Proposal for a COUNCIL REGULATION adopting autonomous measures concerning the importation of fish and fishery products originating in the Republic of Cyprus.

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 4 April 2001, the Council authorised the Commission to undertake negotiations on behalf of the Community with the Republic of Cyprus, in order to further liberalise reciprocal trade in fish and fishery products.

The Community has a large trade surplus vis-à-vis Cyprus in the fisheries sector and the major Cypriot export interest is linked to sea bass, sea bream and fish fry products.

Negotiations with Cyprus were held on 11 May and 28 June 2001. The two parties agreed on a model for simple, gradual and reciprocal tariff concessions, whose details have been recorded in the Agreed Minutes signed by each head of delegation. The main commitments made by the Community as a result of the conclusion of negotiations are as follows:

As regards sea bass (Dicentrarchus labrax) falling under CN subheading 0302 69 94, gilt-head seabream (Sparus aurata) falling under CN subheading 0302 69 95 and sharpsnout bream (Puntazzo puntazzo) falling under CN subheading ex 0302 69 99 it was agreed that the Community would establish a tariff quota common to the three species. The tariff quota, based on traditional trade, will be 500 tonnes at 7.5% at the entry into force of the agreement. It will be increased to 600 tonnes at 0% one year after the entry into force of the agreement and eliminated two years after the entry into force of the agreement.

As regards fish fry of the above mentioned species falling under CN subheading ex 0301 99 90, the Community will establish a tariff quota, based on traditional trade, which will be 12 500 000 pieces at 5% at the entry into force of the agreement. It will be increased to 15 000 000 pieces at 0% one year after the entry into force of the agreement, and will be eliminated two years after the entry into force of the agreement.

As regards the tariff duties applied to all other fish and fishery products, as covered by the definition set out in Regulation (EC) No 104/2000, a one-third reduction will be applied from the date of entry into force of the agreement. The following year a further reduction of one third will be applied. Two years after the entry into force of the agreement, full free trade of all fish and fishery products will be applied.

A Protocol laying down the new trade arrangements for certain fish and fishery products has to be added to the Association Agreement between the Community and the Republic of Cyprus. Pending the completion of internal procedures required for the entry into force of the additional Protocol, it is proposed that, through a Council Regulation, the Community adopts autonomous measures enabling the concessions made to Cyprus to apply as early as 1 January 2002. A swift implementation of the agreement is desirable in order to introduce the gradual liberalisation of trade in fish and fishery products and to give a positive political sign to Cyprus in the context of the accession process.

The adoption of the proposed autonomous measures will bring forward the effective starting date for the gradual liberalisation of trade in fish and fishery products between the Community and the Republic of Cyprus. It is therefore necessary to ensure that this circumstance is taken into account at the time when the new Additional Protocol to the Association Agreement enters into force. For this purpose, the Commission will propose the conclusion of an interpretative Exchange of Letters with Cyprus.

In light of the above, the Council is requested to adopt the attached Regulation implementing, on an autonomous basis, the concessions agreed between the Community and Cyprus.

2001/0261 (ACC)

Proposal for a COUNCIL REGULATION adopting autonomous measures concerning the importation of fish and fishery products originating in the Republic of Cyprus.

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission,

Whereas:

(1) An Agreement establishing an association between the European Economic Community and the Republic of Cyprus [1] was signed at Brussels on 19 December 1972 and entered into force on 1 June 1973.

[1] OJ L 133, 21.5.1973, p. 2

(2) In accordance with the directives issued by the Council on 4 April 2001, negotiations with Cyprus on a new Additional Protocol to the Association Agreement were concluded on 28 June 2001.

(3) The new Additional Protocol, based on Article 2 of the Association Agreement, provides for concessions on fish and fishery products.

(4) A swift implementation of the agreement forms an essential part of the results of the negotiations for the conclusion of a new Additional Protocol to the Association Agreement with Cyprus.

(5) Cyprus will take all useful legislative provisions, on an autonomous basis, in order to enable the reciprocal and simultaneous implementation of concessions to the Community provided for in the Additional Protocol.

(6) It is therefore appropriate for the Community to adopt autonomous measures introducing the concessions provided for in the new Additional Protocol to the Association Agreement.

(7) As far as the management of tariff quotas is concerned, it is appropriate to follow the chronological order of dates of acceptance of customs declarations in accordance with Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code [2].

[2] OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regulation (EC) No 993/2001 (L 141, 28.5.2001, p. 1)

HAS ADOPTED THIS REGULATION:

Article 1

1. The arrangements for the importation into the Community of fish and fishery products originating in Cyprus, as set out in Articles 2, 3 and 4 below, shall modify the Agreement establishing an association between the European Economic Community and the Republic of Cyprus.

2. From the date of entry into force of the new Additional Protocol to the Association Agreement with Cyprus, the concessions provided for therein shall apply taking account of the implementation measures already adopted by both Parties, in a reciprocal manner, in advance of that date. Accordingly, on the date of entry into force of the Additional Protocol, its provisions shall replace and supersede the relevant provisions of this Regulation.

Article 2

As from 1 January 2002, the Community shall apply a one-third reduction of the tariff duties for fish and fishery products, as defined in Article 1 of Council Regulation (EC) No 104/2000, other than those mentioned in Articles 3 and 4 below.

As from 1 January 2003, the Community shall apply a further one-third reduction of the tariff duties as they were at the time this Regulation became applicable.

As from 1 January 2004, the Community shall eliminate the tariff duties on all fish and fishery products, including those products mentioned in Articles 3 and 4.

Article 3

From 1 January until 31 December 2002, a single Community tariff quota with order number 09.1435 shall be opened for a quota volume of 500 tonnes at a duty rate 7,5% (ad valorem) for sea bass (Dicentrarchus labrax) falling under CN subheading 0302 69 94, gilt-head seabream (Sparus aurata) falling under CN subheading 0302 69 95, and sharpsnout bream (Puntazzo puntazzo) falling under CN subheading ex 0302 69 99, originating in Cyprus.

From 1 January until 31 December 2003, for the same products originating in Cyprus, a Community tariff quota with order number 09.1435 shall be opened for a quota volume of 600 tonnes at a duty rate of 0%.

For quantities imported into the Community above the tariff quota, the provisions of Article 2 shall apply.

Article 4

From 1 January until 31 December 2002, a single Community tariff quota with order number 09.1436 shall be opened for a quota volume of 12 500 000 pieces at a duty rate of 5% (ad valorem) for fish fry of the species mentioned in Article 3, falling under CN subheading ex 0301 99 90, originating in Cyprus.

From 1 January until 31 December 2003, for the same products originating in Cyprus, a Community tariff quota with order number 09.1436 shall be opened for a quota volume of 15 000 000 pieces at 0%.

For quantities imported into the Community above the tariff quota, the provisions of Article 2 shall apply.

Article 5

The tariff quotas referred to in Articles 3 and 4 shall be managed by the Commission in accordance with Articles 308a and 308b of Regulation (EC) No 2454/93.

Article 6

The calculation of the reductions mentioned in Article 2 shall be carried out using common mathematical principles.

In particular, the following rules shall apply:

(a) all the figures which have 50 or less after the first decimal shall be rounded down to the nearest whole number;

(b) all the figures which have more than 50 after the first decimal shall be rounded up to the nearest whole number;

(c) all the tariffs below 2% shall automatically be fixed at 0%.

Article 7

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

It shall apply from 1 January 2002.

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

Done at Brussels, [...]

For the Council

The President

[...]

FINANCIAL STATEMENT

1. Title of operation

Proposal to adopt autonomous measures bringing forward in time the application of the provisions of an Additional Protocol to the Association Agreement with Cyprus laying down the trade arrangements for fish and fishery products. Reciprocal concessions have been agreed and will be implemented over a period of two years, leading to full liberalisation of trade in the products concerned.

2. Budget heading(s) involved

Chapter 12, Article 120

3. Legal basis

Article 133 of the Treaty establishing the European Community

4. Description of operation

4.1 General objective

Full trade liberalisation in fish and fishery products in preparation for accession of Cyprus to the European Community.

5. Classification of expenditure or revenue

5.1 Type of revenue involved

Import duties

6. Type of expenditure or revenue

- The proposed operation will cause a reduction in import duties levied on fish and fishery products originating in Cyprus,

- But the operation will also cause a reduction in import duties paid by the Communities operators when importing fishery products into Cyprus.

7. Financial impact

7.1 Method of calculating total cost of operation (relation between individual and total costs)

Only a few products are imported from Cyprus, the following table gives the imports in 1998, 1999 and 2000 and the average duties paid.

The estimated average duty level for fresh and chilled fish is 12%

>TABLE POSITION>

Import duties levied in 1999 showed an increase of approximately 100% over 1998; duties in 2000 showed an increase of 30% over 1999.

A reasonable increase is also expected for the next years 20% for 2001 and 10% for 2002. But it is not possible to establish a certainty.

7.2 Itemised breakdown of cost

Commitment appropriations EUR million (at current prices)

>TABLE POSITION>