EEC-ICELAND JOINT COMMITTEE DECISION No 2/85 of 5 December 1985 supplementing Annexes II and III to Protocol 3 concerning the definition of the concept of originating products and methods of administrative cooperation by the addition of alternative percentage rules for the products of Chapters 84 to 92 of the Customs Cooperation Council Nomenclature

THE 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 experience has shown that the rules of origin contained in Protocol 3, for those products falling within Chapters 84 to 92 of the Customs Cooperation Council Nomenclature (hereinafter called 'the CCCN'), have in practice given rise to difficulties; whereas, because of the interdependence of the industrial sectors of the European Economic Community and Iceland, and the reciprocal nature and mutual importance of the free trade between the European Economic Community and Iceland, it is necessary to simplify the said rules; Whereas it is desirable to provide for simplified rules which have the same overall effect as the existing rules; whereas, to avoid the possibility of such simplified rules having a more restrictive effect in the case of certain products, it is necessary to provide for the simplified rules to be applied as an alternative to the existing rules; Whereas the most simple alternative rules are identical percentage rules for Lists A and B; whereas the percentage levels chosen have to differ between products to avoid any overall change in economic effect; Whereas it is preferable for reasons of clarity to combine such alternative percentage rules for Lists A and B in two lists of products according to the percentage rule to be applied; Whereas it is necessary to have a safeguard clause in order to avoid the effect of the alternative rules causing, or threatening to cause, serious injury to producers in either of the Contracting Parties, HAS DECIDED AS FOLLOWS:

Article 1

1. Lists A and B contained in Annexes II and III to Protocol 3 shall be amended by the addition of the following rules:(a) Originating status shall be conferred on the products set out in List I annexed hereto by working, processing or assembly in which the value of the non-originating materials incorporated does not exceed 40 % of the value of the finished product;(b)Originating status shall be conferred on the products set out in List II annexed hereto by working, processing or assembly in which the value of the non-originating materials incorporated does not exceed 30 % of the value of the finished product.For certain products a lower percentage and/or special conditions are, however, applicable. 2. The rules set out in paragraph 1 shall be in addition to and not in substitution for the rules contained in Lists A and B. 3. The exporter may decide whether or not to use the rules set out in paragraph 1 above or, alternatively, to use any other rule which may be contained in Lists A and B. However, the rules set out in paragraph 1 may be applied in respect of a particular product only as an alternative to, and not in conjunction with, any other rule which may be contained in those lists.

Article 2

If it is established that, because of the effect of the alternative rules, a product is imported into the territory of one of the Contracting Parties in such increased quantities and under conditions which cause, or threaten to cause, serious injury to producers of similar or directly competitive goods in the Contracting Party concerned, the Contracting Party may suspend the application of these alternative rules for that product. Such decisions shall be notified to the Joint Committee without delay together with all the necessary information. 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

This Decision shall enter into force on 1 March 1986.

Done at Brussels, 5 December 1985. For the Joint Committee The President H. DE LANGE

ANNEX I

LIST I

Finished products to which the 40 % rule in Article 1 (a) applies

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(1) At least 50 % in value of the materials and parts used for the assembly of the head (motor excluded) must be originating products and the thread tension, crochet and zigzag mechanisms must be originating products.

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ANNEX II

LIST II

Finished products to which the 30 % rule in Article 1 (b) applies

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(1) The percentage rule to be applied shall be 25 %. (2) For rotary displacement pumps the percentage rule to be applied shall be 25 %. (3) For fans, blowers and the like the percentage rule to be applied shall be 25 %.

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(4) The percentage rule to be applied shall be 25 %. (5) For heading Nos 85.14 and 85.15 the percentage rule to be applied shall be 25 % and the value of the non-originating transistor used must not exceed 3 % of the value of the finished product. (6)For semi-conductor devices and electronic microcircuits heading ex 85.21 the percentage rule to be applied shall be 25 %.

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