Proposal for a COUNCIL DECISION on a Community position within the EU - Mexico Joint Council relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of 'originating products' and methods of administrative cooperation

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. Rules of origin are essential to the correct functioning of the free trade agreements between the Community and its trading partners, including Mexico. The European Communities and its Member States, of the one part, and the United Mexican States, of the other part, have signed an Economic Partnership, Political Coordination and Cooperation Agreement which entered into force on 1 October 2000 [1].

[1] Council Decision of 28 September 2000. OJ L276 of 28.10.2000, p. 44.

Annex III to Decision 2/2000 of the EC - Mexico Joint Council [2] concerns the definition of the concept of originating products and methods of administrative cooperation and has entered into force on 1 July 2000.

[2] OJ L 245 of 29.9.2000, p. 953.

2. With the objective of ensuring a correct and harmonious application of provisions concerning quotas for certain products exchanged under preference by the Parties, a Communication to traders [3], which followed an exchange of letters, set out an obligation to mention in the proofs of origin the compliance with a separate origin rule for the purpose of benefiting from each quota. In the interest of clarity, it is desirable to include those specific instructions in this Decision.

[3] Communication to traders. Implementation of the rules of origin under the EC-Mexico Agreement. OJ C187 of 6.7.2000, p. 3.

3. Following the amendments to the Harmonized Commodity Description and Coding System ("Harmonized System"), which took effect on 1 January 2002, it is necessary to proceed to an adaptation of a number of origin rules included in Appendix II and II(a) to Annex III, with the view to ensure consistency between the origin rules and the above-mentioned modifications to the Harmonized System. Therefore, the said adaptations are of non-substantial nature. Following an identical rationale, Appendix I and Joint Declaration VI must also be adapted accordingly.

However, it is nevertheless envisaged to set up a mechanism that shall empower, under certain conditions, the Joint Committee to restore the previous rule of origin, should a specific modification have resulted in altering the substance of any origin rule existing previously.

4. The Commission is therefore asked to adopt the text by written procedure for forwarding to the Council.

2002/0207 (ACC)

Proposal for a COUNCIL DECISION on a Community position within the EU - Mexico Joint Council relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of 'originating products' and methods of administrative cooperation

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133,

Having regard to the proposal from the Commission [4],

[4] OJ C

Whereas:

(1) Article 5 and 47 to the Economic Partnership, Political Co-ordination and Co-operation Agreement between the European Community and its Member States, of the one part, and the United Mexican States, of the other part, signed in Brussels on 8 December 1997 [5] empower the Joint Council to take decisions, among others, on rules of origin and administrative cooperation, for the purpose of attaining the objectives of the Agreement;

[5] Council Decision of 28 September 2000. OJ L276 of 28.1.2000, p. 44.

(2) the definition of the concept of 'originating products' and methods of administrative cooperation are set out in Annex III to Decision No 2/2000 [6] of the EU - Mexico Joint Council;

[6] OJ L245 of 29.9.2000, p. 953.

HAS DECIDED AS FOLLOWS:

Sole Article

The position to be adopted by the Community within the Joint Council established by virtue of the Economic Partnership, Political Co-ordination and Co-operation Agreement between the European Community and its Member States, of the one part, and the United Mexican States, of the other part, signed in Brussels on 8 December 1997, is that set out in the attached draft decision of the Joint Council.

Done at Brussels,

For the Council

The President

Draft

Decision No..../2002 of the European Union -Mexico Joint Council

of relating to Annex III to Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of 'originating products' and methods of administrative cooperation

The joint COUNCIL,

Having regard to the Economic Partnership, Political Co-ordination and Co-operation Agreement between the European Community and its Member States, of the one part, and the United Mexican States, of the other part, signed in Brussels on 8 December 1997 (hereinafter "the Agreement"), and in particular Articles 5 and 47 thereof;

Whereas :

(1) Annex III of Decision No 2/2000 of the EU-Mexico Joint Council of 23 March 2000, concerning the definition of the concept of "originating products" and methods of administrative cooperation sets out the rules of origin for the products originating in the territory of the Parties to the Agreement.

(2) To ensure the correct and harmonious operation of these rules, it is necessary to adapt Annex III in order to include the amendments to the Harmonized Commodity Description and Coding System ("Harmonized System") which took effect on 1 January 2002.

(3) The adaptation contained in this Decision has the sole purpose of establishing consistency between the Appendixes and Joint Declaration VI, on the one hand, and the Parties' tariff laws and regulations, on the other hand, and cannot therefore be considered to constitute a substantial change to Decision 2/2000.

(4) To ensure a smooth transition between the existing rules and the new rules as defined by this decision, it appears desirable to set up a mechanism that, upon request of one of the Parties, would enable under certain conditions the Joint Committee to restore, where appropriate, the previously applicable rules,

Has decided as follows:

Article 1

1. For the purposes of benefiting from the special rules of origin applied within the limits of the quotas provided for in Appendix II and in Notes 9 and 12.1 of Appendix II (a) of Annex III to Decision 2/2000, either box No. 7 (Remarks) of the movement certificate EUR. 1 or the invoice declaration must include the phrase contained in Annex I to the present Decision for the relevant tariff heading, in any of the languages listed in Article 59 of the Agreement.

2. The European Commission and the Secretaría de Economía shall regularly inform each other as to the quantities of products drawn from these quotas for rules of origin.

Article 2

1. Note 7.4 to Appendix I, Appendix II and Note 4 to Appendix II (a) of Annex III to Decision 2/2000, as well as Joint Declaration VI, shall be replaced by the text contained in Annex II to the present Decision.

2. In accordance with the new editorial standard of the Harmonized System, the expression "heading No" or "heading Nos" shall read « heading » or headings » respectively in the English version of Annex III to Decision 2/2000.

Article 3

Where, following the amendments made to the Harmonized System, the changes to the rules of origin as introduced by this Decision alter the substance of any rule existing previously, and it appears that such alteration results in a situation prejudicial to the interest of the sectors concerned, then, if one of the Parties so requests in the period up to three years after the date on which the Decision enter into force, an examination shall be made as a matter of urgency by the Joint Committee, of the need to restore the substance of the rule concerned as it was before this Decision. In any case the Joint Committee shall decide to restore, or not to restore, the substance of the rule concerned within a period of six months of the request being made to it by either of the Parties to the Agreement.

Article 4

This Decision shall enter into force the day of its adoption.

Done at [...]

For the Joint Council

Annex I (Referred to in Article1)

Section A

For tariff headings 5208 to 5212, 5407, 5408, 5512 to 5516, 5801, 5806 and 5811 at importation into Mexico:

English version

"Meets the specific rule of origin as set out in Appendix II"

Spanish version

"Cumple la norma de origen específica con arreglo a lo establecido en el apéndice II".

Danish version

"Opfylder den specifikke oprindelsesregel i tillæg II".

German version

"Spezifische Ursprungsregel der Anlage II erfüllt".

Greek version

"Áíôáðïêñßíåôáé óôïí åéäéêü êáíüíá êáôáã ùãÞò ðïõ êáèïñßæåôáé óôï ðñïóÜñôçìá ÉÉ".

Finnish version

"Täyttävät lisäyksessä II annetun erityisen alkuperäsäännön".

French version

"Satisfait la règle d'origine particulière prévue à l'Appendice II".

Italian version

"Conforme alla norma di origine specifica di cui all'appendice II".

Dutch version

"Voldoet aan de specifieke oorsprongsregel van aanhangsel II".

Portuguese version

"Em conformidade com a regra de origem específica de acordo com o previsto no Apêndice II".

Swedish version

"Uppfyller kraven i den särskilda ursprungsregeln i tillägg II"

Section B

For tariff headings 6402, 6403 and 6404 at importation into Mexico:

English version

"Meets the specific rule of origin as set out in Appendix II(a), note 9"

Spanish version

"Cumple la norma de origen específica con arreglo a lo establecido en el apéndice II (a), nota 9"

Danish version

"Opfylder den specifikke oprindelsesregel i tillæg II(a), note 9"

German version

"Spezifische Ursprungsregel der Anlage II(a), Bemerkung 9, erfüllt"

Greek version

«Áíôáðïêñßíåôáé óôï åéäéêü êáíüíá êáôáãùãÞò ðïõ êáèïñßæåôáé óôï ðñïóÜñôçìá II(á), óçìåßùóç 9»

Finnish version

"Täyttävät lisäyksessä II a olevassa 9 huomautuksessa annetun erityisen alkuperäsäännön"

French version

"Satisfait la règle d'origine particulière prévue à l'Appendice II(a), note 9"

Italian version

"Conforme alla norma di origine specifica di cui all'appendice II(a), nota 9"

Dutch version

"Voldoet aan de specifieke oorsprongsregel van aanhangsel II A, aantekening 9"

Portuguese version

Em conformidade com a regra de origem específica de acordo com o previsto na nota 9 do Apêndice II-A"

Swedish version

"Uppfyller kraven i den särskilda ursprungsregeln i tillägg II A, anmärkning 9"

Section C

For tariff headings ex 8701 (road tractors for semi-trailers), 8702 and 8704 at importation into the Community

English version

"Meets the specific rule of origin as set out in Appendix II(a), note 12.1"

Spanish version

"Cumple la norma de origen específica con arreglo a lo establecido en el apéndice II (a), nota 12.1"

Danish version

"Opfylder den specifikke oprindelsesregel i tillæg II(a), note 12.1"

German version

Spezifische Ursprungsregel der Anlage II(a), Bemerkung 12.1, erfüllt"

Greek version

«Áíôáðïêñßíåôáé óôïí åéäéêü êáíüíá êáôáãùãÞò ðïõ êáèïñßæåôáé óôï ðñïóÜñôçìá II(á), óçìåßùóç 12.1»

Finnish version

"Täyttävät lisäyksessä II a olevassa 12.1 huomautuksessa annetun erityisen alkuperäsäännön"

French version

"Satisfait la règle d'origine particulière prévue à l'Appendice II(a), note 12.1"

Italian version

"Conforme alla norma di origine specifica di cui all'appendice II(a), nota 12.1"

Dutch version

"Voldoet aan de specifieke oorsprongsregel van aanhangsel II A, aantekening 12.1"

Portuguese version

"Em conformidade com a regra de origem específica de acordo com o previsto na nota 12.1 do Apêndice II-A"

Swedish version

"Uppfyller kraven i den särskilda ursprungsregeln i tillägg II A, anmärkning 12.1

Annex II (Referred to in Article 2)

Appendix I

Introductory Notes to the List in Appendixes II and II (a)

Note 7:

(...)

7.4 Redistillation by a very thorough fractionation process means distillation (other than topping) by a continuous or batch process employed in industrial installations using distillates of subheadings 2710 11 to 2710 99, 2711 11, 2711 12 to 2711 19, 2711 21 and 2711 29 (other than propane of a purity of 99 per cent or more) to obtain:

1. Isolated high-purity hydrocarbons (90 per cent or more in the case of olefins and 95 per cent or more in the case of other hydrocarbons), mixtures of isomers having the same organic composition being regarded as isolated hydrocarbons.

Only those process by means of which at least three different products are obtained are admissible, but this restriction does not apply in any instance where the process consists in the separation of isomers. In so far as this concerns xylenes, ethylbenzene is included with xylene isomers;

2. Products of subheadings 2707 10 to 2707 30, 2707 50 and 2710 11 to 2710 99:

(a) with no overlapping of the final boiling point of one fraction and the initial boiling point of the succeeding fraction and a difference of not more than 60 °C between the temperatures at which 5 and 90 per cent by the volume (including losses) distil by the ASTM D 86-67 method (re-approved 1972);

(b) with an overlapping of the final boiling point of one fraction and the initial boiling point of the succeeding fraction and a difference of not more than 30 °C between the temperatures at which 5 and 90 per cent by volume (including losses) distil by the ASTM D 86-67 method (re-approved 1972).

Appendix II

List of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status

The products mentioned in the list may not all be covered by the Decision. It is therefore necessary to consult the other parts of the Decision

>TABLE POSITION>

>TABLE POSITION>

Appendix II(a)

List of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status

The products mentioned in the list may not all be covered by the Decision. It is therefore necessary to consult the other parts of the Decision

Note 4:

Until 31 December 2002, the following rule shall apply for the products described below instead of the rule set out in Appendix II:

>TABLE POSITION>

Joint Declaration VI

Regarding Note 4 of Appendix II(a) to Annex III for headings 4104 and 4107

1. The Joint Committee shall extend beyond 31 December 2002 the rule established in Note 4 of Appendix II(a), if the multilateral / WTO negotiations continue beyond that date until these negotiations have finished. At that time, in light of the results of these negotiations, the Joint Committee shall determine the rule of origin to be applied.

2. Within the context of the multilateral negotiations, both Parties shall seek to establish disciplines for the elimination of export taxes or restrictions that operate to increase the exports of, or the protection afforded to, domestic industries, such as leather.

LEGISLATIVE FINANCIAL STATEMENT

The proposed Joint Council Decision has no financial impact, as its purpose is to align the preferential origin rules applied in the context of the EC - Mexico Association Agreement, to the amendments to the Harmonized System which entered into force on 1 January 2002.