DECISION No 5/88 OF THE EEC-ICELAND JOINT COMMITTEE of 16 December 1988 modifying Protocol 3 on the concept of "originating products" and methods of administrative cooperation in order to simplify the cumulation rules

THE EEC-ICELAND JOINT COMMITTEE,

Having regard to the Agreement between the European Economic Community, and the Republic of Iceland, signed in Brussels on 22 July 1972,

Having regard to Protocol 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation, hereinafter referred to as "Protocol 3", and in particular Article 28 thereof,

Whereas, on the one hand, experience has shown that the complex nature of the present cumulation system in Protocol 3 is not likely to facilitate its use by operators nor its control by customs administrations;

Whereas, on the other hand, the present system of cumulation of origin does not represent the best incentive to use materials, parts or components furnished by one or more of the partner countries, as, in particular, the cumulative origin acquired in a particular commercial relationship is not necessarily acceptable in the case of export to other partner countries while the process of manufacture of the final product is strictly identical in the various commercial relationships concerned;

Whereas it is necessary to introduce a single unified cumulation system based on the concept that materials, parts and components originating in the other countries party to the different agreements concluded between the European Economic Community and Austria, Finland, Norway, Sweden or Switzerland may be used in the manufacture of a product in the Community or in Iceland without there being any particular provisions limiting the acquisition of cumulative origin;

Whereas therefore Articles 1, 2 and 3 as well as the provisions in Protocol 3 referring to these Articles must be consequently amended;

Whereas it is necessary to have a safeguard clause in order to avoid the new cumulation rules causing, or threatening to cause, serious injury to producers in the territory of either of the contracting parties;

Whereas it is necessary to review the effects of the introduction of the new cumulation rules after a period of experience to verify their economic effects ; whereas, therefore, this Decision should apply for three years,

HAS DECIDED AS FOLLOWS:

Article 1

Protocol 3 is modified as follows: 1. Articles 1, 2 and 3 are replaced as follows:

"Article 1

For the purpose of implementing the Agreement, and without prejudice to the provisions of Articles 2 and 3 of this Protocol, the following products shall be considered as: 1. products originating in the Community: (a) products wholly obtained in the Community within the meaning of Article 4 of this Protocol;

(b) products obtained in the Community incorporating materials which have not been wholly obtained there, provided that: (i) such materials have undergone sufficient working or processing in the Community within the meaning of Article 5 of this Protocol, or that

(ii) such materials originate in Iceland, within the meaning of this Protocol, or in Austria, Finland, Norway, Sweden or Switzerland pursuant to the provisions of Protocol 3 annexed to the Agreement between the Community and each of these countries and in so far as the said provisions are identical to those in this Protocol;

2. products originating in Iceland: (a) products wholly obtained in Iceland within the meaning of Article 4 of this Protocol;

(b) products obtained in Iceland incorporating materials which have not been wholly obtained there, provided that: (i) such materials have undergone sufficient working or processing in Iceland within the meaning of Article 5 of this Protocol, or that

(ii) such materials originate in the Community, within the meaning of this Protocol, or in Austria, Finland, Norway, Sweden or Switzerland pursuant to the provisions of Protocol 3 annexed to the Agreement between the Community and each of these countries or pursuant to the origin provisions in the Agreement governing trade between Iceland and the said countries in so far as these provisions and those in the said Protocols are identical.

Article 2

1.Notwithstanding Article 1 (1) (b) (ii), products originating in Austria, Finland, Iceland, Norway, Sweden or Switzerland pursuant to the provisions of the Protocol 3 referred to in Article 1, and exported from the Community to Iceland in the same state or having undergone in the Community no working or processing going beyond that referred to in Article 5 (5), retain their origin.

2. Notwithstanding the provisions of Article 1 (2) (b) (ii), products originating in the Community, within the meaning of this Protocol, or in Austria, Finland, Norway, Sweden or Switzerland, pursuant to the origin provisions referred to in Article 1 and in so far as these provisions are identical to those in this Protocol, and exported from Iceland into the Community in the same state or having undergone in Iceland no working or processing going beyond that referred to in Article 5 (5), retain their origin.

3. For the purpose of implementing paragraphs 1 and 2, where products originating in the Community and in one or more of the countries referred to in Article 1 or in two or more of these countries are used and those products have undergone no working or processing in the Community or in Iceland going beyond that referred to in Article 5 (5), the origin is determined by the product with the highest customs value or, if this is not known and cannot be ascertained, with the highest first ascertainable price paid for the products in the Community or in Iceland.

Article 3

The products listed in Annex II shall be temporarily excluded from the scope of this Protocol. However, the provisions concerning administrative cooperation and Article 23 shall apply, mutatis mutandis, to these products."

2. In Article 5 (5), "Article 1 (1) (b) and (2) (b)" is replaced by "Article 1 (1) (b) (i) and (2) (b) (i)".

3. Article 6 (3) is deleted.

4. In Article 8 (3), second subparagraph, "mentioned in Article 2" is replaced by "mentioned in Article 1".

5. Article 9 is amended as follows: (a) Paragraph 3 is replaced as follows:

"3. The customs authorities of the Member States of the Community or Iceland may issue EUR 1 certificates under the conditions laid down in this Protocol if the goods to be exported can be considered as products originating in the Community, Austria, Finland, Iceland, Norway, Sweden or Switzerland within the meaning of Article 2 of this Protocol and provided that the goods to be covered by the EUR 1 certificates are in the Community or in Iceland.

In such cases, the issue of the EUR 1 certificates is subject to the presentation of the evidence of origin issued or made out previously."

(b) In the first subparagraph of paragraph 4, "provided for in the Agreement" is replaced by "provided for in the Agreements between the Community and the countries referred to in Article 1".

(c) The following paragraph 10 is added:

"10. The provisions of paragraphs 2 to 9 above shall apply, mutatis mutandis, to the evidence of origin made out by approved exporters under the conditions set out in Article 13."

6. In Article 10 (5), "and the EUR 1 certificates referred to in the second subparagraph of Article 9 (3)" is replaced by "and the evidence of origin referred to in the second subparagraph of Article 9 (3)".

7. In Article 13 (8) (a), "referred to in Article 2 (1)" is replaced by "referred to in Article 1".

8. In Article 16 (1), "referred to in Article 2" is replaced by "referred to in Article 1".

9. In Article 22, "the Agreements referred to in Article 2" is replaced twice by "the Agreements referred to in Article 1".

10. In Article 23 (1), in fine, "referred to in Article 2" is replaced by "referred to in Article 1".

11. In Article 24, paragraphs 3 and 4 are replaced as follows:

"3. For the application of Articles 1 (2) (b) (ii) and 2, products originating in Spain or products accompanied by a EUR 1 certificate with the symbol "ES" entered in box 7, "Remarks", that are imported into Iceland and, not having undergone sufficient working or processing there to confer on them the status of products originating in Iceland, are exported to a Member State of the Community other than Spain, or to Austria, Finland, Norway, Sweden or Switzerland, shall benefit, on import there only from a treatment identical to that which they would have received had they been imported directly from Spain.

4. For the application of paragraph 3, the exporter or his authorized representative shall enter the symbol "ES" in box 7, "Remarks", of EUR 1 certificates issued in Iceland."

12. In Article 25 (2), "mentioned in Article 2" is replaced by "mentioned in Article 1".

13. Article 27 is replaced as follows:

"Article 27

1. For the purpose of implementing Article 1 (1) (b) (ii) of this Protocol, any product originating in Austria, Finland, Norway, Sweden or Switzerland shall be treated as a non-originating product during the period or periods in which Iceland applies the rate of duty applicable to third countries or any corresponding safeguard measure to that product in respect of one of the said countries under the provisions governing trade between Iceland and the said countries.

2. For the purpose of implementing Article 1 (2) (b) (ii) of this Protocol, any product originating in Austria, Finland, Norway, Sweden or Switzerland shall be treated as a non-originating product during the period or periods in which the Community applies the rate of duty applicable to third countries to that product in respect of one of the said countries under the Agreement concluded by the Community with that country."

14. Annex I (Explanatory Notes) is amended as follows: (a) Note 3 - in the title, the reference to Article 3 is deleted,

- in the text of the note, "specified in Article 2" is replaced by "specified in Article 1".

(b) Note 9

"True copies of the EUR 1 certificate or certificates issued previously" is replaced by "true copies of the evidence of origin issued or made out previously".

15. In Annex II, Title, "Article 1" is replaced by "Article 3".

Article 2

If it is established that the application of the new cumulation provisions leads to the effective incorporation of non-originating materials in such increased quantities that it causes, or threatens to cause, serious injury to a producing activity exercised in the territory of a contracting party, the contracting party involved may derogate from Article 1 (1) (b) (ii) and (2) (b) (ii) of Protocol 3. In such case, the cumulation rules previously applicable shall apply to the product(s) concerned. Such measures shall be notified to the Joint Committee without delay together with all the necessary details. Without prejudice to any safeguard measure taken, the Joint Committee shall, without delay, examine the situation so as to find a solution acceptable to the contracting parties.

Article 3

1. For the application of Article 2, during the trial period referred to in Article 4, the exporter shall indicate on the documentary evidence of origin by means of the symbol "DC" those cases where in the Community or in Iceland materials originating in Austria, Finland, Norway, Sweden or Switzerland and in addition materials not originating in the Community, Iceland or any of these countries are used.

2. Such indication shall be entered in box 7 of the EUR 1 certificate or, in the case of an exporter's declaration, it should be mentioned immediately after the indication of the country of origin.

Article 4

This Decision shall enter into force on 1 January 1989.

It shall apply until 31 December 1991.

Done at Brussels, 16 December 1988.

For the EEC-Iceland Joint Committee

The President

P. BENAVIDES