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COM(75)214
Vol.1975/0078

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COMMISSION GIFTHEEUROEEAN COMMUMTISS
COM(75)214 final .
Brussels ,21May 1975
Proposal for a
REGULATION (?"C)OFTHECOUNCIL
ontheopening ,allocation andadministration
ofaCommunity tariff quota forprocessing
work inrelation tocertain textile products
under the outward processin traffic arrangements
ofthe Community
(submitted totheCouncil Vt'eCommission )
COW75)214final .

EXPLANATORY MEMORANDUM
1.InanArrangement concludedwiththeSwissFederation onIAugust1969*
theEuropeanEconomicCommunityundertooktoopenanannualdutyfree
Communitytariffquotaof1,87®,000unitsofaccountofaddedvalueonthe
variouskindsofprocessingworkforcertaintextileproductsincludedintheo
outwardprocessingtrafficoftheCommunityt»Switzerland .
2.Undertheterms»fthememorandumagreedatthetimetheArrangement was
made,thisannualtariffquotaisdividedintothreecategoriesofpro­
cessing!basedonthequantitiesrecordedund.ertheformerbilateralagree­
ments(concludedwithSwitzerlandbyFrance,GermanyandItaly),buttaking
intoaccountthepossibilities ofextendingittotheBeneluxcountries.
Onthebasis®fthatdivisionthetotalquotaamountof1,870,000unitsof
accountisappropriated asfollows;
a)1,650,000unitsofaccountforprocessingworkonwovenfabricsfalling
withinChr.pters50to57oftheCommonCustomsTariff;
b)143,000unitsofaccountfortwistingorthrowing,re–-twistingcabling,
texturizing (whetherornotcombinedwithetherprocessingwork)ofyarns
fallingwithinChapters50to57oftheCommonCustomsTariff;
c)77»000unitsofaccountforprocessingworkonarticlesfallingwithin
headings58»04l58.05,5&.0],58.08,58.09and6^.01oftheCommon
CustomsTariff.
(I)OJNoL240,24.9.1969.

AttherequestoftheSwissauthorities andsothatthedivisionofthe
wholequotaintothethreecategoriesofprocessingreferredtoaboveshould
"bebetterrelatedtotheactual"movementoft"badeduringthereferenceyear
whichservedasthebasisforcalculatingthetotalamountofthequotaand
trademovementsduringrecentquotaperiodsorforeseeablemovements,itwas
decided .tomakecertaintransfersbetweenthethreequotaamountsof
whichthefinalonewas150,000u.a.,transferring fromthefigurealloca­
tedforprocessingworkonarticles(categoryC)tothatsetasidefor
processingworkonwovenfabricsfallingwithinChapters50to57*Simi­
larlyandinordertoallowaccesstothetariffquota,itwasdecidedthat
theCommunityreservesshouldbeamalgamated andthatinthiswaythenew
reservecouldcoveralltypesofprocessingworkregardlessofthecate­
gorytheycomeunder.
Thetotalquotaamountof1,870,000u.a.wouldbeallocatedamongthethree
categories ,asfollows: ..,.
–1,520,000u.a.forprocessingoperationsonwovenfabricsfailingwithin
J?'■.'w. ■.i. ,*"Chapters .50to57of"theCommonCustomsTariffj
–123,000u.a.forprocessingoperationsonwovenfabricsfallingwithin
Chapters50to57of"theCCT$
–227,000u.a.forprocessingworkonarticlesfallingwithinheadings
58.04to.,60.01oftheCCT,subjecttothesettingupofaCommunityre–
serveof230,000u.a.tobedrawn,fromtheaboveamounts,thatis160,000
u.a.,13.000u.a.,an,d57»000u.a.respectively .
vv «■'* *
TheonlyobjectiveoftheproposalRegulationannexedheretois,therefore,
toopenthetariffquotaprovidedforintheArrangementconcernedforthe
periodfromISeptember1975to31August1976,andtodivideitbetween"the
MemberStatesaccordingtothefactorsshownintheMemorandumtotheArrange­
mentreferredtoabove,takingintoaccounttheamendmentswhichhavebeen
mademeanwhileandtheneedtoprovidefortheparticipation ofthenew
MemberStatesintheallocationofthetariffquota.

-3-
Itshouldhoweverbenotedinthisconnectionthataccordingtoinformation
obtainedduringthemeetingofthejointEEC-SwissCommission,confirmed
bytheStateofexhaustionofthequotaconcernedduringpreviousquota
periods,thenewMemberStatesarenotusingoutwardprocessingfortheir
textileproducts .UntilsuchtimeasthesaidArrangementisrepealedor
thoroughly amendedbyreasonoftheexpiryoftheperiodoftransitionof
theAssociation AgreementconcludedwithSwitzerland ,itshouldbepossible
inordertocoveranyneedswhichcouldariseinthenewMemberStatesfor
theseStatestodrawasufficientshare,wherenecessary,fromtheCommunity
reserve.
5.TheproposalforaRegulationannexedheretoprovidesfortheadministration
ofthequotabythesystemofpriorallocationandthatthemaximumamount
returnedtothereserveshallbe20$oftheinitialshare.
/

Proposaifora
REGULATICN(EEC)No.,/73QF.THECOUNCIL
from. i••.
ontheopening,allocationandadministration
ofaCommunitytariffquotaforprocessingwork
inrelationtocertaintextileproductsunder
theoutwardprocessingtrafficarrangements of
theCommunity
THECOUNCILOPTHEEUROPEANCOMMUNITIES ,.
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle113thereof5
HavingregardtotheproposalfromtheCommission } ,'
WhereasonIAugust1969theCommunityconcludedanArrangementwithSwitzer­
landontheprocessingtrafficintextiles}whereasunderthatArrangement
theCommunityundertooktoopenanannualCommunityduty-freetariffquotaon
ISeptembereveryyearamountingtoatotalof1,870,000unitsofaccountof
addedvalueforprocessedgoods,dividedasfollows;
a)1,650,000unitsofaccountforprocessingworkonwovenfabricsfalling'
withinChapters50to57oftheCommonCustomsTariff}
b)143»000unitsofaccountforthetwistingorthrowing,cabling,texturi­
zing(whetheror.notcombinedwithotherprocessingworks)ofyarns
fallingwithinChapters50to57oftheCommonCustomsTariff}
c)77»000unitsofaocountforprocessingworkonarticlesfallingwithin
headingNos58»Q4»58*05,58.07,58*08,58*09and60.01oftheCommon
CustomsTariff}

-2-
Whereas,inorderthatthedivision ,ofthewholequotaintothethree
categoriesreferredtoaboveshallcorrespondmoreexactlywiththeactual
movementoftrade^during.thereferenceyearor,.duringpreviousquotaperiods
aswellaswiththeforeseeable movementoftradeduringfuturequotaperiods,
ithas"beendecidedtoadjustthesaidallocation "betweenthethreecate­
goriesbygivingthem1,520,000,123,000and227,000unitsofaccount
respectively jwhereastheCommunitytariffquotainquestionshouldbe
openedfortheperiodISeptember1975to31August1976accordingtothepro­
visionslaiddownintheArrangementspecifiedabove,andinamendmentstoit)
Whereasequalandcontinuousaccesstothequotashouldbeensuredforall
interestedpartiesandtherateofdutyforthetariffquotashouldbeapp­
liedconsistentlyuntilthecjiotaisexhaustedtoallproductswhichhave
undergoneojieoftheprocessesmentionedaboveandhavebeenreimported
intotheMemberStatesjwhereasinthe,lightoftheseprinciples,arrange­
mentsfortheutilizationoftheCommunitytariffquotabasedonanalloca­
tionamongMemberStateswouldseemtobeconsistentwiththeCommunity
natureofthequotajwhereas,therefore,itseemsappropriatetomakethe
allocationtakingintoaccountthequantitiesrecordedundeirtheprevious
bilateralagreements,withoutprejudicingtheopportunities ofMemberStates,
includingthenewMemberStates,whichwerenotinvolvedpreviouslyinthis
traffic;whereastosafeguardtheCommunitynatureofthequotainquestions,
provisionshouldbemadetomeetrequirements whichmayariseinthese
MemberStatesinthefuturebyallowingthemtodrawsufficientquantities
fromtheCommunityreserves
,•••/•••

-3-
Whereastotakeaccountoffuturetrendsinthetrafficinquestioninthe
variousMemberStates,thetotalquotavolumeof1,870,000unitsofaccount
shouldbedividedintotwotranches,thefirstbeingallocatedamongcertain
MemberStatesandthesecondpartheldasareservetocoversubsequently
therequirements ofMemberStateswhichhaveexhaustedtheirinitialshare
ofthequota,andrequirements whichmayariseintheotherMemberStates'
processingworkforwhichaninitialshareofthequotawasnotallocated !
whereastogivethepartiesconcernedintheotherMemberStatessomede­
greeofcertaintyitwouldbeappropriatetofixthefirsttrancheofthe
Communitytariffquotaatarelativelyhighlevel,thatisat1,640,000
unitsofaccount|whereasthetotalCommunityreserveof230,000unitsof
accountshallconsistofamountsdrawnfromtheallocations inrespectof
eachcategory,thatis160,000,13,000and57»000u.a.respectively !
WhereasMemberStatesmayexhausttheirinitialsharesatdifferentrates!
whereastoavoiddisruptionofsuppliesonthisaccountitshouldbeprovi-
dedthatanyMemberStatewhichhasalmostuseduponeofitsinitialshares
shoulddrawanadditionalsharefromthereserve!whereaseachtimeits
additional shareisalmostexhaustedaMemberStateshoulddrawafurther
share,andsoonasmanytimesasthereserveallows!whereastheinitial
andadditionalsharesshouldbevaliduntiltheendofthequotaperiod;
Whereasthisformofadministration requiresclosecollaboration between
theMemberStatesandtheCommission ,andtheCommissionmustbeinaposi­
tiontokeepaccountoftheextenttowhichthequotahasbeenusedup
andtoinformtheMemberStatesaccordingly !
Whereasifatagivendateinthequotaperiodaconsiderable quantityofa
MemberState'sinitialshareremainsunuseditisessential,topreventa
partofthequotafromremainingunusedinoneMemberStatewhileitcould
beusedinothers,thatsuchStateshouldreturnasignificantproportion
thereoftothereservej
Whereas,sincetheKingdomofBelgium,theKingdomoftheNetherlands and
theGrandDuchyofLuxembourg .areunitedwithinandjointlyrepresented
•••I•••

-4-
bytheBeneluxEconomioUnion,anytransactioninrespectoftheadmini­
strationofthesharesallocatedtothatEconomicUnionmaybecarriedout
"byanyoneofitsmembers!--
HASADOPTEDTHISREGUI^ICNî ._.
ArticleI
I.There,shallbeopenedfortheperiodISeptember1975"to31August1976a
Communitytariffquotaof1,870,000unitsofaccountofvalueaddedinre­
spectof.goodsresultingfromtheprocessingworkprovidedforinthe
ArrangementwithSwitzerland onprocessingtrafficintextiles.Suchquota
shallbedividedasfollows:
a)1,520,000unitsofaccountforprocessingworkonwovenfabricsfalling'
withinChapters50to57oftheCommonCustomsTariff}
b)123,000unitsofaccountfortwistingorthrowing,cabling,texturizing ,
(whethercombinedwithotherprocessingwork)ofyarnsfallingwithin
Chapters50to.57oftheCommonCustomsTariff}
c)277»000unitsofaccountforprocessingworkonarticlesfallingwithin,
thefollowingheadingsoftheCommonCustomsTariff:
53.04-Wovenpilefabricsandphenillefabrics :(otherthanterrytowel–\
...lingorsimilarterryfabricsofcottonfallingwithinheading
No.55*08andfabricsfallingwithinheadingHo.58.05);•
-,'53.05Narrowwovenfabrics,andnarrow,fabrics(bolduc)consistingof
.warpwithoutweftassembledbymeansofanadhesive,otherthan
goodsfallingwithinheadingNo.58.05J,.
58.07Chenilleyarn(includingflockchenilleyam),gimpodyarn(other
thanmetallised ,yarnofheadingNo52.01andgimpedhorsehair
yarn)Jbraidsandornamentaltrimmingsinthepiece}tassels,pom­
pomsandthelike}
58.08Tulleandothernetfabrics(butnotincludingwoven,knittedor
crochetedfabrics),plainj
53.09Tulleandothernetfabrics(butnotincludingwoven,knittedor
crochetedfabrics),figured}handormechanically madela'?e,in
thepiece,instripsorinmotifs}

-5-
60.01knitted ,orcrochetedfabric,notelasticnorrubberized.
2.ForthepurposesofthisRégulation,
a)"processingwork"means:
-forthepurposesofparagraphI(a)and(c):bleaching,dyeing,.
printing,flocking,impregnating ,dressingandotherworkwhich
changestheappearanceof-qualityofthegoods,without,however,
changingtheirnaturej, ^
-forthepurposesofparagraphI(b):twistingorthrowing,cabling
andtexturizing ,whetherornotcombinedwithreeling,dyeingorother
workwhichchanges ,theappearance,qualityorfinishofthegoods,
withouthoweverchangingtheirnature.
b)"addedvalue'*means:thedifferencebetweenthevalueforcustomspur­
posesasdefinedbyRegulation(EKJ)No803/68(i)andthevaluefor
customspurposesasitwouldbeiftheproductswereimportedinthe.
samestateinwhichtheywereexported.
3.EachoftheamountsreferredtoinparagraphIshallbesubdividedinto
twotranches 5thefirstshallbeallocatedamongcertainMemberStatesin
accordancewithArticle3$thesecondshallconstituteaCommunityreserve
forthethreecategoriesofprocessing.
4.TheCommonCustomsTariffdutiesshallbetotallysuspendedinrespectof
importations undertheabovequota.
NewMemberStatesshallapplyinrespectofimportations withinthequota
dutiescalculatedinaccordancewiththerelevantprovisionsoftheAct
ofAccession.
I0JNoL148,28.6.1968,p.I.

ThefirsttrancheofeachoftheamountsreferredtoinArticlel(l)shall
beallocatedasfollowsaajongtheMemberStatesmentionedintheArrange­
ment5thesharesshallbevalidsubjecttoArticle6fromISeptember1975
to31August197^
a)Germanyj
M'
1,080,000unitsofaccount,dividedasfollows:
-850,000unitsofaccountforprocessingworkonwovenfabricsfalling
withinChapters50to57oftheCommonCustomsTariffj
-100,000unitsofaccountfortwistingorthrowing,cabling,texturizing
(whethercombinedwithotherprocessingwork)ofyarnsfallingwithin
Chapters50to-57.oftheCommonCustomsTariffj
-130,000unitsofaccountforprocessingworkonarticlesfallingwithin
headings58.04»58.05»58.07,58.08,58.09and60.01oftheCoriimon
CustomsTariffs ' ,v
b)France:
520,000unitsofaccount,dividedasfollows:
-500,000unitsofaccountforprocessingworkonfabricsfallingwithin
Chapters50to57oftheCommonCustomsTariffj
-20,000unitsofaccountforprocessingworkonarticlesfallingwithin
headings58.04,58.05,58.07,58.08,58.09and60.01oftheCommon
CustomsTariffs
c)Italy: ■' 7
20,000unitsofaccount,i.e.halffortwistingorthrowing,cabling,
texturizing(whethercombinedwithotherprocessingwork)ofyarnsfallin
withinChapters50"to57oftheCommonCustomsTariff,andhalfforpro­
cessingworkonwovenfabricsfallingwithinChapters50to57on
articlesfallingwithinheadings58.04,58.05,58*07,58*08,58.09and
60.01oftheCommonCustomsTariffî :

-7-
ά)Ββηθίΐΐχί ;
20,000unitsofaccountforprocessingwork-onyarnsandwovenfabrics
fallingwithinChapters50to57oronarticlesfallingwithinheadings
58.04,58.05,58.07,58.08,58.09and60.01oftheCommonCustomsTariff.
2.ThesecondtrancheofeachoftheamountsreferredtoinArticlel(l):
-160,000,13,000and57»000unitsofaccountrespectively-shall,
constitutetheCommunityreserve,whichshallthusamountto230,000.;
unitsofaccount.
Article3
IftheprocessingworkreferredtoinArticlel(l)(b)isrequiredinPrance
orifanyprocessingworkisrequiredinthenewMemberStates,thoseStates
shalldrawasufficientsharefromthereserve,totheextentthatthere­
servesopermits.
Articig4
1.AssoonasaMemberStatehasused$Ofaormoreofoneofitsinitialshares
asfixedinArticle2(l),orofthatshareminusanyportionreturnedtothe
reservepursuanttoArticle6,itshallforthwith,"bynotifyingtheCommission,
drawasecondshare,totheextentthatthereservesopermits,equalto
10$ofitsinitialshare,roundeduptothenearestunit.
2.AssoonasaMemberStatetafterexhaustingoneorotherofitsinitial .
shares,hasusedSCffoormoreofthesecondsharedrawn"byit,thatMember
Stateshallforthwith,inthemannerandtotheextentprovidedinpara­
graphX,drawathirdshareequalto5$ofitsinitialshare.

-s-
Assoon asaMember State ,after exhausting oneorother ofitssecond ,
shares ,hasused 9ormore ofthethird share drawn byit,that -Member
State shall ,inthemanner andtotheextent provided inparagraph I,draw
afourth share equal tothethird .
Itshall continue inthis fashion until the reserve isexhausted .
Bywayofderogation from paragraphs I,2and3,aMember State maydraw
shares lower than those specified inthose paragraphs ifthere aregrounds
forbelieving that those specified maynotbeused infull .-AnyMember State
applying this paragraph ,shall inform theCommission ofitsgrounds forso
doing .
Article 5
Additional shares drawn pursuant toArticle 4shall bevalid until 31Au­
gust 1976 .
Article .6 ..
AMember State which on15May1976 hasnotexhausted oneorother ofits
initial shares asfixed inArticle 2(l)orresulting from theapplication
of .Article 3shall not ,later than TOJune 1976 return tothereserve any
unused portion inexcess of20fcoftheinitial amount .It ,nayreturn a
greater portion ifthere aregrounds forbelieving that such portion may
not beused infull .
Member States shall ,not .later than 10June 1976,notify theCommission of
thetotal quantities oftheproduct inquestion reimported uptoandinclur -
ding 15May197^andcharged against theCommunity quota andofmyportion
oftheir initial shares returned tothe reserve .

-9-
. Article 7
TheCommission shall keep anaccount oftheshares opened "bytheMember
States pursuant toArticles 2,3and .4andshall ,assoon astheinformation
reaches it,inform each State oftheextent towhich thereserve hasbeen
used up.
Itshall ,notlater than 15June 1976 ,inform theMember States ofthe
amount still inreserve following anyreturn ofshares pursuant toArticle 6.
Itshall ensure that when anamount exhausting thereserve isdrawn the
amount sodrawn does notexceed thebalance available ,andtothis endshall
notify theamount ofthat balance totheMember State making thelast
drawing .
"I'
Article 8
1.Every Member State shall take allappropriate measures toensure that shares
drawn pursuant toArticle 4areopened insuch awaythat importations maybe
charged without interruption against itsaccumulated share oftheCommunity
quota .
2.Member States shall administer their shares bythesystem ofprior alloca­
tion .They shall ensure that allpersons involved intheprocessing traffic
intheir territory have free access tothequotas allocated tothem .
3.Theextent towhich aMember State hasused upitsshares shall bedeter­
mined onthebasis ofthevalue added admitted upon reimportation ofthe
products concerned entered with thecustoms authorities forhome use .
*m•/•••

-10-
Articlé9
EveryMemberStateshallnotifytheCommissionatregularintervalsof
productsreimportedandchargedagainstitsshare.
Article10
TheMemberStatesandtheCommissionshallcooperatecloselytoensurethat:
thisRegulationiscompliedwith.
ArticleII
ThisRegulationshallenterintoforceonISeptember1975*
ThisRegulationshallbebindinginitsentiretyenddirectly'
applicableinallMemberStates. "
DoneatBrussels, FortheCouncil
ThePresïdélit•