AGREEMENT in the form of an exchange of letters between the European Community and the Republic of Hungary on the reciprocal establishment of tariff quotas for certain wines

A. Letter from the Community

Brussels, 29 November 1993

Sir,

I have the honour to refer to the consultations which have taken place between the European Community and the Republic of Hungary concerning the reciprocal establishment of tariff quotas for certain wines. Since it is in the interest both of the Community and of Hungary to promote trade in wine in accordance with Articles 20 (5) and 14 (5) respectively of the Association Agreement and the Interim Agreement on trade and trade-related matters between the Community and Hungary, signed on 16 December 1991, the two Parties have agreed to grant each other reciprocal tariff concessions subject to the maximum quantities and the conditions set out below:

1. Hungary is to open annual tariff quotas subject to reduced customs duties as set out in point 3 for wine originating in the Community up to the following quantities:

- 24 000 hectolitres of wine in containers holding not more than two litres, falling within subheading ex 2204 21 of the Hungarian customs tariff,

- 63 500 hectolitres of wine in containers holding more than two litres, falling within subheading ex 2004 29 of the Hungarian customs tariff,

- 2 500 hectolitres of quality sparkling wine, whether or not produced in specific regions, within the meaning of Title III of Regulation (EEC) No 2332/92, in containers holding not more than two litres, falling within subheading ex 2204 10 of the Hungarian customs tariff.

The abovementioned quotas will be increased each year as from 1 January 1994 in accordance with Table 1 in the Annex.

2. The Community is to open an annual tariff quotas subject to reduced customs duties as set out in point 3 for wine originating in Hungary up to the following quantities:

- 115 000 hectolitres of quality wine, including wine of superior quality und quality wine bearing the geographical indication 'Tokaj` and wine bearing the name 'Tajbor` (country wine) within the meaning of Hungarian Law No 36/1970 on wine-growing and implementing Regulation No 40/1977 (MEM), as amended by Regulation No 7/1990 (FM) and No 23/1992 (FM), in containers holding not more than two litres, falling within subheading ex 2204 21 of the combined nomenclature,

- 70 000 hectolitres of wine in containers holding more than two litres, falling within subheading ex 2204 29 of the combined nomenclature,

- 2 500 hectolitres of quality sparkling wine within the meaning of Hungarian Law No 36/1970 on wine-growing and implementing Regulation No 40/1977 (MEM), as amended by Regulations No 7/1990 (FM) and No 23/1992 (FM), in containers holding not more than two litres, falling within subheading ex 2204 10 of the combined nomenclature.

The abovementioned quotas will be increased each year as from 1 January 1994 in accordance with Table 2 in the Annex.

3. The following reduced customs duties will apply to the maximum annual quantities set out in points 1 and 2:

(a) in the case of duties applied by Hungary to imports of wine originating in the Community:

- in 1993, 90 % of the basic duty,

- in 1994, 80 % of the basic duty,

- in 1995 and subsequent years, 70 % of the basic duty;

(b) in the case of duties applied by the Community to imports of wine originating in Hungary:

- in 1993, 80 % of the basic duty,

- in 1994, 60 % of the basic duty,

- in 1995 and subsequent years, 40 % of the basic duty.

4. For the purposes of this Agreement, wine will be deemed to originate in the Community or in Hungary if it has been produced from fresh grapes wholly produced and harvested in the territory of the Party in question in accordance with the rules governing the oenological practices and processes referred to in Title II of Regulation (EEC) No 822/87.

5. The period covered by the quotas referred to in points 1 and 2 will run from 1 January to 31 December of the same year. If this Agreement comes into force after 1 January 1993, the annual quotas set out in points 1 and 2 will be adjusted pro rata temporis.

6. Imports of wine under the concessions provided for in this Agreement will be subject to presentation of:

- an import licence valid from its date of issue to the end of the fourth month thereafter, unless the quota period expires before the latter date. Licences must be granted without discrimination between the economic operators concerned. They will entail a system of securities, introduced and administered so that the agreed quantities may actually be imported. The two Parties will exchange information regularly on the number of licences issued and used, and

- a certificate issued by a mutually recognized official body appearing on a list to be drawn up jointly, to the effect that the wine in question complies with points 1, 2 and 4.

7. The Contracting Parties must ensure that the benefits granted reciprocally are not called into question by other measures. On application, Hungary will in particular issue import licences as referred to in point 6 for up to the quantities agreed to in point 1 and will refrain from taking any measure which may prevent them from being used.

8. Consultations are to take place at the request of either Party on any problem relating to the way this Agreement operates. Both Parties may amend the latter by mutual consent.

9. 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, in the territory of the Republic of Hungary.

10. This Agreement shall 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. It shall apply for an initial period expiring on 31 December 1998. During the first six months of 1998, consultations will take place to decide whether and on what terms it is to be extended.

I should be obliged if you would confirm that your Government is in agreement with the contents of this letter.

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

On behalf of the Council of the European Union

>REFERENCE TO A FILM>

ANNEX Increase in quotas for wine referred to in points 1 and 2

>TABLE>

>TABLE>

B. Letter from Hungary

Brussels, 29 November 1993

Sir,

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

'I have the honour to refer to the consultations which have taken place between the European Community and the Republic of Hungary concerning the reciprocal establishment of tariff quotas for certain wines. Since it is in the interest both of the Community and of Hungary to promote trade in wine in accordance with Articles 20 (5) and 14 (5) respectively of the Association Agreement and the Interim Agreement on trade and trade-related matters between the Community and Hungary, signed on 16 December 1991, the two Parties have agreed to grant each other reciprocal tariff concessions subject to the maximum quantities and the conditions set out below:

1. Hungary is to open annual tariff quotas subject to reduced customs duties as set out in point 3 for wine originating in the Community up to the following quantities:

- 24 000 hectolitres of wine in containers holding not more than two litres, falling within subheading ex 2204 21 of the Hungarian customs tariff,

- 63 500 hectolitres of wine in containers holding more than two litres, falling within subheading ex 2204 29 of the Hungarian customs tariff,

- 2 500 hectolitres of quality sparkling wine, whether or not produced in specific regions, within the meaning of Title III of Regulation (EEC) No 2332/92, in containers holding not more than two litres, falling within subheading ex 2204 10 of the Hungarian customs tariff.

The abovementioned quotas will be increased each year as from 1 January 1994 in accordance with Table 1 in the Annex.

2. The Community is to open an annual tariff quotas subject to reduced customs duties as set out in point 3 for wine originating in Hungary up to the following quantities:

- 115 000 hectolitres of quality wine, including wine of superior quality and quality wine bearing the geographical indication 'Tokaj` and wine bearing the name 'Tajbor` (country wine) within the meaning of Hungarian Law No 36/1970 on wine-growing and implementing Regulation No 40/1977 (MEM), as amended by Regulations No 7/1990 (FM) and No 23/1992 (FM), in containers holding not more than two litres, falling within subheading ex 2204 21 of the combined nomenclature;

- 70 000 hectolitres of wine in containers holding more than two litres, falling within subheading ex 2204 29 of the combined nomenclature;

- 2 500 hectolitres of quality sparkling wine within the meaning of Hungarian Law No 36/1970 on wine-growing and implementing Regulation No 40/1977 (MEM), as amended by Regulations No 7/1990 (FM) and No 23/1992 (FM), in containers holding not more than two litres, falling within subheading ex 2204 10 of the combined nomenclature.

The abovementioned quotas will be increased each year as from 1 January 1994 in accordance with Table 2 in the Annex.

3. The following reduced customs duties will apply to the maximum annual quantities set out in points 1 and 2:

(a) in the case of duties applied by Hungary to imports of wine originating in the Community:

- in 1993, 90 % of the basic duty,

- in 1994, 80 % of the basic duty,

- in 1995 and subsequent years, 70 % of the basic duty;

(b) in the case of duties applied by the Community to imports of wine originating in Hungary:

- in 1993, 80 % of the basic duty,

- in 1994, 60 % of the basic duty,

- in 1995 and subsequent years, 40 % of the basic duty.

4. For the purposes of this Agreement, wine will be deemed to originate in the Community or in Hungary if it has been produced from fresh grapes wholly produced and harvested in the territory of the Party in question in accordance with the rules governing the oenological practices and processes referred to in Title II of Regulation (EEC) No 822/87.

5. The period covered by the quotas referred to in points 1 and 2 will run from 1 January to 31 December of the same year. If this Agreement comes into force after 1 January 1993, the annual quotas set out in points 1 and 2 will be adjusted pro rata temporis.

6. Imports of wine under the concessions provided for in this Agreement will be subject to presentation of:

- an import licence valid from its date of issue to the end of the fourth month thereafter, unless the quota period expires before the latter date. Licences must be granted without discrimination between the economic operators concerned. They may entail a system of securities, introduced and administered so that the agreed quantities may actually be imported. The two Parties will exchange information regularly on the number of licences issued and used, and

- a certificate issued by a mutually recognized official body appearing on a list to be drawn up jointly, to the effect that the wine in question complies with points 1, 2 and 4.

7. The Contracting Parties must ensure that the benefits granted reciprocally are not called into question by other measures. On application, Hungary will in particular issue import licences as referred to in point 6 for up to the quantities agreed to in point 1 and will refrain from taking any measure which may prevent them from being used.

8. Consultations are to take place at the request of either Party on any problem relating to the way this Agreement operates. Both Parties may amend the latter by mutual consent.

9. 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, in the territory of the Republic of Hungary.

10. This Agreement shall 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. It shall apply for an inital period expiring on 31 December 1998. During the first six months of 1998, consultations will take place to decide whether and on what terms it is to be extended.

I should be obliged if you would confirm that your Government is in agreement with the contents of this letter.`.

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

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

For the Government of the Republic of Hungary

>REFERENCE TO A FILM>

ANNEX Increase in quotas for wine referred to in points 1 and 2

>TABLE>

>TABLE>

JOINT DECLARATION ON POINT 1 OF THE AGREEMENT

For the purposes of applying subheadings 2204 21-018 and 2024 29-012 of the Hungarian customs tariff, wine intended for processing and which cannot be consumed without further processing or put on the market for direct human consumption is considered 'kommersz bor`.

Fortified wine of fresh grapes is to be classified under subheading 2204 21-027 and 2204 29-021 of the Hungarian customs tariff.

Liqueur wines, also called 'dessert wines`, are to be classified under subheadings 2204 21-036 and 2204 29-030 of the Hungarian customs tariff.

As a consequence, wine of fresh grapes other than as referred to in the first, second and third paragraphs is to be classified under subheadings 2204 21-993 and 2204 29-997 of the Hungarian customs tariff.

The classification of a wine under any of the subheadings referred to in the first paragraph is subject to presentation of a certificate to be drawn up in accordance with the rules to be laid down pursuant to the second indent of point 6 of the Agreement