Council Regulation (EC) No 1031/2002

of 13 June 2002

establishing additional customs duties on imports of certain products originating in the United States of America

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) The United States of America has imposed a safeguard measure in the form of tariff increases or tariff quotas on imports of steel products from, inter alia, the European Community as from 20 March 2002.

(2) This measure is causing considerable injury to the Community producers concerned and disturbs the balance of concessions and obligations resulting from the WTO Agreement; the measure will significantly limit Community exports of the steel products concerned to the United States of America, affecting Community exports worth at least EUR 2407 million per year.

(3) The consultations which were held between the United States of America and the Community as envisaged in the WTO Agreement did not reach any satisfactory solution.

(4) The WTO Agreement gives any affected exporting Member the right to suspend the application of substantially equivalent concessions or other obligations, provided the WTO Council for Trade in Goods does not disapprove.

(5) The imposition of additional customs duties of 100 %, 30 %, 15 %, 13 % and 8 % on selected products originating in the United States of America imported each year into the Community represents the suspension of a substantially equivalent trade concession, in that the duties collected will not exceed the amount of duties to be collected on Community exports of the products covered by the United States of America safeguard measure, namely EUR 626 million per year.

(6) The suspension of substantially equivalent concessions should be applied by priority with respect to the steel sector, and to other sectors where appropriate. In particular, the manufactured products originating in the United States of America which have been selected are those on which the Community is not substantially dependent for its supply, but on which the imposition of additional customs duties will have an impact substantially equivalent to the impact on Community exports of the safeguard measure imposed by the United States of America.

(7) For some products designated as "certain flat steel products" the safeguard measure adopted by the United States of America has not been taken as a result of an absolute increase in imports.

(8) As allowed by the WTO Agreement, a part of the Community's concessions corresponding to the safeguard measure that was not taken as a result of an absolute increase of imports and representing an amount of applicable duties of EUR 379 million may be subject to additional duties as from 18 June 2002.

(9) However, the primary objective of the Community in the short term remains to reach an agreement with the United States of America on both compensation and product exclusions from the safeguard action. The Council shall therefore decide on the application of additional duties in the light of decisions by the United States of America on economically meaningful product exclusions and on the presentation of an acceptable offer on trade compensation.

(10) This Regulation is without prejudice to the question of the compatibility of the safeguard measure applied by the United States of America with the WTO Agreement. In any event, the additional duty should apply in full from 20 March 2005 until the safeguard measure imposed by the United States of America is lifted. It should however apply immediately after a decision by the WTO Dispute Settlement Body that the safeguard measure imposed by the United States of America is incompatible with the WTO Agreement.

(11) Products for which an import licence with an exemption from, or a reduction of, duty was issued prior to the date of entry into force of this Regulation should not be subject to these additional customs duties.

(12) Products for which it can be proved that they have been exported from the United States of America to the Community prior to the date of application of the additional customs duties should not be subject to these additional customs duties.

(13) Products affected by the suspension of concessions should be placed under the customs procedure "processing under customs control" only pursuant to an examination in the Committee of the Customs Code.

(14) The Community provided the Council for Trade in Goods with written notice of the suspension on 14 May 2002. The Council for Trade in Goods has not disagreed with such suspension,

HAS ADOPTED THIS REGULATION:

Article 1

The tariff concessions granted by the Community to the United States of America in respect of the products listed in Annex I and II are hereby suspended from 18 June 2002.

Article 2

1. The customs duties applicable to the products originating in the United States of America listed in Annex I and II shall be increased by an additional ad valorem duty of 100 %, 30 %, 15 %, 13 % or 8 %, as indicated in the Annexes.

2. The application of the additional duties listed in Annex I shall be decided on in accordance with the procedure and the modalities set out in Article 3(2).

3. The additional duties listed in Annex II shall be applied in accordance with Article 4.

Article 3

1. Before 19 July 2002, the Commission shall present a report to the Council on the state of discussions with the United States of America, in particular on the issue of product exclusions and on trade compensation, together with any necessary proposal for a Council decision.

2. The Council, acting in each case by qualified majority and on a proposal from the Commission, shall decide on the application of the additional duties listed in Annex I, including on the date of application and definitive content of that Annex:

(a) not later than 12 October 2002, if the United States of America has decided before 19 July 2002 on economically meaningful product exclusions and has started its domestic process to present an acceptable offer on trade compensation;

(b) not later than 1 August 2002, if the criteria under (a) are not fulfilled.

3. The additional duties listed in Annex I shall apply until the additional duties in Annex II apply.

Article 4

The additional duties listed in Annex II shall apply:

(a) from 20 March 2005, or

(b) from the fifth day following the date of a decision by the WTO Dispute Settlement Body that the safeguard measure imposed by the United States of America is incompatible with the WTO Agreement, if that is earlier. In this event, the Commission shall publish in the Official Journal of the European Communities a notice indicating the date of the decision of the WTO Dispute Settlement Body.

Article 5

The Council, acting by qualified majority on a proposal from the Commission, shall decide on the repeal of this Regulation once the safeguard measure of the United States of America is lifted.

Article 6

1. Products listed in Annex I for which an import licence with an exemption from, or a reduction of, duty was issued before the date of entry into force of this Regulation shall not be subject to the additional duty laid down in Annex I.

2. Products listed in Annex I for which it can be proved that they are already on their way to the Community on the date of application of that Annex and whose destination cannot be changed, shall not be subject to the additional duty laid down therein.

Products listed in Annex II but not in Annex I for which it can be proved that they are already on their way to the Community on the date of application of Annex II and whose destination cannot be changed, shall not be subject to the additional duty laid down in Annex II.

3. Products listed in Annexes I and II may be placed under the customs procedure "processing under customs control" in accordance with Article 551(1), first subparagraph, of the Regulation (EEC) No 2454/93(1) only where the examination of the economic conditions has taken place in the Committee of the Customs Code unless the products and operations are mentioned in Annex 76, Part A, of that Regulation.

Article 7

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

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

Done at Luxembourg, 13 June 2002.

For the Council

The President

M. Rajoy Brey

(1) Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ L 253, 11.10.1993, p. 1). Regulation as last amended by Regulation (EC) No 444/2002 (OJ L 68, 12.3.2002, p. 11).

ANNEX I

The products covered by this Annex are determined by the product description of the Combined Nomenclature(1) for the CN codes listed below. The product descriptions in this Annex are only for information.

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(1) Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1). Regulation as last amended by Commission Regulation (EC) No 796/2002 (OJ L 128, 15.5.2002, p. 8).

ANNEX II

The products covered by this Annex are determined by the product description of the Combined Nomenclature for the CN codes listed below. The product descriptions in this Annex are only for information.

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