This Decision is addressed to the Commission.

The position to be taken on the Union’s behalf in the Association Concil shall be based on the draft act of the Association Council attached to this Decision.

(8)In the context of amending the Convention, Lebanon has formulated to the Union a request for more flexible rules of origin for certain textile products, in order to allow garments produced from imported tissues to be regarded as originating under the Agreement. In the light of the serious effects of the Syrian refugee crisis on Lebanon and given the limited development of the Lebanese textiles sector, the Council, on behalf of the Union, considers it justified to agree to more relaxed rules of origin for certain textile products within limited annual quotas,

(7)The discussions on amending the Convention have resulted in a new set of modernised and more flexible rules of origin to be incorporated into the Convention. The Union and Lebanon have signalled their will to apply the new rules as soon as possible bilaterally, on an alternative basis alongside the current rules while awaiting the final outcome of the amending process.

(6)Article 6 of the Convention provides that each Contracting Party is to take appropriate measures to ensure that the Convention is effectively applied. To that effect, the Association Council should adopt a decision introducing in Protocol 4 to the Agreement a reference to the Convention.

(5)The Regional Convention on pan-Euro-Mediterranean preferential rules of origin (‘the Convention’) was concluded by the Union by Council Decision 2013/93/EU and entered into force in relation to the Union on 1 May 2012. It lays down provisions on the origin of goods traded under relevant agreements concluded between the Contracting Parties, which apply without prejudice to the principles laid down in those agreements.

(4)It is appropriate to establish the position to be taken on the Union’s behalf in the Association Council as the Association Council Decision will be binding on the Union.

(3)The Association Council, during its next meeting is to adopt a Decision on an amendment of Protocol 4.

(2)The Agreement includes Protocol 4 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation. Pursuant to Article 38 of that Protocol, the Association Council established by Article 74(1) of the Agreement (“Association Council”) may decide to amend its provisions.

(1)The Euro-Mediterranean Agreement establishing an association between the European Community and its Member states, of the one part, and the Republic of Lebanon, of the other part (‘the Agreement’) was concluded by the Union by Council Decision 2006/356/EC and entered into force on 1 April 2006.

Having regard to the proposal from the European Commission,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(3) and the first subparagraph of Article 207(4), in conjunction with Article 218(9) thereof,

on the position to be taken on behalf of the European Union within the Association Council established by the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, as regards the amendment of Protocol 4 to that Agreement concerning the definition of the concept of 'originating products' and methods of administrative cooperation

As the act of the Association Council will amend the Association Agreement, it is appropriate to publish it in the Official Journal of the European Union after its adoption.

The legal basis of the proposed decision should be Article 207(3) and first subparagraph of Article 207(4), in conjunction with Article 218(9) TFEU.

Therefore, the substantive legal basis of the proposed decision is Article 207(3) and first subparagraph of Article 207(4) TFEU.

The main objective and content of the envisaged act relate to the common commercial policy.

The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union’s behalf.

Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.

The envisaged act does not supplement or amend the institutional framework of the Agreement.

The act which the Association Council is called upon to adopt constitutes an act having legal effects. The envisaged act will be binding under international law in accordance with Article 76, paragraph 2 of the Association Agreement.

The Association Council is a body set up by an agreement, namely the Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part.

The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the rules of international law governing the body in question. It also includes instruments that do not have a binding effect under international law, but that are ‘capable of decisively influencing the content of the legislation adopted by the EU legislature’.

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’

The proposed bilateral quotas for certain articles of apparel and clothing accessories would allow imports with a value of about EUR 17 million based on the relaxed rules (estimate based on average unit prices of past imports from Lebanon). The impact on the European market of such limited imports under the quota rules are expected to be negligible.

In relation to textiles and garments, new options have been introduced regarding outward processing and tolerances. New origin conferring processes have also been introduced for these products, especially for fabric which would become more easily available. Finally, full bilateral cumulation will apply also to these products. Such cumulation will allow processing carried out on textile materials (i.e. weaving, spinning etc.) to be taken into account in the production process in the cumulation zone.

All these changes result in updated and modernised list rules which in general make it easier to meet the criterion for obtaining the originating status of a product. In addition, the above-mentioned possibility of using an average basis over a period of time to calculate the ex-works price and the value of non-originating will provide for further simplification for exporters.

- the inclusion in the current Chapter rule of an alternative rule thereby offering to the exporter more choice in meeting the origin criterion (Chapters 27, 40, 42, 44, 70 and 83, 84 and 85).

- a large number of specific rules that are derogating from the Chapter rule have been deleted (HS Chapters 28, 35, 37, 38 and 83). This more horizontal approach implies a simpler panorama for operators and customs;

- regarding a number of products the current Chapter rule contains a double cumulative condition. This is brought to a single condition (HS Chapters 74, 75, 76, 78 and 79);

The proposed compromise contains considerable changes compared to the current rules:

Other agricultural products (i.e. vegetable oils, nuts, tobacco) contain more flexible rules adapted to the economic reality notably for HS chapters 14, 15, 20 (including heading 2008), 23, 24. The alternative set of rules strike the balance between regional and global sourcing like for chapters 9 and 12. Rules have also been simplified (reduction of exceptions) in chapters 4, 5, 6, 8, 11, ex-13.

The alternative set of rules raised the threshold of weight (from 20% to 40%) and the possibility for some headings to use an alternative choice value or weight. The HS chapters and headings concerned by the change are notably: ex-1302, 1704 (alternative rule weight or value), 18 (1806: alternative rule weight or value), 1901.

The limit of non-originating materials was expressed only in value. The new thresholds are expressed in weight in order to avoid price fluctuation and currency fluctuation (e.g. ex-chapters 19, 20, 2105, 2106) together with a deletion of certain limit for sugar (e.g. chapter 8 or HS 2202).

It is proposed to prolong the period of validity of a proof of origin from 4 to 10 months. It should again provide for more leniencies for the movement for originating products between the Parties.

In order to be able to distinguish products originating under the alternative set of rules from products originating under the Convention, origin certificates or invoice declarations based on the alternative set of rules will have to include a statement pointing to the rules applied.

Further, the amended rules foresee the option to agree on the use of proof of origin that is issued and/or submitted electronically.

The amended rules (art. 17) also include the option to agree on the application of a system of registered exporters (REX). These exporters registered in a common database will be responsible for making out themselves statements on origin without going through the approved exporter procedure. The statement on origin will have the same legal value as the origin declaration or the movement certificate EUR.1.

The text introduces a single type of proof of origin (EUR.1 or origin declaration), instead of the double approach EUR.1 and EUR.MED, which substantially simplifies the system. This should improve compliance by economic operators by avoiding mistakes due to complex rules as well as facilitate the management by the customs authorities. Moreover, it should not affect the capacity of verification of proofs of origin, which remains the same.

Under the current rules (art. 15) the general principle of the prohibition of drawback applies to materials used in the manufacture of any product. Under the proposed rules (art. 16) the prohibition is eliminated for all products, with the exception of materials used in the manufacture of products falling within the scope of HS Chapters 50 to 63. Nevertheless, the text also provides for some exceptions to the prohibition of duty drawback to these products.

(h)Prohibition of drawback of, or exemption from, customs duties

The proposed non-alteration rule (art. 14) provides for more leniencies for the movement for originating products between Contracting Parties. It should avoid situations whereby products, for which there is no doubt about their originating status, are excluded from the benefit of the preferential rate at importation because the formal requirements of the direct transport provision are not met.

The current rules (art. 12) allow for certain working or processing to be done outside the territory under certain conditions, with the exception of products of HS Chapters 50 to 63, such as textiles. The proposed rules (art. 12) no longer contain the exclusion for textiles.

In the case of sugar, being a material or a final product, originating and non-originating stocks will no longer have to be kept physically separated.

An exporter will no longer have to justify when requesting an authorisation for accounting segregation that keeping separate stocks has a considerable cost or gives rise to material difficulties; it will be sufficient to indicate that fungible materials are used.

Under the current rules (art. 20 of ‘the Convention’), customs authorities may authorise accounting segregation where ‘considerable cost or material difficulties arise in keeping separate stocks’. The amended rule (art. 12) stipulates that customs authorities may authorise accounting segregation ‘if originating and non-originating fungible materials are used’.

Moreover, for products of HS Chapters 50-63, it provides for bilateral full cumulation. Finally, the Union and Lebanon will have the option to agree to extend the generalised full cumulation also to products of HS Chapters 50-63.

The proposed text (art. 7) maintains diagonal cumulation for all products. In addition, it provides for a generalised full cumulation for all products except textiles and clothing listed in Chapters 50-63 of the Harmonised System (HS).

The tolerance in weight introduces a more objective criterion and a 15% threshold should provide a sufficient level of leniency. It ensures also that the international price fluctuation of the commodities does not have an impact on the origin of the agricultural products.

The proposed text (art. 5) provides for agricultural products a tolerance of 15% of the net weight of the product and for industrial products a tolerance of 15% in value of the ex-works price of the product.

The current tolerance (art. 6) is set at 10% in value of the ex-works price of the product.

The proposed alternative set of rules (art. 4) offers the exporter the flexibility to ask the customs authorities an authorisation to calculate the ex-works price and the value of non-originating materials on an average basis in order to take account of fluctuations in costs and currency rates. This should provide exporters with more predictability.

The so-called vessel conditions contained in the alternative set of rules are simpler and provide for more flexibility. Compared to the current text (art. 5) certain conditions have been deleted (i.e. specific crew requirements); others have been amended in order to provide for more relaxation (ownership).

The proposed amendments relating to the introduction of the alternative set of rules of origin provide for additional flexibilities and elements of modernisation, which have already been agreed by the Union in other bilateral agreements (Comprehensive Economic and Trade Agreement between the EU and Canada, EU-Vietnam Free Trade Agreement, EU-Japan Economic Partnership Agreement, EU-South African Development Community Economic Partnership Agreement) or preferential schemes (Generalised System of Preferences). The main ones are the following:

The proposed amendments insofar they relate to the current Convention are technical in nature and do not affect the substance of the protocol on rules of origin currently in effect. Therefore, they do not require an impact assessment.

The position to be taken by the EU within the Association Council should be established by the Council.

Moreover, during the discussions on the amendments to the Convention, Lebanon asked for more flexible list rules for certain textile products, in order to allow garments produced from imported tissues to be originating under the agreement. Lebanon asked that those rules last for 15 years and are applied without any quota. Considering, on one side, the serious effects of the Syrian refugee crisis on Lebanon and the limited development of the Lebanese textiles sector and, on the other side, the needs of the EU industry, it is proposed to consider the Lebanese request by establishing limited origin quotas that would allow the use of more relaxed rules. These limited quotas represent a total value of € 17 million or a value similar to the average exports of clothing products from Lebanon to the EU in years 2015-2017. Such derogation shall apply for 10 years. The Lebanese also requested a review clause that would allow for a modification – possibly an increase – of the quota after three years. It is proposed that a review is foreseen after at least 5 years, without explicitly committing on a revision of the quota but on the possibility of amending the system. The new rules should make it easier for the EU industry to export to Lebanon, as a result of applying alternative and more modern rules of origin; and for the Lebanon industry to export to the EU, as a result of more relaxed rules of origin for certain textile products within limited annual quotas.

These rules are intended for provisional application, on an optional and bilateral basis, by the EU and Lebanon pending the conclusion and entry into force of the amendment of the Convention. They are intended to apply alternatively to the rules of the Convention, as the latter are laid down without prejudice to the principles laid down in the relevant agreements and other related bilateral agreements among Contracting Parties. Accordingly, these rules will not be mandatory but of optional application by economic operators that wish to use preferences based on them, instead of Convention-based preferences. They are not intended to modify the Convention, which will remain in application among the Contracting Parties, and will not alter the rights and obligations of the Contracting Parties under the Convention.

Against this background, Lebanon has requested: (i) to start applying the amended set of rules as soon as possible, alternatively to the current rules of the Convention, while awaiting the outcome of the amendment process; and (ii) to agree on more relaxed rules of origin for certain textile products within limited annual quotas. Such requests are explained below.

At the same time, the ongoing process of amending the Convention resulted in a new set of modernised and more flexible rules of origin. The formal amendment of the Convention requires a vote by unanimity by the Contracting Parties. The fact that there are still some contracting parties which have objections to the amendment risks delaying its adoption. Additionally, given the number of Contracting Parties and their respective internal procedures required to be in a position to vote on the formal adoption and to prepare the entry into force of the amended rules, no clear timeframe for the application of the amended Convention can be established.

Article 6 of the Convention provides that each Contracting Party shall take appropriate measures to ensure that the Convention is effectively applied. To that effect, the Association Council established by the Association Agreement between the European Union and its Member States, of the one part, and the Republic of Lebanon, of the other part, should adopt a Decision introducing the rules of the Convention under Protocol 4 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation. This is done by introducing in the amended Protocol a reference to the Convention that will render it applicable.

The EU and Lebanon deposited their instrument of acceptance with the depositary of the Convention on 26 March 2012 and 25 October 2017 respectively. As a consequence, in application of its Article 10(2), the Convention entered into force in relation to the EU and Lebanon on 1 May 2012 and on 1 December 2017 respectively.

The Regional Convention on pan-Euro-Mediterranean preferential rules of origin (‘the Convention’) lays down provisions on the origin of goods traded under relevant Agreements concluded between the Contracting Parties. The EU and Lebanon signed the Convention on 15 June 2011 and on 22 October 2014 respectively.

3.Position to be taken on the Union’s behalf

The envisaged act will become binding on the parties in accordance with Article 76, paragraph 2 of the Association Agreement.

The purpose of the envisaged act is the amendment of the provisions of Protocol 4 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation.

On its next meeting, the Association Council is to adopt a Decisionregarding the amendment of the provisions of Protocol 4 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation (‘the envisaged act’).

The Association Council established according to the provisions of article 74 of the Agreement, may decide to amend the provisions of Protocol 4 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation (Article 38 of Protocol 4). The Association Council consists of the members of the Council of the European Union and members of the Commission of the European Union, on one hand, and the members of the Government of Lebanon, on the other. The Association Council draws up its decisions and recommendations by agreement between the two Parties.

The Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part (‘the Agreement’) aims to establish the conditions for the gradual liberalization of trade in goods, services and capital. The Agreement entered into force on 1st of April 2006.

2.1.The Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part

This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Association Council of the EU-Lebanon Association Agreement in connection with the envisaged adoption of a Decision amending Protocol 4 of the EU-Lebanon Association Agreement.

on the position to be taken on behalf of the European Union within the Association Council established by the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, as regards the amendment of Protocol 4 to that Agreement concerning the definition of the concept of 'originating products' and methods of administrative cooperation

EUROPEAN COMMISSION Brussels, 25.9.2019 COM(2019) 430 final ANNEX to the Proposal for a Council Decision on the position to be taken on behalf of the European Union within the Association Council established by the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, as regards the amendment of Protocol 4 to that Agreement concerning the definition of the concept of 'originating products' and methods of administrative cooperation



Draft



DECISION No … OF THE EU-LEBANON ASSOCIATION COUNCIL on amending Protocol 4 to the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, concerning the definition of the concept of 'originating products' and methods of administrative cooperation The EU-LEBANON ASSOCIATION COUNCIL, Having regard to the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, and in particular Article 38 of its Protocol 4 concerning the definition of the concept of 'originating products' and methods of administrative cooperation, Whereas: (1)Article 28 of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part ('the Agreement'), refers to Protocol 4 to the Agreement ('Protocol 4') which lays down the rules of origin and provides for cumulation of origin between the European Union, Lebanon and other countries which are signatories to a European-Mediterranean Association Agreement. (2)Article 38 of Protocol 4 provides that the Association Council established by Article 74(1) of the Agreement may decide to amend the provisions of that protocol. (3)The Regional Convention on pan-Euro-Mediterranean preferential rules of origin ('the Convention') aims to transpose the existing bilateral systems of rules of origin into a multilateral framework, without prejudice to the principles laid down in the relevant agreements concluded among the Contracting Parties. (4)The European Union and Lebanon signed the Convention on 15 June 2011 and 22 October 2014, respectively. (5)The European Union and Lebanon deposited their instruments of acceptance with the depositary of the Convention on 26 March 2012 and 25 October 2017, respectively. Consequently, in application of Article 10(3) of the Convention, the Convention entered into force in relation to the European Union and Lebanon on 1 May 2012 and on 1 December 2017, respectively. (6)The European Union and Lebanon agreed to also introduce an amended set of rules which could be used bilaterally as alternative rules of origin to those laid down by the Convention, pending the finalisation and entry into force of the amendment of the Convention currently ongoing. (7)The European Union agreed to grant Lebanon origin quotas for certain textile products for a limited period of time. (8)Protocol 4 should therefore be amended in order to make reference to the Convention, to provide for an alternative set of rules, and to include the origin quotas for certain textile products, HAS ADOPTED THIS DECISION: Article 1 Protocol 4 to the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, concerning the definition of the concept of 'originating products' and methods of administrative cooperation shall be replaced by the text set out in the Annex to this Decision. Article 2

This Decision shall enter into force on the date of its adoption. It shall apply from … Done at For the Association Council The President Annex “Protocol 4 concerning the definition of the concept of 'originating products' and methods of administrative cooperation Article 1 Applicable rules of origin 1. For the purpose of implementing this Agreement, Appendix I and the relevant provisions of Appendix II to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin ('the Convention'), as it may be subsequently amended and published in the Official Journal of the European Union, shall apply. 2. All references to the 'relevant agreement' in Appendix I and in the relevant provisions of Appendix II to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin shall be construed so as to mean this Agreement. Article 2 Alternative applicable rules of origin 1. Notwithstanding Article 1, for the purpose of implementing this Agreement, products which acquire preferential origin in accordance with the provisions set out in Appendix II to this Protocol shall also be considered as originating in the European Union or in Lebanon. 2. The alternative rules shall apply until the amendment of the Convention enters into force. Article 3 Dispute settlement 1. Where disputes arise in relation to the verification procedures of Article 32 of Appendix I to the Convention or of Article 32 of Appendix II to this Protocol that cannot be settled between the customs authorities requesting the verification and the customs authorities responsible for carrying out that verification, they shall be submitted to the Association Council. 2. In all cases the settlement of disputes between the importer and the customs authorities of the importing country shall take place under the legislation of that country.

Article 4 Amendments to the Protocol The Association Council may decide to amend the provisions of this Protocol. Article 5 Withdrawal from the Convention 1. Should either the European Union or Lebanon give notice in writing to the depositary of the Convention of their intention to withdraw from the Convention according to Article 9 thereof, the European Union and Lebanon shall immediately enter into negotiations on rules of origin for the purpose of implementing this Agreement. 2. Until the entry into force of such newly negotiated rules of origin, the rules of origin contained in Appendix I and, where appropriate, the relevant provisions of Appendix II to the Convention, applicable at the moment of withdrawal, shall continue to apply to this Agreement. However, as of the moment of withdrawal, the rules of origin contained in Appendix I and, where appropriate, the relevant provisions of Appendix II to the Convention shall be construed so as to allow bilateral cumulation only between the European Union and Lebanon. Article 6 Rules of origin subject to quotas for certain products 1.For the products listed in Appendix I to this Protocol, the provisions of that Appendix may also apply instead of the rules set out in the Convention for determining if a product is originating in Lebanon. 2.In case of introduction or maintenance of measures in the form of new customs duties or charges having equivalent effect, or quantitative restrictions or non-tariff barriers or any other form that have a restrictive effect on trade between the EU and Lebanon and that are not compliant with the provisions of the EU-Lebanon Association Agreement, and after discussion at the EU-Lebanon Association Council level on the nature of these measures, the EU reserves the right to unilaterally suspend or terminate this derogation via a notification that will enter into force at the end of the month following the reception of such notification. 3.The implementation of the provisions of Appendix I and the impact of its application will be subject to regular monitoring, and will be reviewed within the framework of the Association Committee at the latest 5 years of the entry into force of Appendix I. The Association Council may, in the light of the review, decide to amend Appendix I.





APPENDIX I ADDENDUM TO THE LIST OF WORKING AND PROCESSING REQUIRED TO BE CARRIED OUT ON NON-ORIGINATING MATERIALS IN ORDER THAT THE PRODUCT MANUFACTURED CAN OBTAIN ORIGINATING STATUS Article 1 Common provisions 1. Without prejudice of the rules in Annex II, the following rules shall also confer origin to goods listed under Article 2 exported from Lebanon to the European Union within the indicated annual quotas: Chapter 61 Articles of apparel and clothing accessories, knitted or crocheted: - Obtained by sewing together or otherwise assembling, two or more pieces of knitted or crocheted fabric which have been either cut to form or obtained directly to form Manufacture from fabric Chapter 62 Articles of apparel and clothing accessories, not knitted or crocheted Manufacture from fabric 2. When a product is covered by a rule of origin that is subject to quotas in line with this Appendix, the poof of origin for these products shall contain the following statement "Product originating in accordance with Appendix I of Protocol 4”. 3. This Appendix shall apply for […] years from the day of entry into force of the Association Council decision to which it is attached. In case the Association Council decision enters into force on a date different from 1st January, the Appendix shall apply for […] years starting on the 1st of January of the following calendar year. Article 2 List of products and annual quantities of quotas

HS Annual quantity 6101, 6102 174 units 6103, 6104 35 757 units 6105, 6106 94 364 units 6107, 6108 2 911 units 6109 1 042 499 units 6110 128 091 units 6112 727 units 6114 6 900 kg 6115 136 888 units 6117 3 400 kg 6201, 6202 1 222 units 6203, 6204 84 979 units 6205, 6206 25 934 units 6207, 6208 5 151 units 6210 5 300 kg 6211 5 900 kg 6212 514 units 6214, 6215 74 372 units 6217 500 kg



APPENDIX II ALTERNATIVE APPLICABLE RULES OF ORIGIN Rules for optional application among Contracting Parties of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin, pending the conclusion and entry into force of the amendment of the Convention (thereafter called "the Rules") definition of the concept of ‘originating products’ and methods of administrative cooperation TABLE OF CONTENTS OBJECTIVES TITLE I GENERAL PROVISIONS Article 1 Definitions

TITLE II DEFINITION OF THE CONCEPT OF ORIGINATING PRODUCTS Article 2 General requirements Article 3 Wholly obtained products Article 4 Sufficient working or processing Article 5 Tolerance rule Article 6 Insufficient working or processing Article 7 Cumulation of origin Article 8 Cumulation of origin – Conditions for its application Article 9 Unit of qualification Article 10 Sets Article 11 Neutral elements Article 12 Accounting segregation TITLE III TERRITORIAL REQUIREMENTS Article 13 Principle of territoriality Article 14 Non alteration Article 15 Exhibitions TITLE IV DRAWBACK OR EXEMPTION Article 16 Drawback of, or exemption from, customs duties TITLE V PROOF OF ORIGIN Article 17 General requirements

Article 18 Conditions for making out an origin declaration Article 19 Approved exporter Article 20 Procedure for issue of a movement certificate EUR.1 Article 21 Movement certificates EUR.1issued retrospectively Article 22 Issue of a duplicate movement certificate EUR.1 Article 23 Validity of proof of origin Article 24 Free zones Article 25 Importation requirements Article 26 Importation by instalments Article 27 Exemption from proof of origin Article 28 Discrepancies and formal errors Article 29 Supplier's declarations Article 30 Amounts expressed in euro TITLE VI PRINCIPLES OF COOPERATION AND DOCUMENTARY EVIDENCE Article 31 Documentary evidence, preservation of proofs of origin and supporting documents Article 32 Dispute settlement TITLE VII ADMINISTRATIVE COOPERATION Article 33 Notification and cooperation Article 34 Verification of proofs of origin Article 35 Verification of supplier's declarations

Article 36 Penalties TITLE VIII APPLICATION OF THE PROTOCOL Article 37 European Economic Area Article 38 Liechtenstein Article 39 Republic of San Marino Article 40 Principality of Andorra Article 41 Ceuta and Melilla List of 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 for the product manufactured to obtain originating status ANNEX III: Text of the origin declaration ANNEX IV: Specimens of movement certificate EUR.1 and application for a movement certificate EUR.1 ANNEX V: Special conditions concerning products originating in Ceuta and Melilla ANNEX VI: Supplier's declaration ANNEX VII: Long-term supplier's declaration



OBJECTIVES These rules are intended for provisional application, on an optional and bilateral basis, by Contracting Parties of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (‘PEM Convention’ or ‘Convention’), pending the conclusion and entry into force of the amendment of the Convention. They will become applicable to trade between those Contracting Parties that decide so and refer to them or include them in their bilateral preferential trade agreements. They are intended to apply alternatively to the rules of the Convention, that in accordance with the Convention are without prejudice to the principles laid down in the relevant agreements and other related bilateral agreements among Contracting Parties. Accordingly, they will not be mandatory but of optional application by economic operators that desire to claim preferences based on them instead of on the basis of the rules of the Convention. They are not intended to modify the Convention, that will remain in full application among the Contracting Parties to the Convention, and will not alter the rights and obligations of the Contracting Parties under the Convention.

TITLE I GENERAL PROVISIONS Article 1 Definitions For the purposes of these Rules: (a)’applying Contracting Party’ means a Contracting Party to the PEM Convention that incorporates these Rules in its bilateral preferential trade agreements with another Contracting Party to the PEM Convention. ’Applying Contracting Party’, includes also the Parties to this Agreement. (b)‘chapters’, ‘headings’ and ‘sub-headings’ mean the chapters, the headings and sub-headings (four- or six-digit codes) used in the nomenclature which makes up the Harmonised System with the changes pursuant to the Recommendation of 26 June 2004 of the Customs Cooperation Council; (c)‘classified’ refers to the classification of goods under a particular heading or sub-heading of the Harmonised System; (d)‘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; (e)‘customs authorities of the Party or applying Contracting Party’ for the European Union means any of the customs authorities of the Member States of the European Union; (f)‘customs value’ means the value as determined in accordance with the 1994Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade (WTO Agreement on Customs Valuation); (g)‘ex-works price’ means the price paid for the product ex works to the manufacturer in the Party in whose undertaking the last working or processing is carried out, provided that the price includes the value of all the materials used and all other costs related to its production, minus any internal taxes which are, or may be, repaid when the product obtained is exported. Where the last working or processing has been subcontracted to a manufacturer, the term 'manufacturer' refers to the enterprise that has employed the subcontractor. Where the actual price paid does not reflect all costs related to the manufacturing of the product which are actually incurred in the Party, the ex-works price means the sum of all those costs, minus any internal taxes which are, or may be, repaid when the product obtained is exported; (h) ‘fungible materials’ or fungible products means materials or products that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another ; (i)‘goods’ means both materials and products; (j)‘manufacture’ means any kind of working or processing including assembly; (k)‘material’ means any ingredient, raw material, component or part, etc., used in the manufacture of the product;

(l) 'maximum content of non-originating materials' means the maximum content of non-originating materials which is permitted in order to consider a manufacture as working or processing sufficient to confer originating status on the product. It may be expressed as a percentage of the ex-works price of the product or as a percentage of the net weight of these materials used falling under a specified group of chapters, chapter, heading or sub-heading; (m)‘product’ means the product being manufactured, even if it is intended for later use in another manufacturing operation; (n)‘territory’ includes the land territory, internal waters and the territorial sea of a Party; (o)‘value added’ shall be taken to be the ex-works price of the product minus the customs value of each of the materials incorporated which originate in the other applying Contracting Parties with which cumulation is applicable or, where the customs value is not known or cannot be ascertained, the first ascertainable price paid for the materials in the exporting Party; (p)‘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 exporting Party. Where the value of the originating materials used needs to be established, this point shall be applied mutatis mutandis. TITLE II DEFINITION OF THE CONCEPT OF ‘ORIGINATING PRODUCTS’ Article 2 General requirements For the purpose of implementing the relevant Agreement, the following products shall be considered as originating in a Party when exported to the other Party: (a) products wholly obtained in a Party, within the meaning of Article 3; (b) products obtained in a Party incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in that Party within the meaning of Article 4; Article 3 Wholly obtained products 1. The following shall be considered as wholly obtained in a Party when exported to the other Party: (a) mineral products and natural water extracted from its soil or from its seabed; (b) plants, including aquatic plants, and vegetable products grown or harvested there; (c) live animals born and raised there; (d) products from live animals raised there;

(e) products from slaughtered animals born and raised there; (f) products obtained by hunting or fishing conducted there; (g) products of aquaculture where the fish, crustaceans, molluscs and other aquatic invertebrates are born or raised there from eggs, larvae, fry or fingerlings; (h) products of sea fishing and other products taken from the sea outside any territorial sea by its vessels; (i) products made on board its factory ships exclusively from products referred to in (h); (j) used articles collected there fit only for the recovery of raw materials; (k) waste and scrap resulting from manufacturing operations conducted there; (l) products extracted from the seabed or below the seabed which is situated outside its territorial sea but where it has exclusive exploitation rights; (m) goods produced there exclusively from the products specified in (a) to (l). 2. The terms ‘its vessels’ and ‘its factory ships’ in paragraph 1(h) and (i) shall apply only to vessels and factory ships which meet each of the following requirements: (a) they are registered in the exporting or the importing Party; (b) they sail under the flag of the exporting or the importing Party; (c) they meet one of the following conditions: (i) they are at least 50 % owned by nationals of the exporting or the importing Party, or (ii) they are owned by companies - which have their head office and their main place of business in the exporting or the importing Party and - which are at least 50% owned by the exporting or the importing Party or public entities or nationals of these Parties. 3. For the purpose of paragraph 2, when the exporting or the importing Party is the European Union, it means the Member States of the European Union. 4. For the purpose of paragraph 2, in case of application of Article 7 with the EFTA States the EFTA States are to be considered as one applying Contracting Party. Article 4

Sufficient working or processing 1. Without prejudice to paragraph 3 and to Article 6, products which are not wholly obtained in a Party shall be considered to be sufficiently worked or processed when the conditions laid down in the list in Annex II for the goods concerned are fulfilled. 2. If a product which has acquired originating status in a Party in accordance with paragraph 1 is used as a material in the manufacture of another product, no account shall be taken of the non-originating materials which may have been used in its manufacture. 3. The determination of whether the requirements of paragraph 1 are met, shall be carried out for each product. However, where the relevant rule is based on compliance with a maximum content of non-originating materials, the customs authorities of the Parties may authorise exporters to calculate the ex-works price of the products and the value of the non-originating materials on an average basis as set out in paragraph 4, in order to take into account fluctuations in costs and currency rates. 4. In the case referred to in the second sub-paragraph of paragraph 3, an average ex-works price of the product and average value of non-originating materials used shall be calculated respectively on the basis of the sum of the ex-works prices charged for all sales of the products carried out during the preceding fiscal year and the sum of the value of all the non-originating materials used in the manufacture of the products over the preceding fiscal year as defined in the exporting Party, or, where figures for a complete fiscal year are not available, a shorter period which should not be less than three months. 5. Exporters having opted for calculation on an average basis shall consistently apply such a method during the year following the fiscal year of reference, or, where appropriate, during the year following the shorter period used as a reference. They may cease to apply such a method where during a given fiscal year, or a shorter representative period of no less than three months, they record that the fluctuations in costs or currency rates which justified the use of such a method have ceased. 6. The averages referred to in paragraph 4 shall be used as the ex-works price and the value of non-originating materials respectively, for the purpose of establishing compliance with the maximum content of non-originating materials. Article 5 Tolerance rule 1. By way of derogation from Article 4 and subject to paragraphs 2 and 3, non-originating materials which, according to the conditions set out in the list in Annex II, are not to be used in the manufacture of a given product may nevertheless be used, provided that their total net weight or value assessed for the product does not exceed: (a) 15% of the net weight of the product falling within Chapters 2 and 4 to 24, other than processed fishery products of Chapter 16; (b) 15% of the ex-works price of the product for products other than those covered by point (a). This paragraph shall not apply to products falling within Chapters 50 to 63 of the Harmonised System, for which the tolerances mentioned in Notes 6 and 7 of Annex I shall apply. 2. Paragraph 1 shall not allow to exceed any of the percentages for the maximum content of non-originating materials as specified in the rules laid down in the list in Annex II. 3. Paragraphs 1 and 2 shall not apply to products wholly obtained in a Party within the meaning of Article 3. However, without prejudice to Article 6 and Article 9(1), the tolerance provided for in those paragraphs shall nevertheless apply to product for which the rule laid down in the list in Annex II requires that the materials which are used in the manufacture of that product are wholly obtained. Article 6 Insufficient working or processing 1. Without prejudice to paragraph 2, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 4 are satisfied: (a) preserving operations to ensure that the products remain in good condition during transport and storage;

(b) breaking-up and assembly of packages; (c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings; (d) ironing or pressing of textiles; (e) simple painting and polishing operations; (f) husking and partial or total milling of rice; polishing, and glazing of cereals and rice; (g) operations to colour or flavour sugar or form sugar lumps; partial or total milling of crystal sugar; (h) peeling, stoning and shelling, of fruits, nuts and vegetables; (i) sharpening, simple grinding or simple cutting; (j) sifting, screening, sorting, classifying, grading, matching; (including the making-up of sets of articles); (k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations; (l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging; (m) simple mixing of products, whether or not of different kinds; (n) mixing of sugar with any material; (o) simple addition of water or dilution or dehydratation or denaturation of products; (p) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts; (q) slaughter of animals. (r) a combination of two or more operations specified in (a) to (q); 2. All the operations carried out in the exporting Party on a given product shall be taken into account when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1. Article 7

Cumulation of origin Bilateral and diagonal cumulation 1. Without prejudice to the provisions of Article 2, products shall be considered as originating in the exporting Party when exported to the other Party if they are obtained there, incorporating materials originating in any applying Contracting Party other than the exporting Party provided that the working or processing carried out in the exporting Party goes beyond the operations referred to in Article 6. It shall not be necessary for such materials to have undergone sufficient working or processing. 2. Where the working or processing carried out in the exporting Party does not go beyond the operations referred to in Article 6, the product obtained by incorporating materials originating in any other applying Contracting Party, shall be considered as originating in the exporting Party only where the value added there is greater than the value of the materials used originating in any one of the other applying Contracting Party. If this is not so, the product obtained shall be considered as originating in the applying Contracting Party which accounts for the highest value of originating materials used in the manufacture in the exporting Party. Full bilateral and diagonal cumulation 3. Without prejudice to the provisions of Article 2, and with the exclusion of products falling within Chapters 50 to 63, working or processing carried out in an applying Contracting Party other than the exporting Party shall be considered as having been carried out in the exporting Party when the products obtained undergo subsequent working or processing in this exporting Party. Full bilateral cumulation for Chapters 50 to 63 4. Without prejudice to the provisions of Article 2, for products falling within Chapters 50 to 63 and only for the purpose of bilateral trade between the Parties, working or processing carried out in the importing Party shall be considered as having been carried out in the exporting Party when the products undergo subsequent working or processing in this exporting Party. Full diagonal cumulation for Chapters 50 to 63 . The Parties may extend the application of paragraph 3 on importation of products falling within Chapters 50 to 63 of the Harmonised System. Insufficient operations 6. For the purpose of cumulation of paragraphs 3 to 5, the originating products shall be considered as originating in the exporting Party only if the working or processing undergone there goes beyond the operations referred to in Article 6. Non-working or processing 7. Products originating in the applying Contracting Parties referred to in paragraphs 1 and 4 which do not undergo any working or processing in the exporting Party shall retain their origin if exported into one of the other applying Contracting Parties. Article 8 Cumulation of origin – Conditions for its application 1. The cumulation provided for in Article 7 may be applied only provided that:

(a) a preferential trade agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT) is applicable between the applying Contracting Parties involved in the acquisition of the originating status and the applying Contracting Party of destination, and (b) goods have acquired originating status by the application of rules of origin identical to those given in these Rules. 2. Notices indicating the fulfilment of the necessary requirements to apply cumulation shall be published in the Official Journal of the European Union (C series) and in an official publication in Lebanon, according to their own procedures. The cumulation provided for in Article 7 shall apply from the date indicated in these notices. Lebanon shall provide the European Commission with details of the agreements with other applying Contracting Parties including these rules. The information provided shall include the dates of entry into force. 3. The proof of origin should include the statement in English “CUMULATION APPLIED WITH (name of the relevant applying Contracting Party/Parties in English)” when products obtained the originating status by application of cumulation of origin in accordance with Article 7. In case a movement certificate EUR.1 is used as a proof of origin, this statement shall be made in box 7. 4. A Party may decides, for the products exported to them that obtained the originating status in the exporting Party by application of cumulation of origin in accordance with Article 7, to waive the obligation of including on the proof of origin the statement referred to in paragraph 3. The importing Party will notify the exporting Party. This waiver may not be activated before [2024]. Article 9 Unit of qualification 1. The unit of qualification for the application of the provisions of these Rules shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonised System. It follows that: (a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonised System in a single heading, the whole constitutes the unit of qualification; (b) when a consignment consists of a number of identical products classified under the same heading of the Harmonised System, each individual item shall be taken into account when applying the provisions of these Rules. 2. Where, under General Rule 5 of the Harmonised System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin. 3. Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the ex-works price thereof, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question. Article10 Sets

Sets, as defined in general rule 3 of the Harmonised System, shall be regarded as originating when all the component products are originating. When a set is composed of originating and non-originating products, the set as a whole shall however be regarded as originating, provided that the value of the non-originating products does not exceed 15% of the ex-works price of the set. Article 11 Neutral elements In order to determine whether a product is an originating product, no account shall be taken of the origin of the following which might be used in its manufacture: (a) energy and fuel; (b) plant and equipment; (c) machines and tools; (d) any other goods which do not enter, and which are not intended to enter, into the final composition of the product. Article 12 Accounting segregation 1. If originating and non-originating fungible materials are used in the working or processing of a product, economic operators may ensure the management of materials using the accounting segregation method, without keeping the materials on separate stocks. 2. Economic operators may ensure the management of originating and non-originating fungible products of heading 1701 using the accounting segregation method, without keeping the products on separate stocks. 3. The Parties may require that the application of accounting segregation is subject to prior authorisation by the Customs authorities. The Customs authorities may grant the authorisation subject to any conditions they deem appropriate and shall monitor the use made of the authorisation. The Customs authorities may withdraw the authorisation whenever the beneficiary makes improper use of the authorisation in any manner whatsoever or fails to fulfil any of the other conditions laid down in these Rules. Through the use of accounting segregation it must be ensured that, at any time, no more products can be considered as ‘originating in the exporting Party’ than would have been the case if a method of physical segregation of the stocks had been used. The method shall be applied and the application thereof shall be recorded on the basis of the general accounting principles applicable in the exporting Party. 4. The beneficiary of the method referred to in paragraphs 1 and 2 shall make out or apply for proofs of origin for the quantity of products which may be considered as originating in the exporting Party. At the request of the customs authorities, the beneficiary shall provide a statement of how the quantities have been managed. TITLE III TERRITORIAL REQUIREMENTS Article 13

Principle of territoriality 1. The conditions set out in Title II shall be fulfilled without any interruption in the Party concerned. 2. If originating products exported from a Party to another country are returned, they shall be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that: (a) the products returned are the same as those which were exported; and (b) they have not undergone any operations beyond that necessary to preserve them in good condition while in that country or while being exported. 3. The acquisition of originating status in accordance with the conditions set out in Title II shall not be affected by working or processing done outside the exporting Party on materials exported from this Party and subsequently re-imported there, provided: (a) the said materials are wholly obtained in the exporting Party or have undergone working or processing beyond the operations referred to in Article 6 prior to being exported; and (b) it can be demonstrated to the satisfaction of the customs authorities that: (i) the re-imported products have been obtained by working or processing the exported materials; and (ii) the total added value acquired outside the exporting Party by applying the provisions of this Article does not exceed 10 % of the ex-works price of the end product for which originating status is claimed. 4. For the purposes of paragraph 3, the conditions for acquiring originating status set out in Title II shall not apply to working or processing done outside the exporting Contracting Party. However, where, in the list in Annex II, a rule setting a maximum value for all the non-originating materials incorporated is applied in determining the originating status of the end product, the total value of the non-originating materials incorporated in the territory of the exporting Party, taken together with the total added value acquired outside this Party by applying the provisions of this Article, shall not exceed the stated percentage. 5. For the purposes of applying the provisions of paragraphs 3 and 4, ‘total added value’ shall be taken to mean all costs arising outside the exporting Contracting Party, including the value of the materials incorporated there. 6. The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil the conditions set out in the list in Annex II or which can be considered sufficiently worked or processed only if the general tolerance fixed in Article 4 is applied. 7. Any working or processing of the kind covered by the provisions of this Article and done outside the exporting Party shall be done under the outward processing arrangements, or similar arrangements. Article 14 Non-alteration 1. The preferential treatment provided for under the relevant Agreement shall apply only to products satisfying the requirements of these Rules and declared for importation in a Party provided these products are the same as those exported from the exporting Party. They shall not have been altered, transformed in any way or subjected to operations other than to preserve them in good condition or than adding or affixing marks, labels, seals or any documentation to ensure compliance with specific domestic requirements of the importing Party carried out under customs supervision in the country(ies) of transit or splitting prior to being declared for home use. 2. Storage of products or consignments may take place provided they remain under customs supervision in the third country(ies) of transit. 3. Without prejudice to the provisions of Title V, the splitting of consignments may take place, provided they remain under customs supervision in the third country(ies) of splitting. 4. In case of doubt, the importing Party may request the importer or its representative to submit at any time, all appropriate documents to provide evidence of compliance with the provisions of this Article, which may be given by any documentary evidence, and notably by:

i) contractual transport documents such as bills of lading; ii) factual or concrete evidence based on marking or numbering of packages; iii) a certificate of non-manipulation provided by the customs authorities of the country(ies) of transit or splitting or any other documents demonstrating that the goods remained under customs supervision in the country(ies) of transit or splitting; iv) any evidence related to the goods themselves. Article 15 Exhibitions 1. Originating products, sent for exhibition in a country other than with which cumulation is applicable in accordance with Articles 7 and 8 and sold after the exhibition for importation in a Party, shall benefit on importation from the provisions of this Agreement provided it is shown to the satisfaction of the customs authorities that: (a) an exporter has consigned these products from a Party to the country in which the exhibition is held and has exhibited them there; (b) the products have been sold or otherwise disposed of by that exporter to a person in another Party; (c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and (d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition. 2. A proof of origin must be issued or made out in accordance with the provisions of Title V and submitted to the customs authorities of the importing Party in the normal manner. The name and address of the exhibition shall be indicated thereon. Where necessary, additional documentary evidence of the conditions under which they have been exhibited may be required. 3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organised for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control. TITLE IV DRAWBACK OR EXEMPTION Article 16 Drawback of, or exemption from, customs duties Prohibition of drawback or exemption from, customs duties for products of Chapters 50 to 63 1. Non-originating materials used in the manufacture of products falling within Chapters 50 to 63 of the Harmonised System originating in a Party for which a proof of origin is issued or made out in accordance with the provisions of Title V shall not be subject in the exporting Party to drawback of, or exemption from, customs duties of whatever kind. 2. The prohibition in paragraph 1 shall apply to any arrangement for refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect, applicable in the exporting Party to materials used in the manufacture, where such refund, remission or non-payment applies, expressly or in effect, when products obtained from the said materials are exported and not when they are retained for home use there.

3. The exporter of products covered by a proof of origin shall be prepared to submit at any time, upon request from the customs authorities, all appropriate documents proving that no drawback has been obtained in respect of the non-originating materials used in the manufacture of the products concerned and that all customs duties or charges having equivalent effect applicable to such materials have actually been paid. Exceptions to the prohibition of drawback or exemption from, customs duties for products of Chapters 50 to 63 Drawback with full cumulation 4. The prohibition in paragraph 1 of this Article shall not apply to trade between the Parties for products that obtained originating status by application of cumulation of origin covered by Article 7 (4) or (5). Drawback without diagonal cumulation . The prohibition in paragraph 1 of this Article shall not apply in bilateral trade between the Parties without application of cumulation with materials originating in any other applying Contracting Party. TITLE V PROOF OF ORIGIN Article 17 General requirements 1. Products originating in one of the Parties shall, on importation into the other Party, benefit from the provisions of this Agreement upon submission of one of the following proofs of origin: (a) a movement certificate EUR.1, a specimen of which appears in Annex IV (b); in the cases specified in Article 18(1), a declaration, subsequently referred to as the ‘origin declaration’) given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified; the text of the origin declaration appears in Annex III; 2. Notwithstanding paragraph 1, originating products within the meaning of these Rules shall, in the cases specified in Article 27, benefit from the provisions of this Agreement without it being necessary to submit any of the proofs of origin referred to in paragraph 1 of this Article. 3. Without prejudice to paragraph 1, the Parties may agree that, for the preferential trade between them, proofs of origin listed in paragraph 1 points (a) and (b) above are replaced by statements on origin made out by exporters registered in an electronic database in accordance with the internal legislation of the Parties. 4. For the purposes of paragraph 1, the Parties may agree to establish a system that allows proofs of origin listed in paragraph 1 points (a) and (b) to be issued electronically and/or submitted electronically. Article 18

Conditions for making out an origin declaration 1. An origin declaration as referred to in Article 17(1)(b) may be made out: (a) by an approved exporter within the meaning of Article 19, or (b) by any exporter for any consignment consisting of one or more packages containing originating products the total value of which does not exceed EUR 6000. 2. An origin declaration may be made out if the products can be considered as originating in an applying Contracting Party and fulfil the other requirements of these Rules. 3. The exporter making out an origin declaration shall be prepared to submit at any time, at the request of the customs authorities of the exporting Party, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of these Rules. 4. An origin declaration shall be made out by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the declaration, the text of which appears in Annex III, using one of the linguistic versions set out in that Annex and in accordance with the provisions of the national law of the exporting country. If the declaration is handwritten, it shall be written in ink in printed characters. 5. Origin declarations shall bear the original signature of the exporter in manuscript. However, an approved exporter within the meaning of Article 19 shall not be required to sign such declarations provided that he gives the customs authorities of the exporting Party a written undertaking that he accepts full responsibility for any origin declaration which identifies him as if it had been signed in manuscript by him. 6. An origin declaration may be made out by the exporter when the products to which it relates are exported, or after exportation (hereafter ‘retrospective origin declaration’) on condition that it is presented in the importing country within two years after the importation of the products to which it relates. Where the splitting of a consignment takes place in accordance with Article 14(3) and provided that the same two-year deadline is respected, the retrospective origin declaration shall be made out by the approved exporter of the Party of exportation of the products. Article 19 Approved exporter 1. The customs authorities of the exporting Party may, subject to national requirements, authorise any exporter established in that Party (hereinafter referred to as ‘approved exporter’), to make out origin declarations irrespective of the value of the products concerned. 2. An exporter who requests such authorisation must offer, to the satisfaction of the customs authorities, all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of these Rules. 3. The customs authorities shall grant to the approved exporter a customs authorisation number which shall appear on the origin declaration. 4. The customs authorities shall verify the proper use of an authorisation. They may withdraw the authorisation if the approved exporter makes improper use of it and shall do so if the approved exporter no longer offers the guarantees referred to in paragraph 2. Article 20 Procedure for issuing of a movement certificate EUR.1 1. A movement certificate EUR.1 shall be issued by the customs authorities of the exporting Party on application having been made in writing by the exporter or, under the exporter’s responsibility, by his authorised representative. 2. For this purpose, the exporter or his authorised representative shall fill in both the movement certificate EUR.1 and the application form, specimens of which appear in the Annex IV. These forms shall be completed in one of the languages in which the Agreement is drawn up and in accordance with the provisions of the national law of the exporting country. If the completion of the forms is done in handwriting, they shall be completed in ink in printed characters. The description of the products shall be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line shall be drawn below the last line of the description, the empty space being crossed through.

3. The EUR1 should include the statement in English ‘ORIGIN OBTAINED ACCORDING TO THE TRANSITIONAL RULES OF ORIGIN’ in box 7. 4. The exporter applying for the issue of a movement certificate EUR.1 shall be prepared to submit at any time, at the request of the customs authorities of the exporting Party where the movement certificate EUR.1 is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of these Rules. 5. A certificate of origin shall be issued by the competent authorities of the exporting Party if the products concerned can be considered as products originating and fulfil the other requirements of these Rules. 6. The customs authorities issuing movement certificates EUR.1 shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of these Rules. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate. They shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions. 7. The date of issue of the movement certificate EUR.1 shall be indicated in Box 11 of the certificate. 8. A movement certificate EUR.1 shall be issued by the customs authorities and made available to the exporter as soon as actual exportation has been effected or ensured. Article 21 Movement certificates EUR.1 issued retrospectively 1. Notwithstanding Article 20(7), a movement certificate EUR.1 may be issued after exportation of the products to which it relates if: (a) it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances; or (b) it is demonstrated to the satisfaction of the customs authorities that a movement certificate EUR.1 was issued but was not accepted at importation for technical reasons; or (c) the final destination of the products concerned was not known at the time of exportation and was determined during their transportation or storage and after possible splitting of consignments in accordance with Article 14(3). (d) a movement certificate EUR.1 or EUR.MED was issued in accordance with the rules of the PEM Convention for products that are also originating according to these Rules. 2. For the implementation of paragraph 1, the exporter shall indicate in his application the place and date of exportation of the products to which the movement certificate EUR.1 relates, and state the reasons for his request. 3. The customs authorities may issue a movement certificate EUR.1 retrospectively within two years from the date of exportation and only after verifying that the information supplied in the exporter’s application complies with that in the corresponding file. 4. Notwithstanding the article 20 (3), movement certificates EUR.1 issued retrospectively shall be endorsed with the following phrase in English: ‘ISSUED RETROSPECTIVELY’» 5. The endorsement referred to in paragraph 4 shall be inserted in Box 7 of the movement certificate EUR.1. Article 22 Issue of a duplicate movement certificate EUR.1

1. In the event of theft, loss or destruction of a movement certificate EUR.1, the exporter may apply to the customs authorities which issued it for a duplicate made out on the basis of the export documents in their possession. 2. Notwithstanding the article 20 (3), the duplicate issued in this way shall be endorsed with the following word in English: ‘DUPLICATE’» 3. The endorsement referred to in paragraph 2 shall be inserted in Box 7 of the duplicate movement certificate EUR.1. 4. The duplicate, which shall bear the date of issue of the original movement certificate EUR.1, shall take effect as from that date. Article 23 Validity of proof of origin 1. A proof of origin shall be valid for ten months from the date of issue or making out in the exporting Party, and shall be submitted within that period to the customs authorities of the importing Party. 2. Proofs of origin which are submitted to the customs authorities of the importing Party after the period of validity mentioned in paragraph 1 may be accepted for the purpose of applying the tariff preferences, where failure to submit these documents by the final date set is due to exceptional circumstances. 3. In other cases of belated presentation, the customs authorities of the importing Party may accept the proofs of origin where the products have been presented to customs before the said final date. Article 24 Free zones 1. The Parties shall take all necessary steps to ensure that products traded under cover of a proof of origin, which in the course of transport use a free zone situated in their territory, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration. 2. By way of derogation from paragraph 1, when products originating in a Party are imported into a free zone under cover of a proof of origin and undergo treatment or processing, a new proof or origin may be issued or made out, if the treatment or processing undergone complies with the provisions of these Rules. Article 25 Importation requirements Proofs of origin shall be submitted to the customs authorities of the importing Party in accordance with the procedures applicable in that Party. Article 26 Importation by instalments Where, at the request of the importer and subject to the conditions laid down by the customs authorities of the importing Party, dismantled or non-assembled products within the meaning of General Rule 2(a) for the interpretation of the Harmonised System falling within Sections XVI and XVII or headings 7308 and 9406 of the Harmonised System are imported by instalments, a single proof of origin for such products shall be submitted to the customs authorities on importation of the first instalment.

Article 27 Exemptions from proof of origin 1. Products sent as small packages from private persons to private persons or forming part of travellers’ personal luggage shall be admitted as originating products without requiring the submission of a proof of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of these Rules and where there is no doubt as to the veracity of such a declaration. 2. Imports shall not be considered as imports by way of trade if all the following conditions are met: (a) the imports are occasional; (b) the imports consist solely of products for the personal use of the recipients or travellers or their families; (c) it is evident from the nature and quantity of the products that no commercial purpose is in view. 3. The total value of these products shall not exceed EUR 500 in the case of small packages or EUR 1200 in the case of products forming part of travellers’ personal luggage. Article 28 Discrepancies and formal errors 1. The discovery of slight discrepancies between the statements made in the proof of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the proof of origin null and void if it is duly established that this document does correspond to the products submitted. 2. Obvious formal errors such as typing errors on a proof of origin shall not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document. Article 29 Supplier's declarations 1. When a movement certificate EUR.1 is issued or an origin declaration is made out in a Party for originating products, in the manufacture of which goods coming from another applying Contracting Party which have undergone working or processing there without having obtained preferential originating status have been used in accordance with Article 7(3) or Article 7(4) account shall be taken of the supplier's declaration given for those goods in accordance with this Article. 2. The supplier's declaration referred to in paragraph 1 shall serve as evidence of the working or processing undergone in an applying Contracting Party by the goods concerned for the purpose of determining whether the products in the manufacture of which those goods are used, may be considered as products originating in the exporting Party and fulfil the other requirements of these Rules. 3. A separate supplier's declaration shall, except in the cases provided in paragraph 4, be made out by the supplier for each consignment of goods in the form prescribed in Annex [supplier's declaration] on a sheet of paper annexed to the invoice, the delivery note or any other commercial document describing the goods concerned in sufficient detail to enable them to be identified. 4. Where a supplier regularly supplies a particular customer with goods for which the working or processing undergone in an applying Contracting Party is expected to remain constant for a period of time, he may provide a single supplier's declaration to cover subsequent consignments of those goods (hereinafter referred to as a "long-term supplier's declaration"). A long-term supplier's declaration may normally be valid for a period of up to two years from the date of making out the declaration. The customs authorities of the applying Contracting Party where the declaration is made out lay down the conditions under which longer periods may be used. The long-term supplier's declaration shall be made out by the supplier in the form prescribed in Annex [long term supplier's declaration] and shall describe the goods concerned in sufficient detail to enable them to be identified. It shall be provided to the customer concerned before he is supplied with the first consignment of goods covered by that declaration or together with his first consignment. The supplier shall inform his customer immediately if the long-term supplier's declaration is no longer applicable to the goods supplied. 5. The supplier's declarations referred to in paragraphs 3 and 4 shall be typed or printed using one of the languages of this Agreement, in accordance with the provisions of the national law of the applying Contracting Party where the declaration is made out, and shall bear the original signature of the supplier in manuscript. The declaration may also be handwritten; in such a case, it shall be written in ink in printed characters. 6. The supplier making out a declaration shall be prepared to submit at any time, at the request of the customs authorities of the applying Contracting Party where the declaration is made out, all appropriate documents proving that the information given on that declaration is correct.

Article 30 Amounts expressed in euro 1. For the application of the provisions of Article 18(1)(b) and Article 27(3) in cases where products are invoiced in a currency other than euro, amounts in the national currencies of the Parties equivalent to the amounts expressed in euro shall be fixed annually by each of the countries concerned. 2. A consignment shall benefit from the provisions of Article 18(1)(b) or Article 27(3) by reference to the currency in which the invoice is drawn up, according to the amount fixed by the country concerned. 3. The amounts to be used in any given national currency shall be the equivalent in that currency of the amounts expressed in euro as at the first working day of October. The amounts shall be communicated to the European Commission by 15 October and shall apply from 1 January the following year. The European Commission shall notify all countries concerned of the relevant amounts. 4. A country may round up or down the amount resulting from the conversion into its national currency of an amount expressed in euro. The rounded-off amount may not differ from the amount resulting from the conversion by more than 5 %. A country may retain unchanged its national currency equivalent of an amount expressed in euro if, at the time of the annual adjustment provided for in paragraph 3, the conversion of that amount, prior to any rounding-off, results in an increase of less than 15 % in the national currency equivalent. The national currency equivalent may be retained unchanged if the conversion were to result in a decrease in that equivalent value. 5. The amounts expressed in euro shall be reviewed by the Association Committee at the request of a Party. When carrying out this review, the Association Committee shall consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in euro Title VI PRINCIPLES OF COOPERATION AND DOCUMENTARY EVIDENCE Article 31 Documentary evidence, preservation of proofs of origin and supporting documents 1. An exporter who has made out an origin declaration or has applied for a movement certificate EUR.1 shall keep a hard copy or an electronic version of these proofs of origin and all documents supporting the originating status of the product, for at least three years from the date of issuance or making out of the origin declaration. 2. The supplier making out a supplier’s declaration shall keep for at least three years copies of the declaration and of all the invoices, delivery notes or other commercial document to which this declaration is annexed as well as the documents referred to in Article 29(6). The supplier making out a long-term supplier’s declaration shall keep for at least three years copies of the declaration and of all the invoices, delivery notes or other commercial documents concerning goods covered by that declaration sent to the customer concerned, as well as the documents referred to in Article 29(6). This period shall begin from the date of expiry of validity of the long-term supplier’s declaration. 3. For the purposes of paragraph 1, the “documents supporting the originating status” include, inter alia, the following: (a) direct evidence of the processes carried out by the exporter or supplier to obtain the product, contained, for example, in his accounts or internal bookkeeping; (b) documents proving the originating status of materials used, issued or made out in the relevant applying Contracting Party in accordance with its national legislation; (c) documents proving the working or processing of materials in the relevant Party, made out or issued in that Party in accordance with its national legislation; (d) origin declarations or movement certificates EUR.1 proving the originating status of materials used, made out or issued in the Parties in accordance with these Rules; (e) appropriate evidence concerning working or processing undergone outside the Parties by application of Article 13 and 14, proving the fulfilment of the requirements of these Articles.

4. The customs authorities of the exporting Party issuing movement certificates EUR.1 shall keep for at least three years the application form referred to in Article 20(2). 5. The customs authorities of the importing Party shall keep for at least three years the origin declarations and the movement certificates EUR.1 submitted to them. 6. Supplier's declarations proving the working or processing undergone in an applying Contracting Party by materials used, made out in that applying Contracting Party, shall be treated as a document referred to in Articles 18(3), 20(3) and 29(6) used for the purpose of proving that products covered by a movement certificate EUR.1 or an origin declaration may be considered as products originating in that applying Contracting Party and fulfil the other requirements of these Rules. Article 32 Dispute settlement Where disputes arise in relation to the verification procedures of Articles 34 and 35, or in relation to the interpretation of this Appendix, which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification, they shall be submitted to the Association Committee. In all cases the settlement of disputes between the importer and the customs authorities of the importing Party shall take place under the legislation of that country. TITLE VII ADMINISTRATIVE COOPERATION Article 33 Notification and cooperation 1. The customs authorities of the Parties shall provide each other with specimen impressions of stamps used in their customs offices for the issue of movement certificates EUR.1, with the models of the authorisation numbers granted to approved exporters and with the addresses of the customs authorities responsible for verifying those certificates and origin declarations. 2. In order to ensure the proper application of these Rules, the Parties shall assist each other, through the competent customs administrations, in checking the authenticity of the movement certificates EUR.1, the origin declarations, the supplier’s declarations and the correctness of the information given in these documents. Article 34 Verification of proofs of origin 1. Subsequent verifications of proofs of origin shall be carried out at random or whenever the customs authorities of the importing Party have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of these Rules. 2. When they make a request for subsequent verification, the customs authorities of the importing Party shall return the movement certificate EUR.1 and the invoice, if it has been submitted, the origin declaration, or a copy of these documents, to the customs authorities of the exporting Party giving, where appropriate, the reasons for the request for verification. Any documents and information obtained suggesting that the information given on the proof of origin is incorrect shall be forwarded in support of the request for verification. 3. The verification shall be carried out by the customs authorities of the exporting Party. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate. 4. If the customs authorities of the importing Party decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary. 5. The customs authorities requesting the verification shall be informed of the results thereof as soon as possible. These results shall indicate clearly whether the documents are authentic and whether the products concerned may be considered as products originating in one of the Parties and fulfil the other requirements of these Rules.

6. If in cases of reasonable doubt there is no reply within ten months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences. Article 35 Verification of supplier's declarations 1. Subsequent verifications of supplier's declarations or long-term supplier's declarations may be carried out at random or whenever the customs authorities of an applying Contracting Party where such declarations have been taken into account to issue a movement certificate EUR.1 or to make out an origin declaration, have reasonable doubts as to the authenticity of the document or the correctness of the information given in this document. 2. For the purposes of implementing the provisions of paragraph 1, the customs authorities of the applying Contracting Party referred to in paragraph 1 shall return the supplier's declaration or the long-term supplier's declaration and invoices, delivery notes or other commercial documents concerning goods covered by such declaration, to the customs authorities of the country where the declaration was made out, giving, where appropriate, the reasons of substance or form of the request for verification. They shall forward, in support of the request for subsequent verification, any documents and information that have been obtained suggesting that the information given in the supplier's declaration or the long-term supplier's declaration is incorrect. 3. The verification shall be carried out by the customs authorities of the applying Contracting Party where the supplier's declaration or the long-term supplier's declaration was made out. For this purpose, they shall have the right to call for any evidence and carry out any inspection of the supplier's accounts or any other check which they consider appropriate. 4. The customs authorities requesting the verification shall be informed of the results thereof as soon as possible. These results shall indicate clearly whether the information given in the supplier's declaration or the long-term supplier's declaration is correct and make it possible for them to determine whether and to what extent such declaration could be taken into account for issuing a movement certificate EUR.1 or for making out an origin declaration. Article 36 Penalties Each Party shall provide for the imposition of criminal, civil or administrative penalties for violations of its legislation related to these Rules. TITLE VIII APPLICATION OF THE PROTOCOL Article 37 European Economic Area In case of application of Article 7 with the EFTA States, goods originating in the European Economic Area (EEA) within the meaning of Protocol 4 to the Agreement on the European Economic Area shall be considered as originating in the European Union, Iceland, Liechtenstein or Norway (‘EEA Parties’) when exported respectively from the European Union, Iceland, Liechtenstein or Norway to Lebanon, provided that free trade agreements using these Rules are applicable between Lebanon and the EEA Parties. Article 38 Liechtenstein In case of application of Article 7 with the EFTA States, without prejudice to Article 2, a product originating in Liechtenstein shall, due to the customs union between Switzerland and Liechtenstein, be considered as originating in Switzerland. Article 39

Republic of San Marino Without prejudice to Article 2, a product originating in the Republic of San Marino shall, due to the customs union between EU and the Republic of San Marino, be considered as originating in the EU. Article 40 Principality of Andorra Without prejudice to Article 2, a product originating in the Principality of Andorra classified under Chapters 25 to 97 of the Harmonised System shall, due to the customs union between the EU and the Principality of Andorra, be considered as originating in the EU. Article 41 Ceuta and Melilla 1. For the purpose of implementing these Rules, the term ‘European Union’ shall not cover Ceuta and Melilla. 2. Products originating in Lebanon, when imported into Ceuta or Melilla, shall enjoy in all respects the same customs regime as that which is applied to products originating in the customs territory of the European Union under Protocol 2 of the Act of Accession of the Kingdom of Spain and the Portuguese Republic to the European Communities. Lebanon shall grant to imports of products covered by the relevant Agreement and originating in Ceuta and Melilla the same customs regime as that which is granted to products imported from and originating in the European Union. . For the purpose of the application of paragraph 2 concerning products originating in Ceuta and Melilla, these Rules shall apply mutatis mutandis subject to the special conditions set out in Annex V. Annex I Introductory notes to the list in Annex II Note 1 - General introduction The list sets out the conditions required for all products to be considered as sufficiently worked or processed within the meaning of Article 4 of Appendix I. There are four different types of rule, which vary according to the product: (a) through working or processing a maximum content of non-originating materials is not exceeded; (b) through working or processing the 4-digit Harmonized System heading or 6-digit Harmonized System sub-heading of the manufactured products becomes different from the 4-digit Harmonized System heading or 6-digit sub-heading respectively of the materials used; (c) a specific working and processing operation is carried out; (d) working or processing is carried out on certain wholly obtained materials. Note 2 - The structure of the list

2.1. The first two columns in the list describe the product obtained. The first column gives the heading number or chapter number used in the Harmonized System and the second column gives the description of goods used in that system for that heading or chapter. For each entry in the first two columns, a rule is specified in column 3. Where, in some cases, the entry in the first column is preceded by an "ex", this signifies that the rules in column 3 apply only to the part of that heading as described in column 2. 2.2. Where several heading numbers are grouped together in column 1 or a chapter number is given and the description of products in column 2 is therefore given in general terms, the adjacent rules in column 3 apply to all products which, under the Harmonized System, are classified in headings of the chapter or in any of the headings grouped together in column 1. 2.3. Where there are different rules in the list applying to different products within a heading, each indent contains the description of that part of the heading covered by the adjacent rules in column 3. 2.4. Where two alternative rules are set out in column 3, separated by "or", it is at the choice of the exporter which one to use. Note 3 - Examples of how to apply the rules 3.1. Article 4 of Annex I to the Appendix I, concerning products having acquired originating status which are used in the manufacture of other products, shall apply, regardless of whether this status has been acquired inside the factory where these products are used or in another factory in a Party. 3.2. Pursuant to Article 6, the working or processing carried out must go beyond the list of operations mentioned in that Article. If it does not, the goods shall not qualify for the granting of the benefit of preferential tariff treatment, even if the conditions set out in the list below are met. Subject to the provision referred to in the first sub-paragraph, the rules in the list represent the minimum amount of working or processing required, and the carrying-out of more working or processing also confers originating status; conversely, the carrying-out of less working or processing cannot confer originating status. Thus, if a rule provides that non-originating material, at a certain level of manufacture, may be used, the use of such material at an earlier stage of manufacture is allowed, and the use of such material at a later stage is not. If a rule provides that non-originating material, at a certain level of manufacture, may not be used, the use of materials at an earlier stage of manufacture is allowed, and the use of materials at a later stage is not. Example: when the list-rule for Chapter 19 requires that “non-originating materials of headings 1101 to 1108 cannot exceed 20% weight”, the use (i.e. importation) of cereals of Chapter 10 (materials at an earlier stage of manufacture) is not limited. 3.3. Without prejudice to Note 3.2, where a rule uses the expression "Manufacture from materials of any heading", then materials of any heading(s) (even materials of the same description and heading as the product) may be used, subject, however, to any specific limitations which may also be contained in the rule. However, the expression "Manufacture from materials of any heading, including other materials of heading ..." or "Manufacture from materials of any heading, including other materials of the same heading as the product" means that materials of any heading(s) may be used, except those of the same description as the product as given in column 2 of the list. 3.4. When a rule in the list specifies that a product may be manufactured from more than one material, this means that one or more materials may be used. It does not require that all be used. 3.5. Where a rule in the list specifies that a product must be manufactured from a particular material, the condition does not prevent the use of other materials which, because of their inherent nature, cannot satisfy this. 3.6. Where, in a rule in the list, two percentages are given for the maximum value of non-originating materials that can be used, then these percentages may not be added together. In other words, the maximum value of all the non-originating materials used may never exceed the higher of the percentages given. Furthermore, the individual percentages must not be exceeded, in relation to the particular materials to which they apply. Note 4 - General provisions concerning certain agricultural goods 4.1. Agricultural goods falling within Chapters 6, 7, 8, 9, 10, 12 and heading 2401 which are grown or harvested in the territory of a Party shall be treated as originating in the territory of that Party, even if grown from imported seeds, bulbs, rootstock, cuttings, grafts, shoots, buds, or other live parts of plants. 4.2. In cases where the content of non-originating sugar in a given product is subject to limitations, the weight of sugars of headings 1701 (s