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COM(75)417
Vol.1975/0161

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(75)417 final
Brussels .25July 1975
COMMISSION COMMUNICATION TOTHE COUNCIL
DRAFT
DECISION OFTHE JOINT COMMITTEE
modifying Article 23ofProtocol No3onthe
definition oforiginating products
andmethods ofadministrative cooperation\
r,
\
COM(75 )417final

COMMISSION COMMUNICATION TOTHE COUNCIL
vThepresent provisions ofArticle 23paragraph 1ofProtocol No3
annexed totheagreements concluded with theEFTA-countries stipulate
that products notoriginating incontracting States which areused in
themanufacture oforiginating products benefiting under the .agreements
maynotbegranted drawback orremission ofcustoms duty inany form as
from thedate onwhich theduty applicable tooriginating products ofthe
same kind astheproducts used inmanufacture hasbeen reduced to^0%of
thebasic duty .
Application ofthis rule -generally known asthe "no-drawback rule "-
which was tocome into operation formost products on1January 1975 ,has
been suspended foroneyear byDecision Nob/jkoftheJoint Committees
dated 2December 197^(1)itoallow time fordrawing upanewandimproved
text eliminating certain difficulties liable toarise inpractical applica­
tion ofthe rule .
This newversion isthe subject oftheannexed draft decision ofthe
EEC-Austria Joint Committee ;itwasprepared asamodel and will be .
equally suitable ,mutatis mutandis ,for the other agreements .
Thenew text proposed eliminates theprincipal difficulty likely to
arise inimplementing theformer text wherein theattainment ofacertain
level oftariff dismantling was thedeterminant ofthedate ofapplication
oftherule .This requirement would ,infact ,give rise toquite serious
practical problems where differences existed between thetariff provisions
applicable ontheonehand tothefinished products andontheother hand
totheoriginating products ofthe same kind asthose used inmanufacture .
•••/•••
(1)Putinto effect intheCommunity byRegulations (EEC)Nos3278/7^,
3303/7^,330V7 'S3305/7**,3306/7^and3307/7^oftheCouncil of
19December 197^,published intheOJNoL355of31December 197^.

-2-
Theproposed solution consists ,therefore ,inlaying down asingle
date ofapplication oftheno-drawback rule forthewhole oftheproducts
used inmanufacture .
Apart from theforegoing ,italso became apparent when thenew text
wasbeing drawn upthat itwould beequally possible tosimplify the
special rule laid down inthepresent Article 23paragraphs 2and 3»
This special rule prohibits drawback forproducts -especially those from
theCommunity asoriginally constituted and Ireland -used inthe manufactui
oforiginating products benefitting from thetariff provisions inforce in
respect oftrade between theformer EFTA countries byvirtue ofArticle -3
paragraph 1ofthetrade agreements .
Ittranspires that the date ofexpiration ofthis rule fororiginating
products from theCommunity asoriginally constituted andIreland -which
would ordinarily bethe date onwhich the tariff provisions inforce in
respect oftrade between theformer EFTA countries became identical with
thenormal tariff provisions oftheagreements -could bestandardised ,in
theinterest ofsimplification ,as1July 1977 ,the date onwhich the two
systems will beidentical forthemajority ofgoods .
Those are theprincipal elements ofthe annexed draft decision .
Itshould beadded that ,asregards thebasis oftheno-drawback rule ,
there hasbeen nomodification ofArticle 23initsold form ,especially wi'
reference totheproducts towhich theprohibition ofdrawback applies .The
rule istherefore still confined ,asinthepast ,tonon-originating produc'
ofthe same kind asthose covered bytheagreements .Asaresult ,products
not covered bytheagreements andespecially basic agricultural products
may continue tobeused under theinward processing arrangements .
Accordingly ,itisproposed that theCouncil adopt this draft decison
asrepresenting thecommon position oftheCommunity intheJoint Committeei
oftheEFTA agreements ,sothat thenewArticle 23ofProtocol No3can
enter into force on1January 1976 .

EEC-AUSTRIA AIREEMENT
-Joint Committee -
Draft
DECISION No /75OFTHEJOINT COMMITTEE
modifying Article 23ofProtocol No3
onthedefinition oforiginating products
andmethods ofadministrative cooperation
THE JOINT COMMITTEE ,
Having regard totheagreement between theEuropean Economic Community
and theRepublic ofAustria ,signed inBrussels on22July 1972 ,. .
Having regard toProtocol No3onthedefinition oforiginating products
andmethods ofadministrative cooperation (hereinafter referred toProtocol
No3)inparticular Article 28thereof ,
Whereas thepresent provisions ofArticle 23 (l)ofProtocol No3,suspended
bydecision No oftheJoint Committee of2December 197^until 31
December 1975 ,stipulate that theprohibition onthebenefit oftherepayment
ofcustoms duty orexemption from customs duty inwhatever form ,fornon-
originating products used inthemanufacture oforiginating products ,applies
asfrom the date when the duty applicable tooriginating products ofthe
same kind astheproducts used was ,intheCommunity orinAustria ,reduced
to *f0%ofthebasic duty ; v;
Whereas the reference toacertain level oftariff inorder todetermine
thedate ofapplicability ofthese provisions islikely tocreate practical
difficulties ,inparticular because ofthedifferences intariff regimes
applicable both tothe finished products and totheoriginating products
ofthe same kind astheproducts used ;

Whereasitisconsequently appropriate toprovideforauniformdate
ofapplicability forthewholeoftheproductsconcerned ;whereasthat
datemaybethedateoftheentryintoforceofthisdecision;
Whereas,inaddition,thepresentprovisionsofArticle23(2)and(3),
stipulatethat,fortheapplication ofthetariffregimeinforcebyvirtue
ofArticle3(1)oftheagreement,intradebetweentheformerEFTAcountriei
onlythoseproductsrefaredtoinArticle25(1)ofProtocolNo3may.
benefitfromarepaymentofcustomsdutywhatevertheforminwhichitis
made;
Whereasinpracticeitisaconsequence oftheseprovisionsthatthe'
benefitoftherepaymentofcustomsdutyortheexemptionfromcustoms
dutyinwhateverformittakes,isprohibitedforproductsoriginating
intheCommunityinitsoriginalcomposition orIreland,usedinthe
manufacture ofproductswhichmaybenefitfromthetariffregimeresulting
fromArticle3(1)oftheagreement ;
Whereasthisprohibition mustcontinueforaslongasthetariffregime
resultingfromArticle3(1)oftheagreementisnotidenticaltothat
resultingfromArticle3(2)oftheagreement ;
Whereashoweverforthemajorityoftheproductsconcerned,thisprohibitioi
willcontinueonlyuntil1July1977twhereasitisappropriate ina
desireforsimplification ,toprovidethesamedateforthewholeiofthe
productsinquestion,
HASDECIDED !
Article1
ThetextofArticle23ofProtocolNo3shallbereplacedbythe
following :

-3-
"Article 23
1. Without prejudice toArticle 1ofProtocol No2products ofthe
kind towhich theagreement applies ,used inthemanufacture ofproducts
forwhich amovement certificate EUR.1 oraform EUR .2isissued or
established ,only "bethesubject ofarepayment ofcustoms duty or
benefit from anexemption ofcustoms duty ofwhateverkind when
products originating intheCommunity ,Austria
orone ofthe six countries mentioned inArticle 2ofthis Protocol are
concerned#
2. Without prejudice totheprovisions ofArticle 1ofProtocol No2,
products originating intheCommunity initsoriginal composition or
Ireland ,used inthemanufacture ofproducts obtained inaccordance
with theconditions provided forbyArticle 25(1),maynotbethesubject
intheMember State where such manufacture took place ,ofrepayment of
customs duties orbenefit from anexemption ofcustoms duties ofwhatever
kind until 1July 1977 *
3. The term "customs duty ",when used inthis andsubsequent Articles ,
shall also include taxes ofequivalent effect tocustoms duties ."
Article 2
This decision shall enter into force on1January 1976 .
Done at
BytheJoint Committee
The Président
The Secretaries