Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Euro-Mediterranean Association Agreement between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. The attached proposals constitute the legal instruments for the signature and conclusion of a Euro-Mediterranean Association Agreement between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part:

(i) Proposal for a Council Decision for the signature of the Agreement;

(ii) Proposal for a Council and Commission Decision for the conclusion of the Agreement.

2. Egypt's relations with the European Community are presently covered by the Co-operation Agreement signed in Brussels on 18 January 1977, as modified by subsequent protocols The EU-Egypt Co-operation Council agreed to a series of exploratory talks for a new Agreement and these began in 1994. The Council adopted its negotiating directives in December 1994 and the Commission formally launched the negotiations in January 1995. Progress was extremely slow with no less than ten revision draft texts produced during the four and a half years of negotiations.

3. Following considerable pressure from the EC and the Presidency on the Egyptian side to make progress, a final package was agreed by both negotiators following two intensive negotiating rounds in June 1999. This package was endorsed by the GAC of 21st June 1999. The EC at that point considered the negotiations to be closed and expressed itself ready to initial the final draft.

4. The Egyptian side also considered negotiations to be closed but delayed initialling for 18 months because of problems in finding a consensus in cabinet. During this period there was a ministerial visit to Brussels to present a formal request for clarification on a range of issues and such clarifications were duly given. The Egyptian side finally expressed themselves ready to proceed on 22nd January 2001 and the final draft was initialled by both sides in Brussels on 26th January 2001.

5. The proposed Association Agreement between the EU and Egypt will open a new era in bilateral relations and will consolidate the Euro-Mediterranean partnership launched by the 1995 Barcelona Declaration. It will contribute to peace and security in the region and will stimulate trade and economic relations between Egypt the EU and between Egypt and its Mediterranean partners.

6. The new EU/Egypt Association Agreement will be one of a series of broadly similar agreements between the EU and the countries of the region. Inspired by the 1995 Barcelona Declaration it forms the basis of a new Euro-Mediterranean Partnership covering security, economic, and social relations.

7. The Association Agreement focuses on the following main elements:

-A political, economic, social, and cultural dialogue with Egypt;

-provisions for enhanced regional co-operation, including the creation of a regional Euro-Mediterranean free trade area;

-the establishment of a free-trade area between the European Community and Egypt with improved concessions on agricultural products and the elimination of tariffs on industrial products within 12-15 years after the entry into force of the Agreement;

-provisions on the movement of persons, on the rights of establishment and supply of services; and on payments, competition and the movement of capital;

-provisions for economic and financial co-operation in a wide range of fields;

-provision for the establishment of an Association Council to supervise the implementation of the agreement, and of an Association Committee.

-The Association Council shall take measures to promote co-operation between the European Parliament and the Egyptian People's Assembly.

8. Having initialled the texts of the proposed agreement, the Commission requests the Council to formally approve the results of the negotiations and to engage the procedures required for the signature of this agreement. The Commission also presents its proposal for a decision to allow the Council and the Commission to proceed to the conclusion of the Agreement once it has been signed.

9. The procedures for the signature and the conclusion of the Agreement are different for the European Communities: (European Community, and European Coal and Steel Community):

a) as regards signature, the first indent, first sentence of Article 300 (2) of the EC Treaty provides for a separate Council Decision concerning the signing of the Agreement on behalf of the European Community; a similar act is not required under the ECSC Treaty

b) as regards conclusion of the Agreement:

-The Council concludes the Agreement on behalf of the European Community, after having received the assent of the European Parliament, by virtue of Article 310 of the Treaty;

-The Commission concludes the Agreement on behalf of the European Coal and Steel Community, by virtue of Article 95 of the ECSC Treaty, with the unanimous assent of the Council and following consultation of the Consultative Committee.

10. In line with the above the Commission requests the Council to:

(i) decide on the signature of the Agreement on behalf of the European Community

(ii) conclude the Agreement on behalf of the EC and give its assent and approval for conclusion by the ECSC.

The Agreement will only enter into force following ratification by all Member States.

2001/0092(AVC)

Proposal for a COUNCIL AND COMMISSION DECISION on the conclusion of a Euro-Mediterranean Association Agreement between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part

THE COUNCIL OF THE EUROPEAN UNION, THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular Article 310 in conjunction with the second phrase of Article 300(2) and the second sub-paragraph of paragraph 3;

Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 95 thereof;

Having regard to the proposal from the Commission;

Having regard to the assent of the European Parliament [1];

[1] OJ C ...

After consultation of the Consultative Committee and with the assent of the Council pursuant to Article 95 of the Treaty establishing the European Coal and Steel Community;

Whereas the Euro-Mediterranean Association Agreement between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part, signed on behalf of the European Community, in [Brussels/Luxembourg] on ........2001, should be approved.

HAVE DECIDED AS FOLLOWS:

Article 1

The Euro-Mediterranean Association Agreement between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part, together with the Annexes and Protocols and exchange of letters annexed thereto, and the joint declarations and declarations by the European Community attached to the Final Act, are hereby approved on behalf of the European Community, and the European Coal and Steel Community.

The texts referred to in the first paragraph are attached to this Decision.

Article 2

1. The position to be taken by the Community within the Association Council - and within the Association Committee when the latter is empowered to act by the Association Council - shall be determined by the Council on the basis of a proposal by the Commission or, where appropriate, by the Commission, each in accordance with the corresponding provisions of the Treaties.

2. In accordance with Article 75 of the Association Agreement the President of the Council shall preside over the Association Council. A representative of the President of the Council shall preside over the Association Committee, in accordance with article 78.

3. The decision to publish the decisions of the Association Council and the Association Committee in the Official Journal of the European Communities shall be taken on a case-by-case basis by the Council and the Commission respectively.

Article 3

The President of the Council, on behalf of the European Community, is hereby authorised to designate the persons empowered to give the notification provided for in Article 92 of the Agreement. The President of the Commission is hereby authorised to designate the persons empowered to give the said notification on behalf of the European Coal and Steel Community.

Done at Brussels,

For the Council For the Commission

The President The President

ANNEX

EURO-MEDITERRANEAN AGREEMENT

ESTABLISHING AN ASSOCIATION

BETWEEN THE EUROPEAN COMMUNITIES

AND THEIR MEMBER STATES OF THE ONE PART,

AND THE ARAB REPUBLIC OF EGYPT OF THE OTHER PART

THE KINGDOM OF BELGIUM,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

IRELAND,

THE ITALIAN REPUBLIC,

THE GRAND DUCHY OF LUXEMBOURG,

THE KINGDOM OF THE NETHERLANDS,

THE AUSTRIAN REPUBLIC

THE PORTUGUESE REPUBLIC,

THE FINNISH REPUBLIC

THE KINGDOM OF SWEDEN

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,

Contracting Parties to the Treaty establishing the EUROPEAN COMMUNITY and the Treaty establishing the EUROPEAN COAL AND STEEL COMMUNITY,

hereinafter referred to as the "Member States", and

the EUROPEAN COMMUNITY,

the EUROPEAN COAL AND STEEL COMMUNITY,

hereinafter referred to as "the Community",

of the one part,

and THE ARAB REPUBLIC OF EGYPT, hereinafter referred to as "Egypt",

of the other part,

CONSIDERING the importance of the existing traditional links between the Community, its Member States and Egypt, and the common values that they share,

CONSIDERING that the Community, its Member States and Egypt wish to strengthen those links and to establish lasting relations based on partnership and reciprocity;

CONSIDERING the importance which the Parties attach to the principles of the United Nations Charter, particularly the observance of human rights, democratic principles and political and economic freedoms which form the very basis of the Association,

DESIROUS of establishing and developing regular political dialogue on bilateral and international issues of mutual interest,

CONSIDERING the difference in economic and social development existing between Egypt and the Community and the need to strengthen the process of economic and social development in Egypt;

DESIROUS of enhancing their economic relations and, in particular, the development of trade, investment and technological co-operation, supported by a regular dialogue, on economic, scientific, technological, cultural, audio-visual and social matters with a view of improving mutual knowledge and understanding,

CONSIDERING the commitment of the Community and Egypt to free trade, and in particular to compliance with the rights and obligations arising out of the provisions of the General Agreement on Tariffs and Trade of 1994 and of the other multilateral agreements annexed to the agreement establishing the World Trade Organisation.

CONSCIOUS of the need to associate their efforts to strengthen political stability and economic development in the region through the encouragement of regional co-operation,

CONVINCED that the Association Agreement will create a new climate for their relations,

have agreed as follows:

Article 1

1. An Association is hereby established between the Community and its Member States of the one part and Egypt of the other part.

2. The aims of this Agreement are:

-to provide an appropriate framework for the political dialogue, allowing the development of close political relations between the Parties;

-to establish the conditions for the progressive liberalisation of trade in goods, services and capital;

-to foster the development of balanced economic and social relations between the Parties through dialogue and co-operation;

-to contribute to the economic and social development of Egypt;

-to encourage regional co-operation with a view to the consolidation of peaceful coexistence and economic and political stability;

-to promote co-operation in other areas which are of mutual interest.

Article 2

Relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect of democratic principles and fundamental human rights as set out in the Universal Declaration on Human Rights, which guides their internal and international policy and constitutes an essential element of this Agreement .

TITLE I

POLITICAL DIALOGUE

Article 3

1. A regular political dialogue shall be established between the Parties. It shall strengthen their relations, contribute to the development of a lasting partnership and increase mutual understanding and solidarity.

2. The political dialogue and co-operation will aim, in particular, to:

-develop better mutual understanding and an increasing convergence of positions on international issues, and in particular on those issues likely to have substantial effects on one or the other party;

-enable each party to consider the position and interests of the other;

-enhance regional security and stability;

-promote common initiatives.

Article 4

The political dialogue shall cover all subjects of common interest, and, in particular peace, security, democracy and regional development.

Article 5

1. The political dialogue shall take place at regular intervals and whenever necessary, in particular:

(a) at ministerial level, mainly in the framework of the Association Council;

(b) at senior official level of Egypt of the one part, and of the Presidency of the Council and of the Commission of the other;

(c) by taking full advantage of all diplomatic channels including regular briefings by officials, consultations on the occasion of international meetings and contacts between diplomatic representatives in third countries;

(d) by any other means which would make a useful contribution to consolidating, developing and stepping up this dialogue.

2. There shall be a political dialogue between the European Parliament and the Egyptian People's Assembly.

TITLE II

FREE MOVEMENT OF GOODS

BASIC PRINCIPLES

Article 6

The Community and Egypt shall gradually establish a free trade area over a transitional period not exceeding twelve years from the entry into force of the present Agreement, according to the modalities set out in this Title and in conformity with the provisions of the General Agreement on Tariffs and Trade of 1994 and of the other multilateral agreements on trade in goods annexed to the agreement establishing the World Trade Organisation (WTO), hereinafter referred to as the GATT.

CHAPTER 1

INDUSTRIAL PRODUCTS

Article 7

The provisions of this Chapter shall apply to products originating in the Community and Egypt falling within Chapters 25 to 97 of the Combined Nomenclature and of the Egyptian Customs tariff with the exception of the products listed in Annex 1.

Article 8

Imports into the Community of products originating in Egypt shall be allowed free of customs duties and of any other charge having equivalent effect[ and free of quantitative restrictions and of any other restriction having equivalent effect].

Article 9

1. Customs duties and charges having equivalent effect applicable on import into Egypt of products originating in the Community listed in Annex 2 shall be gradually abolished in accordance with the following schedule:

-on the date of entry into force of this Agreement each duty and charge shall be reduced to 75% of the basic duty;

-one year after the date of entry into force of this Agreement each duty and charge shall be reduced to 50% of the basic duty;

-two years after the date of entry into force of this Agreement each duty and charge shall be reduced to 25% of the basic duty;

-three years after the date of entry into force of this Agreement any remaining duty and charge shall be abolished.

2. Customs duties and charges having equivalent effect applicable on import into Egypt of the products originating in the Community listed in Annex 3 shall be gradually abolished in accordance with the following schedule:

-three years after the date of entry into force of this Agreement each duty and charge shall be reduced to 90 % of the basic duty;

-four years after the date of entry into force of this Agreement each duty and charge shall be reduced to 75% of the basic duty;

-five years after the date of entry into force of this Agreement each duty and charge shall be reduced to 60% of the basic duty;

-six years after the date of entry into force of this Agreement each duty and charge shall be reduced to 45% of the basic duty;

-seven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 30% of the basic duty;

-eight years after the date of entry into force of this Agreement each duty and charge shall be reduced to 15% of the basic duty;

-nine years after the date of entry into force of this Agreement any remaining duty and charge shall be abolished.

3. Customs duties and charges having equivalent effect applicable on import into Egypt of the products originating in the Community listed in Annex 4 shall be gradually abolished in accordance with the following schedule:

-five years after the date of entry into force of this Agreement each duty and charge shall be reduced to 95 % of the basic duty.

-six years after the date of entry into force of this Agreement each duty and charge shall be reduced to 90% of the basic duty;

-seven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 75% of the basic duty;

-height years after the date of entry into force of this Agreement each duty and charge shall be reduced to 60% of the basic duty;

-nine years after the date of entry into force of this Agreement each duty and charge shall be reduced to 45% of the basic duty;

-ten years after the date of entry into force of this Agreement each duty and charge shall be reduced to 30% of the basic duty;

-eleven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 15% of the basic duty;

-twelve years after the date of entry into force of this Agreement any remaining duty and charge shall be abolished.

4. Customs duties and charges having equivalent effect applicable on import into Egypt of the products originating in the Community listed in Annex 5 shall be gradually abolished in accordance with the following schedule:

-six years after the date of entry into force of this Agreement each duty and charge shall be reduced to 90% of the basic duty;

-seven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 80% of the basic duty;

-eight years after the date of entry into force of this Agreement each duty and charge shall be reduced to 70% of the basic duty;

-nine years after the date of entry into force of this Agreement each duty and charge shall be reduced to 60% of the basic duty;

-ten years after the date of entry into force of this Agreement each duty and charge shall be reduced to 50% of the basic duty;

-eleven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 40% of the basic duty;

-twelve years after the date of entry into force of this Agreement each duty and charge shall be reduced to 30% of the basic duty;

-thirteen years after the date of entry into force of this Agreement each duty and charge shall be reduced to 20% of the basic duty;

-fourthteen years after the date of entry into force of this Agreement each duty and charge shall be reduced to 10% of the basic duty;

-fifteen years after the date of entry into force of this Agreement any remaining duty and charge shall be abolished.

5 Customs duties and charges having equivalent effect applicable to imports into Egypt of products originating in the Community , other than those in Annexes 2, 3, 4 and 5 shall be abolished in accordance with the relevant schedule on the basis of a decision of the Association Committee.

6. In the event of serious difficulties for a given product, the relevant timetables in accordance with paragraphs (1), (2), (3) and (4) may be reviewed by the Association Committee by common accord on the understanding that the schedule for which the review has been requested may not be extended in respect of the product concerned beyond the maximum transitional period. If the Association Committee has not taken a decision within thirty days of its application to review the timetable, Egypt may suspend the timetable provisionally for a period that may not exceed one year.

7. For each product concerned, the basic duty to be gradually reduced as provided in paragraphs (1), (2), (3), and (4) shall be the rates referred to in Article 18. Article 10

The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.

Article 11

1. By way of derogation from the provisions of Article 9, Egypt may take exceptional measures of limited duration to increase or re-introduce customs duties.

2. Such measures may only apply to new and infant industries or to sectors undergoing restructuring or experiencing serious difficulties, particularly where those difficulties entail severe social problems.

3. Customs duties on import into Egypt of products originating in the Community that are introduced by such exceptional measures may not exceed 25% ad valorem, and must retain a preferential margin for products originating in the Community. The total value of imports of the products subjected to such measures may not exceed 20% of total imports of industrial products from the Community during the last year for which statistics are available.

4. Such measures shall be applied for no longer than five years, except where a longer duration is authorized by the Association Committee. They shall cease to apply at the latest on expiry of the maximum transitional period.

5. Such measures may not be introduced for a given product if more than three years have elapsed since the abolition of all duties, quantitative restrictions and charges and measures having equivalent effect on the product concerned.

6. Egypt shall inform the Association Committee of any exceptional measures it intends to adopt and, at the Community's request, consultations shall be held on the measures and sectors concerned before they are implemented. When adopting such measures, Egypt shall provide the Committee with a schedule for the abolition of the customs duties introduced pursuant to this Article. Such schedule shall provide for the phasing out of the duties concerned by equal annual instalments, starting no later than the end of the second year following their introduction. The Association Committee may decide on a different schedule.

7. By way of derogation from the provisions of paragraph 4, the Association Committee may exceptionally, in order to take into account the difficulties involved in setting up new industries, endorse the measures already taken by Egypt pursuant to paragraph 1 for a maximum period of four years beyond the 12 years transitional period.

CHAPTER 2

AGRICULTURAL, FISHERIES AND PROCESSED AGRICULTURAL PRODUCTS

Article 12

The provisions of this Chapter shall apply to products originating in the Community and Egypt falling within Chapters 1 to 24 of the Combined Nomenclature and of the Egyptian Customs tariff and to the products listed in Annex 1.

Article 13

The Community and Egypt shall progressively establish a greater liberalisation of their trade in agricultural, fisheries and processed agricultural products of interest to both parties.

Article 14

1. Agricultural products originating in Egypt listed in Protocol No. 1 on importation into the Community shall be subject to the arrangements set out in that Protocol.

2. Agricultural products originating in the Community listed in Protocol No. 2 on importation into Egypt shall be subject to the arrangements set out in that Protocol.

3. Trade for processed agricultural products falling under this chapter shall be subject to the arrangements set out in Protocol 3.

Article 15

1. During the third year of implementation of the agreement the Community and Egypt shall examine the situation in order to determine the measures to be applied by the Community and Egypt from the beginning of the fourth year after the entry into force of the agreement, in accordance with the objective set out in Article 13.

2. Without prejudice to the provisions of paragraph 1 and taking account of the volume of trade in agricultural, fisheries and processed agricultural products between them and of their particular sensitivity, the Community and Egypt shall examine in the Association Council, product by product and on an orderly and reciprocal basis, the possibility of granting each other further concessions.

Article 16

1. In the event of specific rules being introduced as a result of the implementation of its agricultural policy or of any alteration of the current rules or in the event of any alteration or extension of the provisions relating to the implementation of its agricultural policy, the Party concerned may amend the arrangements resulting from the Agreement in respect of the products concerned.

2. In such cases the Party concerned shall inform the Association Committee. At the request of the other Party, the Association Committee shall meet to take due account of the interests of the other Party.

3. If the Community or Egypt, in applying paragraph 1, modifies the arrangements made by this Agreement for agricultural products, they shall accord imports originating in the other Party an advantage comparable to that provided for in this Agreement.

4. The application of this Article should be the subject of consultations in the Association Council.

CHAPTER 3

COMMON PROVISIONS

Article 17

1. No new quantitative restrictions on imports or any other restriction having equivalent effect shall be introduced in trade between the Community and Egypt.

2. Quantitative restrictions on imports and any other restriction having equivalent effect in trade between the Community and Egypt shall be abolished from the entry into force of this Agreement.

3. The Community and Egypt shall not apply to exports between themselves either customs duties or charges having equivalent effect, or quantitative restrictions or measures having equivalent effect.

Article 18

1. The applicable rates for imports between the Parties shall be the WTO bound rate or lower applied rate enforced as of 1 January 1999. If, after 1 January 1999, a tariff reduction is applied on a erga omnes basis, the reduced rate shall apply.

2. No new customs duties on imports or exports, or charges having equivalent effect, shall be introduced, nor shall those already applied be increased, in trade between the Community and Egypt, unless this agreement provides otherwise.

3. The Parties shall communicate to each other their respective applied rates on 1 January 1999.

Article 19

1. Products originating in Egypt shall not, on importation into the Community, be accorded a treatment more favourable than that which the Member States apply among themselves.

2. Application of the provisions of this Agreement shall be without prejudice to the special provisions for the application of the Community law to the Canary Islands.

Article 20

1. The Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.

2. Products exported to the territory of one of the Parties may not benefit from repayment of indirect internal taxation in excess of the amount of indirect taxation imposed on them either directly or indirectly.

Article 21

1. The Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade, except insofar as they alter the trade arrangements provided for in the Agreement.

2. Consultation between the Parties shall take place within the Association Council concerning agreements establishing customs unions or free trade areas and, where requested, on other major issues related to their respective trade policy with third countries. In particular, in the event of a third country acceding to the Union, such consultation shall take place so as to ensure that account can be taken of the mutual interests of the Parties.

Article 22

If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of the provisions of Article VI of the GATT 1994, it may take appropriate measures against this practice in accordance with the WTO Agreement on the Implementation of Art. VI of the GATT 1994 and related internal legislation.

Article 23

Without prejudice to Article 34, the WTO Agreement on Subsidies and Countervailing Measures shall be applicable between the Parties.

Until the necessary rules referred to in Article 34 paragraph 2 are adopted, if either Party finds that subsidy is taking place in trade with the other party within the meanings of Articles VI and XVI of the GATT 1994, it may invoke appropriate measures against this practice in accordance with the WTO Agreement Agreement on Subsidies and Countervailing Measures and related internal legislation.

Article 24

1. The provisions of the Article XIX GATT 1994 and the WTO Agreement on Safeguards are applicable between the Parties.

2. Before applying safeguard measures pursuant to the provisions of the Article XIX GATT 1994 and the WTO Agreement on Safeguards, the Party intending to apply such measures shall supply the Association Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

In order to find such a solution the Parties shall immediately hold consultations within the Association Committee. If, as a result of the consultations, the Parties do not reach an agreement within thirty days of the initiation of the consultations on a solution to avoid the application of the safeguard measures, the Party intending to apply safeguard measures may apply the provisions of the Article XIX GATT 1994 and the WTO Agreement on Safeguards.

3. In the selection of safeguard measures pursuant this article, the Parties shall give priority to those, which cause least disturbance to the achievement of the objectives of this agreement.

4. Safeguard measures shall be notified immediately to the Association Committee and shall be the subject of periodic consultations within the Committee, particularly with a view to their abolition as soon as circumstances permit.

Article 25

1. Where compliance with the provisions of Article 17 paragraph 3 leads to:

(i) re-export towards a third country against which the exporting party maintains, for the product concerned, quantitative export restrictions, export duties, or measures having equivalent effect, or

(ii) a serious shortage, or threat thereof, of a product essential to the exporting party;

and where the situations referred to above give rise, or are likely to give rise to major difficulties for the exporting party, that party may take appropriate measures, according to the procedures laid down in paragraph 2.

2. The difficulties arising from the situations referred to in paragraph 1 shall be submitted for examination to the Association Committee. The Committee may take any decision needed to put an end to the difficulties. If it has not taken such a decision within thirty days of the matter being referred to it, the exporting party may apply appropriate measures on the exportation of the product concerned. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.

Article 26

Nothing in this Agreement shall preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security, of the protection of health and life of humans, animals or plants, of the protection of national treasures possessing artistic, historic or archaeological value, of the protection of intellectual property or of regulations concerning gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

Article 27

The concept of "originating products" for the application of the provisions of the present Title and the methods of administrative co-operation relating to them are set out in Protocol No. 4.

Article 28

The Combined Nomenclature of goods shall be applied to the classification of goods for imports into the Community. The Egyptian customs tariff shall be applied to the classification of goods for imports into Egypt.

TITLE III

RIGHT OF ESTABLISHMENT AND SUPPLY OF SERVICES

Article 29

1. The Parties reaffirm their respective commitments under the terms of the General Agreement on Trade in Services (GATS) annexed to the Agreement establishing the WTO, and in particular the commitment to accord each other most-favoured-nation treatment in trade in service sectors covered by these commitments.

2. In accordance with the GATS, this treatment shall not apply to:

a) advantages accorded by either Party under the provisions of an agreement as defined in Article V of the GATS or under measures adopted on the basis of such an agreement;

b) other advantages accorded pursuant to the list of most-favoured-nation exemptions annexed by either Party to the GATS.

Article 30

1. The Parties will consider extending the scope of the Agreement to include the right of establishment of companies of one Party in the territory of another Party and the liberalization of the supply of services by companies of one Party to service consumers in another Party.

2. The Association Council shall make the necessary recommendations for the implementation of the objective set out in paragraph 1.

When formulating these recommendations, the Association Council shall take into account the experience gained by the implementation of the MFN treatment granted to each other by the Parties in accordance with their respective obligations under the GATS , and in particular Article V thereof.

3. The objective set out in the first paragraph of this Article shall be subject to a first examination by the Association Council at the latest five years after the entry into force of this Agreement.

TITLE IV

CAPITAL MOVEMENTS AND OTHER ECONOMIC MATTERS

CHAPTER 1

PAYMENTS AND CAPITAL MOVEMENTS

Article 31

Subject to the provisions of Article 33, the Parties undertake to authorise, in fully convertible currency, any payments to the current account.

Article 32

1. The Community and Egypt will ensure, from the entry into force of the Agreement, the free circulation of capital for direct investments made in companies formed in accordance with the laws of the host country, and the liquidation or repatriation of these investments and of any profit stemming therefrom.

2. The Parties will hold consultations with a view to facilitating the movement of capital between the Community and Egypt and achieve its complete liberalisation as soon as conditions are met.

Article 33

Where one or several Member States of the Community or Egypt face or risk facing serious difficulties concerning balance of payments, the Community or Egypt respectively may, in conformity with the conditions laid down within the framework of the GATT and Articles VIII and XIV of the Statutes of the International Monetary Fund, take restrictive measures with regard to current payments if such measures are strictly necessary. The Community or Egypt, as appropriate, shall inform the other Party immediately thereof and shall provide as soon as possible a timetable for the removal of such measures.

CHAPTER 2

COMPETITION AND OTHER ECONOMIC MATTERS

Article 34

1. The following are incompatible with the proper functioning of the Agreement, in so far as they may affect trade between the Community and Egypt:

(i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;

(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or Egypt as a whole or in a substantial part thereof;

(iii) any public aid which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods.

2. The Association Council shall, within five years of the entry into force of the Agreement, adopt by decision the necessary rules for the implementation of paragraph 1.

Until these rules are adopted, the provisions of Article 23 shall be applied as regards the implementation of paragraph 1(iii).

3. Each Party shall ensure transparency in the area of public aid, inter alia by reporting annually to the other Party on the total amount and the distribution of the aid given and by providing, upon request, information on aid schemes. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.

4. With regard to agricultural products referred to in Title II, Chapter 2, paragraph 1(iii) does not apply. The WTO Agreement on Agriculture and the relevant provisions on WTO Agreement on Subsidies and Countervailing Duties shall apply with regard these products.

5. If the Community or Egypt considers that a particular practice is incompatible with the terms of the first paragraph of this Article, and:

-is not adequately dealt with under the implementing rules referred to in paragraph 2, or

-in the absence of such rules, and if such practice causes or threatens to cause serious prejudice to the interest of the other Party or material injury to its domestic industry, including its services industry,

-it may take appropriate measures after consultation within the Association Committee or after thirty working days following referral for such consultation.

With reference to practices incompatible with paragraph 1(iii) of the present Article, such appropriate measures, when the WTO rules are applicable to them, may only be adopted in accordance with the procedures and under the conditions laid down by the WTO or by any other relevant instrument negotiated under its auspices and applicable to the Parties.

6. Notwithstanding any provisions to the contrary adopted in conformity with paragraph 2, the Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business secrecy.

Article 35

The Member States and Egypt shall progressively adjust, without prejudice to their commitments to the GATT, any State monopolies of a commercial character, so as to ensure that, by the end of the fifth year following the entry into force of this Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and Egypt. The Association Committee will be informed about the measures adopted to implement this objective.

Article 36

With regard to public enterprises and enterprises to which special or exclusive rights have been granted, the Association Council shall ensure that as from the fifth year following the date of entry into force of this Agreement there is neither enacted nor maintained any measure distorting trade between the Community and Egypt contrary to the Parties' interests. This provision should not obstruct the performance in law or in fact of the particular tasks assigned to these enterprises.

Article 37

1. Pursuant to the provisions of this article and of Annex 6, the Parties shall grant and ensure adequate and effective protection of intellectual property rights in accordance with the prevailing international standards, including effective means of enforcing such rights.

2. The implementation of this Article and of Annex 6 shall be regularly reviewed by the Parties. If problems in the area of intellectual property affecting trading conditions were to occur, urgent consultations shall be undertaken, at the request of either Party, with a view to reaching mutually satisfactory solutions.

Article 38

The Parties agree on the objective of a progressive liberalisation of public procurement. The Association Council will hold consultations on the implementation of this objective.

TITLE V

ECONOMIC COOPERATION

Article 39

Objectives

1. The Parties undertake to intensify economic cooperation in their mutual interest.

2. The aim of economic cooperation shall be to:

-encourage the implementation of the overall objectives of the Agreement;

-promote balanced economic relations between the Parties;

-support Egypt's own efforts to achieve sustainable economic and social development.

Article 40

Scope

1. Co-operation shall focus primarily on sectors suffering from internal difficulties or affected by the overall process of liberalisation of the Egyptian economy, and in particular by the liberalisation of trade between Egypt and the Community.

2. Similarly, cooperation shall focus on areas likely to bring the economies of the Community and Egypt closer together, particularly those which will generate growth and employment.

3. Co-operation shall encourage the implementation of measures designed to develop intra-regional co-operation.

4. Conservation of the environment and ecological balance shall be taken into account in the implementation of the various sectors of economic co-operation to which it is relevant.

5. The Parties may agree to extend the economic co-operation to other sectors not covered by the provisions of this Title.

Article 41

Methods and Modalities

Economic co-operation shall be implemented in particular by:

a) a regular economic dialogue between the Parties, which covers all areas of macro-economic policy;

b) regular exchange of information and ideas in every sector of co-operation including meetings of officials and experts;

c) transfer of advice, expertise and training;

d) implementation of joint actions such as seminars and workshops;

e) technical, administrative and regulatory assistance.

Article 42

Education and Training

The Parties shall cooperate with the objective of identifying and employing the most effective means to improve significantly education and vocational training, in particular with regard to public and private enterprises, trade-related services, public administrations and authorities, technical agencies, standardisation and certification bodies and other relevant organisations. In this context, the access of women to higher education and training will receive special attention.

Co-operation shall also encourage the establishment of links between specialized bodies in the Community and in Egypt and shall promote the exchange of information and experience and the pooling of technical resources.

Article 43

Scientific and Technological Co-operation

Co-operation shall have the objective of:

a) encouraging the establishment of durable links between the scientific communities of the Parties, notably through:

-the access of Egypt to Community R&D programmes, in conformity with existing provisions concerning the participation of third countries;

-the participation of Egypt in networks of decentralized co-operation;

-the promotion of synergy between training and research;

b) strengthening research capacity in Egypt;

c) stimulating technological innovation, transfer of new technologies, and dissemination of know-how.

Article 44

Environment

1. Co-operation shall aim at preventing deterioration of the environment, controlling pollution and ensuring the rational use of natural resources, with a view to ensuring sustainable development.

2. Co-operation shall focus, in particular, on:

-desertification;

-quality of Mediterranean water and the control and prevention of marine pollution;

-water resource management;

-energy management;

-waste management;

-salinisation;

-environmental management of sensitive coastal areas;

-the impact of industrial development and the safety of industrial plant in particular;

-the impact of agriculture on soil and water quality;

-environmental education and awareness.

Article 45

Industrial Co-operation

Co-operation shall promote and encourage in particular:

-the debate regarding industrial policy and competitiveness in an open economy;

-industrial co-operation between economic operators in the Community and in Egypt, including access for Egypt to the Community's networks for the rapprochement of businesses and to networks created in the context of decentralized co-operation;

-modernisation and restructuring of Egyptian industry;

-the establishment of an environment favourable to the development of private enterprise, in order to stimulate the growth and the diversification of industrial production;

-technology transfer, innovation and R&D;

-the enhancement of human resources;

-access to the capital market for the financing of productive investments.

Article 46

Investments and promotion of investments

Co-operation shall aim at increasing the flow of capital, expertise and technology to Egypt through, inter alia:

-appropriate means of identifying investment opportunities and information channels on investment regulations;

-providing information on European investment regimes (technical assistance, direct financial support, fiscal incentives, investment insurance etc.) related to outward investments and enhancing the possibility for Egypt to benefit from them.

-a legal environment conducive to investment between the two parties, where appropriate through the conclusion by the Member States and Egypt of investment protection agreements, and agreements to prevent double taxation.;

-examining the creation of joint ventures, especially for SMEs and, when appropriate, the conclusion of agreements between the Member States and Egypt.

-establishing mechanisms for encouraging and promoting investments

Co-operation may extend to the planning and implementation of projects demonstrating the effective acquisition and use of basic technologies, the use of standards, the development of human resources and the creation of jobs locally.

Article 47

Standardization and Conformity assessment

The Parties shall aim to reduce differences in standardization and conformity assessment. Co-operation in this field shall focus in particular on:

a) rules in the field of standardization, metrology, quality standards, and recognition of conformity, in particular as regards sanitary and phytosanitary standards for agricultural products and foodstuffs;

b) upgrading the level of Egyptian conformity assessment bodies, with a view to the establishment, in due time, of mutual recognition agreements in the area of conformity assessment;

c) developing structures for the protection of intellectual, industrial and commercial property, for standardization and for setting quality standards.

Article 48

Approximation of laws

The Parties shall use their best endeavours to approximate their respective laws in order to facilitate the implementation of this Agreement.

Article 49

Financial services

The Parties shall cooperate with a view to the rapprochement of their standards and rules, in particular:

a) to encourage the strengthening and restructuring of the financial sector in Egypt;

b) to improve accounting and supervisory and regulatory systems of banking, insurance and other parts of the financial sector in Egypt.

Article 50

Agriculture and Fisheries

Cooperation shall be aimed at:

a) the modernisation and restructuring of agriculture and fisheries, including: the modernisation of infrastructures and of equipment; the development of packaging, storage and marketing techniques; the improvement of private distribution channels;

b) the diversification of production and of external outlets, inter alia through the encouragement of joint ventures in the agri-business sector;

c) The promotion of cooperation in veterinary and phytosanitary matters and in growing techniques, with the objective of facilitating trade between the Parties. In this regard, the Parties shall exchange information.

Article 51

Transport

Cooperation shall be aimed at:

-the restructuring and modernisation of road, port and airport infrastructures linked to the main trans-European lines of communication of common interest;

-the establishment and enforcement of operating standards comparable to those prevailing in the Community;

-the upgrading of technical equipment for road/rail transport, container traffic and transhipment;

-the improvement of management of airports, railways and air traffic control, including cooperation between the relevant national bodies;

-the improvement of navigation aids.

Article 52

Information society and telecommunications

The Parties recognise that information and communication technologies constitute a key element of modern society, vital to economic and social development and a cornerstone of the emerging information society.

The co-operation activities between the Parties in this field shall aim at :

-a dialogue on issues related to the different aspects of the information society, including telecommunications policies;

-the exchanges of information and eventual technical assistance with regulatory matters, standardisation, conformity testing and certification in relation to information technologies and telecommunications;

-the diffusion of new information and communications technologies and the refinement of new applications in these fields;

-the implementation of joint projects for research, technical development or industrial applications in information technologies, communications, telematics and information society;

-the participation of Egyptian organisations in pilot projects and European programmes within the established frameworks;

-interconnection between networks and the interoperability of telematic services in the Community and Egypt.

Article 53

Energy

The priority areas of co-operation shall be:

-the promotion of renewable energies;

-the promotion of energy-saving and energy efficiency;

-applied research into data bank networks in the economic and social sectors, linking Community and Egyptian operators in particular;

-support for the modernization and development of energy networks and for their linking to European Community networks.

Article 54

Tourism

Priorities for cooperation shall be:

-promoting investments in tourism;

-improving the knowledge of the tourist industry and ensuring greater consistency of policies affecting tourism;

-promoting a good seasonal spread of tourism;

-promoting cooperation between regions and cities of neighbouring countries;

-highlighting the importance of the cultural heritage for tourism;

-ensuring that the interaction between tourism and the environment is suitably maintained;

-making tourism more competitive through support for increased professionalism.

Article 55

Customs

1. The Parties shall develop customs cooperation to ensure that the provisions on trade are observed. Cooperation will focus in particular on:

a) the simplification of controls and procedures concerning the customs clearance of goods;

b) the introduction of the single administrative document and a system to link up the Community's and Egypt's transit arrangements.

2. Without prejudice to other forms of cooperation envisaged in this agreement, notably for the fight against drugs and money laundering, the Parties' administrations will provide mutual assistance in accordance with the provisions of Protocol No. 5.

Article 56

Co-operation on statistics

The main objective of co-operation in this field shall be to harmonise methodology in order to create a reliable basis for handling statistics in all the fields that are covered by this agreement and lend themselves to the establishment of statistics.

Article 57

Money laundering

1. The Parties shall cooperate with a view in particular to preventing the use of their financial systems to launder the proceeds arising from criminal activities in general and drug trafficking in particular.

2. Cooperation in this field shall include, in particular, technical and administrative assistance aimed at establishing effective standards relating to the fight against money laundering in line with international standards.

Article 58

Fight against drugs

1. The Parties shall cooperate with a view in particular to:

-improving the effectiveness of policies and measures to counter the supply of, and illicit trafficking in, narcotic drugs and psycho-tropic substances and the reduction of the abuse of these products;

-encouraging a joint approach to reducing demand.

2. The Parties shall determine together, in accordance with their respective legislation, the strategies and cooperation methods appropriate for attaining these objectives. Their operations, other than joint operations, shall form the subject of consultations and close co-ordination.

The relevant governmental and non-governmental sector bodies, in accordance with their own powers, working with the competent bodies of Egypt, the Community and its Member States, may take part in these operations.

3. Cooperation shall take the form of exchanges of information and, where appropriate, joint activities on:

-establishment or extension of social and health institutions and information centres for the treatment and rehabilitation of drug addicts;

-implementation of projects in the areas of prevention, training and epidemiological research;

-establishment of effective standards relating to the prevention of the diversion of precursors and other essential substances used for the illicit production of narcotic drugs and psychotropic substances, in line with international standards.

Article 59

Fight against terrorism

In accordance with international conventions and with their respective national legislations, the Parties shall co-operate in this field and focus in particular on:

-exchange of information on means and methods used to counter terrorism;

-exchange of experiences in respect of terrorism prevention;

-joint research and studies in the area of terrorism prevention.

Article 60

Regional Cooperation

Such cooperation shall focus on:

-development of economic infrastructures;

-scientific and technological research;

-intra-regional trade;

-customs matters.

-cultural matters;

-environmental issues.

Article 61

Consumer Protection

Cooperation in this field should be geared to making consumer protection schemes in the European Community and Egypt compatible and should, as far as possible, involve:

-increasing the compatibility of consumer legislation in order to avoid barriers to trade;

-establishment and development of systems of mutual information on dangerous food and industrial products and interconnecting them (rapid alert systems);

-exchanges of information and experts;

-organising training schemes and supplying technical assistance.

TITLE VI

CHAPTER 1

DIALOGUE AND COOPERATION ON SOCIAL MATTER

Article 62

The Parties reaffirm the importance they attach to the fair treatment of their workers legally residing and employed in the territory of the other Party. The Member States and Egypt, at the request of any of them, agree to initiate talks on reciprocal bilateral Agreements related to the working conditions and social security rights of Egyptian and Member States workers legally resident and employed in their respective territory.

Article 63

1. The Parties shall conduct regular dialogue on social matters which are of interest to them.

2. This dialogue shall be used to find ways to achieve progress in the field of movement of workers and equal treatment and social integration of Egyptian and Community nationals legally residing in the territories of their host countries.

3. The dialogue shall notably cover all issues related to:

(a) migrant communities' living and working conditions;

(b) migration;

(c) illegal migration;

(d) actions to encourage equal treatment between Egyptian and Community nationals, mutual knowledge of cultures and civilizations, the furthering of tolerance and the removal of discrimination.

Article 64

Dialogue on social matters shall be conducted in accordance with the same procedures as those provided for in Title I of this agreement.

Article 65

With a view to consolidating cooperation between the Parties in the social field, projects and programmes shall be carried out in any area of interest to them.

Priority will be given to:

a) reducing migratory pressures, notably by improving living conditions, creating jobs, and income generating activities and developing training in areas from which emigrants come;

b) promoting the role of women in economic and social development;

c) bolstering and developing Egyptian family planning and mother and child protection programmes;

d) improving the social protection system;

e) improving the health care system;

f) improving living conditions in poor areas;

g) implementing and financing exchange and leisure programmes for mixed groups of Egyptian and European young people residing in the Member States, with a view to promoting mutual knowledge of their respective cultures and fostering tolerance.

Article 66

Cooperation schemes may be carried out in cooperation with the Member States and the relevant international organisations.

Article 67

A working group shall be set up by the Association Council by the end of the first year following the entry into force of this Agreement. It shall be responsible for the continuous and regular evaluation of the implementation of chapters 1 to 3.

CHAPTER 2

COOPERATION FOR THE PREVENTION AND CONTROL OF ILLEGAL IMMIGRATION and other consular issues

Article 68

The Parties agree to co-operate in order to prevent and control illegal immigration. To this end:

-each of the Member States agrees to readmit any of its nationals illegally present on the territory of Egypt, upon request by the latter and without further formalities once such persons have been positively identified as such;

-Egypt agrees to readmit any of its nationals illegally present on the territory of a Member State, upon request by the latter and without further formalities once such persons have been positively identified as such;

The Member States and Egypt will also provide their nationals with appropriate identity documents for such purposes.

In respect of the Member States of the European Union, the obligations in this Article apply only in respect of those persons who are to be considered their nationals for Community purposes.

In respect of Egypt, the obligation in this Article applies only in respect of those persons who are considered nationals of Egypt in accordance to the Egyptian legal system and all the relevant laws concerning citizenship.

Article 69

After the entry into force of the Agreement, the Parties, at the request of any of them, shall negotiate and conclude bilateral agreements with each other, regulating specific obligations for the readmission of their nationals. These Agreements shall also cover, if deemed necessary by any of the Parties, arrangements for the readmission of third country nationals. Such agreements will lay down the details about the categories of persons covered by these arrangements as well as the modalities of their readmission.

Adequate financial and technical assistance to implement these Agreements will be provided to Egypt.

Article 70

The Association Council shall examine what other joint efforts can be made to prevent and control illegal immigration as well as deal with other consular issues.

CHAPTER 3

CO-OPERATION IN CULTURAL MATTERS, AUDIO-VISUAL MEDIA AND INFORMATION

Article 71

1. The Parties agree to promote cultural co-operation in fields of mutual interest and in a spirit of respect for each other's cultures. They shall establish a sustainable cultural dialogue. This co-operation shall promote in particular :

-Conservation and restoration of historic and cultural heritage (monuments, sites, artefacts, rare books and manuscripts, etc.);

-exchange of art exhibitions, troupes of performing arts, artists, men of letters, intellectuals, cultural events;

-translations;

-training of persons working in the cultural field.

2. Co-operation in the field of audio-visual media shall seek to encourage co-operation in such areas as coproduction and training. The Parties shall seek ways to encourage Egyptian participation in Community initiatives in this sector.

3. The Parties agree that existing cultural programmes of the Community and of one or more of the Member States and further activities of interest to both sides, can be extended to Egypt.

4. The Parties shall, in addition, work to promote cultural co-operation of a commercial nature, particularly through joint projects (production, investment and marketing), training and exchange of information.

5. The Parties shall, in identifying co-operation projects, programmes and joint activities, give special attention to young people, self-expression, heritage conservation issues, the dissemination of culture, and communication skills using written and audio-visual media.

6. Co-operation shall be implemented in particular through :

-a regular dialogue between the Parties;

-regular exchange of information and ideas in every sector of co-operation including meetings of officials and experts;

-transfer of advice, expertise and training;

-implementation of joint actions such as seminars and workshops;

-technical administrative and regulatory assistance;

-the dissemination of information on co-operation initiatives.

TITLE VII

FINANCIAL COOPERATION

Article 72

In order to achieve the objectives of this agreement, a financial cooperation package shall be made available to Egypt in accordance with the appropriate procedures and the financial resources required.

Financial cooperation shall focus on:

-promoting reforms designed to modernize the economy;

-upgrading economic infrastructure;

-promoting private investment and job-creating activities;

-responding to the economic repercussions for Egypt of the gradual introduction of a free trade area, notably by upgrading and restructuring industry and enhancing Egypt's export capacity;

-accompanying measures for policies implemented in the social sector;

-promoting Egypt's capacity and capabilities in the field of the protection of intellectual property rights.

-where appropriate, supplementary measures for the implementation of bilateral agreements to prevent and control illegal immigration;

-accompanying measures for the establishment and implementation of competition legislation.

Article 73

In order to ensure that a coordinated approach is adopted to any exceptional macro-economic and financial problems that might arise as a result of the implementation of this agreement, the parties shall use the regular economic dialogue provided for in Title V to give particular attention to monitoring trade and financial trends in relations between the Community and Egypt.

TITLE VIII

INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 74

An Association Council is hereby established which shall meet at ministerial level once a year and when circumstances require, at the initiative of its President and in accordance with the conditions laid down in its rules of procedure.

It shall examine any major issues arising within the framework of this Agreement and any other bilateral or international issues of mutual interest.

Article 75

1. The Association Council shall consist of the members of the Council of the European Union and of the Commission of the European Communities, on the one hand, and members of the Government of Egypt, on the other.

2. Members of the Association Council may arrange to be represented in accordance with the provisions laid down in its rules of procedure.

3. The Association Council shall establish its rules of procedure.

4. The Association Council shall be presided in turn by a member of the Council of the European Union and a member of the Government of Egypt, in accordance with the provisions laid down in its rules of procedure.

Article 76

The Association Council shall, for the purpose of attaining the objectives of the Agreement, have the power to take decisions in the cases provided for therein.

The decisions taken shall be binding on the Parties which shall take the measures necessary to implement the decisions taken. The Association Council may also make appropriate recommendations.

It shall draw up its decisions and recommendations by agreement between the two Parties.

Article 77

1. Subject to the powers of the Council, an Association Committee is hereby established which shall be responsible for the implementation of the Agreement.

2. The Association Council may delegate to the Association Committee, in full or in part, any of its powers.

Article 78

1. The Association Committee, which shall meet at official level, shall consist of representatives of members of the Council of the European Union and of the Commission of the European Communities, on the one hand, and of representatives of the Government of Egypt, on the other.

2. The Association Committee shall establish its rules of procedure.

3. The Association Committee shall be presided in turn by a representative of the Presidency of the Council of the European Union and by a representative of the Government of Egypt.

Article 79

1. The Association Committee shall have the power to take decisions for the management of the Agreement as well as in the areas in which the Association Council has delegated its powers to it

2. It shall draw up its decisions by agreement between the two Parties. These decisions shall be binding on the Parties which shall take the measures necessary to implement the decisions taken.

Article 80

The Association Council may decide to set up any working group or body necessary for the implementation of the Agreement. It shall define the terms of reference of any such working group or body that shall be subordinate to it.

Article 81

The Association Council shall take all appropriate measures to facilitate cooperation and contacts between the European Parliament and the Egyptian People's Assembly.

Article 82

1. Each of the Parties may refer to the Association Council any dispute relating to the application or interpretation of this Agreement.

2. The Association Council may settle the dispute by means of a decision.

3. Each Party shall be bound to take the measures involved in carrying out the decision referred to in paragraph 2.

4. In the event of it not being possible to settle the dispute in accordance with paragraph 2 of this Article, either Party may notify the other of the appointment of an arbitrator; the other Party must then appoint a second arbitrator within two months. For the application of this procedure, the Community and the Member States shall be deemed to be one party to the dispute.

The Association Council shall appoint a third arbitrator.

The arbitrators' decisions shall be taken by majority vote.

Each party to the dispute must take the steps required to implement the decision of the arbitrators.

Article 83

Nothing in the Agreement shall prevent a Party from taking any measures:

(a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests;

(b) which relate to the production of, or trade in, arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes;

(c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.

Article 84

In the fields covered by this Agreement and without prejudice to any special provisions contained therein:

-the arrangements applied by Egypt in respect of the Community shall not give rise to any discrimination between the Member States, their nationals or their companies or firms;

-the arrangements applied by the Community in respect of Egypt shall not give rise to discrimination between Egyptian nationals or its companies or firms.

Article 85

As regards direct taxation, nothing in the Agreement shall have the effect of:

-extending the fiscal advantages granted by either Party in any international agreement or arrangement by which it is bound;

-preventing the adoption or application by either Party of any measure aimed at preventing the avoidance or evasion of taxes;

-opposing the right of either Party to apply the relevant provisions of its tax legislation to taxpayers who are not in identical situation, in particular as regards their place of residence.

Article 86

1. The Parties shall take any general or specific measures required to fulfil their obligations under the Agreement. They shall see to it that the objectives set out in the Agreement are attained.

2. If either Party considers that the other Party has failed to fulfil an obligation under the Agreement, it may take appropriate measures. Before so doing, except in cases of a material breach of the Agreement by the other Party, it shall supply the Association Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

A material breach of the Agreement shall consist of the repudiation of the Agreement not sanctioned by the general rules of international law or a grave violation of an essential element of the Agreement, creating an environment not conducive for consultations or where a delay would be detrimental to the objectives of the Agreement.

3. In the selection of the appropriate measures referred to in paragraph 2, priority must be given to those which least disturb the functioning of the Agreement. The Parties also agree that these measures shall be taken in accordance with international law and shall be proportional to the violation.

The measures shall be notified immediately to the Association Council and shall be the subject of consultations within the Association Council if the other Party so requests. If one Party takes a measure as a result of a material breach of the Agreement referred to in paragraph 2, the other Party may invoke the dispute settlement procedure.

Article 87

Protocols 1 to 5 and Annexes 1 to 6 shall form an integral part of this Agreement.

Article 88

For the purpose of this Agreement the term "Parties" shall mean Egypt on the one hand and the Community, or the Member States, or the Community and the Member States, in accordance with their respective powers, on the other hand.

Article 89

The Agreement is concluded for an unlimited period.

Each of the Parties may denounce the Agreement by notifying the other Party. The Agreement shall cease to apply six months after the date of such notification.

Article 90

This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community, and the European Coal and Steel Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of Egypt.

Article 91

This Agreement, drawn up in duplicate in the Arabic, Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, and Swedish languages, each of these texts being equally authentic.

Article 92

1. This Agreement will be approved by the Parties in accordance with their own procedures.

This Agreement shall enter into force on the first day of the second month following the date on which the Parties notify each other that the procedures referred to in the first paragraph have been completed.

2. Upon its entry into force this Agreement shall replace the Agreement between the European Economic Community and Egypt, and the Agreement between the European Coal and Steel Community and Egypt, signed in Brussels on 18 January 1977.

JOINT DECLARATIONS

Joint Declaration on Article 3 paragraph 2

It is understood that the political dialogue and cooperation will also cover issues relating to the fight against terrorism.

Joint Declaration on Article 14

Both Parties agree to negotiate with a view to granting each other concessions in the trade of fish and fishery products on the basis of reciprocity and mutual interest, with the objective of reaching agreement on the details no later than one year after the signature of this Agreement.Joint Declaration on Article 18

In case of serious difficulties arising in relation to the level of imports under the agreement the provisions providing for consultation between the Parties may be used, urgently where necessary.

Joint Declaration on Article 34

The Parties recognize that Egypt is currently in the process of drafting its own competition law. This will provide the necessary conditions for agreeing on the implementation rules referred to in paragraph 2 of article 34. While drafting its law, Egypt will take into account the competition rules developed within the European Union.

Until the implementation rules referred to in Article 34 paragraph 2 are adopted, if serious problems arise, the Parties may raise the matter for consideration in the Association Council.

Joint Declaration on Art. 37 and Annex 6

For the purpose of this Agreement, intellectual property includes in particular copyright, including the copyright in computer programmes, and neighbouring rights, patents, industrial designs, geographical indications, including appellations of origin, trademarks and service marks, topographies of integrated circuits, as well as the protection against unfair competition as referred to in Article 10 bis of the Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967) and protection of undisclosed information on "know-how".

Joint Declaration on Article 39

The Parties agree that, in the event of a serious disequilibrium in their overall balance of trade, which threatens trade relations, either Party may call for consultations within the Association Committee in order to promote, in line with Article 39, balanced economic relations and to consider ways to sustainably improve the situation with a view to reduce the imbalances.

Joint Declaration on Title VI Chapter 1

The Parties agree to endeavour to facilitate the issuing of visas to bona fide persons active in the implementation of this Agreement, including inter-alia business persons, investors, academics, trainees, government officials; first degree family members of persons legally resident in the territory of the other party shall also be considered.

Joint Declaration on the protection of data

The Parties agree that the protection of data will be guaranteed in all areas where the exchange of personal data is envisaged.

DECLARATIONS BY THE EUROPEAN COMMUNITY

Declaration by the European Community on Article 11

When consultations are requested as provided for in the last paragraph of Article 11, the Community will be ready to hold consultations within 30 days of the exceptional measures being notified to the Association Committee by Egypt.

The purpose of such consultations will be to ensure that the measures concerned are in accordance with the provisions of Article 11, and the Community will not oppose the adoption of the measures if these conditions are met.

Declaration by the European Community on Article 19

The special provisions applied by the Community to the Canary Islands, referred to in Article 19 paragraph 2 are those provided for by Council Regulation (EEC) N° 1911/91 of 26 June 1991.

Declaration by the European Community on Article 21

Th Community is prepared to hold meetings at official level, at Egypt's request, to provide information on any modifications which may have been introduced in its trade relations with third countries.

Declaration by the European Community on Article 34

The Community declares that, until the adoption by the Association Council of the implementing rules on fair competition referred to in Art. 34 paragraph 2, in the context of the interpretation of Article 34 paragraph 1, it will assess any practice contrary to that Article on the basis of the criteria resulting from the rules contained in Articles 81, 82 and 87 of the Treaty establishing the European Community, and, for products covered by the Treaty establishing the European Coal and Steel Community, by those contained in Articles 65 and 66 of that Treaty and the Community rules on State aids, including secondary legislation.

The Community declares that, as regards the agricultural products referred to in Title II Chapter 3, the Community will assess any practice contrary to paragraph 1(i) of Article 34 according to the criteria established by the Community on the basis of Articles 36 and 37 of the Treaty establishing the European Community and in particular those established in Council Regulation No. 26/62 as amended, and any practice contrary to paragraph 1(iii) of Article 34 according to the criteria established by the European Community on the basis of Articles 36 and 87 of the Treaty establishing the European Community.

>TABLE POSITION>

LIST OF ANNEXES AND PROTOCOLS [AND EXCHANGE OF LETTERS]

Annex 1: List of Products falling under Chapters 25-97 of the Harmonised System referred to in articles 7 and 12.

Annex 2: Lists of industrial products originating in the Community on which are applicable, on importation into Egypt, the schedules for tariff dismantling referred to in Article 9 paragraph 1.

Annex 3: Lists of industrial products originating in the Community on which are applicable, on importation into Egypt, the schedules for tariff dismantling referred to in Article 9 paragraph 2.

Annex 4: Lists of industrial products originating in the Community on which are applicable, on importation into Egypt, the schedules for tariff dismantling referred to in Article 9 paragraph 3.

Annex 5: List of industrial products originating in the Community referred to in Article 9 paragraph 4.

Annex 6: Intellectual Property Rights.

Protocol 1: Arrangements applicable to imports into the Community of agricultural products originating in Egypt [referred to in Article 14 paragraph 1].

Protocol 2: Arrangements applicable to imports into Egypt of agricultural products originating in the Community [referred to in Article 14 paragraph 2].

Protocol 3: Arrangements applicable to processed agricultural products [referred to in Article 14 paragraph 3].

Protocol 4: Definition of 'originating products' and methods of administrative co-operation.

Protocol 5: Mutual assistance between administrative authorities on customs matters.

Exchange of letters between the European Community and Egypt concerning imports into the Community of fresh cut flowers and flowers and flower buds falling within subheading 0603 10 of the Common Customs Tariff.

ANNEX I

List of agricultural and processed agricultural products falling under HS chapters 25-97 of the HS REFERRED to in ARTICLES 7 AND 12

HS Code 2905.43 (mannitol)

HS Code 2905.44 (sorbitol)

HS Code 2905.45 (glycerol)

HS Heading 33.01 (essential oils)

HS Code 3302.10 (odoriferous substances)

HS Headings 35.01 to 35.05 (albuminoidal substances, modifies starches, glues)

HS Code 3809.10 (finishing agents)

HS Heading 38.23 (industrial fatty acids, acid from oil refining,

industrial fatty alcohols).

HS Code 3824.60 (sorbitol n.e.p.)

HS Headings 41.01 to 41.03 (hides and skins)

HS Heading 43.01 (raw furskins)

HS Headings 50.01 to 50.03 (raw silk and silk waste)

HS Headings 51.01 to 51.03 (wool and animal hair)

HS Headings 52.01 to 52.03 (raw cotton, waste and cotton carded or combed)

HS Heading 53.01 (raw flax)

HS Heading 53.02 (raw hemp)

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87031030

87031090

87032290

87032310

87032320

87032390

87032400

87033190

87033220

87033290

87033300

87039000

87161000

ANNEX 6

referred to in Article 37

Intellectual Property

1. By the end of the fourth year after the entry into force of the Agreement, Egypt shall accede the following multilateral conventions on intellectual property rights:

- the Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome, 1961);

- Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure (1977, amended 1980);

- the Patent Co-operation Treaty (Washington 1970, amended in 1979 and modified in 1984);

- the International Convention for Protection of New Varieties of Plants (UPOV) (Geneva Act 1991);

- Nice Agreement concerning the international Classification of Goods and Services for the Purpose of the Registration of Marks (Geneva Act 1977and amended in 1979);

- Protocol relating to the Madrid Agreement concerning the international registration of Marks (Madrid 1989).

2. The Parties confirm the importance they attach to the obligations arising from the following multilateral conventions.

- * the World Trade Organisation agreement on Trade Related Aspects of Intellectual Property Rights (Marrakech, April 15, 1994), taking into consideration the transitional period provided for developing countries in Article 65 of that agreement;

- * the Paris Convention for the protection of industrial property (Stockholm Act 1967 amended in 1979);

- * Berne Convention for the protection of literary and artistic works (Paris Act 1971);

- * Madrid Agreement concerning the International Registration of Marks (Stockholm Act 1967 amended in 1979).

3. The Association Council may decide that paragraph 1 shall apply to other multilateral conventions in this field.

PROTOCOL 1

Concerning the arrangements applicable to imports into the Community of agricultural products originating in Egypt [referred to in Article 14, paragraph 1]

The products listed in the Annex, originating in Egypt, shall be admitted for importation into the Community, according to the conditions contained hereafter and in the Annex.

a) Customs duties shall be either eliminated or reduced as indicated in column "A",

b) For certain products, for which the Common Customs Tariff provides for the application of an ad valorem duty and a specific duty, the rates of reduction, indicated in columns "A" and "C", shall apply only to the ad valorem duty.

For certain products, customs duties shall be eliminated within the limit of the tariff quotas listed in column "B". For the quantities imported in excess of the quotas, the common customs duties shall, according to the product concerned, be applied in full or reduced, as indicated in column "C".

For the first year of application, the volumes of tariff quotas shall be calculated as a pro rata of the basic volumes, taking into account the part of the period elapsed before the date of entry into force of this agreement.

For the products for which the specific provisions in column "D" refer to this paragraph, the tariff quota volumes listed in column "B" shall be increased annually by 3% of the volume of the previous year; the first increase taking place one year after the entry into force of this agreement.

From 1 December to 31 May, for sweet oranges, fresh, falling within CN codes ex 0805 10 10, ex 0805 10 30 and ex 0805 10 50, within the limit of the tariff quota of 34.000 tonnes applicable for the concession on the ad valorem customs duties, the agreed entry price between the European Community and Egypt, from which the specific duty provided in the Community's list of concessions to the WTO is reduced to zero, is:

- 266 EUR/tonne, from 1 December 1999 to 31 May 2000,

- 264 EUR/tonne, for every period thereafter, from 1 December to 31 May.

If the entry price for a consignment is 2, 4, 6 or 8 % lower than the agreed entry price, the specific customs duty shall be equal respectively to 2, 4, 6 or 8 % of this agreed entry price. If the entry price of a consignment is less than 92 % of the agreed entry price, the specific customs duty bound within the WTO shall apply.

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PROTOCOL 2

Concerning the arrangements applicable to imports into Egypt of agricultural products originating in the Community [referred to in Article 14, paragraph 2]

1. The products listed in the Annex originating in the Community shall be admitted for importation into Egypt according to the conditions contained hereafter and in the Annex.

2. Import duties on imports shall be either eliminated or reduced to the level indicated in column « A ».

3. For certain products, the duties shall be eliminated or reduced within the limit of a tariff quota listed in column « B ».

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PROTOCOL 3

on trade between Egypt and the Community in processed agricultural products [referred to in Article 14, paragraph 3]

Article 1

1. Customs duties and charges having equivalent effect applicable on import into Egypt of processed agricultural products originating in the Community, listed in Annex I shall be gradually reduced in accordance with the following schedule:

* as regards the products listed in Table 1, duties shall be abolished two years after the entry into force of the Agreement;

* as regards the products listed in Table 2, duties shall be subject to the following reductions:

two years after entry into force of the agreement: -5% of the basic duties;

three years after the entry into force of the Agreement: -10% of the basic duties;

four years after the entry into force of the agreement: -15% of the basic duties;

* as regards the products listed in Table 3, duties shall be reduced as be subject to the following reductions:

two years after entry into force of the agreement: -5% of the basic duties;

three years after the entry into force of the Agreement: -15% of the basic duties;

four years after the entry into force of the agreement: -25% of the basic duties;

2. Imports into the Community of processed agricultural products originating in Egypt, listed in Annex II, shall be subject to the duties mentioned therein, whether limited by quota or not.

3. The reductions of customs duties mentioned in Annexes I and II shall apply to the basic duties referred to in Article 18.

4. The Association Council may decide on:

extensions of the list of processed agricultural products under this Protocol;

amendments of the duties mentioned in Annexes I and II;

increases or abolition of tariff quotas.

Article 2

1. Customs duties applied pursuant Article 1 may be reduced by decision of the Association Committee:

when in trade between the Community and Egypt the duties applied to the basic products are reduced, or

in response to reductions resulting from mutual concessions relating to processed agricultural products.

2. As regards the duties applied by the Community, the reductions provided for under the first indent will be calculated on the part of the duty designated as the agricultural component which shall correspond to the agricultural products actually used in the manufacture of the processed agricultural products in question and deduced from the duties applied to these basic agricultural products.

Article 3

The Community and Egypt shall inform each other of the administrative arrangements adopted for the products covered by this Protocol.

These arrangements should ensure equal treatment for all interested parties and should be as simple and flexible as possible.

PROTOCOL 3 _ Annex I

Table 1

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PROTOCOL 3 _ Annex II

Table 1

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PROTOCOL 4

CONCERNING THE DEFINITION OF THE CONCEPT OF "ORIGINATING PRODUCTS" AND METHODS OF ADMINISTRATIVE COOPERATION

TABLE OF CONTENTS

TITLE I GENERAL PROVISIONS

- Article 1 Definitions

TITLE II DEFINITION OF THE CONCEPT OF "ORIGINATING PRODUCTS"

- Article 2 General requirements

- Article 3 Bilateral cumulation of origin

- Article 4 Diagonal cumulation of origin

- Article 5 Wholly obtained products

- Article 6 Sufficiently worked or processed products

- Article 7 Insufficient working or processing operations

- Article 8 Unit of qualification

- Article 9 Accessories, spare parts and tools

- Article 10 Sets

- Article 11 Neutral elements

TITLE III TERRITORIAL REQUIREMENTS

- Article 12 Principle of territoriality

- Article 13 Direct transport

- Article 14 Exhibitions

TITLE IV DRAWBACK OR EXEMPTION

- Article 15 Prohibition of drawback of, or exemption from, customs duties (amended)

TITLE V PROOF OF ORIGIN

- Article 16 General requirements

- Article 17 Procedure for the issue of a movement certificate EUR.1

- Article 18 Movement certificates EUR.1 issued retrospectively

- Article 19 Issue of a duplicate movement certificate EUR.1

- Article 20 Issue of movement certificates EUR.1 on the basis of a proof of origin issued or made out previously

- Article 21 Conditions for making out an invoice declaration

- Article 22 Approved exporter

- Article 23 Validity of proof of origin

- Article 24 Submission of proof of origin

- Article 25 Importation by instalments

- Article 26 Exemptions from proof of origin

-Article 27 Supporting documents

- Article 28 Preservation of proof of origin and supporting documents

- Article 29 Discrepancies and formal errors

- Article 30 Amounts expressed in Euro

TITLE VI ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

- Article 31 Mutual assistance

- Article 32 Verification of proofs of origin

- Article 33 Dispute settlement

- Article 34 Penalties

- Article 35 Free zones

TITLE VII CEUTA AND MELILLA

- Article 36 Application of the Protocol

- Article 37 Special conditions

TITLE VIII FINAL PROVISIONS

- Article 38 Amendments to the Protocol

- Article 39 Implementation of the Protocol

- Article 40 Goods in transit or storage

ANNEXES

ANNEX I: Introductory notes to the list in Annex II

ANNEX II: List of working or processing required to be carried out on non-originating materials in order that the products manufactured can obtain originating status.

ANNEX II(a) List of working or processing required to be carried out on non-originating materials in order that the products manufactured referred in Article 6(2) can obtain originating status.

ANNEX III : List of products originating in Turkey to which the provisions of Article 4 do not apply, listed in the order of HS Chapters and Headings

ANNEX IV: Movement certificate EUR.1 and application for a movement certificate EUR.1

ANNEX V: Invoice declaration

ANNEX VI: Joint declarations

TITLE I

GENERAL PROVISIONS

Article 1 Definitions

For the purposes of this Protocol:

(a) "manufacture" means any kind of working or processing including assembly or specific operations;

(b) "material" means any ingredient, raw material, component or part, etc., used in the manufacture of the product;

(c) "product" means the product being manufactured, even if it is intended for later use in another manufacturing operation;

(d) "goods" means both materials and products;

(e) "customs value" means the value as determined in accordance with the 1994 Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade (WTO Agreement on customs valuation);

(f) "ex-works price" means the price paid for the product ex works to the manufacturer in the Community or Egypt in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the product obtained is exported;

(g) "value of materials" means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the Community or Egypt;

(h) "value of originating materials" means the value of such materials as defined in subparagraph (g) applied mutatis mutandis;

(i) "added value" shall be taken to be the ex-works price minus the customs value of each of the products incorporated which did not originate in the country in which those products were obtained;

(j) "chapters" and "headings" mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonised Commodity Description and Coding System, referred to in this Protocol as "the Harmonised System" or "HS";

(k) "classified" refers to the classification of a product or material under a particular heading;

(l) "consignment" means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;

(m) "territories" includes territorial waters.

TITLE II

DEFINITION OF THE CONCEPT OF "ORIGINATING PRODUCTS"

Article 2 General requirements

1. For the purpose of implementing this Agreement, the following products shall be considered as originating in the Community:

(a) products wholly obtained in the Community within the meaning of Article 5 of this Protocol;

(b) products obtained in the Community incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the Community within the meaning of Article 6 of this Protocol;

2. For the purpose of implementing this Agreement, the following products shall be considered as originating in Egypt:

(a) products wholly obtained in Egypt within the meaning of Article 5 of this Protocol;

(b) products obtained in Egypt incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in Egypt within the meaning of Article 6 of this Protocol.

Article 3 Bilateral cumulation of origin

1. Materials originating in the Community shall be considered as materials originating in Egypt when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 7(1) of this Protocol.

2. Materials originating in Egypt shall be considered as materials originating in the Community when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing, provided they have undergone working or processing going beyond that referred to in Article 7(1) of this Protocol.

Article 4 Diagonal cumulation of origin

1. Subject to the provisions of paragraphs 2 and 3, materials originating in Algeria, Cyprus, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia, Turkey *or the West bank and the Gaza Strip, within the meaning of the Agreements between the Community and Egypt and these countries shall be considered as originating in the Community or Egypt when incorporated into a product obtained there. It shall not be necessary that such materials have undergone sufficient working or processing.

2. Products which have acquired originating status by virtue of paragraph 1 shall only continue to be considered as products originating in the Community or Egypt when the value added there exceeds the value of the materials used originating in any one of the other countries referred to in paragraph 1. If this is not so, the products concerned shall be considered as originating in the country referred to in paragraph 1 which accounts for the highest value of originating materials used. In the allocation of origin, no account shall be taken of materials originating in the other countries referred to in paragraph 1 which have undergone sufficient working or processing in the Community or Egypt.

3. The cumulation provided for in this Article may only be applied where the materials used have acquired the status of originating products by an application of rules of origin identical to the rules in this Protocol. The Community and Egypt shall provide each other, through the European Commission with details of agreements and their corresponding rules of origin which have been concluded with the other countries referred to in paragraph 1.

4. Once the requirements laid down in paragraph 3 have been fulfilled, and a date for the entry into force of these provisions has been agreed, each party shall fulfil its own notification and information obligations.

Article 5 Wholly obtained products

1. The following shall be considered as wholly obtained in the Community or Egypt:

(a) mineral products extracted from their soil or from their seabed;

(b) vegetable products harvested there;

(c) live animals born and raised there;

(d) products from live animals raised there;

(e) products obtained by hunting or fishing conducted there;

(f) products of sea fishing and other products taken from the sea outside the territorial waters of the Community or Egypt by their vessels;

(g) products made aboard their factory ships exclusively from products referred to in subparagraph (f);

(h) used articles collected there fit only for the recovery of raw materials, including used tyres fit only for retreading or for use as waste;

(i) waste and scrap resulting from manufacturing operations conducted there;

(j) products extracted from marine soil or subsoil outside their territorial waters provided that they have sole rights to work that soil or subsoil;

(k) goods produced there exclusively from the products specified in subparagraphs (a) to (j).

2. The terms "their vessels" and "their factory ships" in paragraph 1(f) and (g) shall apply only to vessels and factory ships:

(a) which are registered or recorded in an EC Member State or in Egypt;

(b) which sail under the flag of an EC Member State or of Egypt;

(c) which are owned to an extent of at least 50 per cent by nationals of EC Member States or of Egypt, or by a company with its head office in one of these States, of which the manager or managers, Chairman of the Board of Directors or the Supervisory Board, and the majority of the members of such boards are nationals of EC Member States or of Egypt and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to those States or to public bodies or nationals