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Vol. 1983/0 223 
  
 
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 198 3 über die Freigabe der historischen Archive der Europäischen  
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COMMISSION OF THE EUROPEAN COMMUNITIES
C0HC83) 597 final
Brussels, 13 October 1983
Proposal for a  
COUNCIL REGULATION (EEC)
amending for the second time Regulation (EEC) No 616/78 on proof  
of origin for certain textile products falling within Chapter 51  
or Chapters 53 to 62 of the Common Customs Tariff and imported  
into the Community and on the conditions for the acceptance of
such proof
(submitted to the Council by the Commission)
C0M(83) 597 final

EXPLANATORY MEMORANDUM
For the purposes of ensuring that measures of commercial policy taken in 
the textile sector were respected, Council Regulation No. 3059/78 (i) 
and 6]6/78 (2) implementing in the Community bilateral textile agreements 
with certain third countries, laid down a procedure for the control of 
origin of imports of textile products into the Community.
Due to an increasing problem of fraud these provisions were strengthened 
by Council Regulation No. 1681/81 ( 3)  which provided for increased 
cooperation between Member States and with third countries through 
exchanges of information on cases of fraud.
On the basis of this procedure, a large number of cases of fraudulent 
imports of an overall value of around 300 million ECU were discovered 
during this period. These cases involved goods which had been incorrectly 
admitted into the Community (including in some cases without payment of 
duty), on the basis of falsely declared origin and falsified documentation.
As a result of investigations carried out on an ad hoc basis by the 
Commission in collaboration with Member States in a number of third 
countries, the Commission was able to obtain compensation from the true 
country of origin for a quantity of 50 million pieces of clothing 
representing a value of '150 million ECU. In parallel, legal proceedings 
were taken in Member States against the responsible importers. In. this 
context action has been taken with a view to recovering a considerable 
amount of the customs duties involved in a number of cases.
The abovementioned measures were reviewed by the Commission when drawing 
up the measures necessary to implement the bilateral textile agreements 
negotiated under the third Multifibre Arrangement. This review has 
demonstrated that while some progress has been made in preventing fraud, 
experience has also shown that the existing provisions are inadequate to 
cope with the increasingly sophisticated frauds often involving several 
Member States with which the Community is faced and which tend to be 
organized outside the Community.
(1) 0J No L 365 of 2.7.1978
(2) 0J No. L 8U of 31.3.1978
(3) 0J No. L 169 of 2.6.1981

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These frauds are often carried out by international criminal organisations 
transiting goods through several countries. By exploiting the weak 
administrative procedures in force there the necessary documentation to 
disguise the true origin of goods can be obtained. The proof relating 
to such cases therefore very often lies outside the Community.
Following this review,revised origin control and administrative cooperation 
procedures were accordingly included in the latest series of bilateral 
textile agreements which entered into force on 1  January 1983.  These 
agreements now contain measures concerning :
— adjustment of quantitative limits in cases where evidence of circum­
vention of these limits has been presented to the third country 
concerned. These provisions include the right for the Community to 
unilaterally adjust these limits where no agreement on the adjust­
ments is reached with the third country;
strengthened administrative cooperation and verification procedures 
including participation of Community officials in enquiries in 
third countries.
When adopting Regulation 3589/82 (1 )  implementing the bilateral agreements 
from 1  January 1983, the Council and the Commission declared that all 
the necessary measures would be taken, including revision of Regulation 
616/78 to ensure that provisions concerning fraud would be applied in a 
satisfactory manner.
This draft is accordingly submitted on the basis of experience acquired 
to date in ensuring the satisfactory application of the bilateral textile 
agreements and in response to the joint declaration by the Council and 
the Commission. The object of this draft is to :
(1) OJ No. L 37^ of 31.12.1982./.

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extend and clarify the procedure established by Regulation 1681/81 
to provide for exchanges of information between Member States on 
all cases of fraud (not just origin) and between them and the 
Commission so that the evidence required for the adjustment of 
quantitative limits can be furnished to third countries;
to create a procedure for the carrying out of Community administrative 
cooperation and investigative missions in third countries by the 
Commission in cooperation with Member States.
The adoption of this draft is essential to ensure that measures of 
commercial policy provided for in the textile sector are correctly 
applied, in particular as regards the adjustment of quantitative limits 
by the Commission and the carrying out of legal proceedings in Member 
States.

Proposal for a  
COUNCIL REGULATION (EEC)  
amending for the second time
Regulation (EEC) No. 616/78 on proof of origin for certain textile products  
falling within Chapter 51 or Chapters 53 to 62 of the Common Customs Tariff  
and imported into the Community and on the conditions for the acceptance of  
such proof.
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,  
and in particular Article 113 thereof,
Having regard to the proposal from the Commission,
W.hereas the arrangements applied since 1  January 1978 to certain textile  
products falling within Chàpters 51 and 53 to 62 of the Common Customs Tariff  
and imported into the Community include quantitative limits established or  
agreed with certain third countries which supply the Community; whereas, in  
addition, all imports of the said textile products are subject to a system of  
surveillance; whereas such arrangements and systems have been renewed as  
from 1  January 1983;
Whereas in order to prevent any deflection of trade or abuse which could be  
detrimental to the application of these arrangements, the Council has  
adopted in Regulation (EEC) No. 616/78 0 ) as amended by Regulation  
(EEC) No. 1681/81 a system for the control of origin of certain textile
products imported into the Community, based on the requirement of a  
certificate of origin , or in the case of less sensitive products,
.  »  ·/. . .
(1) OJ No. L  84, 3 1 .3 .1 9 7 8 , p. 1
(2) OJ No. L 169, 26.6.1981, p. 5

-  2 -
a declaration of origin; whereas Regulation (EEC) No. 1681/81 has reinforced  
this system by laying down an internal procedure for exchanges of information  
between Member States on cases of fraud and between them and the  
Commission;
.  Whereas experience has snown that the scope of the procedure thus established  
needs to tje extended and clarified;
Whereas experience has also shown that prevention of fraud requires that the  
Commission in particular carries out Community administrative cooperation  
and investigative missions be carried out in third countries by the Commission  
in cooperation with Mfember States to discover the facts and establish proof 
relating to fraudulent traffic for the purposes of taking appropriate measures  
both within the Community and with regard to third countries,
HAD ADOPTED THIS REGULATION :
Article 1
Regulation (EEC) No 616/78 is hereby amended as follows:
1. Article 4 is replaced by the following:
"  Article 4 r
1. In order to ensure that measures of commercial policy provided for in the  
textile sector are correctly applied, each Member State shall work  
together with the Commission in the framework of Council Regulation  
(EEC) No. 1468/81 of 19 May 1981 on mutual assistance between the
•  · · /...

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administrative authorities of the Member States and cooperation between  
the latter and the Commission to ensure the correct application of the  
iaw on customs or agricultural matters (D. To this end each Member State  
shall communicate to the Commission as soon as possible all the useful  
information in its possession concerning important cases of abuses or  
irregularities which come to its notice or which it has valid reason to  
presume exist with regard to such measures of commercial policy. The  
Commission shall inform the other Member States thereof. Furthermore  
Member States shall on their own initiative or at the request of the  
Commission provide additional information including copies of ail docu­
mentation, possibly in the form of an extract, necessary to determine the  
facts fuily and to establish proof of abuses or irregularities with regard to  
the third countries concerned with a view to :
(i) implementing administrative cooperation with third countries as  
provided for in Article 4a (2);
(ii) adjusting quantitative iimits established for imports of textile  
products in accordance with the procedure iaid down in Article 13 of  
Council Regulation (EEC) No. 3589/82 of 22 December 1982 on  
common rules for imports of certain textile products originating in  
third countries (2).
(iii) carrying out missions referred to in Article 4b.
(1) 03 No. L 144 of 2.6.1981, p.l
(2) 03 No. L 374 of 31.12.1982, p. 106

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2. The Commission shall/ at the request of a Member State or on its own  
initiative examine, at the earliest opportunity with Member States all  
questions relating to the application of paragraph 1, and proceed with  
exchanges of views which will enable Member States and the Commission  
to complete their information and to present any possible observations on  
cases concerning the application of paragraph 1.
3. When paragraph 1  has been applied to the products provided for in Article  
3, the Committee on Origin shall, pursuant to the procedure laid down in  
Article 13 of Regulation (EEC) No. 802/68 examine whether to require  
that a certificate of origin be produced for the products concerned and  
with regard to the third countries concerned in accordance with Article 2.
The decision shall be taken in accordance with the procedure laid down in  
Article 14 of Regulation (EEC) No. 802/68."
2. Article 4a(1) is replaced by the following:
"  1. Information communicated in whatever form pursuant to Article 4,  
including information obtained as a result of the missions referred to in  
Article 4 b, shall be of a confidential nature. It shall be covered by the  
obligation of professional and commercial secrecy and shall enjoy the  
protection extended to iike information under both the national law of the  
Member State which received it and the corresponding provisions applying  
to the Community authorities."
3. The following Article is inserted:
"Article 4b
1. For the purposes of ensuring that measures of commercial policy  
provided for in the textile sector are correctly applied, the  
Commission shall in particular carry out Community administrative  
cooperation and investigate missions in third countries in  
cooperation with Member States under the following terms:

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(i) the Commission may undertake such missions on its own initiative  
or at the request of the Member State(s) concerned;
(ii) the Member State(s) concerned shall designate, at the request  
of the Commission, experts entrusted to participate in such  
missions;
(iii) the Member States and the Commission shall make available the  
information and documentation necessary for execution of the  
missions to be carried out in accordance with the procedure  
laid down in Article 4;
(iv) mission expenses incurred in carrying out tasks referred to in  
this Article shall be reimbursed by the Commission.
2. The Commission shall inform the Member States of the results of the  
missions referred to in paragraph 1."
Article 2
This Regulation shall enter into force on the day of its publication in the
Official Journal of the European Communities.
It shall apply with effect from 1 September 1983.
This Regulation shall be binding in its entirety and directly applicable
in all Member States.
Done at Brussels, For the Council  
The President

FINANCIAL RECORD
Draft proposal for a Council Regulation amending for the second time 
Regulation (EEC) No. 616/78 on proof of origin for certain textile 
products falling within Chapter 51 or Chapter 53 to 62 of the Common 
Customs Tariff and imported into the Community and on the conditions for 
the acceptance of such proof.
1. Budgetary heading code :  1301 and 2500
2. Legal Basis :  Article 113, EEC Treaty
3. Description of Project
3.1 General Objectives
To ensure the effective application of Community textile 
import arrangements by reinforcing the methods of preventing 
fraud on the origin of textile products.
3.2 Specific Objectives
- to extend and clarify the methods of exchanging information 
on cases of fraud between Member States and between them and 
the Commission established by Regulation 616/78 as amended 
by Regulation 1681/81.
- to establish a coordinated procedure for the carrying out 
of Community administrative cooperation and investigative 
mission by the Commission in cooperation with Member States.
3.3 Financial implications of the pro.ject
The carrying out of Community administrative cooperation and 
investigative missions by the Commission in cooperation with 
Member States.
·/.

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H.  Justification of the project
To date some investigations into cases of fraud involving enquiries 
in third countries have been carried out on an ad hoc basis by the 
Commission in collaboration with certain Member States.  These 
missions have been necessary to establish proof relating to fraudulent 
operations (not otherwise available in the Community) and to determine 
the true origin of the goods. The successful outcome of these ad 
hoc missions has enabled the Member States to instigate proceedings 
against those responsible in the Community, and the Commission to 
seek compensation vis-à-vis the true country of origin of the 
goods. These investigations have also provided the basis for the 
recovery of a certain amount of own resources. However, experience 
has shown that these frauds tend increasingly to become more sophis­
ticated and involve more than one Member State,. Moreover, most of 
the proof lies outside the Community while the means at the disposal 
of the Community to carry out the appropriate investigations are 
insufficient.
Furthermore since 1  January, the Commission is responsible for 
implementing the provisions on the new textile agreements in particular 
those relating to the adjustment of quantitative limits. As establishing 
the necessary proof in support of such adjustments may involve 
carrying out enquiries in third countries, it is necessary that the 
appropriate Community basis for the undertaking of such enquiries 
be created.
5. Financial implication in respect of intervention appropriations 
5.] Basis for estimation
The introduction of a procedure for the carrying out of 
Community administrative cooperation and investigative missions 
by the Commission in cooperation with Member States will

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result in operational expenses necessary for such missions 
which will be carried out as and when the need arises.
The appropriations to be provided should cover the following :
mission expenses (i.e. travel and accomodation) of 
Commission officials carrying out the missions in third 
countries ;
mission expenses of experts of Member States assisting 
the Commission in carrying out such missions in third 
countries;
- mission expenses of Commission officials incurred as a
result of travel within the Community for the preparation 
of such missions;
mission expenses of experts of Member States incurred as 
a result of travel within the Community (Brussels or in 
other Member States) for the preparation of such missions.
The estimations shown below are based on an initial hypothesis 
of 6 enquiries per year. Each enquiry will require 5 days of 
preparation of dossiers in Brussels, 5 days in Member State(s) 
concerned and 3 weeks in one or several third countries.
5.2 Estimated appropriations to be provided for
Task Budgetary post Budgetary post
1301 2500
Preparation of dossier in 
Brussels
6 x (2pers. 5 days)8,300 ECUS
Preparation of dossier in 
Member States 
6 x (2 pers. 5 days)3,600 ECUS ^,600 ECUS
Enquiry in third countries 
6 x (3 pers, 21 days)27,600 ECUS 55,200 ECUS
Total 31,200 ECUS 68,100 ECUS

6.Implications for own resources
In addition to their repercussion on the implementation of the 
quantitative arrangements applicable to textile imports, the 
administrative cooperation and investigative missions are liable to 
lead to the recovery of customs duties in cases where goods fraudu­
lently imported have been incorrectly exempted from payment of duty 
under a preferential regime.