AGREED MINUTE amending the Agreement between the European Economic Community and the Republic of Hungary on trade in textile products

1. The delegations of the European Economic Community and the Republic of Hungary met in Brussels on 29 and 30 November 1990. Consultations were held pursuant to Article 14 of the Agreement between the European Economic Community and Hungary on trade in textile products, initialled on 11 July 1986 and applied provisionally since 1 January 1987.

2. The purpose of the consultations was to amend the bilateral Agreement on trade in textile products with a view to integrating provisions relating to reimports of textile products after processing, manufacturing or working in that country.

3. Both Parties have agreed to amend Article 3 (4) of the Agreement and insert a Protocol E establishing a special arrangement governing reimports into the Community of textile products after processing, manufacturing or working in Hungary in accordance with the relevant Community legislation. The texts of Article 3 (4) and Protocol E are annexed to this Agreed Minute.

4. In order to contribute to a better management of the agreed quotas, the Commission services are ready to provide information to Hungary, should the need arise, concerning the granting of prior authorizations by a Member State of the Community, as laid down in the framework of the community arrangements for economic outward processing (Regulation (EEC) N° 636/82).

5. Both Parties have agreed that the amendment to the Agreement by this Agreed Minute shall be applied provisionally from 1 January 1991.

Brussels, 30 November 1990.

Delegation of the

Republic of Hungary

Delegation of the

European Economic Community

EEC-Hungary Agreement

Article 3 (4) as amended

'The Community and Hungary recognize the special and distinct nature of reimports into the Community of textile products after processing, manufacturing or working in Hungary.

Reimports shall not be subject to the quantitative limits established in Annex II, provided they are effected in accordance with the regulations on economic outward processing traffic in force in the Community and are eligible for the specific arrangement described in Protocol E.`

'PROTOCOL E

Reimports into the Community, within the meaning of Article 3 (4) of this Agreement, of products listed in the Annex to this Protocol shall be subject to the provisions of the Agreement, unless the special provisions below provide otherwise.

1.Only reimports into the Community of products subject to the specific quantitative limits laid down in the Annex to this Protocol, possibly amended pursuant to paragraph 2, shall be treated as reimports within the meaning of Article 3 (4).

2.Reimports not covered by the Annex to this Protocol may be made subject to specific quantitative limits following consultations in accordance with the procedures set out in Article 14 of the Agreement, provided the products concerned are subject to quantitative limits under Annex II.

3.Having regard to the interests of both Contracting Parties, the Community may at its discretion, or in response to a request from Hungary pursuant to Article 14 of the Agreement, examine:

(a)the possibility of transferring from one category to another, using in advance or carrying over from one year to the next portions of specific quantitative limits;

(b)the scope for allocating portions of the specific quantitative limit unused in one region of the Community to another such region.

4.However, the Community may apply automatically the flexibility rules set out in paragraph 3 within the following limits:

(a)transfers between categories may not exceed 25 % of the quantity for the category to which the transfer is made(1);

(b)carryover of a specific quantitative limit from one year to the next may not exceed 10,5 % of the quantity set for the year of actual utilization;

(c)advance use of specific quantitative limits from one year to another may not exceed 7,5 % of the quantity set for the year of actual utilization;

(d)transfers from one region to another may not exceed 24 % of the quantity set for the region to which the transfer is made.

5.The Community shall inform Hungary of any measures taken pursuant to the preceding paragraphs.

6.The competent authorities in the Community shall debit the specific quantitative limits referred to in paragraph 1 at the time of issue of the prior authorization required by Council Regulation (EEC) N° 636/82 which governs economic outward processing arrangements. The specific quantitative limits shall be debited for the year in which such prior authorization is issued.

7.Transfers from one category to another and combined debits from the quantitative limit for products of groups II and III will be calculated in accordance with the table of equivalence in Annex I to the Agreement.

8.A certificate of origin made out by the Hungarian organizations authorized to do so under Hungarian law shall be issued, in accordance with Protocol A to the Agreement, for all products covered by this Protocol. This certificate shall bear a reference to the prior authorization mentioned in paragraph 6 as evidence that the processing operation it describes has been carried out in Hungary.

9.The Community shall provide Hungary with the names and addresses of, and specimens of the stamps used by, the competent authorities of the Community which issue the prior authorizations referred to in paragraph 6.

10.Without prejudice to the provisions of paragraphs 1 to 9, Hungary and the Community shall continue consultations with a view to reaching a mutually acceptable solution enabling both Contracting Parties to benefit from the Agreement's provisions on outward processing traffic and so ensure the effective development of trade in textile products between Hungary and the Community.

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(1) However, for categories in group II or III, transfers between quota shares under the German, French, Italian and Benelux quotas shall be allowed up to 100 % of the category from which the transfer is made.