufactured in conditions conforming to standards laid down by the International Labour Organization (ILO) in countries whose legislation contains rules of similar scope and substance which are actually applied;
(18) Whereas beneficiary countries may also be encouraged to undertake effective environmental protection policies, by means of incentives for products and production methods internationally approved as consistent with the objectives set out in international conventions on the environment and in Agenda 21; whereas to that end special incentive arrangements may initially be introduced for products complying with international standards;
(19) Whereas the special incentive arrangements take the form of an additional preferential margin for the bringing into force of which the intensity and modalities will be decided upon by the Council in 1997, acting on a proposal from the Commission and on the basis of an examination of the results of discussions held in international forums on the relationships between trade and labour rights and between trade and the environment;
(20) Whereas in certain circumstances it might be appropriate to withdraw temporarily some, or all of a country's preferential entitlement; whereas this may also apply to any form of forced labour, exports of goods made by prison labour, inadequate controls on the export or transit of drugs or money laundering, discriminatory treatment against the Community in the legislation of the beneficiary countries or failure to apply administrative methods of cooperation which would enable the scheme to function properly; whereas the same also applies in the case of failure to comply with obligations entered into in the Uruguay Round to meet agreed market-access objectives;
(21) Whereas temporary withdrawal of entitlement would be the culmination of a procedure enabling all interested parties to make known their point of a view;
(22) Whereas at the end of such a procedure the decision on temporary withdrawal as defined above should be taken having regard to the context of relations with the beneficiary country in question as a whole; whereas Community interests might therefore be better served in certain instances if the matter, which is likely to include aspects other than trade-related aspects, is examined within the Council; whereas the Council should therefore retain decision-making powers with regard to withdrawal of entitlement in whole or in part;
(23) Whereas it would be illogical to accord preferences in respect of products subject to anti-dumping or anti-subsidy measures, where such measures fail to reflect the impact of the preferential arrangements;
(24) Whereas the preferential rates of duty to be applied under this Regulation should be calculated, as a general rule, from the conventional rate of duty of the Common Customs Tariff for the products concerned; whereas they should however be calculated from the autonomous rate of duty where, for the products concerned, no conventional rate is provided or where the autonomous rate is lower that the conventional rate;
(25) Whereas the same methods of calculation should apply to ad valorem rates of duty as well as to the treatment of minimum and maximum duties provided in the common customs tariff; whereas this reduction of duties does not affect the collection of charges laid down under the common agricultural policy such as agricultural specific duties added to ad valorem duties or import charges which are not customs duties within the meaning of Article 20 (3) (c) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (4);
(26) Whereas, in order to allow a transitional period in which to enable economic operators to adjust to the new situation, the effective implementation of the mechanisms of the new scheme for agricultural products should be delayed until 1 January 1997; whereas, in those circumstances, for the period from 1 July to 31 December 1996 the provisions of the existing scheme arising under Regulation (EC) No 3058/95 (5) should be applied mutatis mutandis in respect of agricultural products,
HAS ADOPTED THIS REGULATION:
Article 1
1. A Community scheme of generalized tariff preferences, comprising general arrangements and special incentive arrangements, is hereby established for the period from 1 January 1997 to 30 June 1999, to apply in accordance with the conditions and arrangements prescribed by this Regulation.
2. This Regulation shall apply to products falling within Chapters 1 to 24 of the Common Customs Tariff listed in Annex I and, on the conditions laid down in Article 3, to the products listed in Annex VI.
3. Access to the arrangements referred to in paragraph 1 shall be restricted to the countries and territories listed in Annex III.
4. In order to be admitted under one of the preferential arrangements established by this Regulation, products must comply with a definition of origin adopted in accordance with the procedure laid down in Article 249 of Regulation (EEC) No 2913/92.
TITLE I General arrangements
Article 2
1. The preferential duty applicable to products listed in Part 1 of Annex I shall be 85 % of the Common Customs Tariff duty applicable to the product concerned, without prejudice to Articles 7 and 8 of this Regulation.
2. The preferential duty applicable to products listed in Part 2 of Annex I shall be 70 % of the Common Customs Tariff duty applicable to the product concerned, without prejudice to Articles 7 and 8 of this Regulation.
3. The preferential duty applicable to products listed in Part 3 of Annex I shall be 35 % of the Common Customs Tariff duty applicable to the product concerned, without prejudice to Articles 7 and 8 of this Regulation.
4. Common Customs Tariff duties shall be suspended in their entirety on products listed in Part 4 of Annex 1.
Article 3
1. Common Customs Tariff duties on the products listed in Annex I and Annex VI shall be suspended in their entirety for the least-developed countries listed in Annex IV.
2. The Common Customs tariff duties shall also be suspended in their entirety in respect of the countries listed in Annex V for the products listed in Annex VI except for those products marked with an asterisk, without prejudice to the procedure referred to in Article 17 (3).
Article 4
1. A graduation mechanism shall be set up.
2. The graduation mechanism shall be applicable to the countries and sectors listed in Part 1 of Annex II which meet the criteria laid down in Part 2 of Annex II.
3. Without prejudice to Articles 5 to 8, the preferential margin obtained by applying Article 2 to imports of products originating in the countries and falling within the sectors referred to in paragraph 2 of this Article shall be reduced:
- by 50 % on 1 January 1997,
- by 100 % on 1 January 1999.
Article 5
1. The graduation mechanism shall also apply to countries whose exports to the Community of products covered by the scheme of generalized preferences in a given sector exceed 25 % of beneficiary countries' exports to the Community in that sector. The preferential margin for those countries and sectors obtained by applying Article 2 shall be abolished as from 1 January 1997.
2. The graduation mechanism shall not apply to countries whose exports to the Community of products covered by the scheme in a given sector do not exceed 2 % of beneficiary countries' exports to the Community in that sector.
Article 6
The most advanced beneficiary countries shall be excluded from entitlement under this Regulation as from 1 January 1998 on the basis of objective, clearly defined criteria for which the Commission shall submit appropriate proposals before 1 January 1997.
TITLE II Special incentive arrangements
Article 7
1. As from 1 January 1998 special incentive arrangements in the form of additional preferences may be granted to beneficiary countries covered by the scheme which request such arrangements in writing and provide proof that they have adopted and actually apply domestic legal provisions incorporating the substance of the standards laid down in International Labour Organization (ILO) Conventions Nos 87 and 98 concerning the application of the principles of the right to organize and to bargain collectively and ILO Convention No 138 concerning the minimum age for admission to employment.
2. To that end the Council shall in 1997 carry out a review based on a Commission report on the results of the studies carried in international fora such as the International Labour Organization (ILO), World Trade Organization (WTO) and Organization for Economic Cooperation and Development (OECD) on the relationship between trade and labour rights.
3. In the light of that review and on the basis of internationally accepted, objective and operational criteria, the Commission shall submit a proposal for a Council decision on the intensity of the special incentive arrangements referred to in paragraph 1 and the modalities for implementing them.
Article 8
1. As from 1 January 1998 special incentive arrangements in the form of additional preferences may be granted to beneficiary countries covered by the scheme which request such arrangements in writing and provide proof that they have adopted and actually apply domestic legal provisions incorporating the substance of international environmental standards for agriculture.
2. To that end the Council shall in 1997 carry out a review based on a Commission report on the results of the studies carried out in international forums such as the WTO and OECD on the relationship between trade and the environment.
3. In the light of that review and on the basis of internationally accepted, objective and operational criteria, the Commission shall submit a proposal for a Council decision on the intensity of the special incentive arrangements referred to in paragraph 1 and the modalities for implementing them.
TITLE III Temporary withdrawal, in whole or in part, of the scheme of generalized preferences
Article 9
1. The arrangements provided for by this Regulation may at any time be temporarily withdrawn in whole or in part, in the following circumstances:
- practice of any form of forced labour as defined in the Geneva Conventions of 25 September 1926 and 7 September 1956 and International Labour Conventions Nos 29 and 105,
- export of goods made by prison labour,
- manifest shortcomings in customs controls on the export or transit of drugs (illicit substances or precursors), or failure to comply with international conventions on money laundering,
- fraud or failure to provide administrative cooperation as required for the verification of certificates of origin Form A,
- manifest cases of unfair trading practices on the part of a beneficiary country, including discrimination against the Community and failure to comply with obligations under the Uruguay Round to meet agreed market-access objectives,
- manifest cases of infringement of objectives of international conventions, such as NAFO, NEAFC, ICCAT, NASCO concerning the conservation and management of fishery resources.
2. Temporary withdrawal shall not be automatic, but shall follow the procedural requirements laid down in the following Articles, including Article 12 (3).
Article 10
1. The circumstances referred to in Article 9 which might make it necessary to resort to temporary withdrawal of preferences shall be brought to the Commission's attention by the Member States, or by any natural or legal person, or association not endowed with legal personality, which can show an interest in such withdrawal. The Commission shall communicate the information immediately to all Member States.
2. Consultations may be initiated either at the request of a Member State or at the Commission's request. They shall take place within eight working days of receipt by the Commission of the information referred to in paragraph 1 and in any event before adoption of any Community measures withdrawing preferences.
3. The consultations shall take place in the Committee referred to in Article 17, which shall be convened by its chairman, who shall communicate all pertinent information to the Member States as soon as possible.
4. The consultations shall be concerned inter alia with analysis of the circumstances referred to in Article 9 and the measures to be taken.
Article 11
1. Where the Commission finds, following the consultations referred to in Article 10, that there is sufficient evidence to justify initiation of an investigation, it shall:
(a) announce the initiation of an investigation in the Official Journal of the European Communities and notify the country concerned thereof; such announcement shall give a summary of the information received and state that all relevant information is to be communicated to the Commission, indicating the period within which interested parties may make known their views in writing;
(b) commence the investigation, lasting up to one year, in cooperation with the Member States and in consultation with the Committee referred to in Article 17. The duration of the investigation may be extended if need be under the same procedure.
2. The Commission shall seek all information it deems to be necessary and shall, where it considers this appropriate, after consulting the Committee referred to in Article 17, verify the information with economic operators and the competent authorities of the beneficiary country concerned. For this purpose the Commission may dispatch its own experts to establish on the spot, the truth of the allegations made by the person referred to in Article 10 (1). The Commission shall provide the competent authorities of the beneficiary country concerned with every opportunity to cooperate as necessary in the conduct of these enquiries.
3. The Commission may also be assisted by officials of the Member State on whose territory verification might be sought, if the said Member State so requests.
4. The Commission may hear the interested parties. It shall so hear them if they have, within the period prescribed in the notice published in the Official Journal of the European Communities, made a written request for a hearing showing that they are likely to be affected by the result of the investigation and that there are particular reasons why they should be heard orally.
5. Where information requested by the Commission is not provided within a reasonable period or the investigation is significantly impeded, findings may be made on the basis of the facts available.
Article 12
1. When the investigation referred to in Article 11 is complete the Commission shall report the findings to the Committee referred to in Article 17.
2. If the Commission considers temporary withdrawal of preference to be unnecessary, it shall publish in the Official Journal of the European Communities, after consulting the Committee, a notice of termination of the investigation setting out its main conclusions.
3. If the Commission considers temporary withdrawal of preference to be necessary, it shall submit an appropriate proposal to the Council, which shall decide on it by a qualified majority.
Article 13
Preferences shall normally be granted to products which are subject to anti-dumping or anti-subsidy measures under Council Regulations (EC)No 384/96 (6) and (EC) No 3284/94 (7) unless it can be shown that those measures were based on the injury caused and on prices which did not reflect the preferential tariff arrangements granted to the country concerned. To that end, the Commission shall publish in the Official Journal of the European Communities a list of products and countries to which preference is not granted.
Article 14
1. Where a product originating in one of the countries or territories listed in Annex III is imported on terms which cause or threaten to cause serious difficulties to a Community producer of like or directly competing products, Common Customs Tariff duties on that product may be reintroduced at any time at the request of a Member State or on the Commission's own initiative.
2. The Commission shall announce the opening of an investigation in the Official Journal of the European Communities. The announcement shall provide a summary of the information received and state that any useful information should be communicated to the Commission; it shall specify the time limit within which interested parties may make their views known in writing.
3. In examining the possible existence of serious difficulties the Commission shall take account, inter alia, of the factors listed in Annex VII where the information is available.
4. The Commission shall take the decision to reintroduce the Common Customs Tariff duties within 30 working days of consulting the Committee referred to in Article 17. A Member State may refer the Commission's decision to the Council within 10 days. The Council, acting by a qualified majority, shall have 30 days within which to adopt a different decision.
5. The beneficiary countries concerned shall be informed of such measures before the said measures become effective.
6. Where exceptional circumstances requiring immediate action make either notification or examination impossible, the Commission may, after so informing the Member States, implement any preventive measure which is strictly necessary and which satisfies the conditions laid down in paragraph 1 to deal with the situation.
7. Nothing in this Article shall affect the application of safeguard clauses adopted as part of the common agricultural policy under Article 43 of the Treaty, or as part of the common commercial policy under Article 113 of the Treaty, or any other safeguard clauses which may be applied.
TITLE IV Common provisions
Article 15
1. Subject to paragraph 2, rates of preferential duty calculated in accordance with this Regulation shall be rounded up or down to the first decimal place.
2. Where the application of paragraph 1 results in a rate of preferential duty of 0,5 % or less, the preferential rate shall be considered a full exemption.
3. Changes to Annexes I, II and VI made necessary by amendments to the combined nomenclature shall be adopted in accordance with the procedure laid down in Article 18.
Article 16
1. Within six weeks of the end of each quarter the Member States shall send the Statistical Office of the European Communities their statistical data on goods admitted for free circulation during that quarter under the tariff preferences provided for in this Regulation. The said data, supplied by reference to combined nomenclature codes and, where applicable, Taric codes, shall show values, quantities and any supplementary units required in accordance with the definitions in Regulations (EC) No 1172/95 (8) and (EC) No 840/96 (9), broken down by country of origin.
2. The Member States shall forward to the Commission, at its request, and by the 11th day of each month at the latest, details of the quantities of products for which the benefit of the present arrangements were granted during the previous months. The Member States and the Commission shall cooperate closely to ensure that this provision is complied with.
Article 17
1. The Generalized Preferences Committee created by Article 17 of Council Regulation (EC) No 3281/94 of 19 December 1994 applying a four-year scheme of generalized tariff preferences (1995 to 1998) in respect of certain industrial products originating in developing countries (10) may examine any matter relating to the application of this Regulation which is raised by its chairman either on his own initiative or at the request of a Member State's representative.2. On the basis of an annual report from the Commission, it shall examine the extent to which the principle of neutrality of the effects of this scheme has been observed and any steps being considered by the Commission, either in accordance with the procedure laid down in Article 18 or through a proposal submitted to the Council, to ensure proper observance thereof.
3. It shall also examine, on the basis of an annual report from the Commission, the effects of the special arrangements with regard to drugs, including the progress made by the countries listed in Annex V in the fight against drugs and, if progress is insufficient, any measures which the Commission is considering taking, in accordance with the procedure laid down in Article 18 and after consulting the country concerned, to suspend in whole or in part the application of Article 3.
Article 18
1. The Commission representative shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit which the chairman may lay down according to the urgency of the matter. The opinion shall e delivered by the majority laid down in Article 148 (2) of the Treaty. The chairman shall not vote.
2. (a) The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the Committee.
(b) If the measures envisaged are not in accordance with the opinion of the Committee, or if no opinion is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the measures to be taken. The Council shall act by a qualified majority.
(c) If, within three months of referral to the Council, the Council has not acted, the proposed measures shall be adopted by the Commission.
TITLE V Final provision
Article 19
1. This Regulation shall enter into force on 1 July 1996.
2. The provisions of Regulation (EC) No 3058/95 shall apply mutatis mutandis for the period from 1 July to 31 December 1996.
3. The scheme established in Article 1 shall apply from 1 January 1997 until 30 June 1999.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Luxembourg, 20 June 1996.