Proposal for a COUNCIL REGULATION temporarily suspending the autonomous Common Customs Tariff duties on certain goods imported with airworthiness certificates

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. As result of the Matthaeus Seminar ,Customs treatment of parts and components used in aircrafts" organised by the customs authorities of the Netherlands in October 1999 the participants considered it necessary that customs procedures for the duty free imports of parts, components and other goods used for aircrafts should be simplified. The suspension of autonomous customs duties for the imports of such goods imported with airworthiness certificates is an appropriate measure to achieve this aim.

2. The suspension reduces the administrative burden for the economic operators in the aircraft sector as the measure diminish the need for these companies to use suspensive customs regimes. It therefore enables also smaller enterprises in this sector to benefit from tariff suspensions and become more competitive with regard to the bigger operators in this area.

3. In view of the fact that the prices for the parts and components used in the aircraft sector are usually at least three times higher than the prices for similar goods used for other purposes, the risk that the goods, imported duty free, might be used in other industrial areas is very small.

4. Since airworthiness certificates do not always accompany the goods during transport a procedure has to be foreseen that allows the customs authorities to identify the certificates during possible on-spot verifications after the product was released for free circulation.

5. In view of the complexity of the rules in the aviation sector customs authorities should be able to use the expertise of an representative of the national aviation authorities at the expense of the importer where it has good reasons to believe that airworthiness certificates have been falsified and the matter could not be resolved otherwise.

6. No later than three years after the entry into force of this Regulation the Commission shall prepare a report on the basis of the information received from Member States about the experience in applying the measure and prepare when necessary a proposal for the Council to improve the measure.

Proposal for a COUNCIL REGULATION temporarily suspending the autonomous Common Customs Tariff duties on certain goods imported with airworthiness certificates

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 26 thereof,

Having regard to the proposal from the Commission [1],

[1] OJ C , , p. .

Whereas:

(1) Customs procedures for duty-free imports of parts, components and other goods used for the manufacture, repair, maintenance, rebuilding, modification or conversion of aircraft should be simplified.

(2) In order to achieve that aim, it is appropriate to suspend autonomous customs duties on imports of such goods imported with airworthiness certificates issued by a party authorised by aviation authorities within the Community or in a third country.

(3) In view of the fact that the prices for parts and components used in the aircraft sector are usually at least three times higher than the prices for similar goods used for other purposes, the risk that the goods imported duty free might be used in other industrial areas is very small.

(4) Suspension would alleviate the administrative burden for the economic operators in the aircraft sector since it would reduce the need for these companies to use suspensive customs regimes like favourable tariff treatment for goods by reason of their end-use, inward processing relief or customs warehousing. Furthermore, it would enable small and medium sized enterprises, which have hitherto been unable to use suspensive customs regimes, to become more competitive with regard to the bigger operators in this area.

(5) Since airworthiness certificates do not always accompany the goods during transport, a procedure should be laid down under which customs authorities would be able to identify the certificates during on-spot checks after the product has been released for free circulation.

(6) In view of the complexity of the rules in the aviation sector, customs authorities should be able, at the expense of the importer, to call upon the expertise of a representative of the national aviation authorities where they have good reason to believe that airworthiness certificates have been falsified and where the matter cannot be resolved otherwise. However, before taking such action, customs authorities should weigh the costs entailed against the import volume and the amount of duty at risk, so as to avoid a situation where it transpires that no infringement has been committed, but the benefit to the importer of the duty suspension has been nullified by the cost of procuring the expert opinion.

(7) The Commission should prepare a report on the basis of the information received from Member States about their experience in applying this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

The autonomous Common Customs Tariff duties shall be suspended for parts, components and other goods of a kind to be incorporated in or used for civil aircraft and falling within Chapters 25 to 97 of the Common Customs Tariff and in respect of which an airworthiness certificate has been issued by a party authorised by European aviation authorities or the aviation authorities of a third country.

Article 2

1. The suspension laid down in Article 1 shall be conditional on submission of the original airworthiness certificate to the customs authorities when the goods are declared for release into free circulation.

Where the original airworthiness certificate cannot be submitted at the time when the goods are released for free circulation, suspension shall be conditional on the inclusion of a declaration, signed by the seller of the goods in question, on the commercial invoice or a document annexed thereto. A model of the required declaration is set out in Section A of the Annex.

2. In field 44 of the Single Administrative Document ("SAD") the text set out in Section B of the Annex shall be inserted by the importer.

3. Where goods are released for free circulation under simplified procedures in accordance with Council Regulation (EEC) No 2913/92 [2], the importer shall insert in the SAD (field 44) or in any authorised document replacing the SAD the text set out in Section B of the Annex.

[2] OJ L 302, 19.10.1992, p. 1.

In such cases suspension shall be conditional on the submission of the documents referred to in paragraph 1 in accordance with the terms of the authorisation of the simplified procedure at the time when the supplementary declaration is submitted to the competent customs office.

Article 3

Where the customs authorities have good reason to suspect that airworthiness certificates have been falsified and where the matter cannot be resolved otherwise, they may request an expert opinion from a representative of the national aviation authorities at the expense of the importer.

In such cases, customs authorities shall take into account the import volume and the amount of duty at risk, in order to prevent the benefit to the importer of the duty suspension being nullified by the cost of procuring the expert opinion, if the investigation shows that the rules for the issuing of those certificates have not been infringed.

Article 4

No later than three years after the entry into force of this Regulation the Commission shall submit to the Council a report on the application of that Regulation based on the information received from Member States.

Article 5

This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Communities.

It shall apply from 1 April 2002.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

ANNEX

A. Declaration on the commercial invoice or a document annexed to such invoice (Article 2 (1) ):

"For the following goods of [this invoice]/[invoice no.......of ...........] [3] the following airworthiness certificates (see column 2) have been issued by the company shown in column 3 authorised by the aviation authority shown in column 4 of the country shown in column 5.

[3] When the declaration is annexed on a separate page, the number and date of the invoice should be inserted.

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B. Text to be inserted in field 44 of the Single Administrative Document (Article 2 (2) and (3) ):

"Import with airworthiness certificate"

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Customs policy

Activit(y/ies): Autonomous suspension of duties

Title of action:

Proposal for a Council Regulation temporarily suspending the autonomous Common Customs Tariff duties on certain goods imported with airworthiness certificates

1. BUDGET LINE(S) + HEADING(S)

Chap. 12 art. 120 (1210 + 1060).

2. OVERALL FIGURES

2.1. Total allocation for action (Part B): EUR million for commitment

2.2. Period of application:

(start and expiry years)

2.3. Overall multiannual estimate of expenditure:

(a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

EUR million (to three decimal places)

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(b) Technical and administrative assistance and support expenditure(see point 6.1.2)

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(c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

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2.4. Compatibility with financial programming and financial perspective

Proposal is compatible with existing financial programming.

Proposal will entail reprogramming of the relevant heading in the financial perspective.

Proposal may require application of the provisions of the Interinstitutional Agreement.

2.5. Financial impact on revenue [4]:

[4] For further information, see separate explanatory note.

Proposal has no financial implications (involves technical aspects regarding implementation of a measure)

OR

Proposal has financial impact - the effect on revenue is as follows:

(NB All details and observations relating to the method of calculating the effect on revenue should be shown in a separate annex.)

(EUR million to one decimal place)

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(Please specify each budget line involved, adding the appropriate number of rows to the table if there is an effect on more than one budget line.)

3. BUDGET CHARACTERISTICS

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4. LEGAL BASIS

Article 26 of the Treaty

5. DESCRIPTION AND GROUNDS

5.1. Need for Community intervention [5]

[5] For further information, see separate explanatory note.

5.1.1. Objectives pursued

The measure aims to reduces the administrative burden for the customs authorities in the Member States as well as for the economic operators in the aircraft sector as it will diminish the need to use suspensive customs regimes like favourable tariff treatment for goods by reason of their end-use, inward processing relief or customs warehousing.

5.1.2. Measures taken in connection with ex ante evaluation

The measure results from a Matthaeus Seminar on "Customs treatment of parts and components used in aircrafts" organised by the customs authorities of the Netherlands in October 1999 and has been discussed in detail since March 2000 with the MS and the industrial associations concerned.

5.2. Action envisaged and budget intervention arrangements

The measure aims to simplify the duty free imports for certain parts, components and other goods used for the manufacture, repair, maintenance, rebuilding, modification or conversion of aircrafts. These imported products are at present subject to suspensive customs regimes such as favourable tariff treatment for goods by reason of their end-use, inward processing relief or customs warehousing which create a considerable administrative burden for the economic operators and the customs administrations concerned.

6. FINANCIAL IMPACT

The measure has in principle no financial impact on the own resources of the Community as it can be assumed that almost all economic operators in this sector make use of the suspensive customs regimes. The lack of information relating to companies which have hitherto made no use of these regimes means that it is impossible to predict whether they will benefit from the new measure and, if so, to what extent.

6.1. Total financial impact on Part B - (over the entire programming period)

(The method of calculating the total amounts set out in the table below must be explained by the breakdown in Table 6.2. )

6.1.1. Financial intervention

Commitments (in EUR million to three decimal places)

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6.2. Calculation of costs by measure envisaged in Part B (over the entire programming period) [6]

[6] For further information, see separate explanatory note.

(Where there is more than one action, give sufficient detail of the specific measures to be taken for each one to allow the volume and costs of the outputs to be estimated.)

Commitments (in EUR million to three decimal places)

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If necessary explain the method of calculation

7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

The measure does not have any impact on the Commission' staff and administrative expenditure.

7.1. Impact on human resources

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7.2. Overall financial impact of human resources

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The amounts are total expenditure for twelve months.

7.3. Other administrative expenditure deriving from the action

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The amounts are total expenditure for twelve months.

(1) Specify the type of committee and the group to which it belongs.

I. Annual total (7.2 + 7.3)

II. Duration of action

III. Total cost of action (I x II) // EUR

years

EUR

(In the estimate of human and administrative resources required for the action, DGs/Services must take into account the decisions taken by the Commission in its orientation/APS debate and when adopting the preliminary draft budget (PDB). This means that DGs must show that human resources can be covered by the indicative pre-allocation made when the PDB was adopted.

Exceptional cases (i.e. those where the action concerned could not be foreseen when the PDB was being prepared) will have to be referred to the Commission for a decision on whether and how (by means of an amendment of the indicative pre-allocation, an ad hoc redeployment exercise, a supplementary/amending budget or a letter of amendment to the draft budget) implementation of the proposed action can be accommodated.)

8. FOLLOW-UP AND EVALUATION

8.1. Follow-up arrangements

Article 4 of the proposed Regulation provides for a review of the measure within three years.

8.2. Arrangements and schedule for the planned evaluation

(Describe the planned schedule and arrangements for interim and ex post evaluations to be carried out in order to assess whether the intervention has achieved the objectives set. In the case of multiannual programmes, at least one thorough evaluation in the life cycle of the programme is needed. For other activities ex post or mid-term evaluations should be carried out at intervals not exceeding six years.)

9. ANTI-FRAUD MEASURES

Article 3 of the Regulation provides that the customs authorities may request an expert opinion from a representative of the national aviation authorities at the expense of the importer where they have reason to believe that airworthiness certificates have been falsified.