Proposal for a COUNCIL REGULATION on measures in retaliation to the Russian Federation's import ban on fresh eggs for human consumption originating in the European Community

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. In May 1996, Finland was informed by the Russian authorities, without any explanation being given, that the imports of fresh eggs for human consumption (CN 0407 00 30) into Russia were prohibited.

2. It was later explained that the ban was applicable to all third countries (erga omnes) and that it was based on human health protection. Imports into Russia of fresh eggs originating in the United States have however increased substantially since the introduction of the ban.

3. Consultations on the Russian import ban on eggs originating in the Community has been held at several occasions on the basis of Article 102 of the Partnership and Cooperation Agreement without any concrete results (e.g. during the first Cooperation Council on 27 January 1998; the first Cooperation Committee on 22 April 1998; technical consultations on 15 September 1998; second Cooperation Committee on 16 December 1998; first Sub-Committee on Agriculture 8-9 February 1999; third Co-operation Committee 8 October 1999). The Commission has also transmitted Aide-Mémoires on the subject to the Russian authorities, without receiving any adequate response.

4. Despite the agreement made in the framework of the negotiations of the Memorandum of Understanding on free deliveries of food products from the Community to Russia to advance formal consultations on the Russian import ban on eggs in order to resolve the problem swiftly, no solution has been found.

5. Without evidence of human health problems, as referred to in Article 19 of the Partnership and Cooperation Agreement, the Russian import ban on eggs constitutes a disguised restriction on trade between the Parties. As such, it violates the provisions of Article 15(2) of the aforementioned Agreement, stipulating that goods originating in the Community shall be imported into Russia free of quantitative restrictions.

6. Following the entry into force of the Russian import ban on eggs, the Community's operators suffer substantial economic losses due to the fact that they no longer are able to export any fresh eggs to Russia. In order to protect the Community's interest, the Commission proposes that measures shall be taken in retaliation to the Russian import ban on eggs. Consequently, this Regulation proposes the introduction of import tariffs on sunflower seeds and rape seeds originating in the Russian Federation. The aforementioned products enter today free of duty into the Community when imported from third countries. The measure will be applied until the import ban has been abolished, or until the Commission has received scientific evidence that the ban imposed by the Russian Federation on imports of eggs originating in the Community is justified on health grounds.

7. The Council is requested to adopt the proposed Regulation.

2000/0105 (ACC)

Proposal for a COUNCIL REGULATION on measures in retaliation to the Russian Federation's import ban on fresh eggs for human consumption originating in the European Community

THE COUNCIL OF THE EUROPEAN UNION,

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

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

[1] OJ C..., ..., p. .

Whereas:

(1) The Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Russian Federation, of the other part [2] lays down as one of the main objectives the promotion of trade and investment and harmonious economic relations between the Parties.

[2] OJ L 327, 28.11.1997, p. 1.

(2) This aforementioned objective of the agreement is seriously threatened by the Russian import ban on eggs originating in the Community, introduced in May 1996.

(3) Article 19 of the Partnership and Cooperation Agreement stipulates that import prohibitions or restrictions on grounds of the protection on health and life of humans, animals or plants shall not be precluded. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

(4) The Russian authorities have not been able to provide evidence that imports into Russia on eggs originating in the Community provoke the need to protect the health and life of humans, animals or plants. The Russian import ban on eggs can therefore be considered as a disguised restriction on trade between the Parties. As such, it violates Article 15(2) of the Partnership and Cooperation Agreement, stipulating that goods originating in the Community shall be imported into Russia free of quantitative restrictions.

(5) At the request of the Community, several consultations have been held between the Parties on the basis of Article 102 of the Partnership and Cooperation Agreement to discuss the interpretation and implementation of the Agreement, and in particular Article 19 and 15(2). These consultations have not permitted the Parties find an adequate solution.

(6) As a consequence of the measure taken by the Russian Federation, the Community's exports of fresh eggs have been seriously restricted, with substantial economic impact on the Community operators.

(7) Under the Partnership and Cooperation Agreement with Russia this situation gives raise to the application of Article 107(2) thereof, stipulating that if any Party considers that the other Party has failed to fulfil an obligation under the Agreement it may take appropriate measures. The Community considers that the Russian Federation has failed to fulfil its obligations with regard to trade in eggs as set out in the Agreement.

(8) The Community considers that an appropriate reaction to the failure by Russia to fulfil the obligations of the Partnership and Cooperation Agreement is to protect the Community's trade interests by increasing the import duties on sunflower seeds and rape seeds originating in the Russian Federation by 7 per cent. As required in Article 107(2) of the Partnership and Cooperation Agreement with Russia, priority must be given to those which least disturb the functioning of the Agreement. The counter measures are proportionate to the negative impact on the Community trade in fresh eggs caused by the Russian import ban.

(9) Before taking the measures, the Commission supplied the Cooperation Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

(10) Since the measures necessary for the implementation of this Regulation are management measures within the meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [3], they should be adopted by use of the management procedure provided for in Article 4 of that Decision,

[3] OJ L 184, 17.7.1999, p. 23.

HAS ADOPTED THIS REGULATION:

Article 1

A customs duty shall be applied on imports into the Community of products originating in the Russian Federation as follows:

>TABLE POSITION>

Article 2

The Commission shall repeal the measures set out in Article 1, in accordance with the procedure laid down in Article 3(2) once the import ban has been abolished or when the Commission has received scientific evidence that the ban imposed by the Russian Federation on imports of eggs originating in the Community is justified on health grounds.

Article 3

1. The Commission shall be assisted by the Management Committee for Cereals instituted by Article 23 of Council Regulation (EC) No 1766/1992 on the common organisation of the market in cereals [4].

[4] OJ L 181, 1.7.1992, p. 21.

2. Where reference is made to this paragraph, the management procedure laid down in Article 4 of Decision 1999/468/EC shall apply, in compliance with Article 7(3) thereof.

3. The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.

Article 4

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

It shall not apply to import licences already issued prior to the entry into force of this Regulation.

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

Done at Brussels,

For the Council

The President

>TABLE POSITION>

ANNEX

EU exports of fresh eggs (CN 0407 00 30) to Russia (000 EUR)

>TABLE POSITION>

EU imports of sunflower seeds and rape seeds from Russia (000 EUR)

>TABLE POSITION>

Trade value of the Russian import ban on eggs (000 EUR), 1996-2000 [5]

[5] The trade value has been calculated on the basis of anticipated constant export volume, in value, since 1995.

Year // Value

1996 // 3 225

1997 // 3 225

1998 // 3 225

1999 // 3 225

Total // 12 900

Value in terms of duty collection of the measure imposed against Russia (000 EUR)

>TABLE POSITION>