OPINION OF THE COMMISSION pursuant to Article 251 (2) (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on substances that deplete the ozone layer AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

EXPLANATORY MEMORANDUM

A. Principles and background

1. In August 1998, the Commission submitted a proposal for a European Parliament and Council Regulation (EC) on substances that deplete the ozone layer (COM 398/1998 - [COD] 1998/228) for adoption by the co-decision procedure laid down in Article 251 of the Treaty establishing the European Community.

On 17th December 1998, the European Parliament adopted its first reading with 27 amendments. The Economic and Social Committee gave their opinion on the 2 December 1998. On 23 February 1999 the Council adopted a Common position accepting a number of the amendments proposed by the Parliament in its first reading. On 15th December 1999, the European Parliament adopted a series of amendments at its second reading. On this occasion the Commission gave its position on each amendment, indicating which amendments it could accept and which amendments could not be included. The Commission in its Communication of 24 February 1999 gave short comments on the Common Position.

2. In the light of these developments the Commission has drafted this amended proposal. The Commission has made two types of changes.

Firstly, in response to the second reading by the European Parliament, a number of new provisions were accepted. The majority of these serve either to remove ambiguities or to provide further measures that correspond to but do not change the fundamental principles of the original Commission proposal.

Secondly, the Commission has re-introduced time limits that were contained in the Political agreement but that were left out of the Common position awaiting more reliable information about the time of adoption. It has also replaced references to dates that have become obsolete by dates in line with the spirit of the Common position in light of the likely adoption during 2000 of the new regulation.

B. Commission position on European Parliament Amendments

1. Amendment 1 Recital 16a - Supporting SMEs in their transition out of ozone depleting substances

The proposed phase-out dates were designed to provide a big enough margin so as not to cause significant problems for SMEs. It was, however, demonstrated by several Member States, which have phased out ODS earlier than the EU as a whole, that the transition can be facilitated and accelerated if the responsible authorities are actively promoting the phaseout-process. This can be done with some financial support but other measures, specifically designed for SMEs, can also be important provided these measures take into account the procedure under Article 87 of the treaty and other Community State aid provisions.

For example it is important that MS provide relevant information specifically designed and targeted to SMEs about what consequences the new regulation will have on them (The Commission is also planning such information initiatives, but needs the support of MS). Equally important is that when Member States design the systems required in Article 15 and 16 for training of personnel, special consideration should be given to SMEs. The Commission therefore proposes to incorporate the amendment proposed by the EP.

2. Amendment 9 (article 4 (1) 2nd sub paragraph) - Exemptions for military and other applications from the CFC use ban.

The Common position provides for a ban on use of CFCs as from entry into force. This is an important measure in order to cease the continued emissions of this substance. The mechanism used under the Montreal Protocol for allowing the continued use (and production of CFCs) in cases where continued use is deemed essential and where no alternatives have been found is the so-called essential use mechanism. This requires that the Party (country) concerned puts a request to the meeting of the Parties to the Montreal Protocol which then may approve that request so that CFCs can be produced or imported should so be required. This system is currently used mainly for Metered Dose Inhalers and laboratory uses.

The Protocol does however not place any restrictions on the use of CFCs that already exist on the market. Owing to the ban on use of CFC in the Common position, any amounts of CFCs that exist in stocks cannot be used after the use-ban has entered into force. Limited exemptions to the use ban are foreseen for refilling existing refrigeration and air-conditioning equipment. In addition, the common position introduced the possibility to allow time-limited exemptions for military uses on the request of a Member State.

Amendment 9 of the EP limits the exemption for military uses to existing systems while it opens up the possibility for the Commission to grant time limited exemptions for use in a specialised medical application (where small amounts of CFCs are used in a special type of implant used for drug delivery for pain relief to terminally ill persons). This application is clearly of a kind where emissions are very small (estimated to less than 200 kg/year) but where the use is justified because there is no available alternative. The use has become known only recently and it is justified to change the Common position in order to allow this use to continue until 2004 as proposed by the EP.

3. HCFC use in refrigeration and air-conditioning

Amendment 14 (Article 5 (1) (c) (IV))

The development of alternatives to HCFCs has been rapid in recent years. For new refrigeration and air-conditioning equipment it is difficult to point to a single area where viable alternatives are not available. In the area of small fixed air-conditioning equipment certain industries have taken longer than expected adopting new alternatives. The Commission originally proposed that HCFCs be phased out in this area (as well as in almost all other areas of refrigeration and air-conditioning systems) by 2001. However, bringing the date forward now could cause difficulties to certain companies that have not adopted HCFC-free technology. In addition, the Commission appreciates that this exemption was a significant element in the compromise that led to the Common position and therefore decided not to accept the EP's amendment 14.

Amendment 15 (Article 5 (1) (c) (V))

Amendment 15 relates to HCFC use in refrigeration and air-conditioning. It advances the phaseout for virgin HCFCs in existing systems to 2005 rather than the original Commission proposal (2008) and that agreed in the Common position (2010). This amendment also introduces a ban on the use of all HCFCs (also recovered recycled or reclaimed) for refilling existing refrigeration systems by 2007.

The Commission proposal was based on an assessment of when sufficient recovered HCFCs and "drop-in" replacements would be available. A much earlier date would require more frequent retrofitting of existing systems which could lead to higher costs.

The principle of having a ban on recovered HCFCs is welcomed by the Commission since it would be useful for preventing illegal trade. Illegal trade becomes more likely when prices for ODS are higher in one market than in overseas markets. Such price incentives for HCFCs have not been considerable so far but are likely to occur over the next 10 years. One of the most commonly used methods for illegal trade (particularly in the USA according to several reports) is to disguise material as recycled. This method has been avoided in Europe thanks to a ban in practice on imports of recycled as well as virgin CFCs.

It has also become clear that customs controls alone are not sufficient to stop illegal trade. A ban on the use of the substance is more efficient and this is also the route which has been chosen for CFCs under the Common position (with a complete use-ban 1 January 2001) and other already phased out ODS.

A ban on recycled HCFCs has however also to be considered in the light of the remaining need for refilling of existing equipment. The development of so called "drop-in" replacements to HCFCs has not been as quick as for CFCs and although such alternatives have been developed and commercialised for certain types of refrigeration and air-conditioning systems, they are not available or suitable for all such systems.

A ban as early as 1 January 2007 on use of recycled HCFCs could be difficult and costly as some users would have to retrofit their equipment or install new systems. The Commission suggests a ban on virgin HCFCs from 1 January 2008 (as originally proposed) and from 1 January 2010 on refilling with recovered or reclaimed HCFCs.

Another change that follows upon such an adaptation to the Common position is concerning the supply of HCFCs (Article 4). For coherence the ban on HCFC to be placed on the market by 2010 should include recycled material. Likewise, the amounts of virgin HCFCs should be zero as from 1 January 2008.

4. Procedures for adaptation of HCFC controls through the management Committee procedure and reporting back to Member States.

Amendment 21 (Article 5 (6))

Under Article 5.6, the Commission may in agreement with the Management Committee modify the list of HCFC phase-out dates in Article 5.1. In practice, it is not likely that a decision would be taken to extend an agreed HCFC use phaseout since these have already been carefully considered and reviewed in light of technical progress. Amendment 21 would prevent the possibility to extend the dead-lines set out under Article 5.1. This would, however, be inconsistent with Article 5.7 under which extensions are allowed for specific cases ("essential use" clause for HCFCs) and the Commission therefore could not accept the amendment.

Amendment 22 (Article 5 (7))

Amendment 22 requires the Commission immediately to notify Member States of any exemption granted under Article 5.7. The Commission finds this redundant because any exemption under Art. 5.7 would be granted by the Commission in close co-operation with MS under the Management Committee procedure.

Amendment 24 (Article 14a (new))

Amendment 24 requires the Commission to report back to Member States of any measures taken under Articles 6, 7, 9, 12, 13 and 14. Measures taken under 6,7 and 9 are frequent (1000 licenses each year). The Commission already notifies the Member States concerned when a license is issued and is prepared to continue this practice. If however, the Commission would have to notify Member States immediately about each Decision taken, this provision would pose a significant additional administrative burden to the Commission. This would have little added value for MS which are not concerned by the import/export and would most likely have staffing and thus budgetary consequences. Introduction of a scheme of immediate notifications to all Member States under Articles 12, 13 and 14 can, however, be accepted, as these decisions are far less frequent.

5. Measures to improve the Implementation of the regulation

Amendment 25 (Article 15 (5))

Under Article 15.6 Member States are required to report to the Commission on the systems they have established to promote recovery of ODS including on the facilities available for that. Amendment 25 introduces an explicit reference (in Article 15.5) requiring MS to establish such systems including a requirement for MS to assign the responsibility to ensure compliance with Article 15.1.

It is beneficial to state explicitly that systems for the promotion of recovery need to be established since there is a reporting requirement related to this in Article 15.5. Equally it is useful to include a requirement clearly to identify where the responsibility rests for taking action to promote the recovery. Countries who have already established systems for recovery have demonstrated this.

Amendment 26 (Article 19 (3))

Amendment 26 contains a provision aimed at combating illegal imports of ozone-depleting substances through reinforcement of control by Member States. Spot-checks by Member States customs offices is an important tool for curbing the illegal trade and formalising the results of such checks would be useful. A time limit for MS communications to the Commission should be established and an appropriate date would be by 31 March each year.

6. Amendment 29 (Annex VII, 3rd indent) - List of critical uses of halons for fire-fighting

The list of critical fire-fighting applications where the use of halons would still be allowed after the general ban in Article 4.1 can be amended through the management Committee procedure. Amendment 29 relates to the use of halons in certain applications "where release of flammable liquid could occur".

During the negotiations in Council which led to the Common position, an exemption was introduced allowing the continued use of halons in such applications in the petrochemical sector. It was the Commission's understanding that this term would include the use of halons on offshore oil-rigs where halon use is still needed. After the adoption of the Common position it has however been suggested that the term petrochemical sector does not necessarily include offshore oil-rigs. The alternative wording suggested by the Parliament would according to the Commission's understanding also include these applications and should therefore be accepted.

The second part of this amendment restricts the exemption for use of halons to existing cargo ships. This is also a useful clarification since there is no indication that halon use would be necessary for this application in new cargo-ships.

7. Re-introduction of dates

The Commission and the Council in its common position would like certain provisions of this regulation to enter into force as soon as possible after adoption of the regulation. The Commission has, therefore, changed the relevant dates in the regulation and which have now become obsolete because of the delay in its adoption. Where a reference to such a date existed in the Common position, it has been replaced by a reference to the date of entry into force. This applies to the dates for supply of CFCs in Article 4.4 (ii), which has been deleted and thus applies from entry into force and to HCFC use in integral skin and polyethylene foams in Article 5 1 d (ii).

Equally the Commission has, following the spirit of the political agreement in December 1998, re-introduced dates where these were lifted out in the Common position. This applies to the date for reporting of annual placing on the market of Methyl Bromide for quarantine and pre-shipment purposes in Article 4.2 (iii), for annual export authorisations in Article 12.1. These two provisions are designed for covering a whole calendar year and the reference has therefore been changed to the period 1 January 2001 to 31 December 2001. Similar adaptations were made in Article 20 concerning Member States reports back to the Commission on penalties in place and in Annex 7 (fourth indent of halon 1301 uses) for making inert of existing manned communication and command centres where however the reference introduced is to the date of entry into force.

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on substances that deplete the ozone layer

AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 175 (1) thereof,

Having regard to the proposal from the Commission [1] ,

[1] OJ C 286, 15.9.1998, p. 6.

Having regard to the Opinion of the Economic and Social Committee [2] ,

[2] Opinion delivered on ... (not yet published in the Official Journal).

Acting in accordance with the procedure laid down in Article 251 of the Treaty [3] ,

[3] Opinion of the European Parliament of ... (not yet published in the Official Journal), Council Common Position of ... (not yet published in the Official Journal) and Decision of the European Parliament of ... (not yet published in the Official Journal).

Whereas:

(1) It is established that continued emissions of ozone-depleting substances at current levels continue to cause significant damage to the ozone layer; ozone depletion in the southern hemisphere reached unprecedented levels in 1998; in three out of four recent Springs severe ozone depletion has occurred in the Arctic region; increased UV-B radiation resulting from ozone depletion poses a significant threat to health and environment; further efficient measures need therefore to be taken in order to protect human health and the environment against adverse effects resulting from such emissions;

(2) In view of the responsibilities of the Community for the environment and trade, the Community, pursuant to Decision 88/540/EEC [4] , has become a Party to the Vienna Convention for the Protection of the Ozone Layer and the Montreal Protocol on Substances that Deplete the Ozone Layer, as amended by the Parties to the Protocol at their second meeting in London and at their fourth meeting in Copenhagen;

[4] OJ L 297, 31.10.1988, p. 8.

(3) Additional measures for the protection of the ozone layer were adopted by the Parties to the Montreal Protocol at their seventh meeting in Vienna in December 1995 and at their ninth Meeting in Montreal in September 1997, in which the Community participated;

(4) It is necessary for action to be taken at Community level to carry out the Community's obligations under the Vienna Convention and the latest amendments and adjustments to the Montreal Protocol, in particular to phase out the production and the placing on the market of methyl bromide within the Community and to provide for a system for the licensing not only of imports but also of exports of ozone-depleting substances;

(5) In view of the earlier than anticipated availability of technologies for replacing ozone-depleting substances, it is appropriate in certain cases to provide for control measures which are stricter than those provided for in Council Regulation (EC) No 3093/94 of 15 December 1994 on substances that deplete the ozone layer [5] and stricter than those of the amended and adjusted Protocol;

[5] OJ L 333, 22.12.1994, p. 1.

(6) Regulation (EC) No 3093/94 must be modified substantially; it is in the interest of legal clarity and transparency to revise that Regulation completely;

(7) Under Regulation (EC) No 3093/94 the production of chlorofluorocarbons, other fully halogenated chlorofluorocarbons, halons, carbon tetrachloride, 1,1,1-trichloroethane and hydrobromofluorocarbons has been phased out; the production of those controlled substances is thus prohibited, subject to possible derogation for essential uses and to meet the basic domestic needs of Parties pursuant to Article 5 of the Montreal Protocol; it is now also appropriate to progressively prohibit the placing on the market and use of those substances and of products and equipment containing those substances;

(8) Even after the phase-out of controlled substances the Commission may under certain conditions grant exemptions for essential uses;

(9) The growing availability of alternatives to methyl bromide should be reflected in more substantial reductions in its production and consumption compared to the Montreal Protocol; the production and consumption of methyl bromide should cease completely subject to possible derogations for critical uses determined at Community level following the criteria established under the Montreal Protocol; also the use of methyl bromide for quarantine and preshipment applications should be controlled; such use should not exceed current levels and ultimately be reduced in the light of technical development and developments under the Montreal Protocol;

(10) Regulation (EC) No 3093/94 provides for controls on the production of all other ozone-depleting substances but not for controls on the production of hydrochlorofluorocarbons; it is appropriate to introduce such provision to ensure that hydrochlorofluorocarbons do not continue to be used where non-ozone-depleting alternatives exist; measures for the control of the production of hydrochlorofluorocarbons should be taken by all Parties to the Montreal Protocol; a freeze on production of hydrochlorofluorocarbons would reflect that need and the Community's determination to take a leading role in this respect; the quantities produced should be adapted to the reductions envisaged for the placing on the Community market of hydrochlorofluorocarbons and to the declining demand worldwide as a consequence of reductions in the consumption of hydrochlorofluorocarbons required by the Protocol;

(11) The Montreal Protocol, in Article 2F(7), requires the Parties to endeavour to ensure that the use of hydrochlorofluorocarbons is limited to those applications where other more environmentally suitable alternative substances or technologies are not available; in view of the availability of alternative and substitute technologies, the placing on the market and use of hydrochlorofluorocarbons and products containing hydrochlorofluorocarbons can be further limited; Decision VI/13 of the Meeting of the Parties to the Montreal Protocol provides that the evaluation of alternatives to hydrochlorofluorocarbons should take into account such factors as ozone-depleting potential, energy efficiency, potential flammability, toxicity and global warming and the potential impacts on the effective use and phase-out of chlorofluorocarbons and halons; hydrochlorofluorocarbon controls under the Montreal Protocol should be considerably tightened to protect the ozone layer and to reflect the availability of alternatives;

(12) Quotas for the release for free circulation in the Community of controlled substances should be allocated only for limited uses of controlled substances; controlled substances and products containing controlled substances from States not party to the Montreal Protocol should not be imported;

(13) The licensing system for controlled substances should be extended to include the authorisation of exports of controlled substances, in order to monitor trade in ozone-depleting substances and to allow for exchange of information between Parties;

(14) Provision should be made for the recovery of used controlled substances, and to prevent leakages of controlled substances;

(15) The Montreal Protocol requires reporting on trade in ozone-depleting substances; annual reporting should therefore be required from producers, importers and exporters of controlled substances;

(16) Decision X/8 of the Tenth Meeting of the Parties to the Montreal Protocol encourages Parties to take measures actively, as appropriate, to discourage the production and marketing of new ozone-depleting substances and in particular of bromochloromethane; to this end a mechanism should be established to provide for new substances to be addressed by the present Regulation; the production, importation, placing on the market and use of bromochloromethane should be prohibited,

(17) The switch to new technologies or alternative products, required because the production and use of controlled substances are to be phased out, could lead to problems for small and medium-sized undertakings (SMEs) in particular; the Member States should therefore consider whether they might provide appropriate forms of assistance specifically to enable SMEs to make the necessary changes;

HAVE ADOPTED THIS REGULATION:

CHAPTER I

INTRODUCTORY PROVISIONS

Article 1

Scope

This Regulation shall apply to the production, importation, exportation, placing on the market, use, recovery, recycling and reclamation and destruction of chlorofluorocarbons, other fully halogenated chlorofluorocarbons, halons, carbon tetrachloride, 1,1,1-trichloroethane, methyl bromide, hydrobromofluorocarbons and hydrochlorofluorocarbons, to the reporting of information on these substances and to the importation, exportation, placing on the market and use of products and equipment containing those substances.

This Regulation shall also apply to the production, importation, placing on the market and use of substances in Annex II.

Article 2

Definitions

For the purposes of this Regulation:

- "Protocol" means the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, as last amended and adjusted,

- "Party" means any party to the Protocol,

- "State not party to the Protocol", with respect to a particular controlled substance, includes any State or regional economic integration organisation that has not agreed to be bound by the provisions of the Protocol applicable to that substance,

- "controlled substances" means chlorofluorocarbons, other fully halogenated chlorofluorocarbons, halons, carbon tetrachloride, 1,1,1-trichloroethane, methyl bromide, hydrobromofluorocarbons and hydrochlorofluorocarbons, whether alone or in a mixture, and whether they are virgin, recovered, recycled or reclaimed. This definition shall not cover any controlled substance which is in a manufactured product other than a container used for the transportation or storage of that substance, or insignificant quantities of any controlled substance, originating from inadvertent or coincidental production during a manufacturing process, from unreacted feedstock, or from use as a processing agent which is present in chemical substances as trace impurities, or that is emitted during product manufacture or handling,

- "chlorofluorocarbons" (CFCs) means the controlled substances listed in Group I of Annex I, including their isomers,

- "other fully halogenated chlorofluorocarbons" means the controlled substances listed in Group II of Annex I, including their isomers,

- "halons" means the controlled substances listed in Group III of Annex I, including their isomers,

- "carbon tetrachloride" means the controlled substance specified in Group IV of Annex I,

- "1,1,1-trichloroethane" means the controlled substance specified in Group V of Annex I,

- "methyl bromide" means the controlled substance specified in Group VI of Annex I,

- "hydrobromofluorocarbons" means the controlled substances listed in Group VII of Annex I, including their isomers,

- "hydrochlorofluorocarbons" (HCFCs) means the controlled substances listed in Group VIII of Annex I, including their isomers,

- "new substances" means substances listed in Annex II. This definition shall cover substances whether alone or in a mixture, and whether they are virgin, recovered, recycled or reclaimed. This definition shall not cover any substance which is in a manufactured product other than a container used for transportation or storage of that substance, or insignificant quantities of any new substance, originating from inadvertent or coincidental production during a manufacturing process or from unreacted feedstock,

- "feedstock" means any controlled substance or new substance that undergoes chemical transformation in a process in which it is entirely converted from its original composition and whose emissions are insignificant,

- "processing agent" means controlled substances used as chemical processing agents in those applications listed in Annex VI, in installations existing at 1 September 1997, and where emissions are insignificant. The Commission shall, in the light of those criteria and in accordance with the procedure laid down in Article 17, establish a list of undertakings in which the use of controlled substances as processing agents shall be permitted, laying down maximum emission levels for each of the undertakings concerned. It may, in accordance with the procedure laid down in Article 17, amend Annex VI as well as the list of undertakings referred to above in the light of new information or technical developments, including the review provided for in Decision X/14 of the Meeting of the Parties to the Protocol,

- "producer" means any natural or legal person manufacturing controlled substances within the Community,

- "production" means the amount of controlled substances produced, less the amount destroyed by technologies approved by the Parties and less the amount entirely used as feedstock or as a processing agent in the manufacture of other chemicals. No amount recovered, recycled or reclaimed shall be considered as "production",

- "ozone-depleting potential" means the figure specified in the third column of Annex I representing the potential effect of each controlled substance on the ozone layer,

- "calculated level" means a quantity determined by multiplying the quantity of each controlled substance by its ozone-depleting potential and by adding together, for each group of controlled substances in Annex I separately, the resulting figures,

- "industrial rationalisation" means the transfer either between Parties or within a Member State of all or a portion of the calculated level of production of one producer to another, for the purpose of optimising economic efficiency or responding to anticipated shortfalls in supply as a result of plant closures,

- "placing on the market" means the supplying or making available to third persons, against payment or free of charge, of controlled substances or products containing controlled substances covered by this Regulation,

- "use" means the utilisation of controlled substances in the production or maintenance, in particular refilling, of products or equipment or in other processes except for feedstock and processing agent uses,

- "reversible air-conditioning/heat pump system" means a combination of interconnected refrigerant-containing parts constituting one closed refrigeration circuit, in which the refrigerant is circulated for the purpose of extracting and rejecting heat (i.e. cooling, heating), processes which are reversible in that the evaporators and condensers are designed to be interchangeable in their functions,

- "inward processing" means a procedure provided for in Article 114(1)(a) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code [6] ,

[6] OJ L 302, 19.10.1992, p. 1. Regulation as last amended by Regulation (EC) No 82/97 (OJ L 17, 21.1.1997, p. 1).

- "recovery" means the collection and the storage of controlled substances from, for example, machinery, equipment and containment vessels during servicing or before disposal,

- "recycling" means the reuse of a recovered controlled substance following a basic cleaning process such as filtering and drying. For refrigerants, recycling normally involves recharge back into equipment as is often carried out on site,

- "reclamation" means the reprocessing and upgrading of a recovered controlled substance through such processes as filtering, drying, distillation and chemical treatment in order to restore the substance to a specified standard of performance, which often involves processing off site at a central facility,

- "undertaking" means any natural or legal person who produces, recycles for placing on the market or uses controlled substances for industrial or commercial purposes in the Community, who releases such imported substances for free circulation in the Community, or who exports such substances from the Community for industrial or commercial purposes.

CHAPTER II

PHASE-OUT SCHEDULE

Article 3

Control of production of controlled substances

1. Subject to paragraphs 5 to 10, the production of the following shall be prohibited:

(a) chlorofluorocarbons;

(b) other fully halogenated chlorofluorocarbons;

(c) halons;

(d) carbon tetrachloride;

(e) 1,1,1-trichloroethane;

(f) hydrobromofluorocarbons.

In the light of the proposals made by Member States, the Commission shall, in accordance with the procedure laid down in Article 17, apply the criteria set out in Decision IV/25 of the Parties in order to determine every year any essential uses for which the production and importation of controlled substances referred to in the first subparagraph may be permitted in the Community and those users who may take advantage of those essential uses. Such production and importation shall be allowed only if no adequate alternatives or recycled or reclaimed controlled substances referred to in the first subparagraph are available from any of the Parties.

2. (i) Subject to paragraphs 5 to 10, each producer shall ensure that:

(a) the calculated level of its production of methyl bromide in the period 1 January to 31 December 1999 and in each 12-month period thereafter does not exceed 75% of the calculated level of its production of methyl bromide in 1991;

(b) the calculated level of its production of methyl bromide in the period 1 January to 31 December 2001 and in each 12-month period thereafter does not exceed 40% of the calculated level of its production of methyl bromide in 1991;

(c) the calculated level of its production of methyl bromide in the period 1 January to 31 December 2003 and in each 12-month period thereafter does not exceed 25% of the calculated level of its production of methyl bromide in 1991;

(d) it produces no methyl bromide after 31 December 2004.

The quantities referred to in subparagraphs (a), (b), (c) and (d) shall not include the amount of methyl bromide produced for quarantine and pre-shipment applications.

(ii) In the light of the proposals made by Member States, the Commission shall, in accordance with the procedure laid down in Article 17, apply the criteria set out in Decision IX/6 of the Parties, together with any other relevant criteria agreed by the Parties, in order to determine every year any critical uses for which the production, importation and use of methyl bromide may be permitted in the Community after 31 December 2004, the quantities and uses to be permitted and those users who may take advantage of the critical exemption. Such production and importation shall be allowed only if no adequate alternatives or recycled or reclaimed methyl bromide is available from any of the Parties.

In an emergency, where unexpected outbreaks of particular pests or diseases so require, the Commission, at the request of the competent authority of a Member State, may authorise the temporary use of methyl bromide. Such authorisation shall apply for a period not exceeding 120 days and to a quantity not exceeding 20 tonnes.

3. Subject to paragraphs 8, 9 and 10, each producer shall ensure that:

(a) the calculated level of its production of hydrochlorofluorocarbons in the period 1 January to 31 December 2000 and in each 12-month period thereafter does not exceed the calculated level of its production of hydrochlorofluorocarbons in 1997;

(b) the calculated level of its production of hydrochlorofluorocarbons in the period 1 January to 31 December 2008 and in each 12-month period thereafter does not exceed 35% of the calculated level of its production of hydrochlorofluorocarbons in 1997;

(c) the calculated level of its production of hydrochlorofluorocarbons in the period 1 January to 31 December 2014 and in each 12-month period thereafter does not exceed 20% of the calculated level of its production of hydrochlorofluorocarbons in 1997;

(d) the calculated level of its production of hydrochlorofluorocarbons in the period 1 January to 31 December 2020 and in each 12-month period thereafter does not exceed 15% of the calculated level of its production of hydrochlorofluorocarbons in 1997;

(e) it produces no hydrochlorofluorocarbons after 31 December 2025.

Before 31 December 2002, the Commission shall review the level of production of hydrochlorofluorocarbons with a view to determining:

- whether a production cut ahead of the year 2008 should be proposed, and/or

- whether a change to the levels of production provided for under (b), (c) and (d) should be proposed.

This review will take into account the development of hydrochlorofluorocarbon consumption worldwide, the hydrochlorofluorocarbon exports from the Community and other OECD countries and the technical and economic availability of alternative substances or technologies as well as relevant international developments under the Protocol.

4. The Commission shall issue licences to those users identified in accordance with the second subparagraph of paragraph 1 and paragraph 2(ii) and shall notify them of the use for which they have authorisation and the substances and quantities thereof that they are authorised to use.

5. A producer may be authorised by the competent authority of the Member State in which that producer's relevant production is situated to produce the controlled substances referred to in paragraphs 1 and 2 for the purpose of meeting the demands licensed in accordance with paragraph 4. The competent authority of the Member State concerned shall notify the Commission in advance of its intention of issuing any such authorisation.

6. The competent authority of the Member State in which a producer's relevant production is situated may authorise that producer to exceed the calculated levels of production laid down in paragraphs 1 and 2 in order to satisfy the basic domestic needs of Parties pursuant to Article 5 of the Protocol, provided that the additional calculated levels of production of the Member State concerned do not exceed those permitted for that purpose by Articles 2A to 2E and 2H of the Protocol for the periods in question. The competent authority of the Member State concerned shall notify the Commission in advance of its intention of issuing any such authorisation.

7. To the extent permitted by the Protocol, the competent authority of the Member State in which a producer's relevant production is situated may authorise that producer to exceed the calculated levels of production laid down in paragraphs 1 and 2 in order to satisfy any essential, or critical, uses of Parties at their request. The competent authority of the Member State concerned shall notify the Commission in advance of its intention of issuing any such authorisation.

8. To the extent permitted by the Protocol, the competent authority of the Member State in which a producer's relevant production is situated may authorise that producer to exceed the calculated levels of production laid down in paragraphs 1 to 7 for the purpose of industrial rationalisation within the Member State concerned, provided that the calculated levels of production of that Member State do not exceed the sum of the calculated levels of production of its domestic producers as laid down in paragraphs 1 to 7 for the periods in question. The competent authority of the Member State concerned shall notify the Commission in advance of its intention of issuing any such authorisation.

9. To the extent permitted by the Protocol, the Commission may, in agreement with the competent authority of the Member State in which a producer's relevant production is situated, authorise that producer to exceed the calculated levels of production laid down in paragraphs 1 to 8 for the purpose of industrial rationalisation between Member States, provided that the combined calculated levels of production of the Member States concerned do not exceed the sum of the calculated levels of production of their domestic producers as laid down in paragraphs 1 to 8 for the periods in question. The agreement of the competent authority of the Member State in which it is intended to reduce production shall also be required.

10. To the extent permitted by the Protocol, the Commission may, in agreement with both the competent authority of the Member State in which a producer's relevant production is situated and the government of the third Party concerned, authorise a producer to combine the calculated levels of production laid down in paragraphs 1 to 9 with the calculated levels of production allowed to a producer in a third Party under the Protocol and that producer's national legislation for the purpose of industrial rationalisation with a third Party, provided that the combined calculated levels of production by the two producers do not exceed the sum of the calculated levels of production allowed to the Community producer under paragraphs 1 to 9 and the calculated levels of production allowed to the third Party producer under the Protocol and any relevant national legislation.

Article 4

Control of the placing on the market and use of controlled substances

1. Subject to paragraphs 4 and 5, the placing on the market and the use of the following controlled substances shall be prohibited:

(a) chlorofluorocarbons;

(b) other fully halogenated chlorofluorocarbons;

(c) halons;

(d) carbon tetrachloride;

(e) 1,1,1-trichloroethane; and

(f) hydrobromofluorocarbons.

The Commission may, following a request by a competent authority of a Member State and in accordance with the procedure laid down in Article 17, authorise a temporary exemption to allow the use of chlorofluorocarbons in delivery mechanisms for hermetically sealed devices designed for implantation in the human body for delivery of measured doses of medication until 31 December 2004, and in existing military applications until 31 December 2008, where it is demonstrated that, for a particular use, technically and economically feasible alternative substances or technologies are not available or cannot be used.

2. (i) Subject to paragraphs 4 and 5, each producer and importer shall ensure that:

(a) the calculated level of methyl bromide which it places on the market or uses for its own account in the period 1 January to 31 December 1999 and in each 12-month period thereafter does not exceed 75% of the calculated level of methyl bromide which it placed on the market or used for its own account in 1991;

(b) the calculated level of methyl bromide which it places on the market or uses for its own account in the period 1 January to 31 December 2001 and in each 12-month period thereafter does not exceed 40% of the calculated level of methyl bromide which it placed on the market or used for its own account in 1991;

(c) the calculated level of methyl bromide which it places on the market or uses for its own account in the period 1 January to 31 December 2003 and in each 12-month period thereafter does not exceed 25% of the calculated level of methyl bromide which it placed on the market or used for its own account in 1991;

(d) it does not place any methyl bromide on the market or use any for its own account after 31 December 2004.

To the extent permitted by the Protocol, the Commission shall, following a request by a competent authority of a Member State and in accordance with the procedure laid down in Article 17, adjust the calculated level of methyl bromide referred to in Article 3(2)(i)(c) and subparagraph (c) above where it is demonstrated that this is necessary to meet the needs of that Member State, because technically and economically feasible alternatives or substitutes that are acceptable from the standpoint of environment and health are not available or cannot be used.

The Commission, in consultation with Member States, shall encourage the development, including research, and the use of alternatives to methyl bromide as soon as possible.

(ii) Subject to paragraph 4, the placing on the market and the use of methyl bromide by undertakings other than producers and importers shall be prohibited after 31 December 2005.

(iii) The quantities referred to in subparagraphs 2(i)(a), (b), (c) and (d) shall not include the amount of methyl bromide produced or imported for quarantine and pre-shipment applications. For the period 1 January to 31 December 2001 )and for each 12-month period thereafter, each producer and importer shall ensure that the calculated level of methyl bromide which it places on the market or uses for its own account for quarantine and pre-shipment applications shall not exceed the average of the calculated level of methyl bromide which it placed on the market or used for its own account for quarantine and pre-shipment in the years 1996, 1997 and 1998.

Each year Member States shall report to the Commission the quantities of methyl bromide authorised for quarantine and pre-shipment used in their territory, the purposes for which methyl bromide was used, and the progress in evaluating and using alternatives.

The Commission shall, in accordance with the procedure laid down in Article 17, take measures to reduce the calculated level of methyl bromide which producers and importers may place on the market or use for their own account for quarantine and pre-shipment in the light of technical and economic availability of alternative substances or technologies and of the relevant international developments under the Protocol.

(iv) The total quantitative limits for the placing on the market or use for their own account by producers and importers of methyl bromide are set out in Annex III.

3. (i) Subject to paragraphs 4 and 5 and to Article 5(5):

(a) the calculated level of hydrochlorofluorocarbons which producers and importers place on the market or use for their own account in the period 1 January to 31 December 1999 and in the 12-month period thereafter shall not exceed the sum of:

- 2,6% of the calculated level of chlorofluorocarbons which producers and importers placed on the market or used for their own account in 1989, and

- the calculated level of hydrochlorofluorocarbons which producers and importers placed on the market or used for their own account in 1989;

(b) the calculated level of hydrochlorofluorocarbons which producers and importers place on the market or use for their own account in the period 1 January to 31 December 2001 shall not exceed the sum of:

- 2,0% of the calculated level of chlorofluorocarbons which producers and importers placed on the market or used for their own account in 1989, and

- the calculated level of hydrochlorofluorocarbons which producers and importers placed on the market or used for their own account in 1989;

(c) the calculated level of hydrochlorofluorocarbons which producers and importers place on the market or use for their own account in the period 1 January to 31 December 2002 shall not exceed 85% of the level calculated in application of subparagraph (b);

(d) the calculated level of hydrochlorofluorocarbons which producers and importers place on the market or use for their own account in the period 1 January to 31 December 2003 shall not exceed 45% of the level calculated in application of subparagraph (b);

(e) the calculated level of hydrochlorofluorocarbons which producers and importers place on the market or use for their own account in the period 1 January to 31 December 2004 and in each 12-month period thereafter shall not exceed 30% of the level calculated in application of subparagraph (b);

(f) no producer or importer shall place virgin hydrochlorofluorocarbons on the market or use any for its own account after 31 December 2007; the calculated level of recovered, recycled or reclaimed hydrochlorofluorocarbons which producers and importers place on the market in the period of 1 January to 31 December 2008 and for the period of 1 January to 31 December 2009 shall not exceed 25% of the level calculated in application of subparagraph (b);

(g) no producer or importer shall place hydrochlorofluorocarbons on the market or use any for its own account after 31 December 2009.

(h) each producer and importer shall ensure that the calculated level of hydrochlorofluorocarbons which it places on the market or uses for its own account in the period 1 January to 31 December 1999 and in each 12-month period thereafter until 31 December 2002 shall not exceed, as a percentage of the calculated levels set out in (a) to (c), its percentage market share in 1996.

(ii) Before 1 January 2001, the Commission shall, in accordance with the procedure laid down in Article 17, determine a mechanism for the allocation of quotas to each producer and importer of the calculated levels set out in (d) to (f), applicable for the period 1 January to 31 December 2003 and for each 12-month period thereafter.

(iii) In the case of producers, the quantities referred to in paragraphs 3(i)(a)-3(i)(e) shall apply to the amounts of virgin hydrochlorofluorocarbons which they place on the market or use for their own account within the Community and which were produced in the Community.

(iv) The total quantitative limits for the placing on the market or use for their own account by producers and importers of hydrochlorofluorocarbons are set out in Annex III.

4. (i) (a) Paragraphs 1, 2 and 3 shall not apply to the placing on the market of controlled substances for destruction within the Community by technologies approved by the Parties;

(b) paragraphs 1, 2 and 3 shall not apply to the placing on the market and use of controlled substances if:

- they are used for feedstock or as a processing agent; or

- they are used to meet the licensed demands for essential uses of those users identified as laid down in Article 3(1) and to meet the licensed demands for critical uses of those users identified as laid down in Article 3(2) or to meet the demands for temporary emergency applications authorised in accordance with Article 3(2)(ii).

(ii) Paragraph 1 shall not apply to the use of controlled substances for the maintenance or servicing of refrigeration and air-conditioning equipment or in fingerprinting processes until 31 December 2000.

(iii) Paragraph 1(c) shall not apply to the placing on the market and use of halons that have been recovered, recycled or reclaimed in existing fire protection systems until 31 December 2002 or to the placing on the market and use of halons for critical uses as set out in Annex VII. Each year the competent authorities of the Member States shall notify to the Commission the quantities of halons used for critical uses, the measures taken to reduce their emissions and an estimate of such emissions, and the current activities to identify and use adequate alternatives. Each year the Commission shall review the critical uses listed in Annex VII and, if necessary, adopt modifications in accordance with the procedure laid down in Article 17.

(iv) Except for uses listed in Annex VII, fire protection systems and fire extinguishers containing halons shall be decommissioned before 31 December 2003, and halons shall be recovered in accordance with the provisions of Article 15.

5. Any producer or importer entitled to place controlled substances referred to in this Article on the market or use them for its own account may transfer that right in respect of all or any quantities of that group of substances fixed in accordance with this Article to any other producer or importer of that group of substances within the Community. Any such transfer shall be notified in advance to the Commission. The transfer of the right to place on the market or use shall not imply the further right to produce or to import.

6. The importation and placing on the market of products and equipment containing chlorofluorocarbons, other fully halogenated chlorofluorocarbons, halons, carbon tetrachloride, 1,1,1-trichloroethane and hydrobromofluorocarbons shall be prohibited, with the exception of products and equipment for which the use of the respective controlled substance has been authorised in accordance with the second subparagraph of Article 3(1) or is listed in Annex VII. Products and equipment shown to be manufactured before the entry into force of this Regulation shall not be covered by this prohibition.

Article 5

Control of the use of hydrochlorofluorocarbons

1. Subject to the following conditions, the use of hydrochlorofluorocarbons shall be prohibited:

(a) in aerosols;

(b) as solvents:

(i) in non-contained solvent uses including open-top cleaners and open-top de-watering systems without refrigerated areas, in adhesives and mould-release agents when not employed in closed equipment, for drain cleaning where hydrochlorofluorocarbons are not recovered;

(ii) from 1 January 2002, in all solvent uses, with the exception of precision cleaning of electrical and other components in the aerospace and aeronautics applications where the prohibition shall enter into force on 31 December 2008;

(c) as refrigerants:

(i) in equipment produced after 31 December 1995 for the following uses:

- in non-confined direct-evaporation systems,

- in domestic refrigerators and freezers,

- in motor vehicle, tractor and off-road vehicle or trailer air conditioning systems operating on any energy source, except for military uses where the prohibition shall enter into force on 31 December 2008,

- in road public-transport air-conditioning,

(ii) in rail transport air-conditioning, in equipment produced after 31 December 1997;

(iii) from 1 January 2000, in equipment produced after 31 December 1999 for the following uses:

- in public and distribution cold stores and warehouses,

- for equipment of 150 kW and over, shaft input,

(iv) from 1 January 2001, in all other refrigeration and air-conditioning equipment produced after 31 December 2000, with the exception of fixed air-conditioning equipment, with a cooling capacity of less than 100 kW, where the use of hydrochlofluorocarbons shall be prohibited from 1 January 2003 in equipment produced after 31 December 2002 and of reversible air-conditioning/heat pump systems where the use of hydrochlorofluorocarbons shall be prohibited from 1 January 2004 in all equipment produced after 31 December 2003;

(v) from 1 January 2008 , the use of virgin hydrochlorofluorocarbons shall be prohibited in the maintenance and servicing of refrigeration and air-conditioning equipment existing at that date; the use of all hydrochlorofluorocarbons shall be prohibited from 1 January 2010.

(d) for the production of foams:

(i) for the production of all foams except integral skin foams for use in safety applications and rigid insulating foams;

(ii) from the date of entry into force of this regulation, for the production of integral skin foams for use in safety applications and polyethylene rigid insulating foams;

(iii) from 1 January 2002, for the production of extruded polystyrene rigid insulating foams, except where used for insulated transport;

(iv) from 1 January 2003, for the production of polyurethane foams for appliances, of polyurethane flexible faced laminate foams and of polyurethane sandwich panels, except where these latter two are used for insulated transport;

(v) from 1 January 2004, for the production of all foams, including polyurethane spray and block foams;

(e) as carrier gas for sterilisation substances in closed systems, in equipment produced after 31 December 1997;

(f) in all other applications.

2. By way of derogation from paragraph 1, the use of hydrochlorofluorocarbons shall be permitted:

(a) in laboratory uses, including research and development;

(b) as feedstock;

(c) as a processing agent.

3. By way of derogation from paragraph 1, the use of hydrochlorofluorocarbons as fire-fighting agents in existing fire protection systems may be permitted for replacing halons in applications listed in Annex VII under the following conditions:

- halons contained in such fire protection systems shall be replaced completely,

- halons withdrawn shall be destroyed,

- 70% of the destruction costs shall be covered by the supplier of the hydrochlorofluorocarbons,

- each year, Member States making use of this provision shall notify to the Commission the number of installations and the quantities of halons concerned.

4. The importation and placing on the market of products and equipment containing hydrochlorofluorocarbons for which a use restriction is in force under this Article shall be prohibited from the date on which the use restriction comes into force. Products and equipment shown to be manufactured before the date of that use restriction shall not be covered by this prohibition.

5. Until 31 December 2009, the use restrictions under this Article shall not apply to the use of hydrochlorofluorocarbons for the production of products for export to countries where the use of hydrochlorofluorocarbons in those products is still permitted.

6. The Commission may, in accordance with the procedure laid down in Article 17, in the light of experience with the operation of this Regulation or to reflect technical progress, modify the list and the dates set out in paragraph 1.

7. The Commission may, following a request by a competent authority of a Member State and in accordance with the procedure laid down in Article 17, authorise a time-limited exemption to allow the use and placing on the market of hydrochlorofluorocarbons in derogation from paragraph 1 and Article 4(3) where it is demonstrated that, for a particular use, technically and economically feasible alternative substances or technologies are not available or cannot be used.

CHAPTER III

TRADE

Article 6

Licences to import from third countries

1. The release for free circulation in the Community or inward processing of controlled substances shall be subject to the presentation of an import licence. Such licences shall be issued by the Commission after verification of compliance with Articles 6, 7, 8 and 13. The Commission shall forward a copy of each licence to the competent authority of the Member State into which the substances concerned are to be imported. Each Member State shall appoint a competent authority for that purpose. Controlled substances listed in groups I, II, III, IV and V as listed in Annex I shall not be imported for inward processing.

2. The licence shall, when related to an inward-processing procedure, be issued only if the controlled substances are to be used in the customs territory of the Community under the system of suspension, provided for in Article 114(2)(a) of Regulation (EEC) No 2913/92, and under the condition that the compensating products are re-exported to a State where the production, consumption or import of that controlled substance is not prohibited. The licence shall only be issued following approval of the competent authority of the Member State in which the inward-processing operation is to take place.

3. A request for a licence shall state:

(a) the names and the addresses of the importer and the exporter;

(b) the country of exportation;

(c) the country of final destination if controlled substances are to be used in the customs territory of the Community under the inward-processing procedure as referred to in paragraph 2;

(d) a description of each controlled substance, including:

- the commercial description,

- the description and the CN code as laid down in Annex IV,

- the nature of the substance (virgin, recovered or reclaimed),

- the quantity of the substance in kilograms;

(e) the purpose of the proposed import;

(f) if known, the place and date of the proposed importation and, where relevant, any changes to these data.

4. The Commission may require a certificate attesting the nature of substances to be imported.

5. The Commission may, in accordance with the procedure laid down in Article 17, modify the list of items mentioned in paragraph 3 and Annex IV.

Article 7

Imports of controlled substances from third countries

The release for free circulation in the Community of controlled substances imported from third countries shall be subject to quantitative limits. Those limits shall be determined and quotas allocated to undertakings for the period 1 January to 31 December 1999 and for each 12-month period thereafter in accordance with the procedure laid down in Article 17. They shall be allocated only:

(a) for controlled substances of groups VI and VIII as referred to in Annex I;

(b) for controlled substances if they are used for essential or critical uses or for quarantine and pre-shipment applications;

(c) for controlled substances if they are used for feedstock or as processing agents; or

(d) to undertakings having destruction facilities for recovered controlled substances if the controlled substances are used for destruction in the Community by technologies approved by the Parties.

Article 8

Imports of controlled substances from a State not party to the Protocol

The release for free circulation in the Community or inward processing of controlled substances imported from any State not party to the Protocol shall be prohibited.

Article 9

Imports of products containing controlled substances from a State not party to the Protocol

1. The release for free circulation in the Community of products and equipment containing controlled substances imported from any State not Party to the Protocol shall be prohibited.

2. A list of products containing controlled substances and of Combined Nomenclature codes is given in Annex V for guidance of the Member States' customs authorities. The Commission may, in accordance with the procedure laid down in Article 17, add to, delete items from or amend this list in the light of the lists established by the Parties.

Article 10

Imports of products produced using controlled substances from a State not party to the Protocol

In the light of the decision of the Parties, the Council shall, on a proposal from the Commission, adopt rules applicable to the release for free circulation in the Community of products which were produced using controlled substances but do not contain substances which can be positively identified as controlled substances, imported from any State not party to the Protocol. The identification of such products shall comply with periodical technical advice given to the Parties. The Council shall act by a qualified majority.

Article 11

Export of controlled substances or products containing controlled substances

1. Exports from the Community of chlorofluorocarbons, other fully halogenated chlorofluorocarbons, halons, carbon tetrachloride, 1,1,1 trichloroethane and hydrobromofluorocarbons or products and equipment, other than personal effects, containing those substances or whose continuing function relies on supply of those substances shall be prohibited. This prohibition shall not apply to exports of:

(a) controlled substances produced under Article 3(6) to satisfy the basic domestic needs of Parties pursuant to Article 5 of the Protocol;

(b) controlled substances produced under Article 3(7) to satisfy essential or critical uses of Parties;

(c) products and equipment containing controlled substances produced under Article 3(5) or imported under Article 7(b);

(d) products and equipment containing halon, to satisfy critical uses listed in Annex VII;

(e) controlled substances to be used for feedstock and processing agent applications.

2. Exports from the Community of methyl bromide to any State not party to the Protocol shall be prohibited.

3. From 1 January 2004, exports from the Community of hydrochlorofluorocarbons to any State not party to the Protocol shall be prohibited. The Commission shall, in accordance with the procedure laid down in Article 17, examine the above date in the light of relevant international developments under the Protocol and modify it as appropriate.

Article 12

Export authorisation

1. Exports from the Community of controlled substances shall be subject to authorisation. Such export authorisation shall be issued by the Commission to undertakings for the period 1 January to 31 December 2001 and for each 12-month period thereafter after verification of compliance with Article 11. The Commission shall forward a copy of each export authorisation to the competent authority of the Member State concerned.

2. An application for an export authorisation shall state:

(a) the name and address of the exporter and of the producer, where it is not the same;

(b) a description of the controlled substance(s) intended for export, including:

- the commercial description,

- the description and the CN code as laid down in Annex IV,

- the nature of the substance (virgin, recovered or reclaimed);

(c) the total quantity of each substance to be exported;

(d) the country/countries of final destination of the controlled substance(s);

(e) the purpose of the exports.

3. Each exporter shall notify the Commission of any changes which might occur during the period of validity of the authorisation in relation to the data notified under paragraph 2. Each exporter shall report to the Commission in accordance with Article 18.

Article 13

Exceptional authorisation to trade with a State not party to the Protocol

By way of derogation from Articles 8, 9(1), 10, 11(2) and (3), trade with any State not party to the Protocol in controlled substances and products which contain or are produced by means of one or more such substances may be authorised by the Commission, to the extent that the State not party to the Protocol is determined by a meeting of the Parties to be in full compliance with the Protocol and has submitted data to that effect as specified in Article 7 of the Protocol. The Commission shall act in accordance with the procedure laid down in Article 17 of this Regulation.

Article 14

Trade with a territory not covered by the Protocol

1. Subject to any decision taken under paragraph 2, Articles 8, 9, 11(2) and (3) shall apply to any territory not covered by the Protocol as they apply to any State not party to the Protocol.

2. Where the authorities of a territory not covered by the Protocol are in full compliance with the Protocol and have submitted data to that effect as specified in Article 7 of the Protocol, the Commission may decide that some or all of the provisions of Articles 8, 9 and 11 of this Regulation shall not apply in respect of that territory.

The Commission shall take its decision in accordance with the procedure laid down in Article 17.

Article 14bis (new)

Notification of Member States

The Commission shall immediately notify the Member States of any measures it adopts pursuant to Articles 12, 13 and 14.

CHAPTER IV

EMISSION CONTROL

Article 15

Recovery of used controlled substances

1. Controlled substances contained in:

- refrigeration, air-conditioning and heat pump equipment, except domestic refrigerators and freezers,

- equipment containing solvents,

- fire protection systems and fire extinguishers,

shall be recovered for destruction by technologies approved by the Parties or by any other environmentally acceptable destruction technology, or for recycling or reclamation during the servicing and maintenance of equipment or before the dismantling or disposal of equipment.

2. Controlled substances contained in domestic refrigerators and freezers shall be recovered and dealt with as provided for in paragraph 1 after 31 December 2001.

3. Controlled substances contained in products, installations and equipment other than those mentioned in paragraphs 1 and 2 shall be recovered, if practicable, and dealt with as provided in in paragraph 1.

4. Controlled substances shall not be placed on the market in disposable containers, except for essential uses.

5. Member States shall establish systems to promote the recovery, recycling, reclamation and destruction of controlled substances and assign to users, refrigeration technicians or other appropriate bodies responsibility for ensuring compliance with paragraph 1. Member States shall define the minimum qualification requirements for the personnel involved. At the latest on 31 December 2001, Member States shall report to the Commission on the programmes related to the above qualification requirements. The Commission shall evaluate the measures taken by the Member States. In the light of this evaluation and of technical and other relevant information, the Commission, as appropriate, shall propose measures regarding those minimum qualification requirements.

6. Member States shall report to the Commission by 31 December 2001 on the systems established to promote the recovery of used controlled substances, including the facilities available and the quantities of used controlled substances recovered, recycled, reclaimed or destroyed.

7. This Article shall be without prejudice to Council Directive 75/442/EEC of 15 July 1975 on waste [7] or to measures adopted following Article 2(2) of that Directive.

[7] ) OJ L 194, 25.7.1975, p. 39. Directive as last amended by Decision 96/350/EC (OJ L 135, 6.6.1996, p. 32).

Article 16

Leakages of controlled substances

1. All precautionary measures practicable shall be taken to prevent and minimise leakages of controlled substances. In particular, fixed equipment with a refrigerating fluid charge of more than 3 kg shall be checked for leakages annually. Member States shall define the minimum qualification requirements for the personnel involved. At the latest on 31 December 2001, Member States shall report to the Commission on the programmes related to the above qualification requirements. The Commission shall evaluate the measures taken by the Member States. In the light of this evaluation and of technical and other relevant information, the Commission, as appropriate, shall propose measures regarding those minimum qualification requirements.

The Commission shall promote the preparation of European standards relating to the control of leakages and to the recovery of substances leaking from commercial and industrial air-conditioning and refrigeration equipment, from fire-protection systems and from equipment containing solvents as well as, as appropriate, to technical requirements with respect to the leakproofness of refrigeration systems.

2. All precautionary measures practicable shall be taken to prevent and minimise leakages of methyl bromide from fumigation installations and operations in which methyl bromide is used. Whenever methyl bromide is used in soil fumigation, the use of virtually impermeable films for a sufficient time, or other techniques ensuring at least the same level of environmental protection shall be mandatory. Member States shall define the minimum qualification requirements for the personnel involved.

3. All precautionary measures practicable shall be taken to prevent and minimise leakages of controlled substances used as feedstock and as processing agents.

4. All precautionary measures practicable shall be taken to prevent and minimise any leakage of controlled substances inadvertently produced in the course of the manufacture of other chemicals.

5. The Commission shall develop as appropriate and ensure the dissemination of notes describing Best Available Technologies and Best Environmental Practices concerning the prevention and minimisation of leakages and emissions of controlled substances.

CHAPTER V

COMMITTEE, REPORTING, INSPECTION AND PENALTIES

Article 17

Committee

The Commission shall be assisted by a committee composed of the representatives of the Member States and chaired by a representative of the Commission.

The representative of the Commission shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on that draft within a time-limit which the chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148(2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States within the committee shall be weighted in the manner laid down in that Article. The chairman shall not vote.

The Commission shall adopt measures which shall apply immediately. However, if these measures are not in accordance with the opinion of the committee, they shall be communicated by the Commission to the Council forthwith. In that event, the Commission may defer application of the measures which it has decided for a period of not more than one month from the date of such communication.

The Council, acting by a qualified majority, may take a different decision within the time-limit referred to in the previous paragraph.

Article 18

Reporting

1. Every year before 31 March, each producer, importer and exporter of controlled substances shall communicate to the Commission, sending a copy to the competent authority of the Member State concerned, data as specified below for each controlled substance, in respect of the period 1 January to 31 December of the preceding year.

The format of this report shall be established in accordance with the procedure set out in Article 17.

(a) Each producer shall communicate:

- its total production of each controlled substance,

- any production placed on the market or used for the producer's own account within the Community, separately identifying production for feedstock, processing agent, quarantine and pre-shipment and other uses,

- any production to meet the essential uses in the Community, licensed in accordance with Article 3(4),

- any production authorised under Article 3(6) to satisfy basic domestic needs of Parties pursuant to Article 5 of the Protocol,

- any production authorised under Article 3(7) to satisfy essential, or critical, uses of Parties,

- any increase in production authorised under Article 3(8), (9) and (10) in connection with industrial rationalisation,

- any quantities recycled, reclaimed or destroyed,

- any stocks.

(b) Each importer, including any producers who also import, shall communicate:

- any quantities released for free circulation in the Community, separately identifying imports for feedstock and processing-agent uses, for essential or critical uses licensed in accordance with Article 3(4), for use in quarantine and pre-shipment applications and for destruction,

- any quantities of controlled substances entering the Community under the inward-processing procedure,

- any quantities of used controlled substances imported for recycling or reclamation,

- any stocks.

(c) Each exporter, including any producers who also export, shall communicate:

- any quantities of controlled substances exported from the Community, including substances which are re-exported under the inward-processing procedure, separately identifying quantities exported to each country of destination and quantities exported for feedstock and processing agent uses, essential uses, critical uses, quarantine and pre-shipment uses, to meet the basic domestic needs of Parties pursuant to Article 5 of the Protocol and for destruction,

- any quantities of used controlled substances exported for recycling or reclamation,

- any stocks.

2. Every year before 31 December, Member States' customs authorities shall return to the Commission the stamped used licence documents.

3. Every year before 31 March, each user who has been authorised to take advantage of an essential use exemption under Article 3(1) shall, for each substance for which an authorisation has been received, report to the Commission, sending a copy to the competent authority of the Member State concerned, the nature of the use, the quantities used during the previous year, the quantities held in stock, any quantities recycled or destroyed, and the quantity of products containing those substances placed on the Community market and/or exported.

4. Every year before 31 March, each undertaking which has been authorised to use controlled substances as a processing agent shall report to the Commission the quantities used during the previous year, and an estimate of the emissions which occurred during such use.

5. The Commission shall take appropriate steps to protect the confidentiality of the information submitted to it.

6. The Commission may, in accordance with the procedure laid down in Article 17, modify the reporting requirements laid down in paragraphs 1 to 4, to meet commitments under the Protocol or to improve the practical application of those reporting requirements.

Article 19

Inspection

1. In carrying out the tasks assigned to it by this Regulation, the Commission may obtain all the information from the governments and competent authorities of the Member States and from undertakings.

2. When requesting information from an undertaking the Commission shall at the same time forward a copy of the request to the competent authority of the Member State within the territory of which the undertaking's seat is situated, together with a statement of the reasons why that information is required.

3. The competent authorities of the Member States shall carry out the investigations which the Commission considers necessary under this Regulation. They shall also conduct random checks on imports and communicate the schedules and results of those checks to the Commission.

4. Subject to the agreement of the Commission and of the competent authority of the Member State within the territory of which the investigations are to be made, the officials of the Commission shall assist the officials of that authority in the performance of their duties.

45. The Commission shall take appropriate action to promote adequate exchange of information and cooperation between national authorities and between national authorities and the Commission. The Commission shall take appropriate steps to protect the confidentiality of information obtained under this Article.

Article 20

Penalties

Member States shall determine the necessary penalties applicable to breaches of this Regulation. The penalties shall be effective, proportionate and dissuasive. Member States shall notify the provisions regarding penalties to the Commission by 1 July 2000 at the latest and shall also notify it without delay of any subsequent amendment affecting such provisions.

CHAPTER VI

NEW SUBSTANCES

Article 21

New substances

1. The production, release for free circulation in the Community and inward processing, placing on the market and use of new substances in Annex II are prohibited. This prohibition does not apply to new substances if they are used as feedstock.

2. The Commission shall, as appropriate, make proposals to include in Annex II any substances that are not controlled substances but that are found by the Scientific Assessment Panel under the Protocol to have a significant ozone-depleting potential, including on possible exemptions from paragraph 1.

CHAPTER VII

FINAL PROVISIONS

Article 22

Repeal

Regulation (EC) No 3093/94 is repealed.

References to the repealed Regulation shall be construed as references to this Regulation.

Article 23

Entry into force

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

It shall apply from 1 July 2000.

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

Done at Brussels,

For the European Parliament For the Council

The President The President

ANNEX 1

CONTROLLED SUBSTANCES COVERED

>TABLE POSITION>

>TABLE POSITION>

ANNEX 2

NEW SUBSTANCES

Bromochloroethane

ANNEX 3

TOTAL QUANTITATIVE LIMITS ON PRODUCERS' AND IMPORTERS'

PLACING CONTROLLED SUBSTANCES ON THE MARKET AND

USING THEM FOR THEIR OWN ACCOUNT IN THE COMMUNITY

(calculated levels expressed in ODP tonnes)

>TABLE POSITION>

ANNEX 4

GROUPS, COMBINED NOMENCLATURE 1999 (CN 99) CODES (1) AND DESCRIPTIONS

FOR THE SUBSTANCES REFERRED TO IN ANNEXES I AND III

>TABLE POSITION>

ANNEX 5

COMBINED NOMENCLATURE (CN) CODES FOR PRODUCTS

CONTAINING CONTROLLED SUBSTANCES (*)

(*) These customs codes are given for the guidance of the Member States' customs authorities.

1. Automobiles and truck equipped with air-conditioning units

CN codes

8701 20 10 - 8701 90 90

8702 10 11 - 8702 90 90

8703 10 11 - 8703 90 90

8704 10 11 - 8704 90 00

8705 10 00 - 8705 90 90

8706 00 11 - 8706 00 99

2. Domestic and commercial refrigeration and air-conditioning/heat-pump equipment

Refrigerators:

CN codes

8418 10 10 - 8418 29 00

8418 50 11 - 8418 50 99

8418 61 10 - 8418 69 99

Freezers:

CN codes

8418 10 10 - 8418 29 00

8418 30 10 - 8418 30 99

8418 40 10 - 8418 40 99

8418 50 11 - 8418 50 99

8418 61 10 - 8418 61 90

8418 69 10 - 8418 69 99

Dehumidifiers:

CN codes

8415 10 00 - 8415 83 90

8479 60 00

8479 89 10

8479 89 98

Water coolers and gas liquefying units:

CN codes

8419 60 00

8419 89 98

Ice machines:

CN codes

8418 10 10 - 8414 29 00

8418 30 10 - 8418 30 99

8418 40 10 - 8418 40 99

8418 50 11 - 8418 50 99

8418 61 10 - 8418 61 90

8418 69 10 - 8418 69 99

Air-conditioning and heat-pump units:

CN codes

8415 10 00 - 8415 83 90

8418 61 10 - 8418 61 90

8418 69 10 - 8418 69 99

8418 99 10 - 8418 99 90

3. Aerosol products, except medical aerosols

Food products:

CN codes

0404 90 21 - 0404 90 89

1517 90 10 - 1517 90 99

2106 90 92

2106 90 98

Paints and varnishes, prepared water pigments and dyes:

CN codes

3208 10 10 - 3208 10 90

3208 20 10 - 3208 20 90

3208 90 11 - 3208 90 99

3209 10 00 - 3209 90 00

3210 00 10 - 3210 00 90

3212 90 90

Perfumery, cosmetic or toilet preparations:

CN codes

3303 00 10 - 3303 00 90

3304 30 00

3304 99 00

3305 10 00 - 3305 90 90

3306 10 00 - 3306 90 00

3307 10 00 - 3307 30 00

3307 49 00

3307 90 00

Surface-active preparations:

CN codes

3402 20 10 - 3402 20 90

Lubricating preparations:

CN codes

2710 00 81

2710 00 97

3403 11 00

3403 19 10 - 3403 19 99

3403 91 00

3403 99 10 - 3403 99 90

Household preparations:

CN codes

3405 10 00

3405 20 00

3405 30 00

3405 40 00

3405 90 10 - 3405 90 90

Articles of combustible materials:

CN codes

3606 10 00

Insecticides, rodenticides, fungicides, herbicides, etc.:

CN codes

3808 10 10 - 3808 10 90

3808 20 10 - 3808 20 80

3808 30 11 - 3808 30 90

3808 40 10 - 3808 40 90

3808 90 10 - 3808 90 90

Finishing agents, etc.:

CN codes

3809 10 10 - 3809 10 90

3809 91 00 - 3809 93 00

Preparations and charges for fire-extinguishers; charged fire-extinguishing grenades:

CN codes

3813 00 00

Organic composite solvents, etc.:

CN codes

3814 00 10 - 3814 00 90

Prepared de-icing fluids:

CN codes

3820 00 00

Products of the chemical or allied industries:

CN codes

3824 90 10

3824 90 35

3824 90 40

3824 90 45 - 3824 90 95

Silicones in primary forms:

CN codes

3910 00 00

Arms:

CN codes

9304 00 00

4. Portable fire extinguishers

CN codes

8424 10 10 - 8424 10 99

5. Insulation boards, panels and pipe covers

CN codes

3917 21 10 - 3917 40 90

3920 10 23 - 3920 99 90

3921 11 00 - 3921 90 90

3925 10 00 - 3925 90 80

3926 90 10 - 3926 90 99

6. Pre-polymers

CN codes

3901 10 10 - 3911 90 99

ANNEX 6

PROCESSES IN WHICH CONTROLLED SUBSTANCES ARE USED

AS PROCESSING AGENTS

- use of carbon tetrachloride for the elimination of nitrogen trichloride in the production of chlorine and caustic soda;

- use of carbon tetrachloride in the recovery of chlorine in tail gas from production of chlorine;

- use of carbon tetrachloride in the manufacture of chlorinated rubber;

- use of carbon tetrachloride in the manufacture of isobutyl acetophenone (ibruprofen - analgesic);

- use of carbon tetrachloride in the manufacture of poly-phenylene-terephtalamide;

- use of CFC-11 in manufacture of fine synthetic polyolefin fibre sheet;

- use of CFC-113 in the manufacture of vinorelbine (pharmaceutical product);

- use of CFC-12 in the photochemical synthesis of perfluoropolyetherpolyperoxide precursors of Z-perfluoropolyethers and difunctional derivatives;

- use of CFC-113 in the reduction of perfluoropolyetherpolyperoxide intermediate for production of perfluoropolyether diesters;

- use of CFC-113 in the preparation of perfluoropolyether diols with high functionality;

- use of carbon tetrachloride in the production of tralomethrine (insecticide).

And the use of HCFCs in the above processes when used to replace CFC or carbon tetrachloride.

ANNEX 7

CRITICAL USES OF HALON

Use of halon 1301:

- in aircraft for the protection of crew compartments, engine nacelles, cargo bays and dry bays,

- in military land vehicles and naval vessels for the protection of spaces occupied by personnel and engine compartments;

- for the making inert of occupied spaces where flammable liquid and/or gas release could occur in the military and in the oil, gas and petrochemical sector, and in existing cargo ships;

- for the making inert of existing manned communication and command centres of the armed forces or otherwise essential for national security;

- for the making inert of spaces where there may be a risk of dispersion of radioactive matter;

- in the Channel Tunnel and associated installations and rolling stock.

Use of halon 1211:

- in hand-held fire extinguishers and fixed extinguisher equipment for engines for use on board aircraft;

- in aircraft for the protection of crew compartments, engine nacelles, cargo bays and dry bays;

- in fire extinguishers essential to personal safety used for initial extinguishing by fire brigades;

- in military and police fire extinguishers for use on persons.