DECISION No 3/96 OF THE ASSOCIATION COUNCIL between the European Communities and their Member States, of the one part, and the Republic of Poland, of the other part of 16 July 1996 settling the dispute between the European Communities and the Republic of Poland concerning skins and hides in accordance with Article 105 (1) and (2) of the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Poland, of the other part (96/496/Euratom, ECSC, EC)

THE ASSOCIATION COUNCIL,

Having regard to the Europe Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Republic of Poland, of the other part (hereinafter 'the Europe Agreement`), and in particular Article 105 thereof,

Whereas it is laid down in Article 105 (1) and (2) of the Europe Agreement that the Association Council may settle by means of a decision any dispute relating to the application or interpretation of the Europe Agreement;

Considering that in view of a critical shortage of raw material in the form of skins and hides the Republic of Poland introduced on1 January 1994 a quota for the export of skins and hides set at 1 400 tonnes for 1994 and 1995 and 3 000 tonnes for 1996, invoking Article 31 of the Europe Agreement;

Recognizing that, at the first meeting of the Association Council held in Warsaw on 23 and 24 June 1994, the Community requested Poland to increase the quota to 15 000 tonnes for 1994 and 20 000 tonnes for 1995 in order to maintain a balance, in accordance with the Europe Agreement, between the measures taken by Poland and the real shortage of the raw material existing;

Considering that Poland informed the Community that the restriction had been introduced temporarily, was the result of the existing shortage and would be withdrawn as soon as the causes of its implementation disappeared;

Considering that both sides have not reached a common understanding;

Recognizing that in its letter of 28 July the Community referred the matter to the Association Council in accordance with Article 105 (1) of the Europe Agreement in order that it might settle the dispute;

Considering that at the second meeting of the Association Council held in Brussels on 17 July 1995 the Community proposed that the quota for 1995 be raised to 13 500 tonnes;

Recognizing that, as Poland could not accept the Community's proposal and as various proposals by Poland to increase the quota had not been accepted by the Community, both sides agreed to the application of Article 105 (4) of the Europe Agreement;

Considering that the Republic of Poland and the Community have both notified their arbiters;

Considering that, in the meantime the Republic of Poland in its letter of 18 March 1996 submitted a compromise proposal concerning the establishment of a timetable for liberalization of the export of skins and hides which envisages the final withdrawal of restrictions on 1 January 1999 at the latest and provides for another investigation of the matter in 1997 in order to hasten the process of full liberalization by one year;

Recognizing that in such circumstances both sides have decided to stop the arbitration procedure provided for in Article 105 (4) and finish it according to Article 105 (2) of the Europe Agreement,

HAS DECIDED AS FOLLOWS:

Article 1

The amount of the annual quota for exports from Poland of skins and hides, set by Poland at 3 000 tonnes for 1996 shall be increased for the same products to 10 000 tonnes for 1996, 12 000 tonnes for 1997 and 15 000 tonnes for 1998. The Republic of Poland will eliminate the restriction in export of skins and hides with effect from 1 January 1999.

Article 2

The Association Committee will re-examine the situation in the first quarter of 1997 in order to evaluate the possibility of eliminating the restriction in export of skins and hides with effect from 1 January 1998.

Article 3

This Decision shall enter into force on the day of its adoption. However, the quota for skins and hides set at 10 000 tonnes for 1996 shall apply with effect from 1 January 1996.

Done at Brussels, 16 July 1996.

For the Association Council

The President

D. SPRING