Council Regulation (EC) No 416/2001

of 28 February 2001

amending Regulation (EC) No 2820/98 applying a multiannual scheme of generalised tariff preferences for the period 1 July 1999 to 31 December 2001 so as to extend duty-free access without any quantitative restrictions to products originating in the least developed countries

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 thereof,

Having regard to the proposal from the Commission,

Whereas:

(1) Article 6 of Council Regulation (EC) No 2820/98 of 21 December 1998 applying a multiannual scheme of generalised tariff preferences for the period 1 July 1999 to 31 December 2001(1) provides for more favourable tariff treatment for the least developed countries.

(2) The Community's multiannual scheme of generalised tariff preferences has to be reviewed before the end of 2001 in order to decide what amendments are required for the last phase of the ten-year period of the scheme up to 2004.

(3) At the Singapore ministerial conference in December 1996 the World Trade Organisation (WTO) member countries pledged to carry out an action plan to improve access to their markets for products originating in the least developed countries.

(4) On 2 June 1997 the Council, on the basis of a Commission communication of 16 April 1997, adopted conclusions calling for the Singapore conclusions to be implemented by granting least developed countries not party to the Lomé Convention preferences equivalent to those enjoyed by signatories and, in the medium term, duty-free access for essentially all least developed country products.

(5) Regulation (EC) No 602/98(2) granted least developed countries (LDCs) not party to the Lomé Convention preferences equivalent to those enjoyed by signatories to the Convention.

(6) Article 37(9) of the Partnership Agreement between the Members of the African, Caribbean and Pacific States, of the one part, and the European Community and its Member States, of the other part, signed at Cotonou (Benin) on 23 June 2000 and put into early application by Decision No 1/2000 of the ACP-EC Council of Ministers(3), states that, by the year 2000, the Community will start a process which, by the end of multilateral trade negotiations and at the latest 2005, will allow duty-free access for essentially all products from all LDCs, building on the level of the existing trade provisions of the fourth ACP-EC Convention.

(7) In the light of the real risk of the LDCs becoming increasingly marginalised in the world economy, the Community must go even further than these undertakings and grant all products from LDCs, except arms and munitions, duty-free access without quantitative restrictions immediately.

(8) In the light of the fact that the arrangements for the common organisation of the markets in sugar, rice and bananas are currently being revised or are due to be revised, the Regulations regarding these reforms will have to take account of duty-free access for the LDCs from the outset when they establish new general import arrangements.

(9) Provision should be made for free access for bananas through a process of progressive tariff elimination starting on 1 January 2002 and which is to result in full liberalisation on 1 January 2006, which is the date envisaged for the entry into force of the rate of the common customs tariff for fresh bananas established under the procedure provided for in Article XXVIII of the General Agreement on Tariffs and Trade pursuant to Council Regulation (EC) No 216/2001 of 29 January 2001 amending Regulation (EEC) No 404/93 on the common organisation of the market in bananas(4).

(10) Provision should be made for free access for rice and sugar through a process of progressive tariff elimination starting in 2006, when the current financial perspectives expire, and which is to result in full liberalisation in 2009.

In order to provide effective market access following the entry into force of this Regulation and until full liberalisation, duty-free tariff quotas should be opened for increasing quantities of rice and raw sugar originating in LDCs. The initial quantities of these global tariff quotas for the LDCs should be based on their best export levels to the Community in the recent past. In addition, a significant growth factor should be immediately applied and continue to be applied cumulatively every year until full liberalisation. Therefore, the tariff quota for rice should be opened at a level of 2517 tonnes (husked-rice equivalent), and the tariff quota for sugar shall be opened at a level of 74185 tonnes (white-sugar equivalent). Imports of sugar under the ACP-EC Sugar Protocol should be excluded from the above calculations so as to uphold the viability of this protocol.

In order to ensure adequate management of the liberalisation for sugar and rice, both the tariff elimination and the tariff quotas should be applied on the basis of the respective marketing years. The detailed rules necessary for implementing the tariff quotas should be decided upon by the Commission in accordance with the procedure laid down in Article 32 of Regulation (EC) No 2820/98.

(11) The special arrangements provided for in this Regulation with regard to market access for the least developed countries should be maintained for an unlimited period of time and not be subject to the periodic renewal of the Community's scheme of generalised preferences. Consequently, the date of expiry of the Community's current scheme should not apply to those arrangements nor, to the extent that they are applied in conjunction with them, to the other relevant provisions of Regulation (EC) No 2820/98.

(12) Technical amendments are needed to define more closely the scope of the provisions on the special drug prevention support measures in the light of the changes relating to the LDCs.

(13) It is necessary to add to the reasons for the possible provisional suspension of preferences, allowing the Commission to react swiftly when the Community's financial interests are at stake, massive increases in imports of products originating in the LDCs in relation to their usual levels of production and export capacity,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 2820/98 is hereby amended as follows:

1. Article 1(2) shall be amended as follows:

"2. Without prejudice to Article 6, this Regulation shall apply to the products falling within Chapters 1 to 97 of the Common Customs Tariff, excluding Chapter 93, which are listed in Annex I. It shall apply only to the products listed in Annex VII on the conditions laid down in Article 7.";

2. Article 6 shall be replaced by the following:

"Article 6

1. Without prejudice to paragraphs 2 to 4, Common Customs Tariff duties on all products of Chapters 1 to 97, except those of Chapter 93, originating in the least developed developing countries listed in Annex IV, shall be entirely suspended.

2. Common Customs Tariff duties on the products of CN code 0803 00 19 shall be reduced by 20 % annually starting on 1 January 2002. They shall be entirely suspended as from 1 January 2006.

3. Common Customs Tariff duties on the products of tariff heading 1006 shall be reduced by 20 % on 1 September 2006, by 50 % on 1 September 2007 and by 80 % on 1 September 2008. They shall be entirely suspended as from 1 September 2009.

4. Common Customs Tariff duties on the products of tariff heading 1701 shall be reduced by 20 % on 1 July 2006, by 50 % on 1 July 2007 and by 80 % on 1 July 2008. They shall be entirely suspended as from 1 July 2009.

5. Until Common Customs Tariff duties are entirely suspended in accordance with the provisions of paragraphs 3 and 4, a global tariff quota at zero duty shall be opened for every marketing year for products of tariff heading 1006 and subheading 1701 11 10 respectively, originating in the least developed developing countries listed in Annex IV. The initial tariff quotas for the marketing years 2001/2002 shall be equal to 2517 tonnes, husked rice equivalent, for products of tariff heading 1006 and 74185 tonnes, white sugar equivalent, for products of subheading 1701 11 10. For each of the following marketing years, the quotas shall be increased by 15 % in relation to the quotas of the previous marketing year.

6. The Commission shall decide the implementation of the provisions referred to in paragraph 5 in accordance with the procedure laid down in Article 32.

7. The Commission shall, in close cooperation with the Member States, carefully monitor imports of rice, bananas and sugar.

Member States or any interested natural or legal persons shall inform the Commission, without delay, of any circumstances of which they are aware that could justify the adoption of a measure to suspend preferences. Where the Commission finds that there is sufficient evidence to establish that the conditions for temporary suspension of the preferences are met, all appropriate measures will be taken as quickly as possible.";

3. Article 7 shall be replaced by the following:

"Article 7

For the countries listed in Annex V, Common Customs Tariff duties shall be suspended in their entirety on the industrial products listed in Annex I falling within Chapters 25 to 97 of the Common Customs Tariff, excluding Chapter 93, and on the agricultural products listed in Annex VII, without prejudice to the procedure described in Article 31(3).";

4. Article 22(1)(d) shall be amended as follows:

"(d) fraud or failure to provide administrative cooperation as required for the verification of certificates of origin form A, or massive increases in imports into the Community of products originating in the countries listed in Annex IV in relation to their usual levels of production and export capacity.";

5. in Article 28:

- the following paragraph shall be inserted:

"2. Notwithstanding the provisions of Article 22 and paragraph 1 above, given the particular sensitivity of products of tariff headings 1006 and 1701, and CN code 0803 00 19, if imports of these products cause serious disturbance to the Community markets and their regulatory mechanisms, the Commission may suspend the preferences provided by this Regulation for the products concerned in accordance with the procedure set out below."

- in consequence, current paragraphs 2 to 7 shall be renumbered 3 to 8;

6. Article 29(4) shall be amended as follows:

"4. Save as otherwise provided in the Annexes, with respect to products falling within Chapters 1 to 24, wherever customs duties comprise an ad valorem duty plus one or more specific duties, the preferential reduction shall be limited to the ad valorem duty. However, the exemption from customs duties provided for in Article 6 shall also apply to the specific duties. Where the customs duties comprise an ad valorem duty with a minimum and a maximum duty, the preferential reduction shall also apply to that minimum and maximum duty. Where they comprise more than one specific duty, the preferential reduction shall apply to all of these.";

7. the following paragraph shall be added to Article 35:

"3. The date of 31 December 2001, referred to in paragraph 2, shall not apply to the special market access arrangements for the least developed developing countries provided for in Article 6 nor, to the extent that they are applied in conjunction with those arrangements, to the provisions of Article 1(5) and (6), and of Titles III, IV and V.";

8. Annex VII shall be replaced by the text which appears in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities.

It shall apply from 5 March 2001.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 28 February 2001.

For the Council

The President

A. Lindh

(1) OJ L 357, 30.12.1998, p. 1. Regulation as amended by Regulation (EC) No 1763/1999 (OJ L 211, 11.8.1999, p. 1).

(2) OJ L 80, 18.3.1998, p. 1.

(3) OJ L 195, 1.8.2000, p. 46.

(4) OJ L 31, 2.2.2001, p. 2.

ANNEX

"ANNEX VII

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