ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(78)394
Vol.1978/0153

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(78)394 final .
Brussels .24July 1978
I
m
•Propo salfora
COUNCIL REGULATION (EEC) ,
maintaining quantitative restrictions ontheimportation
into Italy ,France andtheUnited Kingdom ofcertain
, textile products originating inGreece
:
(submitted totheCouncil bytheCommission )
•'i ■ /a-' ;
■"\'•.».<>■•'T.A/ ■'<&
VνΚ ·-?
COM(78 )394final .

EXPIANATORY MEMORANDUM
1.Aswasestablishedatthe"beginningof1977»allGreekexportsof
textileproductsbenefitfromvariousincentives,notablyaninterestrate
subsidyonloanstothesupplier,calculatedasavariableproportionof
theexportprice(DecisionNo1574oftheGreekMonetaryCommittee).
Thesubsidyisaimedatencouragingexportspaidforinconvertible
currencyandtakestheformofarepaymentofpartofthefobpriceon
exportation ;atthemoment,thisrefundcanbeashighastwelvepercenton
textileproducts,dependingontheamountofvalueaddedinGreece*Inthe
caseofcottonyarn,theaverageis8.5$oftheprice.Ameasureofthis
kindisequivalenttoanexportsubsidy,andassuchiscontrarytothe
veryprincipleofArticle$2oftheTreaty.Article51oftheAthensAgree­
mentstatesthattheContractingPartiesrecognizethattheprincipleslaid
downinArticle92oftheTreatyshouldbeappliedintheirrelations
withintheAssociation.Tothatend,Article52(l)providesthattheAsso­
ciationCouncilshall,by1November1964,adopttherulesandconditions
'fortheapplicationoftheseprinciples.Sincenodecisionhassofar"been
taken,Article55enablestheCommunitytoadoptanyprotectivemeasures
whichitconsiderstobeneededtoovercomedifficulties duetotheabsence
*ofadecisionoftheAssociation Councilonthematter.
Itshouldbenotedthatthemeasureconcernedconstitutes anaid
whichundernormalCommunitypracticewouldneverqualifyforexemption
underArticle92(2)or(3).
»
Thismeasure,WhichispresentedbyGreeceasareimbursement of
indirecttaxesonexport,eventhoughsuchapresentation cannotbeaccepted
bytheCommission,would,fromthatpointofview,becontrarytothe
provisionsofArtiole53(2)whichforbids'reimbursements onexportgreater
thantheactualinternalcharges.

EvenontheGreekinterpretation ,thedetailsprovidedbyGreeceindicate
arealleveloftaxpaidofnomorethan,about2,5fa*Anexaminationof
theGreekcalculations showsfirstofallthatonly4*284faasagainstare­
imbursementrateof8*5foisaccountedforandthatastotheremaindereven
Greecedoesnotseemtobeabletoestablishabreakdownofcharges.Out
ofthe4„234f>afurther0.714representingafinancingchargeforthetax
beforeitisreimbursedand1.102foforstampdutyreimbursedbyothermeasures,
shouldbedeductedleavingonly2,468fo•
2.Anotherexportincentivewithamorelimitedeffectshouldalsobe
mentioned#Itconsistsofaflate-ratepercentagedeductionfromtheexporter's
taxableincome,forentertainment expensesetc.,'irrespective ofthevalue
ofMsexports(fij?tiole35ofLawFo3323/1955)®
Thisconcessionissetattwopercentofexportturnover;nosupport­
ingevidenceisrequiredandthedeductionisallowedinadditiontoany
expenditure onpromotiondulysubstantiated andacceptedbythetaxauthorities.'
Itsvalueasaproportionofthepricedependsontherateofdirecttax
payablebytheexporterandmaybeasmuchas0.8f>9
Iltiameasureisaremissionofdirecttaxwhichconstitutes anexport
aid:thesameconsiderations thereforeapplyasforthefirstone®
!
ThesematterswerelaidbeforetheAssociation CouncilinJanuary1977 ?
I
butnodecisionhassofarbeentaken.InOctoberandDecember1977?however,
arn0(^usvivendiwasworkedoutbetweenthepartieswithaviewtoremedying
thecumulativemarketdisruptioncausedbyimportsoftheproductsin
question® j
3„Sincethebeginningof1978,thismodusvivendihasbeencalledinto
questionon.theGreekside.Atthesametimeanumberoftheagreedlimits i
havebeenexceededatregionallevel,andtheapriorisurveillancesystem j
Irevealsthatothers11beexceededshortly. i

Thesedevelopments arecausingtheMemberStatesconsiderable anxiety,
andthreeofthemhavelodgedformalrequestforlimitsonvariousproducts
originatinginGreece*TheserequestshaveobligedtheCommissiontocarry­
outtheundertakings asregardsGreeoegiventotheCouncilon20December
1977andsubsequentlyreaffirmedon$and27June,whenitpromisedtotake
withoutdelayallappropriatepolitioalandeconomicmeasuresconsonantwith
theCommunity'sinternational obligationsinordertoprotecttheinterests
ofitstextilesector.
/
4.However,beforehavingrecoursetotheprovisionsofArticle55"the
Commission madeafinalefforttoresolvetheproblemwithintheEEC-Greece
Association Committeeatameetingwhichtookplaceon30June,butno
solutionwasreached.
5.normally,theestablishment ofacountervailing dutyissufficient
todealwithasituationofabnormalcompetition# Inthepresentsituation
suchsolutionwouldbetotallyinadequatebecauseoftechnicaldifficulties
involvedandtheexceptionally largequantitiesofimportsconcerned.In
thesecircumstances ,themostappropriatecourseofactionistolimitimports
ofproductsoriginatinginGreece,whichispossibleunderArticle55since
thetypeofmeasuretobeinvokedisnotspecified.
Thelimitsmusthoweverbeestablished atsuchalevelthatGreecedoes
notsuffermorethanbytheapplicationofacountervailing duty#
AsthelimitsagreedintheroodnavivenddofDecember1977»which
arebasedontraditionaltradeflows,alsorepresent"acceptable"levelsfor
theCommunity,sincetheyareinlinewiththepolicyofinternalglobal
ceilings,theymeettheoriterionstatedabove.

6• Inview oftheforegoing andinview ofthebreaches already registered
inrespect ofcertain regional tLevels and requests received from theMember
States a.ffected ,theCommission hasdecided touse theprocedure provided in
Article 12ofRegulation (EEC)Wo1439/74TOintroduce quantitative restric­
tions onsome ofthese imports ,byadopting Regulation (EEC)NO1574/78of
5.7.1978 (1).
7« Article 12(6)ofRegulation 1439 /74stipulates that within ten'working
days oftheentry into force ofmeasures which ithas adopted under that
Article ,theCommission shall make aproposal totheCouncil onappropriate
measures tobeadopted bytheCouncil tocarry onfrom theCommission 's
emergency measures .Inthis connection itispointed out that Commission regu­
lations adopted pursuant toArticle 12ofRegulation (EEC)NO1439/74expire
sixweeks after their entry into force unless confirmed bytheCouncil .
Accordingly ,theCommission proposes that theCouncil adopt the
proposal foraregulation setoutintheAnnex ,which isaimed atconfirming
themeasures adopted bytheCommission regulation mentioned above .
(1)OJHoL185 of7*7.1978

Proposaifor»
COUNCILREGULATION(EEC)
maintainingquantitative restrictions ontheimportation
intoItaly,PranceandtheUnitedKingdomofoertain -
textileproductsoriginatinginGreece
THECOUNCILOPTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtoCouncilRegulation(EEC)No1439/74of4June1974oncommon
rulesforimports(l),andinparticularArticle13thereof,
; \
1 •. /
Afterconsultation withintheAdvisoryCommitteeestablished "byArticle5of
thatRegulation,
j
i '
IHavingregardtotheproposalfromtheCommission,
I
WhereasbyRegulation(EEC)NO1574/78of5July1978(2)theCommissionintro­
ducedquantitativerestrictions ontheimportationintoItaly,Franceandthe
UnitedKingdomofcertaintextileproductsoriginatinginGreece;
Whereasthefactorswhichcausedtheserestrictions tobeintroducedstill
persist;whereasitisaccordinglyneoessaxyforthemtoremaininforce
until31December1978t
HASADOPTEDTHISREGULATION I
(1)OJNoL159»15.6.1974,P."1
(2)OJNoL185,7.7.1978,p.31.

Article 1
Thequantitative restrictions ontheimportation into Italy ,Prance
andtheUnited Kingdom ofcertain textile products .originating inGreece ,
introduced byRegulation (EEC)NO1574/78shall remain applicable until
31December 1978#
Article 2
jThis Regulation shall enter into force on18August 1978 .
This Regulation shall bebinding initsentirety anddirectly
appliOable inallMember States *
Done atBrussels , For the Council
The President