EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

In order to ensure the requisite legal security and homogeneity of the Internal Market, the EEA Joint Committee is to integrate all the relevant EU legislation into the EEA Agreement as soon as possible after its adoption.

In this context, it is needed to amend Protocol 4 to the EEA Agreement on rules of origin

2. RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

The draft Decision of the EEA Joint Committee (annexed to the proposed Council Decision) aims to amend Protocol 4 to the EEA Agreement on rules of origin in order to reflect that the Republic of Croatia became a party to the EEA Agreement. The EEA Enlargement Agreement was signed on 11 April 2014 and has been applicable on a provisional basis since 12 April 2014.

Certain transitional arrangements concerning the application of the rules of origin after the provisional application of the EEA Enlargement Agreement need to be reflected in the EEA Agreement.

3. LEGAL ELEMENTS OF THE PROPOSAL

Article 1(3) of Council Regulation (EC) No 2894/94 concerning arrangements for implementing the EEA Agreement provides that the Council establishes the position to be adopted on the Union’s behalf on such Decisions, on a proposal from the Commission.

The Commission submits the Draft Decision of the EEA Joint Committee for adoption by the Council as the Union’s position. The Commission would hope to be able to present it in the EEA Joint Committee at the earliest possible opportunity.

2014/0349 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be adopted, on behalf of the European Union, in the EEA Joint Committee concerning an amendment to Protocol 4 of the EEA Agreement on rules of origin (Croatia Enlargement)

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to Council Regulation (EC) No 2894/94 of 28 November 1994 concerning arrangements for implementing the Agreement on the European Economic Area[1], and in particular Article 1(3) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) The Agreement on the European Economic Area[2] ('the EEA Agreement') entered into force on 1 January 1994.

(2) Pursuant to Article 98 of the EEA Agreement, the EEA Joint Committee may decide to amend, inter alia, Protocol 4 to the EEA Agreement ('Protocol 4').

(3) Protocol 4 contains provisions and arrangements concerning rules of origin.

(4) Certain transitional arrangements concerning the application of the rules of origin after the provisional application of the EEA Enlargement Agreement need to be reflected in the EEA Agreement.

(5) Protocol 4 should therefore be amended.

(6) The position of the Union within the EEA Joint Committee should be based on the attached draft Decision.

HAS ADOPTED THIS DECISION:

Article 1

The position to be adopted, on behalf of the European Union, within the EEA Joint Committee on the proposed amendment to Protocol 4 to the EEA Agreement, on rules of origin, shall be based on the draft Decision of the EEA Joint Committee attached to this Decision.

Article 2

This Decision shall enter into force on the date of its adoption.

Done at Brussels,

For the Council

The President

[1] OJ L 305, 30.11.1994, p. 6.

[2] OJ L 1, 3.1.1994, p. 3.

ANNEX DECISION OF THE EEA JOINT COMMITTEE No .../2014 amending Protocol 4 (rules of origin) to the EEA Agreement

THE EEA JOINT COMMITTEE,

Having regard to the Agreement on the European Economic Area (“the EEA Agreement”), and in particular Article 98 thereof,

Whereas:

(1) Protocol 4 to the EEA Agreement concerns the rules of origin.

(2) The Republic of Croatia acceded to the European Union on 1 July 2013.

(3) Following successful conclusion of the European Union enlargement negotiations, the Republic of Croatia submitted an application to become party to the EEA Agreement.

(4) The Agreement on the participation of the Republic of Croatia in the European Economic Area (“EEA Enlargement Agreement”) was initialled on 20 December 2013.

(5) The EEA Enlargement Agreement was signed on 11 April 2014 and has been applicable on a provisional basis since 12 April 2014.

(6) Certain transitional arrangements concerning the application of the rules of origin after the provisional application of the EEA Enlargement Agreement need to be reflected in the EEA Agreement,

HAS ADOPTED THIS DECISION:

Article 1

Protocol 4 to the EEA Agreement is amended as set out in the Annex to this Decision.

Article 2

This Decision shall enter into force on […], provided that all the notifications under Article 103(1) of the EEA Agreement have been made to the EEA Joint Committee[1].

It shall apply from 1 July 2013.

Article 3

This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Union.

Done at Brussels, […].

For the EEA Joint Committee

The President […]

The Secretaries to the EEA Joint Committee […]

ANNEX

to Decision of the EEA Joint Committee No […]

In Protocol 4 to the EEA Agreement, the following is added after Article 40:

‘Article 41

Transitional arrangements regarding the accession of the Republic of Croatia to the European Union

1. Proof of origin properly issued by an EFTA State or the Republic of Croatia or made out in the framework of a preferential agreement applied between the EFTA States and the Republic of Croatia shall be considered being proof of EEA preferential origin, provided that:

(a) the proof of origin and the transport documents were issued or made out no later than the day before the date of accession of the Republic of Croatia to the European Union; and

(b) the proof of origin is submitted to the customs authorities within the period of four months from the date of accession of the Republic of Croatia to the European Union.

Where goods were declared for importation from an EFTA State or the Republic of Croatia in, respectively, the Republic of Croatia or an EFTA State prior to the date of accession of the Republic of Croatia to the European Union, under preferential agreements applied between an EFTA State and the Republic of Croatia at that time, proof of origin issued retrospectively under those agreements may also be accepted in the EFTA States or the Republic of Croatia provided that it is submitted to the customs authorities within the period of four months from the date of accession of the Republic of Croatia to the European Union.

2. The EFTA States, on the one hand, and the Republic of Croatia, on the other hand, are authorised to retain the authorisations with which the status of ‘approved exporters’ has been granted in the framework of agreements concluded between the EFTA States, on the one hand, and the Republic of Croatia, on the other hand, provided that the approved exporters apply the rules of origin of this Protocol.

The EFTA States, on the one hand, and Croatia, on the other, shall, no later than one year after the date of accession of the Republic of Croatia to the European Union, consider the necessity of replacing such authorisations by new authorisations issued in accordance with this Protocol.

3. Requests for subsequent verification of proof of origin issued or made out under the preferential agreements referred to in paragraphs 1 and 2 shall be accepted by the competent customs authorities of the EFTA States and the Republic of Croatia for a period of three years after the issue or making out of the proof of origin concerned and may be made by those authorities for a period of three years after acceptance of the proof of origin submitted to those authorities in support of an import declaration.

4. The provisions of the Agreement may be applied to goods exported from either the Republic of Croatia to the EFTA States or from the EFTA States to the Republic of Croatia, which comply with the provisions of this Protocol and that on the date of accession of the Republic of Croatia to the European Union are either in transit or in temporary storage in a customs warehouse or in a free zone in an EFTA State or in the Republic of Croatia.

5. Preferential treatment may be granted in cases as referred to in paragraph 4, subject to the submission to the customs authorities of the importing country, within four months from the date of accession of the Republic of Croatia to the European Union, of a proof of origin issued retrospectively by the customs authorities of the exporting country.’

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[1] [No constitutional requirements indicated.] [Constitutional requirements indicated.]