EN Official Journal of the European Union L 29/13

COUNCIL DECISION (EU) 2018/156

of 22 January 2018

on the position to be taken on behalf of the European Union within the Association Council established by the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part, as regards supplementing Annex I-A to Chapter 1 of Title IV of that Agreement, and within the Association Committee in Trade configuration, as regards recalculating the schedule of export duty elimination set out in Annexes I-C and I-D to Chapter 1 of Title IV of that Agreement

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 207(4) and Article 218(9) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) The Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (1) (the ‘Agreement’) entered into force on 1 September 2017. Article 486(3) and (4) thereof provides for the provisional application of the Agreement in part, as specified by the Union.

(2) Article 4 of Council Decision 2014/668/EU (2) specifies the provisions of the Agreement to be applied provisionally, including those related to the elimination of customs duties and those related to Annexes I-A to I-D to Chapter 1 of Title IV of the Agreement. The provisional application has been effective since 1 January 2016.

(3) Having unilaterally anticipated the implementation of the Schedule of concessions set out in Annex I-A to Chapter 1 of Title IV of the Agreement by means of the autonomous trade preferences provided for under Regulation (EU) No 374/2014 of the European Parliament and the Council (3), the Union has already applied the specific modalities of implementation of the schedule (‘staging categories’) which were agreed by the Parties.

(4) A clarification on the modalities of tariff dismantlement was adopted by means of Regulation (EU) No 1150/2014 of the European Parliament and the Council (4), in the context of the amendment to the autonomous trade preferences, with a view to specifying the reduction to be applied to the base rate of customs duties for each staging category referred to in Annex I to Regulation (EU) No 374/2014.

(5) An equivalent clarification is required to ensure that the same modalities, reflecting the joint understanding reached by the Parties during negotiations, are clearly set out for the optimal implementation of the Schedule of concessions. Such modalities are to be applied by both parties to the Agreement.

(6) Annex I-C to Chapter 1 of Title IV of the Agreement, setting out the schedules of export duty elimination of Ukraine, provides that the recalculation of the table is needed in order to maintain the relative preference, that is, same proportion, compared to the WTO-bound export duty rates applicable for each period in case the trade-related provisions of the Agreement enter into force after 15 May 2014.

(7) Annex I-D to Chapter 1 of Title IV of the Agreement, setting out safeguard measures in the form of a surcharge to be applied to the export duty for specific goods, also provides that the recalculation of the table is needed in order to maintain the relative preference, that is, same proportion, compared to the WTO-bound export duty rates applicable for each period in case the trade-related provisions of the Agreement enter into force after 15 May 2014.

(8) A technical amendment in Annex I-C to Chapter 1 of Title IV of the Agreement is required to tariff code 1207 9997 00 to reflect the correct description as per United Commodities Classifier (UKTZED) of Ukraine.

(9) By Decision No 3/2014 (5), the EU-Ukraine Association Council empowered the Association Committee in Trade configuration (the ‘Trade Committee’) to update or amend certain trade-related annexes, including Annexes I-C and I-D to Chapter 1 of Title IV of the Agreement.

(10) The position of the Union within the Association Council and within the Trade Committee configuration should therefore be based on the attached draft Decisions,

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken on behalf of the Union within the Association Council as regards supplementing Annex I-A to Chapter 1 of Title IV of the Agreement and within the Trade Committee as regards recalculating the schedule of export duty elimination set out in Annexes I-C and I-D to Chapter 1 of Title IV of the Agreement, shall be based on the draft Decisions attached to this Decision.

Article 2

This Decision shall enter into force on the date of its adoption.

Article 3

This Decision is addressed to the Commission.

Done at Brussels, 22 January 2018. For the Council The President F. MOGHERINI

(1) OJ L 161, 29.5.2014, p. 3.

(2) Council Decision 2014/668/EU of 23 June 2014 on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part, as regards Title III (with the exception of the provisions relating to the treatment of third-country nationals legally employed as workers in the territory of the other Party) and Titles IV, V, VI and VII thereof, as well as the related Annexes and Protocols (OJ L 278, 20.9.2014, p. 1).

(3) Regulation (EU) No 374/2014 of the European Parliament and of the Council of 16 April 2014 on the reduction or elimination of customs duties on goods originating in Ukraine (OJ L 118, 22.4.2014, p. 1).

(4) Regulation (EU) No 1150/2014 of the European Parliament and the Council of 29 October 2014 amending Regulation (EU) No 374/2014 on the reduction or elimination of customs duties on goods originating in Ukraine (OJ L 313, 31.10.2014, p. 1).

(5) Decision No 3/2014 of the EU-Ukraine Association Council of 15 December 2014 on the delegation of certain powers by the Association Council to the Association Committee in Trade configuration (OJ L 158, 24.6.2015, p. 4).

DRAFT DECISION No …/2018 OF THE EU-UKRAINE ASSOCIATION COUNCIL of … 2018 supplementing Annex I-A to Chapter 1 of Title IV of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part THE EU-UKRAINE ASSOCIATION COUNCIL, Having regard to the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (1), signed in Brussels on 27 June 2014, Whereas: (1) In accordance with Article 486 of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (‘the Agreement’), parts of the Agreement, including provisions on the elimination of customs duties, and related Annex I-A to Chapter 1 of Title IV of the Agreement is applied provisionally as of 1 January 2016. (2) Regulation (EU) No 374/2014 of the European Parliament and of the Council (2) unilaterally established a preferential arrangement which allowed for the reduction or the elimination of customs duties on goods originating in Ukraine in accordance with Annex I to that Regulation. (3) Such preferential arrangement corresponded to the tariff concessions which would be applied in the course of the first year of implementation of the Agreement in accordance with Annex I-A to Chapter 1 of Title IV of the Agreement. (4) Regulation (EU) No 1150/2014 of the European Parliament and of the Council (3), inter alia introduced a clarification on the specific reduction to be applied to the base rate of customs duties for each ‘staging category’ referred to in Annex I to that Regulation. (5) In the interest of clarity of the Agreement an equivalent clarification is required to specify the reduction to be applied to the base rate of customs duties for all subsequent years for each ‘staging category’ referred to in Annex I-A to Chapter 1 of Title IV of the Agreement. Such modalities of tariff dismantlement correspond to the mutual understanding reached with Ukraine during the negotiation, and will be applied by both parties to the Agreement. (6) Article 463(2) of the Agreement provides that the Association Council is a forum for exchange of information on implementation and enforcement measures. (7) Article 463(3) of the Agreement provides that the Association Council may update or amend the Annexes to the Agreement. (8) It is therefore appropriate for the EU-Ukraine Association Council to adopt a decision supplementing Annex I-A to Chapter 1 of Title IV of the Agreement, HAS ADOPTED THIS DECISION: Article 1 A new Appendix C is added to Annex I-A to Chapter 1 of Title IV of the Agreement, as set out in the Annex to this Decision to clarify the implementation of the reduction to the base rate of customs duties to be applied for all subsequent years for each ‘staging category’ referred to in Annex I-A to Chapter 1 of Title IV of the Agreement. Article 2 This Decision shall enter into force on the date of its adoption. Done at …, For the Association Council The Chair (1) OJ L 161, 29.5.2014, p. 3. (2) Regulation (EU) No 374/2014 of the European Parliament and of the Council of 16 April 2014 on the reduction or elimination of customs duties on goods originating in Ukraine (OJ L 118, 22.4.2014, p. 1). (3) Regulation (EU) No 1150/2014 of the European Parliament and the Council of 29 October 2014 amending Regulation (EU) No 374/2014 on the reduction or elimination of customs duties on goods originating in Ukraine (OJ L 313, 31.10.2014, p. 1). ANNEX APPENDIX C TO ANNEX I-A TO CHAPTER 1 OF TITLE IV OF THE AGREEMENT ELIMINATION OF CUSTOMS DUTIES TARIFF ELIMINATION SCHEDULES OF THE PARTIES FOR GOODS ORIGINATING IN OTHER PARTY This Appendix clarifies the reduction to the base rate of customs duties to be applied for each ‘staging category’. 1. Except as otherwise provided in the Tariff Elimination Schedules of Parties included in Annex I-A to Chapter 1 of Title IV of the Agreement (hereinafter referred to as the ‘Schedules’), the following clarifications apply to the elimination of customs duties by Parties pursuant to Article 29 (Elimination of Customs Duties on Imports) of Title IV (Trade and Trade-related Matters) of the Agreement: (a) customs duties on goods originating in Ukraine or EU (hereinafter referred to as ‘originating goods’) provided for in the tariff lines in staging category ‘0’ in the Schedules shall be eliminated entirely and such goods shall be free of any customs duty on the date this Agreement enters into force; (b) customs duties on originating goods provided for in the tariff lines in staging category ‘1’ in the Schedules shall be removed in two equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty; (c) customs duties on originating goods provided for in the tariff lines in staging category ‘2’ in the Schedules shall be removed in three equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty; (d) customs duties on originating goods provided for in the tariff lines in staging category ‘3’ in the Schedules shall be removed in four equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty; (e) customs duties on originating goods provided for in the tariff lines in staging category ‘5’ in the Schedules shall be removed in six equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty; (f) customs duties on originating goods provided for in the tariff lines in staging category ‘7’ in the Schedules shall be removed in eight equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty; (g) customs duties on originating goods provided for in the tariff lines in staging category ‘10’ in the Schedules shall be removed in eleven equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty; (h) customs duties on originating goods provided for in tariff lines marked with ‘20 % in 5 years’ in the Schedules shall be reduced by 20 % in six equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 20 %; (i) customs duties on originating goods provided for in tariff lines marked with ‘20 % in 10 years’ in the Schedules shall be reduced by 20 % in eleven equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 20 %; (j) customs duties on originating goods provided for in tariff lines marked with ‘30 % in 5 years’ in the Schedules shall be reduced by 30 % in six equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 30 %; (k) customs duties on originating goods provided for in tariff lines marked with ‘50 % in 5 years’ in the Schedules shall be reduced by 50 % in six equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 50 %; (l) customs duties on originating goods provided for in tariff lines marked with ‘50 % in 7 years’ in the Schedules shall be reduced by 50 % in eight equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 50 %; (m) customs duties on originating goods provided for in tariff lines marked with ‘50 % in 10 years’ in the Schedules shall be reduced by 50 % in eleven equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 50 %; (n) customs duties on originating goods provided for in tariff lines marked with ‘60 % in 5 years’ in the Schedules shall be reduced by 60 % in six equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be subject to a customs duty equivalent to the base rate reduced by 60 %; (o) customs duties on originating goods provided for in the tariff lines in staging category ‘Ad valorem free (Entry Price (1))’ in the Schedules, shall be eliminated on the date this Agreement enters into force; the liberalisation concerns the ad valorem duty only; the specific duty linked to the entry price system applicable for these originating goods shall be maintained. 2. The base rate and staging category to determine the rate of customs duty applicable at each stage of reduction for a tariff line are indicated in the corresponding tariff line in the Schedule. 3. For the purposes of the elimination of customs duties, the rate of customs duties applied in each stage shall be rounded down at least to the nearest tenth of a percentage point or, if the rate of customs duty is expressed in monetary units, at least to the nearest tenth of the official monetary unit of the Party. 4. For the purposes of this Appendix, the first reduction shall take place on the entry into force of this Agreement, and each successive reduction shall take effect on 1 January of the relevant year. 5. If the entry into force of this Agreement corresponds to a date after 1 January and before 31 December of the same year, the in-quota quantity will be pro-rated on a proportional basis for the remainder of the calendar year. (1) See Annex 2 to 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).