ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(74)556
Vol.1974/0094

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COMMISSION OFTHEEU&OE3AN COMMUMT3ES
COM(74)556final
Brussels,24April1974
Proposalfora
REGULATION (EEC)OFTHECOUNCIL
ontheopening,allocationandadministration
ofaCommunitytariffquotaforprocessingwork
inrespectofcertaintextileproductsunder
Communityoutwardprocessingarrangements
(submittedtotheCounciltartheCommission)
0011(74)556final

EXPLAMTORY MEMORANDUM
11cInanArrangement concluded with theSwiss Fader "tionon 1August 19°9 »
theEuropean Economic Community undertook toopen anannual duty-free
Community tariff quota of18'fO000units ofaccount ofadded value in
respect ofthevrrious kinds ofprocessing work forcertain textile products
i-cluded intheoutward processing traffic oftheCommunity toSwitzerland .
2.Under theAnnex totheArrangement this annual tariff quota isdivided into
three categories ofprocessing ,onthe "basis oftheamount ofthetraffic
under theformer bilateral agreements (concluded with Switzerland byPrance ,
Germany andItaly )plus anallowance fortheBenelux countries .
Onthebasis ofthat division thetotal quota amount of1870000units of
account isappropriated asfollows t
(a)1650000units ofaccount for .processing work onvroven fabrics
falling within Chapters 50 "to57oftheCommon Customs Tariff ;
(b)143000units ofaccount fortwisting orthrowing ,re-twisting ,cabling
andtexturizing (whether ornotcombined with other processing work )of
yarns falling within Chapters 50to57oftheCommon Customs Tariff ;
(c)77000units ofaccount forprocessing work onarticles falling within
headings 53.04 ,58.05 ,58.07 ,53.03 58.09and60.01 oftheCommon Customs
Tariff .
3.Attherequest oftheSwiss authorities andsothat theappropriation ofthe
quota tothethree categories ofprocessing referred toabove should be
better related totheactual movement oftra.de during thereference year
which served asthebasis forcalculating thetotal amount ofthequota ,it
has been decided :
OJNoL240 ,24December 1950 .
•/•

-2--
(a)totransfer 150000units ofaccount ftom theamount allocated for
processing operations onwoven fabrics ?falling within Chapters 50to57
ofthe Common Customs Tariff tothe 77000units ofaccount setaside
forprocessing work onarticles falling within headings 58<04to 60,01
oftheCommon Customs Tariff .These 150000units ofaccount ,which
have been allocated toFrance foroperations on'knitted orcrocheted
fabric (processing work under (c)above ),have been deducted from that
State 'squota -share under theaforementioned Annex inrespect of
processing work onwoven fabrics .
(b)toincrease theamount appropriated toprocessing work onarticles falling
within headings 53.04 to60.01 ofthe .Common Customs Tariff from
227000units ofaccount to377000units ofaccount ,without .an3r
corresponding increases inthetotal amount oftheCommunity Tariff
quota of 1370000units ofaccount .This additional amount of
150000hasbeen drawn from thefollowing sources :
-10000units ofaccount from the 30000units ofaccount allocated
totheBenelux countries forallcategories ofprocessing workj
-120000units ofaccount from the900000units ofaccount allocated
totheFederal Republic ofGermany forprocessing work onwoven fabrics ;
-20000 units ofaccount from 1:20000 units ofaccount allocated to
theFederal ,Republic of .Germany forprocessing work onyarns
Theadditional amount of150000units ofaccount thus obtained has
been allocated asfollows .tooperations t&becarried outonarticles falling
within theabovementioned Tariff headings :
Germany :80000units ofaccount (quota increased from 50000to
130000unitsofaccount )
France :20000units ofaccount (quota increased from 150000to
170000unit sofaccount )
Community reserve :20000units ofaccount (emount increased from
7000to57000 \mits ofaccount ).

-3-
4'Thisallocation among"theMemberStatesofthedifferentpmcmts?roroT>riated
tothethreecategoriesofprocessingworkRAISEDpdifficulty V""c".WPS
examinedftcorsultrtions withexportsfromthevariousMemberStates
organizedbytheCommissioninthecourseoftheyepr1">60.Underthis
allocationitwouldbepossibleforcertainMemberStates(iteiyandthe
Beneluxcountries)tonportion P11oriDartoftheirsharespmongthethree
cptegoricsofprocessingwork(oralternatively pmonptwooftho-ecategories)
inanywsytheywished,whereasthequotes ,eatasideforP.PC>categoryof
processingworkereinsufficient toallowthis:iftheseMemberStates
appropriated thefullemountoftheirallocationsentirelytothefirst
categorythe;*wouldhavetodrawonthereserveforthatcategory,while
iftheypreferredto^ppro-oriate themexclusivelytothesecondandthird
categories .thenthequotasforthosecategorieswouldbeexceeded
However .,afterconsultation withtheMemberStates,ita-opeersth?tsuchp
situationshouldnotreiseanydifficulties innrrcticeThisexplains
thea.bserceofanyprovisionrelatingtothisprobleminthenro^osrlforp
Regulationennexedhereto,itbeingunderstoodthattherelevantCommission
departments ?ct.inginconcertwith,theMemberStates?retoensurethrtthe
fllocationofthequotaamongthedifferentcategoriesofprocessing workis
rdhercdto,andthatrdequatcsctionistakenintheeventoftheslightest
difficulty .
5-TheannualCommunitytariffruotaprovidedforinthisArr»mreme"t wasl?st
*
openedbyCovircilRegulation(EEC)No30'5/73of6November1T73-andws
vrlid.fortheperiod1Septembern73to31August
ThesolepurposeoftheproposedRegulationannexedheretoisthustoopen
alikequotafortheperiod1September1974to31August1975,andto
apportionitamongtheMemberStatesinaccordancewiththeaforementioned
Annex,talcingintoaccounttheejmendedallocationsasindicatedin3above
andtheneedtoprovidefortheparticipation ofthenewMemberStatesinthe
apportionment ofthequota.
OJNoL309of9November1973,p.1«

Itshouldhoweverbenotedinthisconnection,thataccordingtotheinfor­
mationgatheredatameetingoftheEEC-Switzerland JointCommitteeit
appearsthatthenewMemberStatesonlyplayaverysmallpart,ornopart
atall,intheoutwardprocessingofproductsinthetextilesector.
Whilewaitingforamodification oftheabove-mentioned Arrangementinorder
toallocatetheinitialsharestothenewMemberStates,itisadvisable,
inordertocoveranyneedswhichmightarise,inIrelandontheonehand
orinDenmarkortheUnitedKingdomontheother,inparticularforthose
casesnotcoveredbytheAgreementconcludedon22July1972betweenthe
CommunityandSwitzerland ,thatprovisionshouldbemadefortheseMemberStat
tobeabletodrawanadequatequotasharefromtheCommunityreservewhen ■
required.-
.Asforthepreceedingquotaperiod,theproposalforaRegulationannexed
heretoprovidesforthequotatobeadministered underasystemofprior
allocationandsetsat20%thelevelabovewhichunusedportionsofthe
initialquotasharearetobereturnedtothereserve*

PROPOSAL FORA
REGULATION(EEC)OPTHECOU1TCIL
ontheopening,allocationandadministration
ofaCommunitytariffquotaforprocessingworkin
respectofcertaintextileproductsounderCommunity
outwardprocessingarrangements
THECOUNCILOPTHEEUROFEiOT COMMUÎTITIES .
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle113thereof;
HavingregardtotheproposalfromtheCommission ;
Whereason1August1969theCommunityconcludedanArrangementwith
Switzerland onprocessingtrafficintextiles;whereasunderthat
ArrangementtheCommunityundertooktoopeneach1Septemberanannual
duty-freeCommunitytariffquotaforprocessedgoodsof1870000unitsof
accountofaddedvalue,apportionedasfollows:
(a)1650000unitsofaccountforprocessingworkonwovenfabricsfalling
viithinChapters50to57oftheCommonCustomsTariff;
(b)143000unitsofaccountforthetwistingorthrowing,cablingand
texturizing (whetherornotcombinedwithotherprocessingworks)of
yarnsfallingwithinChapters50"to57oftheCommonCustomsTariff;
(c)77000unitsofaccountforprocessingworkonarticlesfallingwithin
headingNos58.04,58.05,58.07.58.08,58.09End60.01oftheCommon
CustomsTariff;
Whereasinorderthattheapportionment ofthequotaamongthethreecategories
referredtoabovemaycorrespondmorecloselywithactualtradeflowsduring
tliereferenceyearithasbeendecidedbyjointagreementto

-2-
raiseto377000unitsofaccounttheamountof77000unitsofaccountset
asidefortheprocessingofarticlesfallingwithincertainTariffheadings
1-!1cCrvaonCustomsTariffbetween58.04and60.01"bydrawingatotalof
300000unitsofaccount(i)fromtheshareofthequotaallocatedtothe
Beneluxcountriesforallprocessingoperationsand(ii)fromtheshares
allocatedtocertainotherMemberStatesinrespectoftheprocessingof
wovenfabricsandyarnsfallingwithinChapters50to57oftheCommon
CustomsTariffjwhereastheCommunitytariffquotainquestionshouldbe
openedfortheperiod1September1974to31August1975inaccordancewith
theapportionment laiddownintheaforementioned Arrangement asthusamended;
Whereasprovisionshouldbemadetoensureinparticularthatthose
participating inthisCommunityTrafficenjoyequalandcontinuousaccess
tothequotaandthatrateofdutyprescribedunderthesaidquotais
appliedconsistently ,untilthequotaisexhausted,toallgoodsreimported
intoanyoftheMemberStateswhichhavereceivedoneorotherofthe
treatmentslistedabove}whereasinthelightoftheseprinciples
arrangements fortheutilization ofthequotabasedonanallocation among
theMemberStateswouldseemtobeconsistentwiththeCommunitynatureof
suchquota;whereas,itthereforeseemsappropriatetomaketheallocation
on"thebasisoftheamountoftheTrafficunderthepreviousbilateral
agreements,butwithoutprecludingparticipation byMemberStatesnot;•
previouslyInvolvedinsuchtrafficamongwhichthenewMemberStatesare
included;whereas,tosafeguardtheCommunitynatureofthequota,provision
shouldbemadetomeetrequirements whichmayariseinthoseMemberStates
inthefuturepermittingthemtodrawonthereserveinaccordancewiththe
systemlaiddowninArticle3ofthepresentregulation;whereassuch
provisionismadeinArticle3»inrespectpfexceptionalcasesandwhere
noinitialshareofthequotahasbeenallocated;
Whereastotakeaccountoffuturetrendsinthetraffioinquestioninthe
variousMemberStates,thetotalquotavolumeof187O000unitsofaccount
shouldbedividedintotwotranches,thefirstbeingallocatedamongthe
MemberStatesandthesecondheldasareservetocoverthesubsequent
requirements ofMemberStateswhicfrhaveexhaustedtheirinitialshares
*w

andalsorequirements whichmayariseincertainMemberStatesinrespect
ofprocessingworkforwhichnoinitialsh»reoftheq"ota -"'IcorJ;'1*
whereasinordertogivethepertiesconcernedineachMemberStatesome
degreeofcertaintyitwouldseemappropriatetofixthefirsttrancheof
thequotaatarelativelyhighlevel,namelysome$Qffoofthefullamountof
thequota;whereasthereserve(approximately 10$)shouldheappropriated
toeachcategoryofworkinaccordancewithtermsoftheArrangement ;
WhereastheMemberStatesmayexhausttheirinitialsharesatdifferentr-tc?
whereastoavoiddisruptionofsuppliesonthisaccountitshouldheprovided
thatanyMemberStatewhichhasalmostuseduponeofitsinitialshares
shoulddrawanadditionalsharefromtherelevantreserve;whereaseach
tiE3itsadditional shareisalmostexhaustedaMemberStateshoulddraw
afurthershareandsoonasnanytimesasthereserveallows;whereasthe
initialandadditionalsharesshould"bevaliduntiltheendofthe'_qu6taperiod
whereasthisformofadministrationrequiresclosecollaboration betweenthe
MemberStatesandtheCommission ,andtheCommissionmustbeinaposition
tokeepaccountoftheextenttowhichthequotahasbeenusedupendto
informtheMemberStatesaccordingly ;
Whereasifatagivendateduringthequotaperiodaconsiderable quantity
ofaMemberState'sinitialshareremainsunuseditisessentialtoprevent
apaJrtofthequotafromremainingunlisedinoneMemberStatewhileitcould
beusedinothers,thatsuchStateshould,returnasignificantproportion ,
thereoftothereserve;
Whereas,sincetheKingdomofBelgium,theKingdomoftheNetherlands and
theGrandDuchyofLuxembourgareunitedinandjointlyrepresented bythe
BeneluxEconomicUnion,anytransactioninconnectionwith,fhtadministration
ofthesharesallocatedtothatEconomicUnionmaybocarriedoutbyanyone
ofitsMembers:
/

HAS ADOPTED THIS EEGULATION :
Article 1
With effect from 1September 1974 and -until 31August 1975 »aCommunity
tariff quota of1870000units ofaccount ofvalue added ^nall "beopened
intheEuropean Economic Community inrespect ofgoods resulting from
processing work asprovided forintheArrangement with Switzerland on
processing traffic intextiles .Such quota shall beapportioned asfollows :
(a)1370000units ofaccount forprocessing work onwoven fabrics falling
within Chapters 50 "to57oftheCommon Customs Tariff ;
(b)123000units ofaccount fortwisting orthrowing ,cabling and
texturizing (whether ornotcombined with other processing work )of
yams falling within Chapters 50to57oftheCommon Customs Tariff ;
(c)377000units ofaccount forprocessing work onarticles falling within
thefollowing headings oftheCommon Customs Tariff :
58.04 Woven pile fabrics andchenille fabrics (other than terry
towelling orsimilar terry fabrics ofcotton falling within
heading No55-08 andfabrics falling within heading No58.05 );
53.05 Narrow woven fabrics ,andnarrow fabrics (bolduc )consisting of
warp without weft assembled bymeans ofanadhesive ,other than
goods falling within heading No58.06 ;
58.07 Chenille yarn (including flock chenille yarn ),gimped yarn
(other than metallized yarn ofheading No52.01 andgimped
horsehair yarn );braids andornamental trimmings inthepiece ;
tassels ,pompons andthelike ;
58.08 Tulle andother netfabrics (butnotincluding woven ,knitted
ororocheted fabrics ),plain ;
58.09 Tulle andother netfabrics (butnotincluding woven ,knitted
ororocheted fabrics ),figured ;hand ormechanically made lace ,
inthepiece ,instrips orinmotifs ;58.04
53.05
58.07
58.08
58.09

-5-
60.01 Knitted ,orcrocheted fabric ,notelastic norrubberized .
2.Forthepurposes ofthis Régulation ,
(a)"processing work"meansî
–forthepurposes ofparagraph 1(a)and (c):bleaching ,dyeing ,
printing ,flocking ,impregnating ,dressing andother work which
changes theappearance orquality ofthegoods ,without however
changing their nature ;
-forpurposes ofparagraph 1(b):twisting orthrowing ,cabling and
texturizing ,whether ornotcombined with reeling ,dyeing orother
work which changes theappearance ,quality orfinish ofthegoods ,
without however changing their nature .
(b)"added value "means :thedifference between thevalue forcustoms
1purposes asdefined inRegulation (EEC)No803/68atthetime of
re-importation andthevalue forcustoms purposes asitwould beif
theproducts were re-imported inthe state inwhich they were exported .
3.Each portion ofthequota aslaid down inparagraph 1shall bedivided into
twotranches ,thefirst ,ofapproximately being allocated among the
Member States inaccordance with Article 3andthesecond ,ofapproximately
'10$,toconstitute theCommunity reserve .
4.TheCommon Customs Tariff duties shall betotally suspended inrespect of
re-import atiorsunder thequota .
ThenewMember States shall apply inrespect ofre-import atiaoflunder the
quota duties calculated inaccordance with therelevant provisions ofthe
Act ofAccession .
0JïïoL148,28X1968 ,p.6.

Article2
TriefirsttrancheofeachportionofthequotaaslaiddovminArticle1(1)
shall "beallocatedamongtheMemberStates.Thesharesforeach
MemberState,aslaiddownbytheabovo-rientionodarrangementandsubject
toArticle63hallbevalidfrom1September1974to31August1975shall
beasfollows:
(a)Germany:
1010000unitsofaccount,apportionedasfollows:
-780000unitsofaccountforprocessingworkonwovenfabrics
fallingwithinChapters50to57oftheCommonCustomsTariff;
-100000unitsofaccountfortwistingorthrowing,cablingand
texturizing (whetherornotcombinedwithotherprocessingwork)of
yarnsfallingwithinChapters5°"to57oftheCommonCustomsTariff;
-130000unitsofaccountforprocessingworkonarticlesfalling
withirheadings58.04,58.05,58.07,58.08,58.09and60.01of
theCommonCustomsTariff:
(b)France:
600000unitsofaccount,apportionedasfollows:
.-430000unitsofaccountforprocessingworkonfabricsfalling
withinChapters50"to57oftheCommonCustomsTariff;
-17Q000.unitsofaccountforprocessingworkonarticlesfalling
withinheadings58.04,58,05,58.07,58.08,58.09and60.01ofthe
CommonCustomsTariff;
(c)Italy:
20000unitsofacoount,i.e.halffortwistingorthrowing,cabling
and.texturizing (whetherornotcombinedwithotherprocessingwork)
ofyarns'fallingwithinChapters50to57oftheCommonCustoms
Tariff,andhalfforprocessingworkonarticlesfallingwithin
headings58.04,58.05,58.07,58.08,58.09and60.01oftheCommon
CustomsTariff; 1

(d)Bénélux:
20000unitsofaccountforprocessingworkonthreadsandwoven
fabricsfallingwithinChapters50to57orforarticlesfalling
withinheadings58.04,58.05,58.07,58.08,58.09and60.01ofthe
CommonCustomsTariff.
r
ThesecondtrancheofeachoftheportionsofthequotaasfixedinArticlel(t)
-150000,13000and57000unitsofaccountrespectively-shallconstitute
theCommunityreserves.
Article3
Incaseofneed,inPranceinrespectoftheprocessingworkreferredtoin
.Articlel(l)(b),orinanyofthenewMemberStatesinrespectofanyofthe
categoriesofprocessingwork,theStateconcernedshall,totheextentthat
therelevantreservesopermits,drawfrom;sueh.rese-rvaasufficientshare
ofthequota.
Article4
AssoonasaMemberStatehasused90%ormoreofoneofitsinitialshares'
asfixedinArticle2(1),orofthatshareminusanyportionreturnedtothe
reservepursuanttoArticle6,itshallforthwith,by.notifyingtheCommission,
drawasecondshare,totheextentthattherelevantreservesopermits,equal
to1055ofitsinitialshare,roundedupasnecessarytothe.nextwholenumber.
AssoonasaMemberState,afterexhaustingoneofitsinitialshares,has
usedJCP/oormoreofthesecondsharedrawnbyit,thatMemberStateshall
forthwith,inthemannerandtotheextentprovidedinparagraph 1,drawa
thirdshareequalto5f°ofitsinitialshare.

-a-
3*AssoonasaMemberState,afterexhaustingitssecondshare,hasused90$
ornor3ofthethirdsharodrawn"byit,thatMemberStateshall,inthe
mannerandtotheextentprovidedinparagraph 1,drawafourthshare
equaltothethird.
Itshallcontinueinthisfashimuntilthereserveisexhausted.
4.Bywnyofderogationfromparagraphs 1to3,aMemberStatemaydrawshares
loi/erthanthosespecifiedinthoseparagraphsiftherearegroundsfor
believingthatthosespecifiedmaynotbeusedinfull.AnyMemberState
applyingthisparagraphshallinformtheCommissionofitsgroundsforsodoing.
Article5
AdditionalsharesdrawnpursuanttoArticle4shallbevaliduntil
.31August1975*
Articlen
AMemberStatewhichon15M?y1975hasnotexhaustedoneofitsinitial
sharesas.fixed.inArticle2(1)shall,notlaterthan10June1975,return
totheRelevantreservethemusedportioninexcessof20$oftheinitial
amount.Itmayreturnagreaterportioniftherearegroundsforbelieving
thatsuchportionmaynotbeusedinfull.
MemberStatesshall,notlaterthan10June1975*notifytheCommissionof
thetotalquantitiesoftheproductinquestionre–importeduptoand
including15May1975EndcountedagainsttheCommunityquotaandofany
portionoftheirinitialquotasreturnedtothereserve. .

-9-
Article7
TheCommissionshallkeepanaccountofthesharesopened "bytheMember
StatespursuanttoArticles2,3and4andshallassoonastheinformation
reachesit,informeachStateoftheextenttowhichthereserveshave"been
usedup.
Itshall,notlaterthan15June1975>informtheMemberStatesofthe
amountsstillinreservefollowinganyreturnofsharespursuantto
Article6.
Itshallensurethatwhenanamountexhaustingoneofthereservesisdrawn
theamountsodrawndoesnotexceedthe"balanceavailable,andtothisend
shallnotifytheamountofthat"balancetotheMemberStatemakingthelast
drawing-
Article3
MemberStatesshalltakeallappropriate measurestoensurethatadditional
sharesdrawnpursuanttoArticle4areopenedinsuchawaythatre–importations
maybechargedwithoutinterruption againstthsiraccumulatedsharesofthe
quota.
Article9
1.EveryMemberStateshalladministeritsquotasharesbyasystemofprior
allocation.Itshallensurethatallpersonsestablishedintheirterritory
involvedintheprocessingtraffichavefreeaccesstothesharesallocated
toit.
2.Thee:rtenttowhichaMemberStatehasusedupitsquotasharesshallbe
determinedonthebasisoftheaddedvalueasestablished whenupon
re-importation theproductsconcernedareenteredwiththecustomsauthorities
forhomeuse.

<40-
Article 10
Member States snail inform tlieCommission atregular intervals ofthe
operations charged against their shares .
Article 11
Member States andtheCommission shall co-operate closely toensure that
this Regulation iscomplied with .
Article 12
This Regulation shall enter into force on1September 1974 •
This Regulation shall bebinding initsentirety raiddirectly applicable
inall Member States .
Done atBrussels , FortheCouncil
The Président