Proposal for a COUNCIL DECISION relating to the conclusion of an Agreement between the European Community and the Republic of Cyprus concerning fish and fishery products, in the form of an additional Protocol completing the Agreement establishing an association between the European Economic Community and the Republic of Cyprus.

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 4 April 2001, the Council authorised the Commission to undertake negotiations with Cyprus, in order to further liberalise reciprocal trade in fish and fishery products.

Negotiations with Cyprus were held on 11 May and 28 June 2001. The two parties agreed on a model for simple, gradual and reciprocal tariff concessions. The details of the bilateral concessions are contained in the Agreed Minutes signed by each head of delegation.

The Community has a large trade surplus vis-à-vis Cyprus in the fishery sector and the major Cypriot export interest is linked to sea bass, sea bream and fish fry.

As regards sea bass Dicentrarchus labrax (0302 69 94) and Gilt-head seabreams Sparus aurata (0302 69 95) and sharpsnout bream Puntazzo puntazzo (ex 0302 69 98), it was agreed that the Community will establish a tariff quota common to the three species. The tariff quota, based on traditional trade, will be 500 tonnes at 7.5% at the entry into force of this agreement. It will be increased to 600 tonnes at 0% one year after the entry into force of this agreement and eliminated two years after the entry into force of this agreement.

As regards fish fry of the above mentioned species (ex 0301 99 90) the Community will establish a tariff quota, based on traditional trade, which will be 12 500 000 pieces at 5% at the entry into force of this agreement. It will be increased to 15 000 000 pieces at 0% one year after the entry into force of this agreement and eliminated two years after the entry into force of this agreement.

From the date of entry into force of this agreement, both parties will apply a one third reduction of the tariff duties applied to all other fish and fishery products as covered by the definition set out in Regulation (EC) No104/2000. The following year a further reduction of one third will be applied. Two years after the entry into force of the agreement, full free trade of all fish and fishery products will be applied.

The Commission is of the opinion that the results of the technical negotiations represent an acceptable result which, in a simple administrative manner, and on a gradual basis, will lead to full free trade.

In the light of the above, the Council is requested to adopt the present decision to add a Protocol concerning trade concessions in the fisheries sector to the Association Agreement with the Republic of Cyprus.

2001/0221 (ACC)

Proposal for a COUNCIL DECISION relating to the conclusion of an Agreement between the European Community and the Republic of Cyprus concerning fish and fishery products, in the form of an additional Protocol completing the Agreement establishing an association between the European Economic Community and the Republic of Cyprus.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 in conjunction with Article 300(2), first sub-paragraph, first sentence, thereof,

Having regard to the proposal from the Commission,

Whereas:

(1) It is desirable to complete by means of an additional Protocol the Agreement establishing an association between the European Economic Community and the Republic of Cyprus [1], so as to provide for preferential conditions for the importation into the Community of certain fish and fishery products originating in the Republic of Cyprus, and into the Republic of Cyprus of certain fish and fishery products originating in the Community;

[1] OJ L 133, 21.5.1973, p. 1.

(2) To that end a new Protocol laying down the trade arrangements for certain fish and fishery products should be added to the said Association Agreement;

(3) The Agreement in the form of a Protocol should be approved,

HAS DECIDED AS FOLLOWS:

Article 1

The Agreement between the European Community and the Republic of Cyprus in the form of an additional Protocol concerning fish and fishery products, completing the Agreement establishing an association between the European Economic Community and the Republic of Cyprus, is hereby approved on behalf of the Community.

The text of the Agreement in the form of a Protocol is attached to this Decision.

Article 2

The tariff quotas referred to in Articles 2 and 3 of the attached agreement in the form of a protocol shall be managed by the Commission in accordance with Articles 308a and 308b of Regulation (EC) No 2454/93 [2]. Their order numbers shall be 09.1435 and 09.1436 respectively.

[2] OJ L 253, 11.10.1993, p.1. Regulation as last amended by Regulation (EC) No 993/2001 (OJ L 141, 28.5.2001, p. 1).

Article 3

The President of the Council is authorised to designate the person empowered to sign the Agreement in order to bind the Community.

Done at Brussels, [...]

For the Council

The President

[...]

ANNEX

AGREEMENT BETWEEN THE EUROPEAN COMMUNITY AND THE REPUBLIC OF CYPRUS CONCERNING FISH AND FISHERY PRODUCTS IN THE FORM OF AN ADDITIONAL PROTOCOL COMPLETING THE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE REPUBLIC OF CYPRUS.

ADDITIONAL PROTOCOL

LAYING DOWN THE TRADE ARRANGEMENTS FOR CERTAIN FISH AND FISHERY PRODUCTS BETWEEN THE EUROPEAN COMMUNITY AND THE REPUBLIC OF CYPRUS.

THE EUROPEAN COMMUNITY, hereinafter referred to as "the Community", of the one part, and

THE REPUBLIC OF CYPRUS, hereinafter referred to as "Cyprus" of the other part,

WHEREAS the Agreement establishing an association between the European Economic Communities and The Republic of Cyprus, hereinafter referred to as "the Association Agreement", was signed at Brussels on 19 December 1972 and entered into force the 1st. June 1973;

WHEREAS technical negotiations based on Article 2 of the Association Agreement were carried out and successfully concluded between the Community and Cyprus to agree on reciprocal tariff concessions in the fisheries sector;

WHEREAS the negotiated concessions in the fisheries sector shall affect the bilateral concessions granted under the Association Agreement, which should, therefore, be amended by means of a Protocol adjusting the trade aspects of the Association Agreement;

WHEREAS the Community and Cyprus also agreed on an administratively simple manner of implementing the negotiated tariff concessions as soon as possible on a gradual basis;

HAVE DECIDED to apply the agreed tariff concessions in view of establishing full free trade of all fish and fishery products:

Article 1

From the date of entry into force of this Protocol, both parties shall apply a one third reduction of the tariff duties for fish and fishery products, as defined in Article 1 of Council Regulation (EC) No 104/2000, other than those mentioned in Articles 2 and 3 below.

One year after the date of entry into force of this Protocol, both parties shall apply a further one third reduction of the tariff duties as they were at the time of entry into force of this Protocol.

Two years after the date of entry into force of this Protocol, full free trade of all fish and fishery products will be applied.

Article 2

From the date of entry into force of this Protocol, the Community will open a Community tariff quota of 500 tonnes at 7,5% (ad valorem) for Sea bass (Dicentrarchus labrax) falling under subheading 0302 69 94, Gilt-head seabreams (Sparus aurata) falling under subheading 0302 69 95 and Sharpsnout bream (Puntazzo puntazzo) falling under subheading ex 0302 69 98 originating in Cyprus.

One year after the entry into force of this Protocol the tariff quota will be settled for 600 tonnes at 0% (ad valorem); two years after the entry into force of this Protocol the tariff quota will be eliminated.

The provisions of Article 1 will apply for quantities imported into the Community above the tariff quota.

Article 3

From the date of entry into force of this Protocol for fish fry of the species mentioned in Article 2, falling under subheading ex 0301 99 90, the Community will open a Community tariff quota of 12 500 000 pieces at 5% (ad valorem).

One year after the entry into force of this Protocol the tariff quota will be settled for 15 000 000 pieces at 0% (ad valorem); two years after the entry into force of this Protocol the tariff quota will be eliminated.

The provisions of Article 1 will apply for quantities imported into the Community above the tariff quota.

Article 4

The calculation of the reductions mentioned in Article 1 will be carried out using common mathematics principles taking into account that:

(a) all the figures which have less than 50 (included) after the first decimal should be rounded down to the nearest whole number;

(b) all the figures which have more than 50 after the first decimal should be rounded up to the nearest whole number;

(c) all the tariffs below 2% should automatically be fixed at 0%

Article 5

This Protocol will enter into force on the first day of the month following the date on which the Parties have notified each other of the accomplishment of their internal procedures.

FINANCIAL STATEMENT

1. Title of operation

Proposal to add a Protocol to the Association Agreement with Cyprus implementing an agreement on concessions on fish and fisheries products. These concessions have been agreed and will be implemented over a period of two years, leading to full trade liberalisation of the products concerned.

2. Budget heading(s) involved

Chapter 12, Article 120

3. Legal basis

Article 133 in conjunction with Article 300(2) of the Treaty establishing the European Community

4. Description of operation

4.1 General objective

Full trade liberalisation in fish and fishery products in preparation for accession of Cyprus to the European Community.

5. Classification of expenditure or revenue

5.1 Type of revenue involved

Import duties

6. Type of expenditure or revenue

- The proposed operation will cause a reduction in import duties levied on fish and fishery products originating in Cyprus,

- But the operation will also cause a reduction in import duties paid by the Communities operators when importing fishery products into Cyprus.

7. Financial impact

7.1 Method of calculating total cost of operation (relation between individual and total costs)

Only a few products are imported from Cyprus, the following table gives the imports in 1998, 1999 and 2000 and the average duties paid.

The estimated average duty level for fresh and chilled fish is 12%

>TABLE POSITION>

Import duties levied in 1999 showed an increase of approximately 100% over 1998; duties in 2000 showed an increase of 30% over 1999.

A reasonable increase is also expected for the next years 20% for 2001 and 10% for 2002. But it is not possible to establish a certainty.

7.2 Itemised breakdown of cost

Commitment appropriations EUR million (at current prices)

>TABLE POSITION>