DECISION No 3/89 OF THE EEC-YUGOSLAVIA COOPERATION COUNCIL of 27 November 1989 amending, as a consequence of the introduction of the harmonized system, Protocol 3 concerning the definition of the concept of 'originating products' and methods of administrative cooperation

THE COOPERATION COUNCIL, Having regard to the Cooperation Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia, signed on 2 April 1980, Having regard to Protocol 3 concerning the definition of the concept of 'originating products' and methods of administrative cooperation, and in particular Article 25 thereof, Whereas the origin rules contained in Protocol 3 are based on the use of the Customs Cooperation Council Nomenclature; whereas the Customs Cooperation Council approved the International Convention on the Harmonized Commodity Description and Coding System (hereinafter referred to as the 'harmonized system') on 14 June 1983; whereas, since 1 January 1988, the harmonized system has replaced the previous nomenclature for the purposes of international trade; whereas it is therefore necessary to adapt the rules of origin contained in Protocol 3 so that they are based on the use of the harmonized system; Whereas, in the light of experience, the presentation of the origin rules could be improved by grouping all the exceptions to the basic change of heading rule into one list and by providing detailed guidance on how it should be interpreted, HAS DECIDED AS FOLLOWS:

Article 1

In Article 1 (3) of Protocol 3, 'in List C in Annex IV' is replaced by 'in Annex II'.

Article 2

Article 3 of Protocol 3 is replaced by the following: 'Article 31. The expressions ''Chapters'' and ''headings'' used in this Protocol shall mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the ''harmonized commodity description and coding system'' (hereinafter referred to as the ''harmonized system'' or ''HS'').The expression ''classified'' shall refer to the classification of a product or material under a particular heading. 2. For the purposes of Article 1, non-originating materials are considered to be sufficiently worked or processed when the product obtained is classified in a heading which is different from those in which all the non-originating materials used in its manufacture are classified, subject to the provisions of paragraphs 3 and 4. 3. For a product mentioned in columns 1 and 2 of the list in Annex III, the conditions set out in column 3 for the product concerned must be fulfilled instead of the rule in paragraph 2. 4. For the purpose of implementing Article 1, the following shall always be considered as insufficient working or processing to confer the status of originating product, whether or not there is a change of heading:(a) operations to ensure the preservation of merchandise in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations);(b)simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting up;(c)(i) changes of packaging and breaking up and assembly of consignments;(ii)simple placing in bottles, flasks, bags, cases, boxes, fixing on cards or boards, etc., and all other simple packaging operations;(d)affixing marks, labels or other like distinguish- ing signs on products or their packaging; (e)simple mixing of products, whether or not of different kinds, where one or more components of the mixture do not meet the conditions laid down in this Protocol to enable them to be considered as originating;(f)simple assembly of parts of articles to constitute a complete article;(g)a combination of two or more operations specified in subparagraphs (a) to (f);(h)slaughter of animals.'

Article 3

Article 4 of Protocol 3 is replaced by the following: 'Article 41. The term ''value'' in the list in Annex III shall mean the customs value at the time of the import 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 territory concerned.Where the value of the originating materials used needs to be established, this paragraph shall be applied mutatis mutandis. 2. The term ''ex works price'' in the list in Annex III shall mean the ex works price of the product obtained minus any internal taxes which are, or may be, repaid when the product obtained is exported.'

Article 4

Article 6 of Protocol 3 is hereby amended as follows:1. in paragraph 2, 'Article 3 (3)' is replaced by 'Article 3 (4)', and 'Brussels nomenclature' by 'harmonized system'; 2.paragraph 4 is replaced by the following:'4. Sets within the meaning of General Rule 3 of the harmonized system shall be regarded as originating when all component articles are originating products. Nevertheless, when a set is composed of originating and non-originating articles, the set as a whole shall be regarded as originating provided that the value of the non-originating articles does not exceed 15 % of the ex works price of the set.'

Article 5

1. Annexes I, II and III to this Decision replace Annexes I, II, III and IV to Protocol 3. 2. Annexes V and VI are renumbered IV and V.

Article 6

1. Products which were exported before 1 January 1990, accompanied by a Movement Certificate EUR 1 or Form EUR 2, shall be considered as originating under the rules in force on 1 January 1990. 2. Movement Certificates EUR 1 or Forms EUR 2 issued or made out before 1 January 1990 under the rules in force before that date shall be accepted up to and including 31 May 1990 according to the rules in force when they were issued. 3. Articles 19 and 20 of Protocol 3 shall apply in the case of goods exported before 1 January 1990 and retrospective or duplicate Movement Certificates may be issued under the rules in force before that date.

Article 7

This Decision shall apply from 1 January 1990. Done at Brussels, 27 November 1989.

For the Cooperation Council The President R. DUMAS

Joint Declaration concerning the review of the changes to the origin rules as a result of the introduction of the harmonized system

Where, following the amendments made to the nomenclature, the new rules introduced by Decision No 3/89 alter the substance of any rule existing prior to Decision No 3/89 and it appears that such alteration results in a situation prejudicial to the interest of the sectors concerned, then, if one of the contracting parties so requests in the period up to and including 31 December 1992, an examination shall be made as a matter of urgency by the Cooperation Council, of the need to restore the rule concerned as it was before Decision No 3/89. In any case, the Cooperation Council shall decide to restore, or not to restore, the substance of the rule concerned within a period of three months of the request being made to it by either of the parties to the Agreement. If the substance of the rule concerned is restored, then the parties to the Agreement shall also provide the legal framework necessary to guarantee that any customs duties improperly levied on the products concerned imported after 1 January 1990 can be reimbursed.