01972A0722(03) — EN — 01.10.2022 — 009.002

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Amended by:





Corrected by:









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AGREEMENT

between the European Economic Community and the Swiss Confederation







THE EUROPEAN ECONOMIC COMMUNITY, of the one part, and THE SWISS CONFEDERATION, of the other part, DESIRING to consolidate and to extend, upon the enlargement of the European Economic Community, the economic relations existing between the Community and Switzerland and to ensure, with due regard for fair conditions of competition, the harmonious development of their commerce for the purpose of contributing to the work of constructing Europe, RESOLVED to this end to eliminate progressively the obstacles to substantially all their trade, in accordance with the provisions of the General Agreement on Tariffs and Trade concerning the establishment of free trade areas, DECLARING their readiness to examine, in the light of any relevant factor, and in particular of developments in the Community, the possibility of developing and deepening their relations where it would appear to be useful in the interests of their economies to extend them to fields not covered by this Agreement, HAVE DECIDED, in pursuit of these objectives and considering that no provision of this Agreement may be interpreted as exempting the Contracting Parties from the obligations which are incumbent upon them under other international agreements, TO CONCLUDE THIS AGREEMENT:







Article 1

The aim of this Agreement is:

(a) to promote through the expansion of reciprocal trade the harmonious development of economic relations between the European Economic Community and the Swiss Confederation and thus to foster in the Community and in Switzerland the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability,

(b) to provide fair conditions of competition for trade between the Contracting Parties,

(c) to contribute in this way, by the removal of barriers to trade, to the harmonious development and expansion of world trade.

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Article 2

The Agreement shall apply to products originating in the Community or Switzerland:

(i) which fall within Chapters 25 to 97 of the Harmonised Commodity Description and Coding System, excluding the products listed in Annex I;

(ii) which are specified in Annex II;

(iii) which are specified in Protocol 2, with due regard to the arrangements provided for in that Protocol.

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Article 3

1. No new customs duty on imports shall be introduced in trade between the Community and Switzerland.

2. Customs duties on imports shall be progressively abolished in accordance with the following timetable: (a) on 1 April 1973 each duty shall be reduced to 80% of the basic duty; (b) four further reductions of 20% each shall be made on: 1 January 1974, 1 January 1975, 1 January 1976, 1 July 1977.

Article 4

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

The Contracting Parties may replace a customs duty of a fiscal nature or the fiscal element of a customs duty by an internal tax.

2. ►M12 ◄ and the United Kingdom may retain until 1 January 1976 a customs duty of a fiscal nature or the fiscal element of a customs duty in the event of implementation of Article 38 of the ‘Act concerning the Conditions of Accession and the Adjustments to the Treaties’ ►M12 ◄ . Denmark, Ireland—————and the United Kingdom may retain until 1 January 1976 a customs duty of a fiscal nature or the fiscal element of a customs duty in the event of implementation of Article 38 of the ‘Act concerning the Conditions of Accession and the Adjustments to the Treaties’—————

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3. Switzerland may retain temporarily, while observing the conditions of Article 18, duties corresponding to the fiscal element contained in customs duties on imports of products specified in Annex III.

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The Joint Committee provided for in Article 29 shall examine whether the conditions set out in the preceding subparagraph are being met, particularly where a change has been made in the amount of the fiscal element.

The Joint Committee shall examine the position with a view to the conversion of such duties into internal charges before 1 January 1980 or before any other date which it might determine in the light of circumstances.

Article 5

1. The basic duty to which the successive reductions provided for in Article 3 and in Protocol No 1 are to be applied shall, for each product, be the duty actually applied on 1 January 1972.

2. If, after 1 January 1972, any tariff reductions resulting from the tariff agreements concluded as a result of the Trade Conference held in Geneva from 1964 to 1967 become applicable, such reduced duties shall replace the basic duties referred to in paragraph 1.

3. ►M12 ◄ shall be applied rounded to the first decimal place. The reduced duties calculated in accordance with Article 3 andProtocols No 1 and No 2shall be applied rounded to the first decimal place.

Subject to the application by the Community of Article 39 (5) of the ‘Act concerning the Conditions of Accession and the Adjustments to the Treaties’ ►M12 ————— ◄ , as regards the specific duties or the specific part of the mixed duties in the Irish Customs Tariff, Article 3 and ►M12 Protocols No 1 and No 2 ◄ shall be applied, with rounding to the fourth decimal place.

Article 6

1. No new charge having an effect equivalent to a customs duty on imports shall be introduced in trade between the Community and Switzerland.

2. Charges having an effect equivalent to customs duties on imports introduced on or after 1 January 1972 in trade between the Community and Switzerland shall be abolished upon the entry into force of the Agreement.

Any charge having an effect equivalent to a customs duty on imports, the rate of which on 31 December 1972 is higher than that actually applied on 1 January 1972 shall be reduced to the latter rate upon the entry into force of the Agreement.

3. Charges having an effect equivalent to customs duties on imports shall be progressively abolished in accordance with the following timetable: (a) by 1 January 1974 at the latest each charge shall be reduced to 60% of the rate applied on 1 January 1972; (b) three further reductions of 20% each shall be made on: 1 January 1975, 1 January 1976, 1 July 1977.

Article 7

1. No customs duty on exports or charge having equivalent effect shall be introduced in trade between the Community and Switzerland.

Customs duties on exports and charges having equivalent effect shall be abolished not later than 1 January 1974.

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2. In the case of products listed in Annex IV, customs duties on exports and charges having equivalent effect shall be abolished in accordance with the provisions of that Annex.

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Article 8

Protocol No 1 lays down the tariff treatment and arrangements applicable to certain products.

Article 9

Protocol No 2 lays down the tariff treatment and arrangements applicable to certain goods obtained by processing agricultural products.

Article 10

1. In the event of specific rules being established as or of any alteration of the current rules the Contracting Party in question may adapt the arrangements resulting from this Agreement in respect of the products which are the subject of those rules or alterations.

2. In such cases the Contracting Party in question shall take due account of the interests of the other Contracting Party. To this end the Contracting Parties may consult each other within the Joint Committee.

Article 11

Protocol No 3 lays down the rules of origin.

Article 12

A Contracting Party which is considering the reduction of the effective level of its duties or charges having equivalent effect applicable to third countries benefiting from most favoured-nation treatment, or which is considering the suspension of their application, shall, as far as may be practicable, notify the Joint Committee not less than thirty days before such reduction or suspension comes into effect. It shall take note of any representations by the other Contracting Party regarding any distortions which might result therefrom.

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Article 12a

In the event of amendments to the customs tariff nomenclature of one or both of the Contracting Parties for products referred to in the Agreement, the Joint Committee may adapt the tariff nomenclature of those products in the Agreement to conform with such amendments having due regard to the principle that the advantages resulting from the Agreement should be maintained.

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Article 13

1. No new quantitative restriction on imports or measures having equivalent effect shall be introduced in trade between the Community and Switzerland.

2. Quantitative restrictions on imports shall be abolished on 1 January 1973 and any measures having an effect equivalent to quantitative restrictions on imports shall be abolished not later than 1 January 1975.

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Article 13a

1. No new quantitative restriction on exports or measures having equivalent effect shall be introduced in trade between the Community and Switzerland.

2. Quantitative restrictions on exports and any measures having equivalent effect shall be abolished on 1 January 1990, except for those applied on 1 January 1989 to products listed in Protocol 6 which shall be eliminated in accordance with the provisions of the said Protocol.

Article 13b

A Contracting Party which is considering a change in the arrangements which it applies to exports to third countries shall, as far as may be practicable, notify the Joint Committee not less than 30 days before the proposed change comes into effect. It shall take note of any representations by the other Contracting Party regarding any distortions which may result therefrom.

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Article 14

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1. The Community reserves the right to modify the arrangements applicable to the petroleum products falling within heading Nos 27.10, 27.11, ex 27.12 (excluding ozokerite and lignite/peat wax), and 27.13 of the Harmonised Commodity Description and Coding System upon adoption of decisions under the common commercial policy for the products in question or upon establishment of a common energy policy.

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In this event the Community shall take due account of the interests of Switzerland; to this end it shall inform the Joint Committee, which shall meet under the conditions set out in Article 31.

2. Switzerland reserves the right to take similar action should it be faced with like situations.

3. Subject to paragraphs 1 and 2, the Agreement shall not prejudice the non-tariff rules applied to imports of petroleum products.

Article 15

1. The Contracting Parties declare their readiness to foster, so far as their agricultural policies allow, the harmonious development of trade in agricultural products to which the Agreement does not apply.

2. The Contracting Parties shall apply their agricultural rules in veterinary, health and plant health matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade.

3. The Contracting Parties shall examine, under the conditions set out in Article 31, any difficulties that might arise in their trade in agricultural products and shall endeavour .to seek appropriate solutions.

Article 16

From 1 July 1977 products originating in Switzerland may not enjoy more favourable treatment when imported into the Community than that applied by the Member States of the Community between themselves.

Article 17

The 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 the Agreement, in particular the provisions concerning rules of origin.

Article 18

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

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

Article 19

Payments relating to trade in goods and the transfer of such payments to the Member State of the Community in which the creditor is resident or to Switzerland shall be free from any restrictions.

The Contracting Parties shall refrain from any exchange or administrative restrictions on the grant, repayment or acceptance of short- and medium-term credits covering commercial transactions in which a resident participates.

Article 20

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

Article 21

Nothing in the Agreement shall prevent a Contracting 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 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 time of war or serious international tension.

Article 22

1. The Contracting Parties shall refrain from any measure likely to jeopardize the fulfilment of the objectives of the Agreement.

2. They shall take any general or specific measures required to fulfil their obligations under the Agreement.

If either Contracting Party considers that the other Contracting Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27.

Article 23

1. The following are incompatible with the proper functioning of the Agreement in so far as they may affect trade between the Community and Switzerland: (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 as regards the production of or trade in goods; (ii) abuse by one or more undertakings of a dominant position in the territories of the Contracting Parties as a whole or in a substantial part thereof; (iii) any public add which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

2. Should a Contracting Party consider that a given practice is incompatible with this Article, it may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27.

Article 24

Where an increase in imports of a given product is or is likely to be seriously detrimental to any production activity carried on in the territory of one of the Contracting Parties and where this increase is due to:

(i) the partial or total reduction in the importing Contracting Party, as provided for in the Agreement, of customs duties and charges having equivalent effect levied on the product in question; and

(ii) the fact that the duties or charges having equivalent effect levied by the exporting Contracting Party on imports of raw materials or intermediate products used in the manufacture of the product in question are significantly lower than the corresponding duties or charges levied by the importing Contracting Party; the Contracting Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27.

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Article 24a

Where compliance with the provisions of Articles 7 and 13a leads to

1. re-export towards a third country against which the exporting Contracting Party maintains, for the product concerned quantitative export restrictions, export duties or measures or charges having equivalent effect; or

2. a serious shortage, or threat thereof, of a product essential to the exporting Contracting Party;

and where the situations referred to above give rise or are likely to give rise to major difficulties for the exporting Contracting Party, that Contracting Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27.

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Article 25

If one of the Contracting Parties finds that dumping is taking place in trade with the other Contracting Party, it may take appropriate measures against this practice in accordance with the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade, under the conditions and in accordance with the procedures laid down in Article 27.

Article 26

If serious disturbances arise in any sector of the economy or if difficulties arise which could bring about serious deterioration in the economic situation of a region, the Contracting Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27.

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Article 27

1. In the event of a Contracting Party subjecting imports or exports of products liable to give rise to the difficulties referred to in Articles 24, 24a and 26 to an administrative procedure, the purpose of which is to provide rapid information on the trend of trade flows, it shall inform the other Contracting Party.

2. In the cases specified in Articles 22 to 26, before taking the measures provided for therein or, in cases to which paragraph 3 (e) applies, as soon as possible, the Contracting Party in question shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Contracting Parties. In the selection of measures, priority must be given to those which least disturb the functioning of the Agreement.

The safeguard measures shall be notified immediately to the Joint Committee, and shall be the subject of periodical consultations within the Committee, particularly with a view to their abolition as soon as circumstances permit.

3. For the implementation of paragraph 2, thefollowing provisions shall apply: (a) As regards Article 23, either Contracting Party may refer the matter to the Joint Committee if it considers that a given practice is incompatible with the proper functioning of the Agreement within the meaning of Article 23 (1). The Contracting Parties shall provide the Joint Committee with all relevant information and shall give it the assistance it requires in order to examine the case and, where appropriate, to eliminate the practice objected to. If the Contracting Party in question fails to put an end to the practice objected to within the period fixed by the Joint Committee, or in the absence of agreement in the Joint Committee within three months of the matter being referred to it, the Contracting Party concerned may adopt any safeguard measures it considers necessary to deal with the serious difficulties resulting from the practices in question; in particular it may withdraw tariff concessions. (b) As regards Article 24, the difficulties arising from thesituation referred to in that Article shall be referredfor examination to the Joint Committee, which maytake any decision needed to put an end to suchdifficulties. If the Joint Committee or the exporting Contracting Party has not taken a decision putting an end to the difficulties within 30 days of the matter being referred, the importing Contracting Party is authorized to levy a compensatory charge on the product imported. The compensatory charge shall be calculated according to the incidence on the value of the goods in question of the tariff disparities in respect of the raw materials or intermediate products incorporated therein. (c) As regards Article 24a, the difficulties arising fromthe situations referred to in that Article shall bereferred for examination to the Joint Committee.With regard to subparagraph (ii) of Article 24a, thethreat of shortage shall be duly evidenced byappropriate quantitative and price indicators. The Joint Committee may take any decision needed to put an end to the difficulties. If the Joint Committee has not taken such a decision within 30 days of the matter being referred to it, the exporting Contracting Party is authorized to apply temporarily appropriate measures on the exportation of the product concerned. (d) As regards Article 25, consultation in the Joint Committee shall take place before the Contracting Party concerned takes the appropriate measures. (e) Where exceptional circumstances requiring immediate action make prior examination impossible, the Contracting Party concerned may, in the situations specified in Articles 24, 24a, 25 and 26 and also in the case of export aids having a direct and immediate incidence on trade, apply forthwith the precautionary measures strictly necessary to remedy the situation.

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Article 28

Where one or more Member States of the Community or Switzerland is in difficulties or is seriously threatened with difficulties as regards its balance of payments, the Contracting Party concerned may take the necessary safeguard measures. It shall inform the other Contracting Party forthwith.

Article 29

1. A Joint Committee is hereby established, which shall be responsible for the administration of the Agreement and shall ensure its proper implementation. For this purpose, it shall make recommendations and take decisions in the cases provided for in the Agreement. These decisions shall be put into effect by the Contracting Parties in accordance with their own rules.

2. For the purpose of the proper implementation of the Agreement the Contracting Parties shall exchange information and, at the request of either Party, shall hold consultations within the Joint Committee.

3. The Joint Committee shall adopt its own rules of procedure.

Article 30

1. The Joint Committee shall consist of representatives of the Community, on the one hand, and of representatives of Switzerland, on the other.

2. The Joint Committee shall act by mutual agreement.

Article 31

1. Each Contracting Party shall preside in turn over the Joint Committee, in accordance with the arrangements to be laid down in its rules of procedure.

2. The Chairman shall convene meetings of the Joint Committee at least once a year in order to review the general functioning of the Agreement.

The Joint Committee shall, in addition meet whenever special circumstances so require, at the request of either Contracting Party, in accordance with the conditions to be laid down in its rules of procedure.

3. The Joint Committee may decide to set up any working party that can assist it in carrying out its duties.

Article 32

1. Where a Contracting Party considers that it would be useful in the interests of the economies of both Contracting Parties to develop the relations established by the Agreement by extending them to fields not covered thereby, it shall submit a reasoned request to the other Contracting Party.

The Contracting Parties may instruct the Joint Committee to examine this request and, where appropriate, to make recommendations to them, particularly with a view to opening negotiations.

2. The agreements resulting from the negotiations referred to in paragraph 1 will be subject to ratification or approval by the Contracting Parties in accordance with their own procedures.

Article 33

The Annexes and Protocols to the Agreement shall form an integral part thereof.

Article 34

Either Contracting Party may denounce the Agreement by notifiying the other Contracting Party. The Agreement shall cease to be in force twelve months after the date of such notification.

Article 35

The Agreement shall apply, on the one hand, to the territories to which the Treaty establishing the European Economic Community applies upon the terms laid down in that Treaty and, on the other, to the territory of the Swiss Confederation.

Article 36

This Agreement is drawn up in duplicate, in the Danish, Dutch, English, French, ►M12 German and Italian languages ◄ each of these texts being equally authentic.

This Agreement will be approved by the Contracting Parties in accordance with their own procedures.

It shall enter into force on 1 January 1973 provided that the Contracting Parties have notified each other before that date that the procedures necessary to this end have been completed.

After this date this Agreement shall enter into force on the first day of the second month following such notification. The final date for such notification shall be 30 November 1973.

The provisions applicable on 1 April 1973 shall be applied upon the entry into force of this Agreement if it enters into force after that date.

Udfærdiget i Bruxelles, den toogtyvende juli nitten hundrede og tooghalvfjerds.

Geschehen zu Brüssel am zweiundzwanzigsten Juli neunzehnhundertzweiundsiebzig.

Done at Brussels on this twenty-second day of July in the year one thousand nine hundred and seventy-two.

Fait à Bruxelles, le vingt-deux juillet mil neuf cent soixante-douze.

Fatto a Bruxelles, il ventidue luglio millenovecentosettantadue.

Gedaan te Brussel, de tweeëntwintigste juli negentienhonderdtweeënzeventig.

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På Rådet for De europæiske Fællesskabers vegne

Im Namen des Rates der Europäischen Gemeinschaften

In the name of the Council of the European Communities

Au nom du Conseil des Communautés européennes

A nome del Consiglio delle Comunità europee

Namens de Raad van de Europese Gemeenschappen

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Für die Schwiezerische Eidenossenschaft

Pour la Confédération Suisse

Per la Confederazione svizzera

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ANNEX I

List of products referred to in Article 2(i) of the Agreement







HS code Description 2905 43 – – Mannitol 2905 44 – – D-glucitol (sorbitol) 3501 Casein, caseinates and other casein derivatives; casein glues: 3501 10 – Casein ex 3501 90 – Other: – Other than casein glues 3502 Albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter), albuminates and other albumin derivatives: – Egg albumin: 3502 11 – – Dried 3502 19 – – Other 3502 20 – Milk albumin, including concentrates of two or more whey proteins 3505 Dextrins and other modified starches (for example, pregelatinised or esterified starches); glues based on starches, or on dextrins or other modified starches 3809 Finishing agents, dye carriers to accelerate the dyeing or fixing or dyestuffs and other products and preparations (for example, dressings and mordants), of a kind used in the textile, paper, leather or like industries, not elsewhere specified or included: 3809 10 – With a basis of amylaceous substances 3823 Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols: – Industrial monocarboxylic fatty acids; acid oils from refining: 3823 11 – – Stearic acid 3823 12 – – Oleic acid 3823 19 – – Other 3823 70 – Industrial fatty alcohols 3824 60 – Sorbitol other than that of subheading 2905 44 5301 Flax, raw or processed but not spun; flax tow and waste (including yarn waste and garnetted stock) 5302 True hemp (Cannabis sativa L.), raw or processed but not spun; tow and waste of true hemp (including yarn waste and garnetted stock)

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ANNEX II

List of products referred to in Article 2(ii) of the Agreement







HS code Description 1302. Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: — Vegetable saps and extracts: ex1302.19 — — Other: — — — Vanilla oleoresin 1404. Vegetable products not elsewhere specified or included: 1404.20 — Cotton linters 1516. Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not refined, but not further prepared: ex1516.20 — Vegetable fats and oils and their fractions: . Hydrogenated castor oil, so called ‘opal-wax’ ex1518. Animal or vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or in inert gas or otherwise chemically modified, excluding those of heading No 1516; inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, not elsewhere specified or included: Linoxyn

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ANNEX III

List of products referred to in Article 4 of the Agreement

On 1 January 1997 Switzerland converted the fiscal element of customs duties on imports of products specified in Annex II to the 1972 Agreement into an internal tax. That Annex is therefore deleted.

ANNEX IV

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List of products referred to in Article 7 of the Agreement

Customs duties applied by Switzerland to exports to the Community of the products listed below shall be eliminated in accordance with the following timetable.







Harmonized system Heading No Product description Date of elimination ex 26.20 Ash and residues containing mainly aluminium 1 January 1993 74.04 Copper waste and scrap 1 January 1993 76.02 Aluminium waste and scrap 1 January 1993

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PROTOCOL no 1

concerning the treatment applicable to certain products













SECTION A

TREATMENT APPLICABLE TO IMPORTS INTO THE COMMUNITY OF CERTAIN PRODUCTS ORIGINATING IN SWITZERLAND

Article 1

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1. Customs duties on imports into the Community as originally constituted of products falling within Chapter 48 or 49 of the Common Customs Tariff shall be progressively abolished in accordance with the following timetable:



Timetable Products falling within heading or subheading Nos 48.01 C II, 48.01 E, 48.07 Β, 48.13 or 48.15 Β Other products Rates of duty applicable — percentage Percentage of basic duties applicable 1 January 1978 8 65 1 January 1979 6 50 1 January 1980 6 50 1 January 1981 4 35 1 January 1982 4 35 1 January 1983 2 20 1 January 1984 0 0

2. Customs duties on imports into Ireland of products referred to in paragraph 1 shall be progressively abolished in accordance with the following timetable:



Timetable Percentage of basic duties applicable 1 January 1978 20 1 January 1979 15 1 January 1980 15 1 January 1981 10 1 January 1982 10 1 January 1983 5 1 January 1984 0

3. By way of derogation from Article 3 of the Agreement, Denmark and the United Kingdom shall apply the following customs duties to imports of products in paragraph 1 which originate in Switzerland:



Timetable Products falling within heading or subheading Nos 48.01 C II, 48.01 E, 48.07 Β, 48.13 or 48.15 Β Other products Rates of duty applicable — percentage Percentage of Common Customs Tariff duty applicable 1 January 1978 8 65 1 January 1979 6 50 1 January 1980 6 50 1 January 1981 4 35 1 January 1982 4 35 1 January 1983 2 20 1 January 1984 0 0

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4. ►M12 ◄ and the United Kingdom shall be entitled to open each year, for imports of products originating in Switzerland, zero-duty tariff quotas the amounts of which, shown in Annex A for 1974, shall be equal to the average amount of imports between 1968 and 1971 raised cumulatively by four increases of 5%; after 1 January 1975 the amount of these tariff quotas shall be raised annually by 5%. During the period from 1 January 1974 to 31 December 1983 Denmark—————and the United Kingdom shall be entitled to open each year, for imports of products originating in Switzerland, zero-duty tariff quotas the amounts of which, shown in Annex A for 1974, shall be equal to the average amount of imports between 1968 and 1971 raised cumulatively by four increases of 5%; after 1 January 1975 the amount of these tariff quotas shall be raised annually by 5%.

5. The expression ‘the Community as originally constituted’ means the Kingdom of Belgium, the Federal Republic of Germany, the French Republic, the Italian Republic, the Grand Duchy of Luxembourg and the Kingdom of the Netherlands.

Article 2

1. Customs duties on imports into the Community as originally constituted and into Ireland of the products specified in paragraph 2 shall be progressively reduced to the following levels in accordance with the following timetable:



Timetable Percentage of basic duties applicable 1 April 1973 95 1 Januar/1974 90 1 January 1975 85 1 Januar/1976 75 1 Januar/1977 60 1 January 1978 40 with a maximum of 3% ad valorem (except subheading Nos 78.01 A II and 79.01 A) 1 Januar/1979 20 1 Januar/1980 0

For tariff subheading Nos 78.01 A II and 79.01 A, listed in the table given in paragraph 2, the tariff reductions shall be made, as regards the Community as originally constituted and notwithstanding Article 5(3) of the Agreement, rounded to the second decimal place.

2. The products referred to in the paragraph above are the following:



Common Customs Tariff heading No Description ex 73.02 Ferro-alloys, excluding ferro-nickel and products covered by the ECSC Treaty 76.01 Unwrought aluminium; aluminium waste and scrap: A. Unwrought 78.01 Unwrought lead (including argentiferous lead); lead waste and scrap A. Unwrought II. Other 79.01 Unwrought zinc; zinc waste and scrap: A. Unwrought 81.01 Tungsten (Wolfram), unwrought or wrought, and articles thereof 81.02 Molybdenum, unwrought or wrought, and articles thereof 81.03 Tantalum, unwrought or wrought, and articles thereof 81.04 Other base metals, unwrought or wrought, and articles thereof; cermets, unwrought or wrought, and articles thereof:

B. Cadmium

C. Cobalt

II. Wrought ►M25

D. Chromium:

I. Unwrought; waste and scrap:

b) Other

II. Other ◄

E. Germanium

F. Hafnium (celtium)

G. Manganese

H. Niobium (columbium)

IJ. Antimony

K. Titanium

L. Vanadium

M. Uranium depleted in U 235

O. Zirconium

P. Rhenium

Q. Gallium; indium; thallium

R. Cermets

Article 3

Imports to which the-tariff treatment provided for in Articles 1 and 2 applies, except unwrought lead other than bullion lead (falling within subheading No 78.01 A II of the Common Customs Tariff), shall be subjected to annual indicative ceilings above which the customs duties applicable in respect of third countries may be reintroduced in accordance with the following provisions:

(a) Taking into account the Community's right to suspend application of ceilings for certain products, the ceilings fixed for 1973 are shown in Annex B. These ceilings are calculated on the assumption that the Community as originally constituted and Ireland shall make the first tariff reduction on 1 April 1973. For 1974 the level of the ceilings shall correspond to that applied in 1973 readjusted on an annual basis for the Community and raised by 5%. From 1 January 1975 the level of the ceilings shall be raised annually by 5%. For products covered by this Protocol but not included in Annex B, the Community reserves the right to introduce ceilings of which the level will be equal to the average amount of imports into the Community over the last four years for which statistics are available, increased by 5%; for the following years, the levels of these ceilings shall be raised annually by 5%.

(b) Should, for two successive years, imports of a product subject to a ceiling be less than 90% of the level fixed, the Community shall suspend the application of this ceiling.

(c) In the event of short-term economic difficulties, the Community reserves the right, after consultation within the Joint Committee, to maintain for a year the level fixed for the preceding year.

(d) On 1 December each year the Community shall notify the Joint Committee of the list of products subject to ceilings in the following year and of the levels of the ceilings.

(e) Imports under the tariff quotas opened in accordance with Article 1 (4) shall also be set off against the ceiling levels fixed for the same products.

(f) Notwithstanding Article 3 of the Agreement and Articles 1 and 2 of this Protocol, when a ceiling fixed for imports of a product covered by this Protocol is reached, Common Customs Tariff duties on imports of the product in question may be reimposed until the end of the calendar year. In this event, prior to 1 July 1977: (i) Denmark ►M12 ————— ◄ and the United Kingdom shall reimpose customs duties as follows:



Years Percentage of Common Customs Tariff duties applicable 1973 0 1974 40 1975 60 1976 80 (ii) Ireland shall reimpose customs duties applicable to third countries. The customs duties specified in Articles 1 and 2 of this Protocol shall be reintroduced on 1 January of the following year.

(g) After 1 July 1977 the Contracting Parties shall examine within the Joint Committee the possibility of revising the percentage by which the levels of ceilings are raised, having regard to the trend of consumption and imports in the Community and to experience gained in applying this Article.

(h) The ceilings shall be abolished at the end of the tariff dismantling periods provided for in Articles 1 and 2 of this Protocol.

Article 4

1. The community as originally constituted shall retain until 31 December 1975 a minimum rate of customs duties on imports of the following products:



Common Customs Tariff heading No Description Minimum rate retained 91.01 Pocket-watches, wrist-watches and other watches, including stop-watches 0.35 UA per article 91.07 Watch movements (including stop-watch movements), assembled: A. With balance-wheel and hairspring 0.28 UA per article 91.11 Other clock and watch parts: C. Watch movements, unassembled: I. With balance-wheel and hairspring 028 UA per article

2. The customs duties referred to in paragraph 1 shall be abolished in two equal stages on 1 January 1976 and 1 July 1977. Notwithstanding Article 5(3) of the Agreement, duties reduced in this way shall be applied, rounded to the second decimal place.

3. The provisions of the Agreement shall apply to products falling within Chapter 91 of the Brussels Nomenclature provided that Switzerland applies the provisions of the Additional Agreement to the 1967 Agreement concerning products of the clock and watch industry between the Swiss Confederation and the European Economic Community and its Member States, signed in Brussels on 20 July 1972.

Any obligations laid down in the supplementary Agreement shall be considered obligations within the meaning of Article 22 of this Agreement.







SECTION Β

TREATMENT APPLICABLE TO IMPORTS INTO SWITZERLAND OF CERTAIN PRODUCTS ORIGINATING IN THE COMMUNITY

Article 5

▼M25

1. From 1 January 1978 customs duties on imports into Switzerland of products originating in the Community as originally constituted and in Ireland and listed in Annex C to this Protocol shall be progressively abolished in accordance with the following timetable:



Timetable Percentage of basic duties applicable 1 January 1978 65 1 January 1979 50 1 January 1980 50 1 January 1981 35 1 January 1982 35 1 January 1983 20 1 January 1984 0

2. Customs duties on imports into Switzerland of products falling within Customs Cooperation Council Nomenclature heading No 4418 and originating in the Community as originally constituted and in Ireland shall be progressively abolished in accordance with the following timetable:



Timetable Percentage of basic duties applicable 1 January 1978 65 1 January 1979 50 1 January 1980 40 1 January 1981 20 1 January 1982 0

3. From 1 January 1978 and by way of derogation from Article 3 of the Agreement, Switzerland reserves the right, in the light of its economic needs and administrative considerations, to apply the following customs duties to imports of products mentioned in Annex C and originating in Denmark and the United Kingdom:



Timetable Percentage of basic duties applicable 1 January 1978 65 1 January 1979 50 1 January 1980 50 1 January 1981 35 1 January 1982 35 1 January 1983 20 1 January 1984 0

▼B

Article 6

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For products falling within Customs Cooperation Council Nomenclature heading Nos 4418, 4801 and 4807, Switzerland reserves the right to introduce, in the case of serious difficulties, indicative ceilings in accordance with the procedures defined in Article 3 of this Protocol. For imports exceeding the ceilings, customs duties not exceeding those applicable in respect of third countries may be reintroduced.

▼B

ANNEX A

List of tariff quotas for 1974

DENMARK ►M12 ————— ◄ , UNITED KINGDOM







Common Customs Tariff heading No Description Level (in metric tons) Denmark ►M12 — ◄ United Kingdom Chapter 48 PAPER AND PAPERBOARD; ARTICLES OF PAPER PULP, OF PAPER OR OF PAPERBOARD ►M25 48.01 ◄ ►M25 Paper and paperboard (including cellulose wadding), in rolls or sheets: ◄ C. Kraft paper and kraft board: ex II. other, excluding kraft liner and sack paper — ►M12 — ◄ 145 ►M25

ex F. Other: ◄ ►M25 — Bible paper, manifold (thin typing) paper; other printing paper and other writing paper, not containing mechanical wood pulp or in which mechanical wood pulp does not represent more than 5% ◄ — ►M12 — ◄ 202 ►M25 — Wallpaper base ◄ — ►M12 — ◄ 244 48.03 Parchment or greaseproof paper and paperboard, and imitations thereof, and glazed transparent paper, in rolls and sheets _ ►M12 — ◄ 126 ►M25 48.07 ◄ ►M25 Paper and paperboard, impregnated, coated, surface-coloured, surface-decorated or printed (not constituting printed matter falling within Chapter 49), in rolls or sheets: ◄ ►M25

C. Other: ◄ ►M25 — Coated printing or writing paper ◄ — ►M12 — ◄ 152 . ►M25 — Other ◄ — ►M12 — ◄ 586 ►M25 48.16 ◄ ►M25 Boxes, bags and other packing containers, of paper or paperboard; box files, letter trays and similar articles, of paper or paperboard, of a kind commonly used in offices, shops and the like: ◄ — ►M12 — ◄ ►M25

A. Boxes, bags and other packing containers, of paper or paperboard ◄ — 207 ►M25 48.21 ◄ ►M25 Other articles of paper pulp, paper, paperboard or cellulose wadding: ◄ ►M25

B. Napkins and napkin liners, for babies, put up for retail sale ◄ — ►M12 — ◄ ►M25

D. Other ◄ — ►M12 — ◄ 147 ►M25

ex

Chapter 48 ◄ ►M25 Other products falling within Chapter 48, excluding products falling within subheading 48.01 A ◄ 1 261 ►M12 ◄ 522 ex Chapter 49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans — | subject to customs duties in the Common Customs Tariff (heading Nos 49.03, 49.05 A, 49.07 A, 49.07 O II, 49.08, 49.09, 49.10, 49.11 Β) 190 ►M12 ◄ 756918.00 (1) ( 1 ) In sterling.

ANNEX B

List of ceilings for 1973







Common Customs Tariff heading No Description Level (in metric tons) 73.02 Ferro-alloys: C. Ferro-silicon 6 617 76.01 Unwrought aluminium; aluminium waste and scrap: A. Unwrought 9 824

ANNEX C

List of products for which Switzerland will reduce its duties in regard to the Community during an extended transitional period







Swiss Customs Tariff heading No Description ▼M25 4801 Paper and paperboard (including cellulose wadding), in rolls or sheets ▼B 4803 Parchment or greaseproof paper and paperboard, and imitations thereof, and glazed transparent paper, in rolls or sheets: 20 — other ▼M25 4807 Paper and paperboard, impregnated, coated, surface-coloured, surface-decorated or printed (not constituting printed matter falling within Chapter 49), in rolls or sheets ▼B 4815 Other paper and paperboard, cut to size or shape: 22 — other 4821 Other articles of paper pulp, paper, paperboard or cellulose wadding: 20 — Tablecloths, serviettes and handkerchiefs

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PROTOCOL 2

Concerning certain processed agricultural products

Article 1

General principles

1. The provisions of the Agreement shall apply to products listed in Tables I and II unless otherwise specified in this Protocol.

2. In particular, with respect to these products, the Contracting Parties may not levy customs duties on imports or charges having equivalent effect, including agricultural components, or grant export refunds or any refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect.

3. The provisions of this Protocol shall likewise apply to the Principality of Liechtenstein until the application of Protocol 3 to the Agreement on the European Economic Area to the Principality of Liechtenstein.

Article 2

Application of price compensation measures

1. In order to take account of differences in the cost of the agricultural raw materials used in the manufacture of the products specified in Table I, the Agreement does not preclude the application of price compensation measures to these products; that is the levying of agricultural components upon import and the granting of export refunds or the granting of refunds, remissions or non-payments, partial or complete of customs duties or charges having an equivalent effect.

2. If a Contracting Party applies internal measures, which reduce the price of raw materials to processing industries, these measures shall be taken into account in the calculation of the price compensation amounts.

Article 3

Price compensation measures on imports

1. Switzerland's basic amounts for the agricultural raw materials taken into consideration in calculating the agricultural components on imports shall neither exceed the difference between the Swiss domestic reference price and the Community's domestic reference price for the respective agricultural raw material nor the Swiss import duty actually applied for the agricultural raw material when imported as such.

2. The Swiss import regime for products specified in Table I is laid down in Table IV.

3. If the Swiss domestic reference price is lower than the Community's domestic reference price, the Community may introduce the price compensation measures as laid down in Article 2 that is the levying of agricultural components upon import, in accordance with Regulation (EC) No 1460/96 as subsequently amended.

Article 4

Price compensation measures on exports

1. The Swiss export refunds or refunds, remissions or non-payments, partial or complete, of customs duties or charges having an equivalent effect for exports to the Community for products listed in Table I shall not exceed the difference between the Swiss domestic reference price and the Community's domestic reference price for the agricultural raw materials used in the manufacture of these products multiplied by the quantities actually used. If the Swiss domestic reference price is equal or lower than the Community's domestic reference price, the Swiss export refund or refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect shall be zero.

2. If the Swiss domestic reference price is lower than the Community's domestic reference price, the Community may introduce the price compensation measures as laid down in Article 2 that is the granting of export refunds, in accordance with Regulation (EC) No 1520/2000 as subsequently amended, or the granting of refunds, remissions or non-payments, partial or complete of customs duties or charges having an equivalent effect.

3. For sugar (HS headings 1701 , 1702 and 1703 ) used in the manufacture of products listed in Table I and Table II the Contracting Parties may not grant any export refunds or any refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect.

Article 5

Reference prices

1. The Community and Swiss domestic reference prices for agricultural raw materials mentioned in Articles 3 and 4 are listed in Table III.

2. The Contracting Parties shall periodically, at least once every year, provide to the Joint Committee the domestic reference prices of all raw materials for which price compensation measures are applied. The domestic reference prices, which are provided, shall reflect the actual price situation in the territory of the Contracting Party. They shall be the prices normally paid at the wholesale or the manufacturing stage by processing industries. If an agricultural raw material is available to the processing industry, or to a part of it, at a price lower than the one otherwise ruling on the domestic market, the domestic reference prices provided shall be adjusted accordingly.

3. The Joint Committee shall fix the domestic reference prices and the price differences, for agricultural raw materials listed in Table III on the basis of the information provided by the services of the European Commission and the Swiss Federal Administration. If necessary for the preservation of the relative preferential margins, the basic amounts of the agricultural raw materials listed in Table IV shall be adapted.

4. The Joint Committee shall review the domestic prices for agricultural raw materials mentioned in Articles 3 and 4 that are listed in Table III prior to the application of this Protocol.

Article 6

Special provision on administrative cooperation

Special provisions on administrative cooperation are laid down in the Appendix to this Protocol.

Article 7

Amendments

The Joint Committee may decide to amend the tables, the appendices to the tables and the Appendix attached to this Protocol.

TABLE I

Products subject to price compensation measures







HS heading Description of products 0403 Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavoured or containing added fruit, nuts or cocoa: .10 – Yogurt: ex .10 – – Flavoured or containing added fruit, nuts or cocoa .90 – Other: ex .90 – – Flavoured or containing added fruit, nuts or cocoa 0405 Butter and other fats and oils derived from milk; dairy spreads: .20 – Dairy spreads: ex .20 – Of a fat content, by weight, of 39% or more but less than 75% 1517 Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516 : .10 – Margarine, excluding liquid margarine: ex .10 – – Containing more than 10% but not more than 15% by weight of milk fats .90 – Other: ex .90 – – Containing more than 10% but not more than 15% by weight of milk fats 1704 Sugar confectionery (including white chocolate), not containing cocoa: 1806 Chocolate and other food preparations containing cocoa: 1901 Malt extract; food preparations of flour, groats, meal, starch or malt extract, not containing cocoa powder or containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 0401 to 0404 , not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: 1902 Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared: 1904 Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes); cereals (other than maize (corn)) in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked, or otherwise prepared, not elsewhere specified or included: 1905 Bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products: 2004 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products of heading 2006 : .10 – Potatoes: ex .10 – – In the form of flour, meal or flakes 2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006 : .20 – Potatoes: ex .20 – In the form of flour, meal or flakes 2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: – Nuts, ground-nuts and other seeds, whether or not mixed together: .11 – – Ground-nuts: ex .11 – – – Peanut butter 2101 Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: – Extracts, essences and concentrates, of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: .12 – – Preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: ex .12 – – – Containing by weight 1,5% or more milk fat, 2,5% or more milk proteins, 5% or more sugar or 5% or more starch .20 – Extracts, essences and concentrates, of tea or maté, and preparations with a basis of these extracts, essences or concentrates, or with a basis of tea or maté: ex .20 – Containing by weight 1,5% or more milk fat, 2,5% or more milk proteins, 5% or more sugar or 5% or more starch 2103 Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard: .20 – Tomato ketchup and other tomato sauces .90 – Other: ex .90 – – Other than mango chutney, liquid 2104 Soups and broths and preparations therefor; homogenised composite food preparations 2105 Ice cream and other edible ice, whether or not containing cocoa: 2106 Food preparations not elsewhere specified or included: .10 – Protein concentrates and textured protein substances: ex .10 – – Containing more than 1% milk fats, 1% other fats or more than 5% sugars .90 – Other ▼M78 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of heading No 2009 .90 - Other: ex .90 - - Containing milk components of headings No 0401 and No 0402 2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol.; spirits, liqueurs and other spirituous beverages: .90 - Other: ex .90 - - Other than concentrated grape juice containing added spirit ▼M73 3501 Casein, caseinates and other casein derivatives; casein glues .10 – Casein .90 – Other: ex .90 – – Other than casein glues

TABLE II

Free-trade products







HS heading Description of products 0501 Human hair, unworked, whether or not washed or scoured; waste of human hair 0502 Pigs', hogs' or boars' bristles and hair; badger hair and other brush making hair; waste of such bristles or hair: 0503 Horsehair and horsehair waste, whether or not put up as a layer with or without supporting material 0505 Skins and other parts or birds, with their feathers or down, feathers and parts of feathers (whether or not with trimmed edges) and down, not further worked than cleaned, disinfected or treated for preservation; powder and waste of feathers or parts of feathers 10 – Feathers of a kind used for stuffing; down ex 90 – Other (other than for feed purposes) 0506 Bones and horn-cores, unworked, defatted, simply prepared (but not cut to shape), treated with acid or degelatinised; powder and waste of these products 0507 Ivory, tortoiseshell, whalebone and whalebone hair, horns, antlers, hooves, nails, claws and beaks, unworked or simply prepared but not cut to shape; powder and waste of these products 0508 Coral and similar materials, unworked or simply prepared but not otherwise worked; shells of molluscs, crustaceans or echinoderms and cuttle-bone, unworked or simply prepared but not cut to shape, powder and waste thereof: ex 00 – Other (than for feed purposes) 0509 Natural sponges of animal origin: 0510 Ambergris, castoreum, civet and musk; cantharides; bile, whether or not dried; glands and other animal products used in the preparation of pharmaceutical products, fresh, chilled, frozen or otherwise provisionally preserved 0710 Vegetables, frozen: 40 – Sweet corn (Zea mays var. saccharata) 0711 Vegetables provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption: 90 – Other vegetables; mixtures of vegetables: ex 90 – – Sweet corn (Zea mays var. saccharata) 0901 Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion: 0902 Tea, whether or not flavoured: 0903 Maté 1212 Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included: ex 20 – Seaweeds and other algae (other than for feed purposes) 1302 Vegetables saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: 1401 Vegetable materials of a kind used primarily for plaiting (for example bamboos, rattans, reeds, rushes, osier, raffia, cleaned, bleached or dyed cereal straw, and lime bark): 1402 Vegetable materials of a kind used primarily as stuffing or as padding (for example kapok, vegetable hair and eelgrass), whether or not put up as a layer with or without supporting material 1403 Vegetable materials of a kind used primarily in brooms or in brushes (for example broomcorn piassava, couch grass and istle), whether or not in hanks or bundles 1404 Vegetable products not elsewhere specified or included: 10 – Raw vegetable materials of a kind used primarily in dyeing and tanning 20 – Cotton linters ex 90 – Other (other than for feed purposes) 1505 Wool grease and fatty substances derived therefrom (including lanolin): ex 00 – Other (than for feed purposes) 1516 Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not refined, but not further prepared: 20 – Vegetable fats and oils and their fractions: ex 20 – – Hydrogenated caster oil, so called ‘opal-wax’ 1517 Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516 : 90 – Other: ex 90 – – Edible mixtures or preparations of a kind used as mould release preparations 1518 Animal or vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or in inert gas otherwise chemically modified, excluding those of heading 1516 ; inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this Chapter, not elsewhere specified or included: ex 00 – Linoxyn 1520 Glycerol, crude; glycerol waters and glycerol lyes 1521 Vegetable waxes (other than triglycerides), beeswax, other insect waxes and spermaceti, whether or not refined or coloured 1522 Degras; residues resulting from the treatment of fatty substances or animal or vegetable waxes 1702 Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel: 50 – Chemically pure fructose 90 – Other, including invert sugar and other sugar syrup blends containing in the dry state 50% by weight of fructose: ex 90 – – Chemically pure maltose (other than for feed purposes) 1803 Cocoa paste, whether or not defatted: 1804 Cocoa butter, fat and oil 1805 Cocoa powder, not containing added sugar or other sweetening matter 1903 Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings or in similar forms 2001 Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic acid: 90 – Other: ex 90 – – Sweet corn (Zea mays var. saccharata); palm hearts; yams, sweet potatoes and similar edible parts of plants of heading 0714 2004 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products of heading 2006 : 90 – Other vegetables and mixtures of vegetables: ex 90 – – Sweet corn (Zea mays var. saccharata) 2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006 : 80 – Sweet corn (Zea mays var. saccharata) 2006 Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glacé or crystallised): ex 00 – Sweet corn (Zea mays var. saccharata) 2007 Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by cooking, whether or not containing added sugar or other sweetening matter: 2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: – Nuts, ground-nuts and other seeds, whether or not mixed together: 11 – – Ground-nuts: ex 11 – – Ground nuts, roasted – Other, including mixtures other than those of subheading 2008 19 : 91 – – Palm Hearts 99 – – Other: ex 99 – – Maize (corn), other than sweet corn (Zea mays var. saccharata) 2101 Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: – Extracts, essences and concentrates, of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: 11 – – Extracts, essences and concentrates: 12 – – Preparations with a basis of these extracts, essences or concentrates or with a basis of coffee: ex 12 – – Containing no milk fats, milk proteins, sucrose, isoglucose, glucose or starch or containing by weight less than 1,5% milk fat, 2,5% milk proteins, 5% sucrose or isoglucose 5% glucose or starch 20 – Extracts, essences and concentrates, of tea or maté, and preparations with a basis of these extracts, essences or concentrates, or with a basis of tea or maté: ex 20 – – Containing no milk fats, milk proteins, sucrose, isoglucose, glucose or starch or containing by weight less than 1,5% milk fat, 2,5% milk proteins, 5% sucrose or isoglucose, 5% glucose or starch 30 – Roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: 2102 Yeasts (active or inactive); other single-cell micro-organisms, dead (but not including vaccines of heading 3002 ); prepared baking powders: ex 10 – Active yeasts (other than bakers' yeast and other than for feeding purposes) ex 20 – Inactive yeasts; other single-cell micro-organisms, dead (other than for feed purposes) 30 – Prepared baking powders 2103 Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard: 10 – Soya sauce 30 – Mustard flour and meal and prepared mustard: ex 30 – – Mustard flour and meal other than for feed purposes; prepared mustard 90 – Other: ex 90 – – Mango chutney, liquid 2106 Food preparations not elsewhere specified or included: 10 – Protein concentrates and textured protein substances: ex 10 – – Other than containing more than 1% milk fats, 1% other fats or more than 5% sugars 2201 Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter not flavoured; ice and snow ▼M78 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of heading No 2009 .10 - Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured .90 - Other: ex .90 - - Other than fruit juice or vegetable juice diluted with water or aerated and other than containing milk components of headings No 0401 and No 0402 ▼M73 2203 Beer made from malt: 2205 Vermouth and other wine of fresh grapes flavoured with plants or aromatic substances: 2207 Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol or higher; ethyl alcohol and other spirits, denatured, of any strength: 2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol; spirits, liqueurs and other spirituous beverages: 20 – Spirits obtained by distilling grape wine or grape marc: 30 – Whiskies: 40 – Rum and tafia: 50 – Gin and Geneva: 60 – Vodka: 70 – Liqueurs and cordials: 2209 Vinegar and substitutes for vinegar obtained from acetic acid:

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TABLE III EU and Swiss domestic reference prices Agricultural raw material Swiss domestic reference price EU domestic reference price Article 4(1) Applied on Swiss side Difference Swiss/EU reference price Article 3(3) Applied on EU side Difference Swiss/EU reference price CHF per 100 kg net CHF per 100 kg net CHF per 100 kg net EUR per 100 kg net Common wheat 51,80 23,54 28,25 0,00 Durum wheat — — 1,20 0,00 Rye 42,80 18,50 24,30 0,00 Barley — — — — Maize — — — — Common wheat flour 91,60 46,68 44,90 0,00 Whole-milk powder 629,60 323,59 306,00 0,00 Skimmed-milk powder 420,10 260,22 159,90 0,00 Butter 1 128,35 409,97 718,40 0,00 White sugar — — — — Eggs — — 38,00 0,00 Fresh potatoes 40,05 17,05 23,00 0,00 Vegetable fat — — 170,00 0,00

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TABLE IV

Swiss Import Regime

(a) The customs duty for the products listed in the Appendix to this Table is an agricultural component calculated on the basis of the net mass. The standard recipes are specified in the Appendix.

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(b) Basic amounts for agricultural raw materials taken into account for the calculation of the agricultural components:



Agricultural raw material Applied basic amount on the Swiss side Art. 3(2) Applied basic amount on the EU side Art. 4(2) CHF per 100 kg net EUR per 100 kg net Common wheat 23,00 0,00 Durum wheat 1,00 0,00 Rye 19,80 0,00 Barley — — Maize — — Common wheat flour 36,60 0,00 Whole-milk powder 248,45 0,00 Skimmed-milk powder 130,30 0,00 Butter 570,15 0,00 White sugar — — Eggs 30,95 0,00 Fresh potatoes 18,20 0,00 Vegetable fat 138,55 0,00

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(c) The customs duty for the products listed in the table below is zero.



Swiss tariff heading Comments 1901.9099 1904.9020 1905.9040 2103.2000 ex 2103.9000 Other than mango chutney, liquid 2104.1000 2106.9010 2106.9024 2106.9029 2106.9030 2106.9040 2106.9099 ex 2202.9090 Containing milk components of headings 0401 and 0402 2208.9010 2208.9099

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(d) As from the application of this Protocol the customs duties for the products listed in the table below are reduced to zero in three equal yearly steps.



Swiss tariff heading Applied duty as from the entry into force Applied duty as from one year after the entry into force Applied duty as from two years after the entry into force CHF per 100 kg gross CHF per 100 kg gross CHF per 100 kg gross 2208.9021 27,30 13,70 0,00 2208.9022 46,70 23,30 0,00

(e) The tariff headings set out in this Table refer to those applicable in Switzerland on 1 January 2002. Notwithstanding Article 12bis of the Agreement, the terms of this Table will not be affected by any changes that may be made in the tariff nomenclature.

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Appendix







Swiss tariff heading Comments Common wheat Durum wheat Rye Barley Maize Common wheat flour Whole-milk powder Skimmed-milk powder Butter Sugar Eggs Fresh potatoes Vegetable fat Kg of raw material per 100 kg net of finished product 1901.2099 90 20

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Appendix to Protocol 2

Provisions on administrative cooperation

1. The Contracting Parties agree that administrative cooperation is essential for the implementation and the control of the preferential treatment granted under this Protocol and underline their commitment to combat irregularities and fraud in customs and related matters.

2. Where a Contracting Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud under this Protocol, the Contracting Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Annex.

3. For the purpose of this Appendix a failure to provide administrative cooperation shall mean, inter alia:

(a) a repeated failure to respect the obligations to verify the originating status of the product(s) concerned;

(b) a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin;

(c) a repeated refusal or undue delay in obtaining authorisation to conduct administrative cooperation missions to verify the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.

For the purpose of this Appendix a finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Contracting Party that is linked to objective information concerning irregularities or fraud.

4. The application of a temporary suspension shall be subject to the following conditions:

(a) the Contracting Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud in customs and related matters shall without undue delay notify the Joint Committee of its finding together with the objective information and enter into consultations within the Joint Committee, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Contracting Parties;

(b) where the Contracting Parties have entered into consultations within the Joint Committee as above and have failed to agree on an acceptable solution within three months following the notification, the Contracting Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned. A temporary suspension shall be notified to the Joint Committee without undue delay;

(c) temporary suspensions under this Appendix shall be limited to that necessary to protect the financial interests of the Contracting Party concerned. They shall not exceed a period of six months, which may be renewed. Temporary suspensions shall be notified immediately after their adoption to the Joint Committee. They shall be subject to periodic consultations within the Joint Committee in particular with a view to their termination as soon as the conditions for their application are no longer given;

5. At the same time as the notification to the Joint Committee under paragraph 4(a) of this Appendix, the Contracting Party concerned should publish a notice to importers in its Official Journal. The notice to importers should indicate for the product concerned that there is a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud.

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PROTOCOL 3

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

Article 1

Applicable rules of origin

1. For the purpose of implementing the Agreement, Appendix I and the relevant provisions of Appendix II to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin ( 1 ) ('the Convention'), as last amended and published in the Official Journal of the European Union, shall apply.

2. All references to the 'relevant agreement' in Appendix I and in the relevant provisions of Appendix II to the Convention shall be construed so as to mean the Agreement.

3. Notwithstanding Articles 16(5) and 21(3) of Appendix I to the Convention, where cumulation involves only EFTA States, the Faroe Islands, the European Union, the Republic of Turkey, the participants in the Stabilisation and Association Process, the Republic of Moldova, Georgia and Ukraine, the proof of origin may be a movement certificate EUR.1 or an origin declaration.

Article 2

Alternative applicable rules of origin

1. Notwithstanding Article 1 of this Protocol, for the purpose of implementing the Agreement, products which acquire preferential origin in accordance with the alternative applicable rules of origin set out in Appendix A to this Protocol ('Transitional rules') shall also be considered as originating in the European Union or in Switzerland.

2. The Transitional rules shall apply until the amendment of the Convention on which the Transitional rules are based enters into force.

Article 3

Dispute settlement

1. Where disputes arise in relation to the verification procedures set out in Article 32 of Appendix I to the Convention or in Article 34 of Appendix A to this Protocol that cannot be settled between the customs authorities requesting the verification and the customs authorities responsible for carrying out that verification, they shall be submitted to the Joint Committee.

2. In all cases, the settlement of disputes between the importer and the customs authorities of the importing country shall take place under the legislation of that country.

Article 4

Amendments to the Protocol

The Joint Committee may decide to amend the provisions of this Protocol.

Article 5

Withdrawal from the Convention

1. Should either the European Union or Switzerland give notice in writing to the depositary of the Convention of their intention to withdraw from the Convention according to Article 9 thereof, the European Union and Switzerland shall immediately enter into negotiations on rules of origin for the purpose of implementing the Agreement.

2. Until the entry into force of such newly negotiated rules of origin, the rules of origin contained in Appendix I and, where appropriate, the relevant provisions of Appendix II to the Convention, applicable at the moment of withdrawal, shall continue to apply to the Agreement. However, from the moment of withdrawal, the rules of origin contained in Appendix I and, where appropriate, the relevant provisions of Appendix II to the Convention shall be construed so as to allow bilateral cumulation only between the European Union and Switzerland.

Appendix A

ALTERNATIVE APPLICABLE RULES OF ORIGIN

Rules for optional application among Contracting Parties to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin, pending the conclusion and entry into force of the amendment of the Convention

('the Rules' or 'the Transitional rules')

DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS' AND METHODS OF ADMINISTRATIVE COOPERATION

TABLE OF CONTENTS OBJECTIVES TITLE I GENERAL PROVISIONS Article 1 Definitions TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS' Article 2 General requirements Article 3 Wholly obtained products Article 4 Sufficient working or processing Article 5 Tolerance rule Article 6 Insufficient working or processing Article 7 Cumulation of origin Article 8 Conditions for the application of cumulation of origin Article 9 Unit of qualification Article 10 Sets Article 11 Neutral elements Article 12 Accounting segregation TITLE III TERRITORIAL REQUIREMENTS Article 13 Principle of territoriality Article 14 Non-alteration Article 15 Exhibitions TITLE IV DRAWBACK OR EXEMPTION Article 16 Drawback of or exemption from customs duties TITLE V PROOF OF ORIGIN Article 17 General requirements Article 18 Conditions for making out an origin declaration Article 19 Approved exporter Article 20 Procedure for issue of a movement certificate EUR.1 Article 21 Movement certificates EUR.1 issued retrospectively Article 22 Issue of a duplicate movement certificate EUR.1 Article 23 Validity of proof of origin Article 24 Free zones Article 25 Importation requirements Article 26 Importation by instalments Article 27 Exemption from proof of origin Article 28 Discrepancies and formal errors Article 29 Supplier's declarations Article 30 Amounts expressed in euro TITLE VI PRINCIPLES OF COOPERATION AND DOCUMENTARY EVIDENCE Article 31 Documentary evidence, preservation of proofs of origin and supporting documents Article 32 Dispute settlement TITLE VII ADMINISTRATIVE COOPERATION Article 33 Notification and cooperation Article 34 Verification of proofs of origin Article 35 Verification of supplier's declarations Article 36 Penalties TITLE VIII APPLICATION OF APPENDIX A Article 37 European Economic Area Article 38 Liechtenstein Article 39 Republic of San Marino Article 40 Principality of Andorra Article 41 Ceuta and Melilla List of Annexes ANNEX I: Introductory notes to the list in Annex II ANNEX II: List of working or processing required to be carried out on non-originating materials in order for the product manufactured to obtain originating status ANNEX III: Text of the origin declaration ANNEX IV: Specimens of movement certificate EUR.1 and application for a movement certificate EUR.1 ANNEX V: Special conditions concerning products originating in Ceuta and Melilla ANNEX VI: Supplier's declaration ANNEX VII: Long-term supplier's declaration

OBJECTIVES

These Rules are optional. They are intended to apply on a provisional basis, pending the conclusion and entry into force of the amendment of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin ('PEM Convention' or 'Convention'). These Rules will apply bilaterally to trade between those Contracting Parties that agree to refer to them or include them in their bilateral preferential trade agreements. These Rules are intended to apply as an alternative to the rules of the Convention, which, as provided by the Convention, are without prejudice to the principles laid down in the relevant agreements and other related bilateral agreements among Contracting Parties. Accordingly, these Rules will not be mandatory, but optional. They may be applied by economic operators that desire to claim preferences based on these Rules instead of on the basis of the rules of the Convention.

These Rules are not intended to modify the Convention. The Convention continues to apply in full between the Contracting Parties to the Convention. These Rules will not alter the rights and obligations of the Contracting Parties under the Convention.

TITLE I

GENERAL PROVISIONS

Article 1

Definitions

For the purposes of these Rules:

(a) 'applying Contracting Party' means a Contracting Party to the PEM Convention that incorporates these Rules in its bilateral preferential trade agreements with another Contracting Party to the PEM Convention and includes the Parties to the Agreement;

(b) 'chapters', 'headings' and 'subheadings' mean the chapters, the headings and the subheadings (four- or six-digit codes) used in the nomenclature which makes up the Harmonized Commodity Description and Coding System ('Harmonised System') with the changes pursuant to the Recommendation of 26 June 2004 of the Customs Cooperation Council;

(c) 'classified' means the classification of a good under a particular heading or subheading of the Harmonised System;

(d) 'consignment' means products which are either: (i) sent simultaneously from one exporter to one consignee; or (ii) 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;

(e) 'customs authorities of the Party or applying Contracting Party' for the European Union means any of the customs authorities of the Member States of the European Union;

(f) 'customs value' means the value as determined in accordance with the Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (WTO Agreement on Customs Valuation);

(g) 'ex-works price' means the price paid for the product ex works to the manufacturer in the Party in whose undertaking the last working or processing is carried out, provided that the price includes the value of all the materials used and all other costs related to its production, minus any internal taxes which are, or may be, repaid when the product obtained is exported. Where the last working or processing has been subcontracted to a manufacturer, the term 'manufacturer' refers to the enterprise that has employed the subcontractor. Where the actual price paid does not reflect all costs related to the manufacturing of the product which are actually incurred in the Party, the ex-works price means the sum of all those costs, minus any internal taxes which are, or may be, repaid when the product obtained is exported;

(h) 'fungible material' or 'fungible product' means material or product that is of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another;

(i) 'goods' means both material and product;

(j) 'manufacture' means any kind of working or processing, including assembly;

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

(l) 'maximum content of non-originating materials' means the maximum content of non-originating materials which is permitted in order to consider a manufacture to be working or processing sufficient to confer originating status on the product. It may be expressed as a percentage of the ex-works price of the product or as a percentage of the net weight of these materials used falling under a specified group of chapters, chapter, heading or subheading;

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

(n) 'territory' includes the land territory, internal waters and the territorial sea of a Party;

(o) 'value added' shall be taken to be the ex-works price of the product minus the customs value of each of the materials incorporated which originate in the other applying Contracting Parties with which cumulation is applicable or, where the customs value is not known or cannot be ascertained, the first ascertainable price paid for the materials in the exporting Party;

(p) '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 exporting Party. Where the value of the originating materials used needs to be established, this point shall be applied mutatis mutandis.

TITLE II

DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS'

Article 2

General requirements

For the purpose of implementing the Agreement, the following products shall be considered as originating in a Party when exported to the other Party:

(a) products wholly obtained in a Party, within the meaning of Article 3;

(b) products obtained in a Party incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in that Party within the meaning of Article 4.

Article 3

Wholly obtained products

1. The following shall be considered as wholly obtained in a Party when exported to the other Party: (a) mineral products and natural water extracted from its soil or from its seabed; (b) plants, including aquatic plants, and vegetable products grown or harvested there; (c) live animals born and raised there; (d) products from live animals raised there; (e) products from slaughtered animals born and raised there; (f) products obtained by hunting or fishing conducted there; (g) products of aquaculture where the fish, crustaceans, molluscs and other aquatic invertebrates are born or raised there from eggs, larvae, fry or fingerlings; (h) products of sea fishing and other products taken from the sea outside any territorial sea by its vessels; (i) products made on board its factory ships exclusively from products referred to in point (h); (j) used articles collected there fit only for the recovery of raw materials; (k) waste and scrap resulting from manufacturing operations conducted there; (l) products extracted from the seabed or below the seabed which is situated outside its territorial sea but where it has exclusive exploitation rights; (m) goods produced there exclusively from the products specified in points (a) to (l).

2. The terms 'its vessels' and 'its factory ships' in points (h) and (i) of paragraph 1 respectively shall apply only to vessels and factory ships which meet each of the following requirements: (a) they are registered in the exporting or the importing Party; (b) they sail under the flag of the exporting or the importing Party; (c) they meet one of the following conditions: (i) they are at least 50 % owned by nationals of the exporting or the importing Party; or (ii) they are owned by companies which: — have their head office and their main place of business in the exporting or the importing Party; and — are at least 50 % owned by the exporting or the importing Party or public entities or nationals of these Parties.

3. For the purpose of paragraph 2, when the exporting or the importing Party is the European Union, it means the Member States of the European Union.

4. For the purpose of paragraph 2, the EFTA States are to be considered as one applying Contracting Party.

Article 4

Sufficient working or processing

1. Without prejudice to paragraph 3 of this Article and to Article 6, products which are not wholly obtained in a Party shall be considered to be sufficiently worked or processed when the conditions laid down in the list in Annex II for the goods concerned are fulfilled.

2. If a product which has obtained originating status in a Party in accordance with paragraph 1 is used as a material in the manufacture of another product, no account shall be taken of the non-originating materials which may have been used in its manufacture.

3. The determination of whether the requirements of paragraph 1 are met, shall be carried out for each product.

However, where the relevant rule is based on compliance with a maximum content of non-originating materials, the customs authorities of the Parties may authorise exporters to calculate the ex-works price of the product and the value of the non-originating materials on an average basis as set out in paragraph 4, in order to take into account the fluctuations in costs and currency rates.

4. Where the second subparagraph of paragraph 3 applies, an average ex-works price of the product and average value of non-originating materials used shall be calculated respectively on the basis of the sum of the ex-works prices charged for all sales of the same products carried out during the preceding fiscal year and the sum of the value of all the non-originating materials used in the manufacture of the same products over the preceding fiscal year as defined in the exporting Party, or, where figures for a complete fiscal year are not available, a shorter period which should not be less than three months.

5. Exporters having opted for calculation on an average basis shall consistently apply such a method during the year following the fiscal year of reference, or, where appropriate, during the year following the shorter period used as a reference. They may cease to apply such a method where during a given fiscal year, or a shorter representative period of no less than three months, they record that the fluctuations in costs or currency rates which justified the use of such a method have ceased.

6. The averages referred to in paragraph 4 shall be used as the ex-works price and the value of non-originating materials, respectively, for the purpose of establishing compliance with the maximum content of non-originating materials.

Article 5

Tolerance rule

1. By way of derogation from Article 4 and subject to paragraphs 2 and 3 of this Article, non-originating materials which, according to the conditions set out in the list in Annex II, are not to be used in the manufacture of a given product may nevertheless be used, provided that their total net weight or value assessed for the product does not exceed: (a) 15 % of the net weight of the product falling within Chapters 2 and 4 to 24, other than processed fishery products of Chapter 16; (b) 15 % of the ex-works price of the product for products other than those covered by point (a).

This paragraph shall not apply to products falling within Chapters 50 to 63 of the Harmonised System, for which the tolerances mentioned in Notes 6 and 7 of Annex I shall apply.

2. Paragraph 1 of this Article shall not allow to exceed any of the percentages for the maximum content of non-originating materials as specified in the rules laid down in the list in Annex II.

3. Paragraphs 1 and 2 of this Article shall not apply to products wholly obtained in a Party within the meaning of Article 3. However, without prejudice to Article 6 and Article 9(1), the tolerance provided for in those provisions shall nevertheless apply to product for which the rule laid down in the list in Annex II requires that the materials which are used in the manufacture of that product are wholly obtained.

Article 6

Insufficient working or processing

1. Without prejudice to paragraph 2 of this Article, the following operations shall be considered to be insufficient working or processing to confer the status of an originating product, whether or not the requirements of Article 4 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 and partial or total milling of rice; polishing, and glazing of cereals and rice; (g) operations to colour or flavour sugar or form sugar lumps; partial or total milling of crystal sugar; (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) mixing of sugar with any material; (o) simple addition of water or dilution or dehydratation or denaturation of products; (p) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts; (q) slaughter of animals; (r) a combination of two or more operations specified in points (a) to (q).

2. All the operations carried out in the exporting Party on a given product shall be taken into account when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1.

Article 7

Cumulation of origin

1. Without prejudice to Article 2, products shall be considered as originating in the exporting Party when exported to the other Party if they are obtained there, incorporating materials originating in any applying Contracting Party other than the exporting Party provided that the working or processing carried out in the exporting Party goes beyond the operations referred to in Article 6. It shall not be necessary for such materials to have undergone sufficient working or processing.

2. Where the working or processing carried out in the exporting Party does not go beyond the operations referred to in Article 6, the product obtained by incorporating materials originating in any other applying Contracting Party, shall be considered as originating in the exporting Party only where the value added there is greater than the value of the materials used originating in any of the other applying Contracting Parties. If this is not so, the product obtained shall be considered as originating in the applying Contracting Party which accounts for the highest value of originating materials used in the manufacture in the exporting Party.

3. Without prejudice to Article 2, and with the exclusion of products falling within Chapters 50 to 63, working or processing carried out in an applying Contracting Party other than the exporting Party shall be considered as having been carried out in the exporting Party when the products obtained undergo subsequent working or processing in this exporting Party.

4. Without prejudice to Article 2, for products falling within Chapters 50 to 63 and only for the purpose of bilateral trade between the Parties, working or processing carried out in the importing Party shall be considered as having been carried out in the exporting Party when the products undergo subsequent working or processing in this exporting Party.

For the purpose of this paragraph, the participants in the European Union's Stabilisation and Association process and the Republic of Moldova are to be considered as one applying Contracting Party.

5. The Parties may opt to extend the application of paragraph 3 of this Article on importation of products falling within Chapters 50 to 63 unilaterally. A Party that opts for such extension shall notify the other Party and inform the European Commission in accordance with Article 8(2).

6. For the purpose of cumulation within the meaning of paragraphs 3 to 5 of this Article, the originating products shall be considered as originating in the exporting Party only if the working or processing undergone there goes beyond the operations referred to in Article 6.

7. Products originating in the applying Contracting Parties referred to in paragraph 1 which do not undergo any working or processing in the exporting Party shall retain their origin if exported into one of the other applying Contracting Parties.

Article 8

Conditions for the application of cumulation of origin

1. The cumulation provided for in Article 7 may be applied only provided that: (a) a preferential trade agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT) is applicable between the applying Contracting Parties involved in the acquisition of the originating status and the applying Contracting Party of destination; and (b) goods have obtained originating status by the application of rules of origin identical to those given in these Rules.

2. Notices indicating the fulfilment of the necessary requirements to apply cumulation shall be published in the Official Journal of the European Union (C series) and in an official publication in Switzerland, in accordance with its own procedures.

The cumulation provided for in Article 7 shall apply from the date indicated in those notices.

The Parties shall provide the European Commission with details of the relevant agreements concluded with other applying Contracting Parties, including the dates of entry into force of these Rules.

3. The proof of origin should include the statement in English 'CUMULATION APPLIED WITH (name of the relevant applying Contracting Party/Parties in English)' when products obtained the originating status by application of cumulation of origin in accordance with Article 7.

In cases where a movement certificate EUR.1 is used as a proof of origin, that statement shall be made in Box 7 of the movement certificate EUR.1.

4. The Parties may decide, for the products exported to them that obtained the originating status in the exporting Party by application of cumulation of origin in accordance with Article 7, to waive the obligation of including on the proof of origin the statement referred to in paragraph 3 of this Article ( 2 ).

The Parties shall notify the waiver to the European Commission in accordance with Article 8(2).

Article 9

Unit of qualification

1. The unit of qualification for the application of these Rules shall be the particular product which is considered to be the basic unit when determining classification using the nomenclature of the Harmonised System. 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 individual item shall be taken into account when applying these Rules.

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.

3. 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 ex-works price thereof 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 the component products are originating.

When a set is composed of originating and non-originating products, the set as a whole shall however 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 is an originating product, no account shall be taken of 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) any other goods which do not enter, and which are not intended to enter, into the final composition of the product.

Article 12

Accounting segregation

1. If originating and non-originating fungible materials are used in the working or processing of a product, economic operators may ensure the management of materials using the accounting segregation method, without keeping the materials on separate stocks.

2. Economic operators may ensure the management of originating and non-originating fungible products of heading 1701 using the accounting segregation method, without keeping the products on separate stocks.

3. The Parties may require that the application of accounting segregation is subject to prior authorisation by the Customs authorities. The Customs authorities may grant the authorisation subject to any conditions they deem appropriate and shall monitor