1997A1716 — EN — 01.01.2012 — 001.003

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

Amended by:









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EURO-MEDITERRANEAN INTERIM ASSOCIATION AGREEMENT

on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part







The EUROPEAN COMMUNITY, hereinafter referred to as ‘the Community’, of the one part, and the PALESTINE LIBERATION ORGANIZATION (PLO) FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY OF THE WEST BANK AND THE GAZA STRIP, hereinafter referred to as ‘the Palestinian Authority’, of the other part, CONSIDERING the importance of the existing links between the Community and the Palestinian people of the West Bank and the Gaza Strip, and the common values that they share, CONSIDERING that the Community and the PLO wish to strengthen those links and to establish lasting relations based on partnership and reciprocity, CONSIDERING the importance which the Parties attach to the principles of the United Nations Charter, particularly the observance of human rights, democratic principles and political and economic freedoms which form the very basis of their relations, DESIROUS of strengthening the framework of relations between the European Community and the Middle East, and of regional economic integration of the Middle Eastern countries as an objective to be achieved as soon as conditions permit, CONSIDERING the difference in economic and social development existing between the Parties and the need to intensify existing efforts to promote economic and social development in the West Bank and the Gaza Strip, DESIROUS of establishing a cooperation, supported by a regular dialogue, on economic, cultural, scientific and educational matters with a view to improving mutual knowledge and understanding, CONSIDERING the commitment of the Parties to free trade, and in particular to compliance with the provisions of the General Agreement on Tariffs and Trade of 1994, DESIROUS of building on the existing autonomous trade arrangements between the Parties and placing them on a contractual and reciprocal basis, CONVINCED of the need to promote the creation of a new climate for their economic relations in order to improve the environment for investment flows, CONSIDERING the rights and obligations of the parties under the international agreements which they have signed, CONVINCED that the full participation of the Palestinian Authority in the Euro-Mediterranean Partnership launched at the Barcelona Conference is an important step in the normalization of relations between the Parties, which should be reflected in an Agreement on an interim basis at the present stage, AWARE of the major political significance of the holding of Palestinian elections on 20 January 1996 for the process leading to a permanent settlement based on United Nations Security Council Resolutions 242 and 338, RECOGNIZING that this Agreement should be replaced by a Euro-Mediterranean Association Agreement as soon as conditions permit, HAVE AGREED AS FOLLOWS:







Article 1

1. An Interim Association on Trade and Cooperation is hereby established between the Community and the Palestinian Authority.

2. The objectives of this Agreement are:

— to provide an appropriate framework for a comprehensive dialogue, allowing the development of close relations between the Parties,

— to establish the conditions for the progressive liberalization of trade,

— to foster the development of balanced economic and social relations between the Parties through dialogue and cooperation,

— to contribute to the social and economic development of the West Bank and Gaza Strip,

— to encourage regional cooperation with a view to the consolidation of peaceful coexistence and economic and political stability,

— to promote cooperation in other areas which are of reciprocal interest.

Article 2

Relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect of democratic principles and fundamental human rights as set out in the universal declaration on human rights, which guides their internal and international policy and constitutes an essential element of this Agreement.







TITLE I

FREE MOVEMENT OF GOODS







BASIC PRINCIPLES

Article 3

The Community and the Palestinian Authority shall establish progressively a free trade area over a transitional period, not extending beyond 31 December 2001, according to the modalities set out in this Title and in conformity with the provisions of the General Agreement on Tariffs and Trade of 1994 and of the other multilateral agreements on trade in goods annexed to the agreement establishing the World Trade Organization (WTO), hereinafter referred to as the GATT.







CHAPTER 1

INDUSTRIAL PRODUCTS

Article 4

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The provisions of this Chapter shall apply to products originating in the European Union and in the West Bank and the Gaza Strip other than those listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT. However, this Chapter shall continue to apply to chemically pure lactose of CN code 1702 11 00 and glucose and glucose syrup, containing in the dry state 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90 .

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Article 5

No new customs duty on imports, or any other charge having equivalent effect, shall be introduced on trade between the Community and the West Bank and Gaza Strip.

Article 6

Imports into the Community of products originating in the West Bank and the Gaza Strip shall be allowed free of customs duties and of any other charge having equivalent effect and free of quantitative restrictions and of any other measure having equivalent effect.

Article 7

1. The provisions of this Chapter do not preclude the retention by the Community of an agricultural component in respect of goods originating in the West Bank and the Gaza Strip and listed in Annex 1.

The provisions of Chapter 2 applicable to agricultural products shall apply mutatis mutandis to the agricultural component.

2. For the products listed in Annex 2 originating in the Community, the Palestinian Authority may retain for the duration of the Agreement customs duties on import and charges having equivalent effect not higher than those in force on 1 July 1996.

3. The Joint Committee established under Article 63 may decide on further concessions which the parties grant each other on a mutual basis.

Article 8

1. Customs duties and charges having equivalent effect applicable on import into the West Bank and the Gaza Strip of products originating in the Community, other than those listed in Annexes 2 and 3, shall be abolished when the Agreement enters into force.

2. From the entry into force of the Agreement, for the products originating in the Community listed in Annex 3 imported into the West Bank and the Gaza Strip, the Palestinian Authority may levy fiscal charges not exceeding 25 % by value. These charges shall be gradually abolished in accordance with the following schedule:

one year after the date of entry into force of this Agreement, each charge shall be reduced to 90 % of the basic charge;

two years after the date of entry into force of this Agreement, each charge shall be reduced to 80 % of the basic charge;

three years after the date of entry into force of this Agreement, each charge shall be reduced to 70 % of the basic charge;

four years after the date of entry into force of this Agreement, each charge shall be reduced to 60 % of the basic charge;

five years after the date of entry into force of this Agreement, each remaining charge shall be abolished.

3. In the event of serious difficulties for a given product, the schedule referred to in paragraph 2 may be reviewed by the Joint Committee by common accord, on the understanding that it may not be suspended beyond the maximum transitional period of five years. If the Joint Committee has not taken a decision within 30 days of its application to review the schedule, the Palestinian Authority may suspend the schedule provisionally for a period which may not exceed one year.

4. If the charge is reduced erga omnes, the reduced charge shall replace the basic charge described in paragraph 2 from the date on which the reduction is applied.

5. The Palestinian Authority shall notify the Community of its basic duties and charges.

Article 9

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

Article 10

1. By way of derogation from Articles 5 and 8, the Palestinian Authority may take exceptional measures of limited duration to introduce, increase or re-introduce customs duties.

2. Such measures may only apply to infant industries and to sectors undergoing restructuring or experiencing serious difficulties, particularly where those difficulties entail severe social problems.

3. Customs duties on imports into the West Bank and the Gaza Strip of products originating in the Community that are introduced by such exceptional measures may not exceed 25 % by value, and must retain a preferential margin for products originating in the Community. The total value of imports of the products subjected to such measures may not exceed 15 % of total imports of industrial products originating in the Community during the last year for which statistics are available.

4. Such measures shall be applied for no longer than five years, except where a longer duration is authorized by the Joint Committee.

5. The Palestinian Authority shall inform the Joint Committee of any exceptional measures it intends to adopt and, at the Community’s request, consultations shall be held on the measures and sectors concerned before they are implemented. When adopting such measures, the Palestinian Authority shall provide the Committee with a schedule for the abolition of the customs duties introduced pursuant to this Article. Such schedules shall provide for the phasing out of the duties concerned by equal annual instalments, starting no later than the end of the second year following their introduction. The Joint Committee may decide on a different schedule.







CHAPTER 2

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AGRICULTURAL PRODUCTS, PROCESSED AGRICULTURAL PRODUCTS AND FISH AND FISHERY PRODUCTS

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Article 11

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The provisions of this Chapter shall apply to products originating in the European Union and in the West Bank and the Gaza Strip listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT, with exception of chemically pure lactose of CN code 1702 11 00 and of glucose and glucose syrup, containing in the dry state, 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90 , for which duty free market access was already granted within Chapter 1.

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Article 12

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The European Union and the Palestinian Authority shall progressively establish greater liberalisation of their trade in agricultural products, processed agricultural products and fish and fishery products of interest to both Parties.

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Article 13

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1. Agricultural products, processed agricultural products and fish and fishery products originating in the West Bank and the Gaza Strip listed in Protocol 1, on importation into the European Union shall be subject to the arrangements set out in that Protocol.

2. Agricultural products, processed agricultural products and fish and fishery products originating in the European Union listed in Protocol 2, on importation into the West Bank and the Gaza Strip shall be subject to the arrangements set out in that Protocol.

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Article 14

1. From 1 January 1999, the Community and the Palestinian Authority shall examine the situation in order to determine the measures to be applied by the Community and the Palestinian Authority from 1 January 2000, in accordance with the objective set out in Article 12.

2. Without prejudice to paragraph 1 and taking account of the volume of trade in agricultural products between the Parties and of the particular sensitivity of such products, the Community and the Palestinian Authority shall examine in the Joint Committee, product by product and on an orderly and reciprocal basis, the possibility of granting each other further concessions.







CHAPTER 3

COMMON PROVISIONS

Article 15

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

2. Quantitative restrictions on imports and measures having equivalent effect in trade between the Community and the West Bank and Gaza Strip shall be abolished from the entry into force of this Agreement.

3. The Community and the Palestinian Authority shall not apply to exports between themselves either customs duties or charges having equivalent effect, or quantitative restrictions or measures having equivalent effect.

Article 16

1. Products originating in the West Bank and the Gaza Strip shall not, on importation into the Community, be accorded a treatment more favourable than that which the Member States apply among themselves.

2. Application of the provisions of this Agreement shall be without prejudice to Council Regulation (EEC) No 1911/91 of 26 June 1991 on the application of the provision of Community law to the Canary Islands.

Article 17

1. In the event of specific rules being introduced as a result of the implementation of its agricultural policy or of any alteration of the current rules or in the event of any alteration or extension of the provisions relating to the implementation of its agricultural policy, the Party concerned may amend the arrangements resulting from the Agreement in respect of the products concerned.

2. In such cases the Party concerned shall inform the Joint Committee. At the request of the other Party, the Joint Committee shall meet to take due account of the interests of the other Party.

3. If the Community or the Palestinian Authority, in applying paragraph 1, modifies the arrangements made by this Agreement for agricultural products, they shall accord imports originating in the other Party an advantage comparable to that provided for in this Agreement.

4. The application of this Article may be the subject of consultations in the Joint Committee.

Article 18

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

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

Article 19

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

2. Consultation between the Parties shall take place within the Joint Committee concerning agreements establishing customs unions or free trade areas and, where requested, on other major issues related to their respective trade policy with third countries. In particular, in the event of a third country acceding to the European Union, such consultation shall take place so as to ensure that account can be taken of the mutual interests of this Parties.

Article 20

If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of GATT, it may take appropriate measures against this practice in accordance with the Agreement on implementation of Article VI of the GATT and with its relevant internal legislation, under the conditions and in accordance with the procedures laid down in Article 23 of this Agreement.

Article 21

Where any product is being imported in such increased quantities and under such conditions as to cause or threaten to cause:

— serious injury to domestic producers of like or directly competitive products in the territory of one of the Parties, or

— serious disturbances in any sector of the economy, or

— difficulties which could bring about serious deterioration in the economic situation of a region,

the Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 23.

Article 22

Where compliance with the provisions of Article 15 (3) leads to:

(i) re-export towards a third country against which the exporting Party maintains, for the product concerned, quantitative export restrictions, export duties, or measures having equivalent effect, or

(ii) a serious shortage, or threat thereof, of a product essential to the exporting Party;

and where the situations referred to above give rise, or are likely to give rise to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 23. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.

Article 23

1. In the event of the Community or the Palestinian Authority subjecting imports of products liable to give rise to the difficulties referred to in Article 21 to an administrative procedure, the purpose of which is to provide rapid information on the trend of trade flows, it shall inform the other Party.

2. In the cases specified in Articles 20, 21 and 22, before taking the measures provided for therein, or, as soon as possible in cases to which paragraph 3 (d) of this Article applies, the 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 Parties.

In the selection of appropriate 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 periodic consultations within that Committee, particularly with a view to their abolition as soon as circumstances permit.

3. For the implementation of paragraph 2, the following provisions shall apply:

(a) As regards Article 20, the exporting Party shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. When no end has been put to the dumping within the meaning of Article VI of GATT or no other satisfactory solution has been reached within 30 days of the notification being made, the importing Party may adopt the appropriate measures.

(b) As regards Article 21, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Joint Committee, which may take any decision needed to put an end to such difficulties. If the Joint Committee or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred, the importing Party may adopt the appropriate measures to remedy the problem. These measures shall not exceed the scope of what is necessary to remedy the difficulties which have arisen.

(c) As regards Article 22, the difficulties arising from the situations referred to in that Article shall be referred for examination to the Joint Committee. The Committee may take any decision needed to put an end to the difficulties. If it has not taken such a decision within 30 days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned.

(d) Where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Party concerned may, in the situations specified in Articles 20, 21 and 22 apply forthwith such precautionary measures as are strictly necessary to remedy the situation, and shall inform the other Party immediately.

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Article 23bis

Temporary Withdrawal of Preferences

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

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

3. For the purpose of this Article a failure to provide administrative cooperation/assistance 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 enquiry visits to determine the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.

4. For the purpose of this Article 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 Party that is linked to objective information concerning irregularities or fraud.

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

(a) The Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation/assistance and/or of irregularities or fraud 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 Parties.

(b) Where the Parties have entered into consultations within the Joint Committee and have failed to agree on an acceptable solution within 3 months following the notification, the 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 Article shall be limited to that necessary to protect the financial interests of the Party concerned. They shall not exceed a period of 6 months, which may be renewed if at the date of expiry nothing has changed with respect to the conditions that gave rise to the initial suspension. 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 no longer apply.

Each Party shall publish according to its internal procedures, in the case of the European Union in the Official Journal of the European Union, notices to importers concerning any: notification referred to in paragraph 5 (a); decision referred to in paragraph 5 (b); and extension or termination referred to in paragraph 5 (c).

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Article 24

Nothing in this Agreement shall preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security, of the protection of health and life of humans, animals or plants, of the protection of national treasures possessing artistic, historic or archaeological value, of the protection of intellectual, industrial and commercial property or of regulations concerning gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

Article 25

The concept of ‘originating products’ for the application of the provisions of the present Title and the methods of administrative cooperation relating to them are set out in Protocol 3. The Joint Committee may decide to make the necessary adaptations to this Protocol with a view to the implementation of cumulation of origin as agreed in the Declaration adopted at the Barcelona Conference.

Article 26

The combined nomenclature shall be used for the classification of goods in the trade between the Parties.







TITLE II

PAYMENTS, CAPITAL, COMPETITION, INTELLECTUAL PROPERTY AND PUBLIC PROCUREMENT







CHAPTER 1

CURRENT PAYMENTS AND MOVEMENT OF CAPITAL

Article 27

Subject to the provisions of Article 29, the Parties undertake to impose no restrictions on any current payments for current transactions.

Article 28

1. With regard to transactions on the capital account of balance of payments, the Parties undertake to impose no restrictions on the movement of capital relating to direct investments in the West Bank and Gaza Strip in companies formed in accordance with current laws, nor on the liquidation and repatriation of the yield from such investments, or any profit stemming therefrom.

2. The Parties shall consult each other with a view to facilitating the movement of capital between the Community and the West Bank and Gaza Strip.

Article 29

Where one or more Member States of the Community, or the Palestinian Authority, is in serious balance of payments difficulties, or under threat thereof, the Community or the Palestinian Authority, as the case may be, may, in accordance with the conditions established under the GATT and Articles VIII and XIV of the Articles of Agreement of the International Monetary Fund, adopt restrictions on current transactions which shall be of limited duration and may not go beyond what is necessary to remedy the balance of payments situation.

The Community or the Palestinian Authority, as the case may be, shall inform the other Party forthwith and shall submit to it as soon as possible a timetable for the elimination of the measures concerned.







CHAPTER 2

COMPETITION, INTELLECTUAL PROPERTY AND PUBLIC PROCUREMENT

Article 30

1. The following are incompatible with the proper functioning of the Agreement, insofar as they may affect trade between the Community and the Palestinian Authority:

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

(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or the West Bank and the Gaza Strip as a whole or in a substantial part thereof;

(iii) any public aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

2. The Parties shall, as appropriate, assess any practice contrary to this Article on the basis of the criteria resulting from the application of Community competition rules.

3. The Joint Committee shall, before 31 December 2001, adopt by decision the necessary rules for the implementation of paragraphs 1 and 2.

Until these rules are adopted, the provisions of the Agreement on Subsidies and Countervailing Measures shall be applied as the rules for the implementation of paragraph 1 (iii) and the relevant parts of paragraph 2.

4. As regards the implementation of paragraph 1 (iii), the Parties recognize that the Palestinian Authority may wish to use, during the period until 31 December 2001, public aid to undertakings as an instrument to tackle its specific development problems.

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

6. With regard to products referred to in Title I, Chapter 2:

— paragraph 1 (iii) does not apply,

— any practices contrary to paragraph 1 (i) shall be assessed according to the criteria established by the Community on the basis of Articles 42 and 43 of the Treaty establishing the European Community and in particular those established in Council Regulation No 26/62.

7. If the Community or the Palestinian Authority considers that a particular practice is incompatible with the terms of paragraph 1 of this Article, and:

— is not adequately dealt with under the implementing rules referred to in paragraph 3, or

— in the absence of such rules, and if such practice causes or threatens to cause serious prejudice to the interest of the other Party or material injury to its domestic industry, including its services industry,

it may take appropriate measures after consultation within the Joint Committee or after 30 working days following referral for such consultation.

With reference to practices incompatible with paragraph 1 (iii) of this Article, such appropriate measures, when the GATT is applicable to them, may only be adopted in accordance with the procedures and under the conditions laid down by GATT or by any other relevant instrument negotiated under its auspices and applicable between the Parties.

8. Nothwithstanding any provisions to the contrary adopted in accordance with paragraph 3, the Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business secrecy.

Article 31

The Member States and the Palestinian Authority shall progressively adjust, without prejudice to their commitments to the GATT where appropriate, any State monopolies of a commercial character, so as to ensure that, by 31 December 2001, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and the Palestinian people of the West Bank and Gaza Strip. The Joint Committee will be informed about the measures adopted to implement this objective.

Article 32

With regard to public enterprises and enterprises to which special or exclusive rights have been granted, the Joint Committee shall ensure that by 31 December 2001 there is neither enacted nor maintained any measure distorting trade between the Community and the Palestinian Authority contrary to the Parties’ interests. This provision should not obstruct the performance in law or in fact of the particular tasks assigned to those undertakings.

Article 33

1. The Parties shall grant and ensure adequate and effective protection of intellectual, industrial and commercial property rights in accordance with the highest international standards, including effective means of enforcing such rights.

2. The implementation of this Article shall be regularly reviewed by the Parties. If problems in the area of intellectual, industrial and commercial property affecting trading conditions occur, urgent consultations shall be undertaken within the framework of the Joint Committee, at the request of either Party, with a view to reaching mutually satisfactory solutions.

Article 34

1. The Parties agree on the objective of reciprocal and gradual liberalization of public procurement contracts.

2. The Joint Committee shall take the necessary measures to implement paragraph 1.







TITLE III

ECONOMIC COOPERATION AND SOCIAL DEVELOPMENT

Article 35

Objectives

1. The Parties undertake to intensify economic cooperation in their mutual interest and in accordance with the overall objectives of this Agreement.

2. The aim of cooperation shall be to support the Palestinian Authority’s own efforts to achieve sustainable economic and social development.

Article 36

Scope

1. Cooperation shall focus primarily on sectors suffering from internal difficulties or affected by the overall process of liberalization of the economy of the West Bank and the Gaza Strip, and in particular by the liberalization of trade between the West Bank and the Gaza Strip and the Community.

2. Similarly, cooperation shall focus on areas likely to bring the economies of the Community and the West Bank and Gaza Strip closer together, particularly those which will generate sustainable growth and employment.

3. Cooperation shall encourage the implementation of measures designed to develop intra-regional cooperation.

4. Conservation of the environment and ecological balance shall be taken into account in the implementation of the various sectors of economic cooperation to which it is relevant.

5. The Parties may agree to extend economic cooperation to other sectors not covered by the provisions of this Title.

Article 37

Methods and modalities

Economic cooperation shall be implemented in particular by:

(a) a regular economic dialogue between the Parties, which covers all areas of macro-economic policy and in particular budgetary policy, the balance of payments and monetary policy;

(b) regular exchange of information and ideas in every sector of cooperation including meetings of officials and experts;

(c) transfer of advice, expertise and training;

(d) implementation of joint actions such as seminars and workshops;

(e) technical, administrative and regulatory assistance;

(f) encouragement of joint ventures;

(g) dissemination of information on cooperation.

Article 38

Industrial cooperation

The main aim will be to:

— support the Palestinian Authority, in its efforts to modernize and diversify industry and, in particular, to create an environment favourable to private sector and industrial development,

— foster cooperation between the two Parties’ economic operators,

— foster cooperation regarding industrial policy, competitiveness in an open economy and the modernization and development of industry,

— support policies to diversify production and exports and external outlets,

— promote research and development, innovation and technology transfer as far as they benefit industry,

— develop and enhance the human resources required by industry,

— facilitate access to venture and risk financing facilities for the benefit of Palestinian industry.

Article 39

Investment promotion and investment

The objective of cooperation will be the creation of a favourable and stable environment for investment in the West Bank and Gaza Strip.

Cooperation will take the form of promotion of investment. This will entail the development of:

— harmonized and simplified administrative procedures,

— co-investment machinery, especially for small and medium-sized enterprises (SMEs) of both Parties,

— information channels and means of identifying investment opportunities,

— an environment conducive to investment in the West Bank and the Gaza Strip.

Cooperation may also extend to the conception and implementation of projects demonstrating the effective acquisition and use of basic technologies, the use of standards, the development of human resources (e.g. in technologies and management) and the creation of jobs.

Article 40

Standardization and conformity assessment

The objective of cooperation will be to narrow the gap in standards and certification.

In practical terms cooperation will take the form of:

— the promotion of the use of Community technical regulations and European standards and conformity assessment procedures,

— raising the level of conformity assessment by Palestinian certification and accreditation bodies,

— discussing mutual recognition arrangements, where appropriate,

— cooperating in the field of quality management,

— developing structures for the protection of intellectual, individual and commercial property, for standardization and for setting quality standards.

Article 41

Approximation of laws

The objective of cooperation will be to approximate Palestinian Council legislation to that of the Community, in the areas covered by the Agreement.

Article 42

Small and medium-sized enterprises

The objective of cooperation will be the creation of an environment propitious to the development of SMEs on local and export markets through, inter alia:

— promotion of contacts between enterprises, in particular through recourse to the Community’s networks and instruments for the promotion of industrial cooperation and partnership,

— easier access to investment finance,

— information and support services,

— enhancement of human resources with the aim of stimulating innovation and the setting-up of projects and business ventures.

Article 43

Financial services

The objective of cooperation will be the improvement and development of financial services.

It will take the form of:

— encouraging the strengthening and restructuring of the Palestinian financial sector,

— improving Palestinian accounting, supervisory and regulatory systems of banking, insurance and other parts of the financial sector.

Article 44

Agriculture and fisheries

The objective of cooperation under this heading will mainly be the modernization and restructuring, where necessary, of agriculture and fisheries.

This includes modernization of infrastructures and of equipment; the development of packaging, storage and marketing techniques; and the improvement of distribution channels.

It will be geared more especially to:

— the development of stable markets,

— support for policies to diversify production and exports and external outlets,

— reduction of food dependency,

— promotion of environment-friendly agriculture and fisheries, taking particular account of the need for conservation and rational management of fisheries,

— closer relations on a voluntary basis between business groups and organizations representing trades and professions,

— technical assistance and training,

— harmonization of phytosanitary and veterinary standards,

— integrated rural development including improvement of basic services and the development of associated economic activities, and

— cooperation among rural regions and exchange of experience and know-how concerning rural development.

Article 45

Social development

The Parties acknowledge the importance of social development which should go hand-in-hand with any economic development. They give particular priority to respect for basic social rights.

The Parties will give priority to measures aimed at:

— the promotion of the equality of women and a balanced participation in the decision-making process in the economic and social sphere, notably through education and the media,

— the development of family planning and the protection of mothers and children,

— improving the social protection system,

— improving the response to health requirements,

— improving the living conditions in densely populated areas in less-favoured regions,

— promoting respect for human rights and democracy, inter alia through socio-professional dialogue.

Article 46

Transport

The objectives of cooperation will be:

— aid for restructuring and modernizing roads, ports and airports,

— improved passenger and freight services both at bilateral and regional level, and

— the establishment and enforcement of operating standards comparable to those prevailing in the Community.

The priority areas of cooperation will be:

— road transport including a gradual easing of transit requirements,

— management of railways, ports and airports including navigation systems and cooperation between the relevant national bodies,

— modernization of road, rail, port and airport infrastructure on major routes of common interest,

— trans-European links and routes of regional interest, and

— upgrading of technical equipment to bring it up to Community standards for road/rail transport, container traffic and transhipment.

Article 47

Information infrastructure and telecommunications

Cooperation shall aim at stimulating economic and social development as well as developing an information society.

The priority areas of cooperation will be:

— to facilitate collaboration in the field of telecommunications policy, network development and infrastructures for an information society,

— to develop a dialogue on issues related to the information society and to promote the exchange of information and the organization of seminars and conferences in this area,

— to promote and implement joint projects aimed at the introduction of new telecommunications services and applications related to the information society,

— to allow for information exchange on standardization, conformance testing, and certification in information and communications technologies,

— interconnection and interoperability of networks and telematics services.

Article 48

Energy

The objective of cooperation on energy will be to help the West Bank and Gaza Strip acquire the technologies and infrastructures essential to its development, particularly with a view to facilitating links between its economy and that of the Community.

The priority areas of cooperation will be:

— the promotion of renewable energies,

— the promotion of energy-saving and energy efficiency,

— support to operations designed to facilitate the transit of gas, oil and electricity, and applied research into data bank networks in the economic and social sectors linking Community and Palestinian operators in particular, and

— support for the modernization and development of energy networks and for their link-up to Community networks.

Article 49

Scientific and technological cooperation

The Parties will endeavour to promote cooperation on scientific and technological development.

The aim of cooperation shall be to:

(a) encourage the establishment of permanent links between the Parties’ scientific communities, notably by means of: — providing Palestinian institutions with access to Community research and technological development programmes in accordance with Community rules governing non-Community countries’ involvement in such programmes, — Palestinian participation in networks of decentralized cooperation, — promoting synergy in training and research;

(b) improve Palestinian research capabilities;

(c) stimulate technological innovation and the transfer of new technology and know-how;

(d) encourage all activities aimed at establishing synergy at regional level.

Article 50

Environment

The objectives of cooperation will be to prevent deterioration of the environment, to control pollution, to protect human health and to ensure the rational use of natural resources with a view to promoting sustainable development.

It will place priority on matters relating to: desertification, water resource management, salinization, the impact of agriculture on soil and water quality, the appropriate use of energy, the impact of industrial development in general and the safety of industrial plant in particular, waste management, the integrated management of sensitive areas, the quality of sea water and the control and prevention of marine pollution, and environmental education and awareness.

Cooperation shall be fostered by the use of advanced tools of environmental management, environmental monitoring methods, and surveillance, including the use of environmental information systems (EIS) and environmental impact assessment (EIA).

Article 51

Tourism

Priorities for cooperation shall be:

— promoting investments in tourism,

— improving the knowledge of the tourist industry and ensuring greater consistency of policies affecting tourism,

— promoting a good seasonal spread of tourism,

— promoting cooperation between regions and cities of neighbouring countries,

— highlighting the importance of the cultural heritage for tourism,

— making tourism more competitive through support for increased professionalism ensuring the balanced and sustainable development of tourism.

Article 52

Customs cooperation

Customs cooperation is intended to ensure that the provisions on trade are observed and to guarantee fair trading.

It could give rise to the following types of cooperation:

— various forms of exchange of information and training schemes,

— simplification of controls and procedures concerning the customs clearance of goods,

— introduction of the single administrative document and a system to link up the Community’s and the Palestinian Authority’s transit arrangements, and

— technical assistance provided by experts from the Community.

Without prejudice to other forms of cooperation provided for in this Agreement, the administrative authorities of the Parties will provide each other with mutual assistance on customs matters.

Article 53

Cooperation on statistics

The main objective of cooperation in this domain should aim to ensure the comparability and usefulness of statistics on foreign trade, finance and balance of payments, population, migration, transport and communications, and generally all the fields which are covered by this Agreement and lend themselves to the establishment of statistics.

Article 54

Cooperation on economic policy

Cooperation is aimed at:

— the exchange of information on the macro-economic situation and prospects and development strategies,

— joint analysis of economic issues of mutual interest, and

— the encouragement of cooperation between economists and policy makers in the West Bank and the Gaza Strip and in the Community.

Article 55

Regional cooperation

As part of the implementation of economic cooperation in the various spheres, the Parties will encourage operations designed to develop cooperation between the Palestinian Authority and other Mediterranean partners, through technical support.

This cooperation will be an important element of the Community’s support for the development of the region as a whole.

Priority will be given to operations aimed at:

— promoting intra-regional trade,

— developing regional cooperation on the environment,

— encouraging the development of the communications infrastructure required for the economic development of the region,

— strengthening the development of youth cooperation with neighbouring countries.

In addition the Parties will strengthen cooperation between them on regional development and land-use planning.

To this end the following measures may be taken:

— joint action by regional and local authorities in the area of economic development, and

— the establishment of mechanisms for the exchange of information and experience.







TITLE IV

COOPERATION ON AUDIOVISUAL AND CULTURAL MATTERS, INFORMATION AND COMMUNICATION

Article 56

The Parties shall promote cooperation in the audiovisual sector to their mutual benefit. The Parties shall seek ways of associating the Palestinian Authority with Community initiatives in this sector, thus enabling cooperation in areas such as co-production, training, development and distribution.

Article 57

The Parties shall promote cultural cooperation. The area of cooperation may include Community activities concerning, in particular, translation, exchange of works of art and artists, conservation and restoration of historic and cultural monuments and sites, training of persons working in the cultural field, the organization of European-oriented cultural events, raising mutual awareness and contributing to the dissemination of information on outstanding cultural events.

Article 58

The Parties will undertake to determine how to improve significantly the education and vocational training situation. To this end, the access of women to education, including technical courses, higher education and vocational training, will receive special attention.

In order to develop the level of expertise of senior staff in the public and private sectors, the Parties will step up their cooperation on education and vocational training and cooperation between universities and firms.

Preparing young people to become active citizens in democratic civil society should be actively promoted. Youth cooperation, including training of youth workers and youth leaders, youth exchanges and voluntary service activities, could therefore be supported and developed.

Special attention will be paid to operations and programmes which will enable permanent links (MED-CAMPUS, for instance) to be established between specialized bodies in the Community and in the West Bank and Gaza Strip, such as will encourage the pooling and exchange of experience and technical resources.

Article 59

The Parties shall promote activities of mutual interest in the field of information and communication.

Article 60

Cooperation shall be implemented in particular through:

(a) a regular dialogue between the Parties;

(b) regular exchange of information and ideas in every sector of cooperation including meetings of officials and experts;

(c) transfer of advice and experience and training of young Palestinian graduates;

(d) implementation of joint actions such as seminars and workshops;

(e) technical, administrative and regulatory assistance;

(f) the dissemination of information on cooperation activities.







TITLE V

FINANCIAL COOPERATION

Article 61

In order to achieve the objectives of this Agreement, a financial cooperation package shall be made available to the Palestinian Authority in accordance with the appropriate procedures and the financial resources required.

These procedures shall be agreed by both Parties using the most appropriate instruments after this Agreement has entered into force.

Financial cooperation shall focus on:

— responding to the economic repercussions for the West Bank and the Gaza Strip of the gradual introduction of a free trade area, notably by upgrading and restructuring industry,

— trade institutions which promote trading links with foreign markets,

— accompanying measures for policies implemented in the social sector,

— upgrading economic and social infrastructure,

— promoting private investment and job-creating activities in the productive sectors,

— promoting reforms designed to modernize the economy,

— services,

— urban and rural development,

— the environment,

— the setting-up and improvement of institutions necessary for the proper working of the Palestinian public administration and the advancement of democracy and human rights.

Article 62

In order to ensure that a coordinated approach is adopted to any exceptional macro-economic and financial problems that might arise as a result of the implementation of this Agreement, the Parties shall use the regular economic dialogue provided for in Title III to give particular attention to monitoring trade and financial flows in relations between them.







TITLE VI

INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 63

1. A Joint Committee for European Community- Palestinian Authority trade and cooperation, referred to in this Agreement as ‘the Joint Committee’, is hereby established. It shall have the power to take decisions in the cases provided for in the Agreement as well as in other cases necessary for the purpose of attaining the objectives set out in the Agreement.

The decisions taken shall be binding on the Parties, which shall take such measures as are required to implement them.

2. The Joint Committee may also formulate any resolutions, recommendations or opinions which it considers desirable for the attainment of the common objectives and the smooth functioning of the Agreement.

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

Article 64

1. The Joint Committee shall be composed of representatives of the Community and of the Palestinian Authority.

2. The Joint Committee shall act by mutual agreement between the Community and the Palestinian Authority.

Article 65

1. The office of Chairman of the Joint Committee shall be held alternately by the Community and the Palestinian Authority in accordance with the conditions laid down in the rules of procedure.

2. The Joint Committee shall meet once a year and when circumstances require, on the initiative of its Chairman.

Article 66

1. The Joint Committee may decide to set up any other committee that can assist it in carrying out its duties.

2. The Joint Committee shall determine the composition and duties of such committees and how they shall function.

Article 67

1. Either Party may refer to the Joint Committee any dispute relating to the application or interpretation of this Agreement.

2. The Joint Committee may settle the dispute by means of a decision.

3. Each Party shall be bound to take measures involved in carrying out the decision referred to in paragraph 2.

4. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either Party may notify the other of the appointment of an arbitrator; the other Party must then appoint a second arbitrator within two months.

The Joint Committee shall appoint a third arbitrator.

The arbitrators’ decisions shall be taken by majority vote.

Each Party to the dispute must take the steps required to implement the decision of the arbitrator.

Article 68

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

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

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

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

Article 69

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

— the arrangements applied by the Palestinian Authority in respect of the Community shall not give rise to any discrimination between the Member States, their nationals or their companies or firms,

— the arrangements applied by the Community in respect of the Palestinian Authority shall not give rise to discrimination between members of the Palestinian population, companies or firms of the West Bank and Gaza Strip.

Article 70

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

2. If either Party considers that the other Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it 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 Parties.

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

Article 71

Annexes 1 to 3 and Protocols 1 to 3 shall form an integral part of this Agreement.

Declarations shall appear in the Final Act, which shall form an integral part of this Agreement.

Article 72

For the purpose of this Agreement the term ‘Parties’ shall mean the PLO for the benefit of the Palestinian Authority and the Community, which shall each act in accordance with their respective powers.

Article 73

This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Community is applied and under the conditions laid down in that Treaty and, on the other hand, to the territory of the West Bank and the Gaza Strip.

Article 74

This Agreement, drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish, and Arabic languages, each of these texts being equally authentic, shall be deposited with the General Secretariat of the Council of the European Union.

Article 75

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

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

2. No later than 4 May 1999 negotiations shall commence with a view to concluding a Euro- Mediterranean Association Agreement. Until such an Agreement is concluded, this Agreement shall remain in force, subject to any amendments agreed between the Parties.

3. Each of the Parties may denounce this Agreement by notifying the other Party. The Agreement shall cease to apply six months after the date of such notification.

Hecho en Bruselas, el veinticuatro de febrero de mil novecientos noventa y siete.

Udfærdiget i Bruxelles den fireogtyvende februar nitten hundrede og syv og halvfems.

Geschehen zu Brüssel am vierundzwanzigsten Februar neunzehnhundertsiebenundneunzig.

Έγινε στις Βρυξέλλες, στις είκοσι τέσσερις Φεβρουαρίου χίλια εννιακόσια ενενήντα επτά.

Done at Brussels on the twenty-fourth day of February in the year one thousand nine hundred and ninety-seven.

Fait à Bruxelles, le vingt-quatre février mil neuf cent quatre-vingt-dix-sept.

Fatto a Bruxelles, addì ventiquattro febbraio millenovecentonovantasette.

Gedaan te Brussel, de vierentwintigste februari negentienhonderd zevenennegentig.

Feito em Bruxelas, em vinte e quatro de Fevereiro de mil novecentos e noventa e sete.

Tehty Brysselissä kahdentenakymmenentenäneljäntenä päivänä helmikuuta vuonna tuhatyhdeksänsataayhdeksänkymmentäseitsemän.

Som skedde i Bryssel den tjugofjärde februari nittonhundranittiosju.

Por la Comunidad Europea

For Det Europæiske Fællesskab

Für die Europäische Gemeinschaft

Για την Ευρωπαϊκή Κοινότητα

For the European Community

Pour la Communauté européenne

Per la Comunità europea

Voor de Europese Gemeenschap

Pela Comunidade Europeia

Euroopan yhteisön puolesta

På Europeiska gemenskapens vägnar

List of Annexes

Annex 1: Products referred to in Article 7 (1) Annex 2: Products referred to in Article 7 (2) Annex 3: Products referred to in Article 8 (2)

ANNEX 1

PRODUCTS REFERRED TO IN ARTICLE 7(1)







CN code Description 0403 0403 10 51 to 0403 10 99 0403 90 71 to 0403 90 99 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: Yoghurt, flavoured or containing added fruit, nuts or cocoa Other, flavoured or containing added fruit, nuts or cocoa 0710 40 00 0711 90 30 Sweetcorn (uncooked or cooked by steaming or boiling in water), frozen Sweetcorn provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solution), but unsuitable in that state for immediate consumption ex 15 17 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 No 1516 : 1517 10 10 1517 90 10 Margarine, excluding liquid margarine, containing more than 10 % but not more than 15 % by weight of milk fats Other, containing more than 10 % but not more than 15 % by weight of milk fats ex 17 04 Sugar confectionery (including white chocolate), not containing cocoa; excluding liquorice extract containing more than 10 % by weight of sucrose but not containing other added substances, falling within CN code 1704 90 10 1806 Chocolate and other food preparation containing cocoa ex 19 01 Malt extract; food preparation of flour, meal, starch or malt extract, not containing cocoa powder or containing cocoa powder in a proportion by weight of less than 50 %, not elsewhere specified or included; food preparations of goods Nos 0401 to 0404 , not containing cocoa powder or containing cocoa powder in a proportion by weight of less than 10 %, not elsewhere specified or included, excluding preparations falling within CN code 1901 90 91 ex 19 02 Pasta, excluding stuffed pasta falling within CN codes 1902 20 10 and 1902 20 30 ; couscous, whether or not prepared 1903 Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings or similar forms 1904 Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example cornflakes); cereals other than maize (corn), in grain form, pre-cooked or otherwise prepared 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 2001 90 30 Sweetcorn (Zea mays var. saccharata), prepared or preserved by vinegar or acetic acid 2001 90 40 Yams, sweet potatoes and similar edible parts of plants containing 5 % or more by weight of starch, prepared or preserved by vinegar or acetic acid 2004 10 91 Potatoes in the form of flour, meal or flakes, prepared or preserved otherwise than by vinegar or acetic acid, frozen 2004 90 10 Sweetcorn (Zea mays var. saccharata), prepared or preserved otherwise than by vinegar or acetic acid, frozen 2005 20 10 Potatoes in the form of flour, meal or flakes, prepared or preserved otherwise than by vinegar or acetic acid, not frozen 2005 80 00 Sweetcorn ( Zea mays var. saccharata ), prepared or preserved otherwise than by vinegar or acetic acid, not frozen 2008 92 45 Preparations of the Müsli type based on unroasted cereal flakes 2008 99 85 Maize (corn), other than sweetcorn (Zea mays var. saccharata) otherwise prepared or preserved, not containing added spirit or added sugar 2008 99 91 Yams, sweet potatoes and similar edible parts of plants, containing 5 % or more by weight of starch, otherwise prepared or preserved, not containing added spirit or added sugar 2101 10 98 Preparations with a basis of coffee 2101 20 98 Preparations with a basis of tea or maté 2101 30 19 Roasted coffee substitutes excluding roasted chicory 2101 30 99 Extracts, essences and concentrates of roasted coffee substitutes excluding those of roasted chicory 2102 10 31 to 2102 10 39 Bakers’ yeasts ex 21 03 Sauces and preparations therefor: — Mayonnaise 2105 Ice cream and other edible ice, whether or not containing cocoa ex 21 06 Food preparations not elsewhere specified or included other than those falling within CN codes 2106 10 20 and 2106 90 92 and other than flavoured or coloured sugar syrups 22 029 091 22 029 095 22 029 099 Non-alcoholic beverages, not including fruit or vegetable juices of CN code 2009, containing products of CN code 0401 to 0404 or fat obtained from products of CN code 0401 to 0404 2905 43 00 Mannitol 2905 44 D-Glucitol (sorbitol) ex 3505 10 Dextrins and other modified starches, excluding esterified and etherified starches of CN code 3505 10 50 3505 20 Glues based on starches or on dextrins or other modified starches 3809 10 Finishing agents, dye carriers to accelerate the dyeing or fixing of 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 3823 60 Sorbitol other than that of CN code 2905 44

ANNEX 2

PRODUCTS REFERRED TO IN ARTICLE 7 (2)







CN code Description 1902 A В 1905 10 1905 20 90 А В Pasta and couscous: — of durum wheat — other Crisp bread Gingerbread and the like, not especially for diabetics: — containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content — other ex 30 00 А A1 A1a A1b A2 A2a A2b Waffles and wafers — not filled, whether or not coated — containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content — other — other — containing not less than 1,5 % milk fats or not less than 2,5 % of milk proteins — other 1905 40 10 A В Rusk, containing added sugar, honey, other sweetening matter, eggs, fat, cheese, fruit, cocoa or similar: — containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content — other 1905 ex 30 00 ) В + 9019 ) B1 В2 В2а B2b ВЗ Other bakers’ wares, containing added sugar, honey, other sweetening matter, eggs, fat, cheese, fruit, cocoa or similar: — containing added eggs, not less than 2,5 % by weight — containing added dried fruits or nuts: — containing not less than 1,5 % milk fats and not less than 2,5 % milk proteins; see Annex V — other — containing less than 10 % by weight of added sugar and not containing added eggs, dried fruits or nuts

ANNEX 3

PRODUCTS REFERRED TO IN ARTICLE 8 (2)







CN code Description 1704 90 39/05 1806 32 00/2 1905 90 90/7 2005 20 90/6 6208 51 00/2 6302 60 00 Candies and lollipops Chocolate Biscuits and wafers Chips and snacks Terry bath robes Towels

List of Protocols

Protocol 1 concerning the provisional arrangements applicable to imports into the European Union of agricultural products, processed agricultural products and fish and fishery products originating in the West Bank and the Gaza Strip

Protocol 2 on the arrangements applying to imports into the West Bank and the Gaza Strip of agricultural products, processed agricultural products and fish and fishery products originating in the European Union

Protocol 3 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation

▼M3

PROTOCOL 1

concerning the provisional arrangements applicable to imports into the European Union of agricultural products, processed agricultural products and fish and fishery products originating in the West Bank and the Gaza Strip







1. Customs duties and charges having equivalent effect (including their agricultural component), which are applicable on the import into the European Union of products originating in the West Bank and the Gaza Strip and listed in chapters 1 to 24 of the Combined Nomenclature (CN) and of the customs tariff of the Palestinian Authority, and those listed in Annex 1(1)(ii) of the Agreement on Agriculture of the GATT, with exception of chemically pure lactose of CN code 1702 11 00 and of glucose and glucose syrup, containing in the dry state, 99 % or more by weight of glucose of CN codes ex 1702 30 50 and ex 1702 30 90 covered by Chapter 1, shall be temporarily eliminated in accordance with the provisions of point C.1(a) of the Agreement in the form of Exchange of Letters between the European Union and the Palestinian Authority providing further liberalisation of agricultural products, processed agricultural products and fish and fishery products and amending this Agreement, signed in 2011.

2. Notwithstanding the conditions under point 1 of this Protocol, for the products to which an entry price applies in accordance with Article 140a of Council Regulation (EC) No 1234/2007 ( 1 ), and for which the Common Customs Tariff provides for the application of ad valorem customs duties and a specific customs duty, the elimination applies only to the ad valorem part of the duty.

▼M1

ANNEX TO PROTOCOL 1







CN Code (1) Description (2) Reduction of the MFN customs duty (%) (3) Tariff quota (t, unless otherwise indicated) Reduction of the MFN customs duty beyond current or possible tariff quota (%) (3) Reference quantity (t, unless otherwise indicated) Specific provisions a b c d e 0409 00 00 Natural honey 100 500 0 point 4 — yearly increase of 250 t ex 0603 10 Cut flowers and flower buds, fresh 100 2 000 0 point 4 — yearly increase of 250 t 0702 00 00 Tomatoes, fresh or chilled, from 1 December to 31 March 100 60 2 000 ex 0703 10 Onions, fresh or chilled, from 15 February to 15 May 100 60 0709 30 00 Aubergines (eggplants), fresh or chilled, from 15 January to 30 April 100 60 3 000 ex 0709 60 Fruits of the genus Capsicum or of the genus Pimenta, fresh or chilled: 0709 60 10 Sweet peppers 100 40 1 000 0709 60 99 Other 100 80 0709 90 70 Courgettes, fresh or chilled, from 1 December to end of February 100 60 300 ex 0709 90 90 Wild onions of the species Muscari comosum, fresh or chilled, from 15 February to 15 May 100 60 0710 80 59 Fruits of the genus Capsicum or Pimenta, other than sweet peppers, uncooked or cooked by steaming or boiling in water, frozen 100 80 0711 90 10 Fruits of the genus Capsicum or Pimenta, other than sweet peppers, provisionally preserved but unsuitable in that state for immediate consumption 100 80 0712 31 00 0712 32 00 0712 33 00 0712 39 00 Mushrooms, wood ears (Auricularia spp.), jelly fungi (Tremella spp.) and truffles, dried 100 500 0 ex 0805 10 Oranges, fresh 100 60 25 000 ex 0805 20 Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, fresh 100 60 500 0805 40 00 Grapefruit 100 80 ex 0805 50 10 Lemons (Citrus limon, Citrus limonum), fresh 100 40 800 0806 10 10 Fresh table grapes, from 1 February to 14 July 100 1 000 0 point 4 — yearly increase of 500 t 0807 19 00 Melons (excluding watermelons), fresh, from 1 November to 31 May 100 50 10 000 0810 10 00 Fresh strawberries, from 1 November to 31 March 100 2 000 0 point 4 — yearly increase of 500 t 0812 90 20 Oranges, provisionally preserved, but unsuitable in that state for immediate consumption 100 80 0904 20 30 Fruits of the genus Capscium or of the genus Pimenta, other than sweet peppers, dried, neither crushed or ground 100 80 1509 10 Virgin olive oil 100 2 000 0 point 4 — yearly increase of 500 t 2001 90 20 Fruits of the genus Capsicum, other than sweet peppers or pimentos, prepared or preserved by vinegar or acetic acid 100 80 2005 90 10 Fruits of the genus Capsicum, other than sweet peppers or pimentos, prepared or preserved otherwise than by vinegar or acetic acid, not frozen 100 80 (1) CN codes corresponding to Regulation (EC) No 1789/2003 (OJ L 281, 30.10.2003, p. 1). (2) Without prejudice to the rules for the interpretation of the combined nomenclature, the description of the products is deemed to be indicative only, the preferential scheme being determined, for the purposes of this Annex, by the coverage of the CN codes. Where ex CN codes are indicated, the preferential scheme is to be determined by application of the CN code and corresponding description taken together. (3) Duty reduction applies only to ad valorem customs duties. However, for the product corresponding to the subheading 1509 10 , the duty reduction applies to the specific duty.

▼M3

PROTOCOL 2

on the arrangements applying to imports into the West Bank and the Gaza Strip of agricultural products, processed agricultural products and fish and fishery products originating in the European Union







1. The products listed in the Annexes originating in the European Union shall be admitted for importation into the West Bank and the Gaza Strip according to the conditions contained herein and in the Annexes.

2. Import duties on imports are either eliminated or reduced to the level indicated in column ‘a’, within the limit of the annual tariff quota listed in column ‘b’, and subject to the specific provisions indicated in column ‘c’.

3. For the quantities imported in excess of the tariff quotas, the general customs duties applied to third countries shall apply, subject to the specific provisions indicated in column ‘c’.

4. For the first year of application, the volumes of the tariff quotas and the reference quantities shall be calculated as a pro rata of the basic volumes, taking into account the period elapsed before the date of entry into force of this Protocol.

ANNEX 1 TO PROTOCOL 2







CN Code Description Duty (%) Tariff quota (t, unless otherwise indicated) Specific provisions a b c 0102 90 71 Live bovine animals, of a weight exceeding 300 kg, for slaughter, ther than heifers and cows 0 300 0202 30 90 Meat of bovine animals, boneless excluding fore-quarters, ‘compensated’ quarters, crop, chuck and blade and brisket cuts, frozen 0 200 0206 22 00 Edible livers of bovine animals frozen 0 100 0406 Cheese and curd 0 200 0407 00 19 Poultry eggs for hatching, other than those of turkeys or geese 0 120 000 pieces 1101 00 15 Flour of common wheat and spelt 0 13 000 2309 90 99 Other preparations of a kind used in animal feeding 2 100

ANNEX 2 TO PROTOCOL 2







PRODUCTS REFERRED TO IN ARTICLE 7(2) OF THE EURO-MEDITERRANEAN INTERIM ASSOCIATION AGREEMENT CN code Description 1902 Pasta and couscous: A — of durum wheat, B — other, 1905 10 Crisp bread 1905 20 90 Gingerbread and the like, not especially for diabetics: A — containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content, B — other, ex 1905 32 A Waffles and wafers Al — not filled, whether or not coated, Ala — containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content, Alb — other, A2 — other, A2a — containing not less than 1,5 % milk fats or not less than 2,5 % of milk proteins, A2b — other, 1905 40 10 Rusk, containing added sugar, honey, other sweetening matter, eggs, fat, cheese, fruit, cocoa or similar: A — containing over 15 % by weight of flour from cereals other than wheat in relation to the total flour content, B — other, 1905 ex 31) B + ex 90) Other bakers’ wares, containing added sugar, honey, other sweetening matter, eggs, fat, cheese, fruit, cocoa or similar: Bl — containing added eggs, not less than 2,5 % by weight, B2 — containing added dried fruits or nuts: B2a — containing not less than 1,5 % milk fats and not less than 2,5 % milk proteins; see Annex V, B2b — other, ВЗ — containing less than 10 % by weight of added sugar and not containing added eggs, dried fruits or nuts,

▼M2

PROTOCOL 3

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

Table of contents TITLE I GENERAL PROVISIONS Article 1 Definitions TITLE II DEFINITION OF THE CONCEPT OF ‘ORIGINATING PRODUCTS’ Article 2 General requirements Article 3 Cumulation in the Community Article 4 Cumulation in the West Bank and the Gaza Strip Article 5 Wholly obtained products Article 6 Sufficiently worked or processed products Article 7 Insufficient working or processing Article 8 Unit of qualification Article 9 Accessories, spare parts and tools Article 10 Sets Article 11 Neutral elements TITLE III TERRITORIAL REQUIREMENTS Article 12 Principle of territoriality Article 13 Direct transport Article 14 Exhibitions TITLE IV DRAWBACK OR EXEMPTION Article 15 Prohibition of drawback of, or exemption from, customs duties TITLE V PROOF OF ORIGIN Article 16 General requirements Article 17 Procedure for the issue of a movement certificate EUR.1 or EUR-MED Article 18 Movement certificates EUR.1 or EUR-MED issued retrospectively Article 19 Issue of a duplicate movement certificate EUR.1 or EUR-MED Article 20 Issue of movement certificates EUR.1 or EUR-MED on the basis of a proof of origin issued or made out previously Article 21 Accounting segregation Article 22 Conditions for making out an invoice declaration or an invoice declaration EUR-MED Article 23 Approved exporter Article 24 Validity of proof of origin Article 25 Submission of proof of origin Article 26 Importation by instalments Article 27 Exemptions from proof of origin Article 28 Supporting documents Article 29 Preservation of proof of origin and supporting documents Article 30 Discrepancies and formal errors Article 31 Amounts expressed in euro TITLE VI ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION Article 32 Mutual assistance Article 33 Verification of proofs of origin Article 34 Dispute settlement Article 35 Penalties Article 36 Free zones TITLE VII CEUTA AND MELILLA Article 37 Application of the Protocol Article 38 Special conditions TITLE VIII FINAL PROVISIONS Article 39 Amendments to the Protocol Article 40 Transitional provisions for goods in transit or storage 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 IIIa Specimens of movement certificate EUR.1 and application for a movement certificate EUR.1 Annex IIIb Specimens of movement certificate EUR-MED and application for a movement certificate EUR-MED Annex IVa Text of the invoice declaration Annex IVb Text of the invoice declaration EUR-MED Joint Declarations Joint declaration concerning the Principality of Andorra Joint declaration concerning the Republic of San Marino







TITLE I

GENERAL PROVISIONS

Article 1

Definitions

For the purposes of this Protocol:

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

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

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

(d) ‘goods’ means both materials and products;

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

(f) ‘ex-works price’ means the price paid for the product ex-works to the manufacturer in the Community or in the West Bank and the Gaza Strip in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the product obtained is exported;

(g) ‘value of materials’ means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the Community or in the West Bank and the Gaza Strip;

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

(i) ‘value added’ shall be taken to be the ex-works price minus the customs value of each of the materials incorporated which originate in the other countries referred to in Articles 3 and 4 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 Community or in the West Bank and the Gaza Strip;

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

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

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

(m) ‘territories’ includes territorial waters.







TITLE II

DEFINITION OF THE CONCEPT OF ‘ORIGINATING PRODUCTS’

Article 2

General requirements

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

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

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

(c) goods originating in the European Economic Area (EEA) within the meaning of Protocol 4 to the Agreement on the European Economic Area.

2. For the purpose of implementing the Agreement, the following products shall be considered as originating in the West Bank and the Gaza Strip:

(a) products wholly obtained in the West Bank and the Gaza Strip within the meaning of Article 5;

(b) products obtained in the West Bank and the Gaza Strip incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the West Bank and the Gaza Strip within the meaning of Article 6.

3. The provisions of paragraph 1(c) shall apply only provided a free trade agreement is applicable between, on the one hand, the West Bank and the Gaza Strip and, on the other hand, the EEA EFTA States (Iceland, Liechtenstein and Norway).

Article 3

Cumulation in the Community

1. Without prejudice to the provisions of Article 2(1), products shall be considered as originating in the Community if they are obtained there, incorporating materials originating in, Switzerland (including Liechtenstein) ( 2 ), Iceland, Norway, Turkey or in the Community, provided that the working or processing carried out in the Community goes beyond the operations referred to in Article 7. It shall not be necessary for such materials to have undergone sufficient working or processing.

2. Without prejudice to the provisions of Article 2(1), products shall be considered as originating in the Community if such products are obtained there, incorporating materials originating in the Faeroe Islands or in any country which is a participant in the Euro-Mediterranean partnership, based on the Barcelona Declaration adopted at the Euro-Mediterranean Conference held on 27 and 28 November 1995, other than Turkey, provided that the working or processing carried out in the Community goes beyond the operations referred to in Article 7. It shall not be necessary for such materials to have undergone sufficient working or processing.

3. Where the working or processing carried out in the Community does not go beyond the operations referred to in Article 7, the product obtained shall be considered as originating in the Community only where the value added there is greater than the value of the materials used originating in any one of the other countries referred to in paragraphs 1 and 2. If this is not so, the product obtained shall be considered as originating in the country which accounts for the highest value of originating materials used in the manufacture in the Community.

4. Products originating in one of the countries referred to in paragraphs 1 and 2 which do not undergo any working or processing in the Community, retain their origin if exported into one of these countries.

5. The cumulation provided for in this Article may be applied only provided that:

(a) a preferential trade agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT) is applicable between the countries involved in the acquisition of the originating status and the country of destination;

(b) materials and products have acquired originating status by the application of rules of origin identical to those given in this Protocol; and

(c) notices indicating the fulfilment of the necessary requirements to apply cumulation have been published in the Official Journal of the European Union (C series) and in the West Bank and the Gaza Strip according to its own procedures.

The cumulation provided for in this Article shall apply from the date indicated in the notice published in the Official Journal of the European Union (C series).

The Community shall provide the West Bank and the Gaza Strip, through the Commission of the European Communities, with details of the Agreements, including their dates of entry into force, and their corresponding rules of origin, which are applied with the other countries referred to in paragraphs 1 and 2.

Article 4

Cumulation in the West Bank and the Gaza Strip

1. Without prejudice to the provisions of Article 2(2), products shall be considered as originating in the West Bank and the Gaza Strip if they are obtained there, incorporating materials originating in Switzerland (including Liechtenstein) ( 3 ), Iceland, Norway, Turkey or in the Community, provided that the working or processing carried out in the West Bank and the Gaza Strip goes beyond the operations referred to in Article 7. It shall not be necessary for such materials to have undergone sufficient working or processing.

2. Without prejudice to the provisions of Article 2(2), products shall be considered as originating in the West Bank and the Gaza Strip if they are obtained there, incorporating materials originating in the Faeroe Islands or in any country which is a participant in the Euro-Mediterranean partnership, based on the Barcelona Declaration adopted at the Euro-Mediterranean Conference held on 27 and 28 November 1995, other than Turkey, provided that the working or processing carried out in the West Bank and the Gaza Strip goes beyond the operations referred to in Article 7. It shall not be necessary for such materials to have undergone sufficient working or processing.

3. Where the working or processing carried out in the West Bank and the Gaza Strip does not go beyond the operations referred to in Article 7, the product obtained shall be considered as originating in the West Bank and the Gaza Strip only where the value added there is greater than the value of the materials used originating in any one of the other countries referred to in paragraphs 1 and 2. If this is not so, the product obtained shall be considered as originating in the country which accounts for the highest value of originating materials used in the manufacture in the West Bank and the Gaza Strip.

4. Products originating in one of the countries referred to in paragraphs 1 and 2 which do not undergo any working or processing in the West Bank and the Gaza Strip shall retain their origin if exported into one of these countries.

5. The cumulation provided for in this Article may be applied only provided that:

(a) a preferential trade agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT) is applicable between the countries involved in the acquisition of the originating status and the country of destination;

(b) materials and products have acquired originating status by the application of rules of origin identical to those given in this Protocol; and

(c) notices indicating the fulfilment of the necessary requirements to apply cumulation have been published in the Official Journal of the European Union (C series) and in the West Bank and the Gaza Strip according to its own procedures.

The cumulation provided for in this Article shall apply from the date indicated in the notice published in the Official Journal of the European Union (C series).

The West Bank and the Gaza Strip shall provide the Community through the Commission of the European Communities with details of the Agreements, including their dates of entry into force, and their corresponding rules of origin, which are applied with the other countries referred to in paragraphs 1 and 2.

Article 5

Wholly obtained products

1. The following shall be considered as wholly obtained in the Community or in the West Bank and the Gaza Strip:

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

(b) vegetable products harvested there;

(c) live animals born and raised there;

(d) products from live animals raised there;

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

(f) products of sea fishing and other products taken from the sea outside the territorial waters of the Community or of the West Bank and the Gaza Strip by their vessels;

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

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

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

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

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

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

(a) which are registered or recorded in a Member State of the Community or in the West Bank and the Gaza Strip;

(b) which sail under the flag of a Member State of the Community or of the West Bank and the Gaza Strip;

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

(d) of which the master and officers are nationals of a Member State of the Community or of the West Bank and the Gaza Strip; and

(e) of which at least 75 % of the crew are nationals of a Member State of the Community or of the West Bank and the Gaza Strip.

Article 6

Sufficiently worked or processed products

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

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

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

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

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

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

3. Paragraphs 1 and 2 shall apply subject to the provisions of Article 7.

Article 7

Insufficient working or processing

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

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

(b) breaking-up and assembly of packages;

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

(d) ironing or pressing of textiles;

(e) simple painting and polishing operations;

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

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

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

(i) sharpening, simple grinding or simple cutting;

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

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

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

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

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

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

(p) slaughter of animals.

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

Article 8

Unit of qualification

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

It follows that:

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

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

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

Article 9

Accessories, spare parts and tools

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

Article 10

Sets

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

Article 11

Neutral elements

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

(a) energy and fuel;

(b) plant and equipment;

(c) machines and tools;

(d) goods which neither enter into the final composition of the product nor are intended to do so.







TITLE III

TERRITORIAL REQUIREMENTS

Article 12

Principle of territoriality

1. Except as provided for in Article 2(1)(c), Articles 3 and 4 and paragraph 3 of this Article, the conditions for acquiring originating status set out in Title II must be fulfilled without interruption in the Community or in the West Bank and the Gaza Strip.

2. Except as provided for in Articles 3 and 4, where originating goods exported from the Community or from the West Bank and the Gaza Strip to another country return, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

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

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

3. The acquisition of originating status in accordance with the conditions set out in Title II shall not be affected by working or processing done outside the Community or the West Bank and the Gaza Strip on materials exported from the Community or from The West Bank and the Gaza Strip and subsequently reimported there, provided:

(a) the said materials are wholly obtained in the Community or in the West Bank and the Gaza Strip or have undergone working or processing beyond the operations referred to in Article 7 prior to being exported; and

(b) it can be demonstrated to the satisfaction of the customs authorities that: (i) the reimported goods have been obtained by working or processing the exported materials; and (ii) the total added value acquired outside the Community or the West Bank and the Gaza Strip by applying the provisions of this Article does not exceed 10 % of the ex-works price of the end product for which originating status is claimed.

4. For the purposes of paragraph 3, the conditions for acquiring originating status set out in Title II shall not apply to working or processing done outside the Community or the West Bank and the Gaza Strip. However, where, in the list in Annex II, a rule setting a maximum value for all the non-originating materials incorporated is applied in determining the originating status of the end product, the total value of the non-originating materials incorporated in the territory of the party concerned, taken together with the total added value acquired outside the Community or the West Bank and the Gaza Strip by applying the provisions of this Article, shall not exceed the stated percentage.

5. For the purposes of applying the provisions of paragraphs 3 and 4, ‘total added value’ shall be taken to mean all costs arising outside the Community or the West Bank and the Gaza Strip, including the value of the materials incorporated there.

6. The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil the conditions set out in the list in Annex II or which can be considered sufficiently worked or processed only if the general tolerance fixed in Article 6(2) is applied.

7. The provisions of paragraphs 3 and 4 shall not apply to products of Chapters 50 to 63 of the Harmonised System.

8. Any working or processing of the kind covered by this Article and done outside the Community or the West Bank and the Gaza Strip shall be done under the outward processing arrangements, or similar arrangements.

Article 13

Direct transport

1. The preferential treatment provided for under the Agreement applies only to products, satisfying the requirements of this Protocol, which are transported directly between the Community and the West Bank and the Gaza Strip or through the territories of the other countries referred to in Articles 3 and 4 with which cumulation is applicable. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, transhipment or temporary warehousing in such territories, provided that they remain under the surveillance of the customs authorities in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition.

Originating products may be transported by pipeline across territory other than that of the Community or the West Bank and the Gaza Strip.

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

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

(b) a