AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS

between the European Community and the Republic of Uzbekistan amending the Agreement between the European Economic Community and the Republic of Uzbekistan on Trade in Textile Products initialled on 8 June 1993, as last amended by an Agreement in the form of an Exchange of Letters initialled on 4 December 1995

A. Letter from the Council of the European Union

Sir,

1. I have the honour to refer to the negotiations held on 14 and 15 September 1999 between our respective Delegations with a view to renew the Agreement between the European Community and the Republic of Uzbekistan on trade in textile products initialled on 8 June 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on 4 December 1995.

2. As a result of these negotiations, both Parties agreed to amend the following provisions of the Agreement:

2.1. The second and third sentence of Article 20(1), are replaced by the following text: "It shall be applicable until 31 December 2004."

2.2. Annex I which sets out the products referred to in Article 1 of the Agreement is replaced by Appendix 1 to this letter.

2.3. Annex II which sets out the quantitative restrictions for exports from the Republic of Uzbekistan to the European Community is replaced by Appendix 2 to this letter.

2.4. Annex III which sets out the products without quantitative limits subject to the double-checking system referred to in Article 2(3) of the Agreement is replaced by Appendix 3 to this letter.

2.5. Article 5(2) is replaced by the following text: "2. Where the Community finds, under the system of administrative control set-up, that the level of imports of products in a given category not listed in Annex II originating in Uzbekistan exceeds, in relation to the preceding year's total imports into the Community from all sources of products in that category, the following rates:

- 0,35 % for categories of products in Group I, except category 1,

- for category 1 the levels referred to in paragraph 5.2 bis,

- 1,2 % for categories of products in Group II,

- 4 % for categories of products in Groups III, IV and V,

it may request the opening of consultations in accordance with the procedure described in Article 15 of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products in such category."

2.6. A new Article 5.2 bis is inserted after Article 5(2): "2 bis (a) Uzbekistan will monitor the levels, as well as average prices, of exports into the EC of products of category 1, with a view to keeping them within the following targets as a share of total EC imports in such category:

In the year 2000: 6 %, in 2001: 7,2 %, in 2002: 8,4 %, in 2003: 9,6 % and in 2004: 10,8 %.

(b) The EC and Uzbekistan will consult whenever it appears that the targets are exceeded or are likely to be exceeded, as well as when average prices of exports from Uzbekistan are significantly below average prices of total imports of category 1 into the EC.

(c) The provisions on price monitoring as under Paragraph 2 bis (a) will be applicable to imports of category 2 from Uzbekistan as from 1 January 2004."

2.7. For the purpose of facilitating the exchange of information on licenses for textile products under quota or under surveillance, an electronic link between the competent authorities of Uzbekistan and the SIGL system (système integré de gestion de licenses) will be established.

3. Should the Republic of Uzbekistan become a member of the World Trade Organisation before the date of expiry of the Agreement, this Agreement and its annexes will be applied and notified to the World Trade Organisation as an Administrative Arrangement, and its provisions will be applied within the framework of the Agreements and rules of the World Trade Organisation.

4. The Agreed Minutes set out in Appendix 4 to this letter shall form an integral part of the Agreement.

5. I should be obliged if you could kindly confirm the acceptance of your Government of the foregoing. Should this be the case, this Agreement in the form of an Exchange of Letters shall enter into force on the first day of the month following the day on which the Parties have notified each other that the legal procedures necessary to this end have been completed. In the meantime, it shall be applied provisionally from 1 January 2000 on the condition of reciprocity to be specified in an Exchange of Notes (Appendix 5).

Please accept, Sir, the assurance of my highest consideration.

For the Council of the European Union

Appendix 1

Annex I to the Agreement between the European Community and Uzbekistan on trade in textile products initialled on 8 June 1993 is replaced by Annex I to Regulation (EEC) No 3030/93(1). It is understood that without prejudice to the rules for the interpretation of the combined nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within that Annex by CN codes. Where there is an "ex" symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

(1) In 1999 this Annex was amended by Commission Regulation (EC) No 1072/1999 (OJ L 134, 28.5.1999, p. 1).

Appendix 2

ANNEX II

(The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Agreement)

COMMUNITY QUANTITATIVE LIMITS

>TABLE>

Appendix 3

ANNEX III

(Products without quantitative limits subject to the double-checking system referred to in Article 2(3) of the Agreement)

1, 3, 4, 5, 6, 7, 8 and 26.

Appendix 4

Agreed Minutes

In the context of the Agreement between the European Community and the Republic of Uzbekistan on trade in textile and clothing products, initialled in Brussels on 15 September 1999, the Republic of Uzbekistan confirmed that the tariff rates presently applied for textile and clothing products originating from the European Community are the rates contained in Annex 1 to this Agreed Minutes. Both Parties agreed that these tariff rates shall not be exceeded for the duration of the Agreement.

Concerning customs duties applicable to imports into the Republic of Uzbekistan of products covered by the Harmonised System codes 57, 58 and 63, the Community's proposal for their progressive alignment within the period of duration of the Agreement towards the customs duties applicable to imports of the same products into the Community was accepted by the Republic of Uzbekistan. The Republic of Uzbekistan agreed to reduce the rates according to the schedule contained in Annex 2 to this Agreed Minutes.

In the case of disagreement on the application of the provisions of the two foregoing paragraphs, the Community and the Republic of Uzbekistan will immediately start consultations in accordance with Article 15 of the Agreement with the aim to ensure the fulfilment of commitments undertaken by the parties. Should the disagreement persist after these consultations, the Community will have the right to reintroduce for the period of the agreement remaining unexpired on a pro rata basis the levels for quantitative restrictions for categories 2 and 2a applicable in 1999 as specified in the Exchange of Letters initialled on 4 December 1995. For category 1 the Community may reintroduce the basket exit limit of 0,35 %.

Both parties also agreed that the Republic of Uzbekistan will ensure that the supply to the Community industry of cotton and other raw textile materials, as well as of other textile products shall be made at conditions not less favourable than to users of other developed countries under normal market conditions.

Brussels, ... 1999.

For the Government of the Republic of Uzbekistan

For the Council of the European Union

ANNEX 1

to Agreed Minutes

Maximum rates of customs duties applicable to textile products imported into the Republic of Uzbekistan from the European Community

>TABLE>

ANNEX 2

to Agreed Minutes

Schedule for alignment of Uzbekistan's tariff rates for products of chapters 57, 58 and 63 of the HS code

Reduction of tariffs of products of chapter HS 57

>TABLE>

Reduction of tariffs of products of HS 5801

>TABLE>

Reduction of tariffs of products of HS 6302

>TABLE>

Appendix 5

Exchange of Notes

The Trade Directorate-General of the European Commission presents its compliments to the Mission of the Republic of Uzbekistan to the European Union and has the honour to refer to the Agreement between the European Community and the Republic of Uzbekistan on Trade in Textile Products initialled on 8 June 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on ...

The Directorate-General for Trade wishes to inform the Mission of Uzbekistan that whilst awaiting the completion of the necessary procedures for the conclusion an coming into force of the Agreement in the form of an Exchange of Letters, the European Community is prepared to allow the provision of the Agreement to apply de facto from 1 January 2000. This is on the understanding that either Party may at any time terminate this de facto application of the Agreement in the form of an Exchange of Letters provided that four months notice is given.

The Directorate-General would be grateful if the Mission of the Republic of Uzbekistan would confirm its authorities' agreement with the foregoing.

The Directorate-General for Trade of the European Commission avails itself of this opportunity to renew to the Mission of the Republic of Uzbekistan the assurance of its highest consideration.

B. Letter from the Government of the Republic of Uzbekistan

Sir,

I have the honour to acknowledge receipt of your letter of today's date which reads as follows: "Sir,

1. I have the honour to refer to the negotiations held on 14 and 15 September 1999 between our respective Delegations with a view to renew the Agreement between the European Community and the Republic of Uzbekistan on trade in textile products initialled on 8 June 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on 4 December 1995.

2. As a result of these negotiations, both Parties agreed to amend the following provisions of the Agreement:

2.1. The second and third sentence of Article 20(1), are replaced by the following text: 'It shall be applicable until 31 December 2004.'

2.2. Annex I which sets out the products referred to in Article 1 of the Agreement is replaced by Appendix 1 to this letter.

2.3. Annex II which sets out the quantitative restrictions for exports from the Republic of Uzbekistan to the European Community is replaced by Appendix 2 to this letter.

2.4. Annex III which sets out the products without quantitative limits subject to the double-checking system referred to in Article 2(3) of the Agreement is replaced by Appendix 3 to this letter.

2.5. Article 5(2) is replaced by the following text: '2. Where the Community finds, under the system of administrative control set-up, that the level of imports of products in a given category not listed in Annex II originating in Uzbekistan exceeds, in relation to the preceding year's total imports into the Community from all sources of products in that category, the following rates:

- 0,35 % for categories of products in Group I, except category 1,

- for category 1 the levels referred to in paragraph 5.2 bis,

- 1,2 % for categories of products in Group II,

- 4 % for categories of products in Groups III, IV and V,

it may request the opening of consultations in accordance with the procedure described in Article 15 of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products in such category.'

2.6. A new Article 5.2 bis is inserted after Article 5(2): '2 bis (d) Uzbekistan will monitor the levels, as well as average prices, of exports into the EC of products of category 1, with a view to keeping them within the following targets as a share of total EC imports in such category:

In the year 2000: 6 %, in 2001: 7,2 %, in 2002: 8,4 %, in 2003: 9,6 % and in 2004: 10,8 %.

(e) The EC and Uzbekistan will consult whenever it appears that the targets are exceeded or are likely to be exceeded, as well as when average prices of exports from Uzbekistan are significantly below average prices of total imports of category 1 into the EC.

(f) The provisions on price monitoring as under Paragraph 2 bis (a) will be applicable to imports of category 2 from Uzbekistan as from 1 January 2004.'

2.7. For the purpose of facilitating the exchange of information on licenses for textile products under quota or under surveillance, an electronic link between the competent authorities of Uzbekistan and the SIGL system (système integré de gestion de licenses) will be established.

3. Should the Republic of Uzbekistan become a member of the World Trade Organisation before the date of expiry of the Agreement, this Agreement and its annexes will be applied and notified to the World Trade Organisation as an Administrative Arrangement, and its provisions will be applied within the framework of the Agreements and rules of the World Trade Organisation.

4. The Agreed Minutes set out in Appendix 4 to this letter shall form an integral part of the Agreement.

5. I should be obliged if you could kindly confirm the acceptance of your Government of the foregoing. Should this be the case, this Agreement in the form of an Exchange of Letters shall enter into force on the first day of the month following the day on which the Parties have notified each other that the legal procedures necessary to this end have been completed. In the meantime, it shall be applied provisionally from 1 January 2000 on the condition of reciprocity to be specified in an Exchange of Notes (Appendix 5).

Please accept, Sir, the assurance of my highest consideration."

I have the honour to confirm that my Government is in agreement with the content of your letter.

Please accept, Sir, the assurance of my highest consideration.

For the Government of the Republic of Uzbekistan

Appendix 1

Annex I to the Agreement between the European Community and Uzbekistan on trade in textile products initialled on 8 June 1993 is replaced by Annex I to Regulation (EEC) No 3030/93(1). It is understood that without prejudice to the rules for the interpretation of the combined nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within that Annex by CN codes. Where there is an "ex" symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

(1) In 1999 this Annex was amended by Commission Regulation (EC) No 1072/1999 (OJ L 134, 28.5.1999, p. 1).

Appendix 2

ANNEX II

(The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Agreement)

COMMUNITY QUANTITATIVE LIMITS

>TABLE>

Appendix 3

ANNEX III

(Products without quantitative limits subject to the double-checking system referred to in Article 2(3) of the Agreement)

1, 3, 4, 5, 6, 7, 8 and 26.

Appendix 4

Agreed Minutes

In the context of the Agreement between the European Community and the Republic of Uzbekistan on trade in textile and clothing products, initialled in Brussels on 15 September 1999, the Republic of Uzbekistan confirmed that the tariff rates presently applied for textile and clothing products originating from the European Community are the rates contained in Annex 1 to this Agreed Minutes. Both Parties agreed that these tariff rates shall not be exceeded for the duration of the Agreement.

Concerning customs duties applicable to imports into the Republic of Uzbekistan of products covered by the Harmonised System codes 57, 58 and 63, the Community's proposal for their progressive alignment within the period of duration of the Agreement towards the customs duties applicable to imports of the same products into the Community was accepted by the Republic of Uzbekistan. The Republic of Uzbekistan agreed to reduce the rates according to the schedule contained in Annex 2 to this Agreed Minutes.

In the case of disagreement on the application of the provisions of the two foregoing paragraphs, the Community and the Republic of Uzbekistan will immediately start consultations in accordance with Article 15 of the Agreement with the aim to ensure the fulfilment of commitments undertaken by the parties. Should the disagreement persist after these consultations, the Community will have the right to reintroduce for the period of the agreement remaining unexpired on a pro rata basis the levels for quantitative restrictions for categories 2 and 2a applicable in 1999 as specified in the Exchange of Letters initialled on 4 December 1995. For category 1 the Community may reintroduce the basket exit limit of 0,35 %.

Both parties also agreed that the Republic of Uzbekistan will ensure that the supply to the Community industry of cotton and other raw textile materials, as well as of other textile products shall be made at conditions not less favourable than to users of other developed countries under normal market conditions.

Brussels, ... 1999.

For the Government of the Republic of Uzbekistan

For the Council of the European Union

ANNEX 1

to Agreed Minutes

Maximum rates of customs duties applicable to textile products imported into the Republic of Uzbekistan from the European Community

>TABLE>

ANNEX 2

to Agreed Minutes

Schedule for alignment of Uzbekistan's tariff rates for products of chapters 57, 58 and 63 of the HS code

Reduction of tariffs of products of chapter HS 57

>TABLE>

Reduction of tariffs of products of HS 5801

>TABLE>

Reduction of tariffs of products of HS 6302

>TABLE>

Appendix 5

Exchange of Notes

The Mission of the Republic of Uzbekistan to the European Union presents its compliments to the Directorate-General for Trade of the European Commission and has the honour to refer to the Note of the Directorate-General (date of Note Verbale) regarding the Agreement on trade in textile products initialled on 8 June 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on ...

The Mission of the Republic of Uzbekistan wishes to confirm to the Directorate-General that whilst awaiting the completion of the necessary procedures for the conclusion and coming into force of the Agreement in the form of an Exchange of Letters, the Government of the Republic of Uzbekistan is prepared to allow the provisions of the Agreement to be applied de facto from 1 January 2000. This is on the understanding that either Party may at any time terminate this de facto application of the Agreement in the form of an Exchange of Letters provided that four months notice is given.

The Mission of the Republic of Uzbekistan to the European Union avails itself of this opportunity to renew to the Directorate-General for Trade of the European Commission the assurance of its highest consideration.