Proposal for a

COUNCIL DECISION

of ...

amending at mid-term Council Decision 91/482/EEC of 25 July 1991 on the Association of the Overseas Countries and Territories with the European Community

(96/C 139/01)

COM(95) 739 final - 96/0043(CNS)

(Submitted by the Commission on 16 February 1996)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 136 thereof,

Having regard to the Internal Agreement on the financing and administration of Community aid in the framework of the second financial protocol to the fourth Lomé Convention, signed in ... on ...,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas Article 240 (3) of Council Decision 91/482/EEC of 25 July 1991 on the association of the overseas countries and territories, (hereinafter referred to as 'the OCT'), with the European Community lays down that, before the end of the first five years, the Council, acting unanimously on a proposal from the Commission, shall establish the Community's financial assistance for the second five-year period opened by this Decision and any amendments to its provisions ();

Whereas the Council, in adopting Decision 95/... of ... on the transitional measures applicable from 1 March 1995 in the framework of the Association of the OCT with the EC (), took the necessary steps to ensure the continuity of financial assistance;

Whereas the financial assistance for the second period of application of Decision 91/482/EEC has been increased to stand at ECU 165 million under the eighth European Development Fund, hereinafter referred to as 'the Fund', and ECU 35 million in loans from the own resources of the European Investment Bank, hereinafter referred to as 'the Bank'; whereas this assistance may be maintained at unchanged levels in respect of non-programmable aid and increased accordingly in respect of financing for development projects and programmes implemented under the indicative programmes of the OCT;

Whereas, in accordance with Article 240 (3) of Decision 91/482/EEC, the competent OCT authorities have informed the Commission of the amendments or additions they desired through written memoranda and at meetings held in the context of Commission/Member State/OCT partnership; whereas the Commission then sent the Council a communication on the mid-term review of the association of the OCT with the EC in which it recommended various amendments to the Decision (); whereas these amendments take account, as far as is possible, of the desires of the OCT, the experience gained by the Commission in the five years of implementing Decision 91/482/EEC, the steps taken towards building the European Union since 1991 and the mid-term review of the fourth ACP-EC Convention;

Whereas by Decision 91/482/EEC the Council introduced the possibility of consultations with the local OCT authorities through the Commission/Member State/OCT partnership arrangements and whereas the memoranda drawn up preparatory to the mid-term review of the Decision showed the local authorities' enthusiasm for these arrangements; whereas the partnership arrangements should therefore be strengthened and consultations put on a regular footing;

Whereas the introduction under Decision 91/482/EEC of free access for all products originating in the OCT and the maintenance of cumulation for ACP and OCT originating products has given rise to the risk of conflict between two Community policy objectives, namely the development of the OCT and the common agricultural policy; whereas serious disruption on the Community markets for certain products subject to a common organization of the market led to the adoption of safeguard measures in 1993; whereas the Court of First Instance of the European Community ruled in its judgment of 14 September 1995 that decisions in the framework of the association 'must therefore serve to strengthen the association of the OCT in order to increase trade and to promote jointly economic and social development... without, however, hindering the adoption of a common policy in the sphere of agriculture ...';

Whereas measures to create a propitious framework for regular trade flows that is also compatible with the common agricultural policy should be taken in order to prevent fresh disruption; whereas these objectives may be achieved by more detailed and fuller provisions on the rules of origin, in particular the exclusion of cumulation for agricultural products coupled with greater flexibility as regards derogations;

Whereas the mid-term review of the fourth Lomé Convention has produced a number of improvements designed to make cooperation more coherent and effective, to promote local initiatives through decentralized cooperation, to place a new emphasis on the development of trade and services and to step up dialogue in the context of the programming of EDF resources; whereas these improvements would also be desirable in cooperation of the OCT and that Decision 91/482/EEC should therefore be amended accordingly, mutatis mutandis;

Whereas, lastly, Decision 91/482/EEC should be supplemented by a number of provisions aimed at taking more account of the human dimension to the association of the OCT with the Community; whereas this can be done by making citizens of the OCT eligible for a number of Community programmes open to citizens of the European Union; whereas this can also be done by providing for the recognition, in time, of diplomas acquired in the OCT in respect of certain professions,

HAS DECIDED AS FOLLOWS:

Article 1

Decision 91/482/EEC shall be amended as follows:

A. THROUGHOUT THIS DECISION

1. The term 'European Economic Community' shall be replaced by the term 'European Community', and the abbreviation 'EEC' by 'EC'.

2. The term 'Council of the European Communities' by the term 'Council of the European Union'.

3. The term 'Delegate' shall be replaced by the term 'Head of Delegation'.

B. PART ONE

GENERAL PROVISIONS OF EC-OCT

COOPERATION

Article 2 (Article 4 of Lomé IV)

4. In Article 2, the following paragraph shall be added:

'In support of the development strategies of the OCT, due account shall be taken of both the objectives and priorities of the Community's cooperation policy, and the OCT's development policies and priorities.'

Articles 7, 8 and 9 (Articles 20, 21 and 22 of Lomé IV)

5. The chapter heading 'Decentralized cooperation and partnership' shall be replaced by the heading 'Partnership'.

6. Articles 7, 8 and 9 shall be deleted.

C. PART TWO

THE AREAS OF EC-OCT COOPERATION

TITLE I

ENVIRONMENT

Article 16 (Article 39 of Lomé IV)

7. In Article 16, the following paragraph 2a shall be added:

'2a. Council Regulation (EEC) No 259/93 of 1 February 1993 on the supervision and control of shipments of waste within, into and out of the European Community shall apply to imports into the Community of hazardous waste from the OCT ().

'

TITLE V

INDUSTRIAL DEVELOPMENT, MANUFACTURING

AND PROCESSING

Article 48 (Articles 87 to 98 of Lomé IV)

8. Article 48 shall be replaced by the following:

'Article 48

At the request of their relevant authorities, the OCT may be eligible for the services of the Centre for the Development of Industry referred to in Articles 87 to 98 of the fourth Lomé Convention, hereinafter referred to as 'the CDI', the objectives and activities of which are described in Chapter 1, or those of the Euro Info Correspondence Centres set up under the Community's business promotion policy, the objectives and activities of which are described in Chapter 2.

Any costs resulting from services provided by the CDI or the Euro Info Correspondence Centres for the benefit of the OCT shall be financed from the funds provided for in Article 154 for whichever of the three groups the OCT in question belong to.'

9. The following Chapter 1 shall be inserted:

'Chapter 1

The Centre for the Development of Industry (CDI)'

Article 48a (Article 89 of Lomé IV)

10. The following Article 48a shall be inserted:

'Article 48a

1. The CDI shall help to establish and strengthen industrial enterprises in the OCT, especially by encouraging joint initiatives by economic operators of the Community and of the OCT. The CDI shall exercise selectiveness in undertaking its tasks, laying emphasis on opportunities for joint ventures and subcontracting.

2. The CDI shall:

(a) with a view to ensuring its effectiveness, focus its efforts on OCT that have:

(i) identified support for industrial development, or for the private sector in general, within the framework of Article 187 (3) (b) and (c) in their indicative programmes; and/or

(ii) obtained financial contributions and assistance from other Community institutions for the promotion and development of the private and/or the industrial sector;

(b) carry out its activities in the framework of the implementation of industrial development or private sector support projects established by the OCT referred to in subparagraph (a) for their indicative programmes;

(c) step up its operational presence in the OCT referred to in subparagraph (a), particularly with regard to the identification of projects and project promoters and to providing assistance for the presentation of such projects to the financing institutions;

(d) give priority to the identification of operators with viable small to medium-sized industrial projects and, in the case of those meeting the needs of the OCT, to assisting them in their promotion and implementation.

3. The Commission, the Bank, and the CDI shall maintain operational cooperation in the context of their respective responsibilities. To this end, and to ensure the consistency of Community operations in support of the private sector, in general, and the industrial sector, in particular, in the OCT referred to in paragraph 2 (a), the Commission shall, in consultation with the Bank and in liaison with the CDI, prepare support programmes for these sectors that incorporate guidelines for the strategy to be pursued.'

Article 48b (Article 90 of Lomé IV)

11. The following Article 48b shall be added:

'Article 48b

1. In undertaking the tasks referred to in Article 48a the CDI shall operate by giving priority to viable projects. In particular, it shall:

(a) identify, appraise, evaluate, promote and assist in the implementation of economically viable industrial projects of the OCT;

(b) carry out studies and appraisals aimed at identifying practical opportunities for industrial cooperation with the Community in order to promote the industrial development of the OCT, and facilitating the implementation of appropriate schemes;

(c) supply information and also specific advisory services and expertise, including feasibility studies, with a view to expediting the establishment and/or restoration of industrial enterprises;

(d) identify potential partners of the OCT and the Community for joint investment operations and assist in the implementation and follow-up;

(e) identify and provide information on possible sources of financing, assist in the presentation for financing and, where necessary, assist in the mobilization of funds from these sources for industrial projects in the OCT;

(f) identify, collect, evaluate and supply information and advice on the acquisition, adaptation and development of appropriate industrial technology relating to specific projects and, where appropriate, assist in the setting up of experimental or demonstration schemes.

2. In order to improve the attainment of its objectives, the CDI, in addition to its main activities, may also pursue the following:

(a) carry out studies, market research and evaluation work and gather and disseminate all relevant information on the industrial cooperation situation and opportunities and notably on the economic environment, the treatment which potential investors may expect and the potential of viable industrial projects;

(b) help, in appropriate cases, to promote the marketing of OCT manufactures on their domestic markets and the markets of other OCT, the ACP States and the Community in order to encourage optimum exploitation of installed or projected industrial capacity;

(c) identify industrial policy-makers, promoters and economic and financial operators in the Community and the OCT, and organize and facilitate contacts and meetings of all kinds between them;

(d) identify, on the basis of needs indicated by the OCT, opportunities in industrial training, chiefly on the job, to meet the requirements of existing and planned industrial undertakings in the OCT and, where necessary, assists in the implementation of appropriate schemes;

(e) gather and disseminate all relevant information concerning the industrial potential of the OCT and trends of industrial sectors in the Community and the OCT;

(f) promote the subcontracting and also the expansion and consolidation of regional industrial projects.'

12. The following Chapter 2 shall be inserted:

'Chapter 2

Euro Info Correspondence Centres (EICC)'

13. The following Article 48c shall be inserted:

'Article 48c

In respect of the OCT the tasks of the EICC shall be to:

- disseminate Community information to OCT firms,

- gather and transmit to the Euro Info Centres (EIC) information from the OCT that may be of use to European small and medium-sized enterprises,

- answer general, legal, administrative and statistical questions from OCT firms about the European Union,

- answer general, legal, administrative and statistical questions from Community firms about the OCT.

To achieve the greatest possible reciprocity in the exchange of information, the Commission shall ensure that Community firms have access to the same type of information and the same advisory/support services in relation to the OCT as those offered by the Community to OCT firms.

Only one correspondence centre shall be set up per country or territory and each centre may develop a subnetwork to suit its own needs and resources in order to ensure as wide a dissemination of information and services as possible.'

14. The following Article 48d shall be inserted:

'Article 48d

The tools and services to be made available to or to be acquired by the correspondence centre for the proper performance of its work are the following:

(a) documentation: a list of documents selected for basic library collection (to be acquired): terms and cost of acquisition;

(b) a specific software programme (to be acquired) for creating and managing dossiers on specific issues and conducting searches on previous dossiers and existing document and databases;

(c) databases: a list of accessible (for which there is a charge) and terms and cost of connection;

(d) training: 'teach yourself' courses (to be acquired), timetable of training sessions (specific Community matters, working of the EICs), fee-paying training sessions in database use, and annual conference of all EICs and EICCs (travel and accommodation expenses to be borne by the EICC);

(e) access to information officers of the central administration for replies to requests for information on Community-related matters;

(f) access to the capitalization database via the VANS: this EIC-network database contains questions and answers on mainly Community matters;

(g) electronic mail: the EICCs shall have access to the electronic mail system, in particular the EIC network's own environment.'

15. The following Article 48e shall be inserted:

'Article 48e

1. A request for the establishment of a correspondence centre and the choice of host structure should be addressed to the Commission by the competent authorities of the country or territory through the channels provided for in Article 222.

2. An agreement providing for, inter alia, sufficient human, material and financial resources shall be concluded between the EICC and the Commission.

3. At the request of the competent authorities and in accordance with the procedures set out in Part Three, Title III, of this Decision, partial financing may be made available to the EICC host structure from the grant aid available under the local or regional indicative programme.

4. The following criteria shall be used to select applicant host structures of the EICCs:

- experience in assisting and advising businesses and a business-oriented attitude to small and medium-sized enterprises,

- representativeness in respect of business sector in the applicant country or territory,

- knowledge of European issues,

- the will and the ability to ensure reciprocity of services to OCT and Community firms,

- the potential for financial independence,

- the willingness to employ as staff for the centre people with a good command of English or French and experience of computers,

- provision of computer and communications equipment that complies with the specifications,

- an undertaking to serve all small and medium-sized enterprises equally without discrimination as to status or sector, where appropriate in liaison with other EICs or EICCs on the network.'

TITLE IX

DEVELOPMENT OF SERVICES

Chapter 4

Transport, communications and informatics

Article 79 (Article 129 of Lomé IV)

16. In Article 79, '1' shall be inserted at the beginning of the sole paragraph and the following paragraphs 2 and 3 added:

'2. With a view to contributing to the promotion and development of the OCT maritime trade, the contracting parties may, in the framework of the implementation of development finance cooperation, give special attention within the existing instruments to the facilitation and encouragement of access for OCT maritime operators to the resources provided for in this Convention, in particular as regards projects and programmes for improving the competitiveness of their maritime services.

3. The Community may give assistance in the form of risk-capital and/or loans by the Bank to finance projects and programmes in the sectors set out in this Article.'

TITLE X

TRADE DEVELOPMENT

Article 84 (Article 135 of Lomé IV)

17. Article 84 shall be replaced by the following:

'Article 84

With a view to attaining the objectives set out in Article 100, the Community shall implement measures for the development of trade at all stages up to final distribution of the product.

The object is to ensure that the ACP States derive the maximum benefit from the provisions of this Decision and may participate under the most favourable conditions in the Community, domestic, subregional, regional and international markets by diversifying the range and increasing the value and the volume of the OCT's trade in goods and services.

To this end the competent OCT and Community authorities undertake to ensure that high priority is given to trade development programmes in the context of establishing national and regional programmes as provided for in Article 187 and other relevant provisions of this Convention.'

Article 85 (Article 136 of Lomé IV)

18. In Article 85, paragraphs 1 and 2 shall be replaced by the following:

'1. In addition to developing trade between the OCT and the Community, particular attention shall be given to operations designed to increase the OCT's self-reliance and improve regional cooperation in trade and services.

2. Within the instruments provided for in this Convention and in accordance with the provisions set out in relation thereto, operations shall be undertaken at the request of the competent OCT authorities, particularly in the following areas:

- support for the definition of appropriate macroeconomic policies necessary for trade development,

- support for the creation or reform of appropriate legal and regulatory frameworks as well as for the reform of administrative procedures,

- the establishment of coherent trade strategies,

- support for the OCT in developing their internal capacities, information systems and awareness of the role and importance of trade in economic development,

- support for strengthening the infrastructure related to trade and in particular support for the OCT's efforts to develop and improve supportive service infrastructure, including transport and storage facilities, in order to ensure their effective participation in the distribution of goods and services and in order to enhance the flow of exports from the OCT,

- development of human resources and professional skills in the field of trade and services, in particular in the processing, marketing, distribution and transport sectors for the Community, regional and international markets,

- support to private sector development and, in particular, to small and medium-sized enterprises for product identification and development, market outlets and export-oriented joint ventures,

- support for OCT actions aimed at encouraging and attracting private investment and joint venture operations,

- the establishment, adaptation and strengthening of organizations in the OCT dealing with the development of trade and services, particular attention being paid to the special needs of organizations in the least-developed OCT,

- support for the OCT's efforts to develop and improve the quality of their products, adapt them to market requirements and diversify their outlets,

- support for the OCT's efforts to penetrate third-country markets more effectively,

- market development measures including increasing contacts and exchanges of information between economic operators in the OCT, ACP States, the Member States and third countries,

- support for OCT in the application of modern marketing techniques in production-oriented sectors and programmes, in particular in areas such as rural development and agriculture.'

TITLE XI

CULTURAL AND SOCIAL COOPERATION

19.

The Title 'Cultural and social cooperation' shall be replaced by 'Cultural and social cooperation and combating drug abuse'.

Article 88 (Articles 139 and 140 of Lomé IV)

20. In the last line of Article 88 the words 'and nutrition' shall be replaced by 'and combating drug abuse'.

Article 88a (Article 154 of Lomé IV)

21. The following Article 88a shall be inserted:

'Article 88a

1. The Community recognizes the importance of the health sector in ensuring the sustainable and self-reliant development of the OCT. The aim of cooperation shall be to facilitate the right of access of the greatest number of people to adequate health care, thus promoting equity and social justice, alleviating suffering, reducing the economic burden of disease and mortality, and promoting the effective participation of the community in operations to improve health and well-being.

The attainment of these aims calls for:

- a systematic, long-term approach to the improvement and strengthening of the health sector,

- the definition of comprehensive national health guidelines and programmes,

- improved management and use of existing human, financial and physical resources.

2. To this end, cooperation in this sector shall seek to support functional and sustainable health services which are financially affordable, culturally acceptable, geographically accessible and technically competent. It shall seek to promote an integrated approach to the creation of health services based on the extension of preventive care, the improvement of curative care and complementarity between hosptial-based and basic-level services, in accordance with primary health care policy.

3. Cooperation in the health sector may provide support for:

- the improvement and extension of basic health services and also the strengthening of hospitals and maintenance of equipment, acknowledged as essential for the smooth operation of the health system as a whole,

- health-sector planning and management, including the strengthening of statistical services, and the formulation of health-financing strategies at territorial, regional and district levels, this last level being the focal point for coordination of basic services, provision of specialist services and implementation of programmes to stamp out widespread diseases,

- schemes to integrate traditional medicine in modern health care,

- essential drug programmes and strategies, including local production units for basic drugs and consumables, taking account of traditional pharmacy, in particular the use of medicinal plants, which is something that should be studied and developed,

- training of staff in the context of an overall programme, from public health planners, administrators, management staff and specialists, down to the personnel working in the field; this training being tailored to the actual responsibilities borne at each level,

- support for training and information programmes and campaigns aimed at stamping out endemic diseases, improving environmental hygiene, combating the use of narcotic drugs, the spread of transmitted diseases and other health scourges in the framework of integrated health systems,

- the building up of research institutes, university departments and specialist schools in the OCT, notably in the field of public health.'

TITLE XII

REGIONAL COOPERATION

Article 90 (Article 156 of Lomé IV)

22. In Article 90, the second subparagraph of paragraph 4 shall be replaced by the following:

'It shall include regional cooperation between OCT, ACP States, overseas departments, the Canary Islands, the Azores and Madeira, in accordance with Article 98. The funding to cover the participation of ACP States, overseas departments, the Canary Islands, the Azores and Madeira shall be additional to the funds allocated to the OCT under this Decision.'

Article 91 (Article 157 of Lomé IV)

23. In Article 91 (1), the third indent shall be replaced by the following:

'- one or more of the OCT and one or more ACP States, overseas departments, the Canary Islands, the Azores or Madeira,'

Article 92 (Article 158 of Lomé IV)

24. In Article 92, paragraph 1 (d) shall be replaced by the following:

'(d) acceleration of economic diversification in order to stimulate complementarity in production and intensification of cooperation and development within and between OCT regions, and between the regions and ACP States, overseas departments, the Canary Islands, the Azores and Madeira;'

25. In Article 92, paragraph 1 (h) shall be replaced by the following:

'(h) expansion of the OCT's markets by promoting trade among OCT and between OCT, ACP States, neighbouring third countries and overseas departments, the Canary Islands, the Azores and Madeira;'

D. PART THREE

THE INSTRUMENTS OF EC-OCT COOPERATION

TITLE I

TRADE COOPERATION

Chapter I

General trade arrangements

Article 101 (Article 168 Lomé IV)

26. In Article 101:

Paragraph 1 is replaced by the following:

'Without prejudice to the provisions of Annex IIa, products originating in the OCT shall be imported into the Community free of import duty.'

The first indent of paragraph 3 shall be replaced by the following:

'- agricultural products listed in Annex II to the Treaty nor to products covered by Council Regulation (EC) No 3448/93 of 6 December 1993 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products (),

'

Paragraphs 4 and 5 shall be deleted.

Article 108 (Article 176 of Lomé IV)

27. In Article 108:

Paragraph 2 shall be replaced by the following:

'2. Any amendments to Annexes II and III shall be adopted by the procedure laid down in Article 249 of Council Regulation (EEC) No 2913/92 of 12 October 1992, establishing the Community Customs Code ().

'

Paragraph 3 shall be deleted.

28. Chapter 2 shall be deleted.

TITLE II

COOPERATION IN THE FIELD OF COMMODITIES

Chapter 1

Stabilization of export earnings from agricultural

commodities (Stabex)

Article 115 (Article 187 of Lomé IV)

29. In Article 115, item 24 of paragraph 1 shall be replaced by the following:

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The following item 50 shall be added:

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Article 121 (Article 194 Lomé IV)

30. In Article 121, the following paragraph 5 shall be added:

'5. Other than the reduction referred to in paragraph 2, there shall be no further reduction as a result of a shortfall in the resources of the system if, in the case of the least-developed OCT, the transfer basis reduced in accordance with paragraph 2 is less than ECU 1 million.'

Article 129 (Article 203 of Lomé IV)

31. Article 129 shall be replaced by the following:

'Article 129

1. Should examination of:

(a) marketed production in the application year by comparison with the reference period; or

(b) total exports as a share of marketed production over the same period; or

(c) the share of total exports going to the Community over the same period; or

(d) the sum of the figures referred to in (b) and (c)

reveal a large decline, consultations shall be held between the Commission and the competent authorities of the country or territory to determine whether the transfer basis is to be maintained or reduced, and if reduced, to what extent.

2. For the purpose of applying paragraph 1, a decline shall be deemed to be large if it is at least 20 %.'

TITLE III

DEVELOPMENT FINANCE COOPERATION

Chapter 1

General provisions

Section 4

Scope of financing

Article 147 (Article 224 of Lomé IV)

32. In Article 147, subparagraph (g) shall be replaced by the following:

'(g) the human and material resources, supplementary to those borne by the OCT strictly necessary for efficient and effective administration of and supervision of projects and programmes financed by the European Development Fund, hereinafter referred to as "the Fund";'

Section 6

Eligibility for financing

Article 153 (Article 230 of Lomé IV)

33. In Article 153, subparagraph 2 (g) shall be replaced by the following :

'(g) decentralized agents from OCT and from the Community, to enable them to undertake economic, cultural, social and educational projects and programmes in the OCT in the framework of decentralized cooperation.'

Chapter 2

Financial cooperation

Section 1

Financial resources

Article 154a (second financial protocol to Lomé IV)

34. The following Article 154a shall be inserted:

'Article 154a

1. For the purposes set out in Chapter 1 of this Title, and for a period of five years commencing on 1 March 1995, the overall amount of the Community's financial assistance shall be ECU 200 million.

This amount shall comprise:

(a) ECU 165 million from the Fund, allocated as follows:

(i) for the purposes set out in Articles 143, 144 and 147, ECU 126,5 million in the form of grants;

(ii) for the purposes set out in Articles 143, 144 and 147, ECU 30 million in the form of risk capital;

(iii) for the purposes set out in Articles 114 to 136, ECU 5,5 million in the form of transfers from the Stabex facility for the stabilization of export earnings;

(iv) for the purposes set out in Articles 137 to 142, ECU 2,5 million in the form of grants from the Sysmin facility;

(b) for the purposes set out in Articles 143, 144 and 147, not more than ECU 35 million from the Bank in the form of loans from own resources in accordance with the terms and conditions provided for by its statute. These loans shall be subject to the provisions of Article 157 on interest rate subsidies.

2. The Bank shall administer loans from its own resources, including interest-rate subsidies, and risk capital. All other financial resources provided for in this Decision shall be administered by the Commission.

3. The amount referred to in paragraph 1 (a) (i) shall be allocated as follows:

(a) ECU 105 million to finance projects and programmes, which shall be broken down as follows:

(i) United Kingdom OCT: ECU 19,2 million;

(ii) French OCT: ECU 50,3 million;

(iii) Dutch OCT: ECU 35,5 million;

(b) ECU 10 million to finance regional projects and programmes in the OCT, including regional programmes to develop trade and services under Article 85 and the partnership arrangements referred to in Articles 234 and 235;

(c) ECU 8,5 million to finance the interest rate subsidies referred to in Article 157;

(d) a special allocation of ECU 3,5 million, of which:

(i) ECU 3 million for emergency aid as provided for in Article 164; and

(ii) ECU 0,5 million to aid refugees, returnees and displaced persons as provided for in Article 165;

(iii) should the appropriations provided for under one of the Articles referred to above be exhausted before the expiry of this Decision, transfers may be made from the appropriations provided for in the other Article;

(iv) on the expiry of this Decision, appropriations not committed for emergency assistance or aid for refugees, returnees and displaced persons shall be returned to the Fund for the purpose of financing other operations coming within the scope of development finance cooperation, unless the Council, by a qualified majority, decides otherwise;

(v) should all the special appropriations be exhausted before the expiry of this Decision, the Council shall adopt by a qualified majority, on a proposal from the Commission, appropriate measures to deal with the situations referred to in Articles 164 and 165.'

Section 2

Terms and conditions of financing

Article 155 (Article 233 of Lomé IV)

35. In Article 155, paragraph 4 shall be replaced by the following:

'4. Where financial assistance is granted to the final recipient through an intermediary or directly to the final beneficiary in the private sector:

(a) the terms on which the assistance may be made available by the intermediary to the final recipient or directly to the final beneficiary in the private sector shall be laid down in the financing agreement or loan contract; and

(b) any financial benefit accruing to the intermediary from the on-lending transaction, or resulting from direct lending operation to the final beneficiary in the private sector, shall be used for development purposes, on the conditions laid down in the financing agreement or the loan contract, after taking into account administrative costs, exchange and financial risks, and the cost of technical assistance given to the final recipient.'

Article 155a

36. The following Article 155a shall be inserted:

'Article 155a

Any funds remaining from those earmarked for special loans under the Fifth and Sixth Funds, whether for a country or territory or region, which have not been committed by the date of this Decision, plus any funds decommitted following closures, shall be used for grants.

The Chief Authorizing Officer of the Fund shall implement this conversion.'

Article 156 (Article 234 of Lomé IV)

37. In Article 156:

- the introductory words of paragraph 1 shall be replaced by the following:

'1. Risk capital may be deployed in the form of loan, equity participation or other quasi-capital assistance.'

- the following subparagraph 1 (ba) shall be inserted:

'(ba) Quasi-capital assistance may consist of shareholders' advances, convertible bonds, loans with participating rights or any other similar form of assistance.'

- subparagraph 1 (c) shall be replaced by the following:

'(c) The terms of risk capital operations shall depend on the characteristics of each project or programme financed and shall in general be more favourable than those of subsidized loans. In the case of loans to the OCT or to intermediaries the interest rate shall, in any case, be less than 3 %.'

- the following subparagraphs 1 (d) and 1 (e) shall be added:

'(d) Risk capital resources may be used in support of pre-investment studies and technical assistance, as provided for in Article 175 (g). In such cases, the loans shall be repaid only if the investment is carried out.

(e) Equity participation or other quasi-capital assistance shall be remunerated on the basis of the performance of the project or programme considered and profits generated shall be shared between the Community and the parties engaged in the abovementioned project or programme.'

- subparagraph 2 (b) shall be replaced by the following:

'(b) in the case of risk capital financing for small and medium-sized enterprises, hereinafter referred to as "SME", the exchange-rate risk shall be shared by the Community, on the one part, and by the other parties involved, on the other. On average, the foreign exchange risk shall be shared equally.'

Article 157 (Article 235 of Lomé IV)

38. In Article 157, the following subparagraph (ba) shall be inserted:

'(ba) in the case of direct financing of the private sector for strictly commercial projects, the rate of subsidy referred to in subparagraph (b) shall not apply.'

Article 158 (Article 236 of Lomé IV)

39. In Article 158, subparagraph (a) shall be replaced by the following:

'(a) contribute, through the resources it manages, to the economic and industrial development of the OCT on a national and regional scale; and to this end, finance as a priority, productive projects and programmes, or other investments aimed at promoting the private sector, in industry, agro-industry, tourism, mining, energy and in transport and telecommunications linked to these sectors. These sectoral priorities shall not exclude the possibility of the Bank's financing, from its own resources, productive projects and programmes in other sectors, including commercial agriculture;'

40. In Chapter 2 of Title III, the following Section 3a shall be inserted:

'Section 3a

Decentralized cooperation

Article 161a (Article 251a of Lomé IV)

1. With a view to strengthening and diversifying the basis for the long-term development of the OCT, and in order to encourage all agents from the OCT and the Community which are in a position to contribute to the autonomous development of the OCT to put forward and implement initiatives, EC-OCT cooperation shall support, within limits laid down by the country or territory concerned, development operations within the framework of decentralized cooperation, in particular where they combine the efforts and resources of organizations from the OCT and their counterparts from the Community. This form of cooperation shall, in particular, aim at making available for the development of the OCT, the capabilities, innovative operating methods and resources of the agents of decentralized cooperation.

2. The agents referred to in this Article are decentralized public authorities, rural and village groups, cooperatives, trade unions, teaching and research institutions, non-governmental development organizations, other associations, groups and agents which are able and wish to contribute to the development of the OCT on their own intiative, provided that these agents and/or operations are non-profit-making.

Article 161b (Article 251b of Lomé IV)

1. In the framework of EC-OCT cooperation special efforts shall be made to encourage and support the initiatives of OCT agents and, in particular, to reinforce the capabilities of these OCT agents. In this framework, cooperation shall support the activities of OCT agents, either on their own or in association with similar agents from the Community, which make their capabilities, experience, technological and organizational capacities or financial resources available to their OCT counterparts.

2. The cooperation shall encourage agents from the OCT and from the Community to provide supplementary financial and technical resources for the development effort including encouragement of partnerships between such agents. The cooperation may provide decentralized cooperation operations with financial and/or technical support drawn from the resources of this Decision under the conditions laid down in Articles 161c, 161d and 161e.

3. This form of cooperation shall be organized in accordance with the role and the prerogative of the public authorities of the OCT.

Article 161c (Article 251c of Lomé IV)

1. Decentralized cooperation operations may be supported through the financial resources of the indicative programme or counterpart funds. The extent of the support shall be that which is necessary for the successful implementation of the proposed operations provided that the viability of the proposed operations has been established in accordance with the provisions for development finance cooperation.

2. Projects or programmes under this form of cooperation may or may not be linked to programmes in the sectors of concentration of the indicative programmes, but may be a way of achieving the specific objectives of the indicative programme or the results of initiatives by decentralized agents.

Article 161d (Article 251d of Lomé IV)

1. Projects and programmes undertaken within the framework of decentralized cooperation shall be subject to the approval of the competent authorities of the country or territory concerned. These operations shall be financed with contributions from:

(a) the Fund, in which case the contribution shall not normally exceed three-quarters of the total cost of each project, or programme, and may not exceed ECU 300 000. The amount representing the Fund's contribution shall be drawn from the grant allocation of the national or regional indicative programme;

(b) the agents of decentralized cooperation, provided that the financial, technical, material and other resources brought in by such agents is not, as a general rule, less than 25 % of the estimated cost of the project/programme; and

(c) exceptionally, by the competent authorities of the country or territory concerned, either in the form of financial contribution or through the use of public equipment or the supply of services.

2. The procedures applicable to projects and programmes financed within the framework of decentralized cooperation shall be those laid down in the development finance cooperation chapter, in particular, those referred to in Article 196.

Article 161e (Article 251e of Lomé IV)

In addition to the possibilities offered to the agents of decentralized cooperation in this Section, in Articles 162 and 163 relating to microprojects and in Article 184 (2) (c) on technical cooperation schemes and Article 206 on emergency assistance, the competent authorities may request or may agree to the participation of agents of decentralized cooperation in the implementation of other Fund projects and programmes, in particular, those performed by direct labour, in conformity with Article 205 and other relevant provisions of the Decision.'

Chapter 5

Implementation procedures

Section 1

Programming

Article 187 (Article 281 of Lomé IV)

41. In Article 187, the introductory words of paragraph 1 'At the beginning of the period covered by this Decision' shall be replaced by '1. At the beginning of the second five-year period covered by the Decision'.

Paragraph 3 shall be replaced by the following:

'3. As soon as each country and territory has been notified of the total amount available to it, the competent authorities shall draw up and submit to the Community a draft indicative programme on the basis of and consistent with its development objectives and priorities. The draft indicative programme shall contain:

(a) the priority development objectives of the country or territory concerned at local and regional levels;

(b) the focal sector or sectors on which support should be concentrated, with emphasis on poverty alleviation and sustainable development, and the resources to be deployed for that purpose;

(c) the most appropriate measures and operations for attaining the objectives in the focal sector or sectors;

(d) wherever possible, specific and clearly identified projects and programmes, and especially those which constitute a follow-up to existing projects and programmes;

(f) any proposals for regional projects and programmes;

(g) a timetable for the implementation of the indicative programme, including commitments and disbursements;

(h) the reserve set aside for insurance against possible claims, and to cover cost increases and contingencies.'

Article 188 (Article 282 of Lomé IV)

42. Article 188 shall be replaced by the following:

'Article 188

1. The draft indicative programme shall be the subject of an exchange of views between the relevant authorities of the country or territory concerned and the Community, due regard being given to the local needs of the country or territory; the indicative programme shall then be adopted by agreement between the Community and the relevant authorities of the country or territory concerned on the basis of the draft indicative programme proposed by those authorities.

2. The indicative programme shall specify all the elements referred to in Article 187 (3) and, where the country or territory has a sufficiently large indicative amount, shall allocate 70 % of the indicative amount.

3. The indicative programme shall be sufficiently flexible to ensure that operations are kept constantly in line with the objectives and to take account of any changes occurring in the economic situation, priorities and objectives of the country or territory concerned. It may be revised at the request of the country or territory.

In the case of OCT referred to in paragraph 2, it shall be reviewed when the country or territory concerned has achieved a high level of commitments in the implementation of the programme and, in any case, not later than three years after the entry into force of the second five years of application of this Decision.

4. At the end of the review referred to in the second subparagraph of paragraph 3, the resources required for completing the implementation of the indicative programme may be allocated giving due consideration to:

(a) the indicative allocation;

(b) progress made in the implementation of the elements of the programme referred to in Article 187 (3) and the agreed timetable of commitments and disbursements, in the light of the annual reports of the head of delegation and of the Local Authorizing Officer referred to in Article 190 (3);

(c) the state of preparation of the activities the competent authorities of the country or territory concerned intend to undertake within the framework of the second phase of the indicative programme; and

(d) the specific situation of the country or territory concerned.

5. Following the review referred to in paragraphs 3 and 4 above and, in any case, not later than the end of the period laid down in Article 154, any unallocated resources remaining from the programmable resources shall be used for financing operations falling within the scope of development finance cooperation, notably those relating to programmable assistance.'

Article 189 (Article 283 of Lomé IV)

43. Article 189 shall be replaced by the following:

'Article 189

The Community and the competent authorities of the OCT shall take all necessary measures to ensure that indicative programmes are adopted in the shortest possible time and, save in exceptional circumstances, within one year of the entry into force of the amended version of this Decision.'

Section 2

Identification, preparation and appraisal of projects

Article 193 (Article 287 of Lomé IV)

44. In Article 193, the following subparagraph (2) (i) shall be added:

'(i) the compatibility with the OCT's trade policies and trade development programmes and the impact on their competitiveness in the domestic, regional, international and Community markets.'

Section 3

Financing proposals and decisions

Article 196 (Article 290 of Lomé IV)

45. Article 196 shall be replaced by the following:

'Article 196

1. With a view to expediting procedures and in derogation from the provisions set out in Articles 194 and 195, financing decisions may deal with multi-annual programmes where financing concerns:

(a) training;

(b) decentralized operations;

(c) microprojects;

(d) trade promotion and trade development;

(e) sets of operations of a limited scale in a specific sector;

(f) project/programme management support;

(g) technical cooperation;

(h) use of the services of the CDI or the establishment of an EICC;

(i) the implementation of Commission/Member State/OCT partnership arrangements.

2. In cases referred to in paragraph 1, the competent authorities of the OCT concerned may submit to the head of delegation a multiannual programme setting out the broad outlines, the types of actions envisaged and the financial commitment proposed:

(a) the financing decision on each multi-annual programme shall be taken by the Chief Authorizing Officer. The letter from the Chief Authorizing Officer to the Local Authorizing Officer notifying such a decision shall constitute the financing agreement within the meaning of Article 197;

(b) within the framework of multi-annual programmes thus adopted, the OCT Authorizing Officer or, when the case arises, the agent of decentralized cooperation which has been delegated functions for this purpose or, in appropriate cases, other eligible beneficiaries shall implement each individual action in accordance with the relevant provisions of this Decision and the terms of the financing agreement referred to in subparagraph (a). Where the implementation is to be carried out by decentralized agents or other eligible beneficiaries, the Local Authorizing Officer and the Head of Delegation shall maintain financial responsibility and monitor the operations regularly with a view to enabling them, inter alia, to carry out their obligations under paragraph 3.

3. At the end of each year, the Local Authorizing Officer in consultation with the Head of Delegation, shall forward a report to the Commission on the implementation of the programmes.'

TITLE IV

GENERAL PROVISIONS FOR THE LEAST-DEVELOPED OCT

Article 230 (Article 330 of Lomé IV)

46. In article 230, the following shall be added to paragraph 1:

'- Saint-Pierre-et-Miquelon.'

Article 231 (Article 331 of Lomé IV)

46a.

In Article 231, the following item 7a shall be inserted:

'7a. Stabex

Article 121 (5).'

E. PART FOUR

PROVISIONS RELATING TO ESTABLISHMENT AND SERVICES

Article 232

47. Article 232 shall be replaced by the following text:

'Article 232

As regards the arrangements applicable to establishment and provision of services, in line with Article 132 (5) of the Treaty and subject to paragraphs 1 and 2 of this Article:

- the Member States shall treat nationals and companies or enterprises of the OCT on a non-discriminatory basis,

- the relevant authorities of the OCT shall treat nationals and companies or enterprises of Member States on a non-discriminatory basis.

1. The relevant authorities of a country or territory may, however, adopt regulations to aid their inhabitants and local activities in derogation from the rules normally applicable to nationals, companies or enterprises of all Member States as long as such derogations are confined to sensitive sectors of the OCT's economy and are intended to promote or support local employment.

(a) Such derogations may be granted by the Commission at the request of the relevant authorities of the country or territory concerned and after consultation in the framework of the partnership provisions of Articles 234 tot 236.

(b) Such a request must be accompanied by reasons indicating in particular the sectors concerned, the duration and other procedures envisaged. It shall be notified to the Commission, which shall inform the Member States and take a decision within three months. If the Commission has not acted within that period, the derogation shall be deemed to have been approved.

(c) Such derogations shall be published in the Official Journal of European Communities.

2. If a Member State is not bound under Community law, or else national law, to accord non-discriminatory treatment for a given activity to inhabitants of a country or territory who are nationals of a Member State or enjoy a legal status specific to a country or territory, or for companies or enterprises established in a country or territory and covered by the definition in Article 233, the authorities of that country or territory shall not be bound to accord such treatment.'

Article 233a

48. The following Article 233a shall be inserted.

'Article 233a

1. The Community and its Member States shall extend to the OCT its undertakings under the General Agreement on Trade in Services (GATS) on the basis of the most-favoured-nation clause.

2. As regards the arrangements governing trade in services, the OCT shall afford nationals, companies or enterprises of the Member States treatment that is no less favourable than that which they extend to nationals, companies or enterprises of third countries.'

Article 233b

49. The following Article 233b shall be inserted:

'Article 233b

1. With a view to the ultimate recognition of professional qualifications acquired in the OCT, the Commission and the Member States concerned shall start work with a view to producing a list of professional qualifications acquired in the OCT by OCT nationals that would be recognized in the Member States as long as these qualifications comply with the minimum training levels required by the Community.

The qualifications in question concern only the professions of doctor, dentist, midwife, general nurse, pharmacist and veterinary surgeon.

2. The list of professional qualifications referred to in paragraph 1 shall be established by the Council, acting unanimously on the basis of a Commission proposal in respect of a future Decision on the association of the OCT with the European Community.'

F. PART FOUR A

COMMUNITY PROGRAMMES FOR INDIVIDUALS

50. The following Article 233c shall be inserted:

'Article 233c

The following programmes shall apply to OCT nationals:

1. Education and training programmes:

(a) Leonardo, set up by Council Decision No 819/94/EC ();

(b) Socrates, set up by Decision No 819/95/EC of the European Parliament and of the Council ();

(c) Youth for Europe III, set up by Decision No 818/95/EC of the European Parliament and of the Council ();

2. Employment and social affairs programmes:

(a) LEIs (Local Employment Initiatives for women), set up by the Council resolutions of 13 December 1984 () and of 21 May 1991 ();

(b) LEDA (Local Employment Development Action Programme), set up by the Council resolution of 7 June 1984 ();

(c) ERGO II (European Community Action Programme for the long-term unemployed), set up by the Council resolution of 29 May 1990 on a programme of action for employment ();

(d) Helios II (handicapped people in the European Community living independently in an open society), set up by Council Decision of 25 February 1993 ().

3. Business progammes:

(a) Interprise, set up by Council Decision of 28 July 1989 () and Council Decision 93/379/EC ();

(b) Europartenariat, set up by Council Decision of 18 December 1989;

(c) BC-Net (Business Corporation Network), BCC (Business Corporation Centre), Artisanat, Euromanagement and Seed Capital, set up by Council Decision 93/379/EC.

4. Research, development and innovation programmes:

(a) Impact II (Information Market Policy Action), set up by Council Decision of 12 December 1991 ();

(b) Telematic applications, set up by Council Decision 94/801/EC of 23 November 1994 adopting a specific programme for research and technological development, including demonstration, in the field of telematics applications of common interest (1994-1998) (), in particular TIDE (Technology Initiative for Disabled and Elderly people), set up by Council Decision of 21 September 1993;

(c) Innovation, set up by Council Decision 94/917/EC ().

5. Cultural and audiovisual programmes:

(a) Media, set up by Council Decision of 21 December 1990 ();

(b) Kaleidoscope;

(c) film festivals, set up following the call for proposals of 15 September 1994 ();

6. The HRTP Japan programme (Human Resources Training Programme in Japan) and topical missions, set up by Council Decision of 18 May 1992 ().

'

G. PART FIVE

COMMISSION/MEMBER STATE/OCT

PARTNERSHIP

Article 234

51. Article 234 shall be replaced by the following:

'Article 234

Community action shall be based on close consultation between the Commission, the Member State responsible for a country or territory and the relevant local authorities of such countries of territories. Such consultations shall hereinafter be referred to as "partnership".'

Article 235

52. Article 235 shall be replaced by the following:

'Article 235

1. Partnership shall cover the programming, preparation, financing, monitoring and evaluation of operations carried out by the Community under this Decision, and any problem arising in relations between the OCT and the Community.

2. To this end, working parties of the OCT association, of an advisory nature and made up of the three partners referred to in Article 234, shall be set up either on the basis of geographical area or by group of OCT under the responsibility of a single Member State, notably at the request of the OCT concerned. These working parties shall be set up:

- on an ad hoc basis to deal with specific problems, or

- on a permanent basis, if possible annual, for the remainder of the period covered by this Decision.

3. The Commission shall chair the working parties. A representative of the Bank shall be present at meetings when matters concerning it are on the agenda.

The expenses incurred by the OCT in attending partnership meetings may be covered by a financial contribution under the territorial or regional programmes of the European Development Fund at the request of the relevant authorities of the OCT concerned, in accordance with the procedures laid down in Title III of this Decision concerning development financing cooperation.'

H. ANNEX II

concerning the definition of the concept of originating products and methods of administrative cooperation

Article 3

53. In Article 3

- subparagraph 2 (d) shall be replaced by the following:

'd) "customs value" shall be understood as meaning the value established in accordance with the 1994 Agreement on the implementation of Article VIII of the General Agreement on Tariffs and Trade (World Trade Organization agreement on customs value).'

- paragraph 3 shall be replaced by the following:

'3. For the purpose of implementing paragraphs 1 and 2 the following shall be considered as insufficient working or processing to confer the status of originating products, whether or not there is a change of heading:

(a) operations to ensure the preservation of products in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, smoking, removal of damaged parts, and like operations);

(b) simple operations consisting of removal of dust, husking, partial or total bleaching, polishing, glazing, (for cereals and rice), sifting or screening, forming sugar lumps, colouring, sorting, classifying, matching (including the making-up of sets of articles, washing, painting, cutting-up);

(c) (i) changes of packaging and breaking up and assembly of consignments;

(ii) simple placing in bottles, flasks, bags, cases, boxes, fixing on cards or boards, etc., and all other simple packaging operations;

(d) affixing marks, labels and other like distinguishing signs on products or their packaging;

(e) simple mixing of products, even of different kinds, where one or more components of the mixture do not meet the conditions laid down in this Annex to enable them to be considered as originating in an ACP State, in the Community or in a country or territory;

(f) simple assembly of parts of articles to constitute a complete article;

(g) a combination of two or more operations specified in subparagraphs (a) to (f);

(h) slaughter of animals.'

54. In Article 5, '10 %' shall be replaced by '15 %'.

55. Article 6 shall be replaced by the following text:

'Article 6

Cumulation and attribution of origin

1. For the purpose of implementing this Title, the OCT shall be considered as being one territory.

2. When products wholly obtained in the Community or in the ACP States undergo working or processing in the OCT, they shall be considered as having been wholly obtained in the OCT.

3. Working and processing carried out in the Community or in the ACP States shall be considered as having been carried out in the OCT when the materials undergo further working or processing in the OCT.

4. Paragraphs 2 and 3 shall not apply to the products falling within Chapters 1 to 24 of the Harmonized System if the products:

- originate in the Community or enjoy financial benefits when exported,

- originate in an ACP State.

5. Without prejudice to paragraph 4, paragraphs 2 and 3 apply to any working or processing carried out in the OCT, including the operations listed in Article 3 (3). However, originating products made up of materials wholly obtained or sufficiently processed in two or more OCT or in one or more ACP States and in one or more OCT shall be considered as products originating in the country or territory or ACP State where the last working or processing took place, provided that this working or processing exceeded the insufficient operations listed in Article 3 (3) or a combination thereof.'

56. Article 7 shall be deleted.

Article 13

Issue of certificate EUR.1 retrospectively

57. In Article 13, the following terms shall be added to paragraph 3:

'ANNETTU JAELKIKAETEEN', 'UTFAERDAT I EFTERHAND'.

Article 14

Issue of a duplicate certificate EUR.1

58. In Article 14, the following term shall be added:

'KAKSOISKAPPALE'.

Article 21

Form EUR.2

59. In Article 21, the sixth line of paragraph 1, 'ECU 2 820' shall be replaced by 'ECU 3 140'.

60. In Article 21, the first line of paragraph 2, '30 April 1991' shall be replaced by '30 April 1997'.

61. In Article 21, the fourth line of paragraph 2, '1 October 1988' shall be replaced by '1 October 1994'.

Article 22

Exemptions from proof of origin

62. In Article 22, the second subparagraph of paragraph 2, 'ECU 200' and 'ECU 565' shall be replaced by 'ECU 230' and 'ECU 630' respectively.

Article 30

Derogations

63. In Article 30, the third subparagraph of paragraph 1 shall be replaced by the following:

'The Community shall accept all requests which are duly justified in conformity with this Article, in particular when substantial processing or working is carried out in the requesting OCT, and which cannot cause serious injury to an industry or agricultural sector of the Community.'

64. In Article 30, the last subparagraph shall be replaced by the following:

'The form may be amended in accordance with the procedure set out in Article 249 (2) and (3) of Regulation (EEC) No 2913/92.'

65. In Article 30, paragraph 6 shall be replaced by the following:

'6. In the examination of requests, special account shall be taken, case by case, of the possibility of conferring originating status on products which include in their composition materials originating in:

- ACP States and excluded from the cumulation provisions of Article 6, or

- neighbouring developing countries or least-developed countries, provided that satisfactory administrative cooperation can be established.'

66. In Article 30, subparagraph 8 (a) shall be replaced by the following:

'8. (a) The Council and the Commission shall take all the necessary measures to ensure that a decision is taken promptly and in any case not later than 60 working days after receipt of the request by the chairman of the Customs Code Committee - Origin Section. In this context, Decision 90/523/EEC shall apply mutatis mutandis to the OCT.'

67. In Article 30, paragraph 10 shall be replaced by the following:

'10. Should a derogation cause serious disturbance in sectors of activity of some regions of the Community, it shall be re-examined in accordance with the procedure set out in Article 249 of Council Regulation (EEC) No 2913/92, without prejudice to the emergency measures that the Commission is authorized to take.

Following this examination, the decision may be amended or revoked.'

Article 33

68. Article 33 shall be deleted.

TITLE IV

CEUTA AND MELILLA

69. In Title IV of Annex II, 'Canary Islands, Ceuta and Melilla', and in Article 31, of which this Title consists, all references to the 'Canary Islands' shall be deleted.

Annexes to Annex II

70. - In Annex 1 to Annex II, the note 8 attached hereto shall be added.

- The list in Annex 2 to Annex II shall be replaced by the list attached hereto.

71. In Annex 3 to Annex II, 'Eritrea' shall be added.

72. In Annex 4 to Annex II, paragraph 4 shall be deleted.

73. Annex 8 to Annex II shall be deleted.

74. Annex 9 to Annex II shall be renamed 'Annex 8'.

I. ANNEX IIa

75. The following Annex IIa shall be inserted.

'ANNEX IIa

establishing implementing provisions for the system of minimum import prices

Article 1

In order to prevent trade between the OCT and the Community in products covered by institutional price arrangements under the Common Agricultural Policy disrupting markets, the Commission, after consulting the authorities involved, as called for by the partnership arrangements referred to in Article 235, may fix a minimum import price for such products.

The minimum price shall not exceed the level strictly necessary to comply with the objectives of Article 39 of the Treaty, and shall allow products originating in the OCT more favourable conditions than those applying to imports of the same product originating in a third country enjoying preferential treatment in trade with the Community.

Principles and definitions

Article 2

1. For the purposes of this Annex, the elements making up the import price shall be:

(a) the fob price in the country or territory of origin;

(b) the actual cost of transport and insurance until arrival on the customs territory of the Community.

2. For the purposes of paragraph 1 'fob-price' shall mean the price paid or payable for the quantity of products contained in a consignment, including the cost of placing the consignment on board a means of transport at the place of loading in the country or territory of origin and other costs incurred in that country or territory. The fob price does not include the cost of any services to be borne by the seller from the time that the products are placed on board the means of transport.

3. Where it is found that prices on resale, directly or via commercial intermediaries, are, after deduction of the import duties actually paid, more than 15 % below the minimum price of an imported consignment, the weighted average of those adjusted prices shall be deemed the import price.

Article 3

The equivalent value in local currency of the ECU for the purpose of applying this Annex shall be established once a month. The rates to be used for this conversion are those published in the Official Journal of the European Communities on the penultimate working day of the month. These rates shall be applicable throughout the whole of the following month.

However, if the rate applicable at the beginning of any given month differs by more than 5 % from that published on the penultimate working day preceding the 15th day of the same month, this latter rate is applicable from and including the 15th until the end of the month in question.

Checks and taxation on imports

Article 4

The competent national authorities shall, whenever a declaration for release for free circulation is accepted, compare the declared import price with the minimum import price applicable to the goods on the day the declaration is accepted.

Where the price shown on the invoice is for deferred payment during a period exceeding three months, the price shown on the invoice shall be reduced by 1 % for each month of deferral granted in excess of those three months.

Article 5

Where the import price is less than the minimum import price applicable to the goods, the competent national authorities shall levy a countervailing charge equal to the difference between those prices.

Special control procedure

Article 6

1. Where the customs authorities have well-founded doubts that the price appearing in the declaration of release for free circulation reflects the actual import price, the importer shall lodge the security referred to in Article 248 (1) of Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation No 2913/92 establishing the Community Customs Code (), plus interest for the period of six months referred to in the second subparagraph. The rate of interest applicable shall be that in force under national law for the recovery of sums due.

Importers shall have six months within which to prove that the product has been disposed of under conditions which guarantee observance of the minimum import price. Failure to comply with the time limit shall entail the loss of the security, without prejudice to paragraph 2.

2. The time limit laid down in paragraph 1 may be extended by the competent authorities by up to three months on a duly justified application by the declarant and provided that the security is adjusted accordingly.

Article 7

1. The minimum import price shall be deemed to be observed if the importer furnishes proof in respect of at least 95 % of the consignment imported that, at all marketing stages including sale to end users, the product has been sold at a price at least equal to the minimum import price after deduction of customs import charges actually paid. If the product undergoes treatment after its release for free circulation and before its sale to the end user, the cost of such treatment shall be reflected in the selling price to the end user.

2. If the proof from the end user cannot be presented despite all steps taken by the importer, the competent authorities may accept other proof to the effect that the product was sold under conditions indicating that the minimum price has been observed.

3. The application of the special control procedure shall be without prejudice to the a posteriori checks referred to in Articles 8, 9 and 10.

4. The end user, for the purposes of this Annex, shall be either a manufacturer who uses the product in question with a view to processing, other than packaging, into another product falling within CN codes other than those shown in the declaration of release for free circulation, or a retailer selling exclusively to consumers.

Post-clearance checks

Article 8

The importer shall keep available for examination by the competent authorities, in view of a posteriori checks, proof of payment to the seller and all commercial documents such as invoices, contracts and correspondence concerning the purchase and the sale of the products in question for at least three years following the year in which the declaration for release for free circulation was accepted.

Article 9

The competent authorities shall carry out random checks.

Article 10

Where, in the course of a check, the competent authorities find that the minimum import price has not been observed, they shall collect the duties owed in accordance with Article 220 of Regulation (EEC) No 2913/92. In establishing the amount of the duties to be recovered or remaining to be recovered, they shall take account of interest incurred from the date of release for free circulation of the goods until that of recovery. The rate of interest applied shall be that in force under national law for the recovery of the sums due.

Administrative cooperation

Article 11

The relevant authorities of the Community and of the OCT shall assist each other, through their respective customs administrations, in carrying out controls to ensure the proper application of this Annex and of any autonomous regulations which may have been adopted by the OCT authorities in connection with the provisions of this Annex.

Price-setting procedure

Article 12

The minimum import price shall be set for each marketing year two months before the beginning of the marketing year, and may if necessary be modified in the light of the market situation, after consultation with the authorities involved in the framework of the partnership arrangements referred to in Article 235, according to the procedures provided for in:

(a) Article 23 of Council Regulation (EEC) No 766/92, of 30 June 1992 concerning the common organization of the markets in cereals (); or

(b) corresponding Articles in the other Regulations concerning common market organizations.

'

J. ANNEX V

on rum

76. Annex V shall be deleted.

Article 2

This Decision shall enter into force on the day following that of its publication in the Official Journal of the European Communities, with the exception of the financial commitments implementing Article 154a.

These commitments shall apply from the date of the internal ratification of the Internal Agreement.

Article 3

This Decision shall be published in the Official Journal of the European Communities.

() OJ No L 30, 6. 2. 1993, p. 1.

() OJ No L 263, 19. 9. 1991, p. 1.

() OJ No L ... (SEC(95) 1177 final of 19. 7. 1995).

() COM(94) 538 final of 21. 12. 1994.

() OJ No L 318, 20. 12. 1993, p. 18.

() OJ No L 302, 19. 10. 1992, p. 1.

() OJ No L 340, 29. 12. 1994.

() OJ No L 87, 20. 4. 1995, p 10.

() OJ No L 87, 20. 4. 1995, p 1.

() OJ No L 331, 19. 12. 1984

() OJ No C 142, 31. 5. 1991.

() OJ No C 161, 21. 6. 1984.

() OJ No C 157, 27. 6. 1984.

() OJ No L 56, 9. 3. 1993.

() OJ No L 239, 16. 8. 1989.

() OJ No L 161, 2. 7. 1993, p. 68.

() OJ No L 377, 31. 12. 1991.

() OJ No L 334, 22. 12. 1994.

() OJ No L 361, 31. 12. 1994.

() OJ No L 380, 31. 12. 1991.

() OJ No C 258, 15. 9. 1994.

() OJ No L 144, 26. 5. 1992.

() OJ No L 253, 11. 10. 1993, p. 1.

() OJ No L 181, 1. 7. 1992, p. 1.

ANNEX 1

NOTES

Note 8

8.1. Appendix 1

For the purposes of heading Nos ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, the 'specific processes' are the following:

(a) vacuum distillation;

(b) redistillation by a very thorough fractionation process ();

(c) cracking;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralization with alkaline agents; decolorization and purification with naturally active earth, activated earth, activated charcoal or bauxite;

(g) polymerization;

(h) alkylation;

(i) isomerization.

8.2. Appendix 2

For the purposes of heading Nos 2710, 2711 and 2712, the 'specific processes' are the following:

(a) vacuum distillation;

(b) redistillation by a very thorough fractionation process ();

(c) cracking;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralization with alkaline agents; decolorization and purification with naturally active earth, activated earth, activated charcoal or bauxite;

(g) polymerization;

(h) alkylation;

(ij) isomerization;

(k) in respect of heavy oils falling within heading No ex 2710 only, desulphurization with hydrogen resulting in a reduction of at least 85 % of the sulphur content of the products processed (ASTM D 1266-59 T method);

(l) in respect of products falling within heading No 2710 only, deparaffining by a process other than filtering;

m) in respect of heavy oils falling within heading No ex 2710 only, treatment with hydrogen at a pressure of more than 20 bar and a temperature of more than 250 5/8C with the use of a catalyst, other than to effect desulphurization, when the hydrogen constitutes an active element in a chemical reaction. The further treatment with hydrogen of lubricating oils of heading No ex 2710 (e.g. hydrofinishing or decolorization) in order, more especially, to improve colour or stability shall not, however, be deemed to be a specific process;

(n) in respect of fuel oils falling within heading No ex 2710 only, atmospheric distillation, on condition that less than 30 % of these products distils, by volume, including losses, at 300 5/8C by the ASTM D 86 method;

(o) in respect of heavy oils other than gas oils and fuel oils falling within heading No ex 2710 only, treatment by means of a high-frequency electrical brush-discharge.

8.3. For the purposes of heading Nos ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, simple operations such as cleaning, decanting, desalting, water separation, filtering, colouring, marking, obtaining a sulphur content as a result of mixing products with different sulphur contents, any combination of these operations or like operations do not confer origin.

() See Additional Explanatory Note 4 (b) to Chapter 27 of the combined nomenclature.

Annex 2 to Annex II

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